INTEGRATED ANNUAL REPORT Impressum
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2018 INTEGRATED ANNUAL REPORT Impressum Publisher: AD Plastik d.d. Matoševa 8, 21210 Solin For publisher: Finance Department Josip Divić, Finance Director Editor: Lori Vitaljić Photos: Archive of AD Plastik Graphic design: Gingola d.o.o. Nomad IT d.o.o. Edition: 200 Copyright © AD Plastik d.d. 2019 All rights reserved. Texts, parts of texts, photographies, drawings and graphic images are protected by copyrights. Use of this data is possible only with prior consent of the company AD Plastik d.d. Introduction This is the second Integrated Annual Report of AD Plastik Group, consisting of Report by Management of the Com- pany, Sustainability Report and annual financial statements as of December 31, 2018. It presents information about the company’s business in the past year from financial point of view and in regard to business impact on society and envi- ronment. Our primary goal is to offer all our stakeholders a transpar- ent, detailed and clear insight into the company’s compre- hensive business with this kind of reporting. We want to provide a better understanding of the industry in which we operate, as well as business opportunities, company’s busi- ness strategy, corporate culture and increment of its value. Financial results, social, environmental and economic im- pacts, management, impact of material activities on com- pany results and business risk management are presented in the integrated report in a transparent and thorough way. We believe that through a quality overview of financial and non-financial indicators of the company’s business we im- prove our transparency and contribute to the trust of our stakeholders. We are the leading company for development and pro- duction of interior and exterior automotive components in Croatia and one of the leading companies in Eastern Eu- rope. More than thirty five years of experience, passion and knowledge of our employees incporporated in each product are a guarantee of our quality and reliability. We are a multi- national company with eight production sites in five coun- tries and we deliver our products to 24 countries around the world. Our corporate culture is based on sustainability, promotion of cooperation and recognizing excellence. We ensure a unique value in each segment of our business, constantly increasing quality standards of our products, services and modes of operation. 3 AD Plastik Group A brief overview in numbers 2018 12.24% 6.76% EBITDA MARGIN NET PROFIT MARGIN 136 mil. € NEW DEALS SEALED 5 8 2,876 COUNTRIES PRODUCTION SITES EMPLOYEES as of December 31, 2018 HRK 1,321.25 million +21.20% OPERATING REVENUE 55compared to the +45T previous year HRK 161.73 million +2.08% EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) 51compared to the +49T previous year HRK 89.32 million +27.23% NET PROFIT 56compared to the +44T previous year Contents Introduction 3 A brief overview in numbers 4 Table of contents 7 Letter from the President of the Management Board 8 The automotive industry 11 The most important events in 2018 12 Mission, vision, key values 22 Company history 23 Production sites 24 Overview of markets and customers 25 Technologies and products 26 Research and development 33 Production and sales 36 01 Corporate governance 44 Business ADPL Share 62 Financial results 2018 67 Business risks 77 Business Plan for 2019 85 Profile 88 Stakeholders 90 Employees 103 Supplier chain 109 02 Obligations towards external initiatives 112 Sustainability Economy 114 Environment 118 Report Society 135 Other 158 Consolidated financial statements of AD Plastik Group 164 Financial statements of the company 03 Annual Financial AD Plastik d.d. 222 Statement 2018 Integrated Annual Report 2018 01 02 03 Letter from the President of the Management Board Dear stakeholders, It is our pleasure to present you the second Integrated An- cial results are the most important indicator in the business nual Report of AD Plastik Group for 2018. Over the past year of every company, but the success of the company is also we have realized record operating revenue and net prof- manifested through qualitative and structured management it, thus completing another in a series of very successful of social and environmental issues. AD Plastik Group has business years. Operating revenue of AD Plastik Group in been achieving a great progress also in that segment, which 2018 amounted to more than HRK 1.3 billion and net profit is confirmed by numerous awards and acknowledgements increased by 27.23 percent compared to the previous year. by professional community. The dynamics of the industry itself and of the unstoppable We base our business on the principles of sustainable devel- changes in the market encourages us to change existing opment, which we confirm as long-standing signatories of patterns on a daily basis, thus improving our business and the United Nations Global Compact initiative. The values of management. New materials and technologies, digitaliza- our company and a clear strategy of business development tion, robotization, security and quality are the trends of the and sustainability make us a desirable partner in the com- automotive industry, to which we adapt every day. Finan- munity in which we operate, but also in the global market. 8 Integrated Annual Report 2018 01 02 03 Employees as our greatest value are the first priority and we During the reporting period we have successfully been pre- pay special attention to them, that’s why we have invested paring for new projects, most significant part of which will additional funds and made additional efforts in the reporting begin with the serial production this year. We had almost period in order to improve and develop the working environ- eighty active projects, of which serial production has begun ment. With our responsible behavior and business we ensure regarding twenty five of them. The automotive industry has our customers delivery of the products that meet the high- its own specificities in operating business, thus year 2018 est quality standards, which is confirmed by new deals we was a project year for us that has successfully introduced us have been sealing. We conduct the most up-to-date policies into the period of serial production. of responsible management of environmental protection, occupational safety and human potentials at all our produc- Satisfied with the results achieved, new deals worth EUR 136 tion sites. In addition, part of our strategy is to continuously million sealed during the observed period give us additional collaborate with the community in which we operate by rep- security and stability. Based on new deals and announce- resenting its interests and providing help to projects through ments of our customers, we expect an increase in revenue sponspoships and donations. We pay special attention to our in 2019. We will have significant investments in increasing shareholders and the financial community. Having entered production capacities at the production sites in Croatia and the Prime market, the most demanding market segment of we will also implement new sub-technologies that will add the Zagreb Stock Exchange, we have confirmed success value to our existing product portfolio. of our corporate governance and business transparency, on which we have been working intensively. We have been The year we have successfully entered will be marked by continuously improving our business to the satisfaction of already mentioned beginning of a serial production regard- all our stakeholders and that is the mission we have under- ing big projects agreed as well as by further technological taken. advancements. We contribute to the goals of sustainable development of the automotive industry on a daily basis Last year was greatly marked by the purchase of the Hun- through constant research and development of materi- garian company Tisza Automotive, by means of which we als and technologies. Corporate social responsibility is un- have achieved one of our strategic goals for the further de- doubtedly our choice and the satisfaction of all stakeholders velopment and growth of the company. The process of its is our everyday mission. integration into the AD Plastik Group’s system is still ongo- ing and will be successfully completed in 2019. Apart from further growth, this acquisition provided us with diversifica- tion and expanding our customers portfolio, which were the goals of our long-term strategy. New plant is located in one of the fastest growing markets in the automotive industry, thus we have additionally provided the conditions for organ- Marinko Došen ic growth of the production site and Group in whole. President of the Management Board 9 Integrated Annual Report 2018 01 02 03 10 Integrated Annual Report 2018 01 02 03 The automotive industry We live in a challenging period of conceptual changes in mo- sole will be a central control room or a work desk, if nec- bility, which directly affects the automotive industry. Elec- cessary. Solutions for additional hidden compartments have tric and autonomous vehicles as well as car sharing are the been developed in order to increase the „living“ space in the trends that have been ocuppying their positions in the auto- vehicle interior. motive world slowly but surely. The plastic components share in the cars of the future will Within a short space of time, the automotive industry will grow without a doubt regardless of a drive unit they use – experience a revolutionary breakthrough regarding design, diesel or petrol engine, electric motor or hybrid, biodiesel or environmental impact, power supply, management, vehi- hydrogen. First and foremost due to the shaping of mate- cle connectivity with other systems, usage and ownership. rials, vehicle weight reduction and CO2 emissions, ease of End vehicle users have been eagerly awaiting technologi- maintenance, wear resistance, multiple decorating and per- cal improvements that will enable them to try and configure sonalization options, transport and recycling costs, techni- personalized vehicles according to their wishes and needs, cally and technologically advanced polymer materials will be namely in virtual salons.