Agrokor GLOBAL COMPACT REPORT 2014 GLOBAL COMPACT REPORT 2014 1 Agrokor GLOBAL COMPACT REPORT 2014 2 Agrokor GLOBAL COMPACT REPORT 2014 Table of Contents Statement of Continued Support and Analysis of Business Environment Agrokor Key Facts Agrokor Group Business Structure Agrokor Companies Report Scope and Boundary Economic and Social Impact Information and Analysis Economic Impact Social Impact Implementation of the UN Global Compact – Communication on Progress Human Rights Labour Standards Environment Anti-Corruption Overview of GRI G4 Indicators presented in Agrokor’s 2014 COP Report parameters and contact person for questions regarding the report 3 Agrokor GLOBAL COMPACT REPORT 2014 Statement of Continued Support and Analysis of Business Environment With pleasure I present to you our fifth COP which manufacturers and suppliers - to enter new markets and covers the year 2014, as a sign of our commitment to the find opportunities for growth and sustainable business UN Global Compact principles, specifically outlining through a stronger and more competitive retail sales. activities of Agrokor Group companies in the areas of human rights, labour, environment and anti-corruption. We have reaffirmed the strategy that has been underlying Agrokor’s expansion and development since The year 2014 was another successful and significant the beginning, with a persistent orientation to business year. The merger of Konzum and Mercator is the central quality, high productivity and competitiveness, constant event and one of the historic business achievements modernization of technology, modern organization of for both companies, as well as for Agrokor as a whole. work, permanent investment in human resources and Agrokor has thus achieved one of its strategic goals and building trust with our business partners and customers. established a new position in the markets of the countries in which it operates and has opened new perspectives Conducting our business in a responsible manner and in South Eastern Europe, where it is already strongly focus on sustainability are postulates of our daily present, but also in Central and Eastern Europe, where operations. We systematically apply the UN Global it has found its place among the largest companies, in Compact principles in our activities, which also affects the retail sector as well as companies in general. New the business community we belong to and cooperate opportunities for Agrokor also carry new responsibilities. with. This COP is a summarized presentation of our sustainability reporting, which we provide in a more The leading retail chain, created by merging Konzum comprehensive and detailed form every two years, guided and Mercator, with more than 2,000 stores, is able to by the GRI Reporting Framework. monitor all of the strategic challenges in business and withstand strong competition. Data on the consumption To conclude: last year will be remembered by the fact that growth is certainly encouraging, but does not exempt us we have ploughed a large, so far the biggest, business from our own responsibility to continue to rationalize furrow, by merging Konzum and Mercator and activating our operations and reduce costs. In 2014 we have also rich synergy potentials resulting from this merger. So we faced different challenges that have largely stemmed from can rightly expect better yields in the coming years, based complex business conditions in the countries in which on Agrokor’s investment in its and our common future, our companies operate. However, once again we have which opens up completely unsuspected possibilities. I demonstrated our strength and ability to be stronger than would like to thank everyone who participated, starting all adverse circumstances we found ourselves in and to with my closest collaborators, as well as all our employees finish the fiscal year with the results with which we can be and end-users of our joint operations, our customers and completely satisfied. consumers. The synergy with Mercator opens a completely new perspective for all companies, starting with Mercator and Konzum, which have joined their forces to secure the leading positions in extremely fierce competition from well-known European retailers. It should be noted that the newly acquired market power of the merged companies also presents an opportunity for the partners - local and regional Ivica Todorić President and CEO of the Agrokor Group 4 Agrokor GLOBAL COMPACT REPORT 2014 The Agrokor Group is the largest privately owned company in Croatia and one of the leading companies in Southeast Europe. Quality, sustainable growth, development and business responsibility are basic corporate values of Agrokor. Agrokor key facts Diversified portfolio of Brands wellestablished brands supported by market leading consumer Leading food awareness. manufacturer, distributor, retailer and wholesaler with robust market position. From field to table Vertically integrated business model with local strategic partnership. Innovation Continually strengthens R&D activities by developing new and improving existing products and processes. 5 Agrokor GLOBAL COMPACT REPORT 2014 Agrokor Group Business Structure Agrokor - Ownership in Subsidiary Companies BUSINESS GROUP BUSINESS GROUP OTHER RETAIL FOOD BUSINESS Angropromet a.d. ................... 96.92% Agrokor - Zagreb d.o.o. .......100.00% Agrokor AG ..........................100.00% Euroviba d.o.o. ...................... 91.56% Agrolaguna d.d. ......................85.22% Agrokor - Energija d.o.o. ......100.00% Idea d.o.o. .............................. 96.92% Belje d.d. .................................67.92% Agrokor kft. ..........................100.00% Frikom Beograd dooel ...........55.30% Dijamant a.d. ...........................73.08% Agrokor - trgovina d.d. .........100.00% Jamnica d.o.o. Beograd ......... 80.44% Frikom d.o.o. ...........................55.30% eLog d.o.o. ..............................96.92% Jamnica d.o.o. Maribor .......... 80.44% Fonyodi kft. .............................80.44% eLog plus d.o.o. .....................96.92% Konzum d.d. ........................... 96.92% Irida d.o.o. ...............................55.30% Kor Broker d.o.o. ..................100.00% Konzum d.o.o. Sarajevo ......... 96.92% Jamnica d.d. ...........................80.44% Kron d.o.o. ............................100.00% Krka d.o.o. .............................. 79.87% Kikindski mlin a.d. ..................66.07% L.G. Moslavina d.o.o. ...........100.00% Ledo d.o.o. Kosovo ................ 55.30% Kor Neretva d.o.o. ................. 96.92% M-profil SPV d.o.o. ..............100.00% Ledo d.o.o. Ljubljana ............. 55.30% Ledo d.d. .................................55.30% mStart d.o.o. .........................100.00% Multiplus card d.o.o. .............. 72.69% Ledo d.o.o. Čitluk ..................55.30% PIK BH d.o.o. Laktaši ............ 96.92% Ledo kft. ................................55.30% Poslovni sistem Mercator d.d. .49.92% Ledo d.o.o. Podgorica ............55.30% Roto dinamic d.o.o. ................ 80.44% Mladina d.d. ............................48.98% Roto ulaganja d.o.o. ............. 100.00% Nova Sloga d.o.o. ................100.00% Super Kartica d.o.o. ............... 64.94% PIK Vinkovci d.d. ....................70.87% Tisak d.d. ................................ 67.35% PIK Vrbovec d.d. ....................96.92% TPDC Sarajevo d.d. ................ 51.00% Sarajevski kiseljak d.d. ...........80.98% Zvijezda d.o.o. Ljubljana ........ 51.84% Sojara d.o.o. ...........................51.84% Zvijezda d.o.o. Sarajevo ......... 51.84% Solana Pag d.d. ......................96.68% Žitnjak d.d. ............................. 86.67% Vupik d.d. ................................86.27% Zvijezda d.d. ...........................51.84% 78,9% Retail 16,9% Food and drink 4,2% Other Bisiness 6 Agrokor GLOBAL COMPACT REPORT 2014 Agrokor Companies Retail, Wholesale and Distribution Edible Oils and Margarines Waters and Beverages Meat Production and Processing Ice-Cream and Frozen Food Agriculture Other Business 7 Agrokor GLOBAL COMPACT REPORT 2014 Report Scope and Boundary This Report is based on the information and data collected from the following companies: • agriculture: Belje, PIK Vinkovci, Vupik, Solana Pag, Kikindski mlin • ice cream and frozen food products: Ledo, Irida, Frikom, Ledo Čitluk • oil, margarine and mayonnaise products: Zvijezda, Dijamant • bottled waters and beverages: Jamnica, Sarajevski kiseljak, Fonyodi, Mladina, Agrolaguna • meat and meat products: PIK Vrbovec • retail sales: Konzum, Mercator S, Mercator Slovenia, Konzum BiH and Tisak • other activities: Agrokor trgovina, Agrokor Energija Our Communication on Progress provides information for the indicators separately, this time per business sector and country entire Group, i.e. consolidated data for the economic, labor, em- of operation, to provide a more concise overview of each busine- ployee, human rights, community, anti-corruption and product ss sector specifics, achievements and trends. responsibility areas. We continue to present our environmental Economic and Social Impact The year 2014 was marked by exceptionally bad weather, synergies within the Group. In addition, in the second half of especially during spring and summer. These adverse weather 2014, following the acquisition of Mercator, Agrokor’s strong conditions have resulted in severe flooding in the whole area focus was placed on the integration of Mercator’s business of our primary markets - Croatia, Bosnia and Herzegovina and operations