Podravka (PODR) Q3 2024 earnings summary

Executive summary

• Group sales revenues rose 8.4% year-over-year to EUR 569.3m, with both Food and Pharmaceuticals segments contributing to growth.

• Normalized net profit after minority interests increased 46.5% year-over-year, while reported net profit declined 8.3% due to prior-year tax incentives.

• All regions reported sales growth, with Western Europe and Overseas up 31.6% and Southeastern Europe up 8.9%.

• Major EUR 333m acquisition of Fortenova's agricultural segment created a new business pillar, Podravka Agri.

• Significant investments in modernization, new factories, and sustainability, totaling nearly EUR 64m, up 36% from the prior year.

Financial highlights

• Group gross profit increased by EUR 37.9m (+20.6%), and normalized EBITDA rose by EUR 25.0m (+34.1%).

• Gross margin improved to 38.9% (+394 bp), normalized EBITDA margin to 17.2% (+344 bp), and normalized net profit margin after MI to 10.1% (+263 bp).

• Net cash from operating activities decreased 29.1% to EUR 52.2m; cash and equivalents fell to EUR 1.1m at period end.

• Total assets grew 8.2% to EUR 570.4m, with property, plant, and equipment up 17.4% due to capital investments.

• Long- and short-term borrowings increased by EUR 28.3m, mainly to finance acquisitions.

Outlook and guidance

• Capital expenditures for 2024 are expected to reach nearly EUR 89.4m.

• Completion of the Fortenova agricultural acquisition is pending regulatory approval, with EBRD expected as minority partner.

• Continued focus on modernization, digitization, and sustainability, including further investments in solar power and irrigation.

• Expansion in Western Europe, especially Germany, with new product launches and brand redesigns.