Podravka 2Q 20 - Bye, bye panic-buying effect but no hard feelings
2Q 20 wrap-up: Although Podravka is mainly oriented towards retail customers (i.e. a limited exposure towards HoReCa customers), negative trends at the top-line already materialised in 2Q 20 as the panic-buying effect disappeared. Additionally, operating hours of brick-and-mortar F&B retailers were shortened in the domestic market during the lockdown period. Even though there were no major surprises on the top line, the company clearly exceeded our expectations on the EBITDA and bottom-line level. The positive surprise also came on the side of operating profitability. Contrary to our expectations, the company managed to increase its operating and net profit margins in 2Q 20 compared to 2Q 19, although operating in unprecedented business circumstances. The tailwind came from realised savings, primarily on marketing expenses (-24% yoy) and lesser than anticipated negative FX effects.
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