Croatian FMCG: Light at the end of the tunnel (Atlantic Grupa stays BUY, Podravka stays HOLD)
The Croatian market has been affected since the beginning of 2017 by the uncertainties related to the insolvency of Agrokor, the leading FMCG retailer in the Adria region, with the main market index down 20% in 2017. As Agrokor’s situation seems to be clearing up (the creditors have reached an agreement for a settlement, including a debt to equity swap) and the macroeconomic environment in the region is still supportive for consumer stocks, we remain positive on the sector outlook in the region. Atlantic Grupa and Podravka appear to be emerging stronger and in a better situation after the Agrokor crisis. While we like both names, and believe their financials will improve, we favour Atlantic (BUY, HRK 1,227 PT) in the short term on the back of a clearer earnings profile and deleveraging, which could lead to M&A opportunities; while, for Podravka (HOLD, HRK 354 PT), we need to wait for the confirmation of an improvement in its results, after the start of its new pharma factory’s operations next year.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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