ADRIS GRUPA d. d.

Rovinj

ADRIS GRUPA d. d.

CONDENSED NON-AUDITED CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS

for the period ended 31 December 2021

This version of a document is translation from the original, which was prepared in Croatian language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation, views or opinions, the original language version of our document takes precedence over this translation.

Content

MANAGEMENT REPORT ......................................................................................................... 3

A SET OF CONDENSED NON-AUDITED CONSOLIDATED AND SEPARATE FINANCIAL

STATEMENTS ........................................................................................................................... 8

Consolidated and separate statement of comprehensive income (cumulative) ...................................................... 9

Consolidated and separate statement of comprehensive income (quarter) .......................................................... 10

Consolidated and separate statement of financial position ..................................................................................... 11

Consolidated and separate statement of changes in equity .................................................................................... 13

Consolidated and separate statement of cash flows ................................................................................................ 17

SELECTED NOTES TO THE FINANCIAL STATEMENTS ...................................................... 18

  • 1. GENERAL INFORMATION ............................................................................................................................ 18

  • 2. SIGNIFICANT ACCOUNTING POLICIES ...................................................................................................... 19

  • 3. SEASONAL AND CYCLIC CHANGES ........................................................................................................... 20

  • 4. SIGNIFICANT CHANGES IN THE CURRENT REPORTING PERIOD ...................................................... 20

  • 5. INFORMATION ON BUSINESS SEGMENTS ................................................................................................ 21

  • 6. EARNING PER SHARE ................................................................................................................................... 22

  • 7. CAPITALIZED COST OF SALARIES .............................................................................................................. 22

  • 8. FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE ...................................................................... 22

  • 9. SHARE CAPITAL ............................................................................................................................................. 23

  • 10. DEFERRED TAXES .................................................................................................................................... 23

  • 11. FINANCIAL ASSETS AND FINANCIAL LIABILITIES ............................................................................. 24

  • 12. DIVIDEND PAYMENT DURING THE REPORTING PERIOD ................................................................ 25

  • 13. SIGNIFICANT TRANSACTIONS BETWEEN RELATED PARTIES ......................................................... 25

  • 14. EVENTS AFTER THE END OF THE REPORTING PERIOD ................................................................... 25

Declaration by the persons responsible for the preparation of the statements ....................... 26

ADRIS GRUPA d. d.

Rovinj

MANAGEMENT REPORT for the period ended 31 December 2021

1. PRINCIPAL ACTIVITY OF THE COMPANY

The principal activity of the company ADRIS GRUPA d. d. (hereinafter: "Adris" or the "Company") is management and investment. The aim of the Company as a corporate centre is to coordinate investment, management, development and operation of the system as a whole.

Adris (hereinafter: the "Group") comprises three strategic business units: tourism, managed by MAISTRA d. d., manufacture of healthy food managed by CROMARIS d. d., and insurance managed by CROATIA osiguranje d. d.

2. SIGNIFICANT EVENTS

Under very uncertain business circumstances, and according to unrevised consolidated financial statements for the fourth quarter of 2021, total revenue1 generated by Adris was HRK 5.73 billion, or 20% higher than a year before. Revenue from sales of goods and services amounted to HRK 5.3 billion, which is up 23% from revenue recorded for 2020. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amount to HRK 1.02 billion, which is 3% below the level in the pre-pandemic 2019. Net profit generated in 2021 amounts to HRK 403 million, and net profit after minority interest is HRK 296 million.

The company maintained the financial potential required for a new investment and development cycle.

The year 2021 began with a great deal of uncertainty. Restrictive epidemiological measures were in force which, consequently, caused a low level of business activities. Cross-border business and tourist trips were practically suspended and HORECA sales channels closed. It was only in June that the re-opening of the economy and, most importantly for Croatia, the mass arrival of tourists began. However, a new big wave of the pandemic came in October and lasted until the end of the year.

In 2021, all companies within the Group initiated and implemented business transformation programmes, including digitalization, with the aim of increasing the level of operational excellence and gaining a competitive advantage. Strategically, this crisis has confirmed that Adris has a well-diversified portfolio of business activities.

Adris' HRK 400 million investment in 2021 and the preparation of new projects show that continuity of development is maintained even under the conditions of high business uncertainty.

The Group's tourism business in Istria showed resilience in the face of economic crisis where the luxury hotels in Rovinj achieved best operating results

On the global level, a 4% rise in international tourist arrivals was reported for 2021, but the figures reached only 23% of 2019 levels. Trends for 2021 show recovery of tourist demand. Europe experienced the fastest recovery with the growth rate of 19%, which is still 63% below the reference year 2019. Croatia generated significantly better tourism results than other Mediterranean countries due to better epidemiological situation in the summer months and the proximity of key outbound travel markets. The situation within Croatia was also diverse with regard to its connection to the key European markets.

The Group's tourism division generated revenue from sales in the amount of 1.48 million units, which represents a rise of 94% compared to last year and/or 75% of the result from the record-breaking year of 2019. The Istrian part of the tourism segment accounted for 86% of sales achieved in 2019, while Zagreb and Dubrovnik hotels accounted for an identical 42% of the units sold. In the Istrian part, the best results were generated in the luxury segment, their sales being 95% of 2019 levels. If we analyse the main season only, i.e. the June-September 2021 period, Adris' luxury hotel segment in Istria achieved a 13% increase in sales compared to the record-breaking results achieved in 2019. This just proves justifiability of Adris' strategy to invest in the highest segments of hotel offer.

The Group's tourism division generated revenues from sales of goods and services in the amount of HRK 1.36 billion, which is 78% of revenue generated in 2019. Earnings before interest, taxes, depreciation and amortization

1 Total revenue comprises of the following positions: operating revenue (revenue from sales of goods and services), other revenue, financial revenue, share in affiliates' profits and joint ventures

(EBITDA) amount to HRK 500 million, which is 79% of the figure achieved in 2019. Net profit amounts to HRK 153 million.

Numerous transformation initiatives have been implemented in the tourism division of the Group, with a special emphasis on improving user experience, revenue management by the use of advanced analytics and further development of direct sales channels. In 2021 too, there were investments made to improve the existing products, for the most part in campsite amenities. Total investments amount to HRK 200 million, and the preparations for the renovation of Zagreb hotels and the Hotel Marjan in Split have continued.

Croatia osiguranje continued its business transformation processes and achieved double-digit net profit growth

In 2021, Croatia's insurance market achieved strong growth of nearly 9%, whereas in 2020, a decline of 2.6 % was recorded.

Croatia osiguranje continues to be the market leader in the Croatian insurance market with a total share of 25.7%. The total gross written premium generated in Croatia amounted to HRK 2,810 million, which is up 5% in comparison with the same period of last year. Consolidated gross written premium, including regional branches, amounts to HRK 3,436 million and is 6% over the last year's figure. Combined operating ratio of CO Group is 93.1 and has improved by 1.7 percentage points compared to the previous year which was marked by two major earthquakes and the pandemic, mainly due to the lower claims ratio. Numerous business improvement projects were implemented in 2021, including price management based on the use of advanced analytics, optimization and rationalization of the non-profitable part of the portfolio, significant improvement of the claims management process, more efficient acquisition costs management and a reduction in the costs of support activities. The programme also covers subsidiaries, thus transferring positive experiences from the parent company to the regional branches.

In compliance with the change in business conditions and the evolution of global trends, Croatia osiguranje continued their investment in digital transformation in the amount of more than HRK 100 million in 2021.

Strong support to Laqo insurance, the complete solution for Croatia's first digital insurance, has continued. Laqo Prevent has been also introduced as a prevention programme utilizing advanced telematics technology to promote safer driving and reduce risks in traffic. The Laqo Prevent programme was awarded by the Croatian Safety Managers' Association as the best project of the business sector enhancing safety in the community. Best user experience, e.g. half as many clicks compared to similar European brands, has improved end-customer satisfaction. Initial results show that Laqo in Croatia is more successful than insurtech companies on bigger European markets. As to its product characteristics, Laqo is comparable to the best insuretech solutions in the world.

In 2021 Croatia osiguranje, together with the leading global reinsurer Swiss Re, introduced its first draft index insurance, an innovative technological solution. The Soil Moisture Deficit Index Insurance is the most recent product of this kind on the Croatian market applying the advanced satellite-based measurement technology for soil moisture, which gives precise data for the insured agricultural land. Claims payment is automatic based on received satellite data with no need for site visits. More than 1,000 farmers have received payments and 90% of insurance indemnities were paid in just two weeks.

Croatia osiguranje achieved a consolidated net profit in the amount of HRK 363 million, which represents an increase of 11%.

Cromaris achieved growth in all of its key business indicators, exports account for 87% of sales revenue

Despite the logistical difficulties and closed catering facilities due to the crisis caused by Covid-19 pandemic in the first part of 2021, Cromaris recorded growth of all key business indicators in 2021. Sales volume of 12,421 tonnes of fresh fish equivalent were made, which is a 20% increase compared to the previous year. The sales volume of fish products amounted to 11,272 tonnes, which is up 21%.

Export markets saw a 21% increase in sales volume. Foreign markets account for 86% of Cromaris' sales volume and 87% of sales revenues. The company is present on a large number of the European markets, and since November 2021, it has been also present on the Spanish market, the world's second-largest market for sea bream and sea bass. Revenues from differentiated products, primarily packed, fresh, gutted sea bass, sea bream and meagre fillets,

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Adris grupa dd published this content on 21 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 April 2022 09:24:11 UTC.