A billion euros in revenue is considered a magic threshold that, at least in the food industry, separates those who are from those who are not. In the last couple of days, this figure has been mentioned by two individuals – Miroslav Vitković and Emil Tedeschi. They were asked what the strategic goal of Podravka, or the Atlantic Group, is in the next few years, and they readily stated a billion euros in revenue by 2015. Those below that threshold will likely be swallowed by large multinationals in the classic story of ‘big fish eats small’, and none of our hopes is obviously considered a small fish.
It would be interesting to open a betting shop on who will reach that goal first (and whether they will at all). The race is probably much more interesting for the participants themselves since they publicly clashed over Podravka, which Tedeschi wanted to buy, but Vitković’s HSS did not allow him because, they say, he was rude. Therefore, he rudely turned on his heel and headed to Slovenia for Droga. Now both sides want, partly out of spite, to be the largest food company in the territories of the former state or, in a more ambitious variant, in Southeast Europe. However, one is desire, and the other is possibility. Perhaps I am mistaken, but I would bet on Tedeschi. Not because I think that Podravka is managed by total incompetents, so as not to offend sensitive Podravci, but because Tedeschi has what is called a ‘track record’. Moreover, he cares so much about a good image that I do not know how it managed to happen that it is spread in the media that, while buying Droga Kolinska for 382 million euros, he has no money for Christmas bonuses and employee reimbursements in Cedevita and Neva because they grew ‘only 10 percent’ during an unprecedented crisis. In most things atypical for Croatian conditions, in some he must still be typical.
What must be acknowledged about Atlantic is its very smart and logical development. – Our ambition is significant growth and strengthening of our regional position, as well as further business expansion through acquisitions, especially in Central Europe. This year we plan to achieve almost 1.8 billion kuna in consolidated revenue, and in five years from pure organic growth, without acquisitions, we expect 2.8 billion kuna in revenue, and looking at the success of previous acquisitions, I am sure that number will be significantly higher – said Tedeschi in October 2007, ahead of the IPO. And he clearly did not lie, despite the crisis, although a large acquisition in Slovenia accelerated growth, so he expects more than 600 million euros in revenue this year. Not everyone was happy with that IPO, especially small shareholders who expected to profit from the rise in stock prices, although it was said then that it was for those with a longer horizon. However, if the story with Droga ends happily, it will be quite pleasant to wake up as a shareholder of one of the largest food companies in the region. On the other hand, Podravka had been throwing around announcements six or seven years ago about how they would soon reach a billion euros in revenue. The then CEO Darko Marinac highlighted three priorities during the presentation of results in 2007: growth strategy, increasing profitability and competitiveness, and improving capital efficiency – The focus of the growth category will relate to meal supplements and culinary programs (ready meals, soups, sauces) and the children’s food and cereals program. Growth should also be achieved through acquisitions, primarily in markets outside Croatia – Marinac said, forgetting to mention that in his free time, together with fellow managers and friends from Fima, he is engaged in taking over Podravka with its money, not the one he identified as a problem.
