ADRIS GROUP No Dividend, Investments in Digitalization

At the General Assembly meeting of Adris Group, shareholders were addressed by Ante Vlahović, Chairman of the Supervisory Board and largest shareholder, who emphasized that 2019 saw one of the best results in the past decade. Revenue grew by six percent, reaching 5.4 billion kuna, while consolidated net profit amounted to 506 million kuna, representing a 13 percent increase. The Group’s indebtedness is low and, Vlahović points out, the company has almost no debt. Despite this, due to the coronavirus crisis, it is proposed that no dividend be paid in order to ‘preserve Adris in the long term’. Addressing the gathered shareholders, Mr. Ante Vlahović reminded them what Adris is and what is at the core of its success.

„Adris is an investment and management company with a strong sense of social responsibility. Our goal is long-term value creation, the creation of new jobs, and benefits for shareholders and the community in which we operate. Over the past fifteen years, the company has undergone a complete transformation and restructuring, so today Adris manages a balanced portfolio of sustainable businesses. Adris has good companies in good industries, and our capital is well distributed!“, said Vlahović. This is the result, as Vlahović emphasized, of the investment criteria that Adris examines before entering any business, taking into account their long-term sustainability.

With growing demand, key criteria include the internationalization of business, premiumization of products and services, as well as room for further consolidation in regional markets and achieving economies of scale. As he stated, along with strategic portfolio thinking, Adris maintains a high level of productivity and strives to be different from the competition. It is also recognized for its contribution to the community, primarily through the Adris Foundation.

– It is crucial to preserve liquidity and investment potential and to adapt Adris to new circumstances – emphasized Vlahović.
Marko Remenar, who has held the position of CEO since January 1 of this year, emphasized that ‘they continue the development cycles of all their companies’.

– There is a special emphasis on the digitalization of business, which will enable us to enter new segments and areas of growth, primarily in tourism and insurance. The total amount we are investing in digitalization exceeds two hundred million kuna – said Remenar. The proverbial lack of debt and strong financial position, Vlahović further emphasizes, have enabled independence in conducting business policy. From 2005 to 2019, more than 10 billion kuna was invested in the growth and development of businesses. Of that, nearly six billion kuna was invested in tourism.

In Croatia osiguranje, the leading position has been maintained with increased operational efficiency. Consequently, net profit has tripled in four years. Cromaris has transformed from a small business into a respectable company, the sixth in the world in the production of sea bream and sea bass, which has grown nine times or an average of 22 percent annually. Today, revenues from foreign markets account for 80 percent of Cromaris’s total revenue, with a trend of further growth. The main competitive advantage is also the value-added products, which have increased from an initial three percent to 44 percent today, or about fifteen times more. We are leaders in luxury tourism in Croatia, continues Vlahović, emphasizing that nearly six billion kuna has been invested in tourism since 2005, including the acquisition of HUP and the Dubrovnik Hilton. The structure of the offering has changed, with 84 percent of hotels now rated 4* and 5*, which is five times more than at the beginning of the investment cycle. Revenues have increased fourfold, and operating profit sixfold.

As much as 95 percent of revenues are generated in foreign markets. During this period, Adris has maintained a balanced dividend policy that allows for further growth and development of the company. The total average annual return on the share, which includes the growth in share price and dividend, amounted to 25.8 percent for voting shares and 25.6 percent for preferred shares from 1994 to 2019. If we take into account, as he said, the difficult start of 2020, then the total average annual return for preferred shares is 25 percent, and for voting shares, it is 25.1 percent. 

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