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CIAK’s Rapid Growth is Largely Due to the Outdated Domestic Vehicle Fleet

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Public attention was drawn this summer by the news that a company in Zadar is seeking amendments to the Detailed Urban Plan (DUP) from business to residential-commercial purposes. The amendment would allow for the construction of a six-story residential building with twenty apartments. Media attention was not so much motivated by the announcement of the construction of an ordinary residential building as by the name of the investor who requested the change. The owner of the land is the company Lerent, and the investor is the company Dilabor, both owned by Ivan Leko, the founder and majority shareholder of CIAK Group, a company best known to the public as a strong player in the auto parts distribution market.

Business in Six Countries

The Croatian king of auto parts, as some call him, is leaving his business and entering construction? No, he is probably just taking advantage of a convenient opportunity given the record real estate prices, believe those who know him. – This is a man who knows and understands business excellently, especially the one he is engaged in – said a businessman connected to CIAK Group who wished to remain anonymous.

The accuracy of this statement is demonstrated by a snapshot of Leko’s business empire – in three decades he has created a holding company that controls 30 companies in six countries (Croatia, Bosnia and Herzegovina, Montenegro, Slovenia, Serbia, and North Macedonia), employs more than 2,300 workers, and operates in five segments: distribution of auto parts, distribution of batteries and oils, parts for commercial vehicles, waste management, and wholesale.

The company today achieves 282 million euros in consolidated business revenues, which was the result for 2023. Compared to the previous year, revenues increased by 24 percent.

High Profitability

Equally noticeable is the growth in business profitability – earnings before interest, taxes, depreciation, and amortization (EBITDA) without one-off items rose to 23 million euros, which is 20 percent more. At the same time, consolidated gross profit amounts to 9.6 million euros, which is an increase of 16 percent, according to the financial report published on Wednesday. Net profit amounted to seven million euros and was higher by 14 percent. On the other hand, although CIAK Group has been expanding its business for years by acquiring smaller distributors, this has not significantly affected its indebtedness. The ratio of net debt to EBITDA at the end of September last year was 2.66, which the company claims is ‘well below possible rates at the consolidated level.’

How much the company has grown in financial results in just three years is also shown by the fact that CIAK, prior to its stock market debut in 2019, first achieved revenues exceeding one billion kuna, or 133 million euros. There are several reasons for such rapid growth. Firstly, the increase in revenues in recent years should not be surprising given that the auto parts trade is favored by several factors. This is primarily the age of the vehicle fleet in Croatia and neighboring countries, whose roads are traversed by vehicles well over 10 years old. Consequently, they require more and more maintenance and repairs.

A detailed analysis of the business of CIAK, owned by Ivan Leko, who almost never appears in the media, can be read in the new printed and digital edition of Lider.

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