baltika breweries h1’06 results
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Baltika BreweriesH1’06 Results
August 10, 2006
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Contents
• Financial Results• Russian Beer Market and Baltika Breweries• Outlook
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• Excellent profit performance
― Net Sales 531.6 MEUR, +18,2%
– EBITDA 162.4 MEUR, +21.5%
– EBIT 124.8 MEUR, +23.8 %
• Russian market volume growth of 6.1%
• Improvement of volume dynamics in Q2’06
– Total volume of Baltika Breweries 11.2 MHL, +4.0 %
– Export volume of Breweries Group 0.8 MHL, +8%; with license volume in Ukraine volume growth abroad +18%
– Beer Volume of Baltika Breweries in Russia in Q2’06 6.6 MHL, +8.5%
– Market share in Russia in H1’06 23.6%, -0.4%pts.; market share of Breweries Group 35.6%, -0.7%pts
– Market share in Russia in Q2’06 24%, -0.1%п.п.; market share of Breweries Group * 36%, -0.4%п.п.
Overview of Developments in 1H’06
*Baltika, Vena, Pikra, Yarpivo
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Financial Results
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1H’06 Financial Results H1’06 H1’05 ∆
Volume, MHL 11.21 10.78 +4.0%
Net Sales, MEUR 531.6 449.6 +18.2%
EBITDA, MEUR 162.4 133.7 +21.5%
EBITDA Margin, MEUR 30.6% 29.7% +0.9 pts
EBIT, MEUR 124.8 100.8 +23.8%
EBIT Margin, MEUR 23.5% 22.4% +1.1 pts
IFRS
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Baltika Net Sales Development in 1H’06
+4.0%
+5.6%
+18.2%
Volume Average Price
Change of Currency
Rate
Net Sales
Many factors such as volume growth, average prices and change of currency rate contributed to net sales growth
+6.6%+1.2%
Other Sales
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MEUR H1’06 H1’05 Change
Net Sales (without VAT, excise) 531.6 449.6 +18.2%
Cost of sales* 244.7 219.0 +11.7%
Gross profit 286.9 230.6 +24.4%
Logistics expenses* 73.3 66.8 +9.8%
Expenses on production promotion (marketing, sales etc. expenses)* 68.3 46.0 +48.3%
Administrative expenses* 20.3 16.7 +21.95%
EBIT 124.8 100.8 +23.8%
Net profit 94.7 81.4 +16.3%
1H’06 Results Breakdown
* Including depreciation
IFRS
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Baltika Margin Development
22.4% 23.5%
EBIT Margin H1’05 Cost of Sales Logistics and Administrative
Expenses
Expenses on production promotion
EBIT Margin H1’06
+2.7% -2.6%
Favorable market conditions and efforts on reduction of production costs compensated growth of expenses on production promotion
+1.0%
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Russian Beer Market and Baltika Breweries
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Russian Beer Market Development
* Baltika, Vena, Pikra, Yarpivo** Estimate
34
6
11
2
9
16
97
-1
8
17
-3
2
7
12
17
22
2005 Q1 Q2 Q3 Q4 2006 Q1 Q2
Market Growth Breweries Group Growth
Source: BBH, State Statistics Committee, BreweriesNote: Domestic Volumes
Source: BBH, State Statistics Committee, Breweries
Market share, % H1’05 H1’06
Baltika 24.1 23.6
Group of Breweries* 36.3 35.6
Sun Interbrew 17.4 18,9
Heineken 13.0 13,6
SABMiller * 5.0 5,7
Ochakovo 5.9 5,2
Others 22.4 21,0
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Price Segments Development
Baltika’s share in segment
H1’05 H1’06
Licensed 7.4 7.5
Premium 29.8 29.5
Mainstream 37.2 33.4
Lower Mainstream 29.0 26.9
Discount 14.7 12.2
6,9% 9,1%
21,7% 20,0%
28,5%28,5%
25,0% 23,1%
17,7% 19,0%
0,3%0,3%
Н1'05 Н1'06
Imported
Licensed
Premium
Mainstream
Lower Mainstream
Discount
Share of different price segments of the total beer market volumes
Source: Business Analitika
Group of Breweries Share in segment
H1’05 H1’06
Licensed 19.4 20.8
Premium 42.6 44.4
Mainstream 52.3 49.4
Lower Mainstream 37.1 33.6
Discount 25.4 23.3
Source: Business Analitika
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Performance of Baltika Brands in 1H’06 Baltika and Arsenalnoye are two leading brands in Russia
Volume growth of licensed brands: Tuborg – brand №1 in licensed segment +102.2%, Carlsberg +22.4%, Foster’s +116.9%, Kronenbourg 1664 +61.8%
Volume growth of premium brand Nevskoye +35.6%
High volume growth of a number of regional brands: Don +24.9%, Leningradskoye +47.7%
Growth of market share of Breweries Group in licensed segment +1.4% pts. (up to 20.8%)
Growth of market share of Breweries Group in premium segment +1.8% pts (up to 44.4%)
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Инновации в начале 2006 года Launch of Foster’s in bottle 0.5 l with ring-pool cork
Launch of Kronenbourg 1664 in bottle 0.46 l, brand transfer to twist-off cork
Launch of a new brand in the Baltika portfolio – beer for young adults “Cooler” in a transparent bottle with NLL label and ring-pool cork
Launch of a new licensed brand Tuborg Twist in a transparent bottle with NLL label and ring-pool cork
Launch of Carlsberg in a new bottle format with a bottom opener
Launch of PET 2.5 l for group of brands– Arsenalnoye, Kupecheskoye, DV, Uralsky Master etc. Launch of a new packing mid-cone for can –brands Baltika 3, 7, Tuborg Launch of Baltika 3 in PET 1.0 l
Launch of Yarpivo brand in PET 1.5 l
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Outlook
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Integration of BBH Russian companiesToday:
4 separate enterprises After integration:
Leader of Russian beer market
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The Company plans to complete the merger process by the end of 2006
21 August. Shareholder assemblies
of Vena, Pikra and Yarpivo are asked to approve the merger
with Baltika
Approval by regulatory and
registration authorities. The
Baltika Group of Companies becomes a
single legal entity
Supplemental share issue, buy-back of Baltika
shares, voluntary
purchase by Baltika of shares in Vena, Pikra,
and Yarpivo
Exchange of Vena, Yarpivo
and Pikra shares for newly issued Baltika shares
03 July Baltika becomes majority
shareholder in Vena, Yarpivo
and Pikra
Extraordinary meeting of Baltika
shareholders approves the
merger with Vena, Pikra and Yarpivo
07 March
March-June
July August September – December
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Baltika Group in 2006
• 10 breweries: St.Petersburg (2 breweries), Rostov-on-Don, Tula, Samara Yaroslavl, Voronezh, Chelyabinsk Krasnoyarsk, Khabarovsk
• Production Capacity: 40 MHL/year • 4 malt-houses: St.Petersburg, Tula, Chelyabinsk, Yaroslavl
• About 11 000 employees• Market share 36%
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Portfolio of United Brands in 2006
Licensed
Premium
Mainstream
Lower Mainstream
Discount
Rating
#3
#1
#1
#1
#1
Балтика 0, 5, 6, 7, 8
Балтика 2, 3, 4, 9
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Breweries Group Network in Russia
ST PETERSBURG
SAMARA
KRASNOYARSK
KHABAROVSK
TULA
CHELYABINSK
YAROSLAVL
YARPIVO
PIKRA
VENA
BALTIKA
VORONEZH
10,5 МHL
4,5 МHL
1,5 MHL
6,0 МHL
1,5 МHL
ROSTOV-ON-DON 2,5МHL
2,5 МHL in 2006,
growth up to 4,5 МHL
3,0 МHL
1 МHL
6 МHL
Thank you!IR: +7 812 329 40 93
Baltika BreweriesH1’06 Results
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