[PPT] - BELUGA GROUP Ma May 2020 PRESENTATION BELUGA GROUP at a glance PowerPoint Presentation

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BELUGA GROUP

PRESENTATION

Ma May 2020

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BELUGA GROUP at a glance

2

Diversified business with portfolio of own and imported brands

BELUGA GROUP at a glance

Growing scale of export Focus on super- premium Beluga

#1 Spirits producer in Russia #4 In vodka globally

One of the largest Importer in Russia Portfolio of premium wines and spirits Vertically integrated

perations

Own retail chain and wine production Constant product development and brand innovation #1 Distribution platform More than 2,5k sales people and 160k accounts across Russia

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3 2010

Over the recent years Beluga successfully turned from vodka producer onto global diversified and vertically integrated business

Business line Products Vodka

Sources: Company data Notes: 1) in Russia, 1Q2020 2) Flavored liquors

Vodka producer with focus on the local market

Today

Business line Products

1

Brandy Other spirits Player in vodka market in Russia

#2

Vodka market share share1

10%

Vodka

1

Brandy Other spirits Production (domestic sales) Production (domestic sales) Wine Vodka

2

Export Spirits

3

Import Wine

4

Specialized retail Winelab retail chain Diversified spirits and wine producer focused on both domestic and global markets Presence in every segment

f the spirits and wine market

Fully vertically integrated business with own specialized retail chain Player in all key spirits segments Vodka & LVI2 market share share1 Flavored liquors market share share1 Brandy market share share1

#1 14% 16% 17%

1

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4

Key investment highlights

Large and resilient spirits and wine market Diversified business with vertically integrated operations The leading spirits producer in Russia Increasing footprint on the fast growing wine market Launch of own specialized retail chain to further increase level of controlled sales Strong financial performance and new initiatives aimed at further efficiency improvement High standards of corporate governance coupled with best management team in the industry with solid track record

1 2 3 4 5 6 7

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Large and resilient spirits and wine market

Sources: Rosstat (2019), IWSR (2018) Notes: 1) Volume terms

1

39% 49% 13% 51% 38% 11% 2019 2012

235 mln 9L cases

in 2019

Wine Vodka & LVI Other spirits

Trend on wine consumption: share of wine in total spirits and wine market increased from 39% in 2012 to over 50% in 2019 Despite economic slowdown, vodka consumption in Russia remains stable while market continue its growth in value terms Vodka is the most popular spirit across the world with Russia alongside USA being the key markets

Global spirits consumption Russian spirits and wine market dynamics1

440 426 190 146 72

Whisky Vodka Brandy Rum Gin

92 65 30 21 11 Global sales of spirits, ‘000 9L cases Top-5 countries by vodka consumption, mln 9L cases Russia USA Poland Ukraine Kazakhstan

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6 Key direction for business diversification

Diversified business with high share of non-vodka products

Categories extension BELUGA GROUP alcohol revenue evolution

Acquisition of vineyards and winery in Russia, focus on

premium Russian wines

Expansion of imported brands portfolio

Brand innovation Distribution platform focused on direct sales Growing share of export operations Product portfolio has been significantly diversified: shares of export & import

perations as well as brown spirits and wine categories continue its growth

Vodka (local sales) Vodka (export) 80% 39% 4% 8% Brandy, flavored liquors & other 12% 26% Wine & spirits 4% 27% In-house production Import 2011 Total alcohol sales

Sources: Company data, AC Nielsen Notes: 1) AC Nielsen, 2018 2) Controlled sales include direct sales and sales through dedicated sales force 3) xx% - share of a given category in alcohol segment revenue

2019

Focus on new product development (launches of Green

Baboon gin, Vogue sparkling wine, Fox & Dogs whisky, etc.)

Successful launch of new vodka brands (e.g. Arhangelskaya

and Mednaya Loshadka): Arhangelskaya gained 5% market share in the category on its third year1

High and growing level of the controlled sales2 (85% of total

sales in 2019)

Expansion of own specialized retail chain Winelab
Export to more than 95 countries across the world
8% of alcohol revenue in 2019 (vs. 4% in 2011)
Natural FX hedge against exchange rate swings

RUB 38.9 bn RUB 21.2 bn

2

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7

Super premium

Diversified product portfolio: own brands

Sub-premium / premium Middle Mainstream Vodka Brandy / Cognac / liquor Wine Other spirits (gin, tequila, rum, etc.)

Sources: Company data Notes: Price range for every segment could differ based on product category

2

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Super premium

Diversified product portfolio: imported brands

Sub-premium / premium Middle Mainstream Whisky Brandy / Cognac / liquor Wine Other spirits (gin, tequila, rum, etc.)

Sources: Company data Notes: Price range for every segment could differ based on product category. Whiskys Cigars Barrel, Fox&Dogs, Trouble Maker, Eagle’s Rock are bottled on Georgiyevskiy Plant

2

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604 stores1 Premium spirits&wine stores with focus

n development in Moscow,
St. Petersburg and Far East

Vertically integrated operations

Sources: Rosstat, Nielsen, ISWR Notes: 1) As of Dec 31, 2019

12 Federal logistic centers

spread across Russia

2,500 sales people 160K active accounts

Retail Distribution Production Own resource base Import Export

6 spirits production facilities

across Russia

1 vineyard 231 ha of fertile vineyards

and 780 ha of land ready for grape planting

117 imported brands

in product portfolio

50 suppliers from 18 countries

Export to

more than 95

countries

2

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10 Unmatched leadership in home country and further advance worldwide

The leading spirits company in Russia

Sources: Rosstat 1Q2020; AC Nielsen (2018); ISWR (2018) Notes: 1) Including bitters, herbal liquors, flavored liquors

Strong brand positions

Russia Distilled spirits producer

#1

Russia Flavored spirits producer1

#1

Beluga In super-premium segment

#2

Russia Brandy producer

#1

Russia Independent importer

#1

Myagkov In low-premium segment

#1

Zolotoy Reserv Brandy in the country

#3

Globally Vodka producer

#4

Globally Spirits companies

#9

Belenkaya Vodka in the country

#1

Belenkaya In middle segment

#1

Tzar In mainstream segment

#1

Dr. August

In flavored liquors

#1

Market share in 1Q2020 by volume

Top-5 vodka & LVI producers Top-5 flavored liquors producers Top-5 brandy producers

6,3% 8,5% 9,6% 9,8% 13,7%

Global Spirits ASG Tatspirtprom Roust Beluga Group

5,7% 6,7% 7,5% 7,6% 16,0%

Roust Tatspirtprom OPVZ Sordis Beluga Group

7,8% 10,4% 11,3% 11,5% 17,4%

KIN Stellar Alvisa Allians Beluga Group

3

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(2,4%) 1,0% 17,0% (3,4%) 0,6% 1 2 4 3 5

74,0% 11,0% 7,0% 3,0% 1,0% Beluga Grey Goose Kremlin Mamont Kauffman

11

Undisputed leader on the Russian market

Sources: Rosstat, ISWR Notes: 1) IWSR (2018) 2) ISWR traditional vodka (2018)

In Top-5 super-premium vodka brands globally

54,1% 14,1% 8,2% 7,8% 2,0% Grey Goose Belvedere Beluga Ciroc Chopin

Market shares of top-5 super-premium vodka brands in Russia1 Market shares of super-premium vodka brands in globally2

#1

Super-premium vodka brand in Russia Super-premium vodka in Baltic states, CIS, Bulgaria, Slovakia, Vietnam; #2 in Germany, Israel, Czech Republic, Serbia, Croatia, Lebanon, India Super-premium vodka brand in travel retail globally Super-premium vodka brand globally Beluga Gold Line: the #1 ultra-premium vodka in the World

#2 #3 #1 #1

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Beluga – flagship brand supplied all around the world…

Over the last years Beluga has experienced double- digit growth, outpacing competitors

Top 5 players volume growth globally2, (’15-’18A, %)

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12 Russia’s wine market

Increasing footprint on the fast-growing wine market

Sources: Euromonitor, public sources, Company data Notes: 1) Volume terms 2) Rosstat

Sales of imported wine brands: significant growth over last few years

Golubitskoe estate

Own premium winery Total production of wine in Russia, volume terms (mln 9L cases)2 BELUGA GROUP is well positioned to gain substantial market share on the wine market

Recent acquisition of Golubitskoe Estate will strengthen its positions among local premium wine makers Vast distribution platform ensures spread of proprietary brands through major federal chains and

wn retail stores (Winelab)
Exceeds vodka market by 33% in volume

terms

Current wine consumption per capita

significantly lags behind developed countries

Share of Russian wine reached 52% of total

wine sales as of 2019 Share of imported wine in total imported alcohol sales1 Imported wine brands Imported wine SKUs Import

59% 78 550

Sales of imported wine by BELUGA GROUP in volume terms (‘000 9L cases)

Production of proprietary brands: promising line of business

Own production 66 76

2015 2018

+15%

Long-term market share target

20%

4

136 263 580 788 896 2015 2016 2017 2018 2019

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13 Evolution of Russian specialized alcohol retailers

Specialized alcohol retailers demonstrate high growth rates with superior economics

Sources: RBC research report “Alcohol retail in Russia 2018”, public sources Notes: 1) Sales of alcohol only; 2) Data for 2019, LFL 3) Average for Pyaterochka, Magnit (2019)

High efficiency of specialized alcohol retailers

Top-10 alcohol retailers sales1 (RUB bn) Sales density of Winelab vs. food retailers (RUB k/sqm)

Specialized alcohol retail highlights

126 251

2015 2018

Fastest growing segment of the Russian retail market 475 255

Winelab² Food retailers³

Significantly higher sales density compared to traditional food retailers Asset light model (small selling space and limited pre-opening capex)

Winelab – modern and convenient alcohol store

2.0x

5

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136 147 165 205 252 294 348 407 468 518 545 570 605 Dec'16 Mar'17 Jun'17 Sep'17 Dec'17 Mar'18 Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Sep'19 Dec'19

14 Winelab key facts

Launch of own specialized retail chain to further increase level of controlled sales

Sources: Company data, Bloomberg Notes: 1) Without beer 2) without export

Stores rollout dynamics High profitability

Winelab accounted for 9,5% of

BELUGA GROUP's in-house brands2 sold in 2019 (vs. 8% in 2018)…

…and for 38% of partners’ brands in

2019 (vs. 30% in 2018)

Focus on 3 major regions: Moscow, St.

Petersburg and East Federal districts

Unique assortment with wide range of

wines and own products

Lucrative locations in trading areas of

stores with high traffic

Proven track record of stores rollout

# of stores (end of period) 31,1% 24,6% 22,8% 22,0%

Beluga (retail only) X5 Retail Group Magnit Lenta

Gross margin, 2019

5

+13.7%

LFL revenue growth 2018/2019

+10%

# of tickets LFL growth 2018/2019

RUB 440

Average ticket

1,000 92 sqm

# of SKUs1 Average selling space

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4,3 5,3 1,2

2018 2019

EBITDA increased by 53% in 2019 due to:

overall volume growth;
improvements in
perating efficiency;
IFRS 16

implementation effect: if apply comparable with previous period IAS 17, EBITDA growth was 25%

15

Strong financial performance

Sources: Company data, IFRS 2019 * - including intersegment

Gross profit & margin

RUB bn Key drivers of revenue growth in 2019:

volume growth both in-

house and imported brands;

increased revenue from

Winelab retail chain;

solid growth of vodka

Beluga sales

6

+22% 16,9 19,5

2018 2019

Net Revenue

RUB bn +53%

12.2% 9.8%

[…]%

– Net profit margin

0,9 1,4 2018 2019

+16%

2.2% 2.7% 37% 39%

EBITDA & margin

RUB bn

IFRS 16 effect

2.2

Net profit & margin

RUB bn

[…]% – EBITDA margin […]% – Gross profit margin

+53% 43,4 53,1

2018 2019

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74% 23% 3% 9,3 15,2 2018 2019 31,3 38,9 2018 2019 64% 25% 11%

16

Segments financials

Sources: Company data, IFRS 2019 Notes: 1) including intersegment 2) including other intersegment income / expenses

Revenue split by segments1

Food Alcohol Retail

6

Since 2018 the Company has reported 3 business segments: Alcohol, Retail, Food

As of 2019 As of 2019

EBITDA split by segments

Food Alcohol Retail

Alcohol revenue1

RUB bn

Retail revenue1

RUB bn +24% +64%

6,5 6,3 2018 2019

Food revenue1

RUB bn

3%

0,8 1,5 2018 2019

8.6%

3,5 4,9 2018 2019

Alcohol EBITDA2

RUB bn

Retail EBITDA2

RUB bn +43% +102%

0,3 0,2 2018 2019

33%

Food EBITDA2

RUB bn

11.2% 12.7%

[…]% – EBITDA margin

10.0% 4.6% 3.0% +[…]% – growth

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17  Расположение текста на цветной плашке  Расположение текста на цветной плашке  Расположение текста на цветной плашке

New initiatives in place aimed at further efficiency improvement

 Расположение текста на цветной плашке  Расположение текста на цветной плашке  Расположение текста на цветной плашке

Сноска или примечание

Production platform restructuring

 Decrease in number of production facilities in order to rise capacity utilization rate

Targeting annual savings

More than RUB 300 mln

Logistic cost reduction

 Cost reduction due to reallocation

f production to customers

proximity  Implementation of the best practices in tenders

Targeting annual savings

More than RUB 200 mln

Headcount optimization

 Workforce reallocation through complete analyses of the payroll expenses and labor productivity

Targeting annual savings

More than RUB 500 mln

COGS reduction

 Active development of special «Restyling Optimization Program» with main focus on innovative package materials (caps, labels, bottles) with no loss in quality

Targeting annual savings

More than RUB 300 mln

6

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High level of corporate governance with independent members on the Board of directors

Sources: Company data

ALEXANDER MECHETIN CEO Founder of BELUGA GROUP NIKOLAY BELOKOPYTOV Chairman of the BoD CFO KONSTANTIN PROKHOROV Head of Retail ROSTISLAV ORDOVSKY- TANAEVSKY BLANCO Independent Non-Executive Director Founder and Chairman of the BoD

f Rosinter

SERGEY MOLCHANOV Chief Operating Officer MIKHAIL KASHIRIN Head of Business Development ALEXANDER IKONNIKOV Independent Non-Executive Director Acknowledged Russian expert in corporate governance and Board efficiency New members

n the Board
f Directors

4

BELUGA GROUP reinforced the Board of Directors in 2018: Independent non-executive directors The Board of Directors has an audit committee with the following members:

Alexander Ikonnikov

(chairman of the committee)

Rostislav

Ordovsky-Tanaevsky Blanco

Nikolay Belokopytov

2

7

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High level of corporate governance with independent members on the Board of directors

Sources: Company data

11,4 16,7 18,1 21,1 25,2 26,7 26,4 28,2 30,7 35,9 37,3 43,3 53,1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Revenue has increased more than 3x over 10 years time frame

Key team members stay with the company since its inception

With BELUGA GROUP

Alexander Mechetin Sergey Molchanov Nikolay Belokopytov Sergey Kuptsov Dmitry Erokhin Mikhail Kashirin Konstantin Prohorov Oleg Yasenov Vladislav Bazhenov CEO COO CFO Head of Corporate Finance Head of East Business Division Head of Business Development Head of Retail Marketing Director Head of Production

Since 1999 Since 2000 Since 1999 Since 1999 Since 2000 Since 2007 Since 2001 Since 2006 Since 1999

20 years 19 years 20 years 20 years 19 years 12 years 18 years 13 years 20 years

Management ownership in BELUGA GROUP creates right incentive for the team to maximize shareholder value

7

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20  Расположение текста на цветной плашке  Расположение текста на цветной плашке  Расположение текста на цветной плашке

Company strategy for further development

 Расположение текста на цветной плашке  Расположение текста на цветной плашке  Расположение текста на цветной плашке

Сноска или примечание

Brand portfolio

 Diversified brand portfolio, coverage of all segments  Focus on premium and profitable products  Increase in price and brand recognition  Strengthening the presence in growing categories

Retail and distribution

 Continued development of the distribution platform with a focus on direct sales  Development of Winelab  Direct contact with end customers through trade marketing and own retail  Best IT platform

Key business

 Production, sale and distribution of its

wn alcohol products

 Use of modern technologies to enhance the overall operational performance

Export

 Expansion of the general export geography and Beluga brand in particular  Improving the quality of imported

perations through targeted selection of

partners  Focus on super-premium international vodka markets

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Appendix

SLIDE 22

91% 9%

22

Debt Profile overview

0,9 0,5 2,4 10,1 12,4 12,6

31 Dec'17 31 Dec'18 31 Dec'19 Short-term debt Long-term debt

79% 19% 19% 1-2 years 2-5 years

Debt statistics summary

RUB mln 31 Dec’18 31 Dec’19 Debt 12,886 15,016 Cash and cash equivalents 1,083 1,085 Net Debt 11,803 13,931 EBITDA* (LTM) 4,251 5,299 Net Debt / EBITDA* 2.8x 2.6x Interest coverage** 2.1x 2.5x 11,0 15,0 12,9

Debt evolution RUB bn Debt breakdown by maturity and type As of 31 Dec, 2019

Less than 1 year Unsecured debt Secured debt

RUB 15.0 bn RUB 15.0 bn

Sources: Company data Notes: * without effect from IFRS 16 ** EBITDA over net finance cost

Cost of borrowing is stable - 9.0% p.a. in 2019 Net Debt/EBITDA* declined from 2.8X in 2018 to 2.6 in 2019 Share of unsecured loans is stable (91%)

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Income statement

Sources: Company data

Rub ub mln ln 2017 2017 2018 2018 2019 2019 YoY

Y,

, % Ne Net revenue 37 37,30 303 43 43,41 411 53 53,07 074 22% 22% Cost of sales (23,628) (26,521) (33,547) 26% Gr Gross ss pr prof

fit

13 13,67 675 16 16,89 890 19 19,52 527 16% 16% margin 36.7% 38.9% 36,8%

2.1 pp

G&A expenses (2,951) (3,102) (3,042)

2%

Distribution expenses (7,719) (10,269) (11,939) 16% Other income / (expenses) (157) (246) (154) Operating profit 2,848 3,273 4,392 34% margin 7.6% 7.5% 8.3% +0.8 pp EB EBITDA 3, 3,62 625 4, 4,25 251 6, 6,49 495 53% 53% margin 9.7% 9.8% 12,2% +2.4 pp Net finance costs (1,931) (2,059) (2,429) 18% Income tax (271) (276) (530) 92% Ne Net inc incom

me

655 655 938 938 1, 1,43 433 53% 53% margin 1.8% 2.2% 2.7% +0.5 pp Ba Basi sic c earn arning ings pe per shar share (Rub) ub) 34 34.60 60 68 68.34 34 10 103. 3.71 52% 52%

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Balance sheet

Sources: Company data

Rub mln 31 Dec’18 31 Dec’19 ASSETS Non Non-curr rrent as asse sets Property, plant and equipment 9,898 13,885 Goodwill 3,095 3,511 Intangible assets 10,091 10,017 Other long-term assets 530 260 Deferred tax assets 1,401 1,786 Tot

tal

al no non-curr rrent as asse sets 25 25,43 431 29 29,45 459 Cur Current asse assets Inventories 12,666 16,181 Biological assets 165 159 Trade and other receivables 8,049 9,813 Prepayments 595 605 Income tax prepayment 133 126 Assets held for sale

Cash and cash equivalents

1,083 1,085 Tot

tal

al cur current as asse sets 22 22,69 691 27 27,96 969 TOTAL ASS ASSETS 48 48,12 122 57 57,42 428 Rub mln 31 Dec’18 31 Dec’19 SHAREHOLDERS’ EQUITY AND LIABILITIES Equity quity and and reser serves Share capital 1,940 1,940 Own shares repurchased from shareholders (545) (669) Share premium 3,760 3,339 Retained earnings 13,012 14,222 Total equity 18,167 18,832 Non-controlling interest 1,136 1,201 Tot

tal

al equity quity and and rese serves 19 19,30 303 20 20,03 033 Lo Long ng-term lia liabilit bilitie ies s Loans and bonds 12,419 12,628 Long-term payables 840 580 Long-term lease liabilities

2,326

Deferred tax liabilities 820 1,077 Tot

tal

al long long-term rm lia liabilit bilities ies 14 14,07 079 16 16,61 611 Cur Current lia liabilit bilities ies Loans and bonds 467 2,388 Lease liabilities

1,232

Trade and other payables 13,917 16,800 Income tax payable 356 364 Total al cur current liabilit liabilitie ies 14, 14,74 740 20, 20,78 784 TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 48 48,12 122 57 57,42 428

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Cash Flow

Sources: Company data

Rub mln 2017 2018 2019 Operating profit 2,848 3,273 4,392 Depreciation and amortization 768 978 2,103 Other non-cash transactions 200 28 229 Changes in working capital (1,860) 466 (2,218) CF from operating activities 1,956 4,745 4,506 Interest paid (1,849) (1,927) (2,063) Income tax paid (578) (636) (595) Net CF from operating activities (471) 2,182 1,848 Acquisition of subsidiaries and associates (380) (463) (551) Acquisition and disposal of PPE (349) (1,720) (1,643) Net CF from investing activities (729) (2,183) (2,194) Issue of share capital

Repurchase of own shares

(913) (1,281) (545) Loans received 40,885 38,804 54,502 Loans repaid (38,963) (37,258) (52,412) Net CF from financing activities 1,009 265 348 Net increase/(decrease) in cash (191) 264 2 Cash at the beginning of the year 1,010 819 1,083 Cash at the end of the period 819 1,083 1,085

SLIDE 26

Key marketing activities

26

Beluga global activations Sports events sponsorship Indoor activity Online On-trade

SLIDE 27

27

Non-core business