Compan mpany pr pres esen entati tion May 2017 Discl claime - - PowerPoint PPT Presentation

compan mpany pr pres esen entati tion
SMART_READER_LITE
LIVE PREVIEW

Compan mpany pr pres esen entati tion May 2017 Discl claime - - PowerPoint PPT Presentation

Compan mpany pr pres esen entati tion May 2017 Discl claime mer Neither this presentation (the Presentation) nor any copy of it nor the information contained herein being issued, and nor may this Presentation nor any copy of it nor


slide-1
SLIDE 1

Compan mpany pr pres esen entati tion

May 2017

slide-2
SLIDE 2

Discl claime mer

2

Neither this presentation (the “Presentation”) nor any copy of it nor the information contained herein being issued, and nor may this Presentation nor any copy of it nor the information contained herein be distributed directly or indirectly to or into, the United States, Canada, Australia or Japan. By attending this meeting where this Presentation is made, or by reading the Presentation slides, you agree to be bound by the following terms, conditions and limitations. The above applies to the Presentation, the oral presentation of the information in the Presentation by the Company (as defined below) or any person on behalf of the Company, and any question-and-answer session that follows the oral presentation, if any (collectively referred to as the Presentation). This Presentation does not constitute or form part of and should not be construed as, an offer to sell, or the solicitation or invitation of any offer to buy or subscribe for or underwrite or otherwise acquire, any securities of Dino Polska S.A (the “Company”) or any member of its group (the “Group”), nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company or any member

  • f its Group, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This Presentation does not constitute a recommendation regarding any securities of the Company or

its Group. This Presentation contains certain statistical and market information. Such market information has been sourced from and/or calculated based on data provided by third-party sources identified herein or by the Company, if not attributed exclusively to third-party sources. Because such market information has been prepared in part based upon estimates, assessments, adjustments and judgments which are based on the Company's or third-party sources' experience and familiarity with the sector in which the Company operates and has not been verified by an independent third party, such market information is to a certain degree subjective. While it is believed that such estimates, assessments, adjustments and judgments are reasonable and that the market information prepared appropriately reflects the sector and the market in which the Company operates, there is no assurance that such estimates, assessments, adjustments and judgments are the most appropriate for making determinations relating to market information or that market information prepared by other sources will not differ materially from the market information included herein. All statements in this document or made during any accompanying oral Presentation other than statements of historical fact are, or may be deemed to be, “forward-looking statements”. In some cases, forward-looking statements can be identified by the use of terms such as “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning. All statements other than statements of historical facts included in this Presentation, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company’s products and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this Presentation. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless otherwise required by the applicable provisions of law. The Company caution you that forward-looking statements are not guarantees of future performance and that the Company’s actual financial position, business strategy, plans and objectives of management for future operations may differ materially from those made in or suggested by the forward looking statements contained in this Presentation. In addition, even if the Company’s financial position, business strategy, plans and objectives of management for future operations are consistent with the forward-looking statements contained in this Presentation, those results or developments may not be indicative of results or developments in future periods. The Company does not undertake any obligation to review or confirm, or to release publicly or otherwise to investors or any other person, any revisions to any forward- looking statements to reflect events that occur or circumstances that arise after the date of this Presentation. This Presentation and any materials distributed in connection with this Presentation are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country

  • r other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any authorization, registration, notification or licensing within such jurisdiction. Persons into

whose possession any document or other information referred to herein comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Neither this Presentation or any part hereof nor the information contained herein may be reproduced or redistributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person or published, in whole or in part. The information contained in the Presentation has not been independently verified. No representation, warranty or undertaking, expressed or implied, is made by any person as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of, the information or the opinions contained herein. Only currents and periodic (financial) reports of the Company are legally binding document containing information about the Company and may contain information that is different from the information contained in this Presentation.

slide-3
SLIDE 3

Dino today

3

3

2008 2009 2010 2011 2012 2013 2014 2015 2016

Expansion phase Foundation phase

PEF VI(2) invested in Dino Second logistics centre in Piotrków

  • Tryb. (leased)

25 25 32 32 50 50 81 81 11 119 15 151 192 192 81 90 111 154 234 324 410 511 628 Net sales area (’000 m2)

  • No. of stores

238 238 Third logistics centre in Jastrowie (owned) 20 20

  • One of the leading

ding Polis ish h food retail ail chains ains

  • 628(1) stores located

mainly in Western Poland

  • Track record of

rapid growth

(1) As of year-end 2016 (2) A company advised by Enterprise Investors; PEF VI sold all shares in Dino’s IPO in April 2017 Source: Company information (July 2016), IFRS financial information, Roland Berger report

  • No. 1 fastest-growing

chain and 2nd largest in proximity segment

Proximity supermarkets operate close to residential areas in large, medium and small cities. Stores have net sales area of 200-500m2 and offer 4,000-8,000 SKUs

  • f which 90% is typically food

Dino at a glance Investment highlights Growth strategy Financials

slide-4
SLIDE 4

(6) Change in gross profit margin between the financial year ended Dec-14 and the financial year ended Dec-16 (7) Change in EBITDA margin between the financial year ended Dec-14 and the financial year ended Dec-16 (8) Adjusted for the management incentive plan cost of PLN5.7m and other IPO-related one-off expenses of PLN1.8m (9) ROIC defined as: EBITDA for the period divided by average property, plant and equipment plus average net working capital over the period

Dino at a glance: ce: fast t growth, th, increasin asing g scale, e, improv

  • ving

ng margins ns

(1) CAGR for the last three financial years ended Dec-14, Dec-15, Dec-16 (2) Like-for-like (“LFL”) sales based on monthly data of stores in operation for 13 months or more (3) Based on the last financial year ended Dec-16 (4) EBITDA defined as earnings before interest, tax, depreciation and amortisation (5) EBITDA margin defined as EBITDA divided by revenues over the same period Source: Company information, IFRS financial information

4

25% 40% 26% 11.3%

2016 LFL(2) sales growth Selling space CAGR

  • ver last 3 years(1)

Sales CAGR

  • ver last 3 years(1)

EBITDA CAGR

  • ver last 3 years(1),(4),(8)

Growth

8.6% 22.9%

FY 2016 Gross profit margin(3) FY 2016 EBITDA margin(3),(5),(8)

PLN 288m PLN 3.4bn

FY 2016 EBITDA(3),(4),(8) FY 2016 Revenues(3)

Profitability

+1.6pp +0.9pp

Δ EBITDA margin(7),(8) Δ Gross profit margin(6)

Attractive 2016

2016 ROIC(9)

30.3%

slide-5
SLIDE 5

Dino's 's winnin ing g concep cept

5

  • competitive prices
  • transparent price points
  • tailored promotions
  • approx. 5,000

000 SKUs

  • fresh products
  • Branded products
  • wn meat production
  • 628

8 mainly owned locations(1)

  • regional, high-traffic locations
  • stores ownership
  • proximity and parking
  • proximity format – approx. 400 m2
  • consistent store design
  • wn logistic system
  • centralized store management
  • efficient IT systems
  • cost effective marketing

Locat atio ion n & real l estat ate Operatio ional nal effic icie ienc ncy Product uct Price ce

(1) As of 31.12.2016

Full l Operationa ional Control

  • l & Q

Qualit lity

1 2 3 4

Dino at a glance Investment highlights Growth strategy Financials

slide-6
SLIDE 6

Investmen estment t highlights ights

1 2 3 4 5 6 7 8

Logo/T /Text xt

Solid macroeconomic environment in Poland with favorable trends in retail Clear strategy for exploiting significant growth potential Highly incentivised management team, with Dino since 2002 Strong financial performance Leading position in the attractive and growing proximity supermarket format Proven rapid network roll-out capabilities and real estate ownership Differentiated

  • ffering focused on

fresh and branded products at competitive prices Lean, cost efficient and scalable business model

6

slide-7
SLIDE 7

9.0 10.3 9.3 PL CEE WE 53.2 51.3 86.2 PL CEE WE

Bulgaria Poland Czech Republic Hungary Slovakia 44 15 18 10 8 5

Strong macro trends in Poland favouring Dino’s format

Increas asing ing dispos

  • sab

able le income

479 531 586 648 716 682 750 816 889 971 2017E 2019E 2021E 2023E 2025E Rural Urban

7

The larges gest economy in the CEE regio ion

Source: Economist Intelligence Unit, 2016 10m 38m 11m 7m 20m 5m 5m

Population

Source: Economist Intelligence Unit, Euromonitor, 2016

Nominal GDP and consumer spending across CEE (%)

Total CEE consumer spending: €561bn (outer pie chart) Total CEE nominal GDP: €1,011bn (inner pie chart)o

Romania

1

Attrac activ ive e GDP forecas ast Effic icie ient nt labour

  • ur market

Stable le fiscal l environm

  • nment

nt

GDP CAGR 2017–19E (%) Public debt % of GDP (2016(3)) Unemployment rate 2016 (%)

Recover ering ing infla latio ion Clear ar subur urban anis isatio ion n trend nd Low urbani anisat ation

Inflation in Poland Fringe population as % of total city population (%) 61% 75% 80% 83% PL Germany France UK

102.0 103.1

95 97 99 101 103 105 Mar-14 Mar-15 Mar-16 Mar-17

CPI CPI—food

3.0 2.7 1.3 PL CEE WE

(1) CEE excl. Poland: Czech Republic, Romania, Hungary, Slovakia and Bulgaria (2) Western Europe (EU15): Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom (3) Latest available Eurostat data as of Q3 2016 Source: Euromonitor Source: Central Office of Statistics (GUS) (2) (1) Source: Economist Intelligence Unit, 2016 Source: Economist Intelligence Unit, 2016 (2) (2) Source: Economist Intelligence Unit, 2016 Source: World Bank, Central Office of Statistics (GUS) Source: Bulletin of geography based data from Central Office of Stattistics (GUS)

43 35

Warsaw Cracow Wroclaw Poznan

48 40 43 32 58 32

2002 2050

(1) (1) 42 17 17 11 8 5

Disposable monthly income per rural and urban inhabitant in Poland (€) Population living in urban areas as % of total population

slide-8
SLIDE 8

Impact ct on store re develop

  • pment

Proximity ty superm rmark rkets ts' strength ths Hyperm rmark rkets ts Large superm rmark rkets ts Disco counter ters Conve venience ce Busy lifestyl tyle Easy and fast shopping due to close location and limited but sufficient assortment New family model model Already wide selection of ready meals or pre- assembled/ semiprepared products Demand for higher r quality, ty, premium product cts Wide assortment of fresh products, with fresh charcuterie, less premium products than in large stores Incre reasi sing health th- consci ciousn sness ss Fresh assortment with high quality of products but limited availability of

  • rganic products

Incre reasi sing price ce aware reness s

  • f custom
  • mers

rs Prices of main SKUs slightly higher than in case of discounters, remaining SKUs at higher prices than larger stores, limited promotions Regional develop

  • pment

Format preferred by small shopping malls outside large agglomerations

8

Source: Roland Berger analysis based on Nielsen, PMR, Industry expert interviews, industry press

Key Key consumer sumer trends ds and food d retail format ats in Poland nd

Negative impact on format development Positive impact on format development

8 2

Traditiona

  • nal

Soft franchi hise Conven enien ence Discoun

  • unter

ers Proximity super ermarket kets Large e super ermarket kets Hyper ermarket kets (15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 2010-2015 sales CAGR 2015-2020E sales CAGR PLN 41bn PLN 55bn PLN 16bn PLN 13bn PLN 35bn PLN 33bn PLN 18bn

Proximity super ermar arket et is one of the most attrac activ ive segm gment nts within hin the Polis ish h food retail ail market(1)

Source: Roland Berger report based on PMR, EMIS, Euromonitor, company webpages and expert interviews (1) Size of the bubble represents relative sales value in 2015

slide-9
SLIDE 9

2.6 3.3 2.4 4.9

Dino Delikatesy Centrum Polomarket Other

Le Leading ng posit itio ion in the attracti ractive ve pro roxim imity ty format rmat 2

9

Larges est t proxim

  • ximit

ity y chain in by sales es and number er of stores es

2nd

37% 12% (4%) 8%

Dino Delikatesy Centrum Polomarket Other

Source: Roland Berger analysis based on PMR, EMIS, Euromonitor, company webpages and expert interviews (1) 2010-2015; by sales and number of stores CAGR (2) Polomarket chain was split into Mila and Polomarket in 2015, Mila was included in other segment (3) Other includes Eko and Spar

Sales CAGR 2010-2015

1st

(2)

Fastest est growin wing proxi ximity y chain in(1)

(1)

The fastest growing ing proximity chain ain in Poland and

Proximity supermarkets operate close to residential areas in large, medium and small cities. Stores have net sales area of 200-500m2 and offer 4,000-8,000 SKUs of which 90% are typically food

Sales 2015 (PLN bn)

(3) (3) (2)

slide-10
SLIDE 10

Dino’s positi tion

  • n withi

hin n the bro roader der food d re retail mark rket et

One of the larges gest and the fastest est growing wing food retailer ailers among ng the Top 20 players(1) in Poland nd

2

Legend nd(6) Soft franchise Hypermarkets Large supermarkets Proximity supermarkets Discounters Convenience

(5) Żabka and Freshmarket (6) Segment in which grocery chain had the most stores in 2015 (7) Proximity supermarkets operate close to residential areas in large, medium and small cities. Stores have net sales area of 200-500m2 and

  • ffer 4,000-8,000 SKUs of which 90% is typically food

Source: Roland Berger analysis based on PMR, EMIS, Euromonitor, company webpages and expert interviews (1) In terms of sales in 2015 (2) Estimated sales in stores (3) Data for Carrefour Group (4) Including Real

10

Top 20 players sales value e 2015 (PLN bn bn) ) 38.5 12.7 11.2 10.4 9.9 9.5 8.9 6.9 6.6 4.4 3.3 3.1 2.7 2.6 2.5 2.4 2.2 2.1 2.1 1.4 10 45 4.4

(4) (2) (2) (2),(5) (2) (2) (2)

Legend nd(6) Soft franchise Hypermarkets Large supermarkets Proximity supermarkets(7) Discounters Convenience

(3)

∆ ranking 2010–15 in terms of sales

  • +4

(1) +4 +2 (3) (2) (4)

  • +2

+1 +2

  • (7)

+5

+3 (2) (2) (2) na

63 37 21 20 19 18 16 15 15 12 20 40 60 80

(5)

Top 10 players CAGR of sales value e 2010-201 2015 5 (%)

Fastest est growin wing food

  • d retai

ailer ler

2nd

slide-11
SLIDE 11

Delive ivering ring consisten sistentl tly superior rior LF LFL L gro rowth th

Annual Inflation (deflation) % Annual Food inflation (deflation) % Deflatio ationar ary period 2.6 2.7 4.3 5.4 3.7 4.3 0.9 2.0 0.0 (0.9) (0.9) (1.7) (0.6) 0.8

2

15.5% 5% 16.6% 6% 14.1% 1% 7.5% 4.2% 5.1% 11.3% 3% 0.0% 5.0% 10.0% 15.0% 20.0% 2010 2011 2012 2013 2014 2015 2016 2016 2010 2011 2012 2013 2014 2015 Poland is recovering from the temporary deflationary environment which is already visible in the recent data for food inflation and LFL trading of the leading food retail chains LFL growth

11

11

Thriv iving ing in a competit itiv ive market

Source: Company information, Central Statistical Office of Poland (1) Biedronka, Lidl, Netto, Polomarket, Freshmarket, Delikatesy Centrum, Mila, Stokrotka (data as at 30 January 2017)

  • 71% of Dino stores compete with at least one store from any network(1)

within 5 km

  • 28% of Dino stores compete with at least one store from any network(1)

within 0.5 km

  • Dino is able to succ

ccess essfully y compe pete te in even the most dense voivodeships

Convenie enient nt proxim imit ity format at Direct ect access ess to regio iona nal l produce ucers

  • f brand

anded ed produc ucts Own meat processing ing plant nt ensur urin ing g high ghest est qualit lity Effic icie ient nt logis istics network capab able of daily ily fresh h deliv iver erie ies Flexib ibili ility to make quick adjus justments ents to produc uct mix and promotions ions Market trends best addressed by Dino’s business model adding to LFL sales growth Dino

  • ready to take advant

antag age e of the consum umer trend nds with h its:

slide-12
SLIDE 12

Pro roven n ro roll-ou

  • ut

t capabilit ities es based sed on store re owners rshi hip

2011 11: : 154 stores, 1 distribution center 2013 13: : 324 stores, 2 distribution centers 2016 16: : 628 stores, 3 distribution centers – further roll-out

3

81 90 111 154 234 324 410 511 628 2008 2009 2010 2011 2012 2013 2014 2015 2016

25 25 32 32 50 50 81 81 11 119 15 151 192 192

Net sales area (’000 m2)

  • No. of stores

238 238 20 20

83%

  • wned

ed stores es Source: Company information

Kroto toszyn Kroto toszyn

12

W

Warsaw Gdańsk Łódź Białystok Lublin Szczec ecin Kraków Poznań Wrocław Kato towi wice Krotos

  • toszyn

Piotrków Trybunalski ki Jastr trowi wie

Opened stores Preliminary agreements Purchased plots of land Stores under construction Logistics centers Major cities

Piotrków Trybunalski ki

slide-13
SLIDE 13

Attrac racti tive ve roll-out

  • ut econom

nomic ics with high h ROIC Effic icien ient distrib ributi tion

  • n networ
  • rk and store design

gn Greater ater flexib ibilit ility in selec ecting ing the most attrac acti tive ve sites Consis iste tent nt store format Lower r maintenance tenance costs Lower r cost of develop loping ing and build lding ing a store Lack k of risk connec ected ted with lease e model Potential ntial for real l estate e value ue increas rease Makes es smaller ler towns (villages llages) acces essib ible le for Dino

Clear r benefi efits ts fro rom re real esta tate te owners ership ip

1 2 3 4 7 6 5 13

Source: Company information (1) ROIC for the whole group, defined as: EBITDA for the period divided by average property, plant and equipment plus average net working capital over the period

8

3

9

slide-14
SLIDE 14

Dry food, beverages, alcohol and tobacco 51% Non-food 13%

  • /w meat and cold cuts

16%

14 4 Differentiat erentiated ed offerin ering g focused cused on fresh h and and bra randed ded products cts at comp mpeti titi tive e pri rices es

Wide branded offering focused on fresh products … … with h own meat process essing ng plant nt

14

Krotoszyn Agro- Rydzyn yna Piotrków Trybunalski Jastrowie

  • Agro-Rydzyna plant is conveniently located in Kłoda, close to

Dino’s headquarters in Krotoszyn

  • The plant is the exclusive supplier of fresh meat for Dino
  • Full control over quality and logistics in meat products is an

important competitive advantage

Convenient location

Agro-Rydzyna Distribution centers

Product split by revenue (2016)1

Fres esh food 36%

Source: Company information (1) Based on financial year ended Dec-16

5,000 000 SKUs s at a a typi pica cal Dino

  • stor
  • re

Fresh sh prod

  • duct offering driving daily

visi sits ts 98% 98%(1) of the offering ing is branded

slide-15
SLIDE 15

Effici icien ent t cooperation peration with h suppliers ers enables es compe petitiv titive pri rices es and attracti ractive marg rgin ins

15

✓ Close

se and long-lasti ting g coopera perati tion

  • n

with supp ppliers ers

✓ Majori

jority ty of offering ing is source ced directly from prod

  • duce

cers or their main representatives, instead of wholesalers, to generate higher margins

✓ Looking for efficiency in

cooperation – Dino’s gross margin went up by 0.9pp in 2 years

4

17% 83%

Top 10 suppliers Others

Concent ntratio ion n of supplie liers(1)

(201 016)

Source: Company information (1) Excluding Agro-Rydzyna

Actively seeking the best purchasing terms

Same e type e of prod

  • duct

ct Global FMCG supplier present in competitive network Local, branded FMCG supplier

Dino no is able e to maintain ntain compet mpetit itiv ive e pricing icing policy licy while ile improvi

  • ving

ng margin gins. s. Smart pricing cing policy licy is a a sustaina inable le compet mpetit itiv ive e advantage ntage.

slide-16
SLIDE 16

Le Lean, , cost t efficie cient nt and scalable e busin iness ess model el 5

16

16

Krotoszyn Total space: 44 500 m2 Piotrków Tryb. Total space: 27 100 m2 Jastrowie Total space: 23 600 m2

Well-in invest ested operational nal backbone

  • ne supportin

ing g networ

  • rk expans

nsion ion and driving ing cost effic icie ienc ncie ies

22.0 22.6 22.9 2014 2015 2016

  • Logistics of supplies centrally

y managed from Krotoszyn and dispatched from three e distri tributi tion

  • n faciliti

ties es

Source: Company information (1) For 2016 EBITDA margin adjusted by IPO costs and Incentive Management Programme (one-offs)

Gross margin (%)

7.0 8.1 8.6 2014 2015 2016 Increas asing ng econo

  • nomies

ies of scal ale Signi nific icant nt operati ationa

  • nal leverage

age

Dino's distribution centres

EBITDA margin (1) (%)

slide-17
SLIDE 17

6

17

Strategy: tegy: roll-out

  • ut + superi

erior

  • r LFL + margin

in improv

  • vemen

ement

2016 '17F '18F '19F '20F end'20F

Strategic egic plan n to exceed 1,200 stores es by the end of 2020(1) LFL growt wth Improving ing profit itab abilit lity

628 Stores(2) Over 1,200 stores by the end of 2020 Dec-14 Dec-15 Dec-16

Strong pipeline of secured locations

✓ Respon

Respond to to key ey tren trends changing customer lifestyle and food shopping habits

✓ Act

ctive ive steps steps to support LFL growth by stor stores es tra traffic and favourable changes in prod

  • duct mix

✓ Capitalise on positi

sitive market trends

11.3% LFL growth in 2016

(vs 0.8% food inflation)

Gross margin improvement by 0.9 pp pp

(2014-2016)

EBITDA margin improvement by 1.6 pp

(2014-2016(3))

(1) Roll-out plan for 2017 – 2020 was developed by the Management and is based on own internal analysis, Roland Berger research report describing the main factors affecting the evolution of the Polish food retail market, the review by Roland Berger

  • f Dino's roll-out plan and procedures in light of the findings of the research, and other market research

(2) As at 31.12.2016 (3) 2016 EBITDA adjusted by one-offs (IPO costs and Incentive Management Programme)

✓ Economies of scale ✓ Operational leverage ✓ Smart approach to marketing ✓ Logistics ✓ Modernisation of Agro-Rydzyna ✓ Further optimizations

197 280 338 86 101 117

1 2 3 Pipeline Actual net openings

slide-18
SLIDE 18

148 210 288 2014 2015 2016 22.0% 22.6% 22.9% 7.0% 8.1% 8.6% 2014 2015 2016 Gross margin EBITDA margin

18

Strong g financi ncial al perfor

  • rma

mance nce

Unparalle allele led growt wth Improving ing margin gins

Number of stores +1.6 p.p. +0.9 p.p. Revenue (PLNm) EBITDA(1) (PLNm)

Source: Company consolidated financial statements for the period of 2014 – 2016 (1) Adjusted for one-off reserves in relation to the new management incentive plan of PLN 5.7m and other IPO-related one-off expenses of PLN 1.8m in 2016 (2) 2016 G&A costs adjusted for the management incentive plan cost of PLN5.7m and other IPO-related one-off expenses of PLN1.8m (3) Net profit adjusted by temporary differences arising on Group reorganization and associated with its joint – stock companies

410 511 628 2014 2015 2016 2,108 2,590 3,370 2014 2015 2016

7

(1)

66 110 151 2014 2015 2016

Robus ust bottom line ne growth wth

Adjusted net income3 (PLNm) 15.40% 15.12% 15.01% 1.49% 1.37% 1.24% 2014 2015 2016 Selling expenses G&A costs

Stable le selli ling ng expenses es and G&A costs in relation n to revenue ue2

(% of revenue)

slide-19
SLIDE 19

(199) (278) (382) (27) (25) (30) 189 245 325 84% 81% 79% 2014 2015 2016 OCF Financial expenses CapEx OCF / CapEx + financial expenses 188 245 324 148 210 288 2014 2015 2016 OCF EBITDA

19

Effecti ective e working ng capit ital al manageme agement nt and stro rong ng operati rating g cash h flow

EBITDA conver ersion ion into

  • OCF

(PLNm, %)

19

Source: Company consolidated financial statements for the period of 2014 – 2016 (1) Working capital calculated as of the end of the respective year due to high pace of rollout requiring a substantial amount of the stock at the end of the year (2) Days inventories held defined as a value of inventories divided by COGS for the last twelve months and multiplied by 365 (3) Days sales outstanding defined as a value of receivables divided by sales for the last twelve months and multiplied by 365 (4) Days payables outstanding defined as a value of trade payables divided by COGS for the last twelve months and multiplied by 365 (5) Adjusted for one-off reserves in relation to the new management incentive plan of PLN 5.7m and other IPO-related one-off expenses of PLN 1.8m in 2016 (6) CapEx is presented as total additions of PPE and intangible assets in each year (as presented in notes 14 and 16 of Company consolidated financial statements for the period of 2014 - 2016); includes assets acquired under financial leases

OCF covering ing sign gnifi ifican ant shar are e of CapEx(6) needs

(PLNm, %)

7

NWC split lit(1)

(days) 40 39 39 3 3 4 (75) (78) (81) 2014 2015 2016 Days payables outstanding Days sales outstanding Days inventories held (36) (31)

(2) (3) (4)

(38) Total NWC

(5)

slide-20
SLIDE 20

266 362 452 118 102 110 (24) (34) (66) 2014 2015 2016 Cash and cash equivalents Current portion on intrest-bearing loans and finance leases Interest-bearing loans and finance leases

20

Net debt/EBI BITDA(1),

, (2)

Net debt struc uctur ure Improving ing debt servic ice

Strong g balan ance ce sheet et

Source: Company consolidated financial statements for the period of 2014 – 2016 (1) Net debt to EBITDA defined as net debt divided by EBITDA for the last twelve months (2) EBITDA and EBIT adjusted for one-off reserves in relation to the new management incentive plan of PLN 5.7m and other IPO-related one-off expenses of PLN 1.8m in 2016 (3) Interest coverage ratio defined as EBIT divided by financial expenses for the last twelve months

380 429 4.0x 6.4x 7.0x 6.6% 5.4% 5.3% 2014 2015 2016 Interest coverage ratio Financial expenses as a % of debt 2.6x 2.0x 1.7x 2014 2015 2016

7

496

(2), (3)

Dino historically has been able to finance majority of its expansion costs from cash flow – operating cash flow covered ca. 80% of the CAPEX and financial expenses in 2014 - 2016

The Management Board does not foresee a need for equity funding to execute its growth strategy

Expected net debt to EBITDA ratio is ca. 2x

Due to the growth profile of Dino and quality of collateral (real estate), banks are willing to finance growth of Dino at attractive terms

In the past three years, Dino has not paid out any dividends, instead using cash flow from operations primarily to fund its profitable organic network expansion

Given Dino’s rapid roll-out plans, the Management does not intend to recommend any dividend pay-outs for 2016 on the Shareholders’ Meeting

(PLNm)

slide-21
SLIDE 21

Investmen estment t highlights ights

1 2 3 4 5 6 7 8

Logo/T /Text xt

Solid macroeconomic environment in Poland with favorable trends in retail Clear strategy for exploiting significant growth potential Highly incentivised management team, with Dino since 2002 Strong financial performance Leading position in the attractive and growing proximity supermarket format Proven rapid network roll-out capabilities and real estate ownership Differentiated

  • ffering focused on

fresh and branded products at competitive prices Lean, cost efficient and scalable business model

21

slide-22
SLIDE 22

Add ddit itio ional in informatio ion

slide-23
SLIDE 23

23

('000 PLN) 2014 2014 2015 2015 2016 2016

Sales 2,107,984 2,589,576 3,369,517 Cost of sales

  • 1,644,080
  • 2,004,710
  • 2,599,005

Gross profit 463,904 584,866 770,512 Other operating income 1,522 3,120 2,616 Selling and marketing costs

  • 324,634
  • 391,580
  • 505,855

Administrative expenses and general overheads

  • 31,338
  • 35,354
  • 49,434

Other operating expenses

  • 3,667
  • 998
  • 2,250

Operating profit 105,787 160,054 215,589 Financial income 168 99 473 Financial expenses

  • 26,662
  • 24,922
  • 29,607

Profit before tax 79,293 135,231 186,455 Income tax

  • 13,156
  • 13,059
  • 35,245

Net profit for the year 66,137 122,172 151,210 Profit attributable to equity holders of the parent entity 66,137 122,172 151,210

2014 2014-20 2016 16 consolidated profit

  • fit and loss accoun
  • unt
slide-24
SLIDE 24

24 2014 2014-20 2016 16 consolidated bal alance nce sheet et

('000 PLN) 2014 2014 2015 2015 2016 2016

Property, plant and equipment 798,948 1 024 199 1 337 207 Intangible assets 90,700 92,253 93,072 Other non-financial assets (long term) 1,885

  • Deferred tax assets

37,049 34,311 26,867 Total non-current assets 928,582 1 150 763 1 457 146 Inventories 182,286 212,146 276,541 Trade receivables and

  • ther receivables

18,796 21,687 33,665 Income tax receivables 48 105 613 Other non-financial assets 13,515 20 742 22,447 Cash and cash equivalents 23,739 33,920 66,428 Total current assets 238,384 288,600 399,694 TOTAL ASSETS 1 166 966 1 439 363 1 856 840

('000 PLN) 2014 2014 2015 2015 2016 2016

Equity 410,073 532,235 683,476 Share capital 9,804 9,804 9,804 Reserve capital 316,048 393,019 510,720 Retained earnings 84,221 129,412 162,952 Non-controlling interests

  • Total equity

410,073 532,235 683,476

Interest-bearing loans, borrowings and finance lease liabilities 285,962 361,774 452,378

Other liabilities

  • 300

Provisions for employee benefits 533 758 1,115 Deferred tax liabilities 1,572 588 5,498 Accruals 76 73 87 Total long-term liabilities 288,143 363,193 459,378 Trade and other payables 337,620 429,195 574,426

Current portion of interest-bearing loans and finance lease liabilities 118,187 101,504 110,173

Income tax liabilities 4,608 3,368 10,268 Accruals 8,286 9,796 13,227 Provisions for employee benefits 49 72 5,892 Total current liabilities 468,750 543,935 713,986 Total liabilities 756,893 907,128 1 173 364 TOTAL EQUITY AND LIABILITIES 1 166 966 1 439 363 1 856 840

slide-25
SLIDE 25

25 2014 2014-20 2016 16 consol solida idate ted cash flow

('000 PLN) 2014 2014 2015 2015 2016 2016

Cash h flows from operati ating ng activities ties Profit before tax 79,293 135,231 186,455 Adjustments for: 109,185 110,163 137,868 Depreciation and amortization 41,880 50,177 65,202 Gain/(loss) from investing activities 417 193 1,574 Change in the balance of receivables 59,041

  • 10,808
  • 15,592

Change in the balance of inventories 25,464

  • 29,860
  • 64,395

Change in the balance of payables except loans and borrowings

  • 45,513

84,204 127,224 Interest income

  • 153
  • 60
  • 440

Interest expenses 26,486 24,955 29,658 Change in the balance of accruals 2,975 3,859 4,928 Change in the balance of provisions 249 114 6,178 Income tax paid

  • 1,639
  • 12,599
  • 16,507

Other

  • 22
  • 12

38 Net t cash h flows from operati ating ng activities ties 188, 8,47 478 245, 5,39 394 324, 4,32 323

('000 PLN) 2014 2014 2015 2015 2016 2016

Cash h flows from inves esti ting ng activiti ties es Proceeds from sale of property, plant and equipment and intangibles 374 925 1,112 Purchase of property, plant and equipment and intangibles

  • 170,722
  • 243,487
  • 311,732

Interest received 153 60 440 Net t cash h flows from inves estin ting activities ties

  • 170,

70,195 95

  • 242,

42,502 02

  • 310,

10,180 80 Cash h flows from financ ncin ing activ iviti ities es Payment of financial lease liabilities

  • 24,456
  • 30,024
  • 43,902

Proceeds from loans and borrowings 111,653 141,770 219,061 Repayment of loans and borrowings

  • 72,771
  • 79,502
  • 127,136

Interest paid

  • 26,486
  • 24,955
  • 29,658

Net t cash h flows from financ ncin ing activ iviti ities es

  • 12,

2,06 060 7,289 289 18,365 365 Net increase/(decrease) in cash and cash equivalents 6,223 10,181 32,508 Cash and cash equivalents at the beginning of the period 17,516 23,739 33,920 Cash and cash equivalents at the end of the period 23,739 33,920 66,428

slide-26
SLIDE 26

Contac tact:

Grzegorz Uraziński, Head of Investor Relations Phone: +48 695 234 561 ir@marketdino.pl | www.grupadino.pl

Calendar:

29 August 2017 – consolidated report for H1 2017 14 November 2017 – consolidated report for Q3 2017

Thank you