ERGOPACK Since inception Ergopack has focused on building presence - - PowerPoint PPT Presentation

ERGOPACK

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Organized retail grew at 39% CAGR’04-08 in USD terms

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Set back in 2009: 36% YoY drop; resumed growth in 1H10 to 13% up YoY

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Share of non-food category in retail increased from 56% in 2004 to 66% in 2008

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Total retail sales of USD 1.2k per capita still lagged those of USD 3.2k in Russia, USD 6.3k in Poland or USD 10.6k EU average

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Harder to displace entrenched players with direct relationships with retailers

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Ergopack products are present in ~10,000 retail points of sale

• Direct deliveries to 2,306 points of sale
• Third-party distributors cover the other 8,000 points of

sale

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According to retail counterparties, Ergopack products are among 100 best selling

Ergopack’s strategy has taken the company to a dominant position in organized retail where the company’s branded products retain an impressive 41% share of shelf-space Since inception Ergopack has focused on building presence in modern retail

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ERGOPACK

• Ergopack boasts the highest depth of

processing and in-house value-added amongst domestic market players

• Garbage bags category contributes 35%

to gross profit Proprietary distribution system advantages (80% of sales):

 Better client service and maximization of profits by

keeping distributor’s margin

 Strong focus on modern retail (21 national/

49 regional retail chains including all 4 international retail chains in Ukraine: Auchan, METRO, Billa, SPAR)

Direct distribution model in combination with vertical integration assure price competitiveness and outstanding margins

Source: Company data Experience in Managing Diversified Portfolio and Proven Ability to Add-On Proprietary Distribution Network Is Unique For The Industry Source: Company data

Product Portfolio & Sales Strategy Delivers Superior Profitability

Sales via direct distribution

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Garbage bags 29% Kitchen sponges 17% Cleaning cloth 17% Other 15% Food packaging 10% Bath sponges 5% Gloves 4% Disposable tableware 3% Open markets 5% Whole- salers 20% Retail chains 75%

ERGOPACK

Distribution

• Selling foam rubber products and garbage bags

Manufacturing

• Acquisition of production premises in Kyiv
• Launch of garbage bags and foam rubber products manufacturing
• Opened eleven sales branches

Expansion/ Focus on Efficiency

• Growth funding provided by PE investor, EEGF
• Production capacity expansion
• Launched polyethylene recycling line
• Strong sales growth along with robust financial performance

1996 - 1999 2001 - 2005 2006 - 2008 2009 - 2010 Continued Growth

• Impressive growth of UAH sales
• Healthy financial standing
• Relocation into brown-field facility in Kyiv region
• Mezzanine financing from EBRD

Milestones

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ERGOPACK

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Nationwide availability of products

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#1/ #2 player with approx. 30% market share

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Strong sales & profitability dynamics

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Growth despite crisis

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On track to exceed 2008 pre-crisis EBITDA in 2010

At a Glance

Outperformed the market by 14% over 2008-2010

Source: Company data, State Statistics Committee

Ergopack is a leading household disposables manufacturer and distributor in Ukraine

2 Consolidated Financial Results (GAAP) 2005 2006 2007 2008 2009 2010 Estimated un-Audited Audited Audited Audited Forecasted Sales, ' 000 USD 11 416 15 233 19 709 26 661 22 289 26 100 CAGR Sales, ' 000 UAH 58 450 76 929 115 432 140 424 173 855 206 169 CAGR EBITDA, ' 000 USD 1 645 1 218 1 986 4 453 4 373 5 086 14% 8% 10% 17% 20% 19% EBIT, ' 000 USD 1 545 1 005 1 551 3 855 3 642 4 274 14% 7% 8% 14% 16% 16% Net Income, ' 000 USD 813 596 733 (3 764) 2 499 2 126 7% 4% 4%

• 14%

11% 8% Organized retail turnover, UAH mln 94 300 130 000 175 122 243 898 229 855 276 747 21% CAGR 33% CAGR 7% CAGR