EUROCASH The broadest food distribution and retail platform in - - PowerPoint PPT Presentation

EUROCASH

The broadest food distribution and retail platform in Poland

Eurocash Group – executive summary

Innovative approach to understanding consumer needs

POLAND’S SIZEABLE MARKET HAS UNIQUELY STRONG TRADITIONAL SECTOR with proximity entrepreneurs able to fight multinational players STRONG CASH GENERATION OVER YEARS allows investment in innovative tools and solutions, with increasing ability to satisfy evolving consumer needs

2

7TH LARGEST RETAILER IN POLAND with fast expansion plan for chain with quality fresh products delivered daily and machine learning solutions addressing consumers individual preferences RAPIDLY GROWING E-COMMERCE B2B2C PLATFORM supported by scale as No. 1 wholesale distributor in Poland

Quality and efficiency

Fresh Products

Personalization + advanced market data

Eurocash.pl

Premiumization + Individualized approach

Eurocash.pl Market

Personalization

POS + CRM

New Technologies

Omnichannel Education 2.0 + Social Engagement of Entrepreneurs

10k wholesale clients

PLN 3.5 bn sales 3

Today Future objective

Enable access by all 80k wholesale clients 1.5k retail stores

40% of turnover, 2.5x LFL

Launched

in September 2019

1.5k retail stores

Quality, everyday delivery

Consumer online access to full marketplace assortment Profitable home delivery of Stock-up mission in main cities Warsaw 42% market share

Automated warehouse

• pened in May 2019

Eurocash – digital company with sizeable scale in Poland’s food market

Access to consumers all over the country brings tremendous advantage to understand needs through big data

Platform extension on “white label” basis to Wholesale’s franchise chain clients Fresh offered next to main franchised supermarket chains

4

Eurocash – digital company with sizeable scale in Poland’s food market

Access to consumers all over the country brings tremendous advantage to understand needs through big data

POS + CRM

Logo

80 000 stores Euroca cash.p .pl Euroca cash.p .pl l Market CRM + POS + Mobile le App Omnich channel

Home delivery Pick-up at store, or Traditional purchase Warehouse Order Independent store Online order Delivery

Shopping missions:

• Stock

ck-up up

• Specialized &

Occasions

1 2 2 3 4 5 6 7 9 15 15 15 18 16 17 18 1 1 1 1 1 2 2 2 3 4 5

1 2 2 3 5 6 7 8 10 17 17 17 20 19 21 23

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Wholesale Retail

 Competitiveness of Traditional trade derive from our scale, rolling-up category leaders, capturing synergies around a common back-office  Modern Trade’s focus on large formats failed: Hypermarkets have shown little growth for last 10 years

3 9 3 6 9 5 10 5 7 17 3 2 7 4 5 9 10 8 11 11 17 32

3 6 7 7 7 8 10 10 11 18 23 51

Selgros Dino Metro (Makro C&C) Żabka Intermarche Carrefour Tesco Kaufland Auchan Lidl Eurocash Biedronka

2018 2013 2009 Eurocash Group sales evolution (PLN bn) Ranking of FMCG distributors & retailers (sales, PLN bn)

Source: RZ500

*IFRS 15 accounting change (appx. 2.4bn PLN)

MBO IPO Delikatesy Centrum KDWT PayUp McLane Batna Premium Distributors Tradis Group Inmedio Kolporter FMCG Frisco.pl Rogala FHC-2 PDA EKO Mila M&A history: MHC PayUp Disposal

*IFRS 15 – change of accounting rules, impacting sales revenues and costs of goods sold by EUR 2.4 bn due to reclassification part of sales into lower purchase conditions. No impact on EBITDA.

5

Eurocash – 2nd largest overall player in Poland

Top players in Poland are not names one would expect to outrank famous international retail chains

Wholesale: no. 1 distributor in Poland

Several times larger than next players, strongest in the categories sold mostly by small stores Wholesale market share

Eurocash Group 28%

Makro - FMCG (C&C) 5% Selgros (C&C) 4% PT Dystrybucja (T) 3% Distribev (A) 3% PHUP Gniezno (T) 2% Alti (A) 1%

Others 54%

• Local sub-wholesalers
• Producers own distribution
• Specialized & categories not

covered by Eurocash

Dedicated distribution platforms covering different store profiles

25% 26% 13% 33% 3%

4,5 4,6 2,2 5,9 0,5

Sales (PLN bn)

Cash&Carry Eurocash Distribution Alcohol Distribution Tobacco & Impulse Distribution HoReCa

Delivery Generalists Specialized

T - Tobacco; A - Alcohol,

2018:

Now merging:

6

Eurocash Group overview

Enormous purchasing power and efficient logistics now serving to transition into Retail growth

Eurocash Group Wholesale Retail Projects Others (HQ)

Delikatesy Centrum Cash&Carry Tobacco Specialized Distribution Alcohol Specialized Distribution Food Service (HoReCa)

Over 80k clients. 13.8k retail stores organized within soft franchise chains: abc, Lewiatan, Groszek, Eurosklep, Gama

Eurocash Distribution

Delikatesy Centrum: 1.56k stores - 564 own & 996 hard franchise Inmedio: 449 newsagents

Sales’18: EBITDA’18: PLN 17.7 bn (+6%) PLN 410 m (+18%) PLN 4.9 bn* (+26%) PLN 112 m (-13%) PLN 74 m PLN -45 m N/A PLN -102 m

Inmedio Duży Ben Kontigo Others Faktoria Win (W) PayUp (W)

Already moved to Wholesale or Retail (W or R) having broken even:

Fresh Project (R)

Sales’18: PLN 22.7 bn (+10% YoY) EBITDA’18: PLN 374 m (+4% YoY)

sold in 2018 for 14x EBITDA

* Consolidated sales. Total annualized sales including franchise retail sales amounted to 7.4 bn. Retail already includes Fresh Project.

In merging process since 2019

7

4,3 3,1

1 560 stores

996

Number

• f Stores

Retail Sales (PLN bn, 2018)

7.4 bn PLN

Own Franchise

564

51 18 11 10 10 8 7 7 7 6 3 3 3 2 2 Biedronka Lidl Auchan Kaufland Tesco Carrefour Delikatesy Centrum Intermarche Żabka Dino Netto*

• E. Leclerc

Stokrotka Polomarket* Piotr i Paweł*

Retail: 1st nationwide proximity supermarket chain in Poland

Entering retail through market consolidation, followed by operational integration, with LT objective to become no. 3 retailer

Ranking of retailers (2018 sales, PLN bn)

+5 bn PLN

> Retail Sales

+900 stores

> By 2023 Acquisitions Green Field Franchise Chain 2-3Y integration to ensure standardized business with unified processes

LT

• bjective

EV/Sales 50% (JMT) 37% (TSCO) 22% (CA) ? 62% (PE**) 114% (DIN, IPO) 49% (PE**) 57%

Profi (Romania)

68% (PE**) Average

consolidated 5.1 Source: RZ500 *no data for 2018, data used for 2017 **PE – Private Equity deal

• Incl. DYI
• Incl. fuel

8

FRISCO.PL

 Warsaw market leader, home delivery with 42% market share  E-supermarket B2C  Automated warehouse launched in May 2019

DUŻY BEN

 Specialized liquor store  Supported by Eurocash scale  Deconsolidated market 57 stores at the end of Q3 2019 with store level avg. break-even in 6 months. LFL in 9M 2019 +20%.

 Following Faktoria Win, PayUp & Fresh Projects success, new and promising ones are in expansion phase  Frisco.pl – a laboratory for innovations, Duży Ben as the next most promising Project operating in non-organized market

Sweet&Alcohol store independence (2018) Sweet&Alcohol store sales dynamics (YoY 2018) 57,0% 43,0%

Non-Organized Chain

7,6% 5,4%

Sweet & Alcohol Total Market

20% 28% 36% 42%

2015 2016 2017 2018

Value Market Share (Warsaw)

Doubled market share in last 3 years

Source: Nielsen Retail Trade Panel, Value sales, period: January 2017 – December 2018, Food categories; Nielsen 2018 In-store audit

Chain/organized store Independent store Total Poland

9

Projects serve to incubate forward-looking retail concepts and solutions

In a changing industry Eurocash is able to keep investing, in good times and bad, to innovate & support small stores

• 11,6
• 11,7
• 12,4
• 5,8
• 11,1
• 17,2
• 13,2
• 19,4
• 17,3
• 25,6
• 27,6

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

0,2 0,4 0,7 0,9 1,6 2,1 2,4 3,4 3,7 4,2 4,7

0,2 0,3 0,7 1,8 1,9 2,0 2,3 2,4 2,7 3,0 3,4

158% 101% 93% 100% 137% 135% 60% 206% 74% 137% 133%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

• Cum. OCF
• Cum. ICF

OCF/EBITDA

Cumulative Operational Cash Flow (OCF) and Investment Cash Flow (ICF) PLN bn Cash Conversion (in days)

 Cash conversion one of best in the market and also if compared with international peers  Cash generative business model funds M&A and innovation for long-term  We kept investing even in tough macro environment: total investment in last 10 years of EUR 800 m

IFRS 15 accounting change (-2 days)*

*IFRS 15 impact on working capital rotation due to 2.4 bn PLN sales reclassification

10

Eurocash Group: high cash generation is the key enabler of success

Now, as before, a capex-light business model and working capital discipline underpin M&A and investments

MSCI ESG Rating 2019: Eurocash with „AA”

Eurocash score 2 levels higher from „BBB” to „AA” which indicates market leaders

 MSCI ESG Research provides MSCI ESG Ratings on global public and a few private companies on a scale of AAA (leader) to CCC (laggard), according to exposure to industry-specific ESG risks and the ability to manage those risks relative to peers  Eurocash over-performed many other global retailers and is placed in the top percentile of all measured companies 4% 17% 21% 15% 15% 26% 2%

CCC B BB BBB A AA AAA

Industry rating distribution

MSCI ESG Research provides in-depth research, ratings and analysis of the environmental, social and governance-related business practices of thousands of companies worldwide. Our research is designed to provide critical insights that can help institutional investors identify risks and opportunities that traditional investment research may overlook. The MSCI ESG Ratings are also used in the construction of the MSCI ESG Indexes, produced by MSCI, Inc.

CCC B BB BBB A AA AAA

LAGGARD AVERAGE LEADER 11

• NO. 1 WHOLESALE DISTRIBUTOR IN POLAND

with 28% market share & the biggest (PLN 3.5 bn) FMCG e-commerce platform DYNAMICALLY ENTERING INTO RETAIL already no. 7 player with fresh products and CRM system driving competitiveness

• f proximity supermarkets

INNOVATIVE COMPANY FOCUSING ON INDIVIDUAL CONSUMER NEEDS ACROSS POLAND through big data management, digitalization, personalization & automation DOMINANT SMALL FORMAT & PROXIMITY STORE OPERATOR Positioned to anticipate consumer needs evolving towards time-saving, convenience and quality

12

Eurocash Group – executive summary

Innovative approach to understanding consumers need

Market performance + Q3 2019 Eurocash Results

01

GROUP SALES INCREASED BY 6.9% IN Q3 2019 YOY WHOLESALE

SALES INCREASED BY PLN 315 M IN Q3 2019

(+6.6%) supported by stable EBITDA despite high base

RETAIL

DELIKATESY CENTRUM +4.1% RETAIL LFL IN Q3 2019 with significant EBITDA improvement (+179%)

02 04

IFRS16 IMPACT ON P&L AND BS:

EBITDA PLN +90 m, EBIT +9 m, Net Profit -16 m and Net Debt +1.8 bn

03 05

LTM OPERATING CASH FLOW AT 0.8X EBITDA

with ND/EBITDA at 1.2x 13

APPENDIX

10% 30% 18% 28% 21% 7% 47% 26% 9% 64% 17% 11% 4% 26% 44% 40% 61% 55% 62% 82% 43% 65% 83% 30% 78% 84% 94% 73% 46% 31% 21% 17% 17% 12% 10% 9% 8% 6% 5% 5% 2% 1% HM (+2500m²) SM (400-2500m²) SMALL FORMAT (under 400m²)

Poland is a unique market

Demographics: small towns, small living quarters that necessitate daily shopping close to home

40% 13% 11% 8% 28%

Rural Cities 0-20K Cities 20-50K Cities 50-100K Cities 100K+

 60% of Poles lives in villages & small towns

Percentage of population living in cities/rural area

 Small living quarters have limited space to store food  As a result, most Poles shop almost every day  Total population of 38.4 M  GDP per Capita PPP of EUR 26.1k

Share of distribution channels in European countries

 GDP increase by 5.1% in 2018

Source: GUS, Eurostat, Nielsen RMS 2017

14

2,9% 9,1%

• 4,0%

9,0%

Small Supermarkets 100-300 Convenience 40- 100 Small Grocers - 40 Specialized & Others

9,5%

• 0,7%

3,2% 4,4%

Discounters Hypermarkets 2500+ Supermarkets 300-2500 Small Format

Food market growth

Most of the market benefiting from strong consumption growth. Hypermarkets continue to struggle.

Source: Nielsen Retail Trade Panel, Value sales, period: October 2018 – September 2019, Food categories

Food market growth by channel

(LTM SEP 2019 YoY)

Food market growth in small format channels

(LTM SEP 2019 YoY)

 In the PLN 280 bn FMCG market, Small format stores have 46% and have grown 3% p.a. last 3 years  LTM September Food sales increased by 5.5%, Nielsen data revised by inclusion of one supermarket chain

123 117 128 107 128 152 230 245 279

2012 2015 2018 Small Format Large Format

Total FMCG Market Evolution

(PMR, incl. VAT)

Source: PMR CAGR

• 1,8%

CAGR 3,0% CAGR 6,1% CAGR 5,9%

CAGR 2,0% CAGR 4,5%

15

21,6% 6,1% 4,7% 4,6% 4,2% 3,6% 1,8% 1,6% 0,7% 0,1%

• 0,2% -1,6%
• 5,5%

Vegetables Bread and Cereals Food Sugar, sweets, jams Meat Fish Alcohol

• incl. Spirits,

Wine, Beer Beverages Coffee & Tea Tobacco Dairy Fats Fruits

2019 (I-IX) 2,0%1,8%1,9%2,2%1,5%1,7%2,0%1,4%1,2%2,4%2,8%2,5% 3,4%3,4% 4,6% 5,6% 3,9% 3,2% 2,2% 1,1% 1,8% 4,7% 6,7% 6,1% 1,1%0,8%1,0%0,9%1,1% 1,7% 1,8% 1,6% 1,4% 1,3%1,2%

1Q'17 2Q 3Q 4Q 1Q'18 2Q 3Q 4Q 1Q'19 2Q 3Q Oct (flash)

CPI CPI - food & non-alcoholic beverages CPI - alcoholic beverages & tobacco

Small format categories

Inflation

Food inflation on record levels

Food average

Inflation

(YoY)

Food inflation by product category

Source: GUS, data for entrepreneurs with more than 9 employees

 Accelerating food inflation reaching 6.7% in Q3 2019  Vegetables, bakery, sugar and meat driving food inflation. Beverages, alcohol and tobacco below 2%.

16

PLN m

3Q 2018 3Q 2019 before IFRS16 Y/Y Change % of Sales 3Q 2018 % of Sales 3Q 2019 before IFRS16 3Q 2019 % of Sales 3Q 2019 Net sales 6 242 6 673 6.9% 6 673 Gross profit 785 835 6.4% 12.6% 12.5% 835 12.5% EBITDA 105.1 129.0 22.7% 1.7% 1.9% 219.2 3.3% EBIT 51.5 75.2 45.9% 0.8% 1.1% 84.3 1.3% Net profit 38.2 41.1 7.4% 0.6% 0.6% 25.1 0.4%

3Q 2019 financial summary

7% sales growth with reported EBITDA margin at 3.3% driven by IFRS16

 Gross Margin flat due to fast growing low margin Tobacco distribution format  Consolidated EBITDA impacted by one-offs: PLN +12.25 m Pay-Up earn-out and PLN -7.98 m Sushi 2 Go write-off  IFRS16 drives EBITDA by PLN +90 m, EBIT by PLN +9.2 m and net profit by PLN -16.0 m (incl. PLN -7.8 m currency effect)

17

PLN m

9M 2018 9M 2019 before IFRS16 Y/Y Change % of Sales 9M 2018 % of Sales 9M 2019 before IFRS16 9M 2019 % of Sales 9M 2019 Net sales 16 988 18 594 9.5% 18 594 Gross profit 2 073 2 385 15.1% 12.2% 12.8% 2 385 12.8% EBITDA 261.8 289.0 10.4% 1.5% 1.6% 556.7 3.0% EBIT 112.0 128.3 14.5% 0.7% 0.7% 156.0 0.8% Net profit 55.7 56.9 2.1% 0.3% 0.3% 31.8 0.2%

9M 2019 financial summary

9.5% sales growth with reported EBITDA margin at 3.0% driven by IFRS16

 Gross Margin driven mainly by consolidation of retail companies  EBITDA increased by PLN 27.2 m, while EBITDA margin slightly deteriorated due to change of sales mix  IFRS16 drives EBITDA by PLN +268 m, EBIT by PLN +27.7 m and net profit by PLN -25.1 m (incl. PLN -7.8 m currency effect)

18

96,5 129,7 130,0

2,15% 2,72% 2,56%

3Q 2017 3Q 2018 3Q 2019 EBITDA EBITDA/Sales

4 479 4 772 5 087

3Q 2017 3Q 2018 3Q 2019 Sales

Wholesale Segment – organic sales increased by 6.6%

Sales growth continues by 6.6%, EBITDA remained at PLN 130 m despite strong base

+33.3 m +34.5%  Sales increase of PLN 315 m driven by fast growing sales of Tobacco distribution format  EBITDA margin impacted by strong sales growth in low margin Tobacco distribution format

3Q Sales of goods evolution

(PLN m)

3Q EBITDA evolution

(PLN m)

+0.3 m +0.2% +293 m +6.5% +315 m +6.6%

177,3

(IFRS16)

before IFRS16

19

4 772 5 087

8 270 16 21

Sales 3Q 2018 Cash&Carry Tobacco Distribution Food Service & Other Sales 3Q 2019

Wholesale sales dynamics by distribution format

Strong 6.6% sales increase despite ongoing integration process in Alcohol Distribution +315 m +6.6%

Wholesale sales evolution by format

(3Q 2019 YoY)

 Significant Tobacco sales increase by 17%, followed by ECD and Food Service positive dynamics  Eurocash Distribution continue to increase sales to franchisees: +14.1% in Q3 2019 YoY  Alcohol off-setting the growth due to merger process aimed at cost reduction and decrease of sales to sub-wholesale competition  C&C growth at +0.7% despite very strong summer last year

+0.7% +16.0% +0.9% +16.9% +11.5% ex. EC Alcohol +14.1% Franchisees 20

28,2 11,6 32,5

2,68% 0,82% 2,14%

3Q 2017 3Q 2018 3Q 2019 EBITDA EBITDA/Sales

1 053 1 417 1 523

3Q 2017 3Q 2018 3Q 2019 Sales

Retail – EBITDA growth with integration on track

4.1% Delikatesy Centrum LFLs, sales increase with Mila already in base

 Retail sales increase by PLN 106 m with Mila consolidated in all comparable periods of last year  EBITDA increased by PLN 21 m driven mainly by ex-EKO & Mila chains  IFRS16 doubling EBITDA to PLN 74 m

3Q Sales of goods evolution

(PLN m)

3Q EBITDA evolution

(PLN m)

• 16.6 m
• 58.7%

+20.9 m +179.4% +364 m +34.6% +107 m +7.5%

73,8

(IFRS16)

before IFRS16

21

8,5% 0,9%

• 0,3%

3,4%

• 1,5%

6,7% 4,1%

6,3%

• 1,8%
• 2,0%

2,1%

• 1,5%

8,0% 4,1% 1Q'18 2Q 3Q 4Q 1Q'19 2Q 3Q

Delikatesy Centrum Wholesale Delikatesy Centrum Retail

8.3% 8.2%

1 417 1 523

64 33 10

Sales 3Q 2018 Supermarkets Own Delikatesy Centrum Franchise Inmedio Sales 3Q 2019

Retail development

Sales increase across all formats, Mila already in base

Retail sales evolution by format

(3Q 2019 YoY)

 Own supermarkets increasing sales by PLN 64 m  Franchise stores with sales increase of 6.0% in Q3 2019

+106 m +7.5%

554 Franchise 747

Own Supermarkets

116 Inmedio 587 Franchise 126 Inmedio

52.7% 39.1% 53.2% 38.5%

 Delikatesy Centrum LFL at +4.06% in Q3 2019 and average retail basket inflation at +3.18%  Inmedio newsagents LFL +4.98% in Q3 2019

Delikatesy Centrum like for like

+8.6% +6.0% +8.3%

811

Own Supermarkets

22

( 8,8) ( 7,5) ( 10,7)

3Q 2017 3Q 2018 3Q 2019 EBITDA

10,1 12,0 27,2

3Q 2017 3Q 2018 3Q 2019 Sales

Projects – accelerating expansion of already defined formats

Duży Ben with significant increase in sales

3Q 2019 Sales of goods evolution

(PLN m)

3Q 2019 EBITDA evolution

(PLN m)

+1.3 m

• 3.2 m

+2.0 m +19.4% +15.2 m +126.0%  Duży Ben driving sales with 57 stores at the end of Q3 2019  EBITDA impacted by costs of expansion and investments in brand awareness

(9,1)

(IFRS16)

before IFRS16

 Kontigo with 20 stores at the end of Q3 2019  Further expansion needed to reach break even point

+10 m Duży Ben

23

105,1 129,0 0,3 20,9 3,2 5,9

EBITDA 3Q 2018 Wholesale Retail Projects Others EBITDA 3Q 2019

3Q 2019 EBITDA evolution (before IFRS16)

Retail increased by PLN 20.9 m

 Wholesale with stable result despite very strong last year summer season  Retail generated PLN 20.9 m (+179.4%) additional EBITDA, mainly from ex-EKO and Mila chain  Others impacted by one-offs: PLN +12.25 m Pay-Up earn-out and PLN -7.98 m Sushi 2 Go write-off

+0.2% +179.4%

before IFRS16 before IFRS16

24

31 31 28 30 30 27 24 21 23 23 20 25 23 21 24 24 24 20 20 25 20 18

( 21) ( 21) ( 22) ( 27) ( 23) ( 25) ( 24) ( 28) ( 25) ( 26) ( 25)

( 76) ( 75) ( 71) ( 81) ( 77) ( 76) ( 68) ( 70) ( 72) ( 68) ( 63)

• 100
• 80
• 60
• 40
• 20

20 40 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Q4 Q1 2019 Q2 Q3

Receivables Stock Cash conversion Liabilities

PLN m

3Q 2019 3Q 2019

before IFRS16

3Q 2018 Net operating cash flow 263

177

115 Net profit (loss) before tax 38

58

37 Depreciation 135

54

54 Change in working capital 75

75

21 Other 15

(9)

4 Net investment cash flow (59)

(59)

(37) Net financial cash flow (244)

(159)

(74) Total cash flow (40)

(40)

4

Cash Flow

Operating CF driven by depreciation from IFRS16- LTM OCF before IFRS16 is at 0.81x EBITDA.

Cash conversion cycle

 Net Working Capital rotation at stable level of -25 days  OCF of PLN 263 m. Before IFRS16 at 177 m.  Changes in Net Working Capital rotation due to different sales mix (fast growing sales of Tobacco category)

25

3.21x

(incl. IFRS16)3

3.44x

(incl. IFRS16)3

Net debt vs. LTM EBITDA

Net Debt decrease by PLN 108 m in Q3. IFRS16 not impacting operations and financial capabilities.

Net Debt vs. EBITDA

2 416

(incl. IFRS16)2

 IFRS16 drives ND to PLN 2.3 bn

(1) IFRS16 EBITDA – estimation for 2019 based on the assumption that the number of contracts will be constant and no change of their conditions is to occur. The estimated IFRS16 EBITDA shall

not constitute any definitive forecasts and as such is not guaranteed by Eurocash to any extent. Full year assumption of PLN 330 m.

(2) NET DEBT – the sum of long and short term loans, borrowings and financial liabilities less cash and cash equivalents (3) IFRS16 INDEX – new measure of indebtedness including operating leasing. The estimation shall not constitute any definitive forecasts and as such is not guaranteed by Eurocash to any extent.

752

(incl. IFRS16)1

 IFRS Index below 3.0x IFRS16 EBITDA

2 554

(incl. IFRS16)2

742

(incl. IFRS16)1

776

(incl. IFRS16)1

2.95x

(incl. IFRS16)3

2 285

(incl. IFRS16)2

1 825 3301 1 788 3301 1 764 3301

363 360 363 419 412 422 446 468 685 608 382 729 628 521 1,29 1,90 1,67 0,91 1,77 1,49 1,17

1Q'18 2Q 3Q 4Q 1Q'19 before IFRS16 2Q before IFRS16 3Q before IFRS16 LTM EBITDA (PLN m) NET DEBT (PLN m) NET DEBT / EBITDA NET DEBT / EBITDA, definition of bank covenant

26

 CAPEX-light business model will drive IFRS16 Index / EBITDA (1) to 2.9x, EBITDA (1) to PLN 748 m and EBITDA (1) margin to 3.3%

IFRS 16

Net Debt vs. EBITDA in 2018 (PLN m)

AFTER IFRS 16 IFRS 16 IMPACT CURRENT

2 184 (3) 1 802 382 (2)

NET DEBT / IFRS16 INDEX

748(1) 330(1) 419

EBITDA

2.9(3) 0.9

NET DEBT (IFRS16 INDEX) / EBITDA

3.3% 1.8%

EBITDA margin

22 833 22 833

SALES

+ 87 +1.4 p.p. + 1 764 +1.8

Q3 2019 (after IFRS16) vs Q3 2019 (before IFST16) 27

(1) IFRS16 EBITDA – estimation for 2019 based on the assumption that the number of contracts will be constant and no change of their conditions is to occur. The estimated IFRS16 EBITDA shall

not constitute any definitive forecasts and as such is not guaranteed by Eurocash to any extent. Full year assumption of PLN 330 m.

(2) NET DEBT – the sum of long and short term loans, borrowings and financial liabilities less cash and cash equivalents (3) IFRS16 INDEX – new measure of indebtedness including operating leasing. The estimation shall not constitute any definitive forecasts and as such is not guaranteed by Eurocash to any extent.

Disclaimer

This presentation and the associated slides and discussion contain forward-looking statements. These statements are naturally subject to uncertainty and changes in circumstances. Those forward-looking statements may include, but are not limited to, those regarding capital employed, capital expenditure, cash flows, costs, savings, debt, demand, depreciation, disposals, dividends, earnings, efficiency, gearing, growth, improvements, investments, margins, performance, prices, production, productivity, profits, reserves, returns, sales, share buy backs, special and exceptional items, strategy, synergies, tax rates, trends, value, volumes, and the effects of Eurocash S.A. merger and acquisition activities. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to developments in government regulations, foreign exchange rates, oil and gas prices, political stability, economic growth and the completion of ongoing transactions. Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, you are cautioned not to place undue reliance on any of the forward looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which speak only as of the date hereof) to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as maybe required under applicable securities laws. Statements and data contained in this presentation and the associated slides and discussions, which relate to the performance of Eurocash S.A. in this and future years, represent plans, targets or projections.

For more information please contact:

Jan Domański

Corporate Relations Director jan.domanski@eurocash.pl mobile: +48 507 010 095

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