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

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 Today Future objective Personalization + 10k wholesale clients Enable access by all 80k advanced market data wholesale clients PLN 3.5 bn sales Eurocash.pl Premiumization + Launched Consumer online access to Individualized approach Eurocash.pl full marketplace assortment in September 2019 Market Platform extension on “white Personalization 1.5k retail stores label” basis to Wholesale’s POS + CRM 40% of turnover, 2.5x LFL franchise chain clients Fresh offered next to main 1.5k retail stores Quality and efficiency franchised supermarket Quality, everyday delivery Fresh Products chains Warsaw 42% market share Profitable home delivery of New Technologies Stock-up mission in main Automated warehouse Omnichannel cities opened in May 2019 Education 2.0 + Social Engagement of Entrepreneurs 3

Eurocash – 2 nd largest overall player in Poland Top players in Poland are not names one would expect to outrank famous international retail chains *IFRS 15 Eurocash Group sales evolution (PLN bn) Ranking of FMCG distributors & retailers (sales, PLN bn) accounting change (appx. 2.4bn PLN) 51 23 Wholesale Retail Biedronka 32 17 21 20 23 Eurocash 17 19 7 5 18 17 2 17 4 17 Lidl 11 5 3 11 2 1 2 Auchan 11 10 10 Kaufland 8 10 5 10 8 Tesco 1 10 18 9 18 7 17 6 16 8 15 15 15 1 5 Carrefour 9 1 6 1 3 7 0 9 2 Intermarche 5 2 1 7 0 2018 3 6 5 4 7 3 2 1 2 Żabka 4 7 2013 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Metro (Makro C&C) 7 9 M&A history: 6 Dino 2 2009 3 Selgros 3 Delikatesy Tradis MHC Inmedio Rogala Premium PayUp 3 MBO IPO McLane Batna EKO Mila Centrum Group Kolporter FMCG FHC-2 Distributors PayUp KDWT Source: RZ500 Frisco.pl PDA Disposal ❑ 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 *IFRS 15 – change of accounting rules, impacting sales revenues and costs of goods sold by EUR 2.4 4 bn due to reclassification part of sales into lower purchase conditions. No impact on EBITDA.

Wholesale: no. 1 distributor in Poland Several times larger than next players, strongest in the categories sold mostly by small stores Wholesale market share Dedicated distribution platforms covering different store profiles • Local sub-wholesalers Eurocash 2018: • Producers own distribution • Group Specialized & categories not Generalists 25% covered by Eurocash Cash&Carry 28% 4,5 Now merging: Sales (PLN bn) 26% Eurocash Distribution 4,6 Others 13% 54% Alcohol Delivery Makro - FMCG Distribution 2,2 (C&C) 5% Specialized Selgros (C&C) Tobacco & Impulse 33% 4% Distribution 5,9 PT Dystrybucja (T) 3% Distribev (A) 3% 3% HoReCa PHUP Gniezno 0,5 (T) 2% Alti (A) 1% T - Tobacco; A - Alcohol, 5

Eurocash Group overview Enormous purchasing power and efficient logistics now serving to transition into Retail growth Sales ’18 : PLN 22.7 bn (+10% YoY) Eurocash EBITDA ’18 : PLN 374 m (+4% YoY) Group Wholesale Projects Others (HQ) Retail Sales ’18: PLN 4.9 bn* (+26%) PLN 74 m N/A PLN 17.7 bn (+6%) EBITDA ’18: PLN 410 m (+18%) PLN 112 m (-13%) PLN -102 m PLN -45 m Duży Ben Cash&Carry Delikatesy Centrum Tobacco Specialized Kontigo Inmedio Distribution Alcohol Specialized Others In merging Distribution process Already moved to Wholesale or Retail since 2019 Eurocash Distribution (W or R) having broken even: Faktoria Win (W) Food Service (HoReCa) sold in 2018 PayUp (W) Delikatesy Centrum: 1.56k stores - Over 80k clients. 13.8k retail stores organized for 14x EBITDA 564 own & 996 hard franchise within soft franchise chains: abc, Lewiatan, Fresh Project (R) Inmedio: 449 newsagents Groszek, Eurosklep, Gama 6 * Consolidated sales. Total annualized sales including franchise retail sales amounted to 7.4 bn. Retail already includes Fresh Project.

Retail: 1 st nationwide proximity supermarket chain in Poland Entering retail through market consolidation, followed by operational integration, with LT objective to become no. 3 retailer EV/Sales Ranking of retailers (2018 sales, PLN bn) 7.4 bn PLN 1 560 stores Biedronka 51 50% (JMT) Lidl 18 564 LT 3,1 Auchan 11 Own objective Kaufland 10 Tesco 37% (TSCO) 10 Carrefour 8 22% (CA) 996 Incl. fuel 4,3 Delikatesy Centrum 7 ? consolidated 5.1 Franchise Intermarche 7 Incl. DYI Retail Sales Number Żabka 7 62% (PE**) (PLN bn, 2018) of Stores Dino 6 114% (DIN, IPO) Netto* 3 +5 bn PLN +900 stores Acquisitions E. Leclerc 3 > Retail Sales > By 2023 49% (PE**) Stokrotka 3 Green Field Polomarket* 2 2-3Y integration to ensure Franchise Chain Piotr i Paweł* standardized business 2 68% (PE**) Profi (Romania) with unified processes Source: RZ500 57% Average 7 *no data for 2018, data used for 2017 **PE – Private Equity deal

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 DUŻY BEN FRISCO.PL ❑ Warsaw market leader, home delivery ❑ Specialized liquor store with 42% market share ❑ Supported by Eurocash scale ❑ E-supermarket B2C ❑ Deconsolidated market ❑ Automated warehouse launched in 50 stores at the end of 1H 2019 with May 2019 store level avg. break-even in 6 months. LFL in first half of year +21%. 42% Sweet&Alcohol store sales Value Market Share Sweet&Alcohol store dynamics (YoY 2018) (Warsaw) independence (2018) 36% 28% 57,0% 7,6% 43,0% Doubled 20% 5,4% market share in last 3 years 2015 2016 2017 2018 Non-Organized Chain Total Poland Independent store Chain/organized store Sweet & Alcohol Total Market ❑ 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 8 Source: Nielsen Retail Trade Panel, Value sales, period: January 2017 – December 2018, Food categories; Nielsen 2018 In-store audit

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 Cumulative Operational Cash Flow (OCF) and Investment Cash Flow (ICF) PLN bn 4,7 4,2 3,7 3,4 3,4 3,0 2,7 2,4 2,4 2,3 2,1 206% 2,0 1,9 1,8 1,6 158% 137% 137% 135% 133% 101% 100% 0,9 93% 74% 0,7 0,7 60% 0,4 0,2 0,3 0,2 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Cum. OCF Cum. ICF OCF/EBITDA Cash Conversion (in days) -5,8 -11,1 -11,6 -11,7 -12,4 -13,2 -17,2 -17,3 -19,4 -25,6 -27,6 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IFRS 15 accounting change (-2 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 9 *IFRS 15 impact on working capital rotation due to 2.4 bn PLN sales reclassification

Eurocash Group – executive summary Innovative approach to understanding consumers need INNOVATIVE COMPANY FOCUSING ON INDIVIDUAL CONSUMER NEEDS ACROSS POLAND through big data management, digitalization, personalization & automation 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 of proximity supermarkets DOMINANT SMALL FORMAT & PROXIMITY STORE OPERATOR Positioned to anticipate consumer needs evolving towards time-saving, convenience and quality 10

APPENDIX Market performance + 1H 2019 Eurocash Results SMALL FORMAT STORES STRONG SALES INCREASE 01 with almost half of the market and 6% sales dynamics WHOLESALE RETAIL 03 02 EBITDA INCREASE BY PLN 22 M YOY (+14%) STRONG DELIKATESY CENTRUM RETAIL LFL AT supported by 5.1% organic sales increase +3.4% IN 1H 2019 and 8.0% in 2Q 2019 LTM OPERATING CASH FLOW AT THE LEVEL IFRS16 IMPACT ON P&L AND BS: 05 04 EBITDA PLN +178 m, EBIT +19 m, Net Profit -9 m and Net Debt OF 0.7X EBITDA +1.8 bn with ND/EBITDA at level 1.5x driven by dividend and M&A 11