One of the most significant producers of non-alcoholic beverages in CEE and SEE Revenues 12M17: € 264M EBITDA 12M17: € 36M 8 production plants 2,182 employees EUR/CZK ex. rate: 26.330 2
Current ownership structure Free float 6.04% OWN shares 5.00% AETOS a.s. 68.00% CED Group S.a.r.l. 20.96% … … … 3
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No. 1 player in the soft No. 2 player in the soft drinks market drinks market in Slovenia 3 rd most admired company No. 1 water brand in both UGO leader in healthy live style refreshment Retail & HoReCa No. 2 water brand No. 2 syrup brand No. 1 Player in the soft drinks market both in Retail & HoReCa 36% HoReCa market share No. 2 syrup brand No. 3 cola brand HoReCa means Private label soft drinks hotel, restaurant , café producer Source: AC Nielsen / Ogilvy & Mather research (value)- for market shares, Awards: Czech TOP 100, Najdoveryhodnejšia značka 5
Exposure to consumers in the CEE Focus on the smaller markets, markets with booming retail difficult for global players to enter, consumptions, falling unemployment and offering higher profitability and growing salaries Strong brands , unique positioning Benefit from very strong cash flow (HoReCa) and focus on innovations allowing for both growth and dividend especially in fresh and healthy lifestyle payout products Developments aimed at increase of free- Lower sugar prices with end of EU sugar float and liquidity import quotas from October 2017
Acquisition Acquisition of of Ugo group Vinea brand in (fresh juices) Slovakia (most popular CSD in 2017 Slovakia) 2015 HoReCa started Expansion into a new 2012 in Czechia & segment of healthy Slovakia products Expansion into the Establishment of Adriatic region Acquisition of Premium 2008 the Kofola brand Rosa Acquisition of Radenska , Acquisition of LEROS No. 1 water producer in Slovenia 2004 Rajec brand created Acquisition of Studenac – no. 2 internally by 2002 2003 Kofola mineral water brand in Croatia 1960 Acquisition of the Kofola brand and original recipe by predecessor of Kofola CZ 7
• • • Distributed & Licensed 8
Kofola Retail market share (VALUE) 25% 25% Kofola gain vs. Competitor 1 Kofola gain vs. Competitor 1 +3.7 %p. +7.1 %p. 20% 20% 19% 17% 15% 15% 15% 13% 10% 10% 5% 5% 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Kofola Competitor 1 Competitor 2 Competitor 3 Based on AC Nielsen and Data Servis, Kofola incl. exclusively distributed brands, Kofola gain vs. Competitor 1 calculated between 2017 and 2012 9
Kofola HoReCa market share (VOLUME) 50% 50% Kofola gain vs. Competitor 1 40% +3.4 %p. 40% Kofola gain vs. Competitor 1 30% +7.4 %p. 35% 30% 31% 20% 24% 20% 20% 10% 10% 0% 0% 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Kofola Competitor 1 Competitor 2 Competitor 3 Based on AC Nielsen and Data Servis, Kofola incl. exclusively distributed brands, Kofola gain vs. Competitor 1 calculated between 2017 and 2012 10
• High market entry barriers leading to limited competition – usually only 2 global players + 1 local like Kofola • Higher margins comparing to retail channel • Loyalty – low fluctuation of clients • Additional marketing tool supporting brand awareness • Successful direct distribution model 11
2017 – STUDENAC Acquisition Rising revenues in Croatia also thanks Radenska and Pepsi. Croatian market oportunity due to bankruptcy of Agrokor. We see potential upside to increase our market share 13
In March 2018 acquired LEROS – leading Important part of the healthy lifestyle strategy of Kofola (July 2017). producer of high quality products from medicinal Start up that records double-digit sales plants and quality natural teas. growth. 40-year tradition, leading share in pharmacy Kofola will expand its portfolio of healthy channel food products: syrups, juices, jams, products made from medicinal plants from Another segment for Kofola - based on herbs certified farms. and authentic healthy raw materials. Purchase price: 2,5 MEUR Revenues in 2017 over 5,2 MEUR Group revenue 2017: 2,4 MEUR (6 months). 14
Substantial increase in Ugo bars sales number of bars (CZK m) 479 84 379 128 73 61 118 39 50 351 261 20 45 12 2016 2017 Own Franchises 2012 2013 2014 2015 2016 2017 16
Brand revenues Total revenues CS Adriatic PL UGO Private 6,200 763 1 065 1 488 5,934 label 5,703 612 1 574 1 743 728 4,701 4,545 889 1 060 817 595 1 034 1 058 6 200 Branded 5 934 5 703 4 701 4 545 4 177 4 128 4 041 3 570 3 470 [CZKm] [CZKm] 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Constant growth in revenue of branded products – 3Y CAGR of 4.2% and 5Y CAGR of 8.1% 2017 revenue decrease attributable to Poland, partly offset by growth of sales in other regions driven by growth in Adriatic and UGO 18 Source: Company data
Guidance for 2018 1,000 MCZK 1,103 CZ+SK SEE Poland 1,064 EBITDA growth in 2013 – 2015 resulting from 229 business improvement on all Kofola markets and 133 950 915 channels 22 Total 820 146 CAGR 4% 196 CZ + SK + Adriatic markets showed stable growth in 120 188 EBITDA 180 Net decrease in total EBITDA in 2016 and 2017 was due to worse performance in Poland,, which was partially compensated by improvement in Slovenia Adriatic market saw power of local brands 785 investment and business model proper 754 740 717 CZ+SK 639 implementation CAGR 4% CZ + SK experienced increased costs of sugar, increased logistic costs (Slovakia) and increased selling and marketing expenses (Ugo) 2013 2014 2015 2016 2017 Poland saw decreased sales mainly of private (CZK m) labels 19 * See page 34 for discussion on adjustments for 2017 EBITDA
• Revenue grew in all segments except Results comparison 3M18 3M17 Change Change Poland. Main increase in Czechia, thanks % CZK mil. CZK mil. CZK mil. to Kofola, Rauch, Vinea and increased Revenue 1 434.0 1 343.5 90.4 6.7% sales in Ugo. Sales in the Adriatic region Cost of sales (894.3) (873.3) (21.0) 2.4% increased by 17.2 %. 539.7 470.2 69.4 14.8% Gross profit Selling, marketing and distribution costs (479.6) (440.8) (38.7) 8.8% Administrative costs (99.8) (88.2) (11.6) 13.1% • Increased selling costs in CzechoSlovakia Other operating income, net 2.4 1.1 1.3 118.8% (mainly marketing), Ugo (selling O/H (37.3) (57.7) 20.4 (35.5%) Operating result including personnel costs), partly 97.3 79.0 18.3 23.2% EBITDA Finance costs, net (27.5) (12.8) (14.6) 113.9% compensated by lower costs in Poland. (3.4) 2.1 (5.4) (263.2%) Income tax Profit for the period (68.1) (68.4) 0.4 (0.6%) • Increased admin costs mainly in Ugo. - attributable to shareholders of the parent (66.8) (67.5) 0.6 (0.9%) • Increased finance costs due to higher FX losses. The Group ´ s revenue without Poland increased by CZK 116 mil. (10.9%). * adjusted for one-offs 20
* adjusted for one-offs 21
• Sugar price increase 17/16: +10,5%. • Direct impact on EBITDA: - € 3M • OCT 2017: the end of EU sugar import quotas • Positive sugar price development in 2018 • Stabilization on world sugar price in next years 37 (m EUR) (m EUR) 18 520 37 180% 975 17 36 180% 490 16 160% 460 160% 430 950 140% 140% 400 370 120% 120% 925 340 100% 100% 310 14% 20% 19% 22% 24% 23% 280 80% 80% 26% 900 24% 25% 250 60% 37% 60% 39% 40% 220 190 40% 40% 875 60% 160 56% 56% 20% 41% 20% 37% 37% 130 100 850 0% 0% 2015 2016 2017 2015 2016 2017 Packaging% Sweeteners% Other% Total Packaging% Sweeteners% Other% Total 22
Aim of dividend distribution to shareholders * of Kofola of at least 60% of its consolidated net profit achieved in each financial year from 2017 until 2020, subject to sufficient distributable profits. * dividend 2018 - suggested by majority shareholder Operating Cash Flow / EBITDA 2017: 76% Net debt / EBITDA 2017: 2.5x (including 5% own shares buy back in 2017) CAPEX in 2017: € 19M (similar level for next 3 years) 23
• Experienced management with commercial background and focus on results improvement. • Production efficiency optimization with focus on own brands, supported by private labels. • Lower sales but standard profitability (target 10%). • Concentration of production in one plant (Kutno), the most modern plant in the group. • Distribution of Nestea – from 2018. Share in group’s EBITDA 2017 is 2% (2016: 13%) 24
A contingency plan assumes divestment of the HOOP business in 2018 Our successful acquisition Premium Rosa will be integrated with LEROS – a new healthy segment 12M17 12M16 Change Change Group Results 12M* - without HOOP HOOP exit impact to Kofola CZK mil. CZK mil. CZK mil. % Revenue 5 761.0 5 262.5 498.5 9.5% Group: EBITDA 938.2 931.1 7.1 0.8% 17% decrease of Kofola 12M17 12M16 Change Change Group Results 12M* - with HOOP Group sales CZK mil. CZK mil. CZK mil. % Revenue 6 963.3 6 999.0 (35.7) (0.5%) No real impact to EBITDA EBITDA 950.2 1 064.4 (114.2) (10.7%) performance * adjusted for one-offs 25 Dividend distribution availability risk
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