Baltika Breweries2005 Results

March 16, 2006

2

Contents

• Financial Results• Russian Beer Market and Baltika Breweries• Future Developments

3

Financial Results

4

• Russian market volume growth of 6% • Strong volume growth

– Total volumes 22,7 MHL, +13.8 %

– Beer Volume 22,4 MHL, +13.1%

– Export volume 1,4 MHL, +23%

– Market share in Russia 24.1%, +1.3 %pts

• Excellent profit performance

― Net Sales 977.2 MEUR, +22.2 %

– EBITDA 302.9 MEUR, +37.6 %

– EBIT 233.0 MEUR, +44.4 %

Overview of Developments in 2005

5

Financial Results 2005

MEUR 2005 2004 Change

Volume, MHL 22.7 19.9 +13.8%

Net Sales 977.2 799.7 +22.2%

EBITDA 302.9 220.1 +37.6%

EBITDA Margin 31.0% 27.5% +3.5%pts

EBIT 233.0 161.4 +44.4%

EBIT Margin 23.8% 20.2% +3.7%pts

Significant volume growth and high financial results

IFRS

6

4Q 2005 Financial Results

MEUR 4Q2005 4Q2004 Change

Volume, MHL 4.9 4.7 +3.6%

Net Sales 219.6 178.9 +22.7%

EBITDA 64.1 46.1 +39.1%

EBITDA Margin 29.2% 25.8% +3.4%pts

EBIT 45.4 31.3 +45.3%

EBIT Margin 20.7% 17.5% +3.2%pts

IFRS

7

Baltika Net Sales Development in 2005

13.1%

+8.5%

+1.6%

22.2%

Volume Price

(/SKU)

Forex Net Sales (EUR)

-1.0%

Mix

Volume growth and average price increases contributed to net sales growth*

* beer volumes only

8

MEUR 2005 2004 Change

Net Sales 977.2 799.7 22.2%

Cost of sales* 469.7 418.3 12.3%

Gross profit 507.5 381.3 33.1%

Logistics expenses* 136.2 112.1 21.5%

Marketing, sales etc. expenses* 101.3 73.4 38.0%

Administrative expenses* 37.0 34.4 7.6%

EBIT 233.0 161.4 44.4%

Net profit 190.4 110.6 72.1%

2005 Results Breakdown

IFRS

*Including depreciation

9

20.2%

23.8%

3.7%0.5% 0.1%

-0.8% 0.1%

EBIT Margin 2004

Cost of sales Administrative Expenses

Marketing, sales, etc. Expenses

EBIT Margin 2005

DepreciationLogistics Expenses

Baltika Margin DevelopmentReduction of production, administrative and material costs contributed to margin development

10

Russian Beer Market and Baltika Breweries

11

Russian Beer Market Development

*With all Heineken acquisitions of 2005** EstimateSource: BBH, State Statistics Committee, Breweries

10 9

35

6

11

32

24

20

9

2

43

0

5

10

15

20

25

30

35

40

45

2004Q3 2004Q4 2005Q1 2005Q2 2005Q3 2005Q4

Market growth Baltika volume growth

In 2005 Baltika grew twice as fast as the market in whole.

Source: BBH, State Statistics Committee, BreweriesNote: Domestic Volumes

Market share, % 2004 2005Baltika 22.8 24.1

Sun Interbrew 15.5 17.5

HeinekenHeineken total*

7.414.9

7.113.4

Efes** 6.2 6.8

Yarpivo 6.4 6.3

Krasny Vostok 6.9 5.9

Ochakovo 6.4 5.7

SABMiller** 4.6 4.9

Vena 3.8 4.6

Others 20.0 17.1

100% 100%

12

Packing Segments Development

36,8 40,1

41,644,9

12,6 12,5

5,8 5,8

2004 2005

Keg*

Can

Glass bottle

PET

Share of the different packaging segments of the total beer market volumes

Baltika has increased market share in all packaging segments and HoReCa

* ITotal HoReCa

Source: Business Analitika

Baltika’s share in segment

2004 2005

Keg* 13.5 16.7

Can 35.4 41.4

Glass bottle 19.9 22.9

PET 19.4 24.1

Source: Business Analitika

13

Price Segments Development

Baltika’s share in segment

2004 2005

Licensed 6.3 8.2Premium 23.6 30.2Mainstream 31.9 35.9Lower mainstream 26.5 29.0Discount 6.1 13.0

5,5 7,5

21,2 21,5

28,230,3

24,1 24,8

18,5 17,7

0,20,2

2004 2005

Imported

Licensed

Premium

Mainstream

Lowermainstream

Discount

Share of different price segments of the total beer market volumes

Source: Business Analitika

Source: Business Analitika

14

Leading European Brands in 2004

108,5

82,0

78,9

72,8

66,1

54,7

88,1

85,3

82,3

0 20 40 60 80 100 120

KROMBACHER

FOSTERS

EFES PILSEN

KRONENBOURG (INC. 1664)

STELLA ARTOIS

AMSTEL

CARLSBERG

CARLING

BALTIKA

HEINEKEN

Mdkl

Baltika is brand №1 in Russia and brand №2 in Europe

Volume in 2004, Mdkl

2005 - 106,690,3

Source: Canadean

15

Beer Consumption Per Capita in Russia

30 28 28 27 2522 21

18 17 16 16 1519

24

30

36

4347

51

5760

0

10

20

30

40

50

60

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: State Statistics Committee, Baltika internal estimate

L/year

16

Performance of Baltika Brands in 2005

• Baltika (market share 10.9%) and Arsenalnoye (5.4%) are the two leading brands of Russia

• Baltika brand volumes growth +11.5%, Arsenalnoye up +6.2%

• Significant growth of regional brands – Leningradskoye +49%, DV +35%, Samara + 17%

• Most growth noted in segments*: premium +6.6 %pts (market share 30.2%), mainstream +4 %pts (35.9%), discount +7,0 %pts (13%)

* Source: Business Analitika

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Innovations at Baltika in 2005• Re-styling of all Baltika sub-brands • First in Russia “Cash-Can” (can with cash inside) for Baltika

brand national promo-action• Re-styling of Arsenalnoye and Medovoye brands • New sub-brand Arsenalnoye Zakalennoye with spicy chili launched• Re-styling of regional brands DV, Samara, Don• First produced brand in a bottle with transparent label - Carlsberg• Baltika №9 first produced in PET1,5 L

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Future Developments

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Integration of BBH Russian companiesToday:

4 separate enterprises After integration:

Leader of Russian beer market

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Major stages of the merger

Baltika shareholders approved all resolutionson merger

Stock issueplacement and cash offers

EGSMs ofPikra, Vena and Yarpivo

Regulatory approvals andregistrations

Baltika Breweries Registration of stock issue with Securities Regulator

Voting on merger resolutions

Federal Antimonopoly ServiceSecurities RegulatorOthers

Baltika shareholders Retain ownershipORAccept cash offer

Pikra, Vena, Yarpivo shareholders

Accept exchange offer ORAccept cash offer ORRetain ownership

Voting on merger resolutions

Final conversion of remaining Pikra, Venaand Yarpivo shares intoBaltika sharesB

altik

a be

com

es m

ajor

ity s

hare

hold

erin

Pik

ra, V

ena

and

Yarp

ivo

Bal

tika

Gro

up b

ecom

es a

sin

gle

lega

l ent

ity

March 7 ~August ~October ~End 2006

Having received the approval of Baltika shareholders the company expects to complete the merger process by the year end

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“Baltika Group” in 2006

• 10 breweries: St.Petersburg (2 breweries), Rostov-on-Don, Tula, Samara Yaroslavl, Voronezh, Chelyabinsk Krasnoyarsk, Khabarovsk

• Production Capacity: 40 MHL/year • 4 malt-houses: St.Petersburg, Tula, Chelyabinsk, Yaroslavl

• About 11 000 employees• Total sales in 2005 – 1.4 billion euro

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Group Brewery Network in Russia

ST PETERSBURG

SAMARA

KRASNOYARSK

KHABAROVSK

TULA

CHELYABINSK

YAROSLAVL

YARPIVO

PIKRA

VENA

BALTIKA

VORONEZH

10,5 МHL

4,5 МHL

1,5 MHL

6,0 МHL

1,5 МHL

ROSTOV-ON-DON 2,0 МHL in 2006,

growth up to 2,5 МHL

2,5 МHL in 2006,

growth up to 4,5 МHL

3,0 МHL

1 МHL

6 МHL

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Portfolio of United Brands in 2006Baltika Yarpivo, Pikra, Vena

Baltika after integration

Licensed

Premium

Mainstream

Lower mainstream

Discount

Rating

#6

#1

#1

#1

#3

Rating

#2

#1

#1

#1

#1

Балтика 0, 5, 6, 7, 8

Балтика 2, 3, 4, 9

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Vise-PresidentFinances

and EconomicsEkaterina Azimina

Group Management as of 1 May, 2006

PresidentAnton Artemiev

Vise-President Supply Chain

Alexander Dedegkaev

Vice-PresidentMarketing

Andrey Rukavishnikov

Vice-PresidentSales (West)

Viktor Semak

Director ExportDmitry Kistev

Vice-PresidentPersonnel and Administration Daniil Briman

Director LegalAnton Rogachevsky

Director Corporate Affairs and

InformationMervi Heinaro

Director SecurityVladimir Bezugly Director Sales

DevelopmentElvira Chornaya

Vice-PresidentSales (East)

Oleg Burkhanov

Thank you!

Baltika Breweries2005 Results

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Supplementary Information

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Baltika Worldwide

Export to 38 countries (3 new countries)• in 2005 1.4 MHL, up +23%• 6% of total Baltika salesMore than 70% of Russian beer exportsproduced by Baltika

                                                                 

Award «The Best Russian Exporter»2001, 2002, 2003, 2004

Other Countries1 GERMANY2 ISRAEL 3 USA 4 LATVIA5 LITHUANIA 6 ESTONIA7 UK8 KOREA9 PORTUGAL10 GREECE11 CYPRUS12 NETHERLANDS13 JAPAN14 CANADA15 SPAIN16 IRAN17 FRANCE18 UAE19 POLAND20 CUBA21 AUSTRALIA22 NEW ZEALAND23 TAIWAN24 CHINA25 NORWAY26 IRELAND27 FINLAND

CIS Countries1 BELARUS2 UKRAINE3 MOLDOVA4 UZBEKISTAN5 KAZAKHSTAN6 KYRGYZSTAN7 AZERBAIJAN8 GEORGIA9 ARMENIYA10 TURKMENISTAN11 TAJIKISTAN

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Baltika Investment Structure

60,2

4

56,955,9

149,4

225,7

30,8

28,9

18,8

18,9

42,6

58,7 4

6,6

3,6

4,2

020406080

100120140160180200

2001 2002 2003 2004 2005

Maintenance and modernization ofexisting capacitiesDistribution

Saving on costs

Increase of Company's productivecapacities

199,0

148,8

119,3105,0

Total volume of investments into the company’s development exceeded 1 bln USD

bln USD

83,3

29

87

3127 26 24 24 23

28

36

44

52

6469

74

82

22.4

0.3 0.3 0.6 0.9 1.1 1.7 3.0 4.9 6.610.6

14.0 16.0 16.119.9

0

10

20

30

40

50

60

70

80

90

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Market VolumeBaltika Sales

(MHL)(MHL)

Beer Market Development and Baltika sales

Source: State Statistics Committee, Baltika internal estimate

30

13%

23%

1%

15%

32%

61%

35%

62%

73%

54%

27%

46%

85%

22%

-4%

6%11%

8%8%

21%19%23%

27%23%

0%-7%-6%-11%1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Baltika Volume Growth

Beer Market Growth

Growth of Beer Market in Russia and Baltika Volume

Source: State Statistics Committee, Baltika internal estimate

31

24.1%22.8%

20.5%22.0%21.4%

20.1%

14.9%13.6%

10.7%

7.6%

4.7%3.7%

2.4%1.2%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Market Share of Baltika Breweries in Russia

Baltika Market Share Development

Source: State Statistics Committee, internal Baltika estimate

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BBH Group Structure

Baltika • St. Petersburg• Tula• Rostov-on-Don• Samara• KhabarovskYarpivo • Yaroslavl• VoronezhVena • St. Petersburg• ChelyabinskPikra

Saku Aldaris SUA • Klaipeda• Utena

Slavutich • Zaporozhje• KievLvivska

Derbes

50%50%

Russia

Scottish&Newcastle plc Carlsberg A/SBBH AB

Baltics Ukraine Kazakhstan