Pivovary Lobkowicz Group, a.s. Source: ČSPS Report on the State of Czech Brewing and Malting 2013 Czech beer production for domestic market in 2013 experienced a 1% annual decline,

Pivovary Lobkowicz Group, a.s.

Initial Public Offering (IPO) Introductory speech of Mr. Zdeněk Radil, CEO and chairman of the board of Pivovary Lobkowicz Group, a.s.:

„Beer and Czechs are inherently belonging to each other for decades. In the long term, we hold first place in the

consumption of the amber nectar over all other countries of the world. I am very glad that we managed to

create a strong brewing group in the highly competitive Czech market. In the past five years, we have

demonstrated that we are firmly committed to maintain the tradition of regional breweries in which honest

and distinctively tasting beer is brewed. Our group has increased its market share and has introduced many

innovations in the portfolio, now consisting of 70 different beers. It is not just about Czech lagers and light

beers; based on the increasing demand we are launching previously less known specialties such as wheat beer,

top fermented beer of Ale type or German Rauchbier, Bockbier etc. The intended offer of our shares is another

important step for our group stemming from investors’ strong interest in the traditional Czech brewing

industry. The IPO will allow us to gain additional funds to support the growth of our market share through

acquisitions of customers in the gastronomy segment, acquisition of another brewery, investments in

marketing and export development while allowing investors to participate in our further growth.“

Introduction to PLG Pivovary Lobkowicz Group, a.s. ( „PLG“) is the 4

th largest brewing group in the Czech Republic measured by domestic sales and the

No. 5 measured by total sales (including exports)

We own seven regional breweries and a 50% stake in the key input supplier – malting company Moravamalt

In 2013, the total production of PLG reached 854 thousand hl of beer and 32 thousand hl of soft drinks, consolidated revenues

reached CZK 1.159 billion and EBITDA* was CZK 190 million

Our business model differentiates us from the competition – thanks to centralised management we are able to realise synergies in

our individual breweries, yet we maintain the regional character of our brands with a very loyal customer base

We offer a portfolio consisting of 70 brands, which is unique on the Czech market

We focus especially on beer specialities, lagers and other premium products

In comparison with competitors, we achieve above average gastronomy segment sales – 54% of our total beer sales in 2013

We are a well-invested company and our maximum production capacity is 1,585 thousand hl of beer and 50 thousand hl of soft

drinks with no need for additional investments in production equipment and technology

* Recurrent EBITDA, i.e. results from operating activities before ordinary amortisation, depreciations and impairments and net of extraordinary results from sales of assets.

Initial Public Offering (IPO) – Pivovary Lobkowicz Group, a.s.

2

PLG Breweries PLG owns and operates seven regional breweries (annual production capacity / actual 2013 production) and has a total of 673 employees.

PLG’s Market Position The Czech Republic has an extremely long and rich tradition in beer brewing and consumption and the domestic market is stable and

saturated. The four largest players (Pilsner Urquell / SABMiller, Staropramen / Molson Coors, Heineken and Budweiser Budvar) have a

combined market share of 75-80%. There are about 50 large and medium-sized industrial breweries and more than 200 micro-breweries

operating in the Czech market, which together produce more than 400 beer brands.

After the 2010 decline caused by a hike in excise tax on beer and by global economic downturn, the Czech beer production returned to growth.

Source: ČSPS Report on the State of Czech Brewing and Malting 2013

Czech beer production for domestic market in 2013 experienced a 1% annual decline,

while exports of Czech beer increased by 9%. Beer consumption in the Czech

Republic stabilised in the recent years at around 145 litres per capita per year. Czechs

are thus still the No. 1 beer drinkers in the world.

With beer production of 854 thousand hl in 2013 we had approx. 4.4% market share

on total Czech beer production, while in the production for domestic market

(excluding exports) we had a 4-5% market share.

19.9

18.1 18.6

19.2 19.3

17

18

19

20

21

2009 2010 2011 2012 2013

mil.

hl

Beer Production in the Czech Republic


3


In recent years, retail segment sales are growing at the expense of gastronomy

segment sales, mainly due to lower beer prices in retail chains.


Customers are changing their preferences though. There’s an increasing demand for

lagers, beer specialties, special occasion beers and regional beers with strong brand

and distinctive character, which allow gastronomy outlet owners to differentiate

themselves from the competition. Thanks to this market trend, PLG’s market share

in the gastronomy segment in the Czech Republic increases (2013: 54%; 2009: 46%).

Currently, we deem the introduction of premium and special beer brands sold at

higher margins as the key growth factor on the Czech market.

Source: ČSPS Report on the State of Czech Brewing and Malting 2013, PLG

16.7

15.1 15.5

16.0 15.8 154

143 143 146

144

140

145

150

155

160

14

15

16

17

18

2009 2010 2011 2012 2013

Co

nsu

mp

tio

n:

litre

s p

er

cap

ita

Pro

du

ctio

n: m

il. h

l

Czech Beer Production for Domestic Market and Consumption per Capita

51% 48% 48%

43% 41%

49% 52% 52%

57%

59%

40%

50%

60%

2009 2010 2011 2012 2013

Beer Sales in the Czech Republic in Gastronomy and Retail Segments

Gastronomy Retail

3.6% 5.2% 5.4% 5.9% 5.8%

3%

4%

5%

6%

2009 2010 2011 2012 2013

PLG's Market Share in Gastronomy Segment in the Czech Republic


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The Czech beer is renowned and is exported to more than 50 countries worldwide. The key export markets are Germany, Slovakia, Russia,

Sweden, Great Britain and Poland. PLG’s exports account for approx. 20% of its total production. Beer imports to the Czech Republic have

stabilised at around 500 thousand hl annually – i.e. only 3% of Czech consumption.


PLG Strategy Our four-pillar strategy based on gastronomy segment growth, focus on premium beers, acquisition of another brewery and export growth is

aimed at increasing shareholder value of PLG.

3.2

3.0 3.1

3.2

3.5

2.8

3.0

3.2

3.4

3.6

3.8

2009 2010 2011 2012 2013

Beer Exports from the Czech Republic


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Financial Snapshot

CZK ths., according to IFRS 2011 2012 2013

Total revenues 1,059,810 1,156,718 1,159,135

revenues growth n/a 9.1% 0.2%

Beer revenues 973,298 1,059,841 1,075,942

share on total revenues 92% 92% 93%

of which gastronomy segment 720,701 751,184 746,034 share on beer revenues 74% 71% 69%

of which retail segment 252,597 308,657 329,907

share on beer revenues 26% 29% 31% Other revenues 86,512 96,877 83,193

share on total revenues 8% 8% 7% malt and others 47,463 57,562 50,824 soft drinks 37,797 38,484 32,311 spirits 1,252 831 58

CZK ths., according to IFRS 2011 2012 2013

Results from operating activities -60,215 -162 40,765

Ordinary amortisation, depreciations and impairments 184,715 184,233 185,062

Normative EBITDA 124,500 184,071 225,827

Extraordinary results from sale of assets -8,091 -2,958 35,481

Recurrent EBITDA 132,591 187,029 190,346

In recent years, we have achieved a significant improvement in profitability at the EBITDA level. Performance of

individual breweries has been rapidly improved after their acquisition through integration into the centralised

management system of PLG and implementation of synergies.

In the first quarter of 2014, we sold a total of 185 thousand hl of beer, meaning almost a 4% year-on-year increase.

This sales growth resulted in the revenues increase by more than CZK 7 million (i.e. by more than 3%) when

compared to the same period of 2013. Our rapid production growth continues as in January to April 2014, we

achieved total beer sales of 273 thousand hl, meaning an increase by 24 thousand hl compared to the first four

months of 2013 (annual increase by 9.5%).

In the past, PLG’s expansion was financed by shareholders loans, which resulted in high interest expenses and negative

equity. In the course of the IPO, all the shareholders loans will be converted to equity (capitalised), resulting in no

interest expenses connected to these shareholders loans in the future.

PLG’s leverage ratio after considering the shareholders loans capitalisation stood at 2.7x EBITDA as at the end of 2013.

PLG’s management intends to maintain such conservative leverage ratio in the future.

Use of IPO Proceeds Up to CZK 200 million to be used on distribution network expansion in the gastronomy segment in the

Czech Republic – in 2012 and 2013 we have acquired 237 new customers this way with average costs

of acquisition of CZK 355 per hl in 2013. Currently, a pipeline of gastronomy segment customers to be acquired by PLG amounts to

CZK 125 million (initial investment made by PLG).

Approx. CZK 100 million to be used on a pre-negotiated brewery acquisition in 2014 – PLG is in advanced stage of negotiation with

potential sellers, no binding agreement has been signed so far though. The target has an annual production of 80-100 thousand hl

and EBITDA in the range of CZK 15-20 million before expected synergies from its integration into PLG. The potential acquisition’s

success is, however, not guaranteed.

Investments in exports growth, mainly in fees for listing PLG’s products in foreign retail chains and generally in higher visibility of the

PLG brand especially on export markets of Slovakia and Russia / CIS; investments in distribution network expansion in the

gastronomy segment in Slovakia (in a similar way like in the Czech market); penetration of additional markets such as USA, Canada,

Vietnam thanks to investments in wider packaging portfolio.

Any amount not utilised for the above activities to be used to support PLG’s market position by intensified marketing and sales

support activities.


6

Experienced Management The company is led by stable management with long-term experience in the brewing sector. All the management team members have been

working for PLG since 2008.

Offering Summary

Issuer Pivovary Lobkowicz Group, a.s.

Transaction Size Up to 2,300,000 newly issued shares offered by the company Up to 3,400,000 shares offered by the selling shareholders Over-allotment option of up to 15% of the base offer (up to 855,000 shares)

Prospectus Publication 12 May 2014

Purchase Orders 12 May – 22 May 2014

Share Price To be determined based on demand („bookbuilding“ process) Nominal value CZK 160 per share Maximum price for retail investors CZK 175 per share

Subscription Price and Allocation Publication

23 May 2014

Settlement 27 May 2014

Start of Trading 28 May 2014

Lead Manager Erste Group Bank AG / Česká spořitelna, a.s.


7

Important Notice This information constitutes neither an offer to sell nor a solicitation to buy any shares in Pivovary Lobkowicz Group, a.s. (the "Shares"). The

offer of Shares in the Czech Republic and Austria is being made solely by means and on the basis of the published prospectus which is available

free of charge at Česká spořitelna, a.s., address Evropská 17, 160 00 Praha 6 during usual business hours. The prospectus is also available at

www.pivovary-lobkowicz-group.com.

This information does not constitute an offer to sell or a solicitation of an offer to purchase any Shares in the United States of America or in

any other jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or

solicitation. Users of this website are requested to inform themselves about and to observe any such restrictions.

http://www.pivovary-lobkowicz-group.com/

Documents

Pivovary Lobkowicz Group, a.s. Source: ČSPS Report on the State of Czech Brewing and Malting 2013 Czech beer production for domestic market in 2013 experienced a 1% annual decline,