BBH H104 Results

1
BBH H104 Results
BBH Half Year 2004 Results

• July 29, 2004

2
Contents

• Results First Half 2004
• Beer Market Trends
• Outlook
• Supplementary Information

3
Results First Half 2004
4
Overview of Developments in H1 2004

• Key markets continue to show strong growth
• Stronger than anticipated Russian market volume
  growth of 13 in H1 2004
• Ukraine up 7, Kazakhstan up 40, Baltics up 6
• Investments made to further strengthen business
  model
• Baltika sales and distribution changes yielding
  benefit
• Gross margins up slightly
• Increased advertising ahead of plan impacts
  margin
• Strong program of product and pack developments
• Ukraine position strengthened
• Kiev brewery was opened in June
• Gaining market share, now in clear No 2 position

5
BBH H1 2004 Results
Margins are below last years, but have improved
from Q104.
6
Good Progress on Volumes and Sales
Including exports H104 vs H103
7
BBH Net Sales Development H104 vs. H103
Achieved average price per litre increased 8 .
8
-3
18
13
Volume
Price/Mix
Forex
Net sales (EUR)
8
BBH Net Sales
Improving growth trend over last 18 months.
growth y/y
9
H1 2004 Results Breakdown
Market investments have increased significantly.
10
Marketing and Sales Investments Impact Margins
Calculated production costs Including
depreciation
11
BBH Margin Development
Gross margin slightly improved. EBITA margin
reduced due to market investments.
22.0
-3.4
-2.1
17.4
2.0
-1.1
EBITA Margin H104
EBITA Margin H103
Marketing
Sales distr.
Depre-ciation
Admin Production
12
Beer Market Trends
13
BBH Beer Market Trends H1 2004
Includes Baltika imports Includes only
official Baltika imports. Estimated total share
of market 25. Source BBH, State Statistics
Committee, Breweries
14
Russian Beer Market Development by Quarter
Includes Amstar Note BBH domestic beer
volumes Source BBH, State Statistics Committee,
Breweries
15
Russian Beer Market Share Development

16
Russia Pack Mix Changes H1 2004 vs. H1 2003
BBH is strong in growing packaging segments.
Volume share of packaging
Change
Change
-1
-0.4
1

• PET and can show strong growth
• BBH is strong in growing packaging types

5.1
5
4.9
-5
-10.4
Source Business Analytika JA04
17
BBH Leadership in Russian Premium Sectors
BBH has 30 share of the premium beer segment

• Premium beer sectors have grown faster than the
  market high value premium brands share
  increased by 4pts in H104.
• BBH licensed brands grew strongly Carlsberg
  262 (fastest in the segment) and Tuborg 70.
• Fosters and Kronenbourg 1664 will add to the
  licensed portfolio
• Local premium brand Nevskoye grew 34.
• Many product innovations at Vena

Source AC Nielsen includes local premium,
licenced and imported beers
18
Baltika Strengthens Leadership Position with
Investment

• Baltika increased advertising and promotional
  activities significantly
• Most popular of Baltika brands, No.3, gets its
  own separate identity, now also available in
  cans
• New bottles and labels for all Baltika brands
• Baltika No. 8 (Wheat) wins prestigious Brewing
  Industry International Award 2004 in London
• Seven awards for Baltika in Moscow Beer
  Festivals

19
News from Ukraine, Baltics and Kazakhstan

• BBH Ukraine opened brewery in Kiev with 1,2 m hl
  capacity, which is easily extendable
• Local premium brand Slavutich grows with brand
  extensions like Red, Wheat, and Ice Lemon and
  new packaging formats
• New mainstream brand Arsenal has captured 6.5
  market share in only 6 months
• Strong market share growth in Ukraine
• EU entrance has energized Estonian market Q2
  19
• Market leadership position in Kazakhstan ahead of
  expectations

20
Outlook
21
BBH Outlook for 2004

• Strong market will continue
• Russian volumes likely to grow around 8
• BBH to re-gain market share to YE2003 level
• Pricing
• Russian pricing is likely to be slightly below
  inflation
• Mix
• Growth in PET segment is a drag on achieved
  sales/litre
• Growth in premium segments acts as counterweight

22
BBH Outlook for 2004 (cont.)

• Margins
• Second half to benefit from operation gearing
• Production efficiency
• Volume momentum
• Continued strong investment in marketing
• Therefore full year margin will be ahead of H1,
  but just below 20
• Increased focus on cost efficiency and
  operational excellence
• Comprehensive benchmarking project finished in
  June
• Cost efficiency programs to start

23
BBH Well Positioned for Profitable Growth
BBH is fast growing, profitable leader

• Robust markets
• 13 market growth in Russia in H1 2004, strong
  growth in Ukraine, Baltics and Kazakhstan
• Market leadership
• 32 market share in Russia, No 1 also in Baltics
  and Kazakhstan, strongly gaining share in Ukraine
• Brand leadership
• Brand leadership in major categories Baltikas
  strong recovery
• Gross margins improved
• Investments made to strengthen business
• Brewery network complete Kiev brewery opened in
  June
• Baltikas sales and distribution network in place
• Advertising investments raised significantly
• Increased focus on cost efficiency and utilizing
  scale
• Significant dividends expected from 2005

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Supplementary Information
25
BBH Q2 2004 Results Overview
26
Currencies
Note that these rates are representative average
rates for the period only
27
Russian Beer Market Share Evolution
BBH 32.3
Sun Interbrew 15.6
Krasny Vostok 7.1
Ochakovo 6.1
Efes est. 5.9
Heineken 5.0
Source State Statistics Committee
28
Russian Beer Market Segmentation 2003
Segment share of total market
BBH share of the segment
0 ML
Bavaria, Budweiser Budvar, Corona, Pilsner
Urquell, Holsten, Efes, Lowenbrau, Miller,
Velkop. Kozel Staropramen Stary Melnik,
Bochkarov, Zolotoya Bochka, Solodov Klinskoye,
PIT, Sibirskaya Korona Ochakova,
Tolstyak, Stepan Razin, Okhota Zhigulevskoye,
Krasny Vostok Volzhanin
0
1
Import
Tuborg, Carlsberg Nevskoye, Baltika
7, Baltika 0, Baltika 5, Baltika 8,
Parnas Baltika 3, Yarpivo, Don, Legenda,
Zolotoy Ural Arsenalnoye Medovoye Volga,
Kupecheskoye, DV, Samara, Slavnoye Uralsky
Master, Chelyabinskoye, Baltika reg., Voronezh
30 ML
14
3
License
479 ML
Premium
40
16
Other brands
BBH brands
60
Mainstream
1743 ML
39
191 ML
Cheap/discount
20
13
BBH volumes 2443 ML BBH market share 33
Total market size 7400 ML
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BBH in Ukrainian Beer Market H1 2004
BBH took the No 2 position in the very
concentrated Ukrainian markets.
Ukraine H1 2004 100 815 million litres
Other
BBH
Donetsk
Obolon
Sun Interbrew
30
BBH in the Baltic Beer Markets H1 2004
The total beer market volume is 252 million
litres, which is 5.8 up from H1 2003.
Estonia H1 2004 100 53 million litres
Latvia H1 2004 100 69 million litres
Lithuania H1 2004 100 131 million litres
BBH Svyturys-Utenos alus
Other
Other
Imports
BBH Aldaris
Other
BBH Saku
Imports
Viru
Ragutis
Imports
Gubernija
Lacpecis
Livu Alus
A le Coq (Tartu)
Cesu Alus
Kalnapilis Tauras
31
BBH in Kazakhstan Beer Market H1 2004
BBH has established a leading position in just
over a year of operations.
Kazakhstan H1 2004 100 148 million litres
Other
BBH
Heineken
Shymkentpivo
Rosa
Almaty Brewery1
Efes
Estimate, incl. unofficial Baltika imports,
without them BBH SOM 21.4
32
BBH Volume Development 1991-2003
ML
3,135
2,911
2,384
1,829
1,278
913
618
318
202
151
75
33
14
33
Key BBH Markets in a European Comparison
Market size est. 2003, MHL
Per capita cons., litres
Trend ? ? ? ? ? ? ? ? ? ? 117 51 98 81 73 34 1
59 29 31 80
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BBH Group Structure
As of June 30, 2004
50
50
ScottishNewcastle plc
CarlsbergBreweries A/S
BBH AB
Russia
Baltics
Ukraine
Kazakhstan

• Baltika 75
• St. Petersburg
• Tula
• Rostov-na-Don
• Samara
• Khabarovsk
• Yarpivo 61
• Yaroslavl
• Voronezh Pikra 78
• Zolotoy Ural 82
• Vena 99.9

• Saku 75
• Aldaris 84
• SUA 75
• Klaipeda
• Utena

• Slavutich 92
• Zaporozhe
• Kiev
• Lvivska 99.6

Derbes 90
Will be merged in 2004 Official name
Ak-Nar
35
BBH Family Companies
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BBH H104 Results
Thank You for Your Interest

• July 29, 2004