Atria Capital Markets Atria Russia

Jarmo Lindholm, 4 December 2013

Atria Russia

14 December 2013

Atria RussiaReview Q1 Q3/2013Review Q1-Q3/2013

EUR millionQ3

2013Q3

2012Q1-Q3

2013Q1-Q3

2012 2012

Net sales 32.0 33.9 90.8 93.5 126.3

EBIT -16.4 0.6 -19.1 -4.7 -8.6

* Non-recurring items which are included in the EBIT.

EBIT % -51.2 1.8 -21.1 -5.0 -6.8

Extraordinary items* -15.4 0.0 -15.4 0.0 0.0

• Atria Russia will discontinue its unprofitable primary pork production in Russia. Furthermore, the industrial production and logistics unit located in Moscow will be discontinued by the end of 2014.

• Atria Russia recognised non-recurring impairments totalling EUR 23 0 million EUR 15 4• Atria Russia recognised non-recurring impairments totalling EUR 23.0 million, EUR 15.4 million of which was allocated to EBIT.

• Atria Russia's EBIT for July-September without non-recurring costs amounted to EUR -0.9 million (EUR 0.6 million).EBIT f J S b i h i i d EUR 3 illi• EBIT for January-September without non-recurring items amounted to EUR -3.7 million (EUR -4.7 million).

• EBIT without non-recurring costs was negative due to the poor profitability of primary production.

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• The result for industrial operations improved thanks to efficiency improvement measures.

2

Atria Russia• It is estimated that the discontinuations of

unprofitable primary production and the Mosco based prod ction operations illMoscow-based production operations will generate annual cost savings of about EUR 6 million compared to 2013. The cost savings will be fully realised as of the beginning ofwill be fully realised as of the beginning of 2015.

• During the period under review, Atria sold its minority share in OOO Dan-Invest, a piggeryminority share in OOO Dan Invest, a piggery company operating in Russia. Atria's holding in the company was 26 per cent. The deal had no major impact on Atria's financial position or performance.

• The discontinuation of primary pork production will have no impact on Atria Russia's access to meat raw material. Atria Russia's meat product industry uses both meat produced in Russia and imported meat.

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Atria Russia turnaround program has been in force for 9 quarters now: Result improvement has been significant, and sustainable

EBIT Previous year  EBIT improvement EBIT EBIT MEUR

Q3/2011 ‐3,3 ‐5,0 1,7/ , , ,Q4/2011 ‐4,5 ‐7,6 3,1Q1/2012 ‐3,3 ‐5,6 2,3Q1/2012 3,3 5,6 2,3Q2/2012 ‐2,0 ‐5,6 3,6Q3/2012 0 6 ‐3 3 3 8Q3/2012 0,6 3,3 3,8Q4/2012 ‐2,0 ‐4,6 2,6Q1/2013 3 3 2 8 1 5Q1/2013 ‐3,3 ‐2,8 1,5Q2/2013 0,4 ‐2,0 2,4Q3/2013 16 4 ( 1 0) 0 6 17 2 ( 1 6)

4

Q3/2013 ‐16,4 (‐1,0) 0,6 ‐17,2 (‐1,6)

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Atria Russia turnaround program is moving into it’s last stagelast stage...

3 KEY OBJECTIVES (in chronological order) Timetable

1) Positive EBITDA and cash flow Y 2012

2) Positive EBIT During H2/2013

3) Profitable growth 2013

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Atria Group strategy 2013 - 2016

64 December 2013

Atria Russia strategy 2013 - 2016Atria Russia strategy 2013 2016

Category leadershipSales up! RussiaSt Sib ll

Industrial excellence in operationsEffi i t i ti

Corporate values & culture developmentSt L d hi dStrong Sibylla

expansionStrong new product development

Efficient organizationStrong supply chain development Absolute cost

i i ll

Strong Leadership and management system developmentGood co-operation and T i itconsciousness in all

actionsDivestment of idle assets

Team spirit

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Atria Russia Strategy 2015 Summary

Commercial Excellence

Atria Russia core businesses: Processed meat products

Processed Meat products

meat products, convenience food and Sibylla

Convenience food & Sibylla

Branded products

• High market value potential in cold cuts.

Strong market position in sausagesp

SPb & MSC Efficiency

Atria Way of

Working

• Strong market position in sausages category.

• Strong market growth potential in convenience food and Sibylla. gconvenience food and Sibylla.

• Strong assortment management and new product development implementation.

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Commercial excellence through category leadershipcategory leadership

• Strong growth through cold cuts and convenience food categories.

• Defend strong market position in sausages category in• Defend strong market position in sausages category in Saint Petersburg.

• Strong new concept and product development for the St o g e co cept a d p oduct de e op e t o t elocal markets.

• Focused support behind the two local brands: Campomos and Pit Produkt. Introduce new brands to the market.

• Continue aggressive Sibylla expansion in Russia

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• Continue aggressive Sibylla expansion in Russia.

Operational efficiency to improve marginsmargins

• Exploit the full industrial potential of Gorelovo: The most modern processed meats factory in Russiamost modern processed meats factory in Russia.

• Further increase operational efficiency in all functions (improvement potential exists).

• Divest idle Moscow factory and shut down loss-making primary production – Streamlined industrial t t i l i 2015structure in place since 2015.

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Unify the way we work andcreate bold high performance culturecreate bold, high performance culture

• Strong Leadership and management system developmentdevelopment.

• Corporate values & culture development: Unified corporate culturecorporate culture.

• Streamlined organization structure after completion of structural divestments.completion of structural divestments.

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Atria Russia Brands – in the future

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Understanding consumer needs and meeting expectations by diverse brand portfolioexpectations by diverse brand portfolio

Health & Safety

Convenience & SpeedConvenience & Speed

Pleasure & Good taste

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Health & Safetyy

Traditional products:

• High quality

• Meets consumers’ taste expectations

• Wide distribution (universally available)

• Convenient packaging

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Convenience & Speedp

Chilled fully cooked products –“convenience food” :

• Do not require prolonged cooking

• Appealing fresh lookspp g

• Perceived freshness and naturalness

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Pleasure & Good taste

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Sibylla concept: fast growth on fast-food marketmarket• Number of POS increased twofold during 2012-2013

G h f POS i l d f d l• Geography of POS includes as federal districts of Russian Federation

• Total quantity of POS will surpass 1000 in 2013

• Total portions served in 2013 (est.): more than 15.000.000

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Market overview RussiaMarket overview Russia

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Russia has grown to the biggest retail market in Europe making it attractive due to high consuming powermaking it attractive due to high consuming power• Source: IGD DatacentreTop 10 European markets 2012 Top 10 global markets 2012

Rank Country

Grocery retail market (US

$bn)

1 Russia 314 1

Rank Country

Grocery retail market (US

$bn)

1 China 1 082 31 Russia 314.1

2 France 283.7

3 Germany 271.1

1 China 1,082.3

2 USA 940.3

3 Japan 408.3

4 United Kingdom 242.7

5 Italy 165.3

4 India 375.2

5 Brazil 329.5

6 Spain 121.8

7 Turkey 87.0

8 Switzerland 59 6

6 Russia 314.1

7 France 283.7

8 German 271 18 Switzerland 59.6

9 Poland 48.6

10 Belgium 46.4

8 Germany 271.1

9 United Kingdom 242.7

10 Indonesia 168.4g

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Macro Economics view on Russia: Official forecast and more conservative oneforecast and more conservative one

Base forecast

2014 2015 2016CPI YoY % 6,7 5,6 4,7 4,7

2013 FCGovernment forecast

GDP growth 1,6 2,8 3,2 3,3Production growth 0,7 2,2 2,3 2,0Real salary growth 6,2 5,4 7,1 8,1

ilRetail turnover 4,2 6,8 8,4 8,9

Pessimistic forecastGovernment forecast

2014 2015 2016CPI YoY % 6,7 5,6 4,7 4,7GDP growth 1,6 0,9 2,2 2,8

2013 FCGovernment forecast

g , , , ,Production growth 0,7 0,8 1,5 1,6Real salary growth 6,2 3,6 3,9 4,0Retail turnover 4,2 0,0 2,8 3,7

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Russia is growing retail market but share of grocery is slowly reducinggrocery is slowly reducing

2009 2010 2011 2012 2013e

Consumer spend (US $bn) 643.0 736.9 964.8 967.1 1,069.2

Total retail market (US $bn) 412 3 483 3 571 6 595 8 658 4Total retail market (US $bn) 412.3 483.3 571.6 595.8 658.4

Grocery retail market (US $bn) 224.2 262.9 309.7 314.1 345.2

Grocery retail market/capita (US $) 1,567.3 1,838.9 2,169.3 2,203.5 2,426.7

Grocery as a % of total retail 54.4% 54.4% 54.2% 52.7% 52.4%

IGD Grocery Retail Market corresponds to the total annual turnover (excluding VAT) of retail outlets

S IGD D t t

y p ( g )predominantly selling food. It includes the sales of non-food articles (i.e. health & beauty, pet care, clothing, DIY etc) sold by hypermarkets, supermarkets, discounters, neighborhood stores, specialised food stores (bakeries, butchers, etc) and open markets. It excludes all cash & carry, delivered wholesale, foodservice and drugstores/chemists.

Source: IGD Datacentre

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