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INVESTOR PRESENTATION CHERKIZOVO GROUP: FY 2016

April 3, 2017 Moscow

2

By attending this presentation, you agree to be bound by the foregoing limitations.

This presentation has been prepared by PJSC Cherkizovo Group (the "Company") solely for use in connection with the presentation to investors of the Company’s annual financial and production results and is not made in contemplation of any

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3

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Company’s securities may be offered or sold within Australia, Canada, or Japan or to any national, resident or citizen of Australia, Canada or Japan.

Abbreviations: mln stands for million; bln stands for billion, t stands for tonne (1000kg); kt stands for 1,000 tonnes; ha stands for hectare.

All figures in graphs are rounded to whole numbers.

Disclaimer

The Largest Meat and Feed Producer in Russia

3

2016 Sales: RUB 82bln

2016 EBITDA: RUB 10bln

Production volume: 903kt

Sausages, salami,

continental meats,

ready-to-cook products

#3 in Russia

Live pigs

15 farms

#2 in Russia

Poultry 49% of Group revenue

41% of Group EBITDA

Chilled / frozen poultry

8 clusters

Feed n/a

100% self-sufficiency

Wheat, corn,

sunflower, bean

cultures

6 plants

Grain 3% of Group revenue

2% of Group EBITDA

37% self-sufficiency

Land bank of

approximately

140,000ha

Operational land bank

of 95,000ha (Lipetsk,

Orel, Tambov &

Voronezh regions)

#1 in Russia

Finished feed

9 plants

12 grain elevators

600,000t 200,000t 226,000t

2,530,800t (feed)

858,700t (storage

capacity)

#1 in Russia

Pork 16% of Group revenue

35% of Group EBITDA

Meat Processing 32% of Group revenue

22% of Group EBITDA

Market

Position

Products

Brands

Facilities

Total

Capacity

Results Overview

4

Key Highlights & Group Performance

5

P&L, RUB mln 2015 2016 % change

Revenue 77,033 82,417 7%

COGS (57,884) (64,562) 12%

Gross profit 19,149 17,855 -7%

Gross margin 25% 22%

Operating expenses (11,615) (12,798) 10%

Operating income 7,534 5,056 -33%

Operating margin 10% 6%

Net income 6,007 1,919 -68%

Net margin 8% 2%

EBITDA 12,630 10,282 -19%

EBITDA margin 16% 12%

2016 – Challenging beginning leading to a strong ending

Challenging market conditions. Volatility in local currency and falling disposable

income

Volatility in pork and poultry prices in the first half of 2016

We wrote off RUB 1.3 bn of unrecoverable interest subsidies and RUB 0.3 bn

related to ASF expenses from 2015

Meat Processing segment demonstrated growth amid an overall declining market

Operational efficiency improved across all segments

Tambov Turkey project became operational, its income is included as JV income

Construction of hatchery has been completed and production at the new breeder

farm in Elets began. By end of 2017 we will be self-sufficient in hatching eggs

New pork farms in Voronezh and Lipetsk regions are under construction. Once

completed, our production capacity will reach 290,000 tons in live weight

Construction of the Kashira meat processing plant began. Project will go live in

2018 boosting annual production by 30,000 tons

Sales Volume, 2010-2016, kt 2016 EBITDA and EBITDA margin quarterly performance

194260

319 343417 470 50088

91104

158

170164

185

142

145127

135

144

191218

0

100

200

300

400

500

600

700

800

900

1000

2010 2011 2012 2013 2014 2015 2016

Poultry Pork Meat Processing

Source: Management estimates, Company reports

903

825

731

636

550 496

424

CAGR + 13%

Poultry Division

6

KEY ACHIEVEMENTS

Live production increased by 24.4 ths tn up to 582 ths tn vs. 2015. Sales volume increased by 2.9% up to 500 ths tn.

Broiler livability improved by 1.19% vs. 2015, we reached record 95.32% since Dec’12. EPEF is 332 (+12 vs. 2015).

On declining market Petelinka sales remained at 2015 level, increase in HoReCa sales by 61% vs. 2015 (6.6 ths tn), extended distribution to St. Petersburg

Export sales five times higher vs. 2015 (16.2 ths tn) as we started export to Egypt and Tanzania

Successful launch of SAP in TH Petelino in Apr’16 and 1C Logistics on all sites, Clover project launched on 4 sites

Unification of organizational structure; launch of S&OP process

Construction of hatchery has been completed and production at the new breeder farm in Elets began. By end of 2017 we will be self-sufficient in hatching eggs

24 new poultry houses launched at Mosselprom production facility boosting annual production by 12,000 tons

Quarterly Gross profit, RUB/kg* Segment’s KPIs

* Management accounts


Sales volume (kt, sellable) 470 500 6%

Revenue 44,590 47,724 7%

COGS (36,185) (40,337) 11%

Gross profit 8,405 7,387 -12%


Operating expenses (5,062) (5,036) -0.5%



Net income 3,510 1,159 -67%

Net margin 8% 2%

EBITDA 5,495 4,624 -16%


Avg. gross price, RUB/kg 94.52 94.94 0.4%

Gross profit, RUB/kg 17.88 14.77 -17%

86,0

89,0

94,2

99,7

79,2

76,4 77,2 74,6

1Q16 2Q16 3Q16 4Q16

Net price, RUR/kg COGS, RUR/kg

6.8 12.7 17.0 25.0

2015 2016

Actual Actual

Parent flock

Chicks / Hen housed, units 105.4 108.6

Hatchability, % 75.3% 77.4%

Hatchability (hatchery), % 76.3% 77.7%

Broilers

Days on feed 37.2 36.7

Feed conversion rate (FCR) 1.69 1.66

Yield, % 83.9% 84.5%

Livability, % 93.4% 94.6%

Live weight, gr 2,152 2.146

Density, heads/sq.m. 20.6 20.7

Efficiency index (EPEF) 320 332

Pork Division

7

KEY ACHIEVEMENTS

Record year in terms of volumes.

Successfully eradicated APP out of a Commercial Sow Farm and the Nursery

(Penza).

Top tier genetic Gilts had a born alive of 12.2 that is out-performing our base

Sow Herd.

Record year in the nurseries with nursery mortality dropping to 3.6%

Record year in Sow Production in almost every KPI.

Botovo farm was closed

Successfully promoted 2 Top Level Russian Business Leaders that are now in

charge of Genetic Services and Commercial Sows

New pork farms in Voronezh and Lipetsk regions are under construction. Once

completed, our production capacity will reach 290,000 tons in live weight




Production volume (kt,) 164 185 13%

Revenue 16,579 15,920 -4%

COGS (11,916) (11,321) -5%

Gross profit 4,663 4,599 -1


Operating expenses (662) (782) 18%



Net income 3,571 2,563 -28%

Net margin 22% 16%

EBITDA 6,287 3,968 -37%


Avg. gross price, RUB/kg 99.57 88.28 -11%

Gross profit, RUB/kg 28.43 24.86 -13%

2015 2016

Actual Actual

Productive females, heads 77,808 71,148

Pre wean mortality, % 15.1% 11.4%

Pigs Weaned/Sow/Crate/Year 115.9 119.0

Nursery loss, % 6.3% 3.7%

Finisher loss, % 8.0% 8.3%

Average weight, kg 121.4 119.0

KG sold / productive sow 2,138 2,597

Feed conv. rate, finisher 2.61 2.66

14.1 15.5 22.5

26.7

Meat Processing Division

8



KEY ACHIEVEMENTS

Segment demonstrated growth amid an overall declining market

Increase in deboning volumes in Moscow up to 240 tn/day (48.5% vs.2015 ).

Preparation of Dankov plant for export sales: 439 tn of byproducts, 10-25% higher sales price vs. local market

Launch of Bikom: increase in sausages and B2C shipping from CMPP, decrease in short shipments at peak days and promotional activities

Lean technologies: decrease in wastages by 1.5% on average, improvement of labor efficiency by 2-3 times on separate stages

HR management: implementation of distant education system and electronic learning programs for production staff, assessment of production managers.

Increase in sausage sales volume by 4.7% vs. 2015 at the declining market, total sales volume growth is 9.6% vs. 2015.

Development of production control system: implementation of production audit program (norms, technology), headcount management, production analytics.

Construction of the Kashira meat processing plant began. Project will go live in 2018 boosting annual production by 30,000 tons



Revenue 29,150 31,667 9%

COGS (24,836) (26,141) 5%

Gross profit 4,314 5,526 28%


Operating expenses (3,061) (3,743) 22%

Operating income 1,253 1,782 42%


Net income 887 1,744 97%

Net margin 3% 6%

EBITDA 1,752 2,427 39%

EBITDA margin 6% 8%

Avg. gross price, RUB/kg 172.31 167.84 -3%

Gross profit, RUB/kg 22.59 25.35 12%

2015 2016

Actual Actual

Live pigs supply, ths heads 968 1,223

Pork yield, % 72.9% 71.8%

Pork dissection, ths tn 52.1 79.5

Sales of main products, ths tn

Sausage 105.2 110.1

B2B/B2C 29.2 46.0

Bone-in-meat 31.6 25.9

Total 166.0 182.0

35.1 37.4 38.8 35.4

Grain Division

9

Operational Results Operational land bank and harvest 2012-2016


KEY ACHIEVEMENTS

5,174 ha of fallow land have been implemented into crop rotation in Tambov

Grain dryer complex with capacity of 120 tones/hour was completed and put into operation for postharvest cleaning and drying of grain

200,000 tons of organic fertilizers were applied (chicken litter)

160,000 tons of lime material were applied for 12,000 ha

KEY PROBLEMS

Cultivated area was decreased by 9,133 ha due to rainy spring

As a result of moving planting timelines of spring cultures, delay in development late spring cultures took place that led to delay of harvest and increase of moisture

Wheat harvesting was accompanied by rainy weather resulting in sprouted wheat volume of 60,000 tons. Sprouted wheat sales reduced EBITDA by RUB 117 million

Decrease of purchase prices for grain led to decrease in EBITDA by RUB 1.2 billion



Revenue 2,581 3,056 18%

COGS (1,501) (3,351) 123%

Gross profit 1,080 (295) -

Gross margin 42% -10%

Operating expenses (242) (268) 11%

Operating income 838 (563) -

Operating margin 33% -18%

Net income 839 (653) -

Net margin 33% -21%

EBITDA 711 210 -70%


Full feed self-sufficiency

1,571kt of feed was produced in 2016

30% grain self-sufficiency in 2016

832kt grain storage capacity

81k ha were sown in 2016 35 40 60 85 95

115

174

242

332

468

0

50

100

150

200

250

300

350

400

450

500

0

10

20

30

40

50

60

70

80

90

100

2012 2013 2014 2015 2016

cropped land, '000ha harvest, kt

Cash Flow and Debt

10

Operational Results


2015 2016

RUB mln Actual Actual

Net income 6,976 2,097

Depreciation 3,989 4,914

Other non cash income/expenses - (2,424)

Change in working capital (5,287) 4,191

Cash flow from operations 5,678 8,778

Capex (9,794) (9,102)

Loans, short term and long term (299) (210)

Free cash flow (4,415) (535)

Cash flows from financing activities 12,501 (3,023)

Proceeds from long-term loans 3,536 3,051

Repayment of long-term loans (5,443) (4,219)

Change in short-term loans 9,408 (7,532)

Refinance from ST into LT - 8,178

Bonds 5,000 (2,500)

Dividends paid (3,401) (1,000)

Net cash flow 4,685 (4,557)

Cash at the beginning of the period 891 5,576

Cash at the end of the period 5,576 1,019

2016 PERFORMANCE

Improvement of working capital as a result of optimization activities (payment policy implementation, prepayments control in place, inventory management, liabilities audits, tax refund activities and using of bank guarantees) by RUB 4.2 billion (vs. 2015 of RUB (5.3) billion

RUB 1.3 billion related to write off of unrecoverable interest subsidies

Non-cash items: mainly accrued reserves and write offs related to previous years results

Credit Portfolio, RUB mln

39%

63%

61% 37%

2015 2016

ST borrowings LT borrowings

41,211 38,354

Debt KPIs

2015 2016

Actual Actual

Gross Debt 41,211 38,354

Net Debt 35,543 37,108

Gross Debt/EBITDA 3.28 3.74

Net Debt/EBITDA 2.83 3.62

Gross rate 12.5% 11.2%

Effective rate 4.6% 7.8%

Interest Coverage 9.2 2.3

Capital Expenditures 2014 – 2017**

RUB mln 2014 2015 2016 2017F

Maintenance capex 1,051 1,678 1,569 1,904

Development capex 5,670 9,292 8,302 9,163

Total capex 6,721 10,970 9,871 11,067

** IFRS

Operational Highlights and

Market Overview

11

The Tambov Turkey Project

12

JV project with Grupo Fuertes, a major Spanish agricultural company

Russian turkey market – double digit growth y-o-y

with ready import substitution

Project Highlights

Greenfield project in the Tambov region on a 10,000 ha land plot

Full cycle production from feed to package

International expertise of Europe’s leading turkey producer

Lowest cost of sales on the market

Production capacity: 50,000 tonnes (live weight) / 40,000 tonnes (sellable

weight)

Potential of doubling capacity to meet future demand

Modern equipment, machinery and state-of-the-art technology

Operational Update

Project is subsidised by the Ministry of Agriculture

Construction began in 2015; project went live in 2016; fully operational in 2017

New Pava-Pava brand is launched to promote Cherkizovo’s turkey products

First shipments to retail chains will start in 1Q 2017

Product quality meets highest European standards

Total investment = RUB 10bn

When the JV reaches full capacity, Cherkizovo Group

will be one of Russia’s top turkey producers

109 137 150

185 230

549 470

262 244 250

2013 2014 2015 2016 2017FProduction Import

(k tons) -54%

+111%

The Dankov Meat Processing Plant

13

Operational Highlights

Located in Lipetsk region - total area 2.9 hectares

Cherkizovo Group acquired the plant in April 2013

The facility was launched in 2015 after undergoing a major renovation

Slaughter line capacity of 124,000 tonnes/year

The Group now not only slaughters 80% of pigs at its own facilities – 2X the number before Dankov acquisition but also does further processing and packs fresh pork

Currently the most technologically advanced facility in Lipetsk region conforming to the highest standards

Total investment to date = RUB 1.5bn

Successful operation of the facility helped the Group’s meat processing segment deliver solid growth despite a stagnating market in 2016

Strong operational performance Double-digit revenue growth expected in 2017

1 20

68 82

2014 2015 2016 2017F

Production volume (k tons)

56 718

8 406 10 365

2014 2015 2016 2017F

Revenue (RUB m)

18 25 32 3423

14 1115

2423

2934

2014

18

1714

13

121214

2020F

76

2015

69

2010

66

2005

51

2000

37

1995

46

1990

72 poultry pork beef

Meat consumption* in Russia, kg per capita

Sausages production in Russia, kg per capita

16171714

7915

2020F 2015 2010 2005 2000 1995 1990

• Exports so far failed to ease the overproduction

pressure.

• Poultry meat currently dominates meat

consumption due to low retail prices.

Production growth is slowing.

• Beef consumption decreases for same reason

- high retail prices on beef.

• Pork production is still on the rise. But ASF

poses significant risks even for well protected

producers.

• Sausages consumption is decreasing. Falling

income, competition from fresh meat “on the

shelf” and demonization in some mass media

are among the main reasons.

*Consumption= (production + import – export)/population; incl. Crimea

1990 1995 2000 2005 2010 2015 2020

11,8 11,3 10,7 8,9

6,5 5,9

9,6

Real GDP per capita in 2010 US dollars, 000 USD

Market overview - Russian meat supply is growing, exerting pressure on prices

14

7076

8074

106110

101

2 3312 428

2 5602 781

2 9063 060

3 3463 547 3 528

3 7233 872

30,37 29,38 31,09 31,8537,97

60,6667,03

24 25 25 2623 23 24 25

1127 11671086 997

425300 260 230 265 304 304

-20

0

20

40

60

80

100

120

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Pork production in RF Pork import Consumption per capita RUR/USD Avg. price, RUR

• With the help of government support domestic

poultry and pork production has been on the

rise since 2009.

• We expect production growth to continue as

new export markets are opening up and

domestic consumption is gradually increasing.

• Russian anti-sanctions gave domestic meat

producers extra growth potential as food

imports from US and EU have been banned.

• Devaluation of the local currency made imports

unviable for the majority of foreign competitors.

Market overview – Effect of sanctions on the Russian meat market

15

72 73

79

74

94 9599

2 847

3 204

3 6253 856

4 119

4 525 4 620 4 712 4 788 4 901 4 999

30,37 29,38 31,09 31,85

37,97

60,66

67,03

25 2629 31 32 32 33 33

688493

528 549 470262 244 250 300 328 360

0

10

20

30

40

50

60

70

80

90

100

0

1 000

2 000

3 000

4 000

5 000

6 000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Poultry production in RF Poultry import Consumption per capita RUR/USD Avg. price, RUR

Poultry

Pork

Soybean meal world price USD/т

Sources: USDA WASDE (May 2016), IMF price forecast (February 2016)

* Wheat and coarse grain total. Coarse grains include corn, sorghum, barley, oats, rye, millet, and mixed grains

Russia wheat balance, mln mt

Russia coarse grain balance

• According to USDA WASDE Russian grain*

production reached 114 mln. t (+15% YOY)

• Export is on the rise (38 mln.t, +19% YOY) but

available resources clearly exceed demand.

• Feed prices are supported by relatively

expensive soy meal.

736159

52

16141313

29252319

2013/14 2015/16 2016/17 2014/15

Production Exports Use for feed

41374036

21212119

9897

2015/16 2016/17 2014/2015 2013/2014

341348350353

-1%

2016 2015 2018 2017

336351347

295

2018Q3 2017Q1 2017Q3 2018Q1

373

2015Q1

369

2015Q3 2016Q1

370

2016Q3

Projections

Market overview - Russian meat supply is growing, exerting pressure on prices

16

World corn and wheat prices USD/t • Cheap corn abroad (and appreciating

RUB) are serious hurdles for Russian grain

exporters.

• Grain is abundant and not expensive in

Russia. Situation is favorable for meat

producers as feed price is going down.

• Next season may be different as probability

of “thin year” (unfavorable weather) is

increasing with each passing “good year”.

If Russia increases production in 2017/18 it

will be statistically exceptional.

Russian corn and wheat prices, RUR/т, VAT incl

9 000

15 000

9 290

9 000

8 190

10 290

8 500

Nov

17

Sep

17

Jul

17

7 900

May

17

Mar

17

Jan

17

Nov

16

Sep

16

7 980

Jul

16

11 450

May

16

Mar

16

Jan

16

wheat (base forecast)

forage corn (base forecast)

163

142

131

163

205

176

164156

174

2018Q3 2018Q1 2017Q3 2017Q1 2016Q3

153

128

2016Q1 2015Q3

169

179

2015Q1

Corn Wheat

157140143

186

2018 2017 2016 2015

Sources: IMF price forecasts (February 2016); IKAR, Belgorod ex-storage

Projections

175162159

170

Wheat

Corn

Projections

-11%

2017

8 400

2016

9 400

2015

9 230

Wheat

8 560

9 900

8 480

-14% Corn

Market overview - Grain is cheap abroad and it weights on Russian market

17

Investment Highlights

18

10 23310 083

10 400 10 400

10 400

10 425

10 925 10 200

9 100 9 180 9 200

9 200 9 320

9 533

8 8409 160 9 250

9 4609 875

11 325

13 380 13 500

12 180

9 600

8 933 8 680

Dec-15 Mar-16 Jun-16 Sep-16 Dec-16

Milling wheat 4 gr., RUB/t Corn, Russia, RUB/t

56,24

69,66

62,15

49,67

63,72

57,02

69,95

70,27

83,59

68,27

64,33

66,65

63,65 62,81

66,03

60,40

30,00

40,00

50,00

60,00

70,00

80,00

90,00

Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16

Macroeconomic data

Real GDP Growth (%) Real Disposable Income Growth (%)

RUB/USD rate

Source: ProZerno - average prices, EXW European Russia, with VAT

Forecast - Management estimates

Price dynamics of wheat and corn

Source: Goskomstat; *forecast Source: Rosstat, Forecast data – World Bank

Source: CBR RF

2015 – Avg. 61,3

1,9% 2,1%

5,1%

0,4%

4,6% 4,0%

-1,0%

-4,0%

-5,9%

2008 2009 2010 2011 2012 2013 2014 2015 2016

5,6%

-7,8%

4,0% 4,3% 3,4%

1,3% 0,6%

-3,7%

-0,2% 2008 2009 2010 2011 2012 2013 2014 2015 2016

2016 – Avg. 66,8

19

Meat Consumption

Source: National Pork Union of Russia

Drop in per capita meat consumption in 2015 driven by

• Rouble devaluation / high prices

• Double digit inflation

• Shrinking real income

20

The Russian meat market

21

11% Miratorg

5% RusAgro 5%

Cherkizovo

5% Agro-Belogorye

4% Velikoluksky Meat

70% Others

Number two in Poultry Number three in Pork

Source: Russian Poultry Union Source: National Pork Union of Russia

Meat Processing Poultry Pork (industrial production)

Top 3 producers in the US account for

approx. 54% of the market





Source: Company estimates

Number one in Meat Processing

11% Prioskolye

10% Cherkizovo

6% Resurs

5% Belgrankorm

5% Severnaya

63% Others

Well positioned to drive industry consolidation

Poultry Meat Processing

Local National National

Premium

Medium

Low

# 1 in the Moscow

region

Powerful flagship brands

Petelinka accounts for almost all of the

Group’s chilled poultry sales

High brand awareness

Petelinka – #1 brand in Moscow and the

Moscow region in 2014 and 2015, enjoying

customer loyalty of 86%

Chicken Kingdom – #1 regional brand in the

frozen and chilled poultry categories

Strong portfolio of national brands covering the entire price spectrum

Pork

National

22

Leading portfolio of brands

Land and Grain

Feed Production *** ()* **

Farm ownership

Pork/Poultry Breeding / / / / /*** ()* / /** /

Meat Processing

Centralised distribution

Degree of vertical

integration 4 6 4 4

Land and Grain Distribution

Quality control and

cost optimisation

Fodder Pork and Poultry Processing

Quality and

biological safety

Lower dependence on

imports and suppliers

Capture margins from

value-added products

Note: Degree of integration of different players based on Cherkizovo’s assessment

* Cattle activities ** Former Sadia operations *** Attributable to Pilgrim’s Pride acquisition

Fully Owned Farms as a Key Differentiating Factor

5 4 6 4

23

Vertically integrated structure

Access to an operational land bank of

approx. 95,000 ha Significant strategic benefits

Cherkizovo Group’s operational land bank consists of the following

(figures approximate):

27,000ha in Voronezh Region

21,000ha in Orel

25,000ha in Lipetsk Region

21,000ha in Tambov Region

1,000ha in Moscow Region

Access to quality land – the Black Earth Region is considered to be

some of the best land in the world

Conveniently located close to pork facilities

Securing feedstock on a long-term basis at a controllable cost

Option to use manure as a highly efficient and natural fertiliser

Land is a strategic asset that provides a hedge against increases in grain prices

Opportunity to secure reliable feedstock

Vertically integrated structure – agricultural land

24

Low cost production assets enabling high profit margins

Moscow

92 13

122

100

Tambov Penza

108 51

Ulyanovsk

16

Annual production capacity

Meat processing (tpa)

Poultry (lwt)

Pork (lwt)

Vologda

8

Bryansk

90

Incl. slaughter facilities .

tpa – ‘000 tons per annum

lwt – ‘000 live weight tonnes

26

Greenfield pork facilities enable us to achieve

industry leading margins as efficiency indicators

are 50-70% higher compared to old pork farms

State-of-the-art broiler and breeder farms and

processing plants use the finest breeds and

latest technologies

Quality is controlled throughout the production

chain

Our pork has received the Ecological Product

certification, a marker of quality 38

100

Orel 12

Kursk

12

Voronezh

32

76

Lip etsk

Tula 22

Kaliningrad

23

97

25

Well invested production assets

LOW COST OF DEBT

MARKET PROTECTION

STRICT VETERINARY RULES

Zero profit tax for agricultural enterprises for perpetuity approved by

V. Putin in 2012 – applicable to Cherkizovo’s poultry, pork and grain

segments

Agricultural enterprises may apply for interest reimbursement for bank

loans for production development. Cherkizovo’s debt cost 9.7% in

RUB in 2016

Veterinary authorities have the right to ban meat imports.

2012: ban on imports of live pigs from the EU

2013: ban on imports of meat from the US and Brazil

2015: ban on imports of pork from the EU (countersanctions)

2016: restrictions on meat imports from Belarus

Annual import quota of 360kt for poultry meat and 430kt for pork

meat. High import duties for out-of-quota imports.

REGIONAL DEVELOPMENT

PROGRAMMES

Several regions have local agricultural development programmes:

– Penza – poultry

– Bryansk – poultry

– Tambov – turkey

ZERO TAX

26

Favorable regulatory and tax environment

Evgeny Mikhailov

Executive director

Chairman, shareholder

15+ years of experience in the

Russian meat industry

Executive director

CEO and shareholder

Chairman of the

Investment and

Strategic Planning

Committee

15+ years of

experience in the

industry

Non-executive director

Deputy Chairman of

the Board

20+ years of

experience in private

equity and direct

investment in Russia

and the US

Independent director

Chairman of the Audit

Committee

20+ years of

experience in

retail/FMCG in the

USA, UK, Germany

and Russia


Chairman of the

Remuneration

Committee

20+ years of

experience in retail and

consumer brand

development in

emerging markets


American poultry

expert

20+ years of

experience in the

poultry industry

Non-executive director

Chairman of the Board

of Grupo Fuertes,

partner and

shareholder of

Cherkizovo Group

20+ years of

experience in the

agricultural industry

Richard

Sobel

Emin

Mammadov Elliot

Jones Rafael

Fuertes

Vitaliy

Podolskiy

Sergey

Mikhailov

27

Strong new Board of Directors

Appendix

28

Period, RUB mln 2016 2015

Sales 82,417.2 77,032.6

incl. Sales volume discounts (5,886.1) (5,343.2)

incl. Sales returns (952.3) (1,034.2)

Net change in fair value of biological assets and agricultural produce (340.1) (1,163.7)

Cost of sales (64,222.3) (56,720.2)

Gross profit 17,854.8 19,148.7

Gross margin 21.7% 24.9%

Operating expenses (12,798.3) (11,614.7)

Operating profit 5,056.5 7,534.0

Operating margin 6.1% 9.8%

Profit before income tax and minority interest 1,960.4 5,871.7

Net income attributable to Group Cherkizovo 1,919.2 6,007.5

Net profit margin 2.3% 7.8%

Weighted average number of shares outstanding 43,855,590 43,855,590

Earnings per share

Net income attributable to Cherkizovo Group per share – basic and diluted (rubles) 43.8 137.0

Consolidated Adjusted EBITDA reconciliation

Income before income tax and minority interest 1,960.4 5,871.7

Add:

Interest expense, net of subsidies 3,738.3 1,364.8

Interest income (343.7) (285.8)

Foreign exchange loss, net (621.1) 646.8

Depreciation and amortisation 4,660.4 3,826.5

Net change in fair value of biological assets and agricultural produce 340.1 1,163.7

Share of loss of a joint venture 200.2

Write-off of receivables from insurance company 348.0

Loss of disposal of subsidiaries 42.6

Consolidated Adjusted EBITDA 10,282.5 12,630.4

Adjusted EBITDA Margin 12.5% 16.4%

29

Consolidated income statement

Period, RUB mln 30 December, 2016 31 December, 2015

Cash and Cash Equivalents 1,002.2 5,560.8

Trade Accounts Receivable 4,942.9 4,445.0

Inventory 10,602.1 12,258.6

Biological Assets 10,712.5 9,829.7

Other Current Assets 5,554.8 7,964.4

Total Current Assets 32,814.5 40,058.5

Plant, Property and Equipment 64,445.3 60,436.0

Other Non-current Assets 9,077.8 7,216.8

Total Non-current Assets 73,523.1 67,652.8

Total Assets 106,337.6 107,711.3

Trade Accounts Payable 8,608.3 8,461.7

Short-term Debt 14,123.0 25,093.0

Other current liabilities 4,603.3 4,320.4

Total current liabilities 27,334.6 37,875.1

Long-term debt 24,469.7 16,118.7

Other non-current liabilities 492.8 568.4

Total non-current liabilities 24,962.5 16,687.1

Total equity 54,040.4 53,149.1

Total Liabilities and Total Equity 106,337.6 107,711.3

30

Balance sheet

Period, RUB mln 2016 2015

Net Income 1,960.4 5,871.7

Depreciation 4,660.4 3,826.5

Adjustments for Non-Cash Items (5,544.9) 2,480.4

Change in Net Working Capital 2,623.3 (5,728.5)

Net Operating Cash Flow 9,368.5 4,992.3

Purchases of PP&E (8,569.6) (9,645.5)

Other Investing Cash Flow (2,040.7) (670.9)

Net Investing Cash Flow (10,610.3) (10,086.4)

Proceeds from/(Repayment of) Debt (2,769.2) 13,058.1

Dividends paid (998.8) (3,392.8)

Net Financing Cash Flow (3,316.8) 9,647.4

Net Increase in Cash and Equivalent (4,558.6) 4,553.3

31

Consolidated cash flow statement

32

Thank you_

T: +7 495 660 24 40 F: +7 495 660 32 33

E: [email protected] www.cherkizovo.com

5 Lesnaya st. B, Moscow, Russia, 107143

“White Square” Office Center

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