2017 Earnings Presentation April 2018

This presentation has been prepared by Beluga Group, Co. (the “Company“, or

“Beluga Group”) and together with its subsidiaries. By attending the meeting where the

presentation is made, or by reading the presentation slides, you agree to the following

limitations and notifications. This presentation is strictly confidential to the recipient, may

not be distributed to the press or any other person, and may not be reproduced in any

form, in whole or in part. Failure to comply with this restriction may constitute a violation

of applicable securities laws. This presentation does not constitute or form part of, and

should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or

acquire shares of the Company or any of its subsidiaries in any jurisdiction or an

inducement to enter into investment activity in any jurisdiction. Neither this presentation

nor any part thereof, nor the fact of its distribution, shall form the basis of, or be relied on

in connection with, any contract or commitment or investment decision whatsoever.

This presentation may contain statements that are, or may be deemed to be,

forward-looking statements within the meaning of the U.S. federal securities laws and

are intended to be covered by the safe harbors created thereby. Examples of such

forward-looking statements include, but are not limited to statements of the Company’s

predictions, forecasts, projections, strategies, plans, targets, objectives, expectations,

estimates, intentions, beliefs or goals, including those related to acquisitions, sales,

products or services, results of operations, financial condition, liquidity, prospects or

dividend policy; statements concerning future business or industry performance; other

statements that do not relate strictly to historical or current facts; and assumptions

underlying such statements.

By their very nature, forward-looking statements involve inherent risks and

uncertainties, both general and specific, and risks exist that the forward-looking

statements will not be achieved. Among other things, forward-looking statements are

based on numerous assumptions regarding the Company’s present and future business

strategies and the environment in which the Company will operate in the future.

Readers should be aware that several important factors could cause the

Company’s assumptions to be incorrect, and could cause actual results to differ

materially from the predictions, forecasts, projections, strategies, plans, targets,

objectives, expectations, estimates, intentions, beliefs or goals expressed in such

forward-looking statements.

These factors include:

• changes in political, social, legal or economic conditions in Russia generally, or in

the regions of Russia in which the Company operates, including changes in levels

of consumer spending and demand for some or all of its products;

• changes in consumer preferences and tastes, demographic trends or perceptions

about health related issues;

• increased competitive product and pricing pressures and unanticipated actions by

competitors that could impact the Company’s market share, increase expenses

and hinder growth potential;

• the ability to complete business combinations, partnerships, acquisitions or

disposals, existing or future, and to achieve integration, expected synergies and/or

costs savings;

• levels of marketing, promotional and innovation expenditure by the Company and

its competitors;

• the Company’s ability to protect its intellectual property rights;

• increasing recognition in Russia of product liability and personal injury torts;

• legal and regulatory developments and changes in the policies of the government

of the Russian Federation, including regional authorities, including regulatory

developments or policy changes regarding consumption of or advertising for

spirits, or taxation;

• changes in the cost of raw materials and labor costs;

• renewal of distribution rights and contracts on favorable terms when they expire;

• technological developments that may affect the distribution of products;

• changes in financial and equity markets, including significant interest rate and

foreign currency exchange rate fluctuations, which may affect the Company’s

access to or increase the cost of financing or which may affect the Company’s

financial results;

• changes in accounting standards, policies or practices;

• availability of qualified personnel, including accounting personnel; and

• ability to identify other risks relating to the Company’s business and manage the

risks associated with the aforementioned factors.

This list of important factors is not exhaustive. Readers should carefully

consider such factors and other uncertainties and events, especially in light of the

political, economic, social and legal environment in which the Company operates.

Such forward-looking statements speak only as of the date on which they are made,

and the Company does not undertake any obligation to update or revise any of them.

Readers should not place undue reliance on forward-looking statements. The

Company does not make any representation, warranty or prediction that the results

anticipated by such forward-looking statements will be achieved, and such forward-

looking statements represent, in each case, only one of many possible scenarios and

should not be viewed as the most likely or standard scenario.

2

COMPANY’S 2017 FINANCIAL HIGHLIGHTS

3

4% total volume increase

Sales grew 6% and reached 61 bln. Rubles

Net Revenue increased by 4% to 37 bln. Rubles

Operating profit increased by 15% to 2,9 bln. Rubles

EBITDA grew 13% to 3,6 bln. Rubles

EBITDA and Operating margins improved by 0,7 pp.

138% growth of Net Income to 655 mln. Rubles. Net margin improved by 1 pp.

COMPANY’S HIGHLIGHTS

•#1 distilled spirits producer in Russia

•#1 vodka producer in Russia

•#1 independent importer in Russia

•#1 flavored spirits producer including bitters, herbal liquors, flavored liquors

•#3 brandy producer

•12% legal vodka market share

•10% brandy market share

•20% flavored liquors market share

•Belenkaya is #1 vodka in Russia

•BELUGA is dominant player in super-premium category

•Myagkov is leading brand in low-premium category

Leadership

Market position

Brands

Distribution

•#1 best in class distribution platform in Russia

4

6 609 6 779

0

2 000

4 000

6 000

8 000

2016 2017

+3%

29 245 30 393

0

11 000

22 000

33 000

2016 2017

+4% 35 903

37 303

0

20 000

40 000

2016 2017

+4%

18%

82%

Alcohol

Food

18%

82%

Alcohol

Food

CONSOLIDATED REVENUE

Consolidated Revenue, million RUB Revenue breakdown by segments, million RUB (1)

Consolidated Revenue split, %

Source: Company’s IFRS financial statements

Note (1): Net of intersegment operations

Main driver for revenue increase was double digit (+35%)

growth of exclusive distribution and export (+25%) volumes.

Important note:

Due to new Trade Law implementation in the beginning of 2017

the Company’s PnL structure changed. The Company provided

reduced prices for retail chains and, accordingly, cut the trade-

marketing expenses (previously, significant part of the trade-

marketing costs was reimbursed via retro-discounts).

Alc

ohol (1

) F

ood

(1)

5

2016 2017

1 485 1 545

0

800

1 600

2016 2017

+4%

13 010 12 064

0

7 000

14 000

2016 2017

-7% 14 518

13 675

0

4 000

8 000

12 000

16 000

2016 2017

-6%

10%

90% Alcohol

Food

12%

88%

Alcohol

Food

CONSOLIDATED GROSS PROFIT

Consolidated Gross Profit, million RUB Gross Profit breakdown by segments, million RUB (1)

Consolidated Gross Profit split, %

Source: Company’s IFRS financial statements

Note (1): Net of intersegment operations

The consolidated Gross Profit and the Alcohol segment Gross

Profit declined together with the Distribution Cost (decreased

by 17%) due to changes in the PnL structure which were

caused by implementation of the New Trade Law since 1st of

January 2017. The Company provided reduced prices for retail

chains and simultaneously cut significantly the trade-marketing

expenses. Changes in the PnL structure are neutral for bottom

line profitability.

Alc

ohol

(1)

Food (

1)

6

2016 2017

3 218

3 625

0

2 000

4 000

2016 2017

+13%

CONSOLIDATED EBITDA AND NET PROFIT

EBITDA, million RUB G&A and distribution expenses , million RUB

Operating profit and Net Income, million RUB

Main reasons of 19% year-on-year increase in G&A:

4% volume growth;

growth of rent expenses;

increase in expenses on staff education.

17% year-on year decrease in distribution expenses due to the

changes in PnL structure which were caused by new Trade Law

implementation in the beginning of the year. According to the

Law the only 5% discount is allowed and no trade-marketing

activity at a producer cost.

EBITDA grew by 13% mostly due to volume growth and

proactive pricing policy.

Net income grew by 138% due to EBITDA growth and decline in

financial expenses.

2 486

2 848

275

655

0

1 000

2 000

3 000

2016 2017

2478 2951

9 346 7 719

0

4 000

8 000

12 000

2016 2017

G&A Distribution expenses

-17%

+19%

+15%

+138%

10.2% 9.7%

7

Source: Company’s IFRS financial statements

2802 2930

900

5 647 6 123 10 112

0

4 000

8 000

12 000

2015 2016 2017

Long tem debt Short term debt Net debt

2016 2017 Change, %

Debt 9 053 11 012 +22%

Cash & cash equivalents 1 010 819 -19%

Net Debt 8 043 10 193 +27%

Equity & reserves 19 453 19 448 0%

Total capital (1)

26 421 30 404 +15%

EBITDA 3 218 3 625 +13%

Net Debt/Equity 0.41 0.52 +0,11pp

Net Debt/Total capital 0.31 0.33 +0,02pp

Net Debt/EBITDA 2.50 2.81 +0,31pp

42%

26%

32%

90%

2% 8%

Less than 1 year

1-2 years

2-5 years

Less than 1

year

1-2 years

2-5 years

BELUGA GROUP GROUP DEBT STRUCTURE

Debt evolution, million RUR

7 288

8 043

10 193

8 449 9 503

11 012

As of 31 December, 2016 As of 31 December, 2017

• The cost of borrowing significantly decreased (9.4%

p.a. in 2017 vs 12.5% p.a. in 2016).

• Share of the unsecured loans reached 95%.

• The structure of the debt was considerably improved:

only 8% of the debt is short-term.

• The Company’s debt grew mainly due to growth of

our sales and inventories.

Note: Company’s IFRS audited statements,

Note (1): Total Capital = (Long term debt + Total Equity)

8

INCOME STATEMENT

Source: Company’s IFRS financial statements

9

2014 2015 2016 2017 YoY, %

Net revenue 28 163 30 706 35 903 37 303 4%

Cost of sales (16 135) (18 033) (21 385) (23 628) 10%

Gross profit 12 028 12 673 14 518 13 675 -6%

Gross margin 43,0% 41,0% 40,4% 36,7% -3,7 pp.

G&A expenses (2 411) (2 582) (2 478) (2 951) 19%

Distribution expenses (7 389) (8 260) (9 346) (7 719) -17%

Other income/(expenses) 46 278 (208) (157)

Operating profit 2 274 2 109 2 486 2 848 15%

Operating margin 8,0% 7,0% 6,9% 7,6% 0,7%

EBITDA 2 973 2 885 3 218 3 625 13%

EBITDA margin 11,0% 10,0% 9,0% 9,7% +0,7 pp.

Net finance costs (945) (1 737) (2 039) (1 931) -5%

Income tax (239) (131) (178) (271)

Net income 1 090 241 275 655 138%

Net margin 4,0% 1,0% 0,8% 1,8% +1 pp.

2014 2015 2016 2017

Operating profit 2 274 2 109 2 486 2 848

Depreciation and amortisation 699 776 726 768

Other non-cash transactions 90 (123) 183 124

Changes in working capital (2 316) 1 332 (1 231) (1 771)

CF from operating activities 747 4 094 2 164 1 969

Interest paid (1 265) (1 918) (2 004) 1 849

Income tax paid (360) (109) (63) 578

Net CF from operating activities (878) 2 067 97 (458)

Acquisition of subsidiaries and associates 11 (700) 16 (380)

Acquisition and disposal of PPE (694) (245) (500) (362)

Net CF from investing activities (683) (945) (484) (742)

Issue of share capital - - - -

Repurchase of own shares (418) (177) (179) (913)

Loans received 30 926 30 351 37 532 40 885

Loans repaid (28 916) (30 596) (37 117) (38 963)

Net CF from financing activities 1 576 (443) 236 1 009

Net increase/(decrease) in cash 15 679 (151) (191)

Cash at beginning of the year 467 482 1 161 1 010

Cash at end of the period 482 1 161 1 010 819

CASH FLOW

Source: Company’s IFRS financial statements

10

APPENDICES

APPENDICES

COMPANY’S STRATEGY

12

STRATEGY

CONTINUED DEVELOPMENT OF THE DISTRIBUTION

PLATFORM WITH A FOCUS ON DIRECT SALES

ACHIEVING DIRECT CONTACT WITH END

CUSTOMERS

THROUGH TRADE MARKETING

BEST IT PLATFORM

EXPANSION OF THE GENERAL EXPORT

GEOGRAPHY AND IN PARTICULAR

BELUGA BRAND

IMPROVING THE QUALITY OF IMPORTED

OPERATIONS THROUGH TARGETED SELECTION

OF PARTNERS

FOCUS ON SUPER-PREMIUM INTERNATIONAL VODKA

MARKETS

DIVERSIFIED BRAND PORTFOLIO, COVERAGE OF ALL

SEGMENTS

FOCUS ON PREMIUM AND MARGINAL PRODUCTS

INCREASE IN PRICE AND

BRAND RECOGNITION

STRENGTHENING THE PRESENCE

IN GROWING CATEGORIES

‣

PRODUCTION, SALE AND

DISTRIBUTION OF ITS OWN

ALCOHOL PRODUCTS

USE OF MODERN TECHNOLOGIES TO ENHANCE

THE OVERALL OPERATIONAL PERFORMANCE

BRAND

PORTFOLIO DISTRIBUTION

EXPORT KEY

BUSINESS

Become the dominant spirits company in Russia with a diversified portfolio of brands and products and best

in class distribution platform

90 000

- - - - -

100 000

13

13,1%

10,5%

9,4% 9,2%

6,4%

Beluga Group Tatspirtprom Roust Kristall ASG

11,8%

10,8% 10,2%

8,4%

7,4%

Allians ALVISA Beluga Group KVC Kin

volume

TOP 5 FLAVORED LIQUORS PRODUCERS, 2017 TOP 5 VODKA LEGAL PRODUCERS, 2017

TOP 5 BRANDY PRODUCERS, 2017

BELUGA GROUP RUSSIA MARKET

RUSSIAN SPIRITS MARKET (MAIN CATEGORIES), 2016

000, 9L Cs.

volume

13 000 11 456

4 333

-

10 000

20 000

30 000

Vodka FlavouredLiqours (LVI)

Brandy &Cognac

Whisky

Source: Rosstat,

22,5%

8,9% 8,4% 7,4%

6,1%

Beluga Group Tatspirtprom OPVZ Sordis Global Spirits

volume

6,2%

5,6% 5,5%

4,9% 4,6%

3,9% 3,7%

0%

4%

7%

60,1%

11,3% 9,4%

3,1% 3,1% 2,8% 2,4%

0%

35%

70%

12,6%

9,9%

7,4% 7,4% 6,6%

5,6% 5,3%

0%

4%

8%

12%

16%

STANDARD ECONOMY

*Source: Nielsen DJ2015 - ON2016

14,7% 13,4%

8,3% 7,8% 6,5% 6,5%

5,9%

0%

4%

8%

12%

16%

SUPER-PREMIUM LOW-PREMIUM

LEADING BRANDS* SEGMENT’S SHARES

14

VODKA PORTFOLIO

RUR 405 RUR 525 RUR 600 RUR 750 RUR 1200 – RUR 5000

TSAR Belenkaya

(Whitish)

Russky

Lyod

(Russian Ice)

Myagkov Arkhange

lskaya

VEDA

ICE

Beluga

Noble

Beluga Trans

atlantic Racing

Beluga

Noble

Celebration

Beluga

Allure

Beluga

Gold Line

Tra

ditio

na

l

qu

alit

y

vo

dka

Pu

re,

org

an

ic

vo

dka

Pa

trio

tism

,

Vic

tory

Tre

nd

y

Vo

dka

fo

r

co

ckta

ils

Cra

ft,

au

the

ntic

bra

nd

Hig

h-q

ua

lity

pro

du

ct

Han

dcra

fte

d

Nob

le v

od

ka

Vo

dka

fo

r

Tre

nd

se

tte

rs

Vo

dka

fo

r

sp

ecia

l

occa

sio

n

Ari

sto

cra

tic

Ga

str

on

om

ic

vo

dka

Low-middle Premium

50% ownership.

Exclusive agreement

for production and

distribution

Sub-premium Super-premium, Ultra-premium Middle

DIVERSIFIED PORTFOLIO OF NATIONAL BRANDS

15

VODKA PORTFOLIO

Reta

il

Pri

ce

pe

r 0,7

5 L

RUR

705

RUR

765

RUR

840

RUR

880-1100 RUR 750 RUR 325-465 RUR 615 RUR 585 RUR 570 RUR 550

Zolotoy

Rezerv

(Golden

Reserve)

Staraya

Gvardia

(Old

Guard)

Le Lion Bastion Fox&Dogs Dr August Ussuriiskiy

Balsam

Ussuriiskiy

Liqueur Captain’s Rum Captain’s Gin

Tra

ditio

na

l,

cla

ssic

, R

ussia

n

bra

nd

y

His

tory

, R

ussia

n

vic

tory

Cla

ssic

Fre

nch

sty

le. 1

00

%

Fre

nch

sp

irits

Str

on

g a

nd

em

otio

na

l

Tra

ditio

na

l S

co

tch

Natu

re, u

niq

ue

taste

s

Eco

, p

ure

na

ture

Vo

ya

ge

,

Ad

ve

ntu

res

Se

a A

dve

ntu

res

Low-middle Middle Low-premium Premium

Brandy Balsam and herbal liqueurs Flavored liquors Gin Whiskey Rum

DEVELOPING PORTFOLIO OF NATIONAL BROWN SPIRITS BRANDS

16

BROWN SPIRITS PORTFOLIO

Source: Company data

Reta

il

Pri

ce

pe

r 0,7

5 L

BELUGA GROUP IMPORTED SPIRITS PORTFOLIO

SCOTCH WHISKY IRISH WHISKY

COGNAC

BRANDY

BOURBON

TEQUILA

GIN SAMBUCA

BITTER RUM ABSINTHE

17

IMPORT. SPIRITS

BELUGA GROUP STRATEGY IN IMPORTED WINE BUSINESS

18

IMPORT. WINE

FOCUS ON MIDDLE&PREMIUM PRICE SEGMENTS

INVEST IN TRADE MARKETING AND BRAND BUILDING

LEVERAGE DISTRIBUTION

PLATFORM IN WINE DEVELOPMENT

DEVELOPMENT NOBLE HOUSE FOR PREMIUM IMPORTED PRODUCTS

Address: 30/1 Obrucheva Str., bldg. 1

Moscow 117485

Russia

Phone: +7 495 510 2695

+7 495 775 3050

Fax: +7 495 510 2697

+7 495 775 3052

E-mail: ir@sygroup.ru

www.sygroup.ru

CONTACTS

19