Central European Distribution: modeFinance Credit Report

If you want to know more, ASKMORE TM

modeFinance’s credit report.

Almost every day millions of peoplearound the world are wondering the realcreditworthiness of the companies withwhich they are in business. Every daythese questions remain unanswered.modeFinance

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now aims to answer thesequestions in a simple, complete andimmediate way.

ASKMORETM

is the modeFinanceTM

product which gives the chance toevaluate the credit risk for every companyfrom all around the world.

ASKMORETM plans 3 types of reports:

s-peek Basic Plus

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Basic:This report includes modeFinance TM

’ sMORE Credit Ratings and MORE CreditLimit to help you in the decision making.It covers all essential information includingfinancial statements of the last three yearsand descriptive information including tradedescription and sector analysis.This report type is ideally suited fordecisions on transactions with each levelof credit risk.

modeFinanceTM HeadquarterBuilding A - AREA Science ParkPadriciano 99 - 34149 Trieste - ItalyPh.: +39 040 375 5337Fax: +39 040 375 [email protected]

askMORETM is a registered mark of modeFinanceTM

CENTRAL EUROPEANDISTRIBUTION CORPORATIONMonday, 08 April 2013

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D C CC CCC B BB BBB A AA AAA

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D C CC CCC B BB BBB A AA AAAnot

available

non return extremlypathological

pathological highdanger

weak sufficient adequate good very

strongextremely

strong

Company name CENTRAL EUROPEAN DISTRIBUTION CORPORATION

Identification number Not available

Country United States of America

ZIP code and city 08054 - MOUNT LAUREL

Address SUITE 265

+1 856 273 6980

www.cedc.com

cedc@ced - c.com

Legal form Not available

Account Consolidated

Incorporation date 1997/09/04

NACE 2 Sector 4634 - Wholesale of beverages

Listed

Status Active

MORE Credit limit 2,600,000 e

31/12/2011 31/12/2010 31/12/2009

Turnover (th e) 641,136 525,194 478,560

Rating CCC B BB

Probability of default 16.00% 3.80% 1.20%

Confidence Level 100% 100% 100%

Solvency ratios

Leverage ratio 8.73 1.18 1.63

Total asset/Total liabilities 1.11 1.85 1.61

Liquidity ratios

Current Ratio 1.40 1.96 1.29

Quick Ratio 1.15 1.73 1.22

Profitability and economic equili-

brium ratios

Return on investement ROI (%) -57.95 -1.91 4.95

Return on equity ROE (%) -638.31 -9.01 4.65

Asset turnover 0.41 0.21 0.16

Interest paid weight -0.10 -1.65 0.56

Gross Profit/Operating revenue 0.36 0.44 0.51

Interest Coverage ratios

EBIT interest coverage ratio -9.22 -0.54 1.62

Analysis and trend of financial

strength


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modeFinance TM srlVAT number [email protected]

Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741

Sector Analysis

Company Healthy Balanced Vulnerable Risky

Solvency ratios

Leverage ratio 8.73 0.63 2.80 9.89 -3.07

Total asset/Total liabilities 1.11 2.59 1.36 1.08 0.97

Liquidity ratios

Current Ratio 1.40 2.30 1.30 1.04 0.94

Quick Ratio 1.15 1.63 0.90 0.71 0.59

Profitability and economic equilibrium ratios

Return on investement ROI (%) -57.95 13.88 5.19 1.27 -7.29

Return on equity ROE (%) -638.31 16.80 10.57 2.29 -104.60

Asset turnover 0.41 2.41 2.21 2.14 2.13

Interest paid weight -0.10 0.01 0.11 0.24 -0.05

Gross Profit/Operating revenue 0.36 0.18 0.15 0.11 0.13

Interest Coverage ratios

EBIT interest coverage ratio -9.22 131.70 7.65 1.13 -13.40

Cash Conversion Cycle (days)

Days Sales Of Inventory (DIO) 52 28 36 41 36

Days Sales Outstanding (DSO) 181 42 55 60 63

Days Payable Outstanding (DPO) 64 24 46 61 59

Cash Conversion Cycle (DIO + DSO - DPO) 169 47 45 37 41

Numer of analyzed companies - 495 1,997 948 165

(Average) Rating CCC A BB B CC

The sector has been chosen according to:

international companies in the sector NACE 2 4634 with financial data of year 2011.


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Sector Analysis - Graphs


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Balance Sheet

BALANCE SHEET (th e) 31/12/2011 31/12/2010 31/12/2009

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate USD - EUR 0.7729 0.748 0.6942

Number of months 12 12 12

Total assets 1,558,635 2,503,648 3,081,424

Fixed assets 1,040,664 1,931,722 1,988,134

Intangible fixed assets 876,530 1,556,085 1,566,912

Tangible fixed assets 136,533 142,030 149,879

Other fixed assets 27,601 233,606 271,343

Current assets 517,971 571,926 1,093,289

Stocks 90,958 68,722 64,012

Debtors 317,541 324,010 329,811

Other current assets 109,473 179,195 699,466

Cash & cash equivalent 72,965 91,343 87,768

Shareholders funds 160,233 1,146,831 1,169,764

Capital 562 530 482

Other shareholders funds 159,672 1,146,301 1,169,282

Total liabilities 1,398,402 1,356,817 1,911,660

Non current liabilities 1,028,205 1,065,165 1,066,238

Long term debt 956,230 936,446 924,486

Other non-current liabilities 71,975 128,720 141,752

Current liabilities 370,197 291,652 845,422

Loans 857 567 334

Creditors 111,907 69,444 78,444

Other current liabilities 257,433 221,641 766,644

Total shareh. funds & liab. 1,558,635 2,503,648 3,081,424

NET DEBT (th e) 31/12/2011 31/12/2010 31/12/2009

Short term debts 857 567 334

Long term debt 956,230 936,446 924,486

Cash & cash equivalent 72,965 91,343 87,768

Net debt 884,122 845,670 837,052

31/12/2011 31/12/2010 31/12/2009

Working capital 296,591 323,287 315,380

Net Current Assets 147,774 280,274 247,867

31/12/2011 31/12/2010 31/12/2009

Days Sales Of Inventory (DIO) 52 48 49

Days Sales Outstanding (DSO) 181 225 252

Days Payable Outstanding (DPO) 64 48 60

Cash Conversion Cycle (DIO + DSO - DPO) 169 225 241


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Income Statement

INCOME STATEMENT (th e) 31/12/2011 31/12/2010 31/12/2009

Accounting practice Local GAAP Local GAAP Local GAAP

Exchange rate USD - EUR 0.7729 0.748 0.6942

Number of months 12 12 12

Sales 641,136 525,194 478,560

Revenues growth (%) 22 10 -

Other revenues +/- variation in inventories and contract in progress + Fixed assets

own construction capitalized0 0 0

Operating revenue / turnover 641,136 525,194 478,560

Total operating costs 1,435,848 568,272 340,101

Costs growth (%) 153 67 -

Service costs - - -

Material costs - - -

Costs of employees - - -

EBITDA 36,891 61,530 157,123

Depreciation 831,603 104,609 18,664

EBIT -794,712 -43,078 138,460

Financial P/L -194,670 -83,911 -71,297

Financial revenue 1,067 3,329 7,587

Financial expenses 195,737 87,239 78,884

Interest paid 86,203 79,120 85,311

P/L before tax -989,382 -126,989 67,163

Extr. and other P/L -6,141 3,726 48

Extr. and other revenue - - -

Extr. and other expenses - - -

P/L before tax + Extr. and other P/L -995,524 -123,263 67,211

Taxation 27,263 -19,984 12,838

P/L for period -1,022,787 -103,279 54,372

31/12/2011 31/12/2010 31/12/2009

Costs of Good Sold 409,997 293,561 236,347

Gross Profit 231,139 231,633 242,213

Other Operating Expenses 1,025,851 274,711 103,753

31/12/2011 31/12/2010 31/12/2009

Cash flow -191,184 1,330 73,036

Added value - - -

31/12/2011 31/12/2010 31/12/2009

Number of employees 4,540 4,150 7,550


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Evolutions and trends


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Qualitative information

Full overview The company is engaged in the importation and distribution of alcoholic beverages, as well as manufacture and

marketing of vodka in the United States. It has its corporate headquarters in Bala Cynwyd, Pennsylvania in United

States of America. The company was founded in 1990 by William O. Carey and his partner Jeffrey Peterson as

Carey Agri International Poland Sp. z. o. o. The company is the leading distributor and importer of alcoholic

beverages in Poland. It operates the largest nationwide next - day alcoholic beverage delivery service with 16

distribution centers and 76 satellite branches located throughout Poland. It imports many of the world’s leading

brands to Poland, including brands such as Rémy Martin, Jagermeister, Metaxa, Jim Beam, Sauza Tequila, Grant’s,

E&J Gallo, Sutter Home, Torres, Penfolds and Concha y Toro wines, Corona, Foster’s, and Guinness Stout beers and

Evian. The company is also one of the world’s largest vodka producers. It produces and markets approximately 8.5

million nine - liter cases of vodka every year in the four main vodka segments in Poland: top premium, premium,

mainstream, and economy. Its product mix includes imported and domestic beer, Polish vodka, imported spirits,

wines, soft drinks, and water. Some of the company’s main brands include Crysta Slaska, Soplica Staropolska,

Soplica Cherry, Soplica Szlachetna, Absolwet, and Batory among others. The company’s mission is to delivering

products of the highest quality, enjoying consumers recognition and achieving leading positions in the market,

assuring the company’s profitability and creating value for our shareholders.

History Founded by William O. Carey and his partner Jeffrey Peterson as Carey Agri International Poland Sp. Z. O. O.

Primary business line Engaged in the importation and distribution of alcoholic beverages, as well as manufacture and marketing of

vodka in the United States.

Secondary business line Not available.

Main activity Wholesale; Manufacturing.

Secondary activity Not available.

Main products and services Alcoholic beverages.

Size estimate Leading distributor and importer of alcoholic beverages in Poland; One of the world’s largest vodka producers.

Strategy, organization and policy To delivering products of the highest quality, enjoying consumers recognition and achieving leading positions in

the market, assuring the company’s profitability and creating value for its shareholders.

Strategic alliances Not available.

Membership of a network Not available.

Main brand names Rémy Martin; Jagermeister; Metaxa; Jim Beam; Sauza Tequila; Grant’s; E&J Gallo; Sutter Home; Torres; Penfolds

and Concha y Toro; Corona; Foster’s; Guinness Stout; Evian; Crysta Slaska; Soplica Staropolska; Soplica Cherry;

Soplica Szlachetna; Absolwet; Batory.

Main domestic country United States of America.

Main foreign countries or regions Poland.


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Main production sites United States of America.

Main distribution sites United States of America; Poland.

Main sales representation sites Not available.

Main customers Not available.

Auditor/Advisor/Bank

name type address

ERNST & YOUNG AUDIT SP Z O.O. Auditor -

American Stock Transfer & Trust Transfer Agent -

Board

name date of birth nationality function

Mr. N. Scott Fine - United States Vice Chairman of the Board, Lead Director

Mr. Jose Aragon - - Director

Mr. David Alain Bailey 11/07/1980 - Director

Mr. Joseph J Farnan 1946 - Director

Mr. Alessandro Picchi - - Independent Director

Mr. Markus Walter Sieger - Switzerland Independent Director

Sharehoders (the first twenty shareholders ordered by Direct %)

ROUST TRADING LTD Rating:

Country ISO code BM Operating Revenue (MIL $) -

NACE Rev. 2, Core code - Total Assets (MIL $) -

Direct % - Number of Employees 0

Total % 19.50 Information date 2013/03

Address : Not available


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RUSSIAN STANDARD VODKA LLC Rating: B

Country ISO code RU Operating Revenue (MIL $) 99.89

NACE Rev. 2, Core code - Total Assets (MIL $) 183.42

Direct % 9.90 Number of Employees 239

Total % - Information date 2011/11


THE CLOSED JOINT STOCK COMPANY RUSSIAN STANDARD CORPORATION Rating:






KAUFMAN MARK Rating:

Country ISO code MC Operating Revenue (MIL $) -


Direct % 9.40 Number of Employees -



ING GROEP NV via its funds Rating:

Country ISO code NL Operating Revenue (MIL $) 23593.51





CAREY WILLIAM V FAMILY Rating:

Country ISO code - Operating Revenue (MIL $) -


Direct % 5.60 Number of Employees -



BLACKROCK, INC. via its funds Rating: AA

Country ISO code US Operating Revenue (MIL $) 9337

NACE Rev. 2, Core code - Total Assets (MIL $) 200451




VANGUARD GROUP, INC. THE via its funds Rating:

Country ISO code US Operating Revenue (MIL $) 2017.7






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POWSZECHNY ZAKLAD UBEZPIECZEN SA via its funds Rating:

Country ISO code PL Operating Revenue (MIL $) 4471.02





AVIVA PLC via its funds Rating: CCC

Country ISO code GB Operating Revenue (MIL $) 46383





STATE STREET CORPORATION via its funds Rating:






W & L ENTERPRISES LTD Rating: A

Country ISO code GB Operating Revenue (MIL $) -





DIMENSIONAL FUND ADVISORS LP via its funds Rating: A






NORTHERN TRUST CORPORATION via its funds Rating:






STATE OF CALIFORNIA via its funds Rating:

Country ISO code US Operating Revenue (MIL $) -


Direct % - Number of Employees -




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BANK OF AMERICA CORPORATION via its funds Rating:






GOVERNMENT OF NORWAY via its funds Rating:

Country ISO code NO Operating Revenue (MIL $) -





AXA via its funds Rating:

Country ISO code FR Operating Revenue (MIL $) 99110.15





BANK OF NEW YORK MELLON CORPORATION via its funds Rating:






KNIGHTSBRIDGE ASSET MANAGEMENT LLC via its funds Rating:






Subsidiaries (the first twenty subsidiaries ordered by Direct %)

CEDC INTERNATIONAL SP. Z O.O. Rating: CCC

Country ISO code PL Operating Revenue (MIL $) 653.11





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ARDY INVESTMENTS LIMITED Rating:

Country ISO code CY Operating Revenue (MIL $) -


Direct % MO Number of Employees -


AUK HOLDINGS LIMITED Rating:





BOLS HUNGARY KFT Rating:

Country ISO code HU Operating Revenue (MIL $) -




BRAVO PREMIUM LLC Rating: B




Total % MO Information date 2011/12

BRAVO RETAIL LLC Rating:

Country ISO code RU Operating Revenue (MIL $) -




CEDC FINANCE CORPORATION INTERNATIONAL INC Rating:





CEDC FINANCE CORPORATION LLC Rating:





CHORNIY & MIKOLA. Rating:

Country ISO code UA Operating Revenue (MIL $) -





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COPECRESTO ENTERPRISES LIMITED Rating:





DANCRAIG WINE & SPIRITS TRADING LIMITED Rating:

Country ISO code GB Operating Revenue (MIL $) -




DISTILLERY TOPAZ JSC Rating:





FIRST TULA DISTILLERY OOO Rating:





GLAVSPIRTTIREST OOO Rating:





GLOBAL WINE & SPIRIT HOLDINGS LIMITED Rating:




Total % MO Information date 2011/12

ISF GMBH Rating:

Country ISO code DE Operating Revenue (MIL $) -


Direct % MO Number of Employees 26


JELEGAT HOLDINGS LIMITED Rating:






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JOIN STOCK COMPANY RUSSIAN ALCOHOL GROUP Rating: CCC



Direct % MO Number of Employees 91


LATCHEY LIMITED Rating:





LIMITED LIABILITY COMPANY TH RUSSIAN ALCOHOL CENTRE Rating:






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ASKMORE rating guide

General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of

an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk

factors.

The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial

companies by using data included in financial statements.

The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy

model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the

model are obtained by applying newly developed numerical methodologies, drawing together financial theory,

data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective

algorithm that produces a classification of each company, by taking into account any attributes (such as sector and

country) characterizing a firm.

The model gives the opportunity to assign a rating to a company even without considering a complete data analysis

and allows to process quality information. It induces a better understanding of a company’s strength and weakness

thanks to sophisticated data mining tools and taking into account the analyst knowledge.

The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the

rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium

between the different aspects, better will be the final rating.

This is done studying, evaluating and aggregating the most important sections of the financial and economic

behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.


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Rating scale

Rating class Rating macro class Assessment

AAA

Healthy

The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent

economic and financial flow and fund equilibrium.

AAThe company has very strong creditworthiness. It also has a good capital structure and economic and financial

equilibrium. Difference from AAA is slight.

AThe company has a high solvency. The company is however more susceptible to the adverse effects of changes in

circumstances and economic conditions than companies in higher rated categories.

BBB

Balanced

Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial

commitments could be affected by serious unfavourable events.

BBA company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing

uncertainties or exposure to adverse business, financial, or economic conditions.

B

Vulnerable

The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic

conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.

CCC

A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial

fundamentals. Adverse market events and an inadequate management could affect with high probability the

company’s solvency.

CC

Risky

The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the

company’s strong disequilibrium could increase.

CThe company shows considerable pathological situations. The company’s capacity to meet its financial

commitments is very low.

D The company has not any longer the capacity to meet its financial commitments.


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Fundamental Credit Rating Ratios

Analysis area Ratio Assessment

Solvency ratios

Leverage ratioThis measures the level of total liabilities of the company in comparison

with equity.

Assets to debtThis indicates company’s solvency. The company shows a level of deficit

when the value of this ratio is under one unit.

Financial ratios Fixed Assets coverage ratioThis is calculated only for holdings. It measures the capital structure i.e.

whether a company covers the fixed assets with long term capital.

Liquidity ratios

Current ratioThis measures whether a company has sufficient short-term assets to cover

its short-term liabilities.

Quick ratioThis compares current liabilities only to those assets that can be readily

turned into cash.

Profitability and economic ratios

Return on Investement(ROI)This measures the profitability of company investments without regard to

the way the investment is financed.

Return on Equity(ROE) This measures the profitability of the equity.

Asset turnover

This indicates the investments turnover with regards to sales. The level

assumed from the ratio depends on the sector in which the company

operates.

Profit margin This indicates the profitability of sales.

Interest coverage ratio Interest Paid coverage

This indicate the ability of the company to cover interest expenses through

the economic margins (Gross profit and EBIT) and through the cash flow

from operating activities.


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MORE Credit Limit, Probability of default and Confidence Level

MORE Credit Limit MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial

relationship with the analyzed company with an outlook of one year.

modeFinance used the following values associated with the company analyzed while computing the credit limit:

• Size;

• Years in Business;

• Average number of suppliers;

• Liquidity of the company and the comparison with its sector;

• The funds dedicated to be paid to suppliers;

• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).

The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual

public data. This value should be reviewed by paying attention to the Confidence Level value and by using other

information such as other business information, news... etc; and private information such as the relationship with

client, history of payments, guarantees and the knowledge of the sector.

Probability of default e Confidence

Level

In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of

confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go

into default.

As the probability of default is strongly affected by the economic climate that the company is operating in,

companies in the same MORE class will not necessarily have the same probability of default.

The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:

Confidence =

∑Available Information∑

Total Information

The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in

availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the

MORE rating is able to take into account for each company.

For companies with fully populated records a confidence level of 100% would be applied: companies where no

financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.


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Notes and disclaimer

NOTES modeFinance has based the present analysis on the company available financial statements, coming from one or

more of the following sources: local providers, Commercial Register (Companies House), websites, modeFinance’s

database etc.

DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of

the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot

be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will

be based on information gathered in good faith from both primary and secondary sources, whose accuracy we

are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken

based on any information that may subsequently prove to be incorrect.

Contacts

Company modeFinance

Products MORE rating

Where AREA Science Park

34149 Trieste, via Padriciano 99 - ITALY

Info [email protected]

web www.modefinance.com

Phone +39 040 3755337

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