GREAT M&A LUCRATIVE OPPORTUNITY FOR DIXY GROUP AFTER THE CRISIS LULL

Contents

2

Brief Market overview

Deal Rationale

Valuation

Deal Considerations

Merger Analysis

Executive summary

3

Analysis

Valuation

Synergies

• DCF, comparable companies and precedent transactions analysis of Lenta Ltd.• Sensitivity tests of results to various valuation assumptions• Impact estimation of contemplated acquisition on financials of Dixy• Synergy analysis

• 2nd largest hypermarket operator and 4th largest public retail in Russia

• Successful IPO – on track to double selling space over the 3 years to 2016

• 138 stores (31 hypermarkets and 14 supermarkets opened during 2014)

• 2nd consecutive year of growth - 194 bln. rub. total sales in 2014 (+34.5% from 2013)

• Lenta’s EV was evaluated using DCF, comparable companies and precedent transactions approaches

• Enterprise Value range from 201 788 mln. ₽ to 284 867 mln. ₽

• Business and country risks were taken into account

Conducted analysis showed that total synergies will add up 13.4 bln. rub. (5.2% of target)

• Revenue synergies = 4.2% (of target)

• SG&A and other operating synergies = 0.9% (of target)

• CapEx synergies = 0.1% (of target)

Why Lenta

Brief market overview

5Sources: Accenture Retail Report

The volume of retail market for the main formats, bln. rub. (20% of the main players in each segment)

Ruble depreciation effect on retailer profits

Recent Russian financial crisis led to decrease in operational and financial indices of Russian retail companies. However, the merger could be a good opportunity to get a significant market share due to crisis effects and irrational strategy of small players. Expected post-crisis growth of Russian retail market remains very positive.

Top 10 groceryretailersin Russia

by sales, 2014

Brief market overview

6Sources: Accenture Retail Report

Forecast for the turnover share of the largest retailers by regions for 2018, %

Siberia

0

2000

4000

6000

8000

10000

12000

Pie chart: share, % Bars: number of products

104

2012 2014

176

+69%

12

2012 2014

34

+183%

Company profile: operationsBrief overview

Principal business: development and operation of food retail stores (mainly hypermarkets) located in Russia

Hypermarkets range in size: from 2,600 to 10,400 m2

with an average size of 6,400 m2

Selling space growth of 38.7% in 2014

Like-for-like sales growth of 10.6% in 2014

Industry-leading loyalty program with 6.5 mln. active cardholders (90% of sales in 2014)

Total selling space (‘000 m2)

Total Number of Stores

8

287 376508

701

2011 2012 2013 2014

42 5677

108

10

24

2011 2012 2013 2014

Hypermarkets Supermarkets

Traffic growth, %

Number of tickets, mln. units

Lenta’s sales by products

46%

14%

40%

Dry food

Fresh food

Non-food

Employees2013 2014

In-store personnel 25,663 32,170

Distribution 1,138 1,678

Management and other 1,058 1,235

Operations performance

+26.3% from 2013 to 2014

Company Profile: financials & valuation

9

Brief overview

Lenta Ltd. is one of the biggest Russian retail companies

Listed on London Stock Exchange and MICEX

Second largest hypermarket operator and sixth largest food retailer

Company was founded in 1993 and is headquartered in Saint Petersburg

Key metrics

Stock price chart

More data (updated)

Sources: Lenta financial reports, Bloomberg, FT

Market Cap. (bln. $) 3.8

Stock Price ($) 8.3

P/E (TTM) 104.9

Ended 31-Dec 2014 2013 2012

EBITDA (mln. ₽) 21.3 16.1 11.8

Gross margin, % 22.6 21.8 20.6

Debt-to-equity, % 13.4 5.9 -1.5

EPS ($) 0.35 0.27 0.2

0

1

2

3

4

5

6

0

2

4

6

8

10

12

14

16

Volume ('000000 shares) Close price ($)

Approximately 35,100 employees

2014 sales of 194 bln. rub. (0.28 mln. rub. per m2 )

113 hypermarkets and 25 supermarkets

Over 85% of Lenta’s real estate is owned

735,128 sq m of selling space

6 distribution centres

Map of Lenta’s hypermarkets – the main format of retail stores

10

Locations of Lenta’s hypermarkets and hypermarket distribution centers in Russia by federal district at the end of 2013

Sources: Lenta financial report FY 2013

Company ownership structure

Top management & board of directors

Ownership

4.1%

16.6%

5.0%

6.3%

38.5%

11Sources: Lenta financial statements

Luna Inc.

EBRDLuna Holdings Inc.

New World Fund, Inc.

Loren Bough

John Oliver, Chairman Jan Danning, CEO

• M.B.A. from INSEAD• CEO, GE Capital Information Technology Solutions• Partner of TPG Capital

• University of Amsterdam, Economics• General Manager, Metro Cash & Carry, Ukraine • Operations Director, Metro Cash & Carry,Russia

Geographical diversification

13

479 Dixy stores + 60Victoria stores + 3 DCs

23 Lenta hypermarkets + 2 DC

91 Dixy stores + 35Megamart stores + 1 DC

16 Lenta hypermarkets + 1 DC

2 Dixy stores

13 Lenta hypermarkets

10 Lenta hypermarkets

1554 Dixy stores + 35Victoria stores + 3 DCs

13 Lenta hypermarkets + 1 supermarket + 1 DC

o The merger will strengthen Dixy operations in Central, North West and Volga regions. It will give Dixy the access to South, Siberia and Urals regions

o It will allow to the merged company be in all retail segments (presented by retail stores formats)

o In addition, merger will lead to increase in purchasing power due to rise in purchase volume

o The merger will cause CapEx and SG&A reduction and other anti-crisis opportunities

* Victoria stores are Dixy group subsidiariesand DCs – abbr. for Distribution Centers

Significant potential increase in main indicators

14Sources: PMR, Lenta and Dixy financial statements,analyst’s estimation

Consolidated share ~5%

Consolidated Number of stores 2195 + 138

Top 10 grocery retailers in Russia by sales, 2014

Consolidated Selling Space ~1448 (‘000 m2)

Consolidated Revenue2195 + 138

Potential increase of main indicators

Valuation methods applied

16

DCF

Comparable Companies

PrecedentTransaction

Intrinsic value of the company was calculated as the sum of free cash flows generated by the upstream assets discounted by specific cost of capital

Description Consideration

- Value of the company was calculated by applying EV/EBITDA and EV/Sales ratios of listed comparable companies to Lenta metrics

- Company value was calculated by applying EV/EBITDAR ratios from previous transactions to LentaEBITDAR estimate

- This valuation method can include premiums historically paid for control in the industry

- Lack of comparable historic transactions for companies and assets with similar characteristics and geography of assets

- Useful only for approximate estimation

- Lack of public companies and assets with similar characteristics and geography of assets

- Useful only for approximate estimation

- Calculated applying EBITDA multiple and Gordon growth methods

- Recent changes in company operations and financials are taken into account

- Calculated with macroeconomic and operations forecasts

Discounted cash flow assumptions

17

Macro

Operating

General & Financial

Sources: Russian CB, Bloomberg, Rosstat,World Bank, OECD, Lenta’s financial statements

11.4%17.5%

8.0% 9.2% 7.8%

Russian GDP growth and inflation forecast

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

World Bank OECD

2014 2015 2016 2017 2018 2019

GDP

Inflation

Key rate: 12.5%

Russian CPI: 17%

Level of poverty: 14%

USD/RUB exchange rate: 50 rubles per USD

Russian default spread: 1.9%

MIBOR (3 month): 14.22%

Amortization rate: 11%

Tax depreciation rate:

Retirement rate:

Dividend payout ratio: 0%

Life time of stores: 20 years

Growth rate in number of stores: 35%

Yearly traffic per store: 1 275 362

Ticket per customer: 1,092.00 rubles

CapEx per store: 95 000 000 rubles

Terminal growth rate: 7.2%

26.40%22.30%

17%

47%

25.30%21.30%

2012 2013 2014

Lenta Dixy

Effective tax rate, %

DCF sensitivity analysis

18

8.0x 9.0x 10.0x 11.0x 12.0x

Discount 17.0% 248,178 ₽ 278,174 ₽ 308,170 ₽ 338,166 ₽ 368,162 ₽

Rate 18.0% 237,717 ₽ 266,463 ₽ 295,210 ₽ 323,956 ₽ 352,703 ₽

(WACC) 19.0% 227,773 ₽ 255,332 ₽ 282,891 ₽ 310,449 ₽ 338,008 ₽

20.0% 218,317 ₽ 244,746 ₽ 271,176 ₽ 297,605 ₽ 324,035 ₽

21.0% 209,321 ₽ 234,676 ₽ 260,031 ₽ 285,386 ₽ 310,741 ₽

22.0% 200,758 ₽ 225,091 ₽ 249,424 ₽ 273,757 ₽ 298,090 ₽

23.0% 192,606 ₽ 215,966 ₽ 239,326 ₽ 262,685 ₽ 286,045 ₽

8.0x 9.0x 10.0x 11.0x 12.0x

Discount 17.0% 406 ₽ 471 ₽ 535 ₽ 600 ₽ 664 ₽

Rate 18.0% 384 ₽ 446 ₽ 508 ₽ 569 ₽ 631 ₽

(WACC) 19.0% 363 ₽ 422 ₽ 481 ₽ 540 ₽ 600 ₽

20.0% 342 ₽ 399 ₽ 456 ₽ 513 ₽ 570 ₽

21.0% 323 ₽ 377 ₽ 432 ₽ 486 ₽ 541 ₽

22.0% 304 ₽ 357 ₽ 409 ₽ 461 ₽ 514 ₽

23.0% 287 ₽ 337 ₽ 387 ₽ 438 ₽ 488 ₽

Total Enterprise Value Total Price Per Share

DCF Analysis (2015-2019): EBITDA Multiple Method

DCF Analysis (2015-2019): Perpetuity Growth Method

Total Enterprise Value Total Price Per Share

Main Inputs

WACC* = 15.4% Terminal growth rate = 7.2% Shares outstanding = 465 mln. Effective tax rate = 20%

Main Outputs

EV (EBITDA multiple) = 285 bln. EV (Gordon growth) = 220 bln. IRR on investment = 13.9% Equity IRR = 30%

5.0% 6.0% 7.0% 8.0% 9.0%

Discount 12.0% 272,183 ₽ 310,520 ₽ 364,193 ₽ 444,701 ₽ 578,882 ₽

Rate 13.0% 235,354 ₽ 263,103 ₽ 300,101 ₽ 351,899 ₽ 429,595 ₽

(WACC) 14.0% 206,786 ₽ 227,621 ₽ 254,409 ₽ 290,126 ₽ 340,130 ₽

15.0% 183,997 ₽ 200,092 ₽ 220,212 ₽ 246,080 ₽ 280,571 ₽

16.0% 165,407 ₽ 178,128 ₽ 193,676 ₽ 213,111 ₽ 238,099 ₽

17.0% 149,966 ₽ 160,209 ₽ 172,501 ₽ 187,524 ₽ 206,303 ₽

18.0% 136,945 ₽ 145,322 ₽ 155,222 ₽ 167,102 ₽ 181,622 ₽

5.0% 6.0% 7.0% 8.0% 9.0%

Discount 12.0% 458 ₽ 541 ₽ 656 ₽ 829 ₽ 1118 ₽

Rate 13.0% 379 ₽ 439 ₽ 518 ₽ 630 ₽ 797 ₽

(WACC) 14.0% 317 ₽ 362 ₽ 420 ₽ 497 ₽ 604 ₽

15.0% 268 ₽ 303 ₽ 346 ₽ 402 ₽ 476 ₽

16.0% 228 ₽ 256 ₽ 289 ₽ 331 ₽ 385 ₽

17.0% 195 ₽ 217 ₽ 244 ₽ 276 ₽ 316 ₽

18.0% 167 ₽ 185 ₽ 207 ₽ 232 ₽ 263 ₽

growth

EV/EBITDA

* The calculation of WACC is described on the slide 29

0

50

100

150

200

250

0

5

10

15

20

25

30

35

40

45

2014 2015 2016 2017 2018 2019

CapEx bln. rub. Total № of stores New stores added

Key outputs

19

Free Cash Flow (bln. rub.) CapEx & Number of Stores

Debt-to-EBITDA Return on Invested Capital

Ca

pE

x

Nu

mb

er

of

sto

res

Notes: declining indicators in 2015 reflect current Russian financial crisis

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00

2014 2015 2016 2017 2018 2019

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

2014 2015 2016 2017 2018 2019

Comparable and precedent transactions analysis

20

Comparable companies Precedent transactions

Multiples Multiples

Date Acquirer TargetEV /

EBITDA EV / Sales

22/2/12 Billa AG ENKA TC LLC 8.6x 0.6x

6/20/11 DIXY Group Victoria Group 9.6x 0.8x

4/31/11 7th Continent Mosmart CJSC 15.4x 1.4x6/9/14 Azbuka Vkusa Spar 6.5x 0.4x

12/15/10 X5 retail group Kopeyka 10.9x 0.9x30/9/09 X5 retail group Paterson 9.8x 0.7x3/12/12 Aushan Real 13.7x 0.4x

9/8/11 EBRD and Luna Lenta 11.3x 1.1x

9/5/13 VimpelCom Ltd Digital ION 3.4x 0.2x

EV / EBITDA EV/ Sales2015 2016 2017 Current

Company x x x x

X5 retail 8.0x 6.7x 6.1x 0.5xMetro Cash & Carry 5.4x 5.2x 5.1x 0.2xMagnit 14.6x 11.4x 8.9x 1.4x

O'key 5.0x 4.3x 3.6x 0.4xDixy group 4.2x 3.5x 3.1x 0.4xM.Video 5.6x 5.4x 4.9x 0.2xMean 7.1x 6.1x 5.3x 0.5x75th Percentile 7.4x 6.4x 5.8x 0.4x25th Percentile 5.1x 4.5x 3.9x 0.3x

Tier I: Relevant Companies

Tier II: Others

EV/EBITDA2015 E

EV/EBITDA2016 E

EV/EBITDA2017 E

EV/Sales 51 694 85 660

127 168 186 935

169 146 239 643

187 379 278 493

mln. rub. mln. rub.

mln. rub. - 50 000 100 000 150 000 200 000 250 000 300 000

EV/EBITDA

Precedent Trasactions (EV/EBITDA)

- 50 000 100 000 150 000 200 000

EV/Sales

Precedent Trasactions (EV/Sales)

50000 75000 100000 125000 150000 175000 200000 225000 250000 275000 300000

Enterprise value

21

Valuation result

DCF method was considered as more relevant. Final Enterprise Value range from 201 788 mln. ₽ to 284 867 mln. ₽. EV/Sales multiple gives very low results as it is very volatile in the analysis.

Enterprise value range

Indicator Range

Implied EV/EBITDA 13.67 17.13

Implied share price 475 492

Premium to market cap 2% 43%

DCF (EBITDA mult.)

Comparablecompanies

Precedenttransactions

EV calculated

DCF (Gordon growth)

DCF

EV/EBITDA 2015E

EV/EBITDA 2016E

EV/EBITDA 2017E

EV/Sales

EV/EBITDA

EV/Sales

Debt adj. Market Cap 257 967

187 379 278 493

169 146 239 643

127 968 186935

51 694 85 660

196 514 257 294

83 700 169 607

mln. rub.

183 997 246 080

244 746 286 080

To finance the acquisition we advice to use debt

The premium paid to the market value of equity can be justified by strategic rationales and cost synergies

Based on Dixy’s last annual report, it will be able to raise debt at around 11.45 – 12.15 % that could be less at the time of initiation of the transaction basing on the last significant decrease in key rate in Russia

Dixy could use it cash though it has not got a significant amount of it

Deal assumptions

23

Funds required

Equity was calculated by subtracting net debt from Lenta’s Enterprise value

The premium paid to the market value of equity can be justified by strategic rationales and cost synergies

We suggest that the whole amount of target’s debt will be repaid

Financing

Sources Uses

Consideration = 228 780

Advisory Fees = 1 964

Debt Issuance Fees =1 079

Debt Retirement = 12 695

Shares issued = 55 140

Target Company Cash = 2 750

New Senior Debt = 154 218

Sources & Uses (mln. rub.)

Total Uses: 245 008 Total Sources: 245 008

Goodwill: 177 853

Dixy Debt-to-EBITDA, x

Sources: Dixy and Lenta financial statements, analyst’s estimations

2.5%

1.2%

0.4%0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2015 2016 2017

In-store DistributionG&A Expense synergies% of Total costs

Potential synergies

24

Revenue synergies

Cost synergies2017

2016

2015

4766

3473

2381

1.4%

0.9%

0.6%

16 955 23 124

29 257

559

772

980

1 265421

1 759269

1 475

119

Revenue synergies(gray), % of revenue (blue)

After the merger between Lenta Ltd. And Dixy Group the management and administrative staff could be reduced due to merger of the HQs and regional offices

Merger will also lead to consolidation of DCs and its reduction that will lead to reduction of DCs’ staff as well

Merger of offices and DCs will lead to cost synergies linked with capital expenditures

We analyzed revenue synergies from Letna Ltd. and Dixy Group merger basing on prediction of market share boost from acquisition that was calculated by revenue split by the type of sales sources: dry food, fresh food and non-food taking into consideration increase in purchasing power

80%

Revenue Synergies

Total Synergies = 13.4 bln. rub. (5.2% of target EV)

CostSynergies

20%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2015 2016 2017 2018 2019Minimum Maximum FFO to Debt

Merger analysis

25

Contribution analysis

Accretion/dilution Analysis Funds From Operation to Total Debt

232.08

341.36

469.89

600.96

728.47

300.22

393.61

516.06

676.59

887.07

- 200.00 400.00 600.00 800.00 1,000.00

2015

2016

2017

2018

2019

Target Company Acquaring Company

Revenue, bln. rub.

20.94

50.68

72.52 75.30

2015 2016 2017 2018

Free Cash Flow, bln. rub.

EPS (rub.)

-

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

2015 2016 2017 2018 2019

Consolidated Earnings Per Share Acquiring Company EPS

Summary of our proposal

26

Acquisition Assumptions Standalone Valuation

Operating AssumptionsCapital Structure

Cash value per share paid = 303.72 rub. New shares issued = 55 139 Debt issued in transaction = 154.22 bln. rub. Premium paid per share = 3%

Traffic per store = 1.33 mln. Margin per store = 18%

Equity consideration = 196. 37 bln. rub. EV paid= 267.88 bln. rub.

Implied P/E ratio = 21.64 Implied EV/EBITDA = 15.17 Implied M/B ratio = 11.74

Consolidated Debt-to-Capital = 70.9% Consolidated Debt-to-EBITDA = 3.6x

What is Lenta Ltd. ? Potential Deal Concerns Consolidated expected share by 2018

12%

6% 14%

26%9%

12%

2nd largest hypermarket operator and 4th largest public retail in Russia

Successful IPO – on track to double selling space over the 3 years to 2016

138 stores (31 hyper- and 14 supermarkets opened during 2014)

2nd consecutive year of growth -194 bln. rub. total sales in 2014 (+34.5% from 2013)

Merger of Dixy Group with Lenta Ltd. would have the following accretive effects: Reduction of SG&A and CapEx

expenses Significant revenue synergy Advantageous geographic location of

companies’ assets and facilities Accretive result of consolidated EPS

Sources: Lenta’s financial statements, Accenture retail report, analyst’s estimations

Appendix contents

28

→ Slide 29: Lenta’s WACC calculation

→ Slides 30-31: Lenta’s IS, BS, CF statements

→ Slides 32-33: Dixy’s IS, BS, CF statements

→ Slide 34-35: Consolidated IS; BS; CF statements

Calculation of Lenta’s WACC

29

Cost of Equity

Levered Beta = 0.68

Risk Free rate = 9.8%

Market RP* = 8.6%Company RP = 5%

Cost of Debt

Tax Rate= 20%

Cost of Debt = 11.8%

Levered Cost of Equity= 40.6%

Levered Cost of Equity= 40.6%

WACC = 15.4%

Weight of Equity = 19%

Weight of Debt = 81%

* RP – abbr. for risk premium

Sources:Investing.com

Aswath Damodaran

Markets.ft.com

Companies' statements

Bloomberg

!Yahoo Finance

Trading Economics

BOND

Lenta’s P&L and cash flow statement

30

Income Statement 2015 2016 2017 2018 2019

Revenues 232,076.86 341,360.60 469,888.55 600,956.37 728,471.13

Less: Operating Expenses 174,016.79 259,940.02 360,744.71 463,527.84 563,488.30

EBITDA 58,060.08 81,420.58 109,143.84 137,428.53 164,982.83

Less: Depreciation - Book 8,934.00 9,179.48 9,481.47 9,843.47 10,233.58

Less: Amortization 671.53 671.53 671.53 671.53 671.53

EBIT 48,454.54 71,569.56 98,990.84 126,913.53 154,077.71

Less: Interest on Long-term Debt 34,243.65 27,963.15 21,682.66 15,402.16 9,121.66

Less: Interest on Short-term Debt 2,539.08 8,482.24 13,181.35 11,997.56 4,236.61

Add: Interest Income 2,042.88 - - - -

EBT 13,714.68 35,124.17 64,126.83 99,513.80 140,719.43

Less: Taxes - Book 2,742.94 7,024.83 12,825.37 19,902.76 28,143.89

Net Income Before Minorty Interest 10,971.75 28,099.34 51,301.47 79,611.04 112,575.55

Less: Minority Interest - - - - -

Net Income to Common Shareholders 10,971.75 28,099.34 51,301.47 79,611.04 112,575.55

Cash Flow Statement

EBITDA 58,060.08 81,420.58 109,143.84 137,428.53 164,982.83

Less: WC Change -8,801.55 -11,107.12 -10,622.17 -9,397.97 -8,119.70

Less: Taxes Paid 1,839.83 5,116.78 10,067.14 16,405.53 24,005.58

Operating Cash Flow 65,021.80 87,410.92 109,698.86 130,420.98 149,096.94

Less: Capital Expenditures 44,219.09 36,701.26 31,156.08 26,456.68 36,934.15

Add: Sale Proceeds

Cash Before Financing 20,802.70 50,709.65 78,542.78 103,964.30 112162.7975

Less: Interest on Long-term 34,243.65 27,963.15 21,682.66 15,402.16 9,121.66

Less: Interest on Short-term 2,539.08 8,482.24 13,181.35 11,997.56 4,236.61

Add: Interest Income 2,042.88 0.00 0.00 0.00 0.00

Less: Debt Repayment 37,759.83 37,759.83 37,759.83 37,759.83 37,759.83

Less: Dividends to Minority - - - - -

Less: Dividends to Common - - - - -

Net Cash Flow (51,696.98) (23,495.57) 5,918.94 38,804.74 61044.68587

Lenta’s Balance Sheet

31

Balance Sheet 2015 2016 2017 2018 2019

Common Equity

Opening Balance 55,139.50 66,111.25 94,210.59 145,512.05 225,123.10

Add: Net Income to Common 10,971.75 28,099.34 51,301.47 79,611.04 112,575.55

Less: Dividends to Common - - - - -

Closing Balance 66,111.25 94,210.59 145,512.05 225,123.10 337,698.64

Minority Interest

Opening Balance 0.00 0.00 0.00 0.00 0.00

Add: Minority Income - - - - -

Less: Dividends to Minority - - - - -

Closing Balance - - - - -

Assets

Current Assets

Cash 0.00 0.00 0.00 0.00 39,861.61

Accounts Receivable 2,557.80 3,762.25 5,178.80 6,623.34 8,028.72

Inventories -9,722.33 -13,434.36 -17,064.11 -20,333.20 -23,205.07

Other 10,816.71 10,816.71 10,816.71 10,816.71 10,816.71

Total Current Assets 3,652.17 1,144.60 (1,068.61) (2,893.15) 35,501.97

Long-term Assets

Fixed Assets - Gross 107,569.29 130,333.51 150,618.70 168,596.08 198,916.37

Accumulated Depreciation 8,934.00 13,691.57 15,081.00 13,716.83 10,097.10

Net Plant 116,503.30 144,025.08 165,699.70 182,312.91 209,013.47

Financial Investments

Fair Value of Derivatives 765.26 765.26 765.26 765.26 765.26

Other Investments 3,668.22 3,668.22 3,668.22 3,668.22 3,668.22

Intangible Assets 3,857.60 3,401.97 2,946.34 2,490.72 2,035.09

Goodwill 177,852.63 177,852.63 177,852.63 177,852.63 177,852.63

Debt Issuance Costs 863.62 647.72 431.81 215.91 0.00

Total Other Investments 187,007.33 186,335.80 185,664.26 184,992.73 184,321.20

Total Assets 307,162.80 331,505.48 350,295.36 364,412.48 428,836.63

Liabilities and Capital

Current Liabilities

Accounts Payable 22,523.51 31,123.06 39,532.03 47,105.45 53,758.66

Short-term Loans 42,411.19 65,906.76 59,987.82 21,183.07 0.00

Total 64,934.70 97,029.82 99,519.84 68,288.52 53,758.66

Long-term Liabilities

Long-Term Debt 175,149.93 137,390.10 99,630.26 61,870.43 24,110.60

Pension Obligations 0.00 0.00 0.00 0.00 0.00

Deferred Taxes 903.10 2,811.16 5,569.38 9,066.61 13,204.91

Other Liabilities 63.82 63.82 63.82 63.82 63.82

Total Long-term Liabilities 176,116.85 140,265.07 105,263.47 71,000.86 37,379.33

Minority Interest 0.00 0.00 0.00 0.00 0.00

Common Equity 66,111.25 94,210.59 145,512.05 225,123.10 337,698.64

66,111.25 94,210.59 145,512.05 225,123.10 337,698.64

Total Liabilities and Equity 307,162.80 331,505.48 350,295.36 364,412.48 428,836.63

Dixy’s historical Balance sheet and P&L

32

Balance Sheet 2011 2012 2013 2014

Assets

Current assets 14,794 19,826 22,837 28,773

Gross Plant 24,529 32,491 34,061 55,711

Plant Gain 292

Accumulated Depreciation -6,787 -9,724 -13,631 -18,887

Property, plant and equipment, net (3) 17,742 22,767 20,430 37,115

Financial Investments 38

Intangible assets 20,744 20,660 20,543 20,553

Other assets 9,920 11,925 16,237 1,842

Total assets 63,201 75,178 80,047 88,321

Liabilities

Short-term debt 6,746 9,364 328 1,126

Current liabilities 14,320 17,302 17,409 28,666

Long-term debt 9,810 23,548 28,560 25,855

Pension Liabilities 0 0 0 0

Deferred income taxes liabilities 1,239 1,115 852 655

Other 7,672 -591 5,370 0

Total liabilities 39,786 50,738 52,519 56,302

Minority Interest 0 1 0 0

Controlling interest 0 0 0 0

Stockholders’ equity 23,415 24,440 27,528 32,019

Total Liabilities and Equity 63,201 75,178 80,047 88,321

Balance check TRUE TRUE TRUE TRUE

Income Statement

Total revenues 102,317 147,023 180,504 228,985

Cost of Sales without Depreciation 74,586 104,872 125,135 159,500

Operating expenses 21,311 33,690 32,316 39,677

Other expenses, net 114 0 10,261 13,448

EBITDA 6,307 8,461 12,793 16,360

Depreciation 2,850 3,976 5,235 6,088

Amortization 0 0 0 0

EBIT 3,456 4,485 7,558 10,272

Interest Expense 1,309 2,505 3,468 4,094

Interest Income 0 0 0 157

Exchange and Other 0 0 0 628

EBT 2,147 1,980 4,090 5,708

Income taxes 1,046 928 1,035 1,217

Consolidated net income for the year 1,102 1,052 3,056 4,491

Minoirty Interest 0.06 -0.36 -0.13 0.23

Net controlling interest income 1,102 1,053 3,056 4,490

Dixy’s projectes balance sheet and P&L

33

Profit and Loss

Revenues 300,218 393,610 516,055 676,590 887,065

Less: Operating Expenses 279,733 366,338 476,288 624,635 821,696

EBITDA 20,485 27,272 39,768 51,955 65,369

Less: Depreciation 6,985 9,728 13,324 18,039 24,221

Less: Amortization - - - - -

EBIT 13,500 17,544 26,443 33,916 41,148

Less: Interest 5,688 8,387 11,201 14,225 18,119

Add: Interest Income 6 - - - -

Less: Other

EBT 7,818 9,157 15,242 19,691 23,030

Less: Income Tax 1,564 1,831 3,048 3,938 4,606

Income After Tax 6,254 7,326 12,194 15,753 18,424

Less: Minority Interest 0 0 1 1 1

Income to Common Shares 6,254 7,325 12,193 15,752 18,423

Balance Sheet

Common Equity

Opening Balance 31,727 37,981 45,306 57,499 73,252

Add: Net Income 6,254 7,325 12,193 15,752 18,423

Less: Dividends - - - - -

Closing Balance 37,981 45,306 57,499 73,252 91,675

Minority Interest

Opening Balance - 0 1 1 2

Add: Net Income 0 0 1 1 1

Less: Dividends 0 0 0 0 0

Closing Balance 0 1 1 2 2

Assets

Current assets 39,899 52,311 68,585 89,920 117,892

Property, plant and equipment, net (3) 51,713 70,665 94,943 126,203 166,618

Investment in shares 0 0 0 0 0

Intangible assets 20,936 21,437 22,094 22,956 24,086

Other assets 1,842 1,842 1,842 1,842 1,842

Total assets 114,391 146,256 187,464 240,921 310,438

Liabilities

Short-term debt 16,513 32,448 49,377 70,432 98,892

Current liabilities 35,971 47,162 61,833 81,068 106,286

Long-term debt 23,270 20,684 18,099 15,513 12,928

Pension Liabilities 0 0 0 0 0

Deferred income taxes liabilities 655 655 655 655 655

Other 0 0 0 0 0

Total liabilities 76,409 100,949 129,963 167,668 218,761

Minority Interest 0 1 1 2 2

Controlling interest 37,981 45,306 57,499 73,252 91,675

Stockholders’ equity 37,981 45,307 57,500 73,253 91,677

Total Liabilities and Equity 114,391 146,256 187,464 240,921 310,438

Consolidated P&L and Cash Flow statements

34

Profit and Loss 2015 2016 2017 2018 2019

Revenues 532,294.92 734,970.92 985,943.73 1,277,546.74 1,615,536.20

Less: Operating Expenses 453,749.62 626,278.41 837,032.30 1,088,162.75 1,385,184.19

EBITDA 78,545.30 108,692.51 148,911.43 189,383.99 230,352.00

Less: Depreciation - Book 15,919.40 18,907.75 22,805.87 27,882.70 34,454.33

Less: Amortization 671.53 671.53 671.53 671.53 671.53

EBIT 61,954.37 89,113.23 125,434.03 160,829.76 195,226.14

Less: Interest on Long-term Debt 33,413.80 26,588.24 19,762.68 12,937.12 6,111.56

Less: Interest on Short-term Debt 237.35 10,940.00 18,020.82 18,945.19 13,560.19

Add: Interest Income 1,485.73 - - - -

EBT 29,788.95 51,584.99 87,650.54 128,947.45 175,554.40

Less: Taxes - Book 5,957.79 10,317.00 17,530.11 25,789.49 35,110.88

Net Income Before Minorty Interest 23,831.16 41,267.99 70,120.43 103,157.96 140,443.52

Less: Minority Interest 0.32 0.38 0.62 0.81 0.94

Net Income to Common Shareholders 23,830.84 41,267.62 70,119.80 103,157.15 140,442.58

Cash Flow

EBITDA 78,545.30 108,692.51 148,911.43 189,383.99 230,352.00

Less: WC Change (5,272.17) (9,885.20) (9,020.12) (7,297.57) (5,365.89)

Less: Taxes Paid 5,054.69 8,408.95 14,771.88 22,292.26 30,972.58

Operating Cash Flow 78,762.78 110,168.76 143,159.67 174,389.30 204,745.32

Less: Capital Expenditures 66,094.38 65,381.55 68,758.27 75,756.21 101,569.85

Less: Expenditures for Intangibles 382.33 501.26 657.20 861.64 1,129.68

Add: Sale Proceeds

Cash Before Financing 12,286.07 44,285.95 73,744.20 97,771.45 102,045.79

Less: Interest on Long-term 33,413.80 26,588.24 19,762.68 12,937.12 6,111.56

Less: Interest on Short-term 237.35 10,940.00 18,020.82 18,945.19 13,560.19

Add: Interest Income 1,485.73 - - - -

Less: Debt Repayment 40,174.18 40,345.33 40,345.33 40,345.33 40,345.33

Less: Dividends to Minority 0.06 0.08 0.12 0.16 0.19

Less: Dividends to Common - - - - -

Net Cash Flow (60,053.59) (33,587.70) (4,384.75) 25,543.64 42,028.53

Consolidated Balance Sheet

35

Balance Sheet 2014 2015 2016 2017 2018 2019

Common Equity

Opening Balace 87,158.40 110,989.24 152,256.85 222,376.66 325,533.81

Add: Net Income 23,830.84 41,267.62 70,119.80 103,157.15 140,442.58

Less: Dividends - - - - -

Closing Balance 87,158.40 110,989.24 152,256.85 222,376.66 325,533.81 465,976.39

Minority Interest

Opening Balace - 0.26 0.56 1.06 1.70

Add: Net Income 0.32 0.38 0.62 0.81 0.94

Less: Dividends 0.06 0.08 0.12 0.16 0.19

Closing Balance - 0.26 0.56 1.06 1.70 2.46

Assets

Current Assets

Cash 9,285.80 - - - - -

Other 67,196.84 43,380.45 53,284.86 67,344.76 86,855.59 113,361.50

Total Current Assets 76,482.63 43,380.45 53,284.86 67,344.76 86,855.59 113,361.50

Long-term Assets

Fixed Assets - Gross 136,928.90 185,155.27 236,599.78 294,487.16 361,764.07 456,720.07

Accumulated Depreciation (18,887.30) (16,938.69) (21,909.39) (33,844.37) (53,247.77) (81,088.24)

Net Plant 118,041.60 168,216.58 214,690.39 260,642.79 308,516.31 375,631.83

Financial Investments 37.51 37.51 37.51 37.51 37.51 37.51

Fair Value of Derivatives 765.26 765.26 765.26 765.26 765.26 765.26

Other Investments 5,510.27 5,510.27 5,510.27 5,510.27 5,510.27 5,510.27

Intangible Assets 24,866.69 24,793.38 24,839.02 25,040.58 25,446.59 26,120.64

Goodwill 177,852.63 177,852.63 177,852.63 177,852.63 177,852.63 177,852.63

Debt Issuance Costs 1,079.53 863.62 647.72 431.81 215.91 -

Total Other Investments 210,111.88 209,822.68 209,652.40 209,638.06 209,828.17 210,286.31

Total Assets 404,636.11 421419.7104 477,627.65 537,625.62 605,200.06 699,279.64

Liabilities and Capital

Current Liabilities

Accounts Payable 77,039.17 58,494.96 78,284.56 101,364.59 128,172.98 160,044.79

Short-term Loans 1,125.87 51,893.66 85,481.36 89,866.11 64,322.46 22,293.94

Total 78,165.04 110,388.62 163,765.92 191,230.70 192,495.45 182,338.73

Long-term Liabilities

Long-Term Debt 238,593.63 198,419.45 158,074.11 117,728.78 77,383.44 37,038.11

Pension Obligations - - - - - -

Deferred Taxes 655.23 1,558.33 3,466.38 6,224.61 9,721.84 13,860.14

Other Liabilities 63.82 63.82 63.82 63.82 63.82 63.82

Total Long-term Liabilities 239,312.68 200,041.60 161,604.32 124,017.21 87,169.10 50,962.07

Minority Interest - 0.26 0.56 1.06 1.70 2.46

Common Equity 87,158.40 110,989.24 152,256.85 222,376.66 325,533.81 465,976.39

Total Liabilities and Equity 404,636.11 421,419.71 477,627.65 537,625.62 605,200.06 699,279.64

Deal analyst & contacts

36

Vitaly Pentegov

Skills:

Corporate finance 80%

Equity research 90%

Programming 60%

Leadership 75%

Awards:

Analyst at VTB

McKinsey Business Diving, captain, semi-finalist Changellenge Cup Moscow: top-15

Education:

Higher School of Economics, BSc, mathematics Erasmus University Rotterdam, EIB banking program Alfa Bank school of risk management Yandex school of data analysis, computer science Yale university, financial markets course

Working experience:

VTB bank, analyst intern in financial department Dialog/ELC, head of IT department Google inc., data specialist Moscow Financial Club, President, CEO

2011-201520152014

2013-20142014

20152013-2015

20122015

20152014

vitaly.pentegov@financialclub.moscow