Shareholders of Baltika Breweries Confirm Dividend Payout for 2005

may 30, 2006

Shareholders of Baltika Breweries Confirm Dividend Payout for 2005

Today at the Annual Meeting the Shareholders of Baltika Breweries approved the Company's 2005 results as well the financial statements and the annual report for the period.

Net profit for the period rose by 3.03 billion rubles (74.4%) year-on-year. This has made it possible to increase the amount of declared dividend for 2005. The dividend for ordinary and preferred shares will amount to 24.33 rubles per share. In line with the Company's policy of increasing dividends each year, a dividend payout at this rate represents an increase of 1.3 billion rubles, or about 70%, over the previous year payout. The dividends will be payable starting from 10 June 2006.

The large dividend is possible due to the Company's good performance in 2005, a well-balanced operational cash flow and a very low level of debt. During 2005 the Company was able to increase its market share, grow the sales volumes and finance all investments using its own funds. Revenue growth was accompanied by effective control of the cost of production, administration and distribution. These successes were achieved during a time of a slowing market growth and the start of the integration process between Baltika and the Vena, Pikra and Yarpivo breweries.

At the meeting shareholders elected the Board of Directors of the Company. The new composition of the Board is the following:

Anton Artemiev - President, Baltika Breweries

Alexander Ikonnikov - General Director, Board Solutions Ltd.

Alexander Izosimov - CEO, VimpelCom Plc.

John Nicolson - Director, Scottish & Newcastle Plc.

Jorgen B. Rasmussen - Executive Vice President, Carlsberg Breweries A/S

BjЖrn SЬndenskov - Vice President, Carlsberg Breweries A/S

Andrew Stevenson - Development Director, Scottish & Newcastle Plc.

The shareholders also elected members of the Audit Commission, confirmed the Company's external auditors, approved the new version of the Company's charter and established the compensation and remuneration for members of the Board of Directors.

The issue of charter capital reduction was on the agenda but no decision was made at the meeting. This was due both to technical procedures and to the fact that the Board of Directors possessed only preliminary information on the number of shares to be redeemed. On May 22 the share redemption was completed and, accordingly, the Board called for an Extraordinary Shareholders' Meeting to be held via absentee voting. The shareholders have been asked to approve the reduction of charter capital on July 12, 2006 (the closing date for submission of voting ballots).

In his comments on the results, Baltika Breweries' President Mr Anton Artemiev stated:

“The Company showed outstanding performance in 2005. The growth in net profit allows us to increase the dividend payout to our shareholders. We are grateful for their understanding and support of the merger processes now uniting Baltika with the other Russian companies of the BBH Group. The year was not an easy one. Market growth slowed and competition heated up. However, the results show that Baltika has a strong team of professionals and with good reason occupies the leading position on the Russian beer market.”


Baltika Breweries has been the leader on the Russian beer market since 1996. The Company owns two of Russia's leading brands, Baltika and Arsenalnoye. The Company comprises 5 breweries in St Petersburg, Rostov-on-Don, Tula, Samara and Khabarovsk. It has a malt plant in Tula and 32 sales subdivisions. The Company's products are exported to 38 countries around the world.

Baltika Breweries is presently in the process of merging with the Vena, Pikra and Yarpivo breweries. The merger process is expected to be completed by the end of 2006. As a result of the merger, Baltika will have 10 breweries and 4 malt enterprises in 9 regions of Russia, the most powerful brand portfolio, and more than 11,000 employees.

Since 1993 the largest shareholder of Baltika Breweries has been Baltic Beverages Holding AB (ВВH). BBH is a company that is 50:50 owned by Carlsberg Breweries A/S and Scottish & Newcastle plc.

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