Baltika Breweries LLC, part of the Carlsberg Group, announces the results over I quarter 2015

may 12, 2015

Baltika Breweries LLC, the leader of the Russian brewing market, announces its results over first quarter 2015.

Due to the difficult macroeconomic situation in the region the Russian beer market declined by estimated 9% from the same period last year.

The volume market share of the Company remained at the level of the similar period last year at 38.4 % 1 while the value market share increased by 0.5 %. Positive dynamics was shown by the premium and economy segments both in volume and value terms. The drivers of the premium segment were Baltika 7, Baltika Razlivnoe and Zatecky Gus brands. The economy segment growth was mostly ensured by regional brands, such as Don, Chelyabinskoe and Gorkovskoe with the unvaried influence of federal brand Arsenalnoe. The draught beer channel demonstrated growth relative to the result of the first quarter last year; the Company also increased its presence in the modern trade channel, which is related both with the growing volume of the channel itself and the good results in the national trade networks.

On the whole, the Company’s share in the Eastern Europe region grew on most markets of the Group. Owing to the strong price/mix the overall organic net revenue declined by 1% only while the organic gross profit per hl increased by more than 10 %. Considering the fact that the possibilities of long-term growth in the region are accompanied by the growing uncertainty Carlsberg Group is proactively adapting the structure of the organization to the changing market conditions while ensuring the long-term stability of the business. The Company focuses on investments and protection of profitability simultaneously developing the trend of maintaining the growing volume and value market share. To strengthen the stable commercial indicators the Company supports international and local premium and mainstream brands using the commercial instruments common for all companies of the Group.

Jacek Pastuszka, President of Baltika Breweries LLC: “This year Baltika is celebrating its jubilee. The 25 years of successful develop inspire us to new victories and do not allow us to consider the possibilities of lowering the bar. In the first quarter we started developing the initiative of raising the efficiency at the level of the Group by simplifying, streamlining and removing duplication in processes and functions and implementing operating cost management. The priority factors of improving the performance is expanding the market share and, like before, balancing the volume and the value. I’d like to note, however, that the further work of the Company and the industry in general will depend on development of the macroeconomic situation in Russia and balanced regulation of the industry.”

The Group’s performance in general in the short 1 quarter was in line with the Company’s expectations. The commercial activities yielded good results and strong overall market share performance was achieved. The Company started rolling out major internal initiatives that will make the Group still more efficient, dynamic and responsive and contribute to improved profits and returns.

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1 Source: AC Nielsen, urban and rural Russia

Baltika Breweries LLC, part of Carlsberg Group, is a major producer of consumer goods in Russia, No. 1 on the Russian beer market since 1996. Baltika owns 8 breweries in Russia and a broad portfolio of brands. The Company is a considerable part of Carlsberg Group and its Eastern Europe region which also includes Azerbaijan, Belarus, Kazakhstan, Ukraine, and Uzbekistan. Baltika Breweries is the leading exporter of Russian beer: Baltika’s products are available in more than 75 countries of the world, with the Company’s share accounting for 67% of all export deliveries of Russian beer.

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