2006 02 14

BBH 2005 Results: 

BBH 2005 Results February 14, 2006 BBH 2005 Results

Contents: 

Contents 2005 Results Russia Integration proposal Other Markets Outlook

2005 Results: 

2005 Results

Overview of Developments in 2005: 

Strong volume growth from BBH Total volumes 4153 ML, up 12% Russia +13%, Kazakhstan +51% Market share in Russia 36.3%, up 2.1%pts BBH’s beer markets continue to show strong growth Russian market volume growth of 6.0% Ukraine up 25%, Kazakhstan up 25%, Baltics up 8% Excellent profit performance EBITDA 484 MEUR, up 25% EBIT 351 MEUR, up 26% Announcement of proposed integration of Russian businesses Dividend payout of 115 MEUR, up from 100MEUR Overview of Developments in 2005

Slide5: 

BBH FY 2005 Results Strong performance, margins improved

Slide6: 

BBH Net Sales Development FY’05 vs. FY’04 EUR +12.3 +8.2 +2.1 +21.0 Volume Price/ Litre Forex Net Sales (EUR) -1.5 Mix Strong price and volume growth drives an excellent sales performance

Slide7: 

BBH Margin Development 19.1 19.9 EBIT Margin FY’04 Marketing Sales & distr. Depre-ciation EBIT Margin FY’05 Admin & Production +0.9 -2.6 +2.5 +0.1 Continuing benefits from best practice sharing

Russia: 

Russia

Russian Beer Market Trends 2005: 

Russian Beer Market Trends 2005 Market continues to grow Per capita consumption up, closer to European average Market size 8720ML, up 6% BBH volume growth of 12.6% BBH market share 36.3%, up 2.1%pts Undisputed market leader Number 1 and 2 brands in Russia * Estimate Source: BBH, State Statistics Committee, Breweries

Russian Beer Market Share Development: 

Russian Beer Market Share Development BBH 36.3% Sun Interbrew 17.5%* Ochakovo 5.7% Krasny Vostok 5.9% Heineken 7.1% ** Efes est. 6.8% * SUN Interbrew since Y2005 includes Tinkoff **Heineken share including recent acquisitions (Irkutsky, Patra, Stepan Razin, PIT) - 13.4% (estimate, Y2005) BBH shows consistent progress in gaining market share Source: State Statistics Committee, Breweries sales data Heineken incl. recent acquisitions est.13,4%

Slide11: 

Russian Beer Market Development BBH significantly outperformed the market in 2005 *Heineken share including recent acquisitions (Irkutsky, Patra,StepanRazin, PIT) - 13.4% (estimate, Y2005) **Estimate Note: BBH domestic beer volumes Source: BBH, State Statistics Committee, Breweries, Business Analytica

BBH Pack Mix 2005: 

BBH Pack Mix 2005 Source: Business Analytika SO05, Breweries M3 forms * Domestic volumes Trend for mix changes towards PET is slowing for BBH Volume* share % of packaging +1,6%pts vs. LY +3,4%pts vs. LY +1,7%pts vs. LY +5,7%pts vs. LY

BBH strengthens its position: 

BBH strengthens its position Baltika Pikra, Vena, Yarpivo Enlarged Baltika Licensed Premium Mainstream Economy Discount Position #6 #1 #1 #1 #3 Position #2 #1 #1 #1 #1 Baltika 0, 5, 6, 7, 8 Baltika 2, 3, 4, 9 Strong position in all segments

Integration Proposal: 

Integration Proposal

Integration Proposal : 

Integration Proposal Proposal made to Baltika shareholders on 18 January 2006 Creation of Russia’s largest FMCG company Merger is expected to generate annualised synergy savings of $60mln to $80mln by 2008 at the latest Sources of Synergies Best practice improvements Cost savings Part of synergies to be reinvested in growth Approximately one third already achieved in 2005

Integration Proposal : 

Integration Proposal Proposal made to Baltika shareholders on 18 January 2006 EGSM to approve merger on 7 March 2006 BBH dividend payout to be at least sustainable at current level going forward BBH has significantly increased ownership of Russian businesses during 2005

Slide17: 

Current shareholding in Russia As at December 31, 2005 (change since H1) 50% 50% Russia Scottish & Newcastle plc Carlsberg A/S BBH AB Vena 93% (-) Baltika 84% (+6%pts) Pikra 70% (-) Yarpivo 87% (+25%pts) Note: * Shareholding includes that of Carlsberg Group, Scottish & Newcastle and Baltika Baltika 91%* Pikra 94%* Yarpivo 88%*

Other Markets: 

Other Markets

Slide19: 

Beer Market Trends 2005 E - Estimate * Includes Baltika imports, both through Slavutich and other distributors ** Includes only official Baltika imports Source: BBH, State Statistics Committee, Breweries Positive volume trends across all markets

Ukraine: 

Ukraine Strong market development as consumption climbs by 25% Per capita consumption now at 45 l PET segment is the main volume driver, but also licensed and premium beer accelerate Imminent announcement of new MD with proven track record Significant future growth opportunity Strong market dynamics but below standard execution

Baltics: 

Baltics Markets continue to grow Growth of quality PET and cans New product launches Focus on brand development and margin growth BBH maintains leading position in all markets Estonia market share 44,9% Latvia market share 38,7% Lithuania market share 41,5% Strong margin growth in what are already our most profitable markets Impressive profit growth continues across the region

Kazakhstan: 

Kazakhstan Most dynamically growing market in CIS Strong market growth of 25% in 2005 Growth of 80% during the last 4 years Favourable long term prospects due to robust economy and low per capita consumption Impressive BBH volume growth: +51% Strengthened market position Market share of 25,3%, up 2,7%pts Major competitors lost share in 2005 New product launches for main brands We will double capacity in 2006 before the start of the season Significant investment in a fast and exciting growing market

Outlook: 

Outlook

BBH Outlook for 2006: 

BBH Outlook for 2006 Russian market growth of 3-5% in the medium term BBH strategy to gain value share Pricing to grow slightly below Russian Food & Beverages inflation Full year EBIT margin stable at around 20% Strong cash flow supporting dividends at current level Completion of legal integration in Russia Focus on turnaround in Ukraine Increased capacity in Russia, doubled capacity in Kazakhstan Confidence maintained

Supplementary Information: 

Supplementary Information

Slide26: 

BBH Q4 2005 Results Overview

Currencies: 

Currencies *Note that these rates are representative average rates for the period only

Russian Beer Market Dynamics by Months : 

Russian Beer Market Dynamics by Months

Russia Pack Mix 2005/2004: 

Russia Pack Mix 2005/2004 Volume share % of packaging Change Change 0 % - 1.0% +3.5% +2.8% -3.4% -2.2% -0.1 % +0.4% Source: Business Analytika SO05, Breweries M3 forms BBH is very strong in the growing packaging segment

BBH in Ukrainian Beer Market 2005: 

BBH in Ukrainian Beer Market 2005 No 3 position in the very concentrated Ukrainian market Ukraine FY2005 100%= 2 113 million litres * Includes only official Baltika imports, both through Slavutich and other distributors

BBH in Estonian Beer Market 2005: 

BBH in Estonian Beer Market 2005 Estonia FY 2005 100%= 125 million litres Source: Breweries’ Association

Slide32: 

BBH in Latvian Beer Market 2005 Latvia FY 2005 100%= 139 million litres Source: Breweries’ Association

BBH in Lithuanian Beer Market 2005: 

BBH in Lithuanian Beer Market 2005 Lithuania FY 2005 100%= 299 million litres

BBH in Kazakhstan Beer Market FY 2005 : 

BBH in Kazakhstan Beer Market FY 2005 Kazakhstan FY 2005 100%= 389 million litres BBH further improves its leading position * Includes only official Baltika imports

BBH Volume Development 1991-2005: 

BBH Volume Development 1991-2005 14 33 75 151 202 318 618 913 1,278 1,829 2,384 2,911 3,135 ML 3,699 4,153

Slide36: 

Group Structure As at December 31, 2005 Baltika 84% St. Petersburg Tula Rostov-na-Don Samara Khabarovsk Yarpivo 87% Pikra 70% Vena 93% Saku 75% Aldaris 85% SUA 75% Klaipeda Utena Slavutich 92% Zaporozhe Kiev Lvivska 99.6% Derbes 90% 50% 50% Russia Scottish & Newcastle plc Carlsberg A/S BBH AB Baltics Ukraine Kazakhstan Note: As at December 2005 BBH, Carlsberg and Scottish & Newcastle control directly or indirectly 91.2% of Baltika ordinary shares, 30.0% of Baltika preference shares, 94.2% of Pikra shares (including 16.4% owned by Baltika), 93.2% of Vena shares and 87.9% of Yarpivo shares.

Slide37: 

BBH Family Companies

BBH 2005 Results: 

BBH 2005 Results February 14, 2006 Thank You for Your Interest