“KONTI” GROUP

“KONTI” GROUP

Key Investment Highlights
Attractive market
Leading Ukrainian confectionery market player
Impressive growth story
Strong brand portfolio
Modern production facilities
Strong distribution and marketing expertise
Excellent credit history
Experienced management team
2

Ukrainian market overview
• The USD value of Ukrainian confectionery market in 2011 was
increased by 10% compared to previous year and reached
USD 2,33 billion.
• The Ukrainian confectionery market is relatively consolidated.
TOP10 confectionery manufactures held more then 60% of the
market in 2011
• Per capita consumption of confectionaries in Ukraine is about
15kg per year, which is still below European (22-25 kg in EU)
• Ukrainian confectionery demand is almost fully satisfied by local
producers
Main market players (in natural term), 2011
Other
36,5%
Grona
1,9%
Lagoda
2,4%
Kraft Foods
2,4%
Mars
2,6%
Nestle
3,1%
Roshen
20,8%
AVK
7,4%
KONTI
13,5%
Biscuit-Chocolate
4,7%
Zhytomyrsweets
4,7%
2,50
2,00
1,50
1,00
0,50
0,00
0,55
0,63
Confectionery market, USD bn
0,83
1,17
1,43
1,67
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
1,94
Market structure in natural term, 2011
Chocolate
7,7%
Sponge cake
1,8%
Dragee
1,0%
Fruit jelly
1,9%
Wafer products
6,7%
Caramel sweets
7,5%
Other
14,3%
Biscuit
31,5%
Sweets
27,5%
2,24
1,69
2,12
3
2,33

Russian market overview
• The confectionery market in Russia is one of the biggest in the
world.
• The USD value of Russian confectionery market in 2011 was
increased by 12% compared to previous year and reached USD
8,0 billion.
• The consumption of confectionaries in Russia is around 16kg per
capita per year
• In 2010 the production of confectionery items decreased by 4%.
TOP 10 producers held about 40% of the market.
• The chocolate segment has the largest market share in money
term. Bakery products segment has the largest market share in
natural term.
• Among TOP 5 producers 1 is Russian-owned and 4 are global
players.
*-preliminary data
Main market players (in natural term), 2011*
Other
59,3%
Ferrero
1,4%
United
Confectioners
15,9%
Mars
4,1%
Nestle
4,1%
Kraft Foods
5,5%
Slavyanka
5,4%
KONTI
4,3%
9,00
8,00
7,00
6,00
5,00
4,00
3,00
2,00
1,00
0,00
2,5
3,3
3,9
Confectionery market, USD bn
4,5
4,9
5,6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011*
Market structure in natural term, 2011*
Dragee
0,9%
Fruit jelly
3,0%
Chocolate
11,3%
Sponge cake
6,2%
Wafer products
7,5%
Other
13,9%
Caramel sweets
8,2%
6,6
Sweets
26,4%
Biscuit
22,6%
7,3
6,1
7,1
4
8,0

History
Konstantinovka
Confectionary
Factory (Ukraine)
became a part of
the Group
1997 1999 2001 2003
Gorlovka
Confectionary
Factory (Ukraine)
was acquired
Donetsk
Confectionary Factory
(Ukraine) was added
to the Group
ISO 9001:2000
implementation
2004
Head-office
Construction,
Donetsk (Ukraine)
Construction of
logistics center in
Makeevka (Ukraine)
2007
Kursk Confectionery
Factory (Russia) was
acquired
2008 2009
Construction of
logistics center in
Kursk (Russia)
Construction of packaging factory for
confectionery products in Makeevka
(Ukraine)
2010-2011
Construction of new
production complex in
Kursk (Russia)
5

Company overview
• KONTI is the second largest and the fastest growing
confectionary producer in Ukraine, with 12% Ukrainian market
share and 4% Russian market share in money term in 2011
• The Company operates the most technologically advanced
production facilities in Ukraine
• Four factories in Ukraine and two factories in Russia are part of
KONTI Group. Since Russian factory acquisition in 2004 its
output was increased by five times. In 2010 New Factory was
built in Kursk.
• KONTI is producing a variety of confectionery products, including
wafers, chocolates, deserts, sponge cakes, biscuits and caramel.
During 2011, KONTI increased its output by 1,1% to
241 thsd. tones
• Strong distribution network is one of major competitive
advantages
• According to the consolidated audit data, net sales rose by 20%
to UAH 5 billion in 2011 .
Production Facilities
Kursk Factory
New Factory in
Kursk
Konstantinovka
Factory
Gorlivka Factory
Donetsk Factory
Packaging factory
(Makeyevka)
300
250
200
150
100
50
0
Production output, thousand tones
54,2
66,7
84
126
151
184
205
219 220
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: company data
Output structure (in natural term), 2011
Christmas gifts
2,5%
Caramel sweets
11,0%
Dragee
0,5%
Marshmallows
0,2%
Fruit jelly
0,2%
Biscuit
32,1%
Other
4,2%
Wafer products
2,1%
Sponge cake
2,1%
Chocolate
4,5%
238
Sweets
40,7%
241
6

Modern production Facilities and Objects
in Ukraine
Factory
Konstantinovka
Horlivka
Donetsk
Office
Logistic centre
Packaging factory
Total:
Acquisition/building
date
Actual investments
to 11
1997 USD 7.5 million
1999 USD 2 million
2001 USD 164 million
2007 USD 10 million
2007 USD 17 million
2009 USD 4 million
USD 204.5 million
Products
7

Modern production Facilities and Objects
in Russia
Factory
Kursk
Kursk New Factory
Logistic centre
Factory
Acquisition/building
date
2004
2008
2008-2014
Actual investments
to 11
USD 17.5 million
USD 20.5 million
USD 108 million
Total: USD 146 million
Products
In 2010-2011 three production lines in new Kursk
production complex were installed.
8

Brand Portfolio
KONTI Group is presented on the confectionery market under such brand names as «Amour», «Bonjour», «Konti».
«AMOUR» combines premium segment chocolate confectioneries.
«Bonjour» is a well known innovative dessert, which practically «blew up» Ukrainian market in 2005.
«Konti» combines more than 250 confectioneries from different confectionery categories: chocolate products, candies, sponge cakes, wafers,
biscuits, tarts, marshmallow, dragee, caramel sweets and Christmas gifts.
Chocolate products «AMOUR»
Chocolate and chocolate sweets
Wafers
Marshmallow
Caramel sweets
Confectionery products «Konti»
Dessert «Bonjour»»
Sponge cakes
Biscuits and tarts
Dragee
Christmas gifts
9

Mission and Strategic goals
Increase market
share in Ukraine to
15%
Increase output of
premium and highyield
brands
Mission
Long-term development with creating unique high-quality and healthy products. To be International
company with stable increase of enterprise value, operation profitability and strong brand portfolio. To
create conditions for personal, professional and financial growth of employees.
Strategic Goals
Increase market
share in Russia to
7.5%
Reach USD 1 billion
yearly net sales
10

000
000
000
000
000
000
0
00,0
00,0
00,0
00,0
00,0
00,0
0,0
Financial results
692
82
Net Sales Gross profit
EBITDA
12% 12%
Net sales, UAH mln growth, %
930
109
34%
1 386
10%
133
49%
EBITDA, UAH mln
EBITDA margin, %
31%
1 816
10%
187
14%
41%
2 559
356
17%
3 253
550
4 185
27% 29%
474
5 037
20%
2004 2005 2006 2007 2008 2009 2010 2011
554
11% 11%
2004 2005 2006 2007 2008 2009 2010 2011
60%
1 400
50%
1 200
40% 1 000
800
30%
600
20%
400
10%
200
0%
0
18%
250,0
16%
200,0
14%
150,0
12%
100,0
10%
50,0
8%
0,0
6%
4%
-50,0
2% -100,0
0% -150,0
-200,0
33%
173
51%
312
Net Income
Gross profit, UAH mln
Gross margin, %
53% 52%
481
622
48%
836
987
44%
1187
40%
1332
2004 2005 2006 2007 2008 2009 2010 2011
7%
4%
45 40
NI, UAH mln NI margin, %
195
2%
26
2%
42
-7%
-191
6%
220
5%
36%
2004 2005 2006 2007 2008 2009 2010 2011
107
2%
70%
60%
50%
40%
30%
20%
10%
0%
10%
5%
Negative Net Income in
0% 2008 was caused by
UAH 433 082 thousand
loss on USD and EURO
loans -5% due to Ukrainian
currency devaluation in
Q4 2008.
-10%
As from 01.09.09 all
KONTI Group USD and
-15% EURO loans are
converted into UAH and
RUR.
-20%
11