BBH H106 Results

1
BBH H106 Results
BBH Half Year 2006 Results

• August 2, 2006

2
Contents

• First Half 2006 Results
• Russia
• Beer market and trends
• Integration process
• Other Markets
• Outlook

3
First Half 2006 Results
4
Overview of Developments in H1 2006

• Beer volume growth of 6
• Net sales (EUR) up 18
• Improvement in market share dynamics in Q2
• Strong margin growth driven by from mix,
  synergies and operational leverage in Russia
• Integration is on schedule for completion by the
  end of 2006

5
BBH H1 2006 Results
Highlights
Includes non-beer volume
6
BBH Net Sales Development
H106 vs. H105
EUR
5.1
17.7
7.2
-0.3
5.7
PackMix
Price (/litre)
Forex
Volume
Net Sales (EUR)
7
BBH Margin Development
H106 vs. H105
20.7
0.8
-0.3
0.1
1.3
0.2
18.6
EBIT Margin H105
EBIT Margin H106
Volume/Price/Mix
Admin Production
Consumer marketing
Sales,distribution trade marketing
Depre-ciation
8
Russia
9
Russian Beer Market Trends H1 2006

• Market continues to grow
• Market size 4416ML, up 6.1
• BBH volume growth of 4.2 against strong H105
  comparables
• BBH H106 market share 35.6
• Stronger performance in Q2 as the temporary
  disruption from integration of our sales and
  distribution arrangements eased.
• Undisputed market leader
• Number 1 and 2 brands in Russia

Estimate Source BBH, State Statistics
Committee, Breweries
10
Russian Beer Market Share Development
June06
Baltika 36.4
Sun Interbrew 18.8
Sun Interbrew w/o acquis. 18.1
Heineken 14.0
Efes N/A
Heineken w/o acquis. 8.2
Ochakovo 5.1
- Estimate Source State Statistics Committee,
Breweries sales dataSUN Interbrew since Y2005
including Tinkoff Heineken includes all
acquisitions (since 2004) Efes includes Krasny
Vostok
11
Russian Beer Market Development
Baltika domestic beer volumes Estimate
Sources Internal data, State Statistics
Committee, Breweries, Business Analytica 2006
12
Innovation Development

• Product innovation is one of the major drivers of
  sales growth in the market
• To strengthen the position and improve consumer
  brand offer BBH introduced a number of
  innovations in the first half on this year
• New sub-brands Baltika Cooler, Tuborg Twist
• New bottles Carlsberg, Fosters, Nevskoe
• New formats Baltika-3 in premium PET
• Can multi-packs for Baltika and other premium
  brands
• Our goal is to maintain innovation leadership

13
Consolidated Brand Portfolio 2006
Rating
Licensed
3
Premium
1
??????? 0, 5, 6, 7, 8
Mainstream
1
??????? 2, 3, 4, 9
Lower mainstream
1
Discount
1
14
Integration Process

• Plans progressing on schedule.
• In early July BBH exchanged its holdings in
  Pikra, Vena and Yarpivo for newly issued shares
  in Baltika. Baltika Breweries became the majority
  shareholder of Pikra, Vena and Yarpivo.
• Legal integration to be completed by end of 2006.
• Merger will consolidate Baltikas position as
  Russias number one brewer with an exceptional
  portfolio of brands and nationwide coverage.
• Integration generates synergies across the
  enlarged group.

15
Other Markets
16
Beer Market Trends
E - Estimate Includes Baltika imports,
both through Slavutich and other distributors
H105 market share reported last year was
adjusted upwards based on new market data
Includes only official Baltika imports
Source BBH, State Statistics Committee,
Breweries
17
Ukraine Highlights

• New MD and team implementing the action plan with
  focus on turnaround and new brand portfolio
  strategy
• BBH market share improved in Q206 compared to
  Q106 (18.0 vs. 17.2)
• Premium and licensed beer accelerate
• Baltika and Carlsberg license production launched
  at Slavutich

18
Baltic Countries Highlights

• Markets continue to grow
• Premium segment grows in all three markets
• Per capita consumption continues to grow
• BBH maintains leading position in all markets
• Market share growth in each of the three markets
• 1.0 pts combined market share growth in H106
• Further margin improvement
• Focus on brand development and margins

19
Kazakhstan Highlights

• Rapid market growth continues
• Upper mainstream and premium segments accelerate
• Per capita consumption increased
• Significant further growth potential
• Impressive BBH volume growth and strengthened
  market position
• Further market share growth
• Number 1 and 2 brands (Baltika Derbes)
• Capacity increased

20
New BBH Market Uzbekistan

• Plans to invest 50m in a new brewery in Tashkent
  announced in June 2006. This is in line with
  BBHs strategy of entering into emerging markets.
• Uzbekistan beer market has developed positively
  recently and has a strong growth potential
• Population - 27 million
• Current beer consumption - ca 10 litres per
  capita
• Growing economy
• The brewery will be operational by spring 2007
  with initial capacity of 1mln hl per annum.
• BBH will have 75 share in the JV
• MD has been appointed and the team is being
  formed.

21
Outlook
22
BBH Outlook for 2006

• Russian market growth of 5 in 2006
• Pricing to grow slightly below Russian Food
  Beverages inflation
• EBIT margin moving towards 21
• Strong cash flow supporting dividends at current
  level
• Capex to increase to 250M - 280M
• Completion of legal integration in Russia
• Focus on turnaround in Ukraine

23
Supplementary Information
24
BBH Q2 2006 Results Overview
Q2 2005 Net Sales restated for change in
accounting treatment of returnable bottles
25
H1 2006 Results Breakdown
Including depreciation
26
Currencies
Note that these rates are representative average
rates for the period only
27
Shareholding in Russia As at July 31 2006
50
50
Scottish Newcastle plc
Carlsberg A/S
BBH AB
Russia
Baltika 1 90
Vena 97.5
Pikra 92.0
Yarpivo 91.4
Notes 1. Indicates ordinary shareholding only 2.
As at July 3 2006 BBH, Carlsberg and Scottish
Newcastle control directly or indirectly 92.9 of
Baltika ordinary shares, 30.0 of Baltika
preference shares, 99.4 of Pikra shares 93.4 of
Vena shares and 88.4 of Yarpivo shares.
28
BBH in Ukrainian Beer Market H1 2006
Ukraine H1 2006 100 1100,5 million litres
29
BBH in Estonian Beer Market H1 2006
Estonia H1 2006 100 62,4 million litres
Source ACNielsen, Breweries Association
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BBH in Latvian Beer Market H1 2006
Latvia H1 2006 100 70,4 million litres
Source ACNielsen, Breweries Association
31
BBH in Lithuanian Beer Market H1 2006
Lithuania H1 2006 100 142,1 million litres
Source ACNielsen, Breweries Association
32
BBH in Kazakhstan Beer Market H1 2006
BBH in Kazakhstan Beer Market H1 2006
Kazakhstan H1 2006 100 212,6 million litres
BBH
BBH
Other
Other
Heineken
Heineken
Rosa
Rosa
Efes
Efes
Almaty Brewery1
Almaty Brewery1
Shymkentpivo
Shymkentpivo
Includes only official Baltika imports
Includes only official Baltika imports
33
BBH Volume Development 1991-2005
ML
4,153
3,699
3,135
2,911
2,384
1,829
1,278
913
618
318
202
151
75
33
14
34
BBH Family Companies
35
BBH H106 Results
Thank You for Your Interest

• August 2, 2006