OREANDA-NEWS. May 11, 2007.  BASIC RESULTS OF Q1 2007:
• Total sales volume — 8.7 million hectolitres
• Net sales — 408.6 million EURO
• Gross profit — 198.8 million EURO
• EBITDA — 113.0 million EURO
• EBIT — 82.5 million EURO


RUSSIAN MARKET AND COMPANY’S POSITION

The high financial results performed by the Company in Q1 2007 were made possible first of all due to the effect of scale based on the impressive growth of sales volume and the beer market in the reporting period, the Company’s marketing initiatives and innovations. The successful merger of Baltika, Vena, Pikra and Yarpivo brewing companies also continues to exert its positive influence.

The significant growth of the market in Q1 2007 (+28%) was driven by the continuing growth of beer consumption primarily on less saturated regional markets and by a number of co-current factors such as unseasonably mild weather and the consequences of regulatory measures affecting alcoholic beverages.

In Q1 2007 the Company grew well ahead of the market and strengthened its leadership with a share of 37.5% (+2.6% to the relevant period in last year).

The sales volume of all the Company’s products in Q1 2007 amounted to 8.7mhl with a growth of +41.6% to Q1 2006 and sales of beer grew by +41.6% to 8.6mhl. Thus Baltika Breweries in Q1 2007 strengthened still further its leadership on the market.

COMPANY’S BRANDS DEVELOPMENT

In Q1 2007 Baltika Breweries continued to develop its brand portfolio.

For the Company, 2007 is the year of the Baltika brand. This key brand consolidated its leadership position thanks to the successful launch of the Company’s new marketing strategy based on thorough research of the market conditions and consumer preferences.

Baltika brand sales growth in Russia amounted to +53.8% in Q1 2007 and the brand’s market share rose by 2.1%, reaching 11.3% (according to the Company’s estimates). The brand’s success was driven by