Nielsen QBN Europe Q4 2017

EUROPE QUARTER BY NUMBERS Q4 2017

SECTION 1

THE BIG PICTURE: EUROPE WEST

Message from Olivier Deschamps…………………..…………………….………03

EUROPE AT A GLANCE

Key economic drivers………………………………………………………….……04

Looking through Europe West FMCG lens………………………………...……06

COUNTRY SNAPSHOT

Belgium……….………………………………………….…………………………..07

France……….………………………………………..….…………………………..10

Germany……….……………………………………..….…………………………..13

Italy……………………………………………………….…………………………..16

Netherlands..….…………………………………….……………….………………19

Portugal……….……………………………………..………………….……………22

Spain………………………………………………………………….………………25

United Kingdom.……………….…………………………………….………………28

IN THE INDUSTRY

Retail Channel Universe Update……...………………………..…………………93

Welcome to the first edition of Europe Quarter by Numbers that includes key Western European markets for Q4 2017, complimenting the view of Central and East Europe already in place. Our ambition is to provide context and insight into how broader macroeconomic factors are influencing consumer sentiment and spending patterns in the retail scene.

After tough times in the last few years, 2017 showed a dynamic economic environment across Europe, with positive consumer confidence in the region reaching some of the highest levels seen for some time. While nations can draw similarities among the positive impacts on Olivier Deschamps consumer sentiment, Europeans diverge in the national issues of greatest concern - terrorism Retail Services Lead Markets remains high on the list and health is definitely a key priority with countries like Portugal showing notable peaks. Encouraged by lower risk of terrorism and better economic conditions, tourists flocked to the region in 2017 (+8%), particularly in Mediterranean countries. France was still the number one global tourist destination and Spain is about to exceed USA. Western European countries also remained strong with the best economic growth see in 10 years. GDP increased +2.5% in 2017 and is now stable following recovery from a number of economic and political crises over the last decade. Among Eurozone's largest economies, GDP growth slowed slightly in Germany, Italy and Spain in Q4, but picked up in France, Netherlands and Belgium.

In this favorable context, the FMCG industry rose with significant value growth across the region, led by Iberia where both Portugal (+6.7%) and Spain (+5.3%) are growing fast. In every market inflation is feeding growth, but volumes are also doing well in 2017, benefitting also from better weather than in 2016 leading to a direct impact on Beverage categories. The exceptions being both Belgium and Netherlands where volumes are declining by -0.3%.

Putting money into savings is the first priority for the majority of markets and consumers continue to navigate the retail environment with a savings mindset, seeking the best deals when shopping. Discounters like Aldi and Lidl are pushing hard across the region and gaining share, modifying the retail landscape. Another key trend is the rapid increase of digital initiatives that will lead to an explosion of e-commerce in the coming years. Best examples are now France and UK where e-commerce has gained 6% share of FMCG and increasing with online `clicks` growing still faster than store “bricks”. This is within the context of a moderately inflationary environment in Western Europe at the end of 2017.

We have seen recently that growth in FMCG is getting harder and harder to achieve but winners can be found across all sectors and markets with many examples of companies, segments and channels performing strongly. Without a doubt, where we see massive and sustained growth is among small players, doing much better than the bigger players across countries. In a number of markets, local brands are capitalizing on revived “local pride”, leveraging an appeal from consumers toward local consumption and a push from retailers towards premium, local champions, who frequently offer products with health and wellness benefits, organic ingredients or “free-from” claims.

Private Labels are also gaining traction across these markets (except in France), at a time when many retailers have revamped their own brands, upgrading ranges and investing in communication. That said, big or small, retailers or manufacturers, it’s up to all the players in the industry to understand the nuances by market and connect with local consumers.

ECONOMIC PULSE OF CONSUMERS AROUND EUROPE

The Nielsen Consumer Confidence Index measures perceptions of local job prospects, personal finances and immediate spending intentions. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

CONSUMER CONFIDENCE INDEX

GDP GDP Q4 2017 vs Q4 2017 vs Q4 2017 (annual % Inflation (annual % Inflation Q4 2017 Q3 2017 Q3 2017 growth) growth)

Belgium 85 -10 1.7 2.0 2.4 1.2 France 79 8 UK 96 -3 1.5 2.8 1.7 1.1 Italy 68 3 2.9 1.6 Germany 103 0 3.2 1.6 Spain 93 0 3.1 1.3 Netherlands 101 0 2.1 1.8 Portugal 84 0

CONSUMER CONFIDENCE INDEX

Positive consumer sentiment across the region with record high indices in various markets – only declining in Belgium and UK

GDP and Inflation reflect % change per annum to Q4 or latest available data Source: Economist Intelligence Unit (EIU)/local government sources 4 The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen.

CONSUMER SENTIMENTS IN EUROPE WHAT ARE THE TOP 2 CONCERNS IN THE NEXT SIX MONTHS? Type of concern

40 33 34 30 26 27 23 23 21 19 19 19 20 17 18 20 15 16 13 14 10 10

0 EU BE DE ES FR GB IT NL PT Health Terrorism

EU BE DE ES FR GB IT NL PT Health 1 -5 2 -3 -1 3 0 -3 5 Terrorism -6 -7 -3 -20 -4 -10 -10 -4 -14

Bars reflect Q4 2017. Table shows comparison to Q3 2017

WHO’S SPENDING, SAVING AND INVESTING?

After living expenses, how is spare money spent 60 51 51 50 48 47 50 44 45 45 42 40 38 37 40 31 29 27 28 28 30 22 20 10 0 EU BE DE ES FR GB IT NL PT Putting into savings New clothes

EU BE DE ES FR GB IT NL PT Putting into savings 1 9 0 3 -1 0 -6 1 0 New clothes 1 4 6 -1 -2 3 -1 0 3 Bars reflect Q4 2017. Table shows comparison to Q3 2017

Putting money into savings is #1 priority for majority of W. Europe markets, spend on clothes is important in Germany, Italy and Spain

5 The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. LOOKING THROUGH EUROPE WEST FMCG LENS

FAST MOVING CONSUMER GOODS MARKET DYNAMICS – Q4 2017 Weighted average – WEST EUROPE – 8 countries

BE FR DE IT NL PT ES GB

6.7%

5.3% 2.9% 3.2% 4.0% 3.7% 2.8% 0.5% 3.1% 2.9% 2.8% 1.8% 1.4% 1.7% 3.2% 3.2% 3.8% 2.1% 2.1% 1.4% 1.3% 1.2%

-0.3% -0.3% Unit value change Volume change Nominal growth

WHERE ARE THE FMCG GROWTH OPPORTUNITIES? Average volume growth Q3 2017 & Q4 2017

UK (+1.7%) GERMANY (-0.4%) NETHERLANDS (-0.6%) BELGIUM (-0.5%)

FRANCE (+0.7%)

ITALY (+2.1%) PORTUGAL (+1.5%) SPAIN (+2.8%)

Avg. volume growth decreasing versus last period Colour coding indicates growth or declining trend compared to same 6 month period year ago Avg. volume growth increasing versus last period 6 Average volume growth of Q3’17 & Q4’17 vs Q3’16 & Q4’16.

While Belgium’s economy is growing significantly, the growth remains minimal compared to neighboring markets. The European Commission believes Belgium’s growth in 2018 will be the second slowest in the Eurozone. After several quarters hovering around the 70 to 80s, consumer confidence has stabilized at 85. Half of Belgian people believe that the country is in a recession at the moment, with a little less than one third believing it is a good time to buy the things they want or need.

The FMCG market grew 1.3% in 2017, which is slower than GDP growth and with volume Pedro Lima Managing Director sales dropping slightly. In addition, Belgium’s FMCG price gap has widened versus Benelux neighboring countries over the past 15 years, creating cross-border competition for

consumers. Over half of Belgians surveyed say they’ve changed spending to cut down on household spending, with 57% saying they have switched to cheaper grocery brands to save on household expenses.

In mature markets like Belgium, the struggle for manufacturers is to find growth opportunities. While elusive, they are present. In Belgium, capitalizing on local footprint and distribution channels are major growth drivers for total FMCG. This year most growth was driven by Hard Discounters, due to introduction of national brands and premium products, and Large Supermarkets, which successfully offer a wide assortment at competitive pricing. Superettes remain small but experienced the largest growth.

There are great opportunities for manufacturers who successfully innovate with local niche products, giving them a local relevance and authenticity that resonates well with consumers. Strong, established brands, particularly within Impulse categories, can benefit from growth by listing at Hard Discounters - even without compromising on price. Experimenting with pack sizing can also be a tactic to combat rising costs, with Millennials in particular open to smaller sizes, especially if it helps keep them healthier. Health is an increasing priority. Belgian consumers want antibiotic-free, hormone-free, and artificial preservative/flavor/color-free products; therefore innovating to create products that match changing consumer demand is another way to find growth in a mature market.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

95 3.0 89 85 84 87 87 85 81 81 81 79 76

1.9 2.0 2.0 1.9 2.0 1.8 1.7 1.7 1.6 1.5 1.4

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU BE The Conference Board® Global Consumer Confidence 7 Source Economist Intelligence Unit (EIU) Survey is conducted in collaboration with Nielsen.

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

3.4% 2.8%

2.6% 1.7% 1.4% 1.8% 1.3% 2.9% 1.5% 1.7% 1.2% 1.0% 0.9% 2.3% 1.4% 2.1% 1.4% 0.6% 0.4% 0.0% 0.0% -0.1% -0.3% -1.6% -0.8% -1.1% -0.9% -0.8% -1.7% -2.9%

Unit Value Growth Volume Growth Nominal Value Growth

Rising prices rather than volume continues to drive nominal growth

TOTAL BELGIUM – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

3% 1.3% 12% 17% 0.0%

4.1%

18% -7.0% 50% 3.3%

7.0%

Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Hard Discounters Superettes

Hypermarkets contract. Growth is mostly driven by Hard Discounters and smaller stores. 8

MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 1.3%

Alcoholic Beverages 14.6% -1.1 %

Dairy 13.3% 2.3 %

Grocery 12.0% 0.5 %

Fresh Products 12.0% 4.5 %

Non Alcoholic Beverages 11.4% 3.1 %

Health & Beauty 8.5% -1.3 %

Housekeeping 5.9% -0.5 %

Frozen 5.0% 1.1 %

Confectionery 4.7% 1.3 %

Sweet Snacks 3.7% 0.4 %

Hot Beverages 2.9% 1.4 %

Salted Snacks 2.3% 3.5 % Pet Product 2.0% -1.1 % Bakery & Toast 1.8% 5.6 % Fresh, Bakery and Dairy drive growth. Great innovation opportunities for local giants in these categories

TOTAL BELGIUM – MANUFACTURER PERFORMANCE - FMCG MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 1.3%

Top 1-5 15.5% 1.3%

Top 6-10 8.3% 0.0%

Top 11-30 13.6% -1.0%

31-100 10.1% -0.4%

100+ 16.9% 1.7%

Private Label 35.5% 2.7%

Manufacturers are mostly growing thanks to innovation. Strong growth evident from smaller companies and Private Label 9

The FMCG industry in France had a strong finish in 2017 reporting a +2.8% growth in value and 1.4% in volume during last quarter, along with a record high consumer confidence. The Christmas period accounted for almost 20% of the full year FMCG growth highlighting the importance of understanding seasonality. E-commerce continues its momentum (mostly click & drive in France) with close to double digit growth while urban convenience stores also performed strongly with high single digit growth.

Laurent Zeller The growing force behind total FMCG growth has been the fresh market industries Managing Director (both Dairy and Non-dairy). During the last quarter in France, there has been a France shortage on butter that created huge price inflation on this category, due to supply and demand effect. This category alone drove 30% of the Dairy sector’s growth during Q4.

The last quarter has seen an accelerating trend for small and medium FMCG companies. Given the price deflation for large brands, consumers have improved purchasing power which has encouraged them to buy more premium segments or categories. This is a continuing trend of “premiumisation” that has been evident over the past five years. Likewise, organic food has also seen significant growth in 2017, up 20% in grocery stores and 16% in specialized organic stores.

We anticipate FMCG will grow between 1.5% and 2% in 2018 on the back of better economic macro trends and positive confidence sentiment, as well as specific 2018 events such as the Soccer World Cup and Olympic games. In 2018, a new legislation (‘SRP’) will also be introduced which will cap promotional levels for retailers as well as guaranteeing a fair price to producers. This might create a slight inflation trend for food products.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

87 87 2.4 85 2.3 79 81 81 79 75 69 71 1.8 66 66 1.5 1.2 1.2 1.2 0.9 1.0 0.9 0.6 0.4

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU FR

The Conference Board® Global Consumer Confidence 10 Source Economist Intelligence Unit (EIU) GDP estimate for Q4 2017 Survey is conducted in collaboration with Nielsen.

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

3.2% 2.8% 0.5% 2.5% 5.1% 0.1% 1.4% 0.8% 1.5% 2.2% 0.8% 0.7% 1.0% 0.8% 0.5% 1.4% 1.0% 0.3% 0.5% 1.0% -0.2% -0.7% 0.0% -0.1% -0.2% -0.3% -1.9% -0.1% -0.3% -0.4%

Unit Value Growth Volume Growth Nominal Value Growth

2017 has been a solid year, with a strong last quarter thanks to a very dynamic Christmas period

TOTAL FRANCE – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

1.5% 11% 0.4% 5% 8% 42% 1.6%

4.2%

8.5% 34% 0.7%

Total FMCG Hypermarkets Supermarkets Convenience Drive (E-Commerce) Smpl / Discounters

One third of FMCG growth comes from e-commerce, urban convenience stores and SMPL (Discounters) 11

MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 1.5%

Sweet Grocery 17.9% 1.8%

Fresh Non-Dairy 16.9% 3.8%

Dairy 16.1% 1.5%

Savoury Grocery 12.2% 1.2%

Alcoholic Drinks 9.7% 2.5%

Soft Drinks 7.1% 2.4%

Homecare 5.9% -0.4%

Personal Care 5.9% -2.5%

Paper Products 3.6% -0.9%

Savoury Frozen Food 3.5% -1.2%

Sweet Frozen Food 1.2% 4.2%

Fresh products continue to drive growth while the Health and Beauty sector confirms its long-term decline in grocery stores

TOTAL FRANCE – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 1.5%

Top 1-5 12.0% 0.5%

Top 6-10 7.4% -2.3%

Top 11-30 16.4% 1.5%

31-100 16.2% 4.7%

100+ 15.6% 4.8%

Private Label 32.5% -0.1%

Small and medium companies are driving growth due to consumer demand and support for local produce and delivery

The overall economy in Germany is good with GDP growth at 2.9% combined with a healthy inflation rate and the lowest unemployment rate since the Reunification of Germany (5.3%). While still considered a strong export-champion, current economic growth is also supported by solid domestic consumption. The continuously low Eurozone interest rates entice consumers to spend more money, especially for out- of-home consumption and durable consumer goods. Despite the “Diesel scandal”, the automobile industry is thriving. Sales of new automobiles were promoted by trade-ins throughout the industry and local legal ramifications were limited. But Ingo Schier recent judicial decisions hold the potential to stir things up in 2018. Managing Director Germany The Consumer Confidence Index is stable and far above European average (103 vs. 87 for Q4 2017). Two thirds of Germans have an excellent or good attitude towards their own job prospects and more than 50% judge their financial situation as good or excellent.

FMCG value growth (+1.8%) remains lower than GDP development. Enhanced listings of A-brands at Aldi is triggering heightened price consciousness among consumers and price-focused reactions by other retailers. Hyper and supermarkets are increasing their focus on Private label activities and promotions. The number of shopping trips consumers are making have been in decline over the last years. Even if consumers spend more per trip, the change in behaviour impacts the number of potential touch points specifically in the brick and mortar environment. E-commerce represents an approximate 1% share of Total FMCG but in categories where online is already important, the market is dominated by pure players. The major offline retail players are not yet investing heavily in e-commerce platforms due to expected lower return on investment than in the offline world.

The key challenge for manufacturers is in determining how to win in a saturated market where price increases for established brands will not work. Both parties, retailers and manufacturers ought to invest in designing a premium strategy where products and services are clearly differentiated from the current mainstream offers and in discovering what consumers are willing to spend more money on. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

2.9 101 103 102 103 2.8 96 100 85 87 87 2.3 79 81 81 2.1 1.9 1.9 1.9 1.7 1.6 1.6

1.0

0.4

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU DE The Conference Board® Global Consumer Confidence 13 Source Economist Intelligence Unit (EIU) GDP forecast for Q4 2017 Survey is conducted in collaboration with Nielsen.

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

3.7% 0.5% 2.8% 3.1% 1.7% 0.0% 1.2% 1.8% 1.7% 1.3% 1.2% 1.1% 3.1% 3.2% 2.7% 0.5% 1.4% 0.5% 1.2% 0.4% -0.7% -1.0% -0.5% -0.7% -0.3% -1.4% -1.0% -0.6% -1.2% -2.6%

Unit Value Growth Volume Growth Nominal Value Growth

Slight market increase in Q4 led by Private label and promotions

TOTAL GERMANY – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

1.8% 10% 2.4% 38% -5.2%

43% 2.6%

10% 3.0%

Total FMCG Hypermarkets Supermarkets Discounters Drug Stores

New openings of large formats within Supermarkets and Hard discounter re-designs are key drivers

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL GERMANY – SUPER CATEGORIES PERFORMANCE MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 1.8%

Food Ambient 17.2% 3.6%

Dairy 11.7% 6.4%

Non Alcoholic Beverages 11.7% 0.8%

Confectionery 10.4% 2.1%

Alcoholic Beverages 10.3% -0.7%

Fresh Food Selfservice 9.0% 1.2%

Personal Care 6.9% 1.0%

Household Care 6.9% 0.2%

Tobacco 6.0% -2.9%

Frozen Food 5.6% 1.9%

Baby 1.6% 2.8%

Pet Food 1.6% -1.1%

Health Care 1.0% 4.3%

Price increases for Dairy products (up to 20%) caused by exploding raw material costs have push value development

TOTAL GERMANY – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 1.8%

Top 1-5 8.0% -1.2%

Top 6-10 5.1% -0.2%

Top 11-30 9.4% 2.4%

Top 31-100 13.7% 0.6%

100+ 22.1% 1.1%

Private Label 41.6% 3.2%

Top manufacturers underperformance is partly due to reduced product offering and less flexibility on targeting niche consumer needs and groups

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. ITALY SNAPSHOT At a glance, Italy’s situation is positive, with GDP growth expected to be 1.4% throughout 2018 according to the Bank of Italy. Public debt has stabilised and the moderate rise in households’ disposable income is encouraging higher consumption and investments. The exceptional increase in consumer confidence in Q3 was the best increase among major EU Countries, +7pp and its positive momentum has been maintained in Q4, reaching an index of 68. Nevertheless, the country needs to reinforce stronger (and braver) measures.

FMCG market performance was strong compared to 2016 with volume growth boosted by seasonal factors, with the hottest and driest summer ever and an Giovanni Fantasia “upgrade” of the average shopping cart. Among FMCG products, Food is the Managing Director primary driver. Millennials and wealthy families are the trendsetters for health & Italy wellness products, and products with a convenience offering (e.g. ready-to-eat). In

response to these emerging needs, retailers and manufacturers are rejuvenating their assortments and encouraging sales across different categories. Beyond structural reforms and a rationalization of tax legislation, innovation should underpin economic recovery. To innovate, companies must keep up with evolving consumer needs and the changing retail landscape.

Ageing population, digital disruption and social fragmentation are all changing the way Italians shop. What and how consumers buy does not necessarily depend on their age or income, but rather on their "specific needs" and willingness to pay for FMCG products. To effectively identify and target the right consumers to drive growth, we have identified five consumer clusters: 1. Traditional mature shoppers 2. Silver - high income older shoppers who have potential to spend more 3. Price conscious – young consumers looking for efficient shopping 4. Mainstream – indulgent (i.e. leaning towards unhealthy diet) and low-income 5. Golden – high income, high spend with healthy sustainable consumption The next step for players operating in Italy is to address each of those shoppers group to determine tomorrow’s opportunities. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

1.7 1.7 85 87 87 81 1.5 1.6 79 81 1.3 1.3 1.3 65 68 57 58 58 1.0 1.1 55 0.9

0.2

-0.1 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017

GDP growth (% change pa) EU IT Inflation, consumer prices (% change pa)

The Conference Board® Global Consumer Confidence 16 Source Economist Intelligence Unit (EIU) GDP estimate for Q4 2017 Survey is conducted in collaboration with Nielsen.

MAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

4.0%

3.1% 3.1% 2.6% 3.1% 1.7% 1.7% 1.6% 2.6% 1.2% 1.4% 0.7% 0.4% 2.1% 1.3% 0.9% 2.1% 0.3% 0.9% 0.6% 0.1% 0.2% -0.9% -0.3% -1.0% -0.5% -0.5%

Unit Value Growth Volume Growth Nominal Value Growth

Strong performance in December helped maintain Q4 growth also supported by inflationary price dynamics

TOTAL ITALY – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

2.6% 5%4% 2.4% 26% 17% 4.2% -2.3% 3.7% 10% 6.2% 37% -4.8%

Total FMCG Hypermarkets Supermarkets Convenience Discounters Drug Stores Others Drug stores are performing well due to faster innovation streams. Convenience and Traditional stores (“Others”) are losing share

MAT Q4-2017 MAT Q4-2017

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.6%

Packaged Food 30.7% 1.5%

All Fresh 28.1% 4.6%

Beverages 14.4% 4.1%

Personal Care 9.9% 0.6%

Home Care 7.8% -0.4%

Frozen 5.4% 5.2%

Pets 2.0% 2.9%

Light Bazaar 1.3% -4.0%

Heavy Bazaar 0.2% -3.5%

Textile 0.1% -6.2%

Food drives FMCG growth. Italians are more willing to “invest” in healthy and premium products. Personal care and Household care are struggling.

TOTAL ITALY – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.6%

Top 1-5 9.7% 0.9%

Top 6-10 5.6% -2.0%

Top 11-30 12.8% 0.1%

Top 31-100 14.3% 2.3%

100+ 31.8% 3.7%

Private Label 25.9% 4.4%

Private Label and smaller players are driving growth thanks to the price/quality ratio they offer and increasing trust from shoppers

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. NETHERLANDS SNAPSHOT The Dutch economy is performing well with all macroeconomic trends pointed in the right direction. According to the Central Bureau of Statistics, in 2017 the Dutch economy saw the fastest growth seen in the past ten years. Consumer confidence has stabilized at 101 points. 58% of Dutch consumers feel positively about the state of their personal finances within the next 12 months, with just over half positive about their future job prospects.

The FMCG market grew +1.9% in 2017, with relatively strong performance in the Pedro Lima second half of the year counterbalancing the contraction in early 2017. Price remains Managing Director Benelux the strong driver of growth, while volume sales are declining. The volume trend is in part due to the good development of HORECA and the shift to e-commerce for several categories. Supermarkets are showing high growth, driven primarily by price and premium products. Drug, Perfumery and Food specialty stores are also growing. but at a slower pace. Channels like Drug are facing more competition from e- commerce players than Supermarkets, and Petrol is contracting due to an increase in unmanned stores. Over 25% of Dutch consumers are now buying groceries or personal care items online, which is a big jump from 2016 (19%). The Dutch e- commerce market for groceries represents EUR 759 million, up 55% since last year.

Out-of-home dining and home delivery are growing exponentially, providing increased competition to retailers. This trend is due to both the growing economy and the growing number of millennials, with no signs of slowing down in the near future. In 2016, the market for delivered food was approximately EUR 420 Million, and estimates for 2017 are in the range of EUR 1.3 - 1.4 billion. The development of additional delivery services like UberEats, Foodora, and of course Thuisbezorgd are evidence of this emerging trend.

Looking forward, with a growing economy and consumer demand, there are opportunities for experimenting with different price tiers as well as innovating with premium concepts. Fresh shows great growth potential, particularly for vegetables, fruit, and cheese. Branded produce can be a great avenue to drive sales and influence store choice, as shoppers look to product quality when choosing where to shop. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

3.8 100 102 101 101 96 3.1 91 3.2 85 87 87 2.8 79 81 81 2.6 2.4

1.3 1.5 1.3 1.0 0.5

-0.2 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017

GDP growth (% change pa) EU NL Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence 19 Source Economist Intelligence Unit (EIU) GDP estimate or Q4 2017 Survey is conducted in collaboration with Nielsen. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL NETHERLANDS - FMCG MARKET DYNAMICS (weighted average)

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

3.2% 2.9% 0.5% 0.9% 2.0% 1.9% 0.3% 1.6% 1.2% 1.1% 1.1% 3.1% 3.2% 2.6% 2.3% 0.6% 1.1% 1.1% 1.0% 0.4% 1.0% -0.5% -0.8% -0.7% -1.1% -0.3% -0.9% -0.7% -2.1% -1.9%

Unit Value Growth Volume Growth Nominal Value Growth

Growth in FMCG largely driven by price increases rather than volume sales

TOTAL NETHERLANDS – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

1.9% 5% 11% 2.2%

0.6%

85% -0.8%

Total FMCG Food Drug-Perfumery Petrol

Supermarkets are showing high growth, driven primarily by price and premium products. Hard discounters (included in Food) are no longer gaining share 20

MAT Q4-2017 MAT Q4-2017

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 1.9%

Beverages 24.7% 1.8%

Other Shelf Stable Food 19.5% 1.2%

Personal Care 13.5% 0.0%

Tobacco 12.3% -0.3%

Confectionery 12.0% 3.6%

Dairy 6.9% 7.6%

Frozen 5.3% 1.8%

Home Care 3.7% 1.9%

Margarine/Butter/Fat 2.1% 5.6%

Strongest growth is in Dairy, with significant price increases on Milk (+20%). Price hikes on Butter also impact the Margarine/Butter/Fat sales

TOTAL NETHERLANDS – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 1.9%

Top 1-5 17.1% 0.9%

Top 6-10 7.8% 1.7%

Top 11-30 14.2% 2.6%

Top 31-100 16.7% 1.0%

100+ 25.8% 2.2%

Private Label 18.4% 2.7%

Strong growth seen from players operating in premium segments and from smaller niche players with distinct consumer propositions

After a period of crisis, the economic climate is now more favorable in Portugal, with increases in GDP and prices supported by growing tourist activity. In fact, the confidence of Portuguese consumers has grown significantly, over the last quarters with the highest indexes ever registered. Consumers believe they have increasingly better employment and personal finances' prospects, recognizing that this is a favorable time to buy what they want or need.

The balance between personal and professional life, as well as health are the Gustavo Nuñez primary concerns to Portuguese consumers, who seek convenient and healthier Managing Director Iberia products, even if that means buying at a higher price. The products' quality and the purchasing experience are also critical to success adding value to the category and bringing additional benefits to consumers.

In 2017, FMCG grew by 4.2%, predominantly due to price increases. This reflects a very different environment to that of 2016 where prices were stable and volume consumption was growing at 2.6%.

The last quarter of 2017, with a dynamic Christmas and New Year's Eve period and healthier volume consumption indicates a positive trend for the immediate future. Brands and retailers in FMCG need to innovate and invest in creating value in their categories, with products that even with higher prices, bring extra benefits and make life easier for consumers.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

3.0 87 87 2.8 85 85 84 79 81 81 82 74 2.5 70 2.2 2.1 65 1.8 1.8 1.6 1.5 1.3

0.8 0.8

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU PT

The Conference Board® Global Consumer Confidence 22 Source Economist Intelligence Unit (EIU) GDP estimate or Q4 2017 Survey is conducted in collaboration with Nielsen.

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

6.7% 6.1%

2.9% 4.2% 4.0% 0.2% 3.7% 1.2% 3.1% 2.5% 0.3% 3.0% 3.4% 3.8% 1.8% 1.2% 2.7% 1.6% 2.4% 2.6% 3.0% 2.8% 3.6% 0.4% 0.6% 1.2% 0.3% -0.1% -0.9% -1.8%

Unit Value Growth Volume Growth Nominal Value Growth

The growing inflationary environment compared to 2016 impacted FMCG which grew by 4.2% in 2017

TOTAL PORTUGAL – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

8% 4.2% 26% 2.7%

4.7%

66% 5.3%

Total FMCG Hypermarkets Supermarkets Superettes+Traditionals

Supermarkets continue to be the most important channel, with smaller formats growing faster than average 23

MAT Q4-2017 MAT Q4-2017

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.2%

Grocery Products 38.3% 3.9%

Dairy Products 18.0% 2.3%

Personal Care 11.2% 3.1%

Alcohol Drinks 10.7% 7.0%

Household Care 8.1% 3.8%

Non Alcohol Drinks 6.9% 10.6%

Frozen Products 6.8% 3.7%

Beverages had the strongest performance thanks to a very hot summer season and new sugar tax on Non alcoholic drinks

TOTAL PORTUGAL – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.2%

Top 1-5 16.4% 2.7%

Top 6-10 8.0% 1.7%

Top 11-30 14.3% 4.7%

Top 31-100 12.1% 3.2%

100+ 20.1% 6.8%

Private Label 29.3% 4.3%

Private Label recover growth in 2017 following retailers’ investments in this area

Spain has undergone an economic recovery over the last few years with increasing GDP and unemployment levels starting to decline (even though it still stands at a high rate of 16.6%). This feeling of optimism is reflected in Spanish consumers’ increasing confidence. While Europe remains steady, Spain posted a consumer confidence increase of two points in the last quarter reaching the highest index score of 93 in the last ten years.

In 2018 it will be a real challenge for the FMCG industry to improve on these very Gustavo Nuñez positive figures (+4% in value in 2017). Bank of Spain CPI’s predictions for 2018 is Managing Director similar to 2017 levels, which together with an ageing population makes volume Iberia growth difficult in the coming year. It seems that tourism is going to be one of the

main drivers of growth in our market, and consequently an important opportunity for the industry. The commercial surface in Spain has also grown moderately (1.4%) so we are facing an increase in the profitability of square meters that can be comparable to the pre-crisis situation.

The composition of Spanish households is changing. Spain is facing an increasingly aging population where in over half of households (56%), the main housekeeper is over 50 years old. In parallel, household size is also shrinking every year whereby singles account for one in four households. These are key issues for manufacturers and retailers to consider moving forward as they look to the emerging demands and requirements of smaller and older households. These “new” shoppers place increasing importance on convenience stores and convenient product formats as consumers seek out products and services that meet their needs for smaller pack sizes and have more limited storage space in their homes.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

91 91 93 86 85 87 87 3.2 3.1 3.2 79 80 81 81 3.0 3.0 3.1 77 2.7

2.0 1.9 1.6

0.8

-0.3 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017

GDP growth (% change pa) EU ES Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence 25 Source Economist Intelligence Unit (EIU) GDP estimate or Q4 2017 Survey is conducted in collaboration with Nielsen.

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

5.3%

4.0% 4.2% 3.6% 3.6% 3.6% 3.2% 3.1% 2.9% 2.1% 2.5% 2.1% 2.2% 3.9% 3.9% 2.2% 3.5% 1.8% 1.7% 2.2% 2.7% 1.7% 2.1% 0.8% 0.4% 0.1% 0.0% 0.2% -0.3% -0.3%

Unit Value Growth Volume Growth Nominal Value Growth

2017 closed with three months of continuous growth driven by a favorable economic environment, improved weather conditions and growing tourism.

TOTAL SPAIN – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

5% 4.0% 16%

0.4%

4.7%

3.8% 79%

Total FMCG Hypermarkets Supermarkets Drug Stores

Supermarkets (including Discounters) are leading growth mainly due to the performance of larger stores 26

MAT Q4-2017 MAT Q4-2017

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.0%

Packaged food 25.3% 3.7%

Drinks 15.2% 5.2%

Health & Beauty 12.1% 2.9%

Household 8.4% 2.8%

Cooked meats 8.2% 5.4%

Canned food 6.4% 5.1%

Frozen food 5.5% 5.7%

Dairy 5.3% 0.1%

Milk and shakes 5.0% 0.5%

Cheese 4.5% 4.0%

Ready meal 4.0% 11.0%

Categories related to a convenience offering are driving high growth in Q4

TOTAL SPAIN – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.0%

Top 1-5 10.9% -0.6%

Top 6-10 5.5% 2.0%

Top 11-30 12.0% 2.4%

Top 31-100 10.0% 3.0%

100+ 20.8% 8.3%

Private Label 40.8% 4.2%

Stable share for Private Label in 2017, thanks to the growth of some PL- oriented retailers

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. UK SNAPSHOT The continued economic uncertainty around Brexit, and consumers becoming slightly more cautious, hasn’t yet translated into a significant slowdown in UK consumer spend. Albeit lagging behind other major European countries, the UK economy finished 2017 with GDP growth of 1.8%.

This is good news for retailers and manufacturers, and is thanks in part to strong consumer confidence among UK shoppers. In the last part of the year, FMCG growth hit 4% driven in large, driven by the return of inflation, after two years of

Steve Smith deflation, and the continued growth of the discount channel (Aldi and Lidl) who Managing Director have focused on expanding their store footprint across the UK. FMCG volume United Kingdom & Ireland growth also improved in 2017 ending the year at +2.9%.

The UK enjoys a developed trade structure which brings with it the benefit of scale and this is evident with retailers and manufacturers working closely together to avoid passing on cost price increases to shoppers. We should remain confident that FMCG spend will continue at current levels over the first part of 2018, although discretionary spend will come under increasing pressure, particularly in the non-food and out-of-home channels. With the rise in inflation, and a fall in real incomes for many households, strategies that help shoppers manage their overall household budgets will be key to ensure that if inflation continues, which is the expectation of the Bank of England, shoppers don’t begin to trade down.

Private label growth hits a new high of 53% of total store value sales (including fresh foods) and we expect the growth to continue, particularly in premium Private label. Manufacturers will need to be mindful of this, as well as the acceleration of the discounter market share which hit 14% of total FMCG sales. By continuing to support the major supermarkets, brands will play a key role to sustaining category volume growth. Finally, the industry will need to closely monitor whether shopping behaviors are impacted when the outcomes of the Brexit negotiations emerge later this year.

COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

2.8 2.7 2.6 106 98 102 99 99 2.2 96 2.1 85 87 87 2.0 2.0 1.9 79 81 81 1.7 1.5 1.5

1.0

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU GB

The Conference Board® Global Consumer Confidence 28 Source Economist Intelligence Unit (EIU) GDP estimate or Q4 2017 Survey is conducted in collaboration with Nielsen.

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

4.0% 4.0% 1.0% 2.9% 3.0% 2.8% 0.6% 1.7% 2.2% 1.2% 1.3% 3.0% 2.4% 0.2% 0.5% 0.5% 1.2% 0.4% 1.4% 0.7% 1.7% 1.2% 0.1% -0.4% -0.7% 0.2% -0.4% -0.3% -1.9% -1.6%

Unit Value Growth Volume Growth Nominal Value Growth

FMCG sales growth peaked at 4% in Q4 driven largely by inflation. This is driving more store visits as shoppers look to make savings by shopping around

TOTAL UK– CHANNEL PERFORMANCE

DETAILS NOT AVAILABLE

MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.9%

Fresh Food 35.2% 4.8%

Impulse 11.3% 3.4%

Beer, Wine & Spirits 11.2% 4.7%

General Merchandise 8.8% -1.1%

Tobacco 8.4% -1.8%

Ambient Grocery 8.1% 3.6%

Health Beauty Toiletries & Baby 7.9% 0.4%

Household & Pet 5.4% 1.5%

Frozen 3.7% 6.2%

Health and wellness trend is driving Fresh Food growth, and as people increasingly dine at home, growth is evident in Impulse and Beer, Wine and Spirits categories.

TOTAL UK – MANUFACTURER PERFORMANCE - FMCG

DETAILS NOT AVAILABLE

SECTION 2 THE BIG PICTURE: EUROPE CENTRAL & EAST Message from Roberto Pedretti and Daniel Chorbadjian………………………………...... 32

EUROPE AT A GLANCE Key economic drivers……………………………………………………………………..…..……33 Looking through Europe FMCG lens………………………………………….……… …….….. 35

COUNTRY SNAPSHOT Belarus……….………………………………………….……………………………..……………36

Bulgaria……….………………………………………….…………………………...……………..39

Croatia……….………………………………………..….…………………….……… ….………..42

Czech Republic………………………………………….………………………...... 45

Estonia………………………….…………………….……………….…………..…………………48

Greece………………………………………………..…………………………...………………… 51

Hungary…………………………………………………………………………...………………… 54

Israel……………………….……………………………………………………….………………. 57

Kazakhstan……………………….……………………………………………….……………….. 60

Latvia……………………….……………………………………………………………………….. 63

Lithuania………………………………..…………….…………………………………………….. 66

Poland………………………………………………………………………………...... 69

Romania…………………………………………………………………………...... 72

Russia…………………………………………………………………………..…...... 75

Serbia……………………………………………………………………………………………… 78

Slovakia……………………………………………………………………………………..……… 81

Slovenia………………………………………………………………………………………… …...84

Turkey………………………………………………………………………………...... 87

Ukraine..……………………………………………………..…………………………...... 90

IN THE INDUSTRY Retail Channel Universe Update……...………………………………………………………… 101

Welcome to the Q4 2017 edition of the European Quarter by Numbers – Central and Eastern Europe. This quarter we add five new markets; Belarus, Israel, Kazakhstan, Serbia and Slovenia to expand our viewpoint across 19 markets to give you a greater perspective across our vast region.

The recent editions have highlighted a number of common themes and this quarter is no exception. As we look across the viewpoints from our market leaders there is a common theme - although positive economic conditions prevail, manufacturers and retailers' willingness to accept price inflation, in Roberto Pedretti many cases has not been matched by consumers’ confidence to pay more, Group Managing Director Turkey and with volume deflation a common occurrence. It should be noted however that Central Eastern even in markets that are experiencing this volume shrinkage in certain basic Europe categories, there are other categories that are growing in volume where inflationary prices have been accepted and value growth has increased.

This could be seen as a sign that consumers are not only making decisions on price points within a product group but are potentially making decisions across product groups based on their own value equations. It is a pertinent reminder that having a clear understanding of price sensitivity is key and that some products may have to exercise a more conservative approach in light of positive economic conditions.

Daniel Chorbadjian With strong GDP growth and low unemployment figuring prominently across Managing Director our markets, there have been some external commentators observing that the Eastern Europe uncertainty evident outside of Eastern Europe is making the region a more Cluster - Emerging attractive area for investment and consolidation of trade. It is certainly a time of Markets positive business and consumer sentiment and although there have been some specific instances in dips in consumer confidence since Q3, it rounds out a year where this measure grew with some countries hitting record highs. This positivity has generally translated into positive news for the FMCG industry with all 19 markets enjoying nominal growth for the quarter rounding off a year where the volume and value sales have been buoyant.

The challenge in 2018 will be to continue evolving and focusing on the mechanics that are driving growth as these positive conditions will not guarantee success for everyone. Consumers’ lives are changing in Eastern Europe. Consumers are becoming more discerning about choice with convenience, healthy options and premium offerings examples of areas where consumers are increasingly willing to spend. On the whole, consumers are feeling more positive across 2017 as economic conditions and their own finances seem to be improving. As this sentiment is expected to continue, it will be advisable for the industry to maintain a strong focus on how their brands, products and services are aligned to consumers’ value equation and ensure they deliver on consumer expectations before raising prices.

CONSUMER CONFIDENCE INDEX

GDP GDP Q4 2017 vs Q4 2017 vs Q4 2017 (annual % Inflation (annual % Inflation Q4 2017 Q3 2017 Q3 2017 growth) growth) ROMANIA 90 -8 6.9 3.3 5.1 2.6 CZECH REP. 104 3 LATVIA 73 -6 4.7 2.6 2.2 14.0 UKRAINE 61 3 BELARUS 60 -3 4.3 4.9 3.8 4.2 LITHUANIA 79 1 HUNGARY 74 -2 4.9 2.3 3.5 2.7 BULGARIA 89 1 KAZAKHSTAN 81 -2 4.2 7.5 5.3 3.8 ESTONIA 81 1 TURKEY 112 -2 - 11.9 2.9 0.3 ISRAEL 103 0 SLOVAKIA 86 -1 3.4 2.0 2.5 2.9 SERBIA 69 0 CROATIA 73 -1 2.0 0.8 1.8 0.6 GREECE 60 0 POLAND 104 -1 5.1 2.2 SLOVENIA 83 -1 6.2 1.3 RUSSIA 69 -1 2.4 2.6

CONSUMER CONFIDENCE INDEX

Some sharp increases in concern over terrorism and health weighed heavily on the minds of many of the markets that saw decline in consumer confidence

GDP and Inflation reflect % change per annum to Q4 /latest available data Source: Economist Intelligence Unit (EIU)/local government sources & Nielsen Consumer Confidence Index reflects Q4 2017 33

CopyrightCopyright © 2018© 2017 The The Nielsen Nielsen Company Company (US), LLC. Confidential and proprietary. Do not distribute. EUROPE CENTRAL & EAST MARKETS AT A GLANCE CONSUMER SENTIMENTS IN EUROPE

WHAT ARE THE TOP 2 CONCERNS IN THE NEXT SIX MONTHS? Type of concern 40 37 37 37 33 30 31 31 28 26 26 27 30 24 25 21 22 22 21 1919 20 19 20 20 16 12 11 12 9 8 9 6 6 6 6 7 10 5 5 5 4 3 2 0 EU BG BL CZ EE GR HR HU IL KZ LT LV PL RO RS RU SI SK TR UA Health Terrorism * HR = Croatia

EU BG BL CZ EE GR HR HU IL KZ LT LV PL RO RS RU SI SK TR UA Health 1 0 -4 5 7 5 2 1 -1 -2 1 6 -4 -2 5 5 3 6 1 0 Terrorism -6 -5 0 -4 -3 -4 -5 -6 -7 1 -2 -3 -3 -4 -4 -6 -4 -5 -2 -1 Bars reflect Q4 2017. Table shows comparison to Q3 2017

WHO’S SPENDING, SAVING AND INVESTING?

After living expenses, how is spare money spent

60 52 47 48 44 50 41 41 42 3837 37 38 37 38 37 37 40 32 33 33 33 34 31 30 29 30 29 26 26 27 28 26 28 28 30 24 23 25 24 23 20 17 20 13 10 0 EU BG BL CZ EE GR HR HU IL KZ LT LV PL RO RS RU SI SK TR UA Putting into savings New clothes * HR = Croatia

EU BG BL CZ EE GR HR HU IL KZ LT LV PL RO RS RU SI SK TR UA Putting into savings 1 -8 -5 -3 3 -5 -3 -6 1 0 -1 4 -1 9 0 3 2 -2 12 -1 New clothes 1 -5 -7 3 1 -2 -6 -7 -1 3 1 0 -2 -3 4 -1 0 -2 7 0

Bars reflect Q4 2017. Table shows comparison to Q3 2017

Savings was the most popular use for spare cash after expenses were taken care of. 34

FAST MOVING CONSUMER GOODS MARKET DYNAMICS Weighted average – EUROPE GROWTH & EMERGING – 19 countries

BG BV CZ EE GR HR HU IL KZ LV LT PL RO RS RU SI SK TR UA

16.8% 15.8% 4.5%

7.0% 9.7% 9.3% 8.4% 0.7% 8.2% 6.5% 7.3% 7.5% 4.9% 6.1% 6.4% 6.7% 1.1% 6.0% 4.0% 2.5% 12.3% 5.9% 3.6% 2.1% 1.2% 4.1% 4.4% 4.7% 4.6% 8.8% 5.9% 2.1% 4.0% 4.8% 5.4% 2.6% 4.7% 2.6% 5.2% 2.9% 3.0% 2.5% 1.6% 2.0% 3.5% 0.6% 3.3% 2.0% 3.3% 1.8% 2.2% 0.5% -0.5% -2.7% -0.5% -4.6% -3.9%

Unit value change Volume change Nominal growth

WHERE ARE THE FMCG GROWTH OPPORTUNITIES? Average volume growth Q3 2017 & Q4 2017 *BL = Belarus, HR = Croatia, RS = Serbia , SI = Slovenia

RUSSIA (+0.8%)

CZECH REP. (-0.1%) ESTONIA (-3.7%) LATVIA (+0.4%) LITHUANIA (-2.4%) BELARUS (+2.5%) KAZAKHSTAN (-4.4%) POLAND (+2.7%) SLOVAKIA (+1.6%) UKRAINE (+5.7%) HUNGARY (+1.8%) SLOVANIA (+1.9%) CROATIA (0%) ROMANIA (+3.2%) SERBIA (-1.2%) BULGARIA (+5.3%) TURKEY (+4.5%) GREECE (+5.8%) ISRAEL (+1.8%)

Avg. volume growth decreasing versus last period Avg. volume growth increasing versus last period 35 COLOUR CODING INDICATES GROWTH OR DECLINING TREND COMPARED TO AVERAGE OF Q3 & Q4 2016

GDP growth grew by 2.4% in Belarus for 2017 versus 2016 after a two-year recession caused by the steep drop in oil prices. Growth is attributed to strong industrial output, Russia’s recovery and better external trade conditions with the restoration of oil and gas supplies. 2017 marked the lowest inflation in the history of sovereign Belarus. For the first time, inflation fell to less than 10%, and year-to-year CPI landed at 6.0%, accompanied by very moderate local currency devaluation. Despite this improved situation in 2017, public debt and unreformed state enterprises, "expensive" loans and weak support for the unemployed remain cause for concern. Consumer confidence has increased in the back half of the year based Vaios Dimoragas on consumers’ increasingly positive sentiment to job prospects and personal Managing Director Ukraine and Belarus finances evidenced by an increase in consumption with improved FMCG volume sales in Q4.

Modern trade continued growing in Q4 2017, as a result of the transition from traditional grocery stores to modern format. Retailers and manufacturers are focusing to capitalize on this growth and therefore competition is escalating with intensified promotional activities. In these improving conditions, consumers are more open to trying new products, willing to indulge in small ‘luxuries’ and trading up to more premium products. It is key for FMCG players to target a balance of tactical wins and longer term loyalty and brand building. Increasing discount levels and extending the periods of promotional activities could lead to a pricing war. This represents a challenge for brands with low price sensitivity becoming highly dependent on price and promotions which do not necessarily translate to sales uplift. Retailers and manufacturers should be focusing on segmenting consumer needs, understanding the path to purchase including both bricks ‘n’ mortar and online routes while developing a healthy mix between short-term wins and longer term equity building for their brands. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

85 87 87 79 81 81

11.7 63 60 11.0 55 55 55 53 7.6 6.3 5.4 4.9 4.3 0.4 1.7 2.9

-3.4 -1.7 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 EU BL

GDP growth (% change pa) Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence 36 Source: GDP and Inflation; local government sources Survey is conducted in collaboration with Nielsen.

MAT YA MAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

19.3% 16.8% 17.8% 0.4% 16.2% 5.5% 4.4% 3.1% 2.2% 13.8% 15.0% 1.0% 10.0% 0.2% 13.4% 8.9% 9.7% 14.9% 13.7% 14.0% 13.8% 14.5% 6.9% 4.9% 9.0% 9.3% 6.7% 4.8%

-1.1% -0.4%

Unit Value Growth Volume Growth Nominal Value Growth

Volume sales recovered in Q4 2017, as a result of economy stabilization and strengthening consumer confidence . Value sales decline is reflective of lower inflation levels

TOTAL BELARUS – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

10.0% 7% 3% 7% 9.2%

14.7% 52% 2.3% 31% 11.7%

2.9%

Total FMCG Hyper/Supermarket (Food Categories) Groceries Modern Trade (Food Categories)

Groceries Traditional Trade (Food Cat) Kiosks + Other Markets (Food Categories) Drug Categories

Faster growth of Groceries in Modern Trade is due to the conversion of Traditional Trade into modern format. Kiosks and Other Markets growth is due to price increases in this channel 37

MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 10.0%

Dairy 23.8% 13.5%

Beer 22.7% 4.4%

Beverages 17.2% 5.0%

Chocolate 10.7% 16.5%

Coffee 8.6% 16.2%

Personal Care 4.8% 3.7%

Snacks 4.7% 14.1%

Candies 4.2% 17.7%

Home Care 1.9% 0.8%

Grocery 1.5% 30.2%

Coffee growth is driven predominantly by assortment expansion and promotional activities of main players to drive market share whilst Chocolate growth has come from innovation/additional support of chocolate tablets

TOTAL BELARUS – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 10.0%

Top 1-5 29.1% 12.0%

Top 6-10 14.0% 1.8%

Top 11-30 27.3% 8.1%

Top 31-100 19.2% 19.7%

100+ 5.4% 0.6%

Private Label 4.9% 9.9%

While top 1-5 manufacturers continue to dominate the market, it is important to watch the development of smaller manufacturers and Private Label

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. BULGARIA SNAPSHOT Bulgaria’s economic landscape continues to be in a very positive position with GDP above 3% growth for the seventh consecutive quarter coinciding with a further drop in unemployment and double digit wage growth. Consumer optimism reflects this situation as well as growth in the FMCG market which displayed the highest value growth in several years at 8.4% in Q4 2017.

Bigger format stores continue to lead the way, assisted by the opening of around 20 new outlets from major supermarket and drug store chains. Interestingly, Traditional trade is starting to recover in Q4 boosted by excellent performance across its

Svyatoslava Svyst destination categories. The majority of super categories are performing well, Managing Director showcasing that shoppers are allocating part of the additional disposal income in Bulgaria / RV Leader FMCG purchases or they are trading up to more premium products (like in drug Eastern Europe categories).

Promotion continues to be a key dynamic at play across the Bulgarian retail landscape. Almost half of Modern Trade value sales (49.1%) were sold on promotion in Q4 2017. This promotional dependence is evident across many super categories excluding baby food with up to a third of sales on promotion for many categories. If we also consider the number of retailers engaged in EDLP activities at the beginning of Q4 and the same retailers also increased the amount of promotions, it should come as no surprise we are seeing a rise in volume consumption .

Looking forward, we expect the market to remain strong despite the lack of significant expansion from retailers in the foreseeable future. Economists however have raised concern that if wages keep rising at the same rate and no investments are made to boost productivity, then the likely result is further inflation which may compromise economic growth. Within FMCG, the challenge will be how to optimize pricing and promotional strategies to drive long term category growth instead of short term uplifts.

COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX 89 87 88 87 85 85 4.3 84 3.9 3.8 81 3.6 3.5 81 79 79 3.0 2.7 75 2.3 1.7 1.6

-0.3 -0.3 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 EU BG GDP growth (% change pa) Inflation, consumer prices (% change pa)

The Conference Board® Global Consumer Confidence 39 Source EIU and local government sources Survey is conducted in collaboration with Nielsen.

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

8.4% 7.8% 6.7% 5.9% 4.7% 5.9% 4.4% 4.1% 4.0% 3.8% 2.8% 2.6% 2.3% 2.7% 3.2% 0.8% 0.5% 2.3% 1.0% 2.4% 0.9% 2.2% 3.0% 1.8% 1.8% 1.8% 1.4% 1.4% 0.8% 2.5%

Unit Value Growth Volume Growth Nominal Value Growth

Strong performance in FMCG as consumers leverage additional disposable income in a heavily promoted environment

TOTAL BULGARIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

6.7% 4% 9.9% 24% 41% 9.2%

3.9%

19% 2.0% 13% 10.5%

Total FMCG Supermarkets/Hypermarkets Extra Large Food Stores Large Food Stores Traditional Trade Drug Stores

Bigger formats lead the way due to new store openings and increase in promotions. Signs of recovery from Traditional Trade. 40

MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 6.7%

Chilled Products 25.2% 7.0%

Alcoholic Drinks 18.7% 7.5%

Confectionery 15.1% 6.5%

Non Alcoholic Beverages 11.9% 5.5%

Personal Care 7.2% 5.2%

Household 6.9% 3.5%

Salty Snacks 5.1% 11.8%

Hot Beverages 4.4% 7.7%

Shelf Stable Food 3.0% 6.1%

Baby Categories 1.3% 3.6%

Petfood 1.2% 18.0%

Salty Snacks are performing above market growth helped by aggressive promotional activity

TOTAL BULGARIA – MANUFACTURER PERFORMANCE - FMCG MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 6.7%

Top 1-5 17.0% 7.0%

Top 6-10 11.1% 2.8%

Top 11-30 20.5% 8.1%

Top 31-100 22.6% 10.6%

100+ 25.8% 4.4%

Private Label 3.1% 3.6%

Both leading and challenger manufacturers show strong growth. Despite new launches and increased communication, Private Label trails overall growth. 41

Although Croatia’s macroeconomic conditions continued to be predominantly positive across 2017, the Agrokor crisis still hangs heavily over business investment. Croatia’s credit rating is improving but it has been tempered by these recent challenges. Croatian consumers are increasingly optimistic across 2017 with almost half believing their personal financial outlook is excellent or good in the coming twelve months.

In FMCG however Q4 2017 bought a decline in volume growth attributed to negative performance of Dairy products, Confectionery and Raw meat/meat products. The impact of volume erosion was offset slightly by price increases in almost all Food categories.

Andrey The retail landscape in 2017 was quite conservative from a promotional perspective, with a Dvoychenkov lack of sharp price points and lower discount frequency which fueled climbing prices across Group Managing the majority of Food categories. The performance of Hypermarkets and Discounters across Director Adriatic Modern Trade have outpaced the market. Discounters are continuing to test new store Region concepts leaning towards more supermarket formats that focus on promoting branded products whilst at the same time offering “consumer-pleasing” premium private label offerings. Supermarkets, which account for one third of the market, are struggling with their performance driven by declines in their largest category, Fresh meat as a result of higher costs and less promotional activity. Positive value growth in Beer, Cheese, Mineral water, Coffee and Yoghurts have not been able to compensate for these losses in the Supermarket channel.

The Top 20 manufacturers (excluding Private Label) account for 43% of total FMCG and are just outpacing the total industry, mainly driven by the Top 5 manufacturers’ performance. Among the top 20, almost 60% of the sales belong to local manufacturers which are growing at a higher rate. Local manufacturers have been more flexible in adjusting their strategy during the Agrokor crisis which resulted in better performance during 2017 compared to the market average. In 2018, all economical eyes will be directed to the outcome of the Agrokor financial settlement, which will have a big effect on the overall economical and investment environment. We can further expect strengthening of Discounters as well as market concentration. But ultimately, manufacturers and retailers need to focus on the key decision makers - the shoppers who will still pursue an efficient shopping experience seeking good value for money.

COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX 85 87 87 79 81 81 3.5 74 3.3 73 70 73 3.1 3.0 66 69 2.6 2.0

0.1 0.8

-0.5 -0.4 -0.5 -1.5 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 EU HR GDP growth (% change pa) Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence 42 Source: DZS – Croatian Bureau of Statistics. Survey is conducted in collaboration with Nielsen.

MAT YAMAT TY Q2 15 Q3 15 Q1 16 Q2 16 Q3 16 Q1 17 Q2 17 Q3 17

0.4% 3.3% 4.3% 3.0% 2.1% 2.3% 2.1% 0.9% 2.4% 3.2% 1.7% 1.7% 1.6% 3.5% 2.5% 1.8% 1.1% 1.2% 2.6% . 0.6% 2.1% 0.5% 0.1% 0.2% -0.4% -1.2% -0.5% -1.4% -1.1%

-2.6% . Unit Value Growth Volume Growth Nominal Value Growth

Inflation drives the industry performance with minimal promotional activity leveraged to drive consumption

TOTAL CROATIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4 2017

2.1% 11% 1% 20% 5.3%

-0.9%

1.0% 36% 32% -5.5%

9.9%

Total FMCG Hypermarkets Supermarkets Traditional trade** Kiosks/Tobacconists Discounters

Hypermarkets and Discounters are outpacing market growth with a focus on premium Private Label and branded promotions

FMCG excludes Tobacco/Cigarettes *bi-monthly databases - periods shown are quadrimesters (periods of 4 month43h s) **Drugstores channel is included in Large groceries (part of Traditional trade) Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL CROATIA – SUPER CATEGORIES PERFORMANCE MAT Q4 2017 MAT Q4 2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.1%

Beverages 26.4% 6.0%

Meat and Meat Products 16.4% -1.1%

Dairy Products 15.7% 5.7%

Confectionery 10.7% -2.1%

Personal Care 10.1% -0.6% . Packed Food 8.4% 0.9%

Household Care 4.6% -1.0%

Frozen Food 4.1% 4.0%

Salted Snacks 2.8% 0.4%

Baby Food 0.8% -1.3%

Beverages have been enjoying strong growth due to a hot Summer season

TOTAL CROATIA – MANUFACTURER PERFORMANCE - FMCG

MAT Q4 2017 MAT Q4 2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.1%

Top 1-5 18.5% 3.9%

Top 6-10 11.2% 2.5%

Top 11-30 20.7% 0.2%

Top 31-100 14.4% 0.4%

100+ 18.0% -0.2%

Private Label 17.2% 6.2%

Top 5 players and Private Label accounts for 80% of the total FMCG growth

FMCG: excluding Tobacco 44 Total FMCG growth is different for Manufacturer Performance at 2.8% as *Raw meat Refrigerated category was not included in the total Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. CZECH REPUBLIC SNAPSHOT

2017 was a great year for the Czech economy with Q4 GDP growth increasing to 5.1%, the best quarter in the year, resulting in annual growth of 4.5%. Whilst unemployment reached historic low levels, manufacturers and retailers are cautious as low unemployment can have the effect of pushing up wages and costs. However it is expected that price inflation will not exceed 2% in 2018 and GDP forecasts range between 3 and 4%. Consumer sentiment reflects the positive economic

Karel Tyra environment with increasing optimism across all key measures of job prospects, Managing Director, personal finances outlook and now being a good time to buy. Czech Republic 2017 was also a year of solid value growth for FMCG. After years of marginal inflation, price increased between 3 to 6 % throughout the year, while volume remained flat. This price inflation was driven in many instances by consumers trading up to more premium products as well as increasing prices in Food rather than Drug categories. One of the most sensitive segments was Dairy with a peak in Q3 due to increased costs in products like Butter.

Private labels did not move in these conditions and kept a flat share in the Czech market. They will potentially need to adjust their strategy to reflect a more positive consumer environment. Larger manufacturers currently appear to have a more internal focus with corporate restructuring, while smaller manufacturers appear to be more flexible towards the market and consumers.

High consumer confidence in light of increasing wages translates to a consumer environment more open to premium offerings and price points. It is essential in times of increasing costs (both labor costs and many commodities) to focus on profitability by understanding consumers’ spending priorities. With this in mind, 2018 will be a year to focus on smart promotional and pricing optimization based on a thorough knowledge on consumer requirements and a solid understanding of the retail and market environment.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

5.1 103 104 5.0 98 99 101 101 4.7 85 87 87 79 81 81

3.0 2.4 2.5 2.6 2.2 1.8 1.8 1.5 0.5

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) EU CZ Inflation, consumer prices (% change pa)

The Conference Board® Global Consumer Confidence Source Economist Intelligence Unit (EIU) Q4 GDP local government source 45 Survey is conducted in collaboration with Nielsen. Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL CZECH REPUBLIC - FMCG MARKET DYNAMICS (weighted average)

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

0.4% 6.1% 5.2% 0.7% 4.8% 5.1% 4.0% 6.1% 4.9% 2.9% 2.7% 2.4% 4.7% 5.4% 1.9% 1.9% 1.5% 3.4% 2.7% 3.0% 2.3% 2.3% 1.2% -0.4% -0.3% -0.1% -0.8% -1.1% -0.7% -0.9%

Unit Value Growth Volume Growth Nominal Value Growth

Record growth in Q4 driven by increasing prices and consumers switching to more premium segments and products.

TOTAL CZECH REPUBLIC – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

4.8% 8% 2.5% 14% 40% 7.6%

8.1% 21% 2.4% 17% 7.8%

Total FMCG Hypermarkets Supermarkets Discounters Traditional Trade Drugstores

Drug stores maintain strong performance while Hypermarkets are losing to more convenient shopping formats

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL CZECH REPUBLIC – SUPER CATEGORIES PERFORMANCE MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.8%

Dairy 19.0% 6.5%

Beverages Alcohol 16.7% 6.6%

Sweets & Treats 14.5% 5.2%

Health & Beauty 12.0% 4.8%

Culinary - Shelf Stable 10.0% 2.9%

Beverages Non Alco 8.6% 5.0%

Beverages Hot 4.2% 1.3%

Home Care excl. Laundry 3.2% 4.2%

Home Care - Laundry 2.3% 1.3%

Pet Care 2.3% 3.0%

Infant Care 2.1% 0.7%

Culinary - Frozen 1.9% 4.4% 5.9% Baking - Shelf Stable 1.6% 3.8% Frozen 1.4% 5.9% Culinary - Refridgerated 0.2% Significant price increases in Dairy are driving growth

TOTAL CZECH REPUBLIC – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.8%

Top 1-5 16.2% 2.8%

Top 6-10 8.1% 2.4%

Top 11-30 17.9% 5.0%

Top 31-100 20.8% 7.2%

100+ 18.2% 6.2%

Private Label 18.9% 3.9%

Despite big manufacturers continued growth, smaller players are on a faster trajectory given flexibility to respond to consumer needs

Estonia’s economy continued to grow with GDP reaching a high of 5.3% for Q4 2017 supported by growth in private consumption, declining unemployment and increased wages. At the same time, inflation also increased at +3.8% in Q4 2017 with increasing prices expected to impact consumer’s choices and reluctance toward spending. While consumers are increasingly optimistic across 2017 compared to 2016, this is driven by positive sentiment to job prospects rather than consumers believing now is a good time to buy.

Despite strong economic performance, FMCG market consumption is slowing Ilona Lepp down. Negative volume consumption remains the key challenge driven by Managing Director inflation. Alcoholic categories which contribute 18.3% of value share to FMCG Baltics was a major contributor to the volume erosion across 2017 with a decline of 4.2%. Although Private Label still captures only 7.9% of value share (across total FMCG), its growth of +5.5% (almost double the industry) indicates shopper’s willingness to try alternatives to branded products.

Store expansion has driven the performance of large Supermarkets with growth at 10% for 2017. Consumer’s evolving need for convenience and proximity has driven the growth of Convenience/Petrol stations by +6.9% and Drug stores /Pharmacies by +5.9%

Accelerated FMCG volume decline throughout 2017 poses a real challenge for market players. It will be critical for manufacturers and retailers to ensure trade spend is optimized as well as a focus on genuine innovation to guarantee continuous growth in 2018. The positive consumer environment coupled with price inflation and volume erosion suggests that there are opportunities for manufacturers and retailers to optimize price points that resonate with consumers and guarantee profitable sales lift.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

5.3 5.3 87 84 85 87 81 81 83 81 81 4.5 79 72 3.9 70 3.7 3.8 3.2 3.0 3.1 2.5

1.3 0.4

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU EE

The Conference Board® Global Consumer Confidence Source: OECD Survey is conducted in collaboration with Nielsen 48

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

6.9% 5.7% 6.5% 4.8% 2.8% 2.8% 3.0% 3.1% 1.9% 2.6% 2.8% 2.5% 2.6% 1.1% 2.1% 6.1% 0.7% 1.3% 3.4% 1.2% -0.6% -0.2% 2.0% -2.7% -1.5% -2.4% -3.3% -0.1% -3.8% -3.9%

Unit Value Growth Volume Growth Nominal Value Growth

Peaking inflation elevates FMCG value, however accelerating volume declines remain the key market challenge

TOTAL ESTONIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

2.8%

2% -0.4% 8% 1% 24% 10.0%

0.2% 31% -5.8%

33% 6.9%

5.9%

Total FMCG Hypermarkets Large Supermarkets Small Supermarkets/Discounters Superettes Conveniences/Petrol Stations Drug Stores+Pharmacies

Due to new openings, large supermarkets are thriving and have reached double digit growth 49

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL ESTONIA – SUPER CATEGORIES PERFORMANCE MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.8%

Chilled and Frozen products 38.9% 7.2%

Alcoholic Drinks 18.3% -4.2%

Shelf Stable Food 9.2% 1.2%

Personal Care 7.5% 0.9%

Confectionery 6.4% 1.9%

Non Alcoholic Beverages 6.2% 2.6%

Household products 4.0% 2.1%

Hot Beverages 3.4% 2.5%

Snacks 3.2% 7.1%

Pet Care 2.2% 2.3%

Baby Food 0.8% 7.4%

Domestic Alcohol sales have decreased due to alcohol trade on Latvian border driven by increase of excise tax

TOTAL ESTONIA – MANUFACTURER PERFORMANCE - FMCG MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.8%

Top 1-5 23.0% 3.3%

Top 6-10 11.8% 4.9%

Top 11-30 22.1% 1.7%

Top 31-100 16.9% 1.9%

100+ 18.3% 2.0%

Private Label 7.9% 5.5%

After several years of deflation and flat FMCG prices, inflation has returned to the market. Large companies are capitalising on strength in negotiation power for price increase ahead of smaller companies 50

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. GREECE SNAPSHOT Since the beginning of 2017, the Greek economy has started to show signs of recovery with many macroeconomic indexes, such as GDP, inflation and unemployment presenting improved trends. Greek consumers continue to be more optimistic in the later half of 2017 compared to early 2017 and 2016 levels but significantly below European averages.

This wider upturn in the market is also evident in the FMCG market, where demand has increased and at the same time price inflation has started to Vicky Grigoriadou emerge. The reactivation of the ex-Marinopoulos stores seem to have Managing Director boosted overall consumption and the Hypermarket format has benefited Greece displaying double-digit growth, 15.1% versus Q4 2016.

Within FMCG, there are several super groups that present positive trends, among which are Confectionery and Beverage categories, both Non- alcoholic and Alcoholic (5.7% and 3.5% respectively), of which a big part of this growth is linked to increased taxation.

While FMCG is growing by 2% overall, it is worth pointing out that the Top 5 suppliers in the Greek market suffered share losses, whereas smaller and local players managed to gain share in many categories, predominantly through innovation, locality claims and competitive pricing.

Even though 2017 has been a year of marginal recovery for the Greek economy and market, there is little base for confident predictions for the future with a sense of instability at play in the political environment, which has added a cautiousness to consumers’ spending. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

85 87 87 79 81 81

60 60 1.8 56 52 53 52 1.5 1.6 1.4 1.2 1.3 0.8 0.1 0.3 0.4 0.6

Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 -0.9 EU GR

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa)

The Conference Board® Global Consumer Confidence 51 Source Economist Intelligence Unit (EIU). Survey is conducted in collaboration with Nielsen

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

6.8% 6.4% 5.0% 2.3% 2.4% 5.4% 5.9% 3.1% 2.0% 4.5% 2.5% -0.6% 1.9% 5.8% 0.6% -0.8% -0.4% -0.3% -0.5% -9.8% -8.7% -2.9% -4.8% -12.2% -15.3% -6.7% -6.2% -2.6% -5.4%

-10.7%

Unit Value Growth Volume Growth Nominal Value Growth

The re-activation of the ex-Marinopoulos stores especially after Q2 seems to have boosted consumption

TOTAL GREECE – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

2.0% 15% 10% 15.1%

1.0% 39% 36% 1.5%

-1.7%

Total FMCG Hypermarkets Large Supermarkets Small Supermarkets Superettes

The re-activation of ex-Marinopoulos stores is driving the strong performance of Hypermarkets, increasing the store count in this channel

MAT Q4-2017 MAT Q4-2017

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.0%

Dairy & Refrigerator Cat. 23.6% 1.0%

Grocery 23.1% 2.4%

Non Alcoholic Drinks 12.1% 5.7%

Health & Beauty 11.7% -1.2%

Confectionery 9.0% 5.0%

Alcoholic Drinks 6.4% 3.5%

Household 6.2% 0.4%

Detergents 4.4% 0.0%

Paper Products 3.4% -1.6%

Beverages and Confectionery categories are performing well however Health & Beauty value is in decline due to aggressive promotions

TOTAL GREECE – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.0%

Top 1-5 21.7% -1.3%

Top 6-10 10.0% 0.5%

Top 11-30 21.3% 1.7%

31+ 31.8% 5.7%

Private Label 15.2% 0.6%

Smaller and more flexible players are putting MNCs under pressure with their ability to respond more quickly to changing market conditions

FMCG performance in Hungary soared by 8.2% in Q4 2017 to set a record across recent years with the full year closing at 5.9% growth compared to a more moderate increase in 2016 (2.8%). All retail channels increased faster in Q4 than Q3, however Discounters and Drug Stores remain the main drivers. Consumers’ emerging need for an enjoyable shopper experience, convenience and proximity are driving this trend supported by retailers’ low prices, strong advertising presence and new store openings.

Kateryna Edelshtein Super categories are seeing this healthy growth momentum across the board Hungary Market with even the biggest categories outpacing average growth. Inflation remains Leader Buy & Watch stable around 2% which is good news for consumers. Food and petrol inflation may accelerate overall price increases in the second half of 2018 but inflation is likely to stay below 3% in mid to longer term.

External and internal economic conditions are stable supported by rising consumer optimism in 2017 across all measures of job prospects, outlook in personal finances and a good time to buy. However, increasing salaries and low unemployment rates create a challenging labor market environment for manufacturers, retailers and marketers alike in terms of talent attraction and retention - a major pressing issue for the year ahead. When it comes to growth opportunities, innovation, new products and added value to existing products will be key.

Nonetheless, with the Hungarian economy having reached its expected growth potential of 4%, the upcoming period is crucial for all FMCG market players. Those who act in a smart and bold manner in the coming months will be well placed in the upcoming years.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

85 87 87 79 81 81 4.9 76 74 70 64 64 3.9 4.1 3.7 57

2.6 2.3 2.4 2.3 2.1 2.1 1.3 0.0 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 EU HU GDP growth (% change pa) Inflation, consumer prices (% change pa)

Source Economist Intelligence Unit (EIU) OECD The Conference Board® Global Consumer Confidence 54 Survey is conducted in collaboration with Nielsen

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

8.2%

6.4% 5.9% 3.6% 0.1%5.3% 1.5% 4.3% 3.6% 3.4% 2.8% 2.8% 4.4% 2.9% 2.3% 1.3% 5.1% 1.6% 4.7% 1.5% 1.9% 2.8% 0.1% 1.6% 2.1% 1.2% 1.4% 0.8% 0.8% 1.4%

Unit Value Growth Volume Growth Nominal Value Growth

Both Food and Drug markets contributed to the value growth. Five out of the top ten Food categories grew by double-digit in Q4 versus last year

TOTAL HUNGARY – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

5.9% 12% 3.1% 26% 7% 4.3% 12.9% 17% 15% 2.8%

23% 9.6% 4.1%

Total FMCG Hypermarkets Large Organized Discounters Small Organized Drug Stores Independent Stores

All channels experience improved momentum in Q4 vs Q3 experiencing faster growth with the exception of Independent stores 55

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL HUNGARY – SUPER CATEGORIES PERFORMANCE MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 5.9%

Dairy Products 15.4% 7.4%

Processed Meat 12.9% 6.9%

Non Alcoholic Beverages 11.3% 8.4%

Alcoholic Beverages 9.7% 5.7%

Personal Care 8.9% 5.7%

Dry Grocery 8.4% 1.9%

Cleaning / Household 5.9% 3.0%

Confectionery 5.5% 5.0%

Hot Beverages 3.7% 3.7%

Frozen Foods 3.6% 4.5%

Snacks 3.0% 8.1%

Household Paper 2.9% 4.4%

Petfood 2.8% 9.9%

Biscuits/Wafers 2.7% 4.3%

Breakfast 2.0% 7.7%

Baby Care 1.3% 5.0%

Private Label outpaces branded products in both Food and Drug categories

TOTAL HUNGARY – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 5.9%

Top 1-5 20.2% 4.1%

Top 6-10 11.7% 4.5%

Top 11-30 20.9% 5.8%

Top 31-100 23.0% 5.1%

100+ 24.4% 5.4%

Growth is evenly balanced across manufacturer tiers

56 Total FMCG includes Private label but Private label is not included in manufacturer tiers

The Israeli economy saw relatively consistent growth across 2017 with impressive growth of 3.3% (annual rate) in 2017 (comparing to 2016) setting the economy in good stead for 2018. Exports (excluding start-up companies and diamonds) grew at an accelerated rate of 7.7%, led by exports of services, especially tourism and high-tech. Private consumption continues to expand particularly among lower income households due to ongoing improvements in the labor market, the availability of cheap credit, and lowering taxes on consumption. Throughout 2017, Israeli consumers have maintained confidence about job prospects, future personal finances and being the right time to buy supported by low inflation. Offer Levy Managing Director Despite positive economic conditions, the FMCG industry has seen marginal value Israel growth, driven predominantly by volume consumption. Recent government legislation into food labeling introduced in November has influenced food trends. Food products high in sugar, fat and sodium were to adhere to strict labeling changes however a month before its implementation date, the legislation was postponed for two years. Despite the postponement, the surrounding buzz has increased consumer awareness towards health with healthier and fresh products experiencing new growth. However, conversely indulgent categories also performed well in different categories from different branches. The strengthening of the premium segment is seen both inside the store and out of home, as consumers seek more value-added experiences.

Like many markets around the world, the digital landscape is transforming Israel’s retail environment at a rapid pace. This is evident in Israel with four leading retailers launching online shopping websites throughout 2017. As the home of many tech start ups, Israel consumers are becoming early adopters of new technology trends, so it is vital to ensure retailers and manufacturers are keeping up with the pace.

Looking forward, the recent labeling legislation is just a sign of growing awareness and importance of health trends and manufacturers need to be thinking and planning ahead to ensure their portfolio will fit with consumers evolving health needs. In a low inflationary environment, Israel consumers are prepared to pay more for premium products, as long as the value is justified with additional consumer benefits. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

100 102 102 103 95 4.7 93 4.5 85 87 87 79 81 81 3.8 3.2 3.2 2.9

0.5 0.4 0.3 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 -0.6 -0.3 -0.2

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 EU IL GDP growth (% change pa) Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence Source OECD & Economic Intelligence Unit 57 Survey is conducted in collaboration with Nielsen

MAT YA MAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

2.1% 2.3% 4.5% 2.6% 2.6% 1.8% 1.9% 0.1% 1.6% 0.0% 0.3% 0.8% 0.8% 1.0% 0.2% 0.5% 0.5% -0.1% -0.7% -0.9% -3.3% -1.3% -1.6% -3.8% -2.0% -6.3% -2.4% -1.5% -2.9% -4.4%

Unit Value Growth Volume Growth Nominal Value Growth

FMCG growth has picked up in Q4 coming from the periphery regions and not from the Centre region which contributes half of the FMCG sales

TOTAL ISRAEL – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

0.8%

15% 2.3% 2%

-0.7%

24% 59% 6.5%

-3.0%

Total FMCG Hypermarkets And Discounters Supermarket Convenience Stores Private Minimarkets

Discounters are growing in Food and Home Care due to a better price offering while Convenience stores give a comfortable, on the go shopping experience 58

MAT Q4-2017 MAT Q4-2017

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 0.8%

Food 76.2% 1.2%

Beverage 11.4% -0.7%

Personal Care 6.2% -1.3%

Home Care 6.2% 0.7%

The Food super category is showing stronger growth driven by growing health trend and focus on fresh and healthy food

TOTAL ISRAEL – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 0.8%

Top 1-5 35.6% -1.5%

Top 6-10 8.8% -1.1%

Top 11-30 11.8% 1.7%

Top 31-100 9.9% 1.1%

100+ 28.1% 2.5%

Private Label 5.8% 8.8%

Small manufacturers and PL are growing at the expense of major manufacturers, mainly in competitive Food categories. In many categories, PL growth comes from new product launches 59

Kazakhstan’s macro economy is improving with GDP projected to be 4.2% in Q4 2017 and inflation levels across 2017 almost half those seen in 2016. Moreover, growth and stabilization of crude oil prices in 2017 has resulted in better exchange rates and conditions for international trade. However the devaluation of the tenge has dramatically affected prices for consumer goods, utilities, clothing, property and others.

Official government statistics report average nominal salary increases have grown by 5% compared to last year and total retail sales are up 10% in 2017 compared to Ilona Lepp 2016. This inconsistency between increased spend versus wage levels Managing Director demonstrates the increasing popularity of small fast loans and credit card debt Baltics especially among low income households. Consumers however are increasingly optimistic driven by positive sentiment towards future job prospects.

Nielsen Measured FMCG demonstrates almost 5% value growth compared to 2016 largely driven by Tobacco and Beer categories. 60% of shoppers state they face budget limitations when shopping. Given the current economic situation and price increases seen in Kazakhstan, almost 38% of shoppers today are looking for promotions (compared to 25% in 2016). Some categories already are becoming reliant on promotions, especially in the Non-food segment. Despite the growth of promo-oriented shoppers, a similar percentage of shoppers claim the store environment and customer service is important when shopping.

Overall, with stabilized crude oil prices and exchange rates, 2018 is expected to have a positive impact on the economy which will flow onto the retail environment. Moreover, with the end of EXPO 2017 project ,there is an expectation that in 2018 the government will be able to spend more of its budget on salary increases for government workers (doctors, teachers etc). that should have a positive effect on consumer spending. In addition, the growing popularity of credit card and small loans represents an opportunity for all retailers to leverage such services. It has already shown great results in apparel business even for low price brands.

COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX 87 87 16.2 85 83

11.7 81 81 81 81 79 79 78 7.7 7.5 7.1 7.5 77 5.3 4.2 4.2 1.5 2.5 3.1 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017

GDP growth (% change pa) EU KZ Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence 60 Source Local government source. Q4 forecast Survey is conducted in collaboration with Nielsen Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL KAZAKHSTAN - FMCG MARKET DYNAMICS (weighted average)

MAT YA MAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

19.8% 17.0% 3.6% 2.2% 13.3% 12.9% 16.3% 9.2% 8.3% 7.9% 6.2% 13.6% 8.5% 14.8% 13.8% 6.5% 4.7% 4.4% 11.0% 3.4% 2.7% 2.0% -0.2% -4.1% -4.5% -0.9% -2.7% -3.9% -4.1% -4.5%

Unit Value Growth Volume Growth Nominal Value Growth

FMCG market is driven by inflationary price pressures with volume consumption declining throughout 2017

TOTAL KAZAKHSTAN – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

3%1% 1% 4.4% 3% 3% 5.1%

2.2%

-4.9%

-6.3%

90% -5.9%

3.2%

Total FMCG Supermarkets Open markets Kiosks & Pavilions Pharmacies Perfumeries Others

Stronger performance of Large stores is a result of evolving modern trade development in Kazakhstan 61

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.4%

Tobacco 28.3% 5.6%

Beverages 23.4% 3.0%

Dairy 12.3% 9.3%

Personal Care 9.8% 1.1%

Food 8.9% 2.4%

Confectionery 7.1% -0.9%

Alcohol 6.4% 9.3%

Home Care 2.3% 5.3%

Baby Food 1.1% -0.4%

Pet Food 0.3% 23.2%

Baby Care 0.1% 6.9%

Strong performance of Dairy is driven by Fresh Refrigerated Milk and Alcohol with end of year accounting for 20-30% of their annual sales in Q4

TOTAL KAZAKHSTAN – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.4%

Top 1-5 34.3% 5.8%

Top 6-10 12.4% 10.4%

Top 11-30 25.2% 0.2%

Top 31-100 18.7% 8.4%

100+ 9.4% -3.8%

Local manufacturer have seen stronger performance in some categories due to lower price (especially in milk products)

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. LATVIA SNAPSHOT After hitting a peak of 6.2% growth in Q3 2017, the Latvian economy continues to thrive with 4.7% growth in Q4 2017. Rising wages and the low unemployment is stimulating household spending and the growth of retail sales while inflation is slowing down from 3.1% at Q2 to rest at 2.6% at the end of 2017. Positive momentum is also expected from increased demand of Latvian production and export. Consumer optimism dipped slightly in Q4 2017 but overall remains higher than the dip seen at the same time last year.

The FMCG market is witnessing positive development as nominal value growth Ilona Lepp reached 4.4% in Q4 2017 versus same period last year with 1.1% increase in Managing Director volume. The slowdown in unit value growth is reflective of overall inflation declines Baltics seen throughout the years with some softening in prices which is helping to drive consumption.

Small Supermarkets / Discounters show strong performance with 5.1% growth while Hypermarkets/Large supermarkets/ Drug stores which account for almost half of the market (47% of share) grew by +3.6% behind industry levels. Consumers evolving needs for convenience products boosted the performance of Snacks (8.9%), Chilled and Frozen food (8.1%), Baby food (7.9%), Pet care (6.8%) and Confectionery (5.4%) within 2017. Private Label, which accounts for more than 10% of the market show no signs of slowdown, growing ahead of the industry at 6.2%.

The Latvian market is enjoying growth and all indicators point toward continuing prosperity and development in 2018. With stability in the market, retailers and manufacturers should use this time to search for the most effective ways to leverage trade spend and stimulate consumer spending with innovation.

COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

6.2 85 87 87 79 81 81 78 78 75 74 73 4.9 4.7 69 4.2

3.2 3.1 2.9 2.7 2.6

1.5 0.6 0.2

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU LV

The Conference Board® Global Consumer Confidence 63 Source: OECD Survey is conducted in collaboration with Nielsen

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

5.4% 4.5% 0.8% 4.4% 0.3% 4.1% 4.2% 0.1% 1.1% 2.9% 2.8% 2.6% 2.6% 0.3% 4.3% 2.3% 4.4% 4.6% 4.2% 1.2% 0.9% 0.5% 1.9% 2.5% 3.3% 1.9% 1.8% 1.3% 0.6% -0.3%

Unit Value Growth Volume Growth Nominal Value Growth

FMCG is enjoying positive momentum driven predominantly by inflationary prices with volume consumption improving in Q4

TOTAL LATVIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

1% 3% 4.5% 15% 3.6%

47% 5.1% 4.2%

37% 6.7% 13.8%

Total FMCG Hypermarket/Large Supermarkets+Drugstores Small Supermarkets/Discounters Superettes Conveniences/Petrol Stations Pharmacies

Channels are benefiting across the board indicating shoppers inclination to larger / everyday shopping missions

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL LATVIA – SUPER CATEGORIES PERFORMANCE MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.5%

Chilled and Frozen products 33.2% 8.1%

Alcoholic Drinks 18.5% 1.2%

Shelf Stable Food 11.9% 1.8%

Personal Care 8.3% 3.3%

Non Alcoholic Beverages 7.0% 2.8%

Confectionery 6.4% 5.4%

Household products 4.3% 2.1%

Hot Beverages 4.2% 1.7%

Snacks 3.3% 8.9%

Pet Care 2.1% 6.8%

Baby Food 0.9% 7.9%

Changing consumer habits towards convenience boosts many categories including Snacks, Chilled and Frozen food, Baby food, Pet care and Confectionery categories.

TOTAL LATVIA – MANUFACTURER PERFORMANCE - FMCG MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.5%

Top 1-5 18.4% 2.2%

Top 6-10 9.2% 1.7%

Top 11-30 19.2% 4.1%

Top 31-100 21.2% 7.0%

100+ 21.8% 5.0%

Private Label 10.2% 6.2%

Smaller and more flexible players are thriving and putting bigger companies under pressure

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. LITHUANIA SNAPSHOT In the final quarter of 2017, the Lithuanian economy grew by +3.8% ending a year of consistent performance. Although rising inflation is slowing consumer spending, we have witnessed one of the fastest periods of wage growth which points to an optimistic outlook on household consumption. This is evident by increasing consumer optimism, up five points in Q4 2017 compared to same time year ago. A positive international trade environment and a boost in demand of Lithuanian production and export related sectors are expected to have positive knock-on effects.

Ilona Lepp FMCG saw signs of recovery in Q3 2017, which stabilised in Q4 with 4.7% Managing Director Baltics nominal value growth. Market development remains driven by inflationary price factors and premium tier spending whilst volume continues to be down on last year.

New openings and shifting shoppers’ preference in channels saw the decline of Hypermarkets by -3.2% while large and small Supermarkets grew respectively by 6.1% and 2.8% in 2017. Convenience/petrol stations and pharmacies channels continue to thrive with the respective growth by 8.2% and 10% in 2017.

The Lithuanian market is enjoying positive momentum; however accelerating inflation became one of the key concerns which is affecting internal consumption. As consumers continue to seek the best value proposition, it is important for retailers and manufactures to understand the price sensitivity of their offers. This will be critical to ensure maximum effectiveness in trade spending and targeted promotions and ensure profitable growth enables reinvestment in innovations for long term success.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

4.4 4.2 87 87 4.0 4.1 85 3.8 3.5 3.6 3.2 81 81 2.8 79 79 77 2.2 76 73 74 73 1.2 0.7

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU LT

The Conference Board® Global Consumer Confidence 66 Source: OECD Survey is conducted in collaboration with Nielsen Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL LITHUANIA - FMCG MARKET DYNAMICS (weighted average)

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

7.3% 7.1% 7.3% 7.0% 6.7% 4.0% 4.6% 4.7% 2.2% 2.1% 1.2% 2.4% 4.3% 2.5% 3.3% 0.1% 0.6% 2.2% -0.7% -2.5% -2.7% -2.1% -4.6% -2.8% -3.5% -3.4% -4.6% -6.0% -5.0% -7.8%

Unit Value Growth Volume Growth Nominal Value Growth

Although the Lithuanian market is still heavily driven by inflationary price factors, volume declines are stabilizing more recently

TOTAL LITHUANIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

2.1% 2% 1% -3.2% 4% 8% 22% 6.1%

2.8%

-0.3%

8.2% 39% 24% 3.5%

10.0%

Total FMCG Hypermarkets Large Supermarkets Small Supermarkets/Discounters Superettes Conveniences/Petrol Stations Drug Stores Pharmacies

Hypermarkets remain challenged by changing shopper preference, while new openings boost performance of large Supermarkets 67

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL LITHUANIA – SUPER CATEGORIES PERFORMANCE MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.1%

Chilled and Frozen products 28.4% 3.0%

Alcoholic Drinks 24.0% 2.2%

Shelf Stable Food 10.9% -2.7%

Personal Care 10.3% 2.8%

Non Alcoholic Beverages 6.4% 3.8%

Confectionery 5.8% 2.0%

Hot Beverages 4.4% 2.3% .

Household products 4.2% -0.8%

Snacks 3.1% 7.4%

Pet Care 1.8% 3.9%

Baby Food 0.7% 0.6%

Majority of categories are growing in value with rising prices but constant promotions in Household products are not always effective in encouraging shoppers to buy more

TOTAL LITHUANIA – MANUFACTURER PERFORMANCE - FMCG MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.1%

Top 1-5 17.6% 1.9%

Top 6-10 9.0% 3.8%

Top 11-30 21.5% 0.6%

Top 31-100 22.5% 1.7%

100+ 19.6% 0.7%

Private Label 9.8% 8.4%

Private Label continues to put pressure on all manufacturers as consumers seek out value in an environment of rising prices

Poland’s economy continues to perform strongly with GDP at 5.1% in Q4 contributing to the annual growth rate of 4.6% - the highest since 2011. Poland’ s Central Statistical Office contributes household consumption as the lead driver of overall GDP growth which grew by 4.8% and was the biggest contributor to growth. Inflation levels throughout 2017 have been higher than those recorded in 2016 driven predominantly from rising prices in food, housing and transportation.

Poland’s economy is viewed with much positivity with investments increasing by 5.4% after a 7.9% decline a year ago. Foreign trade did little to contribute to GDP Szymon Mordasiewicz in 2017 (with only 0.1% contribution) which highlights the growing importance of Managing Director, domestic consumption and foreign investments as drivers of this positive Poland momentum. This positivity is also reflected in consumer confidence with Poland

ranked in the top five most optimistic consumers across Europe in Q4 2017.

Poland’s FMCG market grew by 6% in Q4 2017 with all distribution channels for Food and Drug categories contributing with the exception of Hypermarkets for Drug categories. Discounters performance was strongest across all channels which is the continuation of a successful strategy mixing an appropriate portfolio of products, promotions and pricing. Dairy’s growth can be attributed to raw material price increases while Snack and Confectionary performance was strong due to introduction of small portion snacks and health products.

A new Polish law that seeks to phase out retailing on Sundays has been set in motion in 2018 and there is great debate on how this will affect the industry in the long-term. This new legislation will start with a store opening ban of two Sunday’s per month with some exceptions for small owner-run stores and petrol station. However the plan is to increase the ban to three weeks in 2019 and with a complete ban on Sunday trading effective by 2020. While the impact is uncertain, there are views that this will shift consumption patterns but not overall spending levels. What is certain is that it will be a new dynamic that all players must adapt to. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX 104 104 87 91 88 87 87 82 81 81 5.2 5.1 78 79 4.4 4.3 3.2 2.3 2.2 2.0 1.8 1.8 0.2 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q3 2017 Q4 2017 -0.9

EU PL Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen. 69 Source Economist Intelligence Unit (EIU) Q4 GDP Trading Economics CCI not available for Poland Q1 and Q2 2017

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

6.1% 6.0% 5.4% 4.8% 4.4% 4.6% 4.3% 4.1% 3.1% 1.5% 4.0% 1.5% 2.8% 3.4% 6.3% 2.6% 2.8% 4.1% 2.0% 1.8% 3.1% 2.0% 1.0% 0.9% 0.8% 2.2% 2.0% -0.1% -0.1% -1.0%

Unit Value Growth Volume Growth Nominal Value Growth

Strong economic environment and positive consumer sentiment is behind increasing consumption

TOTAL POLAND – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

4.3% 11% -0.6% 35% 15% 3.9%

8.8%

6.3% 7% 32% 1.8%

Total FMCG Hypermarkets Supermarkets Discounters Drugstores Small Format

Decline of Hypermarkets is driven by Drug categories performance. There has been a visible shift of Drug sales towards Drug stores and Discounters

MAT Q4-2017 MAT Q4-2017

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.3%

Alcoholic Beverages 23.1% 1.5%

Culinary 16.8% 3.0%

Non-Alcoholic Beverages 14.1% 4.0%

Dairy 13.8% 9.3%

Confectionery 11.5% 7.6%

Cosmetics Categories 8.5% 4.2%

Paper Sanitary Hygiene & Other 4.7% 4.6%

Home Categories 4.4% 2.2%

Frozen Products 3.0% 4.1%

Dairy growing mainly from raw material prices. Snacks & Confectionary growth resulting from small portion packs and pro-health products

TOTAL POLAND – MANUFACTURER PERFORMANCE - FMCG MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 4.3%

Top 1-5 16.0% 1.5%

Top 6-10 10.9% 3.7%

Top 11-30 20.0% 5.0%

Top 31-100 17.3% 5.8%

100+ 16.3% 6.7%

Private Label 19.5% 3.2%

Growth continues to be driven by companies beyond Top 10 suppliers

Romania's economy continued to grow throughout 2017, with GDP showing one of the highest increases over the last few quarters across the EU. This positive momentum was due largely to increases in consumption following the fiscal initiatives implemented during 2016 and 2017. However, the last quarter of 2017 brought some turmoil on the political and social scene. Debatable legislative changes, delays in applying promised benefits for various social segments and political battles between state institutions are Luca De Nard degrading the overall economic atmosphere. Inflation has started to rise Managing Director following 2 years of a deflationary trend. Romania Romanians’ optimism has declined for the second quarter in a row. After jumping to a historical peak of 101 points in Q2, consumer confidence index reached 90 points in Q4, from 98 in Q3.

FMCG registered a 9.3% nominal growth in Q4, with the price increases responsible for more than half of the growth. The Organized Trade continues to be dominated by Hypermarkets, who accelerated pace in Q4 2017, but Supermarkets remain the most dynamic based on store expansion. Traditional trade, which still accounts for approximately 40% of the market, also increased in Q4 due to inflationary prices but remains behind total industry growth. Most FMCG categories registered healthy growth, with Non Alcoholic beverages, Processed meat and Dairy products being the largest and most dynamic categories.

Economists continue to issue warnings on the officially communicated growth predictions, based on unsustainable consumption, lack of public investments and legislative instability. While Romania shows significant growth overall in 2017, caution is advisable in planning similar growth for the following year. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

101 98 90 86 87 85 85 87 87 81 81 8.8 79

6.9 5.7 6.1 4.8 4.3 3.3 0.2 0.7 1.5 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017 -0.5 -0.5

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 EU RO

GDP growth (% change pa) Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence 72 Source Q4 GDP National Institute of statistics & Q4CPI National Bank of Romania Survey is conducted in collaboration with Nielsen Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL ROMANIA - FMCG MARKET DYNAMICS (weighted average)

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

11.2% 9.2% 8.5% 9.1% 8.6% 9.3% 7.4% 7.0% 6.4% 6.5% 4.0% 11.3% 10.9% 2.4% 3.6% 15.6% 8.4% 5.3% 13.2% 4.8% 5.2% 3.8% 0.4% 0.2% 1.1% 1.7% 4.6% -2.1% -4.1% -7.1%

Unit Value Growth Volume Growth Nominal Value Growth

Consumption continues to be the economic growth trigger as value increases in line with the higher inflationary rate

TOTAL ROMANIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

1% 7.4% 1% 6.8% 29% 18.4% 40% 6.7%

3.9%

18% -2.4% 11% 13.5%

Total FMCG Hypermarkets Super/Minimarkets Discounters Traditional Trade Pharma/Cosmetics Petrol Stations/Convenience

Supermarkets growth continues through store expansion

MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 7.4%

Dry Grocery 29.4% 6.4%

Fresh Food 22.9% 12.9%

Beverages - Alcoholic 14.4% 5.2%

Beverages - Non Alcoholic 13.2% 8.1%

Personal Hygiene/Cosmetics 8.3% 5.3%

Household Care 7.7% 3.7%

Frozen Food 3.0% 4.9%

Non Food 1.1% -4.2%

Fresh food and Non Alcoholic beverages drive the growth, following increased consumer demand. Household and other Non-food sales lag behind the overall growth

TOTAL ROMANIA – MANUFACTURER PERFORMANCE - FMCG MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 7.4%

Top 1-5 16.4% 5.5%

Top 6-10 9.6% 5.9%

Top 11-30 18.5% 11.9%

Top 31-100 21.1% 9.2%

100+ 22.0% 5.0%

Private Label 12.3% 5.9%

Smaller manufacturers outside of the top 10 continue to enjoy the increasing buying appetite of consumers due to innovations and increased market presence 74

Amid record-low inflation in Russia in 2017 consumer spending has been revived. According to official statistics, consumer expenditures grew 3.4% in 2017 mostly driven by online purchases, imported products and international travel. However, experts claim that spending is driven mainly by growing credit and debt especially by lower-income consumers, so the current consumer landscape is still not healthy. Consumer confidence remained steady and relatively pessimistic throughout 2017.

Spending on FMCG posted positive dynamics in Q4 2017 with sales volumes up Alexander Kotsuba, 1.2% which is a level not seen during the past two years. However this scenario is Managing Director not seen as sustainable. There have been shifts in the retail landscape, with a Nielsen Russia number of top retailers trying new formats, for example, opening proximity stores by hypermarkets, or re-considering their format portfolio moving away from formats that are least profitable. This experimentation is a sign of rapid change in the way consumers shop.

Even though consumers seem more able to spend in the current environment, it does not seem to be transferring to their FMCG budget. However expectations are increasing with lower prices, better quality assortment and convenience emerging as key themes. All three components of today’s “best shopper experience” are increasingly offered by online retailers, either pure online stores or omni-channel stores. Online sales still account for a low share in most categories with the exception of Pet and Baby but given the growing consumer acceptance on this channel, it is time for retailers and manufacturers alike to focus and accelerate their e-commerce offerings..

Looking forward, the first half of 2018 is expected to be a great time for business growth for a number of key reasons. Firstly, with the upcoming Presidential elections the economic environment will be held as stable as possible and it is likely that public sector employees (who account for 20% of the Russian workforce) will receive salary indexation or other forms of financial grants. Secondly; the upcoming World Football Cup 2018 is expected to drive consumption with both visitors and locals.

COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

6.9 85 87 87 5.7 79 81 81 4.6 67 70 70 69 4.2 66 63 3.4 2.4 2.4 2.6 1.9 0.4 0.5

-0.4 Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) EU RU Inflation, consumer prices (% change pa)

The Conference Board® Global Consumer Confidence 75 Source Economist Intelligence Unit (EIU) Survey is conducted in collaboration with Nielsen Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL RUSSIA - FMCG MARKET DYNAMICS (weighted average)

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 0.1% 9.7% 0.3% 7.5% 7.9% 6.8% 4.8% 9.6% 0.1% 1.2% 8.2% 7.2% 7.5% 3.5% 0.4% 3.2% 3.4% 3.0% 7.0% 2.3% 5.8% 3.6% 3.3% 1.9% 1.8% -0.5% -0.7% -0.4% -2.2% -2.4%

Unit Value Growth Volume Growth Nominal Value Growth FMCG volume consumption has increased due to economic stability and holiday consumption in Q4

TOTAL RUSSIA – CHANNEL PERFORMANCE VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

3.2% 26%

6.4%

74% -4.9%

Total FMCG Modern Trade Traditional Trade

Modern trade formats continue to expand with experimentation in new formats by key players at the expense of Traditional Trade

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 3.2%

Other Food & Drinks 28.1% 2.1%

Tobacco 14.3% 6.3%

Dairy 12.7% 5.2%

Beer 8.6% -2.0%

Personal Care & Make-Up 7.0% 4.1%

Vodka 6.2% 0.0%

Sauces & Grocery 4.9% -0.8%

Premium Alco 4.8% 13.2%

Home Care 3.2% 0.0%

Pet 2.7% 6.5%

Baby Food & Infant Formula 2.3% 5.6%

Frozen Food & Fish 1.9% 4.4%

Ice Cream 1.8% 2.6%

Baby Care 1.3% 1.2%

Alcohol sales are strong compared to last year due to more affordable SKUs, specialist stores’ expansion and trade promotion

TOTAL RUSSIA – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 3.2%

Top 1-5 19.9% 3.1%

Top 6-10 12.4% 1.8%

Top 11-30 16.6% 2.5%

Top 31-100 16.7% 3.5%

100+ 30.3% 3.8%

Private Label 4.1% 4.9%

Smaller manufacturers and Private Label exceed average market development levels due to lower price offerings 77

Serbia’s economic environment continues to stabilize and investors’ risk perception improves. The business climate and external environment is also more positive supporting Serbia’s export sector. Despite public-sector layoffs, total unemployment in Serbia is actually falling as many new jobs are being created in the private sector, particularly in manufacturing. If overall unemployment continues to fall as the private sector flourishes, it is anticipated that household consumption will continue to rise and support growth.

While consumer optimism remains stable throughout 2017, job security is cited as consumers’ top concern, which is inline with consumers’ relatively low level of Andrey optimism for job prospects in the next 12 months. According to the official statistics, Dvoychenkov in 2017 real GDP grew by 3% with forecasts anticipating growth up to 3.4% in 2018. Group Managing Director Adriatic Inflation is predicted to continue to decelerate with most economic indicators in Region 2017 supporting this optimistic view. This has no doubt flowed into consumer spending with spending on FMCG increasing by 2.9% in Q4 2017.

Serbian shoppers spend RSD 28.179 (€ 229) on food and groceries in a year, which while €79 lower than the European average, is stable compared to 2016. Out of this budget, 50% is spent on fresh food. The general perception is that prices for food is increasing. Consumers are trying to cut back on their living expenses by looking for discount prices and buying only essential things. Luxury products are not top of mind or top of their shopping lists. Although Private Label has only 6.1% of value share, shoppers increasingly recognize Private Label as a value alternative to branded products.

This year, it is rumored discounter chain Lidl will enter the Serbian market, which will certainly change the market landscape. Existing retailers are already preparing proactive strategies for this market disruption. For FMCG manufacturers, the entrance of a major Discounter chain presents a heightened opportunity to differentiate their offering or risk a head on challenge as there is little doubt Discounter brands and Private Label will change the way consumers shop as seen in other markets across Europe. COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX 3.7 85 87 87 81 81 3.1 3.0 79 2.8 2.9 67 69 69 69 69 2.5 2.5 64 2.1

1.5 1.4 1.0 1.1

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU RS

The Conference Board® Global Consumer Confidence Source Local government source 78 Survey is conducted in collaboration with Nielsen

MAT YA MAT TY Q1 16 Q2 16 Q3 16 Q1 17 Q2 17 Q3 17

0.0% 4.4% 4.2% 3.7% 0.6% 3.6% 3.6% 4.6% 3.9% 3.4% 2.9% 2.1% 2.4% 3.7% 3.7% 1.9% 1.3% 3.3%

-1.4% -0.1% -0.5% -1.2% -2.0% -2.0%

Unit Value Growth Volume Growth Nominal Value Growth

While growth in FMCG is reflective of price increases, as inflationary pressures have lessened, consumption in the FMCG market has picked up In Q4

TOTAL SERBIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

2.1% 0% 4% 3% 2.4% 14% 29% 9.8% -7.5%

-0.9% 22% 11.7% 14.3% 28% 0.3%

Total FMCG Hyper/ Super Large Groceries Small Groceries Kiosks/ Pavillions Drug Stores Petrol Stations Pharmacies

Drug stores are performing particularly well driven by new store openings as well as consumers switching to this format and visiting more often

MAT Q4-2017 MAT Q4-2017

SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.1%

Tobacco 29.8% 2.7%

Food Fresh Refrig. 14.6% 3.5%

Beverages Non-Alcoholic 13.8% 2.9%

Confectionary And Snacks 11.8% 0.6%

Beverages Alcoholic 8.1% -1.0%

Personal Care 7.4% 4.8%

Food Shelf Stable 6.7% -1.0%

Household Products 5.1% -0.5%

Frozen 2.5% 6.9%

Pet Food 0.3% 15.8%

Tobacco which has the biggest impact on overall FMCG growth has performed well due to price increases

TOTAL SERBIA – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.1%

Top 1-5 34.1% 3.6%

Top 6-10 10.5% -0.3%

Top 11-30 22.5% 0.5%

Top 31-100 17.0% 0.4%

100+ 11.6% 6.6%

Private Label 4.2% 1.4%

While global manufacturers dominate the Top 10, two key local giants are keeping up the pace successfully operating in Food categories

2017 was a positive year for the Slovak economy. GDP growth reached 3.4 % and it is anticipated that it could be even stronger in 2018 and 2019. Declining unemployment is assisting this positive momentum. The economy is supported by wage growth which is accelerating inflation and increasing household consumption. This development influences the retail sector and the FMCG market is growing on the back of increasingly confident consumers with a positive outlook on job prospects.

Karel Tyra Managing Director, The FMCG market in Slovakia continues its strong performance with growth of Slovakia 7.5% in Q4 2017 supported by strong volume consumption as well as price growth. Drug categories have been a strong driver of volume growth which is behind the exceptional performance of this channel. In Food, Dairy accounts for the largest percentage of consumers’ spend and is growing at the fastest pace due to increasing prices across a number of categories. In these favorable conditions, both big and small manufacturers are growing and the only players falling behind are Private Labels. This is due to a complexity of reasons – but predominantly the heavy promotional environment driven by branded players is eroding into Private Label’s low price territory and their lower quality offering is making it difficult to compete. Private Label is starting to improving its quality offering to fight back in this space.

The positive market conditions surrounding the FMCG market (with growth, up- trading and confident consumers) also brings increasing costs (such as wages and commodities) which will force many manufacturers and retailers to reconsider their pricing and promotional strategy. Companies with a focus on smart optimization based on a detailed knowledge of price sensitives and cross- effects will be set to win driving profitable growth and not just volume expansion.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

87 87 87 86 85 85 3.4 3.5 3.4 3.0 3.0 3.1 82 81 81 2.0 81 81 1.6 79 1.0 1.0

-0.7 -0.1 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 EU SK GDP growth (% change pa) Inflation, consumer prices (% change pa) The Conference Board® Global Consumer Confidence Source Economist Intelligence Unit (EIU) Q4 2017 estimate 81 Survey is conducted in collaboration with Nielsen Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL SLOVAKIA - FMCG MARKET DYNAMICS* (weighted average)

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 9.3%

7.5% 6.3% 4.1% 6.1% 3.2% 4.3% 4.2% 4.0% 3.2% 1.7% 3.1% 2.3% 2.6% 2.5% 4.9% 1.9% 2.0% 4.1% 2.6% 3.2% 2.7% 3.5% 0.2% -1.8% -0.2% -0.7% -1.3% -1.8% -1.5%

Unit Value Growth Volume Growth Nominal Value Growth *Restatement of 2016 Coop back data with Q4 17

Strong FMCG growth in Q4 is supported by volume as well as pricing growth

TOTAL SLOVAKIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

6.3% 6% 6% 6.2%

27% 6.5% 61% 1.2%

12.9%

Total FMCG Hyper/Supermarkets Organized Groceries Non Organized Groceries SK Organized Drug

Drug retailers’ are clear winners in the market, while only the Non Organized channel has not benefited from this buoyant market 82

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL SLOVAKIA – SUPER CATEGORIES PERFORMANCE MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 6.3%

Dairy 18.5% 9.9%

Sweets & Treats 17.2% 5.9%

Beverages Alcohol 16.6% 6.4%

Health & Beauty 10.5% 6.4%

Culinary - Shelf Stable 9.9% 4.1% .

Beverages Non Alco 9.0% 5.2% .

Beverages Hot 4.8% 3.3%

Frozen 3.1% 6.0%

Home Care excl. Laundry 2.7% 7.0%

Home Care - Laundry 2.2% 3.7%

Baking - Shelf Stable 2.2% 4.1%

Infant Care 1.9% 5.9%

Pet Care 1.5% 7.5%

Dairy accounts for largest share of FMCG and its strong performance has been driven by increasing prices

TOTAL SLOVAKIA – MANUFACTURER PERFORMANCE - FMCG MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 6.3%

Top 1-5 14.4% 6.3%

Top 6-10 10.3% 5.3%

Top 11-30 16.8% 6.8%

Top 31-100 18.7% 7.8%

100+ 19.2% 6.8%

Private Label 20.6% 4.9%

All manufacturers are enjoying growth in a very positive market environment

Slovenia is starting to see benefits from improvements in the economic environment and favorable conditions. Economic growth has primarily come from increased household consumption, not only through increased loans, modest public spending and gross fixed capital formation but also through a 16% growth in tourist arrivals. The banking sector continues to recover, and after returning to profitability in 2016 is contributing to overall economic growth. The employment rate is increasing (3% annual growth in November 2017) and consumer optimism remains at the highest levels seen over the last few years close to the European average. The proportion of consumers who believe that Slovenia is in an economic recession fell to 37% in Q4 2017 compared to 60% in Q4 2016. Over a third of consumers (35%), think job Andrey prospects will continue to be good in the next 12 months which is the highest Dvoychenkov Group Managing recorded level in the past years and more than double Q3 2016 levels. Director Adriatic Region In this environment, Slovenia is enjoying strong FMCG growth especially in the latest quarter at 4.6% driven by both higher volume sales and price increases as promotional activity was less aggressive than in the past. Discounters continue to be the driver of channel growth, expanding in square meters with both store expansion and upsizing existing stores. They continue to adjust their assortment strategy bringing more brands into their portfolios and aligning with emerging consumer trends in areas such as bio and gluten free. Increased promotional activities in this channel focusing on pensioners and sustainable claims have also helped performance. Growth in Beverages and Meat products have often come from new and interesting innovations supporting consumers’ busy lifestyles and growing awareness for healthy products.

Slovenia’s future looks promising with CEEMA recent survey in December 2017 highlighting that more than 90% of businesses expect growth in revenues and 70% in profits. Slovenia’s economy is expected to grow by more than 3% over the next two years which hopefully will continue to boost consumer spending.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

6.2 87 87 85 84 83 5.4 79 81 81 5.1 74 4.9 69 4.4 64 62 3.4

1.8 1.4 1.3 0.2 0.6 1.2

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) Inflation, consumer prices (% change pa) EU SI

The Conference Board® Global Consumer Confidence 84 Source Local government Survey is conducted in collaboration with Nielsen

MAT YA MAT TY Q2 15 Q3 15 Q1 16 Q2 16 Q3 16 Q1 17 Q2 17 Q3 17 4.6%

2.5%

2.4% 0.9% 1.6% 1.8% 1.2% 1.0% 1.2% 0.9% 1.5% 1.6% 2.2% 0.4% 0.0% 1.1% 0.4% -0.4% -0.1% -0.4% -0.7% -0.1% -0.7% -0.4% -0.2% -0.4% -1.5% -0.2% -1.3% -1.7%

Unit Value Growth Volume Growth Nominal Value Growth

Strong FMCG value growth in Q4 was led by both higher volume sales and price increases coupled with less aggressive promotions

TOTAL SLOVENIA – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

2.4%

4% 0.5% 15% 1.6%

25% -3.5%

7.0% 0% 3% -3.0% 11% 42% 6.9% 5.9%

Total FMCG Hypermarkets Supermarkets Large Groceries

Medium And Small Groceries Kiosks Discounters Drugstores** Discounters have driven greatest value growth focusing on Private Labels/Exclusive brands in Food categories with low prices 85

MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.4%

Beverages 24.4% 3.8%

Dairy Products 16.3% 2.1%

Meat And Meat Products 14.3% 3.7%

Packed Food 11.8% -0.7%

Confectionery 11.1% 1.4%

Personal Care 9.8% 1.2%

Household Care 5.8% -0.6%

Frozen Food 3.1% 6.1%

Salted Snacks 2.7% 12.7%

Baby Food 0.5% -3.2%

Above market growth in Beverages and Meat products has often come from innovations supporting consumers’ busy lifestyles and growing awareness for healthy products

TOTAL SLOVENIA – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 2.4%

Top 1-5 17.4% 2.3%

Top 6-10 8.3% 2.8%

Top 11-30 15.8% 2.6%

Top 31-100 15.8% 2.7%

100+ 10.7% 2.2%

Private Label 32.0% 2.3%

Growth consistent across all tiers. Number one manufacturer, driven by Beer sales, recorded value growth twice that of total FMCG

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TURKEY SNAPSHOT The Turkish economy showed above normal growth in Q3 2017 coming of low levels in Q3 2016. Both Turkish domestic spending and exports continued to contribute strongly to the growth performance. Similar to the first two quarters, households benefited from the government's policies aimed at boosting demand with initiatives such as tax discounts in Q3. On top of that, the government’s fiscal stimulus and nationwide campaign on job creation and credit guaranteed fund loans has resulted in increased private sector spending – all of which has contributed to growth.

Didem Sekerel Consumer prices increased sharply throughout 2017 due to government's demand Erdogan boosting fiscal policies and increase in the price of imported goods (due to a weakened General Manager TRY). In Q4 inflation hit some of its highest levels at 11.9%. Nielsen Turkey, Buy. This inflation has had a significant impact on the FMCG market (excluding Tobacco & Alcohol) as nominal growth started accelerating from Q1 2017 to reach 16.8% in Q4 2017. While inflationary pressure may have dampened growth, volume growth for 2017 is still ahead of 2016 levels at 5.1% compared to 4.2% respectively.

Comparing Q4 2017 versus Q4 2016, the highest growing sub sectors are Body and Hair care, Oral care, Dairy and Ice cream. Hair care, Oral care and Dairy recorded additional price increases above inflation, whereas Body care and Ice cream relied on strong volume growth. As for Food, health trends are supporting the growth of Nut Bars, Croquants and Dried nuts, whereas Dairy growth has resulted from strong price increases in raw milk. Convenience is another trend that leads to stronger growth of Frozen Food, Noodles, Sachets and Non-chemical Household Cleaners.

Looking forward, manufacturers should continue to seek growth via innovation that meets consumers’ evolving needs. Health is a key trend, ripe with opportunity as the consumer, retail and business landscape looks for ways to tap into this growing consumer trend. Managing pricing and promotional effectiveness across the full portfolio is also key to ensure optimal brand architecture and profitable growth.

COUNTRY HIGHLIGHTS

ECONOMY WATCH CONSUMER CONFIDENCE INDEX

11.9 113 112 11.3 10.9 11.111.2 107 98 94 90 85 87 87 8.5 81 81 7.3 79 5.3 5.4 4.2 0.0

-0.8 Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) EU TR Inflation, consumer prices (% change pa)

FMCG: excluding Tobacco/Alcohol The Conference Board® Global Consumer Confidence 87 Source Local government – Q4 2017 GDP not available Survey is conducted in collaboration with Nielsen Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL TURKEY - FMCG MARKET DYNAMICS (weighted average)

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

16.8% 14.9% 14.5% 14.2% 4.5% 4.6% 5.1% 11.6% 10.5% 10.9% 10.6% 10.6% 10.1% 5.6% 4.2% 2.6% 3.7% 5.6% 4.4% 6.0% 9.4% 10.3% 12.3% 8.3% 8.5% 6.3% 6.9% 6.0% 5.7% 4.6%

Unit Value Growth Volume Growth Nominal Value Growth

Despite Inflation pressures impacting FMCG from the start of 2017, volume growth is still evident

TOTAL TURKEY – CHANNEL PERFORMANCE VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

14.5%

-2.9% 5% 27% 10.0% 22% 10.3% 3% 33.4% 11%

32% 34.4% 3.9%

Total FMCG Hypermarkets Large & Medium Supermarkets Small Supermarkets Discounters (A101 BIM SOK) Perfumery Traditional Trade Discounters and Perfumeries show strongest growth mainly driven by an increase in number of stores

88 FMCG: excluding Tobacco/Alcohol

Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. TOTAL TURKEY – SUPER CATEGORIES PERFORMANCE MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 14.5%

Confectionery 21.4% 15.4%

Non Alcoholic Drinks 21.2% 10.9%

Dairy 12.8% 17.2%

Grocery 12.2% 13.7%

Housekeeping 7.9% 15.2%

Paper Products 6.2% 13.8%

Fats And Oils 5.6% 12.9%

Body Care 3.8% 20.9%

Ice Cream 3.3% 17.1%

Hair Care 2.8% 18.8%

Oral Care 1.4% 14.3%

Grooming 0.8% 11.3%

Other 0.6% 13.3%

Hair Care, Oral care and Dairy categories showcase strong growth driven by additional price increase above inflation

TOTAL TURKEY – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017

MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 14.5%

Top 1-5 25.0% 10.4%

Top 6-10 11.5% 10.4%

Top 11-30 17.9% 13.0%

Top 31-100 14.8% 12.2%

100+ 30.8% 21.9%

Smaller manufacturers, as well as Private Labels are growing fastest as consumer seek value offerings in face of increasing prices

FMCG: excluding Tobacco/Alcohol 89 *100+ includes private label brands

Q4 2017 marked a positive ending to the overall FMCG industry in Ukraine. Whilst inflationary effect on prices was high, volume consumption continued to build at a faster pace, showcasing the improved spending power of Ukrainian consumers, as a result wages increased above inflationary levels. Legislative changes and reforms in the state administration processes that were introduced in 2017 appear to be working although commentators believe there is still significant room for improvement, most evident with the fight against corruption.

Vaios Dimoragas Consumers feel more empowered to spend but that means they are also becoming Managing Director more demanding of products, services and brands. They are looking for a more Ukraine and Belarus positive and exciting shopper experience even with a limited budget. The internet enables them to research extensively a product or service extensively, seeking advice before actually making a purchase. This change in consumers’ influencers and path to purchase provides opportunities for retailers to grow basket sizes and consumer traffic. It is the Modern Trade channel that are leveraging these new marketing tools more extensively, mostly at the expense of Traditional trade, which whilst still important in Ukraine (30%), is losing market share.

At the same time, the fight to attract more shoppers versus their competitors is an ongoing challenge for retailers. It highlights an opportunity for retailers to work closer with manufacturers to optimize retail strategy and execution. The shift from hard negotiations to a collaborative, insight driven approach is going to be key in identifying opportunities to drive further footfall and category expansion.

In an improving, although yet not fully stabilized market environment, brands (both retailers or manufacturers) need to listen attentively and respond in smart ways to consumer needs. In a rapidly developing digital world, shoppers have access to more information than ever before. In additional to focusing on retail executional tactics such as assortment and promotions, it is pivotal for companies to create a digital plan that incorporates their overall marketing strategy. COUNTRY HIGHLIGHTS ECONOMY WATCH CONSUMER CONFIDENCE INDEX

16.2 85 87 87 79 81 81 13.9 13.8 14.0 12.3 61 57 58 52 50 52 8.0

4.8

2.3 2.5 2.3 2.1 2.2

Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017 Q2 2016 Q3 2016 Q4 2016 Q2 2017 Q3 2017 Q4 2017

GDP growth (% change pa) EU UA Inflation, consumer prices (% change pa)

The Conference Board® Global Consumer Confidence Source Economist Intelligence Unit (EIU) Q4 GDP local government source Survey is conducted in collaboration with Nielsen 90

MAT YAMAT TY Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17

20.7% 15.9% 14.9% 13.8% 15.8% 27.2% 13.4% 0.1% 0.3% 13.4% 12.4% 6.0% 3.8% 3.7% 8.9% 10.0% 3.6% 7.0% 16.2% 12.6% 10.0% 9.7% 9.7% 9.9% 8.8% 9.8% 8.8% -1.3% -6.5% -0.1%

Unit Value Growth Volume Growth Nominal Value Growth

FMCG sales volume improved in Q4 due to economic stability and holiday consumption while prices remained stable

TOTAL UKRAINE – CHANNEL PERFORMANCE

VALUE CONTRIBUTION AND GROWTH – MAT Q4-2017

13.8%

30% 18.4%

21.9% 52%

6% 23.9% 12% 2.5%

Total FMCG Hypermarkets/Supermarkets MT Minimarkets MT Perfumeries MT Traditional Trade

Modern trade continues to grow driven by the national key players leveraging more innovative marketing tools

MAT Q4-2017 MAT Q4-2017 SUPER CATEGORIES VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 13.8%

Beverages - Alcoholic 21.7% 13.2% Beverages - Non Alcoholic Rtd & 20.8% 9.4% Not Rtd Confectionery & Snacks 17.8% 16.9%

Dairy Products 12.6% 19.2%

Personal Cleaning & Hygiene 9.4% 13.9%

Household 5.0% 13.3%

Seasoning & Sauce 4.1% 11.9%

Baby Care 2.2% 8.6%

Meals/Meal Mixes Shelf Stable 2.2% 17.6%

Pet Food 1.9% 14.0%

Baby Food & Drinks 1.7% 20.1%

Desserts/Cakes/Sweet Products 0.6% 7.5%

Dairy growth has come from an easing of regulatory pressure allowing for increased prices. Baby Food growth is a result of expansion of top players and new entrants operating in these categories

TOTAL UKRAINE – MANUFACTURER PERFORMANCE - FMCG

MAT Q4-2017 MAT Q4-2017 MANUFACTURERS VALUE CONTRIBUTION NOMINAL VALUE GROWTH

Total FMCG 100.0% 13.8%

Top 1-5 23.9% 13.5%

Top 6-10 13.6% 11.3%

Top 11-30 22.9% 15.7%

Top 31-100 21.1% 15.2%

100+ 12.9% 13.7%

Private Label 5.6% 9.8%

Growth in mid-sized manufacturers comes from recent price increases in Food categories where Top 10 (predominantly Non Food operators) enjoyed price rises earlier 92

BELGIUM

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 7201 7163 7163 Hypermarkets 52 52 52 Large supermarkets 866 883 928 Small supermarkets 1746 1751 1706 Superettes 1483 1468 1476 Traditional grocers 3054 3009 3001

HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2 TRADITIONAL GROCERS <100 m2

Chain Store Numbers

STORE TYPE 2016 2017 OTHER Self Service Excluding 1065 1030 Petrol <400m2 Carrefour 713 728 Delhaize 587 590 Colruyt 572 590 Aldi 444 443 Lidl 291 294 Kruidvat 223 240 Lambrecht Group 127 134 Louis Delhaize 121 120 Di 118 120 Hema 97 96 Other Supermarkets 89 91 Intermarché 79 78 Alvo 57 57 Metro 15 16 Cora 7 7

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 21811 20336 20872 Hypermarkets 2053 2106 2177 Large supermarkets 2944 2951 6198 Small supermarkets 7401 7115 3556 Superettes 9413 8164 8941 HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2

Chain Store Numbers STORE TYPE 2017 2018 Hypermarkets Centre E. Leclerc 607 620 Carrefour 228 232 Auchan 136 136 Geant Casino 110 110 Intermarche Hyper 89 87 Hyper U 65 61 Cora 58 59 Les Halles D'auchan 4 4 Auchan City 2 2 Record 1 1 Supermarkets Intermarche Super 1332 1343 Super U 715 721 Market 508 574 Carrefour Market 523 455 Casino 357 365 Monoprix 310 311 Simply Market 291 152 Auchan Supermarche 0 131 Match 123 117 Atac 60 54 Hyper Casino 39 38 Bi 1 18 23 Intermarche 15 11 Galeries Gourmandes 3 2 Simply Market Gourmand 1 1 94 Champion 1 1 Copyright © 2018 The Nielsen Company (US), LLC. Confidential and proprietary. Do not distribute. GERMANY

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 32306 31220 30667 Hypermarkets 2062 2082 2093 Large supermarkets 5229 5703 5712 Small supermarkets 20575 19843 19677 Superettes 4440 3592 3185

HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2

Chain Store Numbers

STORE TYPE 2016 2017 Grocery+drugdiscounter 35,343 35,143 Edeka 11,694 11,622 Markant 7,689 7,66 Rewe 6,828 6,825 Aldi 4,221 4,159 Lidl 3,195 3,182 Other 1,717 1,695

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 117429 116400 89511 Hypermarkets 867 876 887 Large supermarkets 2592 2585 2661 Small supermarkets 10391 10483 10518 Superettes 14120 13365 12613 Traditional grocers 89459 89091 62832

HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2 TRADITIONAL GROCERS <100 m2

Chain Store Numbers

STORE TYPE 2016 2017 COOP ITALIA 1550 1567 CONAD 2865 2915 SELEX COMMERCIALE 2190 2241 ESSELUNGA 152 155 GRUPPO CARREFOUR ITALIA SPA 1035 1011 GRUPPO AUCHAN 1801 1711 EUROSPIN 1025 1079 GRUPPO VEGE 1811 1859 LIDL ITALIA 597 616 GRUPPO PAM 914 857 FINIPER 243 250 GRUPPO SUN 584 588 CRAI 2058 2181

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 4998 5037 4872 Hypermarkets 56 55 55 Large supermarkets 1623 1693 1761 Small supermarkets 2840 2827 2749 Superettes 479 462 307

HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2

Chain Store Numbers

STORE TYPE 2016 2017 Albert Heijn 958 962 Jumbo 580 583 Plus 261 260 Detailresult 198 200 Dirk Van Den Broek 117 120 Dekamarkt 81 80 Coop 258 263 Emté 133 130 Hoogvliet 65 68 Deen 80 82 Spar Formule 241 261 Jan Linders 59 60 Poiesz 68 68 Mcd 39 41 Aldi 498 490 Lidl 411 412

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 15874 15523 15465 Hypermarkets 98 100 103 Large supermarkets 404 427 457 Small supermarkets 1373 1371 1386 Superettes 3215 3094 3339 Traditional grocers 10784 10531 10180

HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2 TRADITIONAL GROCERS <100 m2

Chain Store Numbers

STORE TYPE 2016 2017 Total Sonae 225 245 Auchan 33 40 Total Jerónimo Martins 396 405 Intermarché 243 245 Lidl 245 250 Minipreço 541 543

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 51085 51611 51615 Hypermarkets 449 452 453 Large supermarkets 3562 3684 3688 Small supermarkets 5269 5332 5335 Superettes 9696 10086 10089 Traditional grocers 32109 32057 32050

HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2 TRADITIONAL GROCERS <100 m2

Chain Store Numbers

STORE TYPE 2016 2017 Mercadona, S.A. 1,614 1.627 Dia, S.A. 3,704 3,553 Grupo Carrefour 618 687 Grupo Eroski 1,302 1,284 Auchan Retail España, S.A. 357 366 Lidl Supermercados, S.A.U. 528 545 Consum, Sdad.Coop. 676 696 El Corte Ingles/Hipercor 274 271 Coviran, S.C.A. 1,729 1,724 Aldi Supermercados, S.L. 263 278 Condis Supermercats, S.A. 479 525 Ahorramas, S.A. 251 252 Gadisa (Grupo) 314 317 Bon Preu, S.A. 169 174 Alimerka, S.A. 173 172 Grupo Froiz 284 286 Dinosol Supermercados, S.L. 218 216 Uvesco, S.L. 206 230

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 31987 32570 32570 Hypermarkets 1677 1694 1694 Large supermarkets 1943 1924 1924 Small supermarkets 3193 3135 3135 Superettes 15472 16183 16183 Traditional grocers 9702 9634 9634

HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2 TRADITIONAL GROCERS <100 m2

Chain Store Numbers

STORE TYPE 2016 2017 Tesco 2590 2593 Sainsbury 1382 1406 Asda 565 572 Morrisons 491 491 Co operative 3969 3707 Waitrose 354 355 Iceland 837 862 Aldi 684 762 Lidl 650 694 M&S 902 956

100

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 2017 Hyper&supermarkets 554 730 765 765 Large groceries* 1333 1358 1430 Small groceries* 3166 3061 2966 Kiosks, pavilions, & 3371 3300 3504 3504 Open markets Chain Drugstores 1113 1258 1639 Groceries MT** 2054 2106 2153 2255 Groceries TT ** 2445 2313 2243 2341

*not reported since 2017 ** since 2016

Chain Store Numbers

STORE TYPE 2015 2016 2017 Euroopt 344 452 500 Rublevski 63 71 74 Belmarket 69 74 70 Mart Inn 30 29 25 ProStore 5 5 5 Gippo 12 11 11 Almi 43 43 49 Sosedi 75 70 87 Dionis 13 15 15 Korona 11 28 38 Zlatka 17 17 20 Green 3 5 7 Vitalur 39 43 47 Bigzz 3 4 7 Dobronom 191 68 158 Domashni 3 36 50 101

Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Hyper / Supermarkets 1120 1111 1133 (>100 sq.m) Small SM & Traditional 21002 20104 20103 trade (<100 sq.m) Horeca 27642 26905 24884 Convenience 6050 5985 5860 Pharmacies 3151 3066 3033 Drug stores 2404 2142 2152

Chain Store Numbers

STORE TYPE 2015 2016 2017 Grocery Billa 97 110 118 Kaufland 55 56 58 Lidl 79 83 86 Piccadilly 20 16 CBA 194 196 201 Fantastico 38 39 41 Carrefour 13 T Market 47 61 65 Cash & Carry METRO C&C 11 11 11 Drug store DM 54 65 71 Lilly 47 56 69

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Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Hypermarkets 87 89 90 Supermarkets 631 638 654 Large groceries 1195 1203 1223 Medium Groceries 3063 3022 3076 Small Groceries 2173 2083 1880 Kiosks/Tobacconists 2545 2543 2449 Petrol Stations 830 822 876 Drugstores 329 325 335

Chain Store Numbers

STORE TYPE 2015 2016 2017 Tobacconist Tisak 1005 949 865 iNovine 251 254 241 Fibis 11 9 8 NLK 36 Smoking kiosk 88 Drug Stores & Cosmetics dm - drogerie markt 154 156 155 Kozmo 77 68 Bipa 72 81 98 Douglas 28 25 25 Gas Station INA 383 391 383 Tifon 43 43 44 KTC 12 Petrol 101 101 101 Adria Oil 11 15 15

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Chain Store Numbers

STORE TYPE 2015 2016 2017 Hyper/Supermarkets, Groceries Konzum 708 666 607 Billa 61 61 Interspar 52 53 103 Kaufland 36 39 Boso 165 173 185 Pemo 31 33 34 Bakmaz 125 131 127 NTL+NTL Istok 218 233 240 Metss 180 181 179 Trgostil 71 107 105 Diona 61 17 8 Trgonom 47 49 51 Lonia 223 243 250 Trgocentar Zabok 65 76 80 Victa 7 9 10 Sonik 108 101 84 Ribola 56 60 66 PPK Bjelovar 63 63 63 Prehrana 88 84 88 Mlin i pekare 244 287 Djelo 66 65 Jadranka trgovina 11 10 Valalta 3 2 Strahinjčica 40 47 Union 8 8 Vrutak 4 4 KTC 27 Kvarner Punat 22 23 B.tex 1

104

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Supermarket (Food & Mixed Store 401 - 1349 1334 1311 2500 m2) incl. Disc. Hupermarket 314 318 321 (Food & Mixed Store 2501m2+) Chemical stores 2203 2171 2038 Food & Mixed Store 13917 13642 13437 (400 m2)

Chain Store Numbers

STORE TYPE 2015 2016 2017 Hyper/Supermarkets Tesco 200 198 194 Albert 331 331 330 Globus 15 15 15 Kaufland 123 126 128 Billa 204 212 218 Discounters Penny 357 364 373 Lidl 229 225 235 Drugstores DM 223 223 227 Rossmann 124 131 132 PK Solvent 458 517 764

105

Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Hypermarkets 34 36 35 Supermarkets 268 279 294 Discounters 49 46 41 Superettes 295 283 285 Groceries 431 386 381 Perfumeries 176 175 166 Household/Chemical 161 149 153 Stores Pharmacies 484 491 506 Convenience Stores 440 419 402

Chain Store Numbers

STORE TYPE 2015 2016 2017 Hypermarkets, Supermarkets, Discounters Rimi 86 90 87 Maxima 75 74 74 Prisma 8 8 8 Selver 45 47 48 Kaubamaja 6 6 50 Coop Maksimarket 9 10 10 Comarket 19 18 17 Grossi 54 55 57 Perfumeries Rosalind 6 6 7 Ideal Kosmeetika 23 22 21 Laminto 26 26 26 I.L.U. 6 6 6 Pharmacies Benu 143 145 148 Sudameapteek 69 68

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Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Total 17651 17653 17608 Hypermarkets 58 57 56 Large supermarkets 623 629 634 Small supermarkets 1098 1116 1070 Superettes 2872 2864 2862 Traditional grocers 13000 12987 12986

HYPERMARKETS > 2500m² LARGE SUPERMARKETS 1000 - 2500 m2 SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2 TRADITIONAL GROCERS <100 m2

Chain Store Numbers

STORE TYPE 2016 2017 Ahold - delhaize 259 270 Anedik kritikos 104 127 Bazaar 72 79 Eys* 322 Massoutis 236 242 Pente 152 153 Sklavenitis 149 149 Marinopoulos* 339 Metro 203 206 Grand total 1514 1548

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Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Hypermarkets 162 162 163 Independent 10748 11948 11434 Small organized 5731 3691 3499 Large organized 604 613 581 Drug Stores 2186 2370 2196 Discounters 468 487 505

Chain Store Numbers

STORE TYPE 2015 2016 2017 Hypermarket Tesco hyper 111 111 111 Auchan hyper 19 19 19 Interspar 32 32 33 Metro 13 13 13 Large + Small Organized Tesco super 97 96 95 Spar 376 389 408 CBA 1342 668 539 Coop 3186 1445 2574 Reál 1335 451 463 Discounters Lidl 162 164 167 Aldi 106 116 126 Others Other 10748 11948 11434

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Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Hypermarket 424 458 485 Supermarket 1181 1212 1230 Minimarkets 2735 2735 2735 Convenience 805 779 787

Chain Store Numbers

STORE TYPE 2015 2016 2017 Shufersal 277 269 272 Rami Levi 39 51 58 Yeinot Bitan 69 72 84 ABA Victory 33 43 48 Superpharm 218 229 236

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Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Large Food & Mixed 936 1015 1297 Stores Medium Food & Mixed 5622 5828 6154 Stores Small Food & Mixed 22147 21521 20355 Stores Urban Kiosks & Pavilions 2675 2863 2662 Urban Open Markets 6843 7356 7874 Cosmetics/Perfumeries 2430 2493 2421 Households 2395 2405 2110 Pharmacies 5205 5332 5400

Chain Store Numbers

STORE TYPE 2015 2016 2017 Small 29 37 59 Lider 33 36 38 Green 41 33 BestStore 15 27 22 Ramstore 27 19 18 Bahus 17 19 24 Magnum 13 18 32 Vkusnaya Korzinka 9 14 18 A-2 14 16 Aprel 8 9 8

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Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Hypermarkets 31 31 29 Supermarkets 253 263 269 Discounters 62 63 63 Superettes 554 533 551 Groceries 1943 1864 1843 Perfumeries 278 288 287 Household/Chemical 489 475 451 Stores Pharmacies 806 824 832 Convenience Stores 733 686 669

Chain Store Numbers

STORE TYPE 2015 2016 2017 Hypermarkets, Supermarkets, Discounters Rimi 116 118 118 Maxima 148 150 151 Mego 91 88 91 IKI/ IKI Express 0 0 0 Cento 0 0 0 Nelda 0 Prisma 5 3 0 Elvi 122 118 116 Perfumeries/Households Drogas 85 88 88 Kolonna/Douglas 0 0 26 Multilukss 16 16 16 Supereuro 0 0 0 Pharmacies Mēness aptieka 220 226 234 Benu 63 64 64 Euroaptieka 51 51 52

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Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Hypermarkets 58 63 67 Supermarkets 474 537 553 Discounters 68 10 33 Superettes 527 498 520 Groceries 2960 2844 2886 Perfumeries 512 514 523 Household/Chemical 432 422 408 Stores Pharmacies 1261 1259 1255 Convenience Stores 1213 1102 1046

Chain Store Numbers

STORE TYPE 2015 2016 2017 Hypermarkets, Supermarkets Rimi 52 55 55 Maxima 231 239 236 Norfa 138 141 141 IKI 195 217 214 IKI Express 20 19 19 Prisma 4 4 0 Fresh Market 0 0 0 Discounters IKI Cento 24 0 0 Lidl 29 Solo 10 10 10 Perfumeries/Households Sarma/Douglas 33 26 26 Drogas 53 53 53 Kosmada 16 17 17 Eurokos 115 116 119 Kristiana 12 12 11 Pharmacies Eurovaistine 272 271 269 Camelia 323 330 331 Benu 85 83 84 Norfos vaistine 95 99 101 Gintarine vaistine 232 226 22 112

Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Hypermarkets 342 344 346 Supermarkets 3133 3125 3167 excl. Discounters Total Discounters 3697 3776 3849 Drugstores 8419 8235 8045 Large Groceries 6874 7310 7258 excl. Discounters Large Groceries excl. 8520 8982 8962 Discounters incl. Chemical Chains Medium Groceries 28324 27376 27265 Small Groceries 40543 38531 35418 Kiosks 11751 11336 10960 Petrol Stations 6429 6423 6343 Sweet & Alcohol 5263 5313 5657

Chain Store Numbers

Not available

113

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Cosmetic Store 837 767 772 Discounters 354 373 406 Drogerias 71 80 91 Hypermarket 176 181 192 Kiosks 2540 2126 2076 Kiosks Newspaper 2715 2122 2040 Large Grocery 17929 19355 19322 Medium Grocery 27106 28089 27727 New-kiosk Newsagents 193 197 195 Pet Food Store 1075 1145 1169 Petrol Stations Chains 1184 1152 1158 Pharmacy 7711 7757 7656 Small Grocery 23841 19239 19106 Store Within Petrol Station 610 704 673 Supermarkets 540 546 580 Vet Pharmacy 1456 1677 1656

Chain Store Numbers

STORE TYPE 2015 2016 2017 Hypermarket Carrefour 29 32 33 Cora 11 11 11 Real 4 4 2 Auchan 33 33 33 Kaufland 107 112 116 Supermarket Profi 367 500 696 Billa 86 86 86 Mega Image 466 523 591 Carrefour Market 106 123 146 Express 2 3 5 Angst 2 2 2 Express 41 41 41 Contact 10 10 10 drogerie markt 80 91 94 114

Chain Store Numbers

STORE TYPE 2015 2016 2017 Cash & Carry Metro 26 25 25 Metro Punct 5 5 5 Selgros 19 21 22 Discounters Penny Market 174 195 220 Penny Market XXL 8 8 Lidl 191 203 218

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Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Total 205507 205456 206750 Hypermarkets 671 766 827 Small supermarkets 14768 16982 19672 Superettes 33249 35807 37676 Traditional grocers 156819 151900 148575

HYPERMARKETS > 2500m² SMALL SUPERMARKETS 400 - 1000 m2 SUPERETTES 100 - 400 m2 TRADITIONAL GROCERS <100 m2

Chain Store Numbers

STORE TYPE 2016 2017 Magnit 13653 15993 Pjaterochka 7820 10856 Lenta 208 295 Auchan giper 97 104 Diksi/kvartal/deshevo/viktorija 2746 2662

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Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Hypers 85 88 88 Supers 443 491 517 Large Gr. 1006 1066 1084 Medium Gr. 3710 3812 3934 Small Gr. 10723 10484 9607 Mixed Kiosks 3549 3326 3273 Pavilions 900 834 838 Sp. Drug Stores 627 645 682 Perfumeries Pure 16 26 26 Perfumeries Mixed 412 376 344 Pharmacies 2376 2544 2854

Chain Store Numbers

STORE TYPE 2015 2016 2017 Cash & Carry Tempo 12 12 12 Metro 11 10 9 Drugstore Lilly 140 161 180 dm 57 71 86 Jasmin 21 30 30 Kiosks Stampa 534 582 575 Futura Plus 603 592 536 Srem press 37 36 33 Corner Shop 102 50 51 Graf art doo 25 25 Intermezzo System 14 35 Petrol Stations NIS 329 330 317 Lukoil 114 115 Knez petrol 70 70 OMV 61 61 61 EKO 45 54 53 AVIA 49 49 MOL 43 42 Petrol 8 8 11 117 DAKI Petrol 9

Chain Store Numbers

STORE TYPE 2015 2016 2017 Hypermarkets / Supermarkets / Groceries Idea 287 301 302 Maxi 156 185 218 Aman 140 154 180 Shop & Go 165 169 Gomex 123 142 148 Persu 128 124 135 Podunavlje 92 111 122 Univerexport 40 84 94 Luki Komerc 69 71 71 Senta Promet 40 50 50 Soulfood 50 48 Trgopromet 48 46 48 Aroma Market 18 43 50 Metalac Proleter 43 43 Sunce 25 30 39 Morava 35 35 Rodic/Roda Formati 34 33 34 Trend Commerce 30 30 Europrom 31 29 29 Kastrum 26 26 29 Pekabeta /C - Market/ Mini 203 27 Maxi*** Dis 16 24 26 Vum 24 24 Orion 22 22 Trlic Marketi 20 VP Dima 15 19 19 Amanplus 15 18 Tekijanka 11 17 17 Medius 15 15 Trnava Promet 14 14

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Chain Store Numbers

STORE TYPE 2015 2016 2017 Hypermarkets / Supermarkets / Groceries ES Komerc 8 12 12 Styline 12 12 Sprint Market - 7 Juli 12 12 Tempo Express 15 13 10 Ljubago 11 12 Braca Popovic 6 11 11 Mega Market 10 10 10 Nsbomi 10 10 Žinasa 8 8 Veropoulos 6 6 6 Green Market 5 6 6 AS Trgovina 4 4 4 Fortuna 3 4 4 Orasac 1 4 4 Stanovo 3 4 4 Plitvice Marketi 4 Martinovic 2 3 3 Mercator 2 2 2 Interex 9 Novitas 14 Angropromet 26 Ljubisavljevic 20 Rekić 20 Višnjica 22 Lurdy 11 Palma 1 1 Parkic 2 1 Rič 30 30 44 Zlatan Trag 26 26 26 Gala promet 14 14

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Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Organized Trade 4632 4726 4888 (incl. Lidl) Non Organized Trade 3975 3821 3656 Organized Chemical 514 517 550 stores

Chain Store Numbers

STORE TYPE 2015 2016 2017 Hypermarkets/Supermarkets/Large Mixed Tesco 161 154 151 Kaufland 58 62 63 Billa 131 136 145 COOP Jednota 2203 2162 2125 CBA 538 538 523 Terno+Moja Samoska 118 114 108 Discounters Lidl 124 123 131 Drugstores DM 136 138 142 101 163 172 182 Teta 218 246 279

120

Store Universe Numbers

TRADE SECTOR 2014 2015 2016 Hypermarket 157 161 162 Supermarket 317 315 317 Large Groceries 453 448 437 Medium and Small 456 470 500 Groceries Kiosks 363 357 359 Drug Stores 141 149 143 Discounters 121 125 130

Chain Store Numbers

STORE TYPE 2015 2016 2017 Mercator 474 471 466 Mercator franchize stores 220 214 196 Spar/Interspar 97 99 100 Tuš 98 97 97 Tuš franchize stores 98 85 79 Klasek 14 14 Mlinotest 51 51 57 3 DVA 213 209 196 Delo prodaja 96 102 100 dm 71 73 79 Tuš drogerija 40 40 41 Dominur 8 4 4 Petrol 309 307 307 OMV 108 103 104 Hofer 78 81 82 Lidl 47 49 52 Eurospin 46 46 47 Fama 19 19 21 Jager 35 36 39 Mercator Beautique 8 5 5 Muller 15 15 15 MOL Slovenija 34 51 47 Ina 6 6 6 E.Leclerc 2 2 2 Agip 15 121

Store Universe Numbers

TRADE SECTOR 2015 2016 2017 TOTAL TURKEY w/o BIM & A101 2,15,059 2,11,507 2,06,521 & ŞOK TOTAL MODERN TRADE w/o 11,181 11,799 11,881 BIM & A101 & ŞOK Hypermarkets (>= 2500 smq) 259 253 252 Large Supermarkets (1000-24999 965 999 1,003 sqm) Small Supermarkets (400-999 sqm) 3,102 3,288 3,321 Small Self Service (< 400 sqm) 6,855 7,259 7,305 TRADITIONAL STORES 1,40,472 1,36,207 1,31,715 Traditional Stores (>=50 sqm) 31,490 32,347 32,130 Traditional Stores (<50 sqm) 1,08,982 1,03,860 99,585 Specialists (DFV, Tekel+Mixed 31,816 31,241 30,422 Kiosk) Dfv 12,442 11,724 10,790 Kiosks (Tekel Kiosk+Mixed Kiosk) 19,374 19,517 19,632 Gas Stations 4,627 4,835 4,979 Perfumeries 2,357 2,377 2,308 Pharmacies 24,606 25,048 25,216 Years represents beginning of the year Bim, A101 and Şok numbers are as of March

Chain Store Numbers

STORE TYPE 2016 2017 Perfumeries Gratis 398 499 Rossman 65 89 Cosmohome 17 33 Cosmetica 8 10 Watsons 249 322 Cosmo City 4 4 Fatih Kozmetik 20 24 Odak 11 5 T-Shop 24 31 Yuncu Ali 9 19 Suvari 3 - Cosmoshe - 10 Pino Kozmetik - 14 122

Chain Store Numbers

STORE TYPE 2016 2017 STORE TYPE 2016 2017 Supermarkets Supermarkets 4 AS 10 9 GIZERLER 7 7 ADANA SEKERCILER 11 12 GOKKUSAGI 14 12 ADESE 93 GROSERI 21 24 147 ADESEM 61 GRUP RAMMAR 42 43 AKRANLAR 14 15 GULENLER AVM 13 13 AKUGUR AVM 21 22 GUNEY 5 4 AKYURT 39 40 HADIM 36 36 ALDA MARKET 8 5 HAPPY CENTER 130 134 ALNIACIK AVM 24 15 IRMAKLAR MARKET 20 21 ALTUN CENTER 18 21 ISMAR TRABZON 11 11 ALTUNBILEKLER 79 77 ISRAM 11 9 ALYA AVM 10 9 IST SEYHANLAR 15 17 ANBERA 11 13 IYAS 5 7 ARMINA MARKET 13 14 KANDEMIR 8 4 AYMAR 17 19 KIBAROGLU 16 16 AYPA MARKET 10 11 KILER-TR 36 35 BARIS GROSS 19 19 KIM 80 83 BASDAS MARKET 16 25 KIPA 49 49 BASGIMPA 55 54 KIPA EXPRESS 118 111 BEGENDIK 40 29 MACRO 36 42 BICEN GIDA 26 27 MARKA GIDA 52 - BURDA 29 27 MARKETIM AYGUN 4 3 CAGDAS 100 103 MEPAS 24 24 CAGRI 46 53 METROPOL 25 - CARMAR DIYRBAKIR 13 13 MIGROS 1291 1414 CARREFOUR 36 33 MOPAS 103 101 CARREFOUR EXPRESS 620 596 NAMLI 17 20 CELIKKAYALAR 15 16 OLI CENTER 20 20 CEM HIPERMARKET 10 10 ONUR GROUP 82 152 EFOR MARKET 9 - ONUR HIPERMARKET 23 31 EGE SOK 42 50 ORUC 21 21 EKO BAYMAR 9 10 OZDILEK 18 20 ERENLER 9 9 OZHAN 38 44 ESSEN 13 17 OZKURUSLAR 27 29 FURPA MARKET 42 46 OZTURK 16 10 GIMSA 10 11 PEKDEMIR AVM 34 28 123

Chain Store Numbers

STORE TYPE 2016 2017 STORE TYPE 2016 2017 Supermarkets Supermarkets PEKDEMIR CIFTLIGI 76 77 CIVITCIOGLU - 14 PEKDEMIR GIDA 4 4 AZDA SUPERMARKET - 11 REAL 8 - MILLI PAZAR - 28 ROTA MARKET 10 10 ETIK MARKETIM - 12 SANMAR 15 15 ACEM MARKET - 9 SARIYER SPM 11 11 CERGIBOZANLAR - 26 SAVASIR GIDA 10 10 BERKA - 13 SAYPA 67 - KENTPARK AVM - 11 SEHZADE MARKET 29 33 KILO MARKET - 12 SEKERCILER 11 11 AYDIN CETINLER - 15 SEMBOL CENTER 13 13 MAVI KOSE - 8 SEREF MAKRO 195 188 KESKIN AVM - 10 SEYHANLAR 112 113 KALAFATLAR - 10 SHOW MARKET 14 15 NESELI - 13 SINCAP 26 26 SNOWY 17 18 SOYKAN 56 52 SOZ TTM 17 20 SULTAN MARKETIM 29 32 TURKIS 10 - UCLER 11 10 UGUR AVM 12 11 UVEK 14 13 UYSAL MARKET 12 12 UYUM 60 57 YEGENLER 7 7 HIPERMARKET YHM 8 8 YUNUS 82 94

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Store Universe Numbers

TRADE SECTOR 2015 2016 2017 Supermarket + <2500 1920 1920 2132 Hypermarket >2500 127 132 129 Large Grocery 887 755 697 Minimarket 1963 2134 2360 Large Multipurpose 688 648 567 Medium Grocery 7502 7107 7417 Medium Multipurpose 3518 3375 3381 Small Grocery 20311 19387 21940 Small Multipurpose 2977 2767 3551 Food Pavilion 4641 4219 3923 Mixed Pavilion 1927 1875 Food Kiosk 8364 7387 6424 Mixed Kiosk 952 707 Household Store 2882 3008 3408 Pharmacy 13940 14158 14653 Perfumery 7951 7776 8406 Om 49968 45976 45211 Tobacco 1254 1282 1356

125

Chain Store Numbers

STORE TYPE 2015 2016 2017 ATB 813 903 Vezunchik 182 230 257 Fora 230 238 241 Silpo 263 244 235 Delvi 115 EKO-market 106 114 114 Rukavychka 92 106 128 LotOK 31 61 85 Furshet 79 81 76 Polissya Product 71 70 74 Vopak 77 72 65 Varus 55 58 60 Veresen 26 22 13 Nektar 112 Sim-23 48 58 Epicentr 43 45 Kolibris 36 40 32 Faino Market 32 42 45 Soyuz 44 42 39 Billa 39 36 28 Blizenko 33 38 Digma 22 34 Novus 32 34 Nash Kray 28 27 26 Tochka 19 36 Grosh 4 9 2 Sviy market 23

126

Chain Store Numbers

STORE TYPE 2015 2016 2017 Metro C&C 26 27 23 555 19 17 12 Chudo market 9 12 18 Pchelka market 16 Nova Liniya 14 14 Arsen 9 10 9 Delikat 7 7 10 Fozzy hypermarket 8 9 9 Fresh 9 9 9 Karavan 9 9 2 Gostynniy dim 9 8 8 Pakko 8 8 8 Salut 6 7 7 Dobriy Kupets 8 6 6 K-Market 4 5 5 Molly 5 5 5 Pakko C&C 8 7 4 TOP MART 5 5 Vopak Uzhgorod 4 4 4 Bravo 3 3 3 Tam Tam 4 4 3 Barvinok 51 27 2 Korona 6 6 Nash! 1 1 Poltava 2 1 1 Sympatyk 1 1

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Economy Watch % GDP per annum growth sourced from Economist Intelligence Unit (EIU) Inflation, consumer prices % change per annum sourced from Economist Intelligence Unit (EIU) or from local government statistics offices where unavailable.

The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen. - Survey is based on respondents with Internet access. Index levels above and below 100 indicate degrees of optimism/pessimism. Q1 2017 CCI results are unavailable this quarter due to a Nielsen global survey service enhancement.

FMCG Market Dynamics - compares overall market dynamics (value and unit growth) in the Fast Moving Consumer Goods sector based on the sales tracking Nielsen performs in the mentioned markets. The FMCG definition is based on the widest possible basket of product categories that are continuously tracked by Nielsen in each of these countries and channels.

Nominal value growth: Percentage change in value sales (expenditures) as measured by the total basket of reported product categories Unit value growth (≈ ‘price’ change): • The change in average price per unit may result from: • Price changes of individual products • Change in the mix of purchased products; more or less expensive products, more or less promotions, etc. • Channel switching; more or less purchases in discount stores, or hypermarkets, or convenience outlets, etc. • Product or channel mix changes may be induced by price change or may just be the result of market dynamics. • The unit value growth reflects how consumers experience ‘cost of living’ in their actual grocery shopping behaviour. Volume growth: Percentage change in purchased volume (quantity) of products

Super Category Performance – definition of Super Categories are based on local market definitions

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