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ELKO Group

Corporate presentation

May, 2016

About ELKO

2016

LEADING GLOBAL VENDORS

23

YEARS IN BUSINESS

> 120 VENDORS > 20 000 PRODUCTS > 6 500 PARTNERS

2 BUSINESS DIVISIONS:

BROADLINE SOLUTIONS

1993

2

Group’s Legal Structurecture

A/S ELKO Grupa

(1)

  • Baltics
  • CEE

CIS

ELKO Trading Switzerland AG

Switzerland

ELKO Lietuva UAB

Lithuania

ELKOTEX d.o.o.

Slovenia

51% 51%
100% 100%
100%

ELKO Eesti AS

Estonia

ELKO Mobile

Cyprus

WESTech s.r.o.

Slovakia

51%

ELKO Marketing Limited

Cyprus(2)

WESTech CZ

Czech Republic

100%
100%

ELKOTech Romania SA

Romania

Alma Ltd

Russia

100%
100%

ELKO Ukraine Ltd

Ukraine

100%

(1) Sales in Latvia, Lithuania and Estonia are done directly from ELKO Grupa (2) Manages sales to Russia and Ukraine

ELKO Kazakhstan Ltd

Kazakhstan

100%

Regional Coverage

COUNTRIES WITH ELKO OFFICES

10
14

4

COUNTRIES WITH ELKO REPRESENTATION

TRANSIT HUBS

IN RIGA, LATVIA

HQ

4

Extensive Range of Products

% Revenue contribution by product group

Product range: more than 20 000 products

100%
90% 80% 70% 60% 50% 40% 30% 20% 10%
0%

1%

7%

1%

7%

1%

2%

8%

3%

9%

3%

  • 4%
  • 4%

10%

10%
10%
12%

13%

35%

9%

7%

14%

35%

8%

  • 7%
  • 9%

9%

12%
16%

38%
40%

1%
39%
32%

53%
40%

6%

17%
44%

  • 43%
  • 43%

39%

34%
26%
22%
17%

  • 2008
  • 2009
  • 2010
  • 2011
  • 2012
  • 2013
  • 2014
  • 2015

5

Vendor Relations and Range of Products

2015

Top Vendors, 2015

Other vendors

19.1%

2.1%

3.5%
4.3%

4.7%
44.1%
5.4%
8.2%
8.8%

Region Shares

100%
90% 80% 70% 60% 50% 40% 30% 20% 10%
0%

8%

  • 8%
  • 8%
  • 10%

40%
9%
9%

9%

9%

10%

14%

Baltic Region

Latvia, Lithuania and Estonia.

10%

10%
13%
16%

Widest and most balanced product portfolio. Top 3 distributor in the Baltic region.

21%
23%

30%

CEE Region

Romania, Slovakia, Czech Republic and Slovenia. Lenovo Smartphones partnership in Bulgaria, Slovakia, Romania, Hungary, Slovenia, Croatia, Macedonia, Serbia, Bosnia and

Herzegovina.

81%
81%
78%

76%

76%
71%
70%

Apple Premium reseller and B2B solutions provider in Slovakia and Czech Republic.

62%
50%

Top 3 distributor for each of its key vendors in the countries in which ELKO operates.

CIS Region

Present in Russia, Ukraine and Kazakhstan. Smartphones business driving growth. Strongest PC Components Partner of Key Vendors. Top 3 distributor in Russia and Ukraine for each of its key vendors.

7

Sales Performance

2008 – 2015, 2016 FC

1,400 1,200 1,000
800 600 400 200
0

1,046
1,292
1,264

1,176
1,089
1,059

955

790

642

252

  • 2008
  • 2009
  • 2010
  • 2011
  • 2012
  • 2013
  • 2014
  • 2015
  • Q1/2016 / FC

8

Profit Performance

2008 – 2015, 2016 FC

30.0

20.0 10.0
0.0

3.0%

2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0%

1.7%
1.6%

  • 1.5%
  • 1.5%

1.4%
1.3%
1.2%

21.8
18.0

17.2

16.9

13.50
12.9

-0.6%

10.0

1

  • 2008
  • 2009
  • 2010
  • 2011
  • 2012
  • 2013
  • 2014
  • 2015
  • Q1/2016 / FC

-7.0

-10.0

-20.0

-30.0

-26.6

-4.1%

* Financial statements are prepared according to IFRS and audited by Big4 audit company - EY

9

Financing development

Bank financing:

Syndicate (Nordea, Swedbank, SEB) till Aug 2016, available 63m USD / extensions pre-approved Bonds 8m EUR issued New bank financing approved ~20m USD New factoring approved ~10m USD

Trade payable financing programs with Deutsche Bank (40m USD) and IGF (36m USD)

Syndicate Nordea & SEB & SWED

30.04.2016 31.12.2015

31.12.2014

  • 63
  • 15

14

  • 14
  • 9

  • 20
  • 10

Promsvyazbank

Other Bonds

  • 12
  • 9

63

New Bank Financing (in process)

New Factoring (in process)

75

  • 18
  • 20

  • 0
  • 20
  • 40
  • 60
  • 80
  • 100
  • 120
  • 140

Borrowings (millions USD)

Risk Mitigation

Centrally developed group policies, customized for each market

Inventory control:

• Stock planned and ordered according actual situation and trends • Control over slow moving stock

Credit control:

• Conservative credit policy and rigid control • High level in-house risk analysis • Securitization used whenever possible

Fx risk

• Regular semi-automated monitoring • Advanced planning • Industry leading partners to cover open positions via relevant financial instruments

Right Partner To Increase Your Success

Long-term cooperation-oriented and reliable partner Leading Position with the Best Vendors Strong Network of Relationships Highly Developed, Leading Infrastructure and Logistics Excellent Financial Performance

12

Thank you!

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