EUROCASH

Empowering modern entrepreneurs

Eurocash Group – executive summary

NO. 1. WHOLESALE DISTRIBUTOR IN with 27% market share & the biggest (3bn Pln) FMCG ecommerce platform

DYNAMICALLY ENTERING INTO RETAIL already no. 7 with objective to become no. 3 retail chain in Poland

WITH INNOVATION AND BUSINESS DEVELOPMENT PROJECTS DELIVERING RESULTS addressing digitalization, personalization & automation needs

AS THE DOMINANT SMALL FORMAT & PROXIMITY STORE OPERATOR supported by globally changing trends & consumer habits

2 Eurocash Group: steady strategy execution to build 2nd biggest purchasing power

Eurocash Group sales evolution (PLN bn) Ranking of FMCG distributors & retailers (sales, PLN bn)

25 48 23 17 32 Eurocash 25 22 19 20 20 (Pro-Forma) 7 20 11 16 5 18 17 17 1011 16 9 14 8 10 5 12 10 10 10 11 10 10 8 8 7 6 9 6 6 Intermarche 5 7 3 5 3 2017 4 7 2 Żabka 4 2 2 1 7 Metro (Makro C&C) 7 2013 0 9 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 5 Dino Pro 1,7 2009 Forma 3 Source: Company data 3 3 Source: RZ500

Building scale and purchasing power to bring competitiveness to small stores

3 Poland is a place for proven concepts of small stores

Demographics: small towns, small living quarters, daily shopping nearby assure mom & pops stores half of the market

Percentage of population living in cities/rural area Share of distribution channels in food sales in Poland LTM July 2018, % 32,8% 42,0%

Rural 28% Cities 0-20K 40% Small Format Cities 20-50K 300-2500 Cities 50-100K Hypermarkets 2500+ 8% Cities 100K+ 9,8% Discounters 11% 13% 15,4%

 60% of Poles live in villages & small towns  Small living quarters have limited space to store food

 As a result, Poles shop almost every day

Source: GUS, Nielsen

4 Food market growth Small format stores accelerating their growth

Food market growth by channels Food market growth by small format channels (YTD Sep 2018, YoY) (YTD Sep 2018, YoY)

13,2% 12,2% 8,8% 9,4% 7,8% 6,3% 4,2% 3,4% 2,0%

0,8% 1,2% 0,1% -0,5% -0,9%

-0,4% -5,2% Discounters Hypermarkets 2500+ Supermarkets 300-2500 Small Format

YTD 2017 YTD 2018 Small Supermarkets Convenience 40-100 Small Grocers -40 Specialized & Others 100-300

 Food sales in Total Poland increased by 5.3%, while in Small Format stores increase was of 6.3%

Source: Nielsen, Total Poland, All Food 5 Inflation Small Format stores sales growth accelerated with lower inflation than other segments

% Food basket inflation Food inflation by categories (YoY, YTD Sep 2018)

Large format categories Small format categories 4,4% 1.7% difference 9,8% 3,1% 3,1% 3,3% 2,7% 7,2% 2,2% Food average 2,1% 4,0% 3,3% 3,4% 3,0% 2,3% 2,0% 2,5% 1,2% 1,2% 1,1%

Discounters Hypermarkets Supermarkets Small Format Small Convenience Small Grocers 2500+ 300-2500 Supermarkets 40-100 -40 -2,8% Fats Fruits Dairy Food Meat Bread and Coffee & Tobacco Fish Beverages Alcohol incl. Vegetables Sugar, 100-300 Cereals Tea Spirits, sweets, Wine Beer jams Source: Own estimation based on Nielsen

Source: GUS 2018 (I-VI) 2018 (I-IX)

Eurocash inflation much below the market average:

wholesale prices in Delikatesy Centrum: -1.0%, retail prices +0.8% in 9M 2018 YoY

6 Wholesale: No. 1 distributor in Poland Building scale and purchasing power to bring competitiveness to small stores

Wholesale market share Dedicated distribution platforms covering different store profiles • Local sub-wholesalers • Producers own distribution Eurocash Generalists • Specialized & categories not 25% Cash&Carry covered by Eurocash Group 4,3 Sales (PLN bn) 27% 25% Eurocash Others 51% Distribution 4,4

Alcohol 13% Distribution Makro - FMCG 2,3 Specialized (C&C) 6%

Tobacco & Impulse Selgros (C&C) 32% Delivery Distribution 4% 5,7 PT Dystrybucja

(T) 4%

Distribev (A) 3% 5% HoReCa PHUP Gniezno 0,8 Bać-Pol 2% (T) 1% Alti (A) 1%

T- Tobacco; A-Alcohol,

7 Wholesale sales dynamics Wholesale segment supported by increased competitiveness of small format stores

Wholesale sales evolution by formats C&C LFL (9M 2018 YoY)

11% 3% 7% 10% 6% -1% 3,6% 3,8% 31 49 2,6% 2,7% 93 283 -16 0,7% 1,5% 338 0,0% 0,3% 0,3% 1,3% -0,4% -1,3% -2,2% 13 377 -3,5% -3,6% 12 599 +778m -2,7%

+6.2% -4,0% -4,6% -4,9% -5,2%

Wholesale Distribution Cash&Carry Tobacco Alcohol Food Other Wholesale 9M 2017 Service 9M 2018

 Wholesale accelerated growth from 4.6% in 2Q 2018 to 6.9% in 3Q 2018

 C&C LFL in 3Q 18 at +3.8% and 2.8% in 9M 2018 - best performance in last 5 years.

 ECD sales to franchisees (Lewiatan, PSD, Euro Sklep, ) increased by 11.9% in 3Q and 10.3% in 9M YoY

8 Wholesale: eCommerce FMCG - globally unique, Poland’s biggest A revolution that ensures ongoing competitiveness of the independent market and gives opportunity to integrate wholesale assets

Today: Eurocash Distribution Smart business decisions Tomorrow : all wholesale Module "In Your Neighbourhood" Alcohol Distribution, Tobacco, Cash&Carry, Others Demographic data of consumers from the shop area, preview of promotional leaflets of local competitors, information about the best-selling products in the % neighborhood. 3bn 85 Section "I Know More" B2B of Eurocash Distribution e-commerce sales customers order via Over 1000 professional articles, legal advice, personnel electronic channels management, information on products advertised on TV, advice on the display of products.

Time saving Intelligent, shopping lists based on advanced algorithms. The fastest on the market, "learning" of the user, product search engine.

Mobility The first mobile application on the market supporting store management.

9 After many years of growth we are now able to focus on profitability

150 M PLN by 2020 - identified potential for cost reduction WHOLESALE RETAIL

Head Office EC C&C Logistics: ECD Merger with ECA Retail Head Office cost optimization restructuring then ECS impulse cost optimization

~60m PLN ~10m PLN ~40m PLN up to ~40m PLN

(2019-2020) (2020)

9M 2018 EBITDA* evolution (PLN m) -6.9% +21.6% 291 Improvement 257 239 of Wholesale -17.8m +52m 2,18% 2,09% 1,90% EBITDA

9M 2016 9M 2017 9M 2018

10 Retail: 1st nationwide proximity chain in Poland Entering retail through market consolidation, followed by operational integration, with LT objective to become no. 3 retailer in Poland

Ranking of retailers (2017 sales, PLN bn) EV/Sales 7.4 bn PLN 1 527 stores Biedronka 48 39% (JMT)

Lidl 16 538 3,1 LT Tesco 11 36% (TSCO) Own objective Auchan 10

Kaufland 10 22% (CA) 989 Carrefour 10 4,3 Delikatesy Centrum 7 ? Franchise consolidated 5.1 Żabka 7 62% (PE) Retail Sales Number Intermarche 7 (PLN bn) Of Stores Dino 5 114% (DIN, IPO)

Netto 3 Acquisitions +5 bn PLN +900 stores E.Leclerc 3 > Retail Sales > By 2023 Green Field Stokrotka 3 49% (PE) 2 2-3Y integration to ensure Franchise Chain standardized business Piotr i Paweł 2 68% (PE) with unified processes Profi () Average 49%

*PE- Private Equity deal 11 Retail: Consistently investing in the future position Bumps on the road are expected, but potential is huge and Eurocash has proven record for executing challenging business plans

Selling area (k sqm) Sales revenues (PLN bn) Polish peers EBITDA Margin (2017 or 2016) 394 7,4 +66% +60% 8,5% 237 4,6 7,2% 6,3% 6,6% 5,9% 6,2%

2016 2017 2016 2017 4,5% incl. EKO&Mila incl. EKO&Mila

No. of stores Sales per sqm (k PLN) 1 527 20,1 2,1% 1 086 +41% 18,1

2016 2017 3Q 2018 Biedronka Kaufland Żabka Dino 2016 2017 2016 2017 Eurocash Retail incl. EKO&Mila incl. EKO&Mila

INTEGRATION:

 STORES REMODELING  HO & OPERATIONS  SALES  EXPANSION DEVELOPMENT ACCELERATION EKO – 183 stores (Sept),191 (Oct 2018) Mila start in 2019

2017 2018 2019 2020 2021

12 Projects: delivering innovative form of category development Each start-up was unprofitable in initial phase, but nowadays gives competitive advantage and profits

FRESH PROJECT FAKTORIA WIN WHISKY Break even point in 3.5 years Reinvented wine category Total market has been recently developed in small stores mainly by small format stores Further potential for growth: Whisky market share  Increase of Delikatesy Centrum penetration Example how to bring large  Development to Lewiatan, Gama, Euro Sklep, Groszek format category to small stores 35% 2017 2018 YTD 33% 30%32%  Expansion with own retail chain 19%17% 17%16%

Fresh Project sales evolution (PLN m) Small Format stores market share Discounters Hypermarkets Supermarkets Small Stores

156 146 34.7% 132 137 Whisky sales dynamics in 2018 (July YTD) 121 98 83 30.6% 29.6% 57 17% 14% 45 35 3% 3%

1Q 2016 2Q 3Q 4Q 1Q 2017 2Q 3Q 4Q 1Q 2018 2Q 2013 2015 2017 Discounters Hypermarkets Supermarkets Small Stores

Source: Nielsen

13 Projects: innovative store concepts Other start-ups at initial phase, impacting short-term EBITDA, with high future potential

FRISCO.PL DUŻY BEN

 B2C eCommerce market leader with app. 40% annual growth  Proven concept of liquor store – category with Eurocash purchase power

 Development with Delikatesy Centrum to bring stock-up mission to small stores  20 stores: 12 own, 10 franchise and agency

 Fully automated warehouse to be tested as a potential for duplication  Nationwide roll-out initiated with initial clusters development

in wholesale & retail logistics

14 Changing consumer habits are opportunity for small stores in Poland Proximity and small stores will get even more importance having access to Eurocash innovations

Big Shopping Small Shopping 61% 58% 73% 55% 55% 65% 44% 51% 38% 36% 23% 24% 12% 15% 4% 7%

Hypermarkets Supermarkets Discounters Small Stores Hypermarkets Supermarkets Discounters Small Stores Unexpected need Daily routine shopping Special Occasion Stocking Up Source: GfK. Q:In which store do you most often perform given types of shopping missions? .  Thanks to digitalization, automation and e-commerce growth SMALL STORES MAY TAKE OVER BIG SHOPPING FROM LARGE CHAINS

Growing consumption of F&V, Food: eco, organic, Growing share ready meals; less bread, meat, sugar veg, regional, exotic of pensioners

Growing disposable income e- and m-commerce as standard

Consumer change from passive to active 15 Eurocash Group – executive summary

NO. 1. WHOLESALE DISTRIBUTOR IN POLAND with 27% market share & the biggest (3bn Pln) FMCG ecommerce platform

DYNAMICALLY ENTERING INTO RETAIL already no. 7 with objective to become no. 3 retail chain in Poland

WITH INNOVATION AND BUSINESS DEVELOPMENT PROJECTS DELIVERING RESULTS addressing digitalization, personalization & automation needs

AS THE DOMINANT SMALL FORMAT & PROXIMITY STORE OPERATOR supported by globally changing trends & consumer habits

16 APPENDIX 9M 2018 Results

17 I. Executive Summary

01 SMALL STORES ACCELERATING with sales dynamics at +6,3% in 9M 2018 YoY

02 WHOLESALE 03 RETAIL STRONG GROWTH INCREASED ASSET BASE with EBITDA + 52m PLN (+21.6%) with integration impacting profitability

FRESH ROLL-OUT AT BREAK EVEN PAY UP DISPOSAL AGREEMENT 04 with 452m PLN sales 05 5.8m PLN EBITDA (2017) in 9M 2018 (+101m PLN) at a price of 110m PLN (in. earn-outs)

STRONG IMPROVEMENT IN WHOLESALE, PREPARING GROUND FOR RETAIL

18 III. Wholesale Segment – accelerating the growth 9M 2018: +778m PLN sales and +52m PLN EBITDA increase

9M 2018 Sales of goods evolution 9M 2018 EBITDA evolution (PLN m) (PLN m)

+21.6% 291 +2.8% 13 377 12 599 +6.2% 257 -6.9% 12 252 239 +52m +778m +347m -17.8m

2,18% 2,09% 1,90%

9M 2016 9M 2017 9M 2018 9M 2016 9M 2017 9M 2018

 Strong performance in 9M 2018 with sales +6.2%, EBITDA +21.5% and EBIT +32.7% YoY.

 Cost pressure covered by improved efficiency.

19 III. Retail – increased asset base, ongoing integration Integration affecting short-term retail results

9M 2018 Sales of goods evolution 9M 2018 EBITDA evolution (PLN m) (PLN m) 3 622 pro forma

+41% incl. Mila 3 032 +15.6% 106 +44.3% 2 564 91 +14m +18.3% -40.5% 1 795 +768m 5,09% 63 +461m 4,12% -43m

2,07%

9M 2016 9M 2017 9M 2018 9M 2016 9M 2017 9M 2018

 Sales increase driven by M&A. Consolidated 2018 Mila sales 466 m PLN (345m in 3Q 2018)

 Delikatesy Centrum LFL in 9M 2018 + 2.7% wholesale and +0.5% retail. 3Q 2018: -0.3% wholesale and -2.0% retail

 M&A impacting EBITDA with ongoing integration incl: stores remodeling (183 DC stores), Head Office integration, pricing and assortment policy standardization.

20 III. Projects – investments in the future growth Fresh Project reached break even point in 3Q 2018

9M 2018 Sales of goods evolution 9M 2018 EBITDA evolution (PLN m) (PLN m)

9M 2016 9M 2017 9M 2018 +111m 506

+225m 395

-6,41% 170 -26 -9,95% -13m +7m -32

9M 2016 9M 2017 9M 2018 -15,26% -39

 Fresh Project with 452m PLN sales in 9m 2018 (+101m) reached break even in 3Q 2018.

 Most relevant for Delikatesy Centrum positioning and competitiveness.

 Duży Ben & Kontigo – moved into proven franchise system.

 Duży Ben: 15 stores with 4 in franchise / agency model

21 IV. 9M 2018 financial summary Strong sales increase driven by wholesale segment

% of Sales % of Sales PLN m (Normalized*) 9M 2017 9M 2018 Y/Y Change 9M 2017 9M 2018  Sales driven mainly by wholesale segment (+778m PLN) and consolidation of Mila Net sales (total) 15 659 17 032 9% (+466m PLN). Gross profit 1 814 2 073 11,6% 12,2% 14%  Gross Margin increase mainly by

EBITDA normalized* 259 265 1,7% 1,6% 2% consolidation of Mila.  Normalized EBITDA increased by 6m PLN, One-off costs* 114 3 driven by wholesale segment, and off-set by EBITDA reported* 144,8 261,8 0,9% 1,5% 81% EKO & Mila integration.

 Depreciation driven by retail segment. EBIT normalized* 126,0 115,0 0,8% 0,7% -9%

Profit before tax  Net Profit affected by increased effective tax 99,9 82,0 0,6% 0,5% -18% normalized* rate due to changes in law.

Net profit normalized* 75,1 58,7 0,5% 0,3% -22%

* 2018 results normalized by costs of Mila M&A, 2017 by add. VAT payment

22 IV. EBITDA* performance by segments Core business results strong improvement, off-set by 2017-18 M&A

9M 2018 EBITDA development by segments (PLN m)

52 43 7

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 Profit increase in most businesses (ECD, EC 259 262 C&C, ECA, Food

Service)  Fresh Project at  Provision for  Wholesale sales break even point employees bonuses, development  Duży Ben roll-out compliance (incl.  EKO & Mila outperform total food with franchise and GDPR), IT, Quality impacting results market agency model Control

Eurocash Group 2017 Wholesale Retail Projects Other Eurocash Group 2018

* 2017 results normalized by costs of add. VAT 23 IV. Cash Flow LTM Operating CF at 138% EBITDA

Cash conversion cycle PLN m 3Q 2017 3Q 2018 9M 2017 9M 2018 Mila effect (after IFRS 15)

Net operating cash flow 112 115 284 301 40 31 31 28 30 30 27 24 20 Net profit (loss) before tax 49 37 (14) 79 25 23 21 24 24 24 20 0 Depreciation 43 54 133 150 -20 Change in working capital 33 21 174 83 (21) (21) (22) -40 (27) (23) (25) (24) Other (13) 4 (9) (11) (69) -60 (75) (71) (76) (81) (77) (76) Net investment cash flow (81) (37) (285) (415) -80

Net financial cash flow (79) (74) (81) 64 -100 Q1 2017 Q2 Q3 Q4 Q1 2018 Q2 Q3 Total cash flow (48) (0) (82) (54) Receivables Stock Cash conversion Liabilities

 Strong cash generation sustained in 9M 2018.  Consolidation of Mila changing rotation of each WC component but with no impact on total Net WC rotation.

*12M – ostatnie 12 miesięcy 24 IV. Net debt vs. LTM EBITDA** Healthy and declining leverage thanks to strong cash generation

Net Debt* vs. 12M EBITDA in 3Q 2018

1,90 1,67

1,36 1,29 1,10 1,11 0,93x 1,02 0,71x

335 excl. M&A 258 excl. M&A 431 584 441 486 419 464 361 370 363 468 360 685 363 608

1Q'17 2Q 3Q 4Q 1Q'18 2Q 3Q LTM EBITDA (PLN m) NET DEBT (PLN m) NET DEBT / EBITDA

 Net Debt decrease by 77m PLN 3Q 2018

*NET DEBT - the sum of long and short term loans, borrowings and financial liabilities less cash and cash equivalents **Adjusted for one-off item – 114 m PLN potential VAT liability payment done in Aug 2017 25 IV. PayUp disposal to Polskie ePłatności Finalization upon receiving consent from antimonopoly office

Maximum price: 2015 2016 2017

Sales Revenues 220 329 440 PLN 110 m (before IFRS15) (depends on earn-outs) EBITDA 0,8 4,1 5,8 EBITDA % 0,3% 1,2% 1,3% Estimated maximum net profit EBIT -2,1 0,3 0,7 PLN 102 m EBIT % -1,0% 0,1% 0,2%

Long-term cooperation Eurocash Group will focus on its core agreement business

26 Eurocash generates cash to keep investing for future competitiveness Cash generative business model funds M&A and innovation for long-term even in recent tough business context Operational Cash Flow* vs. EBITDA* Cash Conversion (in days)

0,0 1 200 93% 100% 137% 135% 60% 206% 74% 163% 250% 978 1 000 200% -5,0 Eurocash: 800 670 150% -5,8 542 589 -10,0 600 490 476 Ability to generate 412 440 324 402 361 100% -11,1 cash necessary to 400 266 266 -15,0 -12,4 231 216 246 -13,2 invest into future 50% 200 growth -20,0 -17,2 -17,6 0 0% -19,4 2010 2011 2012 2013 2014 2015 2016 2017 -25,0 -22,0 EBITDA Operating cash flow OCF/EBITDA 2010 2011 2012 2013 2014 2015 2016 2017 Eurocash EBITDA margin % vs. gross salary and inflation in PL New Projects EBIT (PLN m)

2015 2016 2017 New initiatives impact 5,0% 4,5% 4,4% 5,0% 0 short term profitability 4,3% 3,9% 3,7% 3,7% -10 but are investment 4,0% 4,0% 3,0% 3,0% -20 2,7% into future 3,0% 2,4% 2,4% 2,3% 3,0% 2,1% -30 -19 competitiveness of our 2,0% 2,0% 2,6% 1,6% 2,0% 0,9% -40 clients 0,8% 1,0% 2,0% 1,0% -50 -0,2% -43 0,0% 0,9% 0,0% -60 -53 -1,0% 0,0% -1,0% -0,9% -0,6% -2,0% -2,0% Clear potential to 2010 2011 2012 2013 2014 2015 2016 2017 increase profits Eurocash EBITDA margin % Gross Salary CPI (Inflation)  We kept investing despite unfavorable macro trends and growing costs of innovative projects

* 2017 adjusted by one-off items, VAT issue 27 Disclaimer

This presentation and the associated slides and discussion contain forward-looking statements. These statements are naturally subject to uncertainty and changes in circumstances. Those forward-looking statements may include, but are not limited to, those regarding capital employed, capital expenditure, cash flows, costs, savings, debt, demand, depreciation, disposals, dividends, earnings, efficiency, gearing, growth, improvements, investments, margins, performance, prices, production, productivity, profits, reserves, returns, sales, share buy backs, special and exceptional items, strategy, synergies, tax rates, trends, value, volumes, and the effects of Eurocash S.A. merger and acquisition activities. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to developments in government regulations, foreign exchange rates, oil and gas prices, political stability, economic growth and the completion of ongoing transactions. Many of these factors are beyond the Company's ability to control or predict. Given these and other uncertainties, you are cautioned not to place undue reliance on any of the forward looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which speak only as of the date hereof) to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as maybe required under applicable securities laws. Statements and data contained in this presentation and the associated slides and discussions, which relate to the performance of Eurocash S.A. in this and future years, represent plans, targets or projections.

For more information please contact: Cezary Giza Investor Relations Director

[email protected] mobile: +48 693 930 415

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