BALTIKA BREWERIES Contents
LETTER OF THE PRESIDENT 5 INVESTMENT ACTIVITIES 34
MAIN PERFORMANCE INDICATORS OF 2005 6 FINANCIAL POSITION 36
ABOUT THE COMPANY 8 CORPORATE SOCIAL RESPONSIBILITY 40 Economic impact for the state 41 KEY FACTS AND EVENTS IN 2005 10 Care for employees 41 Charity 41 2005 – THE YEAR OF BALTIKA’S 15th Environmental projects 42 ANNIVERSARY 12 Work in the Union of Russian producers of beer and soft-drinks products 42 THE BEER MARKET 14 World Market 15 CORPORATE GOVERNANCE 44 Russia 15 Principles of corporate governance 45 Company Management 45 THE COMPANY’S POSITION ON THE MARKET 18 List of transactions completed Baltika is the market leader in Russia 19 by the Company 54 Baltika on the world market 22 The planned merger 55
COMPANY BRANDS 23 SECURITIES 56 Premium and licensed beer segments 24 The mainstream INFORMATION FOR SHAREHOLDERS and lower mainstream segments 25 AND INVESTORS 62 Discount segment 28 COMPANY PRODUCTS 64 SPONSORSHIP 29 USEFUL INFORMATION 76 ОPERATIONAL MANAGEMENT 30 Quality Assurance 31 Checking product quality 31 Company sales 32 Information technologies 33
Letter of the President
Dear readers,
The results of Baltika Breweries in the year 2005 were extraordinary: we reached record sales and we were able to increase our market share while at the same time improving our financial results and profitability, and geographical coverage of our exports to 38 countries around the world.
Remarkable is that the results were achieved during a very demanding year, with many external and internal challenges facing us: Changes in Russian legislation on advertising and places of consumption slowed down the positive market development and the move from strong alcohol towards lighter alcoholic beverages. Consequently the beer market grew by only 6%. However, thanks to our strong brands and favorable consumer preferences, Baltika was able to grow its volumes twice as fast.
The Russian market, already now the fourth largest in the world, attracts international brewing giants, which has led to a con- solidation of the market, as well as an intensified competition.
Internally Baltika has continued to renew itself. Last year the company has undergone major organizational changes triggered by the start of the integration process within the group of companies Baltika, Vena, Pikra and Yarpivo. The start of this closer co-operation and change of best practices influenced the results positively already in 2005, and will continue to do so during the coming years.
My greatest gratitude for the exceptional results goes to the employees of Baltika who have proved to be hard working, flexible and innovative – people that have a true mission and commitment to bring Baltika everywhere where Russia is. I am very proud of our dedicated employees who achieved these results under what were not the easiest of conditions.
Particular joy is that the great results were achieved in a year when Baltika was celebrating its 15th anniversary. Baltika, founded in 1990, has in only 15 years grown from a local, small brewer to be a market leader. Baltika is a world-class company with an aim to be excellent in everything: in our products we are bringing to our consumers, with our processes and quality, as an employer and in our actions as a good corporate citizen of our five home regions and the whole country.
As history shows, Baltika has been changing and developing dynamically throughout its history. The year 2006 will be no exception. However changes in 2006 will be remarkable in scale, as the merger with Pikra in Krasnoyarsk, the Vena breweries in Chelyabinsk and St. Petersburg, and Yarpivo Breweries in Yaroslavl and Voronezh will double the number of breweries to 10 and make Baltika a company with 11,000 employees, with a joint turnover of 1.4 billion euro in 2005. This will make new Baltika by far the largest consumer goods producer in Russia.
Year 2006 will put very many challenges ahead of the management and the employees as integrating organization, all systems, operations and sales and distribution forces is a huge and demanding task. I wish all those employees involved patience, endur- ance and success in making the merger happen. Thank you also to our shareholders for their continued support for the merger and our business.
Be proud of our beers and our company – Baltika is a worthy symbol of the Russian business success. Baltika – Where Russia is!
Sincerely yours, Anton Artemiev President of Baltika Breweries Main performance indicators of 2005
• The total volume of investments in the Company’s development since its founding exceeded $1 billion in 2005.
• Baltika delivered high financial results, simultaneously increasing sales volumes and profit margins.
• A programme approved by the shareholders in the spring of 2005 for im- proving operations is being implemented. Raw material costs have been cut, together with production and administrative expenses. This has contributed to growth in operating profit and profit margins.
• Baltika continued improving the policy of financial risk management with a view to safeguarding the assets while reducing expenditure and ensuring effective use of available financial resources.
• The year 2005 was notable for significant free cash flow, which made it possible to optimise the structure of liabilities by reducing the relative share of borrowed funds. In the course of the year, Baltika efficiently temporarily invested free cash using various bank instruments, and this had a positive influence on the net profitability.
• Baltika’s market capitalisation rose above $ 4 billion for the first time ever in 2005.
Key financial indicators
2005 2004 %, change
Assets*, mln EUR 896.4 741.6 20.9 Revenues*, mln EUR 977.2 799.7 22.2 Current and non-current liabilities*, mln EUR 142.6 185.9 -23.3 Market capitalisation (at end of year), $ bln 4.2 2.1 100 Capital investments, mln EUR 66.8 96 -30.4 Total issued shares 130, 703, 680 130, 703, 680 - Dividend per ordinary share (RUR) 13.94 11.64 19.8 Dividend per preference share (RUR) 18.12 15.13 19.8
Ratios, % 2005 2004 %, change
Current and non-current liabilities/Assets * 0.16 0.25 -36.5 Current and non-current liabilities/Revenues* 0.15 0.23 -37.2 ROA 21.2 14.9 6.3 ROE 25.3 19.9 5.4
Оperational indicators 2005 2004 %, change
Number of employees 7, 520 7, 822 -3.8 Total production capacity (mln dl) 240 235 2.0 Sales volume (mln dl) 227 199 13.8
* According to the Company’s financial reports prepared under IFRS
About the Company
Baltika Breweries was founded in 1990. Today Baltika is:
• The leader on the Russian market and one of the leading European beer producers • 5 factories: in St. Petersburg (the largest and most modern facility in Eastern Europe), Rostov-on-Don, Tula, Samara and Khabarovsk • The Baltika brand holds second place in Europe in terms of sales volume • Exports to 38 countries around the world • Baltika products are available in 97% of the points of sale around Russia • Has a market capitalization of more than $4 billion • ,500 employees
Since 1993, the majority shareholder of Baltika has been Baltic Beverages Holding AB (BBH), which is a joint venture company of Carlsberg (50%) and Scottish & Newcastle (50%).
Baltika’s strategy is directed at producing beer of the highest quality, strengthening its leading position on the Russian market, active promotion of its products on export mar- kets and building up its reputation as a leading, world-class producer of beer. Baltika’s priority for development is to produce high quality beer and nonalcoholic beverages.
We believe it is important that:
• The consumer feels we are brewing the best beer for him • Society acknowledges Baltika’s activities to be useful • Baltika’s profits and the revenue of our shareholder value are growing • Our employees feel that they are important to the Company and that we value them and care for them.
Prospects for future development
Baltika is the leader on the market and intends to strengthen its position on the Russian beer market. Many different factors contribute to this: production of high quality beer; modern, geographically distributed production capacity; an excellent distribution network which encompasses 97% of the points of sale in Russia; efficient marketing communica- tions, high quality management; and the planned merger with brewing companies Vena, Pikra and Yarpivo.
The Company performs its sales activity through subsidiaries in St. Petersburg, Moscow, Podolsk, Voronezh, Germany, the Ukraine, Belarus, Kazakhstan, Moldova and Kirghiz- stan, as well as representative offices in Latvia and China, as well as through 31 distribu- tion centers and 61 sales offices located on the territory of the Russian Federation.
Company structure
Company Headquarters (St. Petersburg)
Baltika Factory St. Petersburg One of the largest breweries in Europe; founded in 1990
Branch Baltika Rostov The largest brewery in the South of Russia; part of the Company since 1998
Branch Baltika Tula One of the largest breweries in the country; part of the Company since 2000. In 2004 Tula commissioned its own malt plant
Branch Baltika Samara Operations began in 2003
Branch Baltika Khabarovsk Operations began in 2003
Branch Baltika-Pikra Opened in 2005
Sales subdivisions Commercial representative offices in cities around Russia
Leasing-Optimum Ltd Subsidiary in St. Petersburg
Universalopttorg Ltd Subsidiary in Voronezh
Terminal Podolsk Ltd Subsidiary in Podolsk (Moscow Region)
Baltika Moscow Ltd Subsidiary in Moscow
Baltika-Bel Ltd Subsidiary in Belarus
ICS ‘BALTIKA’ SRL Subsidiary in Moldova
Baltika-Almaty Ltd Subsidiary in Kazakhstan
Baltika-Ukraina Ltd Subsidiary in the Ukraine
Baltika Ltd Subsidiary in Kirghizstan
Baltika Deutschland GmbH Subsidiary in Germany
Representative offices in foreign countries Representative offices in Latvia and China
Key facts and events in 2005
21 January Second anniversary of Baltika-Samara brewery January
10 March First deliveries of Baltika № 8 to Norway and South Korea
14 March Completion of the restyling of the Don brand line and launch of a new variety – Don Svetloye
18 March Baltika receives the highest award of the Union of Russian Producers of Beer and Nonalcoholic Products – the Amber Star - for “Successfully Building its Business Reputation”
21 March Receives the award of a nationwide competition for being a Russian organisation with “Highest Social Efficiency”
30 March Approval of Baltika 2004 results by the Company’s Annual Shareholders Meeting
30 March Launch of Baltika № 7 Export beer with a new packaging with twist-off caps
31 March Acquisition of a block of shares (16.38% of common stock) in Pikra OJSC March 31 March Baltika receives a diploma for Best Tax-Payer within the municipal project entitled “Best Tax-Payers of St. Petersburg”
11 April Second anniversary of Baltika-Khabarovsk brewery
12 April Completion of the restyling of Arsenalnoye brand
14 April For the fourth time in a row, Baltika brand is acknowledged as the best brand in the beer category at an awards ceremony April honouring winners of the “People’s Brand of 2004” competition
5 May Baltika wins a prize in the field of Information Technologies at the “IT-Leader– 2005” competition
10 May The Board of Directors confirms the appointment of Anton Artemiev to the position of Baltika President
11 May Baltic Beverages Holding (BBH) releases information about the future structure of the Company and the make-up of the top manage- ment team who will be guiding the development and integration of the Russian operations of the future unified Company. Baltika, the largest enterprise in the BBH group of companies, will become the central entity in the new structure
24 May Payment of the second coupon of Baltika bonds
26 May Release of information regarding the Company’s performance during Q1 2005 in accordance with IFRS. The Company has decided that
May beginning 1 January 2005, it is preparing its financial reporting per IFRS (formerly GAAP was applied). At the same time, the Company has changed the currency of accounting, moving from the U.S. dollar to the Euro
1 June The Board of Directors approves the creation of a new Baltika Breweries subsidiary: Baltika-Pikra
15 June Baltika products are awarded 11 Diplomas at the Osiris professional competition and public tasting which takes place within the 7th Great Moscow Beer Festival
June 24 June Baltika Breweries celebrates its 15th anniversary
10 December November October September August July 12-14 September 17-18 September 1-11 September 2-6 September 26 September 21 September 24 November 29 November 23 November 22 November 14 November 18 November 16 November 15 November 8-12 October 8 September 8 December 27 October 31 October 24 August 17 August 5 August 6-10 July 6 July 1 July edgement as Best Russian Exporter of the Year economic ties and for developing export On the basis of an annual competition directed by the RF Ministry of Economic Development, Baltika receives an acknowl Signing of an amicable agreement between Baltika Breweries and Krinitsa, OJSC resolving the issue of refund of loans Exports of Baltika № 0 Nonalcoholic to Iran begin under IFRS standards Baltika brands Arsenalnoye and Don win the BRAND OF THE YEAR/EFFIE Baltika Breweries and Vena, OJSC agree on a joint program of improving distribution in Moscow and the Moscow region Baltika participates in the ANUGA international food industry exhibition in Cologne (Germany) Baltika beer represents Russia at the main event of the U.S. beer industry - the NBWA Trade Show the Brewing Industry International Awards in Germany Baltika №6 Porter wins the silver medal in the ‘Strong Beer’ category at the most prestigious competition in the brewing field, The Baltika brand is recognized as “Best Beer of Baltika takes part in the largest international event on alcoholic beverages in Australia: the Fine Wine, Beer & Spirits Exhibition The Company participates in the “Girin. North-East Asia” exhibition in the PRC The Company participates in the annual Beer Festival in Greece The Board of Directors announces the basic principles for merging Pikra, Vena and Yarpivo with Baltika Breweries The Company releases information about its first half An ACNielsen survey shows that the Baltika brand is now the best selling beer in the Republic of Kazakhstan Baltika participates in the International Beer Festival in Berlin Baltika participates in the Ollesummer beer festival in Tallinn, Estonia Baltika-Samara brewery is accepted as a member of the Environmentalists’ Club Baltika № For the seventh time, the Company receives a prestigious Russian award in the field of consumer goods. In the beer category, Beer exports to Finland begin “Beer (imported product) № 1 – Baltika Breweries wins the “Selection of the Year in Kazakhstan Baltika pays coupon number an international consulting company. The results are published in the magazine BusinessWeek-Russia Baltika has moved up into the ranks of the three most valuable Russian brands in a list prepared by the Interbrand Group, the brewing field, the European Beer Star Award – For the second year in a row, Baltika № 6 Porter wins the silver medal at one of the most prestigious competitions in Baltika Breweries releases information about the Company’s performance during the first 9 months of 3 Classic is honoured at the 3 on Baltika bonds 2 005” 7 th annual awards ceremony of the “Product of the Year” prize 2 2 00 005” in the Republic of Kirghizstan 2 4 005 for an outstanding contribution to broadening the Russian Federation’s 2 005 results according to IFRS 2 005” award in the category 2 005 competition 2 005 - 2005 – The Year of Baltika’s 15th Anniversary
12 During 2005 Baltika celebrated its 15th anniversary. Baltika’s history is unique in both a Russian and inter- 2005 – The Year of Baltika’s national context. After starting out as a small production facility on the outskirts of the city, thanks to the painstaking work of thousands of its employees and bold and unconventional business decisions, Baltika managed to become the undisputed industry leader in Russia, the largest brewing company in the country 15th Anniversary and in all of Eastern Europe. From the time of its creation up to the end of 2004, the Company was success- fully directed by its first President, Taimuraz Bolloev.
Construction of the new factory was begun in 1978. Baltika’s first brewery plant was built according to a design developed by the Giprepishcheprom-2 Institute to serve as one of the beer units of the “Lenpivo” Leningrad Production Association of Beer and Nonalcoholic Bev- erages. A state enterprise called “The Baltika Brewery” was formed in 1990 after the construction was finally completed.
The first shipment of just 27,000 liters of beer was brought to market in November 1990. However, the product itself was not yet Baltika brand beer. Instead the plant produced the widespread trademarks of the time which were stipulated in the State Standards: Zhigulevs- koye, Rizhskoye, Admiralteiskoye and Moskovskoye.
In 1992 the enterprise embarked on privatization. During this process the Company was reor- ganized into Baltika Open Joint-Stock Company. Baltika’s shareholders at that time were 28 legal entities and over 2,000 private individuals. The largest shareholder of Baltika since 1992 is the international company Baltic Beverages Holding AB.
At about this time the idea to create its own brand – “Baltika” arose in the Company. From the very beginning, Baltika was exclusively conceived as a beer of the very highest European quality brewed according to classical technology. In order to fulfill this task, the factory man- agement developed its first investment programme for the reconstruction and development of the enterprise.
In striving to make its products accessible to all Russian consumers, Baltika was the first in Russia to create its own holding company which in 1997 acquired controlling shares in the Donskoye Pivo brewery in Rostov-on-Don and in October 2000 took control of the Tula brewery. Baltika specialists developed an investment programme directed at increasing the capacity of these factories and replacing outdated equipment. Moreover, beginning in 1998 Baltika created a network of sales subdivisions in the regions. In this way the former name “Baltika Brewery” ceased to describe the scope of the company. Therefore, in 1998 the shareholders approved the decision of the Board of Directors to rename the enterprise, and its full name became “Baltika Breweries.”
Today Baltika Breweries is the largest brewing concern in Russia and in all of Eastern Europe. The production equipment used in Baltika plants is more advanced than in many well known Russian and foreign enterprises in the sector.
The Company accords great attention to its System of Quality, which is based on interna- tional standards. Without a well functioning and up-to-date System of Quality it would be impossible to win in the fierce competitive battle for consumer preference. Baltika was the first enterprise in the country’s brewing sector to receive a certificate of conformity to the international ISO-9001:2001 standard.
13 The Beer Market
14 World Market
There are unprecedented changes going on in the worldwide brewing industry. The number of companies active in this sector of the economy is contracting. A dynamic process is underway, whereby assets are being consolidated while the geographic spread of production and sales is expanding: in 2005, the ten leading brewery companies accounted for nearly 50% of all beer sales worldwide.
The volume of beer sold in the world continues to grow, mainly thanks to increasing consumption in the countries of the Asia Pacific region. In China, where investments are flowing in very actively, the size of the market has already grown larger than the American market, which was formerly considered to be the biggest. Eastern Europe is also a very fast growing region, where there are the recognized world leaders in terms of per capita beer consumption.
One other tendency is characteristic for the situation on the world beer market: changes in the structure of consumer prefer- ences. In the USA, beer consumption per capita has declined, but consumers choose brands with lower alcohol and carbohydrate content. The same thing is happening in Europe as well. The only exceptions are those countries in which beer consumption is an inalienable part of the culture and way of life, such as Germany and the Czech Republic.
Russia
The Russian beer market is one of the most rapidly growing and attractive segments of the food and beverage market. Beer pro- ducers are increasing their production capacity, product assortment and investments in marketing. The year 2005 was notable for significant growth in sales among the market leaders and growing consolidation of this branch of industry.
The market’s tempo of growth during 2005 slowed down compared to the preceding year, partly due to a number of legislative restrictions affecting the industry. Nevertheless, it exceeded the expectations of analysts. The volume of beer consumed in Rus- sia during 2005 increased by 6% compared to 2004 and, in the Company’s estimation, reached 87.2 million hectolitres.
Growth of the brewing industry and of the food processing industry
Year 1999 2000 2001 2002 2003 2004 2005
Beer production (in millions of dal)1 451.9 554.5 636.3 702.5 757.3 842.4 872
Growth of beer production, %2 +33 +22.7 +14.7 +10.4 +7.8 +12 +6
Food processing industry, %3 +3.6 +14.4 +8.4 +6.5 +5.1 +4 No data
Russia is the fifth largest beer market in the world. It accounts for 5.5% of the world market and is one of the top five leaders after China, the USA, Germany and Brazil. Despite a declining rate of growth, the market still has sufficient room to grow: in terms of average per capita beer consumption, Russia occupies the 16th place in the world (around 60 litres per person per year) and this is a noticeably lower level of consumption than in Western Europe.
1 Source:Union of Russian Brewers, Baltika 2 Source: Union of Russian Brewers, Baltika 3 Source of data for 2004 : Federal Service of State Statistics.
15 Volume of beer consumption by country in 2004 The shares held by the leading producers on the Russian beer market in 2005
mln HL %
300 30%
266
24.1% 250 235 25%
200 20% 17.5%
150 15% 13.4% 97 87 in 2005 100 84 10% 6.8% 82 65 6.3% 59 5.9% 5.7% 56 4.6% 50 5%
1.2%
0 0%
Source: Canadean, Baltika Source: Rosstat, internal Company data UK Efes Efes USA Pikra Vena Vena Brazil China Japan Russia Baltika Baltika Mexico Yarpivo Yarpivo Germany Heineken Heineken Ochakovo Ochakovo Sun Interbrew Sun Interbrew Krasny Vostok
The following key factors exerted a positive influence on the development of the brewing industry during 2005:
. Growth of macroeconomic and consumer indicators of the Russian Federation, including the price of energy and disposable cash income of the population . Changes in the structure of beverage consumption in the direction of European and worldwide standards of consumption, i.e. towards low-alcohol content products . Consolidation of the brewing industry and growth of investments made by the leading producers . Development of modern formats of retail trade
Growth of per capita beer consumption in the Russian Federation
litres/year 60 60 56
51 47 50
43
40 36
30 30 28 30 28 27 25 24 22 21 19 18 20 17 16 16 15
10
0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Rosstat, Baltika
16 Over the past several years, beer production has seen a lot of innovation. Russian brewers pay ever more attention not only to quality and product assortment, but also to packaging and to the culture and organisation of sales.
Last year several segments of the beer market exhibited growth all at once. The most expensive segment – licensed beer – developed especially actively. The mainstream and discount segments of the market also had notable growth. The development of licensed beer resulted from general tendencies whereby Russia is becoming more European in its consumption patterns; domestic consumers are shifting to the more premium products since image has gained in importance as an element of con- sumption. The significant growth in sales of discount beer may be explained by the way that beer has been partly replacing use of strong alcohol in the regions; and it is also due to large format PET packaging. Sales of licensed brands on the market grew by 41%; the segment constituted 7.5% of sales by volume and more than 13% of sales by revenue. Beer sales in the mainstream segment grew by 7.4%, while discount beer (the so-called discount segment) increased by more than 5%.
Although the volume of licensed beer sales in Russia continues to grow, the share of imported beer on the Russian market does not exceed 2.5% and does not offer competition to domestic beer. In turn, the export of Russian beer abroad is constantly growing (more than 70% of all export of Russian beer is done by Baltika Breweries). The largest export shipments are made to the CIS countries, though, overall, Baltika beer is exported to 38 countries around the world, including the USA, Israel, Great Britain, France, China and Iran.
Price segments of the total beer market, 2004-2005
2005 21.5% 28.2% 24.8% 17.7% 7.5% 0.2%
2004 21.2% 30.3% 24.1% 18.5% 5.5% 0.2%
Discount Lower mainstream Mainstream Premium Licensed Imported
Source: Business Analytica
Priorities also changed with respect to choice of packaging: the glass bottle segment continued to lose ground and its share compared to the preceding year dropped by 3.3%. At the same time there was a noticeable growth in the share of beer in PET bottles (+3.3%), amounting to 40%. The position of beer in cans remained unchanged.
Structure of the market by packaging, 2004-2005
2005 41.6% 40.1% 12.5% 5.8%
2004 44.9% 36.8% 12.6% 5.8%
Glass bottle PET Can Kegs
Source: Business Analytica
17 The Company’s position on the market
18 Baltika is the market leader in Russia
The year 2005 saw the continuation of Baltika’s successful development. Baltika Breweries is the most highly valued company in the Russian consumer sector, with a market capitalisation in excess of $ 4 billion.
Against a background of growing competition and market consolidation, the Company has continued to maintain and strengthen its leadership positions: Baltika Breweries produced one-quarter of all Russian beer; the Company’s market share grew from 22.8% in 2004 to 24.1% in 2005. Moreover, just as in the previous year, Baltika’s contribution to the growth of the market was considerable and amounted to 48%. The factors explaining this are invariably high quality products, the strength and scale of the brands, an effective distribution system and the use of modern instruments of marketing, including extension of the product assortment, innovative solutions in packaging and active advertising support for the Company’s key brands.
Growth of the beer market and sales of Baltika Breweries
87 90 82 Size of the market
80 74 Baltika sales 69 70 64
60 52 Baltika’s total sales during the reporting period amounted to 50 44 36 227 million dal, including 224.4 40 31 million dal of beer. This is the 27 28 30 26 22.4 highest level of annual sales in 24 24 23 19.9 the history of the Russian beer 20 16.1 14.0 16.0 brewing sector. Sales growth 10.6 6.6 10 4.9 during 2005 was 13%, which 3.0 1.1 1.7 0.3 0.3 0.6 0.9 was twice faster than the rate 0 of growth of the beer market as a whole. 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: BBH, Rosstat
Growth of the Russian beer market and sales by Baltika Breweries
85%
Growth of Baltika sales Growth of the beer market 73%
62% 61% 54%
46%
35% 27% 32% 23% 22%
15% 13% 1%
23% 27% 23% 19% 21% 8% 8% 11% 6%
-11% -6% -7% 0% -4%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Rosstat, Baltika Breweries 19 Growth of Baltika’s market share
24.1% 22.8% 22.0%
Baltika’s market share 21.4%
20.5% 20.1%
14.9%
13.6% 10.7% 2.4% 7.6%
4.7% 3.7% 2.4%
1.2%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source Rosstat, Baltikа
Development of the Company’s sales has come mainly from the umbrella brand Baltika and its key varieties – Baltika № 3 Classic and Baltika № 7 Export beer – which are the leaders of the mainstream and premium segments of the market. Growth of the Baltika brand was up to 11.5%. During 2005, sales of Arsenalnoye, the second largest brand on the Russian market and second largest in the Company’s portfolio, grew by 6.2%.
Growth of the Company’s brands in 2005
60%
49.4% 50%
40% 35.3%
30%
17.5% 20%
11.5%
10% 6.2%
0%
Arsenalnoye Baltika DV Samara Leningradskoye
The Company’s regional brands exhibited substantial growth in 2005: DV (35% growth), Samara (17.5% growth) and Lenin- gradskoye (49% growth).
In the past year Baltika consolidated its leadership position in key market segments. Its share in the mainstream segment during 2005 amounted to 36%, while it had more than a 30% share in the premium segment, its share in the licensed beer segment grew to as much as 8%, and it held 29% in the economy segment.
20 Baltika Brand portfolio in 2005
С А М И А Н З РА И ДОСТЬ Ж
During 2005, Baltika continued to build on the successful initiatives of the preceding year. The leadership position of the Baltika brand was further strengthened by the creation of individual strategies for promotion in the mainstream segments, with a focus on the varieties Baltika № 3 and Baltika № 7. This was combined with sponsorship of the Russian Football Championship and with several innovative promotional campaigns, one of which was based on unique packaging technology, and led to further growth of the brand.
After completing the restyling of its main brand, Baltika concentrated on the Arsenalnoye brand. Restyling was carried out on its several beer varieties using a new form of bottle and new label design. A unique new beer variety with chili, called Arsenalnoye Zakalennoye, was brought to market and the Company developed a new and effective advertising communication, which en- abled the brand to consolidate its second place position in Russia. In 2005 the Company made its first advertising campaign on behalf of the licensed brand Foster’s, and this led to a substantial increase in sales volumes. The measures undertaken in 2005 to promote another licensed brand - Carlsberg - included two image-building campaigns and a national promotional campaign; these laid down a reliable platform for further growth.
The structure of Baltika Breweries sales in terms of packaging Innovations were also intro- duced in the regional brands. 2005 30% 44% 22% 4,0% Improvements were made to packaging and brand commu- 2004 32% 43% 22% 3,3% nication during 2005. The quality of the products and 2003 43% 36% 18% 3,0% effectiveness of the Company’s marketing were highlighted by 2002 48% 31% 18% 3,0% awards received in Russian and
2001 60% 29% 8% 3,0% international competitions and at exhibitions.
Glass Bottle РЕТ Can Kegs
21 Baltika on the world market
The Company is one of the largest brewers in Europe. In terms of sales volumes, the Baltika brand occupied second place in Europe in 2004. More than 70% of all exported Russian beer is produced by Baltika Breweries.
The Company’s products are exported to 38 countries, including all the CIS countries, as well as other world markets like the USA, Great Britain, Canada, Germany, Israel, Greece and the Baltic countries. In 2005, Baltika initiated export deliveries to Ireland, Norway and Finland. The volume of export sales during 2005 amounted to 1.39 million hectolitres, which was 23% more than in the preceding year. The volume of export sales compared to total sales exceeded 6% in 2005. Revenue from export sales grew by 40% compared to the level in 2004. The following brands – Baltika, Arsenalnoye, Don, Medovoye and Samara – are repre- sented in the export portfolio. The Baltika brand makes up 85% of the export sales. In 2005, the Company was awarded the title of “Best Russian Exporter” for the fourth time in a row based on the results of a competition carried out by the RF Ministry of Economic Development.
In order to provide support to its export operations, the Company makes use of subsidiaries in Kazakhstan, Belarus, Kirghizstan, Moldova, the Ukraine and Germany, as well as representative offices in Latvia and in China. These subdivisions look after the organisation and monitor the promotion of the Company’s products in the markets of these countries.
The 10 leading European brands, 2004
million dal
Heineken 108.5
Baltika 90.3 in 2005 - 106.6
Carling 88.1
Carlsberg 85.3
Amstel 82.3
Stella Artois 82
Kronenbourg 78.9 (inc. 1664)
Efes Pilsen 72.8
BALTIKA Brand is № 1 in Russia Foster’s 66.1 and № 2 in Europe
Krombacher 54.7
0 20 40 60 80 100 120
Source: Canadean
22 Company Brands
23 Premium and licensed beer segments
Baltika`s premium brand portfolio includes Baltika № 0, Baltika № 5, Baltika № 6, Batika № 7, Baltika № 8. In licensed segment – Carlsberg and Fosters. Baltika № 7 At present Baltika № 7 Export beer occupies first place in the premium segment of the Rus- sian beer market. During 2005, the brand’s share in this segment has risen by 5.3% com- pared to 2004 and constituted 15.8%. During the last year Baltika № 7 Export beer achieved especially impressive results. During this period there were many important events in the life of the brand: restyling of the existing packaging, the beginning of active distribution of the 0.5 litre bottle, the introduction of a 0.33 litre bottle with twist-off cap, and the introduction of a new 5-litre keg with built-in tap. Another important development was the start of active advertising in support of the brand within the context of the new marketing strategy for the Baltika brand using individual positioning of the varieties.
Baltika № 7 is positioned as an open, contemporary, dynamic and self-confident brand and this is reflected in the advertising communications. During 2005 there were two national advertising campaigns for Baltika № 7 which included television ads, ads in the periodical press, and outdoor.
Baltika № 7 Export beer is not only the most popular of Russia’s premium brands, but it also enjoys invariable success abroad, as confirmed by export sales in 30 countries of the CIS and other markets around the world such as Great Britain, Australia, Germany, the Netherlands, the USA, the United Arab Emirates, Spain, China and New Zealand.
Carlsberg Carlsberg is a licensed brand which Baltika has been producing since 2002. This is a leading international beer brand which exists for more than 150 years and is popular in more than 140 countries. Special varieties of Carlsberg are to this day produced for royal families. Since mid-2004, sales of Carlsberg in Russia have been the highest in Eastern Europe. In order to raise the premium image of the brand in retail, Carlsberg with a transparent label was put on sale in November 2005. Consumers of Carlsberg are contemporary and active people who enjoy life and love to travel. The universally known slogan of Carlsberg - “Probably the best beer in the world” - was first used in England in 1973, when it was delivered by the celebrated English actor, Orson Welles. Carlsberg traditionally sponsors the European Football Championship, Liverpool football club (U.K.), annual competitions of downhill skiing in Switzerland (Carlsberg High Five), and golf tournaments in Asia. During the summer of 2005, a national campaign was launched called “Win a set of wings!” This featured a unique top prize: a 7 day trip with family and friends to any point on the globe using a private jet from Carlsberg. The winner from Ekaterinburg, Anna Syromakova, left with her friends on a trip to exotic lands – Singapore and Indonesia – that lasted from December 30, 2005 until January 5, 2006. In November 2005, a new na- tional advertising campaign was launched - “Carlsberg – the force of attraction.” Carlsberg possesses a unique force of attraction which helps consumers take that first step towards one another and helps them find a common language. However, different people may be, they need only take a glass of Carlsberg in hand and conversation gets going on its own. “Carlsberg is the new means of contact.” In 2005 Carlsberg won the gold medal at a tasting competition held within the Lenexpo exhibition “Beer and Beverages Industry – Beer Auction” in St. Petersburg. It won the silver medal at the international tasting competition of brewers “Beer-2005” in the Sochi exhibition grounds. It was also victorious in the “Best Licensed Beer” category of the Grand Moscow Beer Festival.
24 Foster’s Foster’s is an Australian beer which was created by the Foster brothers in 1886, after they arrived in the city of Melbourne. They designed it to be the ideal product for hot Australia – a light and refreshing lager beer. Today Foster’s is one of the fastest growing premium class international beers. It is made in 20 plants in Australia, America, Europe and Asia and is sold in more than 150 countries around the world. In 2004 Foster’s was produced for the first time in Russia.
Foster’s is brewed for active and self-confident people who take bold decisions. People who drink Foster’s have an easygoing attitude towards life, because there is nothing they cannot do. Their joie de vivre, sense of humour, active lifestyle, unusual way of thinking and per- sonal style form the basic rules on which “Foster’s Laws” are based: these are the “laws” to which the advertising campaign of the brand referred in 2005.
Foster’s is the sponsor and official partner of highly popular sporting events and competi- tions: Formula One auto racing and World Championship Surfing for professionals. The con- cept “Laws of life. Foster’s laws” was used in outdoor advertising and won the silver medal at the 15th Moscow International Advertising Festival. Thanks to the advertising campaign, brand recognition caught up with competitors’ levels in 2005.
The mainstream and lower mainstream segments
Baltika`s mainstream brand portfolio includes Baltika № 2, Baltika № 3, Baltika № 4, Baltika № 9. In the lower mainstream segment - Arsenalnoye, DV, Don and Samara. Baltika № 3 Baltika № 3 Classic has been produced since 1992 and is justly considered to be the most pop- ular beer in Russia. Baltika № 3 continued its development during 2005 within the framework of the concept “Where Russia Is,” and, as before, it remained the market leader in Russia with a 4.6% share, as well as the confident leader in the mainstream segment, with a 19% market share. The brand enjoys stable demand among a wide consumer audience. Thanks to the high level of its distribution, Baltika №3 is available to consumers in 96% of the points of sale around the country.
Within the framework of a unified concept for positioning the brand, two image-building video ads were created last year – “Festival” and “City Day.” Support for Russian sports has become a tradition at Baltika. For several years in a row, Baltika was the General Partner of the Russian Football Championships. During the past summer, Baltika ran a special pro- motional campaign for devotees of Baltika № 3 and football fans: as General Partner of the Russian Football Championship, Baltika held an unprecedented national campaign en- titled “Join the Game!” in the course of which more than 4,000,000 prizes were given out, including 20 Chevrolet Viva automobiles.
On November 29, 2005, the 7th awards ceremony of the annual national “Product of the Year” prize took place in Moscow. Within the beer category, Baltika № 3 Classic won this most prestigious award in the field of Russian consumer goods for the seventh time.
25 Baltika № 9 Baltika № 9 Extra was first marketed in 1998 and quickly became one of the most popular beer varieties in Russia. Ever since 2004, it officially bears the nickname it received from the population at large - “Nine.” Baltika № 9 is the leader of the strong beer segment, both in revenue and in terms of distribution. In 2005 the restyling of “Nine” was completed and the variety was being sold in a new, modern glass bottle. The brand was given its own advertising in keeping with the slogan “He said categorically.” At the end of 2005 “Nine” came out in 1.5 litre PET packaging. The high quality of “Nine” is well known abroad: it is one of the leading beer varieties in volume of export sales and it grew by 4.3% in 2005. In 2005, “Nine” won the Gold Medal at the tasting competition held during the Beer and Beverages Industry Exhibition in St. Petersburg.
Arsenalnoye Today Arsenalnoye is the leader of the lower mainstream segment with 19.6% market share per 2005 results. The brand has been produced since 2000 and at the end of 2003 it already became the second best-selling beer on the Russian market in terms of volume of sales: by the end of 2005, the market share of Arsenalnoye in Russia amounted to 5.5%.
At present the brand comprises four beer varieties: Traditional, Krepkoye, Classic and Zakalennoye. The brand is offered in all types of packaging - PET, aluminum cans and glass bottles, as well as kegs for draught beer. Arsenalnoye is exported to 9 neighbouring coun- tries (Azerbaijan, Georgia, Kirghizstan, Belarus, Moldova, Kazakhstan, Tajikistan, Turkmeni- stan and Uzbekistan), as well as to 5 more distant countries (Israel, Latvia, the USA, Estonia and Greece). During the spring of 2005, Arsenalnoye underwent restyling. The new label maintained con- tinuity with respect to the previous design, but Arsenalnoye’s main slogan - “Arsenalnoye – the beer for real men” is emphasized by the coat-of-arms with crossed pistols. The basic strategy for promoting the brand in 2005 was built on the concept of revealing the facets of the male character. Arsenalnoye is positioned as a mass-audience quality beer at an af- fordable price for decisive people who lead active lives. The core target group consists of men aged 30-45 with average and below-average income who value honour, strength, pa- triotism, family and the Fatherland. In October 2005, for the first time in the history of the domestic beer industry, Baltika Breweries brought to market a new variety of beer with chili peppers – Arsenalnoye Zakalennoye. This strong beer with “a bit of pepper” embodies the idea of a strong male character – strong, unyielding, tempered by complex real-life situa- tions. The effectiveness of the promotional strategy of the Arsenalnoye brand in 2005 was con- firmed by the victory achieved in the BRAND OF THE YEAR/EFFIE 2005 competition. At the 6th Grand Moscow Beer Festival, Arsenalnoye Traditional was awarded the Golden Osiris prize as the best lager beer.
26 DV DV is a young, strong and goal-oriented brand, which, nonetheless, is already the leader on the Far Eastern market with a 17.2%7 market share. During 2005, DV’s share in Russia’s lower mainstream segment amounted to 6.2%, which is 3.2% pts higher than in 2004.
Since July 2004, the brand has been on sale throughout Russia and you can be bought it in Rostov-on-Don, Samara, St. Petersburg and other cities. More than 40% of DV’s overall sales are now made in other regions of Russia than the Far East. In 2005, the brand was restyled. Its packaging became more contemporary: a shift was made to a new glass bottle and new 1.5 litre PET container. One design feature of the bottle is a unique long neck.
In September, the DV brand sponsored a major music festival called “Space” in the largest cities of the Far East and brought in well-known musical groups such as Chaif and Tantsy Minus. The events were attended by 27,000 visitors.
Don Don has been the market leader in the southern region of Russia ever since 2001. As per 2005 results, its market share in this region is 11.3%. The brand leads the market in Rostov-on-Don and Stavropol. During 2005, a multi-faceted advertising campaign was carried out: “The beer brand of the South of Russia!” This comprised television ads, outdoor advertising, point of sale ads, a promotion for sales staff at retail and a promotion for consumers on the Black Sea coast of the Caucasus. During 2005 two new beer varieties were brought to market: Don Svetloye and Don Otbornoye. The effective brand-building strategy used for Don resulted in the Company’s winning the most prestigious award in the sphere of marketing communications – the Gold Prize of the BRAND OF THE YEAR/EFFIE in the Regional Project category. In 2005, the Don brand also was awarded a diploma recognising its position as the “Golden Brand of the Southern Region, 2005” and for the seventh time in a row it was a winner in the “100 Best Products of Russia” programme.
Medovoye Medovoye beer was developed in 1999 taking into consideration the taste preferences of Russian consumers and their traditional love for honey. Medovoye is positioned as a specialty beer containing natural honey and it offers consumers good quality at an affordable price. The main brand values are family, traditions, companionship and hospitality. The product is sold in two varieties in 1.5 litre PET bottles - Medovoye Light and Medovoye Krepkoye. The brand is widely distributed not only in Russia but also in the Ukraine, in Moldova and in many other neighboring as well as distant countries, where it has won over consumer confidence.
In 2005 the packaging was restyled. The product’s new look corresponds to the positioning as expressed by Medovoye’s new slogan: “More honey makes life sweeter!” The brand has a traditional beer taste and aroma, together with a light and unusual added note of honey.
7 Source: Business Analytica, November-December 2005.
27 Samara Samara brand beer was first put on sale in 2003 and since June 2004 it has occupied the leading position in the beer market of Samara region.
In 2005 the Samara brand was restyled and moved to a new bottle format and PET packaging. The new promotional concept plays on the name of the brand in Russian and suggests that Samara is the very joy of life. The new look corresponds to the contemporary, fast-paced and competitive image of the Samara brand. Samara is positioned as a beer which makes an occasion festive for all residents of the Volga region.
During last summer the Samara brand was the organiser of a concert series called “Samara - Joy of Life” that was held in various cities of the Volga region and featured Verka Serdyuchka and Avraam Russo.
Discount segment
Zhigulevskoye
Zhigulevskoye was the best known beer of the Soviet period and today it remains one of the most popular brands in the country. Zhigulevskoye beer was first produced by Baltika Breweries in 2003. It was prepared according to the traditional recipe, using high quality Rus- sian raw ingredients processed on the most modern equipment. This quality product is sold at a low price and deservedly is loved by consumers. The 2005 results show that Zhigulevskoye as produced by Baltika is the best-selling product in its price segment and the sales leader in 1.5 litre packaging in Russia.
Leningradskoye
The Leningradskoye brand was brought to market in 2003. Today the brand continues its rapid growth and has already joined the ranks of the 10 best selling Russian brands in its price segment. On the whole, the results show that in 2005 the brand improved sales volume by nearly 50% and now enjoys well-earned popularity among consumers across all of Russia and abroad as well. The product is positioned to appeal to the nostalgic feelings of consum- ers. The brand is offered in two varieties – Svetloye (Lager) and Krepkoye – in 0.5 litre and 1.5 litre packaging. During 2005, active advertising support was provided to the brand using the motto “There are things worth remembering!”
28 Sponsorship
In 2005 the Company continued its high level sponsorship of a variety of major events, pro- viding its consumers with the opportunity to enrich their lives. The following events are out- standing examples:
n On April 28, the Company gave its support to a concert by the legendary founder and former soloist of the group Dire Straits, Маrk Knopfler. The concert was held in the Ice Palace in St. Petersburg and was part of the singer’s world tour to promote the album Shangri-La;
n During the summer of 2005, the Samara brand provided sponsorship support to a tour through the Volga region cities entitled “SAMARA – Joy of Life” which fea- tured Verka Serdyuchka and Avraam Russo;
n Baltika was one of the sponsors of the 7th Grand Moscow Beer Festival which ran from 4 until 12 June. The Company organised an entertainment programme for festival guests including competitions, quizzes, prizes and appearances by popular artists. At the festival opening, the group Blestyashchie performed and on the last day Alexander Marshal. During the festival, around 200,000 people visited the Baltika exhibition space;
n On the occasion of the Company’s 15th anniversary, Baltika Breweries sponsored a concert with performances by Verka Serdyuchka, Sergei Galanin, Alexander Mar- shal and such groups as Russian Size, Blestyashchie, Spitfire, Tequila Jazz and Tea for Two. The event took place within the Petersburg Beer Festival;
n On August 20, Baltika sponsored an open-air rock festival called Shamrock-2005 in Vladivostok, Shamora Bay. Among the leading Russian rock stars who took part in the festival were Vycheslav Butusov and the Jupiter Group and Zemfira; there were also up-and-coming young groups like Equator, Steplers and Snoo-Cheeze;
n A large rock festival called PROSTOR was held in Vladivostok and Khabarovsk on September 16 and 17, with sponsorship support from the DV brand. In Vladivostok the festival attracted 15,000 music enthusiasts and in Khabarovsk there was an au- dience of 15,000. The rock groups CHAIF, Tantsy Minus, Equator, Tumanny Ston, Gorod V, Zabriskie point – 2 and Therr maitz all performed;
n On September 24, the Company was the General Partner of a rock festival in Tula called Maximum of New Rock Music. The festival went on for 5 hours and attracted more than 5,000 visitors. The groups Segodnya Nochiu, Tokio, Chicherina, BI-2 and Mumii Troll took part;
n During the entire year, the Company supported the 2005 Russian Football Champi- onship. This was the third year in a row when Baltika Breweries appeared as General Partner of the Championship. In 2005 the Company decided to continue its support despite the coming into force on September 5, 2004, of amendments to the law “On Advertising” which exclude beer brewing companies from sponsoring most sporting competitions. The Company supported the 2005 Championship as a chari- table donor, without placing any advertising at the event in exchange.
Plant Tours
All five Baltika Breweries facilities organise free daily orientation tours for anyone interested. During 2005 more than 35,000 people visited the Company. For detailed in formation, please go to http://virtual.baltika.ru and by phone +7(812) 329 91 39.
29 Оperational Management
30 Quality Assurance
Emphasis on quality is an inalienable part of our philosophy, insofar as the quality of the products is the guarantee of success for the separate brands and for the Company as a whole. The system of Quality Assurance created within Baltika meets the most demanding requirements and remains fully in force, as the appropriate certificates attest.
Following verification of the Quality Assurance system in use at the Baltika-Khabarovsk af- filiate, in 2005 the certifying body Теst-St-Petersburg, Ltd decided to confirm the certificate of conformity of the system of Quality Assurance to State Standard R ISO 9001-2001 (ISO 9001:2000). The findings of the inspection team and results of internal audits during 2005 confirm that management of Quality Assurance within the Company is carried out at a high level.
The approach to internal audits of the system of Quality Assurance was reviewed. In order to optimise and raise the status of the audits, the separate checks have been consolidated, so that two verifications a year make it possible to evaluate the effectiveness of the processes in place for managing Quality Assurance in the subdivision being tested.
During 2005 Baltika created unified information resources for rapid access to Technical Con- ditions, Process Instructions, Outside Formulas, Conclusions of Sanitary and Epidemiological Inspection, Certificates and Declarations of Conformity relative to the Company’s products.
During the year gone by, a system was finally put in place for integrating the methodological and technical-equipment aspects of the laboratories at Company plants, thereby making it possible to conduct a unified approach to carrying out tests, interpreting results, raising the accuracy of measurements and, in consequence, obtaining products that have stable and homogeneous quality.
In particular, modernisation work was carried out on the systems for recording data from the manufacturing processes, allowing managers to follow in detail the course of each process, beginning with the analysis of initial raw materials and ending in the analysis of the finished goods. Investment programmes have been implemented which involved the purchase of the latest generation apparatus for the automatic analysis of beer and this has made it possible to raise the accuracy of measurements, to reduce the time needed to obtain results, to limit as much as possible the influence of the human factor and, consequently, to minimise the likelihood of having a product which does not meet the requirements.
Baltika’s management system for Quality Assurance ensures full-scale monitoring of brew- ery production, which makes it possible to ensure a single quality of product regardless of the place of production.
Checking product quality
The test laboratories at the Companу’s plants play a key role in the continuous monitoring of production processes, as well as checking the quality of raw materials used in production, semi-finished goods and finished products. The laboratories are equipped with modern analytical equipment from the world’s leading manufacturers, which makes it possible to guarantee highly precise and reproducible physical, chemical and microbiological analysis.
31 The activity of the laboratories has been regularly verified by organisations from the state inspectorate and by licensing compa- nies. All the laboratories have been accredited and tested for technical competence.
In order to ensure an objective evaluation of the competence of the test laboratories, inter-lab comparative testing is regularly carried out, including testing by the CILAS system (Carlsberg Inter Laboratory Analysis Scheme). For the sake of improving the quality of products during the reporting period through the efforts of its own research centre, Baltika has implemented a number of projects including:
n Approbation of new systems of identifying microorganisms based on the use of selective differential diagnostic me- diums. These systems make it possible to carry out microbiological monitoring of production for the purpose of raising the general hygienic culture of the enterprise, as well as ensuring the safety of the product and its microbiological purity;
n Carrying out research work to investigate and ensure the colloidal and organoleptic stability of the beer. Carrying out work to analyse changes in the colloidal makeup of particles in the course of the production process;
n Carrying out work using an additive (copolymer) to the PET granulate with barrier qualities with respect to ultraviolet radiation, resulting in the discovery of ways to significantly protect beer in PET packaging from the destructive effects of ultraviolet radiation;
n The development and introduction of methodologies for quantitative detection of amino acids by means of capillary electrophoresis and detection of “light” sulfur-bearing compounds in the beer.
Company Sales
Reorganisation of the sales department
In implementing its sales strategy, Baltika Breweries completed its reshaping of the organi- sational structure of the sales department based on the principles of efficient management of sales along the territorial concept. The new structure is founded on the responsibility of each employee for sales in a given territory using an analysis of the market situation, forecast and planning of sales, general organisation and monitoring of the sales process, manage- ment of staff in accordance with the adopted strategy, interaction with distributors, and the planning and execution of trade marketing measures. In order to make Company employees more results-oriented, motivation and training programmes were developed and put in place. In order to evaluate the activity of both employees and subdivisions, a system of key indica- tors was developed. Some of the main indicators of the effectiveness of sales activities are: enhanced quality of service to clients and the permanent availability of the product in points of sale.
Trade marketing
Baltika Breweries maintains two types of activity in the field of trade marketing: the development, preparation and implementa- tion of nationwide marketing programmes directed at retail points of sale and the final consumer, as well as providing the sales service with equipment and products for promotional use. In 2005 four national promotional campaigns were carried out, and there were more than 40 multi-regional marketing programmes for retail sales points and the final consumer, plus around 400 local programmes. In 2005, the Company purchased more than 37,000 refrigerators and placed them in points of sale.
32 Sales training
In 2005 the sales department intensively pursued the training of employees at all levels. Over the course of the year, 16 training and development managers worked across all of Russia and carried out 129 training sessions on “the art of sales,” 21 training ses- sions on ”the art of leadership” and 9 training sessions on “interviewing skills,” which were obligatory for employees of the sales department at all levels. Twelve new and supplemental training seminars and sessions were developed and put in place, including “the negotiations professional,” “the art of selling for staff in the draught beer department,” “the basics of trade marketing,” “work with key accounts,” “structuring an order,” and “finance for non-finance staff.” Alongside training in class, staff training was also actively developed on the job. More than 1000 training sessions were arranged for supervisory staff of the sales depart- ment and more than 27,000 trainings were held for staff in the field.
Information Technologies
Information Technologies provide service to a variety of functional groups in the Company and facilitate processes ranging from taking orders for delivery of products to placing orders for the purchase of raw ingredients and materials, to the compilation of summary a nalytical reports; from telephony and email to videoconferences between geographically separated affiliates. Management uses IT to analyse corporate plans and events and to receive information about critical processes, and also about Key Performance Indicators (KPI).
During 2005 the main task of the Company’s IT department was to satisfy the following demands made on Information Services: n Ensure an integrated informational space throughout the Company; n Instantly inform all personnel of key decisions; n Shift from reporting to managing information; n Raise the efficiency of the way business is conducted.
The basis of the strategy for developing Information Technologies is a long-term partnership with leading Russian and interna- tional companies. During 2005 the following projects were completed: n A project to unify all Monolit SQL automated systems within the production affiliates of the Company. Management of sales, goods flows, financial, material and investment resources of the Company is carried out in an integrated informational space for all the production affiliates; n All sales subdivisions and regional warehouses have gone over to a centralised Sales Management system with a single com- mon data base in the Company’s headquarters and organisation of remote work places for employees in sales subdivisions at locations around the country. The goal of the given project is to improve the quality of customer service, to reduce losses by providing a unified client data base and to improve monitoring of the business process so as to avoid making expensive mis- takes; n The first phase of a major IS project for Supply Chain Management has been completed. This affects the activity of three main services involved in production: supply – production – logistics. The introduction of this system has made it possible to reduce to a minimum all possibility of total failure at any link in the chain. The system maintains the rhythm of operations, with regular deliveries at regular time intervals; it is a tool for centralised analysis, for making adjustments and re-distributing production volumes and shipments among the Company’s various facilities; n The Company’s system of paperless, electronic document flow continues to develop and this enables Baltika Breweries to constantly raise the quality and efficiency of staff work, as well as to ensure transparency of the internal document flow and improve the quality of decisions taken; n The CRM system for managing relations with clients continues to evolve. This project makes it possible to integrate the work of staff in the field with the Company’s Information Services, thereby assisting interaction with customers and distributors through appropriate channels and points of contact, as well as the collection and analysis of aggregated data.
Employees in the IT department also keep an eye on the latest tendencies in the worldwide business of advanced technology.
33 Investment Activities
34 In 2005, the overall level of investments in the Company reached $ 1 billion. Capital invest- ment during 2005 itself amounted to $ 83 million. The Company’s own equity was the main source of investments.
Baltika Breweries investments 1991-2005
millions of dollars
250,0
199
200,0
149
150,0 105 105 119 95 59 83 100,0
50,0 16 18 38 13
2 0 1 1
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
The investment projects were directed towards increasing production capacity and moder- nising existing facilities, cutting expenses and raising the quality of production and develop- ment of distribution.
The largest capital investment projects during 2005 were as follows:
n Installation of a PET-line in the Samara affiliate, resulting in expansion of the product assort- ment as well as making it possible to make full, 100% use of the plant’s production capacity. In 2005, the subsidiary produced more than 20 million dal of product; n In Tula the line for filling licensed beers Carlsberg and Tuborg was modernised and a de-pal- letiser of empty bottles was installed in order to eliminate the need for handling pallets; n In Khabarovsk the finished goods warehouse was enlarged, making it possible to stop rent- ing expensive premises and to optimise work in the warehouse. In order to ensure that the needed level of spare stock across the product range is available during the peak season, 12 new brewery vessels were installed; n Significant resources were invested in projects to support distribution: trade marketing (purchase of refrigerators), draught beer equipment, kegs, tents, construction of ware- house terminals, advertising equipment, purchase of vehicles and development of Infor- mation Technologies assisting sales.
35 Financial Position
36 In 2005, the Company delivered high financial results and in this way it confirmed its stable financial situation and increased the prospects for a further rise in the shareholder value.
The analysis below is a supplement to the Company’s financial report. In connection with the change from GAAP to International Financial Reporting Standards on January 1, 2005, the accounting data have been presented for the period from 2004 through 2005.
The Company’s key financial results for the 2004-2005 period (Data presented in accordance with reports prepared on the basis of IFRS), Mln EURO
Change 2005 2004 2005/2004, %
Sales, millions of hectoliters 22.7 19.9 13.8% Net sales 977.2 799.7 22.2% Cost of sales (469.7) (418.3) 12.3% Gross profit 507.5 381.3 33.1% Distribution expenses (236.0) (184.9) 27.7% Administrative expenses (37.0) (34.4) 7.6% Other operating expenses, net (1.5) (0.7) 124.4% Provision for restructuring expenses (1.8) (17.6) -89.5% Financial income 15.1 9.3 62.3% Financial expenses (9.3) (7.6) 23.2% Income from associates 0.9 0.9 4.8% Profit before tax 237.9 146.5 62.4% Income tax expenses (47.5) (35.9) 32.4% Net profit 190.4 110.6 72.1% Net margin, % 19.5% 13.8% 5.7 p.p. ROA 21.2% 14.9% 6.3 p.p. ROE 25.3% 19.9% 5.4 p.p. EPS, EUR 1.56 0.90 74.2% Gearing (Net debt /Equity) 0.19 0.33 -43.4%
The growth in the Company’s net sales during 2005 amounted to 22.2%. The main factors which made it possible to reach this level were the growth in average prices of the Company’s products and growth in sales of beer by volume.
During 2005 the Company’s operating margin amounted to 23.8%, which is 3.6 p.p. higher than in 2004. Growth in operational profitability was facilitated by reductions in the cost of sales (-1.3%) per hectoliter. The main factor which made it possible to achieve such a result was reduction in the Company’s expenditures on raw materials, which in turn resulted from an increased proportion of malt coming from proprietary production, conclusion of long-term contracts for the supply of cans, lower world prices for hops and a fall in the exchange rate of the EURO.
37 The Company’s improved operating margin also was assisted by strict control over administrative expenses. Administrative ex- penses per unit of production were reduced by 5.4% in 2005.
One should mention that in 2005 the Company’s results were substantially influenced by growth in commercial expenses. The main cause of this growth in expenditures was growth in the cost of delivery of product as the sales territory expanded and the rates set by natural monopolies rose. Extensive advertising support of the brands and the active introduction of effective mar- keting communications required that the Company increase spending on marketing and also influenced growth in the distribu- tion expenses of the Company.
During the course of the year, there was a substantial increase in the return on the Company’s assets. The ROA ratio for the year amounted to 21.2%. The Company also demonstrated increased return on equity which confirms the efficient use of the capital invested by the owners of the Company. The ratio of ROE in 2005 came to 25.3%.
During 2005, the Company successfully continued its work on managing working capital. Thanks to the organization of an efficient system of relations with customers and optimal credit policy, the share of trade and other receivables in the Company’s current assets was reduced to 17%. As a result of the regular checking of raw ingredient and material stocks and optimal man- agement of finished goods, the relative amount of inventories within the structure of current assets fell to 25%.
2005 was notable for significant free cash flow, and one of the ways in which the Company chose to use this was short-term placement of free funds in various fixed-income instruments on offer from the leading Russian banks. This permitted the Com- pany to obtain supplemental income. The share of investments in 2005 rose to 43%.
Structure of current assets
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2005 43% 25% 1% 17% 14%
2004 13% 34% 1% 31% 22%
Cash and cash equivalents Income tax receivable
Trade and other receivables Inventories Investments
Thanks to profitable operations and strong cash flow in 2005, the Company could reduce the share of its borrowings. At the end of the year, the share of loans and borrowings amounted to 4%. This enabled the Company to substantially reduce the share of current liabilities in the general structure of the Company’s sources of funds: in 2004 the amount of the Company’s current liabilities amounted to 124.3 million EURO (share 17%), whereas in 2005 it was 80.4 million EURO (share 9%).
Moreover, the Company carried out a number of measures to better manage accounts payable: when concluding contracts, it carefully worked out terms of payment; it analyzed and evaluated discounts and bonuses within payment conditions. In this way at the year’s end the level of trade and other payables in the structure of the Company’s current liabilities grew substantially - reaching 94%.
38 Structure of current liabilities
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2005 4% 94% 2%
2004 36% 51% 13%
Provisions Trade and other payables Loans and borrowings
The Company’s cash flow from operations makes it possible to support a high level of dividends.
Payments of dividends
millions of EURO 60,0
50,0 53,9 40,0 43,2 30,0 35,7 20,0 27,4 10,0 17,4 15,3 0,0
2000 2001 2002 2003 2004 2005
The Company’s excellent financial and operating results during all of 2005 were well appreciated by the market. In 2005 the Company’s market capitalization for the first time ever exceeded $ 4 billion.
39 Corporate Social Responsibility
40 Economic impact for the state
The beer brewing sector is one of the best disciplined tax payers. The high level of tax con- tributions is the direct result of the fast pace of economic development of the sector and the transparency of both production and sales figures. In 2005, Baltika Breweries paid into the Treasury at all levels of government around 8.5 billion rubles, which is on 50% more, than in 2004. The beer brewing sector also stimulates the development of associated fields: machine-building, agriculture, the restaurant business, production of packaging materials, transportation etc. The economic effect of its investment programmes is rather high: be- sides increasing production in certain fields of the manufacturing industry, each workplace in brewing creates as much as 10 workplaces in associated sectors.
Care for employees
During 2005, Baltika continued its social programmes for staff. It offered its employees free meals and free transportation to work on Company vehicles at all facilities including Tula, Rostov, Samara and Khabarovsk. Baltika gave material assistance to those leaving for annual vacations, to newlyweds, to the parents of newborn children, to those convalescing and to those grieving the loss of close relatives. The Company pays 50% of the cost of holidays taken in its resorts during the regular vacation period, as well as costs of tours and travel taken on days off.
Over the course of the year, employees and members of their families were offered more than 40 day trips around St. Petersburg and its suburbs, as well as trips to Vyborg, Novgorod, Pskov, Staraya and Novaya Ladoga and to the Coast. In the Company as a whole, more than 1,200 people took part in these tours. The “Baltika” recreational facility in the village of Molodezhnoye near St. Petersburg was visited by more than 3,000 Baltika employees and their relatives. During the summer period, 250 children of employees in the St. Petersburg factory and sales subdivisions in Murmansk, Vologda, Kursk, Ufa, Yaroslavl, Irkutsk and Khabarovsk vacationed here. Besides organising rest and recreation for employees, the Company arranged corporate events, seminars and training programmes for employees on its premises. Presently a new recreational centre is being built which will become operational in May 2006; this includes a swimming pool, sports hall, dining facility, sauna and pneumatic shooting gallery. Expenditure on this project has amounted to around $ 5 million.
In 2005, the Sports and Recreation Complex in St. Petersburg operated at full capacity. Employees had the use of sports and wellness facilities including a swimming pool, sauna, physiotherapy rooms and dental offices fitted with the latest equipment. The dental service of the factory clinic in Samara was functioning actively. A new health complex opened in Tula. All these ser- vices are offered to employees free of charge. A new health complex will open next in Rostov.
Charity
The Company’s charitable work has traditionally been directed towards supporting the socially unprotected strata of the population, preventive health measures and spreading awareness of a healthy lifestyle, help to veterans of the armed forces and guardians of law and order in the Russian Federation, as well as to the Orthodox Church. In 2005 the budget for charitable assistance amounted to more than 33 million rubles. To mark the 60th anniversary of the victory in World War II, the Company participated in the “Debt” charitable programme of the Governor of St. Petersburg and presented veterans of the Vyborg district of St. Petersburg with household electronics and white goods worth a total of 1 million rubles.
In connection with the environmental disaster in the city of Khabarovsk in December 2005, Baltika donated to municipal hos- pitals and educational establishments some 54,000 litres of bottled drinking water. The Company continues to collaborate with and sponsor the Children’s Home № 8 in the Vyborg district of St. Petersburg, which has been the recipient of Company’s material assistance for 10 years. Assistance was also given to a number of public schools, hospitals, sports clubs and theatres. During 2005, the Company initiated long term programmes of support to the “House of Hope on the Hill” Centre for Rehabilita- tion of Alcoholics and to a St. Petersburg hospice for children.
41 Environmental projects
In 2005, Baltika Breweries completed the following environmental projects:
Measures to conserve water
n The construction of the first stage of a water purification facility in the St. Petersburg factory for filtration of waste water, blending, correction of the pH-factor, and regular release into the city sewers; n The construction of a biological purification facility for household sewage at the Baltika recreational facility in the village of Molodezhnoye. The projected capacity is 66,000 cubic metres/year; n A water-recovery system has been installed in Rostov-on-Don, making it possible to re- duce water consumption by 4,500 cubic metres/month; n A vacuum pump on the bottling line in the Rostov-on-Don facility has been put on a re- circulating regime, thereby lowering water consumption by 1,500 cubic metres/month.
Improvements in work with waste materials
n An expert commission of the state environmental authorities delivered a positive evalu- ation after reviewing materials on the Company’s work in dealing with dangerous waste products and preparatory work has been done on a full set of documents for licensing the work with waste materials; n Sanitary-Epidemiological Conclusions have been received with respect to “Beer industry barley-corn processed for improving the structure of the soil,” “Extraction of beer indus- try processed barley-corn for improving the structure of the soil,” and “Unneeded active silt for fertilising land.” These studies are intended to reduce the volume of waste that has to be buried in solid landfill zones; n Technical documentation has been developed for dangerous waste byproducts. n A project has been initiated to purchase and install a second press for compacting solid waste from production in Tula; n Design work has begun on an installation for drying barley-corn waste in Tula. Work in the Union of Russian producers of beer and soft-drinks products
In the course of 2005, the management of Baltika Breweries took an active role in deciding a broad range of topical issues of the brewing industry. The principal format for the Compa- ny’s interaction with the state authorities was its work in the context of the Union of Russian producers of beer and soft-drinks products.
On March 18, 2005, at the Fifth All-Russian Conference of Producers of Beer and Nonal- coholic Beverages, the President of Baltika Breweries, Anton Artemiev, was elected deputy chairman of the board of the Union of Russian Producers of Beer and Nonalcoholic Beve- rages. During the reporting period, the Union directed its efforts mainly towards improving the state policy on customs duties and the tax policy, as well as the laws governing adver- tising of beer, retail sale of beer and its consumption, plus improvement of the norms and standards of railway freight operations.
On November 2, 2004, the management of Russian Railways OJSC decided to cut the maxi- mum time in transit of pasteurised beer to 10 days. Baltika Breweries and the Union of Rus-
42 sian Brewers applied to the Federal Antimonopoly Service asking that the given decision be reviewed. On February 10, 2005, a commission of the FAS came to the conclusion that the reduced period for transporting beer set by Russian Railways violated antimonopoly legisla- tion and instructed the company to rescind its decision setting 10 days as the maximum peri- od for transporting beer. On August 30, 2005, the Arbitration Court of the City of Moscow recognised the decision of the FAS to be legal and well-founded. Moreover, the Union will obtain an increase in the period for transporting beer in closed railway cars to 25 days and the removal of pasteurised beer from the list of perishable freight.
The Union carried out a great deal of work in the area of regulations on retail trade and consumption of beer. In December 2004, the President of the Russian Federation vetoed a federal law which provided, among other things, for a prohibition on the consumption of beer in public places. At the beginning of 2005, a conciliation commission of representa- tives of the chambers of the Federal Assembly was formed to rework the law in accordance with recommendations from the head of state. In the course of the work on this document, the representatives of the Union carried out a series of consultations with experts of the RF President’s Administration, with the chambers of the Federal Assembly and the Government of the Russian Federation. As a result, the prohibition on the consumption of beer in public places was removed from the bill.
In 2005, Baltika representatives played an active role in improving relations between Rus- sia and the CIS countries. Thus, on October 31, representatives from Baltika Breweries and the Union participated in a conference of representatives from the interested ministries and government bodies of the Republic of Belarus and the RF Government dealing with the ques- tion of removing existing restrictions on export sales of Russian beer to Belarus. On the basis of the results of the conference, a decision was taken to prepare the necessary materials for abolishing the existing restrictions.
The further participation of Baltika in the work of the Union will undoubtedly help raise the authority and role of the Union in the development of the beer and nonalcoholic beverage sector, as well as advance the cause of close collaboration among brewers in solving tasks that are in their common interest.
43 Corporate Governance
44 Principles of corporate governance
The main principles of corporate governance at Baltika Breweries are:
n to defend the rights and legal interests of shareholders and investors n transparency and openness with information n to monitor and evaluate the quality of business management
Information regarding the Company’s adherence to the Code of Corporate Behaviour
The Company carries on its business in strict adherence to the terms of the Code of Corporate Behaviour approved by the Federal Commission for the Securities Market of the Russian Federation:
n Company shareholders are provided with reliable and effective means of understanding the equity value of shares; n Shareholders have the right to participate in the Company’s management when they vote on the most important issues of Company activity at the General Shareholders Meetings; n Shareholders have the right to receive complete and reliable information about the Company on a regular and timely basis; n Shareholders do not abuse the rights granted to them; n The practice of corporate behaviour adopted by the Company ensures that all shareholders owning an equal number of shares of the same share category are treated equally. All shareholders can receive effective defence in case their rights are violated; n Shareholders have equal opportunities to gain access to identical information; n Within the Company there is effective control over the use of confidential information; n The Company’s management bodies motivate employees to work efficiently.
Company Management
General Shareholders Meeting
March 30, 2005 - Annual General Shareholders Meeting.
The Annual General Shareholders Meeting of Baltika Breweries approved the annual report, the report on profit and loss for the financial year, the distribution of profit from 2004, and dividend payments in the amount of 13.94 rubles per ordinary share and 18.12 rubles per preference share. The General Shareholders Meeting elected the Board of Directors and the Internal Auditing Committee. It confirmed the Company’s outside auditors – A&P Audit and KPMG.
The General Shareholders Meeting also introduced amendments and alterations to the Company Articles of Association and approved a new edition of the “Regulation on the Management and Control Bodies.”
45 CHAIRMAN OF THE BOARD OF DIRECTORS
Christian Ramm-Schmidt Date of birth: 1946 Educational level: higher education Occupies positions in the following organisations: President of Baltic Beverages Holding AB Chairman of the Board of Directors of Yarpivo Plc. Chairman of the Board of Directors of VENA JSC Member of the Company’s Board of Directors since 1998 Owns no shares in the Company
MEMBERS OF THE BOARD OF DIRECTORS
Anton Artemiev Paul Bergqvist Date of birth: 1960 Date of birth: 1946 Educational level: higher education Educational level: higher education President of Baltika Breweries Occupies positions in the following organisations: Chairman of the Board of Directors of Pikra OJSC Executive Vice President of Сarlsberg Breweries A/S. Member of the Company’s Board of Directors since 2001 Member of the Board of Directors of Baltic Beverages Owns no shares in the Company Holding AB Member of the Board of Directors of Yarpivo Plc. Member of the Company’s Board of Directors since 1993 Owns no shares in the Company
Tomas Kučinskas John Niсolson Date of birth: 1967 Date of birth: 1953 Educational level: higher education Educational level: higher education Occupies positions in the following organisations: Occupies positions in the following organisations: Vice President of Baltic Beverages Holding AB Member of the Board of Directors of Baltic Beverages President of BBH Baltic CJSC Holding AB President of the Board of Directors of Švyturys-Utenos Director of Scottish&Newcastle Plc. alus CJSC, Aldaris CJSC, Saku CJSC Member of the Board of Directors of Yarpivo Plc. Member of the Company’s Board of Directors since 2005 Member of the Company’s Board of Directors since 2005 Owns no shares in the Company Owns no shares in the Company
INDEPENDENT DIRECTORS
Alexander Izosimov Alexander Ikonnikov Independent Director Independent Director Date of birth: 1964 Date of birth: 1971 Educational level: higher education Educational level: higher education Occupies positions in the following organisations: Occupies positions in the following organisations: General Director of Vympelcom OJSC General Director of Board Solutions CJSC General Director of Vostok-Zapad Telekom CJSC, Sakhalin- Member of the Board of Directors of Severo-Zapadny Telekom Mobile CJSC, Dal Telekom International CJSC. Telekom OJSC General Director of RTI Servis-Svyaz CJSC, Impuls-KB CJSC Chairman of the Board of Directors of the Association of Member of the Company’s Board of Directors since 2005 Independent Corporate Directors Owns no shares in the Company Member of the Board of Directors of Ruselprom OJSC Member of the Company’s Board of Directors since 2005 Owns no shares in the Company
46 Board of Directors
The Board of Directors provides general direction to the Company except for those questions which have been assigned to the competence of the General Shareholders Meeting. Baltika Breweries’ Board of Directors consists of 7 members, two of whom are independent directors.
Composition of the Board of Directors as elected at the Annual General Shareholders Meeting on March 30, 2005.
During 2005 the following changes were made to the composition of the Board of Directors of Baltika Breweries:
1. The following individuals who were members of the Board of Directors in 2004 were not re-elected to the Board of Directors of Baltika Breweries:
1. Taimuraz Kazbekovich Bolloev 2. Vladimir Alekseevich Mikheev 3. Vitaly Gennadievich Saveliev 4. Alan Holms
2. The following individuals joined the Board of Directors of Baltika Breweries in 2005:
1. Alexander Vadimovich Izosimov 2. Alexander Vyacheslavovich Ikonnikov 3.Thomas Kučinskas 4. John Nikolson
Criteria for determination of the amount of compensation (reimbursement of expenses) paid to members of the Board of Directors and Executive body of the Company .
In accordance with paragraph 2, article 64 of the law “On Joint Stock Companies,” the Annual Shareholders Meeting of March 30, 2005, established the upper limit of compensation which may be paid to the independent members of the Board of Direc- tors at $ 130,000. In accordance with paragraph 3, article 69 of the law “On Joint Stock Companies,” the rights and obligations of the Company President are governed by the said law, by the Company Articles of Association, and also by the contract concluded between the President and the Company. The amount of compensation paid for carrying out the duties of the Executive body, as well as the working conditions are determined by the labour contract signed between the President and the Company.
Executive
The Company Articles of Association provide for the creation of a collegial body of management called the “Management.” As of 2005, it had not been created.
The President is the sole executive body of the Company. Beginning in January 2005, Anton Olegovich Artemiev became Acting President based on a decision of the Board of Directors. In May 2005, he became President. The President directs the ongoing activities of the Company.
Anton Artemiev has also been elected to the Company’s Board of Directors.
47 Company Management
48 1 2 3 4 5 6 7
1. Oleg Burhanov Sales Vice-President Division ”East”
2. Alexander Dedegkaev Operations Vice-President
3. Daniil Briman HR and Administrative Vice-President
4. Anton Artemiev President of Baltika Breweries
5. Viktor Semak Sales Vice-President Division ”West”
6. Andrey Rukavishnikov Marketing Vice-President
7. Peter Chernyshov Finance and Economics Vice-President
49 Ekaterina Azimina Teimur Akhundov Boris Batashov Vladimir Bezugly Finance and Economics Core Brands Quality Director Security Director Director and Innovations Director
Dmitry Muzychenko Anton Rogachevsky Boris Rykunov Nadezhda Sirotkina Director for Marketing Legal Director Logistics Director HR Director Communications
DIRECTORS OF BREWERIES
Yury Chentyrev Igor Vasiliev Roman Firsanov St. Petersburg Brewery Director Rostov Brewery Director Tula Brewery Director
50 Igor Bogachenko Gennady Guschin Dmitry Kistev Ivan Kurdumov Administrative Procurement Director Export Sales Director Technical Director Director
Mervi Heinaro Elvira Chornaya Denis Sherstennikov German Epstein Corporate Affairs Director Sales Development Licence Brands IT Director Director and Non-Beer Director
Yury Makariev Alex Ilyin Samara Brewery Director Khabarovsk Brewery Director
51 Internal Auditing Committee
The Internal Auditing Committee was elected at the Annual General Shareholders Meeting on March 30, 2005.
Composition of the Internal Auditing Committee:
Name /date of birth/ education Positions occupied on the date of election
Sergey Shcherbakov Director of the Commercial HQ for the Northwest Date of birth: 1959 Region, Industrial-Construction Bank OJSC Higher education, citizen of Russia (St. Petersburg)
Sergey Ivanchenko Finance Manager, Baltic Beverages Holding AB Date of birth: 1977 Educational level: higher education Citizenship: Russian Federation
Charles Eriksson Finance Director, Baltic Beverages Holding AB Date of birth: 1948 Educational level: higher education Citizenship: Sweden
A description of the main risk factors and risk management
During 2005, the general macroeconomic situation in Russia continued on its path towards steady propitious change. The stability of the economic system, a reasonable monetary and financial policy and reform of the taxation system in the country all enable one to say that the money investors put into the Company is becoming less exposed to the risk of unpredictable change arising from state regulations governing private business activity.
1. Financial risk
During 2005, the general economic situation in Russia continued to encourage a decline in such financial risks as interest rates on ruble borrowings, devaluation of the ruble to the dollar and inflation.
The Company pays constant attention to managing financial risk. Currency risk is one of the essential risks in its business. Most of the Company’s sales are in Russian rubles. At the same time the prices for a significant part of the raw ingredients and materials which the Company uses are quoted in foreign currency. The basic production equipment of the enterprise, as in the majority of food-industry enterprises of Russia, is imported. Advertising services in Russia are also traditionally quoted in foreign currency.
The Company applies considerable effort to reducing this risk. It systematically invests in ways that enable it to reduce its ex- penses, which in turn leads to a reduction in expenses borne in foreign currency. The Company has set for itself the important task of steadily growing export volumes, which leads to growing earnings denominated in foreign currency. Moreover, the Com- pany insures itself against currency risk by hedging with the help of financial instruments and by actively managing the structure of its balance sheet in terms of currencies.
When looking for borrowed funds, and also when investing its free cash, Baltika diversifies its credit and interest risks, seeks flexible credit terms and uses credit lines which allow it to choose the currency and repayment date of each separate borrowing. It combines in its credit portfolio both fixed and floating interest rates.
52 2. Risks related to the industrial sector and to the country
The main risk factors which can have a negative influence on the brewing industry are:
n Tougher government policies towards the industry as expressed in tax policy, changes in legislation, etc. Changes in legislation resulting in limitations on beer advertising in the mass media, the prohibition of beer consumption in public places, and a rise in excise tax on beer all exert a negative influence on the rate of growth of the brewing industry; n Growth in the market of substitute products such as low-alcohol cocktails and wine; n Consumption levels approach their ceiling, leading to a slowdown in the market’s rate of growth. One may speak of our approaching the average European levels of beer consumption in major cities, where most beer produced in Russia is consumed; n An increase in the cost of energy and railway freight charges; n A rise in the cost of raw ingredients used in brewing; n An increase in the competitive fight on the market as a whole and in its separate segments.
The Company undertakes a whole range of measures to strengthen its position in the industry and also to reduce the impact of risk related to the given industrial sector. The following measures deserve special mention: improving the system of cor- porate governance and integration; improving profitability and reducing production expenses; implementing a new marketing strategy; developing and bringing to market new product varieties; developing the distribution system, active advertising support for the brands; further extending the geographic scope of sales. In 2005, Baltika began preparing for its merger with the companies Pikra, Vena and Yarpivo, which will result in the creation of a unified company which enjoys significant synergies in production, management and sales. This will essentially reduce both industrial sector and operational risks.
3. Оperational risk
Risk related to the Company’s operations is covered by the existing procedures for documentation flow and financial proce- dures. These are periodically updated in order to reflect changes occurring since they were first approved.
The processes for risk management put in place by the Company ensure regular monitoring of existing risks to Baltika business, forecasting potential risks and adopting decisions aimed at enhancing the detection of risks.
Other information required by the Company Charter or other internal document of the Company
There is no other information which should be included in the annual report on the Company’s business activities due to requirements of the Company Charter or other internal documents.
53 List of transactions completed by the Company
Major transactions During 2005, Baltika Breweries concluded no major transactions.
Interested party transactions During the course of 2005 Baltika Breweries concluded the following interested party transactions:
№ Parties to Subject of Value of Information about the pt the Agreement the Agreement the Agreement person (persons) having an interest in the transaction
1. Baltika Breweries as Purchase of simple bills 120,000,000 rubles Shareholder Baltic Beverages the “Buyer” and VENA JSC of exchange issued Holding AB, as the “Seller” by Avangard Bank Member of the Board of Direc- tors C. Ramm-Schmidt
2. Baltika Breweries as the Safeguarding equipment of VENA JSC Up to 127,000,000 Shareholder Baltic Beverages “Guardian” and VENA JSC as for summer cafes and rendering as- rubles including VAT Holding AB, the “Depositor” sociated services Member of the Board of Direc- tors C. Ramm-Schmidt
3. VENA JSC as the “Borrower” Frame agreement on providing an Monthly interest per Shareholder Baltic Beverages and Baltika Breweries as interest-bearing loan or loans in RF the formula: Citibank Holding AB, the “Creditor” rubles rate for loan to borrow- Member of the Board of Direc- ers like Baltika + 0.5%. tors C. Ramm-Schmidt
4. VENA JSC as the “Client” According to the Agreement, the The amount of the Shareholder Baltic Beverages and Baltika Breweries as the Agent acts on behalf of the Client in commissions will not Holding AB, Member of the “Agent” his own name but for the account exceed 122 million Board of Directors C. Ramm- of the Client and for compensation rubles, including VAT Schmidt specified in the Agreement to conclude supply agreements for delivery of the Client’s product within the Russian Federation. For purposes of executing such supply agreements, the Agent will transfer to counterparties other property as well, including products used for promotional activities.
5. VENA JSC as the “Customer” Arranging transportation of freight Not more than Shareholder Baltic Beverages and Baltika Breweries as the by railway transport belonging to the 120 million rubles Holding AB, Member of the “Forwarder” Shipper Board of Directors C. Ramm- Schmidt
6. Baltika Breweries as the Agreement on commission for the The amount of broker- Shareholder Baltic Bever- “Agent” and Pikra OJSC as the Agent’s arranging export shipments of age fees cannot exceed ages Holding AB, Member “Client” products produced by the Client 45 million rubles of the Board of Directors A.O. Artemiev
7. Baltika Breweries as the “Con- Processing of raw materials received Up to 45 million rubles Shareholder Baltic Bever- tractor” and Pikra OJSC as the from the Client ages Holding AB, Member “Customer” of the Board of Directors A.O. Artemiev
8. Pikra OJSC as the “Lessor” and Rental of 2 rooms in an office 244,598.40 rubles Shareholder Baltic Bever- Baltika Breweries as the ages Holding AB, Member “Lessee” of the Board of Directors A.O. Artemiev
9. Baltika Breweries as the Providing up to 45 million rubles as Interest on the loan Shareholder Baltic Bever- “Lender” and Pikra OJSC as the a loan on terms of repayment with is set at the rate for ages Holding AB, Member “Borrower” interest rubles proposed by the of the Board of Directors leading banks of Russia A.O. Artemiev to similar lenders for one month plus two percentage points
All of the aforementioned transactions were approved by the Board of Directors of Baltika Breweries.
54 Disclosure of information
The Company holds to the principles of transparency and openness with respect to information.
The Company satisfies the requirements with respect to disclosure of information as set by the Federal Service for the Financial Markets. The Company’s information policy ensures free and unhindered access to information about the Company. Official information about the Company’s business is published in the newspaper Izvestiya. This information is also published in the news agencies АК&M and Interfax. Complete information about the Company’s activities is disclosed on the Company’s official internet site www.baltika.ru Each quarter the Company publishes its financial reports in accordance with international accounting standards. The Planned Merger
The principles of the planned expansion of Baltika through its merger with the brewery companies Pikra OJSC, Vena JSC and Yarpivo Plc.
On September 8, 2005 the Company’s Board of Directors announced the principles of the planned expansion of Baltika through its merger with the brewery companies Pikra OJSC, Vena JSC and Yarpivo Plc. The objective of the proposed merger of these companies into Baltika is the creation of a strong integrated organization called “Baltika” in the interests of all shareholders.
BASIS AND PROSPECTS
In 2005, Baltika established close cooperation with the brewery companies Pikra, Vena and Yarpivo which entailed improve- ment to the working methods, strengthening contact with clients and increasing profitability at Baltika. The objective was to help turn Baltika into the largest and most efficient enterprise in the Russian consumer goods sector.
The proposed merger should be the next natural step in the Company’s development and will ensure that Baltika occupies an advantageous position going forward from the success that has been achieved.
ADVANTAGES OF MERGING THE COMPANIES
n Economies of scale, i.e. a larger company will be able to purchase more cheaply its raw ingredients, materials, advetising time in the media, etc. In a large company, expenses per unit of production are lower and so the cost of goods is lower; n Substantial savings in transportation expenses, since one variety of beer can be brewed at a number of different plants, thereby cutting the distance for delivery to the consumer; n On the whole, a unified company with a unified portfolio of brands and unified distribution can better serve its con- sumers and customers; n Strong management team.
Fair conditions for all shareholders
Baltika intends to make sure that the merger is conducted on terms that are fair to all shareholders of all the companies taking part in the process.
Alternatives for shareholders of Baltika Breweries
All Baltika shareholders can keep their shares in the Company, which, following the merger, will be substantially bigger, stron- ger and more efficient. Alternatively, the Board of Directors of Baltika plans to offer shareholders the possibility of selling their shares at a price which reflects the value of Baltika at the time of the merger.
Long-term commitment of BBH to the Russian market and to Baltika Breweries
The Board of Directors of BBH has confirmed to the Board of Directors of Baltika Breweries that the holding company intends to exchange its shares in Pikra, Vena and Yarpivo for shares in Baltika. In this regard, Baltika will not be obliged to pay out cash for the shares in Pikra, Vena and Yarpivo that it purchases from BBH. This demonstrates the long-term commitment of BBH to the further development of Baltika and to the Russian market, and it also guaranties that whatever happens in the merger, the amount of Baltika’s liabilities will remain insignificant. 55 Securities The Company’s Charter Capital amounts to 130,703,680 rubles. Authorised and issued shares
Type of shares Number of shares Par value, rubles
1. Issued shares Ordinary shares 117,158,530 1 Preference shares, type А 13,545,150 1 2. Authorised shares Ordinary l shares 4,426,510 1 Preference shares, type А 440,450 1
The Company has made three emissions of ordinary shares and two emissions of preference shares, type А
№ Date of Code of Form of shares Number Par value Par value of a pt registration of registration of shares in the amount of the single share, the emission emission, pcs emission, rubles rubles
1 12.09.2001 1-05-00265-А Ordinary 107,087,200 107,087,200 1 2 12.09.2001 2-04-00265-А Preference l shares, type A 13,485,600 13,485,600 1 3 10.06.2002 1-06-00265-А Ordinary 1,803,660 1,803,660 1 4 10.06.2002 1-07-00265-А Ordinary 8,269,830 8,269,830 1 5 10.06.2002 2-05-00265-А Preference l shares, type A 59,550 59,550 1
Structure of Charter Capital Distribution of the Company`s charter capital as of 31.12.2005
7.43%
75.64% 6.23%
Individuals
10.70% Resident Companies
Baltic Beverages Holding AB
Non-resident Companies
56 SHARES
At the present time trading in Baltika Breweries shares is carried out both on the regular stock exchange and over the counter, in non-stock-exchange markets. The Company’s shares are listed on Russia’s two largest stock exchanges: RTS and MICEX.
Capitalisation
The Company’s market capitalisation in 2005 was in excess of $ 4 billion and grew by 100 per cent in the course of the year.
The growth of the shares’ market value is evidence of investors’ interest in the Company and its leadership position on the do- mestic beer market. This is confirmed also by numerous positive recommendations by analysts in investment companies.
Despite the relatively small amount of shares in free circulation, the Company shares are an attractive investment and have great potential for growth.
Information about the stock exchanges on which the Company’s shares are traded
Ticker symbol
Stock Exchanges Ordinary shares Preference shares
MICEX RU14BALT5003 RU14BALT4014 Quotation sheet А2 outside
RTS, classical market PKBA PKBAP Classical market Quotation sheet B outside
RTS, Stock exchange PKBAG outside PKBAGP outside
Trading in shares in 2005
The data shown below on the tables reflect statistics on trading in Company shares during 2005.
RTS: classical market
Price per share During 2005 On 30.12.2005 Value of trades Number U.S. dollars Minimum/ price of the U.S. dollars of trades maximum price last trade
Ordinary shares 16.4 / 33 31.2 3,354,475 143 Preference shares 13.2 / 30 25.8 566,740 36
MICEX
Price per share During 2005 On 30.12.2005 Value of trades Number rubles Minimum/ price of the rubles of trades maximum price last trade
Ordinary shares 450.1 / 1,000.0 918.0 153,044,798.59 4,280 Preference shares 325.0 / 900.0 745.0 1,371,112.04 86
57 Growth of the Price of Ordinary shares on the MICEX, rubles
Buy Sell
1100 1000 900 800 00 600 500 00 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 .11. .11. .11. .1. .1. .01. .01. .10. .10. .0. .0. .0. .0. .0. .0. .05. .05. .05. .06. .06. .09. .09. .0. .0. .08. .08. 15 11 01 1 9 18 1 1 5 1 1 19 0 6 0 0 8 08 05 06 08 09
Growth of the Price of Preference Shares on the MICEX, rubles
Buy Sell
100
1000
800
600
00
00
0 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1. 1. . . . . . . . . . . 5. 5. 5. 6. 6. 9. 9. 0. 0. . . 8. 8. 8. .1 .1 .1 .1 .1 .1 .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 18 1 10 08 1 1 15 6 0 01 1 6 1 16 01 0 9 0 0 0 9 8 08 08 08
Growth in the price of shares traded during 2005, %
3 months 6 months 9 months 12 months
Ordinary shares +18.2% +62.7% +84.1% +99.1% Preference shares +17% +42.8% +125% +122.8%
58 BONDS
Emission of bonds
During the autumn of 2004, the Company carried out the first emission of corporate bonds in its history.
The emission was arranged in such a way as to protect investors from the risks of changing interest rates in the period between the primary placement and the registration of the report on the results of the emission.
In November 2004, there was an auction at which the bonds were sold on the open market (secondary placement). The emis- sion was placed at an average-weighted interest income of 8.99 percent annually until the date of repayment. As a result of the method of placement, the best placement price was achieved (only enterprises in the gas and oil sector achieved lower rates of income at the time).
The first emission of bonds laid the foundations for the Company’s public history on the Russian securities market.
Basic parameters of the bond issue
Nominal value of the emission 1 billion rubles Date of the primary placement 26.10.2004 Date of the secondary placement 23.11.2004 Repayment date 20.11.2007 Method of placement Closed subscription Organisers Organiser – Raiffeisen Bank. Со-organisers: ABN AMRO Bank, Eurofinance-Mosnar Bank, Industrial-Construction Bank of St. Petersburg, Troika Dialog
Number of coupons 7 Interest rate of coupons, annual % Coupon 1 -4% p.a. Coupons 2 - 7 – 8.75% p.a. Periodicity of interest payments Twice a year Date of repayment 20.11.2007
Trading in Baltika bonds during 2005
The Company’s bonds are included in the Quotation List А2 of the MICEX. The securities code is RU000A0DEVY6.
Trading in Baltika bonds during 2005
Total turnover 1,814,190,825 rubles Total number of trades 529 Minimum price 99% of nominal value Maximum price 105.05 of nоminal value Maximum effective rate of return to repayment 9.36% Minimum effective rate of return to repayment 6.11%
59 Volume of trading (rubles) and rate of return of the primary emission of bonds on the MICEX
Volume of trading, rubles Rate of return, annual %
00 000 000 10 180 000 000 160 000 000 9 10 000 000 10 000 000 8 100 000 000 80 000 000 60 000 000 0 000 000 6 0 000 000 0 5 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 05 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1. 1. 1. . . . . . . . . . 5. 6. 6. 9. 9. 0. 0. . . 8. 8. 8. .1 .1 .1 .1 .0 .1 .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 11 11 19 09 01 5 1 1 06 15 18 1 5 0 09 9 0 6 09 0
Payment of interest on the first bond issue during 2005
Coupon number Rate of interest on the coupon, Date of payment annual %
Coupon 2 8.75 24.05.2005 Coupon 3 8.75 22.11.2005
Company policy on dividends
The Company’s policy on dividends is based on the principle of equitable distribution of profit among all its shareholders propor- tionate to the number of shares they own in each share category, with attention to the reasonable correlation between payment of dividends and retained earnings needed to implement the Company’s strategic plans for development.
Dividend payout, 2000-2004 (in accordance with Russian financial reporting standards)
millions of rubles
4500
4000
3500
3000
2500
2000
1500 46,2% 37,8% 1000 32,2% 35,4% 500 18,4% 0 2000 2001 2002 2003 2004
Net Profit Dividends
60 The Company strives to steadily raise the amount of money available to pay dividends to shareholders and observes the prin- ciple of prioritising the size of dividends paid to preference shares relative to the dividend paid on ordinary shares. The level of dividend paid on preference shares cannot be lower than as established in the Company Charter. Over recent years the amount of dividends paid out to shareholders has been growing constantly. When determining the method of paying dividends, the Company tries to ensure that the way which is most convenient for the shareholders is chosen.
Size of the dividend per ordinary share, rubles
Size of the dividend per preference share, rubles 0
18 16 1 1 10 8 6 0 000 001 00 00 00
Period for which Size of the dividend Size of the dividend Form of Growth in size of Growth in size dividends per ordinary share, per preference payment of dividend per of dividend per are paid rubles share, rubles the dividend ordinary share preference share ( % in relation to 2000) ( % in relation to 2000)
2000 * 3.16 4.11 cash 100 100 2001 * 8.5 11 cash 269 268 2002 9.32 12.12 cash 295 295 2003 11.64 15.13 cash 368 368 2004 13.94 18.12 cash 441 441
* The size of the dividend per share is entered with adjustment for the stock splits, which resulted in each ordinary and preference share having a par value of 80 rubles being converted into 80 shares of the same category (type) having a par value of 1 ruble each.
Report on the payment of declared (budgeted) dividends on the Company’s shares
The total amount of dividends available for payment in 2005 amounted to 1,878.6 million rubles, of which more than 95% was actually paid out to shareholders in the reporting year.
61 Information for shareholders and investors
62 Baltika Breweries 6 Verkhnii pereulok, d.3 194292, St. Petersburg, Russian Federation www.baltika.ru, for shareholders - http://invest.baltika.ru/en/ mail for shareholders: [email protected] Call Center for shareholders: (800) 333 33 03
Department of Corporate Relations with Shareholders
The Head of Department Alexei Elfimov Tel .: (812) 329 91 42, 329 91 09 e-mail: [email protected]
Contact Person for Enquiries: Shareholder and Investor Relations IR-Manager Marianna Volodina Tel.: (812) 329 40 93 e-mail: [email protected] [email protected]
Registrar Ediny Registrator Ltd Postal address of the Aero-Avkar branch, Ediny Registrator Ltd, which Belovodsky per., d. 6 keeps the Company’s shareholders Register : Moskovsky Prospekt, d. 212 194044, St. Petersburg, Russian Federation 196066 St. Petersburg, Russian Federation Tel.: (812) 591 78 38, fax (812) 591 78 39 Branch Telephone: (812) 373 54 24, fax: (812) 373 54 24 e-mail: [email protected] www.unireg.ru
Depository of Company bonds National Depository Center Sredny Kislovsky per., 1/13, bldg.4 Tel.: (495) 956 27 90 fax: (495) 956 27 92
Independent Auditors KPMG Ltd A & P Audit Ltd Moskovsky Prospekt, 19 Rizhsky Prospekt,26 198005 St. Petersburg, Russian Federation 198103 St. Petersburg Tel.: (812) 325 83 48 Tel.: (812) 251 69 23 e-mail: [email protected] e-mail: [email protected]
Official newspapers for publishing information Izvestiya newspaper Supplement to Vestnik, Federal Service for the Financial Markets of Russia
63 Company Products
Baltika Non-alcoholic № 0
This beer is especially prepared using a unique technology which ideally preserves the taste and aroma of lager beer. It has been produced since 2001. The ingredients are water, pale barley malt, maltose syrup and hops.
Alcohol content not more than 0.5 % by volume Extract in the primary wort 12.0% Energy value kcal per 100 g Nutritional value not more than 6.1 g carbohydrates per 100 g Sold in 0.5 and 0.33 litre glass bottles and 0.5 litre aluminium cans Shelf life 6 months
Awards: “Best Non-alcoholic Beer” 2002, 2003, 2004. Gold Medal of the Brewers’ International Tasting Competition “Beer-2004” and “Beer-2005”, Gold Medal of the Beer Auction 2005, “Platinum Osiris. Best Non-Alcoholic” 2005.
Baltika Svetloye № 2
Produced since September 2004. Thanks to an original recipe, it possesses an amazing fresh taste and goes down gently. The highest quality varieties of hops give this beer a special velvety taste and pleasant bitter notes. The ingredients are water, pale barley malt, select rice and hops.
Alcohol content not less than 4.7% by volume Extract of primary wort 11% Energy value 1.1 kcal per 100 g Nutritional value carbohydrates not more than 3.4 g per 100 g Sold in 0.5 litre glass bottles Shelf life 6 months
Awards: Gold medal of the 7th Professional Competition “Best Beer of the Year, 2004”, Gold Medal of the Brewers’ International Tasting Competition “Beer-2005”, Gold Medal of the Beer Auction 2005.
64 Baltika Classic № 3
Developed and introduced in 1992. A beer created for those who value classic taste. A lager beer with a mild taste of malt and aroma of hops. The ingredients are water, pale barley malt and hops. Alcohol content not less than 4.8% by volume Extract of primary wort 12.0% Energy value kcal per 100 g Nutritional value not more than 4.8 g carbohydrates per 100 g Sold in 0.5 liter glass bottles and 0.5 liter cans Shelf life: 6 months
Awards: “Best Beer of the Year” 1995, “Genuine People’s Beer” 1999, 2003 (Gold Medal), “100 Best Products of Russia” 1999, “Product of the Year” 1999, 2000, 2001, 2002, 2003, 2004, Crystal Crown and title “Best People’s Beer” 2002, “Best Lager Beer” 2002, 2003, “Best in Russia” 2003, Gold Medal of tasting competition 2003, Gold Medal “Brand of the Year /EFFIE 2004”, Gold Medal of the International Tasting Competition of Brewers and Beer-2005; Gold Medal of the 2005 Beer Auction, Platinum Osiris, in the category “Best Lager Beer of 2005 with 11-12% malt extract”.
Baltika Original № 4
Produced since 1992. Baltika Original № 4 is a dark beer with a harmonious flavor of bread and an aroma of caramel malt. The ingredients are water, light caramel and rye malt, maltose syrup and hops. Alcohol content at least 5.6% by volume Original gravity 15.0% Energy value 54 kcal per 100 g of beer Nutritional value not more than 4.8 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles Shelf life 6 months
Awards: “Best Original Beer” 1999 (Silver Medal), Gold Medal of Beer Auction 2002, “Best Beer of the Year” 2003 (Gold Medal), Gold Medal of tasting competition, 2003, Gold Medal of the 7th International “Best Beer of the Year 2004” Professional Competition, Gold Medal of the International Tasting Competition of Brewers and Beer-2005, Platinum Osiris, in the “Best Dark Beer of 2005”.
Baltika Golden № 5
Produced since 2002. This beer is made of high-quality light and caramel malt and the finest varieties of hops. The beer is a refined beverage for true connoisseurs. The ingredients are water, light barley malt and caramel malt, maltose syrup and hops.
Alcohol content at least 5.3% by volume Original gravity 12.0% Energy value .6 kcal per 100 g of beer Nutritional value not more than 3.0 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles and in 0.5 liter cans Shelf life 6 months
Awards: Gold Medal of tasting competition 2003, Gold Medal of tasting competition “Beer and Beverage Industry. Beer Auction”, Gold Medal of the 7th International Professional Competition “Best Beer of the Year 2004”, Gold Medal of the International Tasting Competition of Brewers and Beer-2005; Gold Medal of the 2005 Beer Auction. 65 Baltika Porter № 6
Baltika Porter is a traditional dark beer made on the basis of longstanding English recipes. Its rich flavor and mild wine aroma will please true beer connoisseurs. The ingredients are water, cara- mel malt and burnt roasted malt, maltose syrup and hops.
Alcohol content at least 7.0% by volume Original gravity 17.0% Energy value 60 kcal per 100 g of beer Nutritional value not more than 6.0 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles Shelf life 6 months
Awards: “Best Women’s Beer” 1995, Gold Medal of the exhibition Beer Auction-95 in St. Peters- burg, Best Dark Beer 1996, 1999, “Best Beer of the Year”, 2003, Gold Medal of tasting competi- tion 2003, Platinum Osiris. “Best Dark Beer” 2004,2005, Silver Medals of tasting competition “European Beer Star Awards – 2004, 2005”, Germany, Gold Medal of the International Tasting Competition of Brewers and Beer-2005; Grand Prix at the 2005 Beer Auction exhibition.
Baltika Export № 7
Production of this beer began in 1994 and the launch was timed to the Good Will Games in St. Petersburg. Made of select malt and a mixture of rare varieties of hops, this beer has a mild and full flavor. This beer is popular both in Russia and abroad. The ingredients are water, light barley malt and hops. Alcohol content at least 5.4% by volume Original gravity 12.5% Energy value kcal per 100 g of beer Nutritional value not more than 4.5 g of carbohydrates per 100 g of beer Sold in 0.5 and 0.33 liter glass bottles, 0.5 liter and 0.33 liter cans, 5 liter barrels and 30 liter kegs Shelf life 6 months Awards: “100 Best Products in Russia” 1999, “Best Classic Beer” 1999, (Gold Medal), Gold Medal of Beer Auction 2002, “Best Beer of the Year” 2003, “Best Beer in St. Petersburg” 2003, 2004, “Best Light Beer” 2004, “Platinum Osiris. Best Light Beer” 2004, “Gold Medal of the 4th Inter- national Brewers’ Exhibition “Beer and Beverage Parade” 2004, Gold Medal of the International Tasting Competition of Brewers and Beer-2005; Grand Prix at the 2005 Beer Auction.
Baltika Wheat Specialty Beer № 8
Produced since 2001. Unfiltered beer with a spicy aroma and rich foam. This specialty beer is based on a unique recipe that uses wheat malt. The ingredients are water, wheat malt, pilsner malt and caramel malt and hops. Alcohol content at least 5.0% by volume Original gravity 12.5% Energy value 5 kcal per 100 g of beer Nutritional value not more than 3.4 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles and 30 liter kegs Shelf life 6 months
Awards: “Best Unfiltered Beer” 2002, 2003, “Best Beer of the Year” 2003, Silver Medal of tasting competition 2003, Bronze Medal of “The Brewing Industry International Awards – 2004”, Lon- don, Gold Medal of the 7th International Brewers’ Competition “Best Beer of 2004”, Gold Medal of the International Tasting Competition of Brewers and Beer-2005; Grand Prix of the 2005 Beer Auction, Platinum Osiris, “Best Wheat Beer of 2005”. 66 Baltika Extra № 9
A lager beer brewed from select raw materials according to the latest technology: a unique combi- nation of beverage strength and easy drinking. The beer was developed and entered full produc- tion in 1998 and immediately won over loyal consumers. Ingredients: water, light barley malt, maltose syrup and hops. Alcohol content at least 8.0% by volume Original gravity 16.5% Energy value 62 kcal per 100 g of beer Nutritional value not more than 3.7 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 0.5 liter cans and 1 liter PET bottles Shelf life 6 months
Awards: “100 Best Products of Russia” 1999, Silver Osiris Prize of the professional beer competi- tion Osiris-2003 in the category of “Strong Beer”, Gold Medal of the 2005 Beer Auction.
Carlsberg
Carlsberg is one of the best known and popular brands of lager beer in the world. This beer has a malt taste and aroma with mild hops bitterness. It is prepared under license from Carlsberg Breweries A/S. Ingredients: water, light barley malt and hops. Alcohol content at least 5.0% by volume Original gravity 12.0% Energy value .5 kcal per 100 g of beer Nutritional value not more than 3.0 g of carbohydrates per 100 g of beer Sold in 0.5 liter and 0.33 liter glass bottles, 0.5 liter and 5 liter cans, multipacks and 30 liter kegs Shelf life 9 months for bottled beer and 6 months for beer in kegs Awards: Best licensed beer at the Grand Moscow Beer Festival 2004, Grand Prix of the 8th In- ternational Professional Beer Competition “Best Beer of 2004”, Silver Medal of the International Tasting Competition of Brewers and Beer-2005; Gold Medal of the 2005 Beer Auction.
Foster’s
A refreshing beer from Australia that was made for successful young people with a sense of humor and an active life philosophy. This lager beer has a clean malt taste and aroma with mild hops bitterness. Ingredients: water, barley light malt, maltose syrup and hops. Produced under license from The Foster’s European Partnership. Alcohol content at least 4.8% by volume Original gravity 11.0% Energy value 1 kcal per 100 g of beer Nutritional value not more than 3.3 g of carbohydrates per 100 g of beer Sold in 0.33 liter glass bottles, 0.5 liter cans, 6-packs and 30 liter kegs Shelf life 9 months for bottled beer and 6 months for beer in kegs Awards: Silver Medal of the 8th International Professional Beer Competition “Best Beer of the Year 2004”, Gold Medal of the International Tasting Competition of Brewers and Beer-2005; Gold Medal of the 2005 Beer Auction.
67 Arsenalnoye Classic
A lager beer with a harmonious taste and a pleasant hops aroma. Ingredients: water, light barley malt, maltose syrup and hops.
Alcohol content at least 4.5% by volume Original gravity 12.0% Energy value 5.6 kcal per 100 g of beer Nutritional value not more than 4.2 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 1.5 liter PET bottles and 30 liter and 50 liter kegs Shelf life 6 months
Arsenalnoye Traditional
This lager beer is produced according to a traditional recipe and has a malt taste and a fine hops bitterness. Ingredients: water, light barley malt and caramel malt, maltose syrup and hops. Alcohol content at least 5.1% by volume Original gravity 13.0% Energy value 9.2 kcal per 100 g of beer Nutritional value not more than 4.2 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 1 liter and 1.5 liter PET bottles and 30 liter and 50 liter kegs Shelf life 6 months
Awards: “Gold Osiris. Best Lager Beer” prize of the Professional Beer Competition Osiris-2004 and 2005, “Best Lager” of the 2005 public tasting competition.
Arsenalnoye Extra
A lager beer with a full malt flavor and a wine touch, harmonious hops bitterness and clearly expressed aroma. Ingredients: water, light barley malt, maltose syrup and hops. Alcohol content at least 7.0% by volume Original gravity 16.0% Energy value 60.5 kcal per 100 g of beer Nutritional value not more than 4.4 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 1 liter and 1.5 liter PET bottles Shelf life 6 months
Awards: “Gold Osiris. Best Extra Beer” prize of the Professional Beer Competition “Osiris-2003”.
68 Arsenalnoye Zakalennoye (NEW)
Ingredients: water, pale barley malt, maltose syrup, hops and extract of chili peppers.
Alcohol content not less than 7.0% by volume Energy value 60.5 kcal per 100 g of beer Nutritional value not more than 4.4 g of carbohydrates per 100 g of beer Shelf life 6 months from date of filling
Produced since October 2005 in 0.5 litre aluminum cans.
Medovoye Light Specialty Beer
A light lager beer brewed according to a special recipe with the addition of natural honey. It has a distinctive golden color and inimitable aroma. Ingredients: water, light barley malt and caramel malt, maltose syrup and hops.
Alcohol content at least 4.1% by volume Original gravity 11.0% Energy value kcal per 100 g of beer Nutritional value not more than 4.6 g of carbohydrates per 100 g of beer Sold in 1.5 liter PET bottles Shelf life 6 months
Medovoye Extra Specialty Beer
A special lager beer brewed from select malt with the addition of natural honey. Ingredients: water, light barley malt and caramel malt, maltose syrup, honey and hops.
Alcohol content at least 7.6% by volume Original gravity 16.0% Energy value 62 kcal per 100 g of beer Nutritional value not more than 6.6 g of carbohydrates per 100 g of beer Sold in 1.5 liter PET bottles Shelf life 6 months
69 Don Otbornoye Lager Beer (NEW)
Ingredients: water, pale barley malt, maltose syrup, barley and hops.
Alcohol content not less than 5.1% by volume Energy value 9.2 kcal per 100 g of beer Nutritional value not more than 4.6 g of carbohydrates per 100 g of beer Shelf life 6 months from day of filling
Produced since November 2005 in 0.5 litre glass bottles.
Don Svetloye Lager Beer (NEW)
Ingredients: water, pale barley malt, maltose syrup and hops.
Alcohol content not less than 4.4% by volume Energy value 9 kcal per 100 g of beer Nutritional value not more than 4.8 g of carbohydrates per 100 g of beer Shelf life 6 months from date of filling
Produced since June 2005 in 0.5 litre glass bottles and 1.5 litre PET bottles.
Don Stanichnoye
A refreshing lager beer that wonderfully quenches thirst. This beverage is brewed according to a special recipe and has a mild malt taste and hops bitterness. Ingredients: water, barley, light barley malt, maltose syrup and hops.
Alcohol content at least 4.0% by volume Original gravity 11.0% Energy value .8 kcal per 100 g of beer Nutritional value not more than 4.2 g of carbohydrates per 100 g of beer Sold in 1.5 liter PET bottles and 30 liter kegs Shelf life 6 months
Awards: Winner of the “100 Best Products of Russia” program 2004.
70 Don Southern
A lager beer with a pleasant hops bitterness and pronounced malt taste. Ingredients: water, bar- ley, light barley malt, maltose syrup and hops.
Alcohol content at least 6.0% by volume Original gravity 16.0% Energy value 62.5 kcal per 100 g of beer Nutritional value not more than 5.9 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 1 liter and 1.5 liter PET bottles Shelf life 6 months
Award: Winner of the programme “100 best products of Russia” 2004.
Don Classic
A lager beer with a unique taste, subtle aroma and pleasant hops bitterness. Ingredients: water, barley, light barley malt, maltose syrup and hops.
Alcohol content at least 4.5% by volume Original gravity 12.0% Energy value kcal per 100 g of beer Nutritional value not more than 4.5 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 1 liter and 1.5 liter PET bottles and 30 liter kegs Shelf life 6 months
Awards: Winner of programme “100 Best Products of Russia”, 2004.
Samara Classic
The production of Samara Classic began with the opening of the Baltika-Samara Brewery in Janu- ary of 2003. This lager beer has a pleasant malt taste and aroma. Ingredients: water, light barley malt, barley, maltose syrup and hops. Alcohol content at least 5.0% by volume Original gravity 12.0% Energy value 6.5 kcal per 100 g of beer Nutritional value not more than 3.8 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles and 1.5 liter PET bottles Shelf life 6 months
Awards: Finalist of All-Russian Competition “Brand of the Year/EFFIE 2003” (Bronze Prize) 2003.
71 Samara Lager
Production of Samara Lager was timed to coincide with the opening of the Baltika-Samara Brew- ery at the beginning of 2003. This lager beer has a light malt and hops aroma. Ingredients: water, light barley malt and caramel malt, barley and hops. Alcohol content at least 4.1% by volume Original gravity 11.0% Energy value .0 kcal per 100 g of beer Nutritional value not more than 4.1 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles and 1.5 liter PET bottles Shelf life 6 months
Awards: Finalist of All-Russian Competition “Brand of the Year/EFFIE 2003” (Bronze Prize) 2003.
DV Classic
DV Classic was first produced in the spring of 2003 together with the opening of the Baltika- Khabarovsk Brewery. This lager beer has a malt taste and aroma and mild hops bitterness. Ingre- dients: water, light barley malt and caramel malt, barley and hops. Alcohol content at least 5.1% by volume Original gravity 12.0% Energy value 6.0 kcal per 100 g of beer Nutritional value not more than 3.6 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 0.5 liter cans, 1 liter and 1.5 liter PET bottles and 30 liter kegs Shelf life 6 months
Awards: Grand Gold Medal of the Amur Trade and Industry Fair, 2003.
DV Lager
DV Lager has a malt taste and aroma and mild hops bitterness. Production of this beer began in 2003. Ingredients: water, light barley malt and caramel malt, barley and hops. Alcohol content at least 4.0% by volume Original gravity 11.0% Energy value .0 kcal per 100 g of beer Nutritional value not more than 4.4 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 0.5 liter cans, 1 liter and 1.5 liter PET bottles Shelf life 6 months
Awards: Grand Gold Medal of the International Exhibition/Fair “KhabProdMarket. Showcase-2003”, Grand Gold Medal of the Interregional Amur Trade&Industry Fair, 2004.
72 DV Extra
Production of this beer began in the spring of 2003 together with the start-up of the Baltika- Khabarovsk Brewery. This lager beer has a pleasant hops bitterness and aroma of malt and hops. Ingredients: water, light barley malt and caramel malt, barley, maltose syrup and hops.
Alcohol content at least 7.0% by volume Original gravity 15.0% Energy value 57.7 kcal per 100 g of beer Nutritional value not more than 3.9 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles, 0.5 liter cans, 1 liter and 1.5 liter PET bottles Shelf life 6 months
Leningradskoye Lager
This lager beer has a malt taste and aroma and a pleasant hops bitterness. Ingredients: water, light barley malt and caramel malt, barley and hops.
Alcohol content at least 4.0% by volume Original gravity 11.0% Energy value .0 kcal per 100 g of beer Nutritional value not more than 4.4 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles and 1.5 liter PET bottles Shelf life 6 months
Leningradskoye Extra (New Product)
Production of this new lager beer, Leningradskoye Extra, began in September of 2004. This full and rich flavor results from a very high density content of dry substances in the first wort: 18%. Ingredients: water, light barley malt, rice and the best varieties of hops.
Alcohol content at least 7.5% by volume Original gravity 18.0% Energy value 69.0 kcal per 100 g of beer Nutritional value not more than 5.8 g of carbohydrates per 100 g of beer Sold in 0.5 liter glass bottles and 1.5 liter PET bottles Shelf life 6 months
73 Zhigulevskoye
This beer is prepared according to a traditional recipe and it remains one of the most popular brand names in the country. Ingredients: water, light barley malt, rice and the best varieties of hops.
Alcohol content at least 4.0% by volume Original gravity 11.0% Energy value .0 kcal per 100 g of beer Nutritional value not more than 4.6 g of carbohydrates per 100 g of beer Sold in 1.5 liter PET bottles Shelf life 6 months
Khrustalnaya Water
Artesian environmentally sound water. Use of a unique treatment technology based on silver filters makes Khrustalnaya an absolutely clean drinking water ideal for daily consumption, since silver totally exterminates harmful bacteria and purifies water. Besides, Khrustalnaya features optimum content of useful minerals and salts such as potassium, calcium and magnesium. Produced either as carbonated or noncarbonated water according to the degree of carbon dioxide added.
Sold in 0.5 and 1.5 liter PET bottles Shelf life of noncarbonated water 6 months of carbonated water 12 months
Khrustalnaya-4 Water
Natural artesian drinking water that is purified using silver. Recommended for daily consumption. Produced either as carbonated or noncarbonated water according to the degree of carbon dioxide added.
Sold in 1.5 liter PET bottles Shelf life of noncarbonated water 6 months of carbonated water 12 months
Awards: Gold Medal of the “KhabProdMarket. Showcase-2003” International Exhibition/Fair in the “Drinking Water” category.
74 Ladoga Lemonade № 1 Soft Drink
Highly carbonated non-alcoholic vitamin-fortified clear beverage with a fine lemon taste and aroma. Made from natural aromatic substances, lemon extract and vitamin mixture. Perfectly quenches thirst and is rich in vitamins and minerals. Contains calcium, vitamin В6, folic acid and niacin.
Energy value kcal per 100 g of lemonade Nutritional value 9.6 g of carbohydrates per 100 g of lemonade Sold in glass 0.33 liter glass bottles and 1.5 liter PET bottles Shelf life 8 months
Ladoga Lemonade № 2 Citron Soft Drink
A highly carbonated invigorating soft drink containing guarana extract obtained from the seeds of South American liana, lemon oil and caffeine. The beverage has a taste and aroma of guarana with lemon.
Energy value 9 kcal per 100 g of lemonade Nutritional value 10.2 g of carbohydrates per 100 g of lemonade Sold in glass 0.33 liter glass bottles and 1.5 liter PET bottles Shelf life 8 months
Ladoga Citrus Mix № 3 Soft Drink
A highly carbonated non-alcoholic beverage with the aroma and taste of grapefruit with a domi- nating note of pink grapefruit, which contains up to 5% natural orange juice along with vitamins and minerals.
Energy value 9 kcal per 100 g of lemonade Nutritional value 12.5 g of carbohydrates per 100 g of lemonade Sold in 0.33 liter glass bottles and 1.5 liter PET bottles Shelf life 8 months
Awards: “Best Non-Alcoholic Beverage of the Year” 2003 (Gold Medal).
75 Useful Information
The official website of Baltika Breweries: www.baltika.ru Сall Center (812) 325 93 25
Addresses and telephone numbers
Baltika St. Petersburg (HQ, factory, sales subdivision) 6 Verkhny per., d. 3, 194292 St. Petersburg [email protected]
Group for wholesale trade in the regions (812) 329 91 38 Group for direct sales in St Petersburg (812) 329 91 37 Group for sales of draught beer (812) 329 91 29 Export to the CIS (812) 329 78 68 Exports to the Rest of the World (812) 326 62 67 Human Resources (812) 329 91 41 Department of Advertising Events (812) 326 66 36 Group for placing advertisements (812) 326 66 33 Public Relations Department (812) 326 66 37 Procurement of Raw Ingredients and Materials (812) 329 91 13 Purchasing of Packaging Materials (812) 326 91 54 Factory tours (812) 329 91 39
Baltika-Rostov (branch, sales subdivision) Ul. Dovatora, d. 146-A, 344090 Rostov-on-Don [email protected]
Reception (863) 2 505102 Department of sales to the regions (863) 2 505213 Direct Sales Group (863) 2 921929 Group for sales of draught beer (863) 2 505229 Factory tours (863) 2 505146
Baltika-Samara (branch, sales subdivision), Baltiisky proezd, d. 1 Kinelsky Village, Kinelsky Rayon , 446410 Samara Oblast [email protected]
Reception (846)2 764366 Department of sales to the regions (846)2 764335 Direct Sales Group (846)2 764384 Group for sales of draught beer (846)2 764332 Factory tours (846)2 764333
Baltika-Tula (branch, sales subdivision) Odoevskoye shosse, d. 85, 300036 Tula [email protected]
Reception (0872) 39 55 35 Department for sales in the West-Central region (0872) 32 99 22 Direct Sales Group (0872) 32 99 02 Group for sales of draught beer (0872) 39 51 51 Factory tours (0872) 39 75 36
76 Baltika-Khabarovsk (branch, sales subdivision) Voronezhskoye shosse, d. 142, Khabarovsk, 680042 Khabarovsk Krai [email protected]
Reception (4212) 41 15 51 Sales Department (4212) 41 20 61 Group for sales of draught beer (4212) 41 15 70 Factory tours (4212) 41 15 91
Company sales subdivisions and regional warehouses
Astrakhan (8512) 33 15 36 1 Proezd Rozhdestvenskogo, d. 8 [email protected] (8512) 33 09 78 Kulakovsky Promuzel Privolzhsky Rayon 414057 Astrakhan Oblast
Vologda (8172) 75 60 78 Ul. Vetoshkina, d. 76 [email protected] 160010 Vologda
Volgograd (8442) 79 89 56 Ul. Kaluzhskaya, 27 (8442) 79 89 57 400006 Volgograd
Voronezh (0832) 30 99 76 Per. Otlichnikov, d. 1 [email protected] 394028 Voronezh
Vladivostok (4232) 44 86 14 Ul. Snegovaya, 11 690000 Vladivostok
Ekaterinburg (3433) 69 39 26 Ul. Shoferov, d. 7-B [email protected] 620137 Yekaterinburg
Zheleznovodsk (87935) 410 45 Ul. Komsomolskaya, d. 13/1 (87935) 410 44 Lermontov 357340 Stavropol Krai
Kazan (8432) 78 85 79 Ul. Krutovskaya, d. 26 [email protected] Kazan, 420054 Tatarstan
Kopeisk (3513) 97 73 52 Ul. Lineinaya, d. 27 [email protected] Kopeisk, 456655 Chelyabinsk Oblast Krasnodar (8612) 53 81 77 Odesskaya ul., d. 41 [email protected] 350020 Krasnodar
Kursk (0712) 34 30 09 Ul. Respublikanskaya, d. 1-B 305038 Kursk
Lipetsk (0742) 34 76 61 Ul. Zadorozhnaya, d. 24 [email protected] (0742) 34 75 87 398650 Lipetsk
Lermontov (87935) 4 10 43 Ul. Komsomolskaya, d. 13/1 [email protected] (87935) 4 10 44 Lermontov 357340 Stavropol Krai Moscow (495) 775 47 81 Dmitrovskoye shosse, 116 [email protected] 127253 Moscow
Murmansk (8152) 43 20 78 Ul. Domostroitelnaya, d. 8 [email protected] (8152) 43 19 21 183018 Murmansk
Nizhny Novgorod (8312) 74 54 36 Ul. Zaitseva, d. 29 [email protected] (8312) 74 54 32 603158 Nizhny Novgorod
Omsk (3812) 28 42 41 Ul. Razdolnaya, d. 1 [email protected] 644105 Omsk
Perm (3422) 55 53 69 Ul. Penzenskaya, d 75 [email protected] (3422) 55 62 65 614113 Perm
Saratov (8452) 95 57 07 Krymsky proezd, “D” 39, [email protected] (8452) 98 03 51 410039 Saratov
Smolensk (4812) 31 34 15 Ul. Industrialnaya, d. 9-A [email protected] (4812) 31 34 20 214031 Smolensk
Tyumen (3452) 48 64 48 Ul. Energetikov, d. 55 [email protected] (3452) 48 64 49 625061 Tyumen
Ufa (3472) 67 22 44 Ul. Gvardeiskaya, d. 39A [email protected] (3472) 67 22 11 Ufa, 450069 Bashkortostan
Yaroslavl (4852) 21 97 36 Ul. Magistralnaya, d. 14 [email protected] (4852) 21 53 85 150049 Yaroslavl
Irkutsk (3952) 25 81 40 Ul. Traktovaya, d. 1-3 (3952) 25 81 43 664020 Irkutsk
Kemerovo (3842) 37 99 76 Ul. Tukhachevskogo, 22b, office 411, 650036 Kemerovo
Krasnoyarsk (3912) 61 63 10 Ul. 60 Let Oktyabrya, 90 A (3912) 61 49 02 660079 Krasnoyarsk
Novosibirsk (3832) 41 88 64 Ul. 2 Stantsionnaya, d. 34 A 630041 Novosibirsk
Baltika Breweries Representative Offices
Company represen- (371) 737 46 22 Republic of Latvia, LV-1012, [email protected] tation in the Fax: (371) 737 45 14 Riga, Brivibas str., 144 Republic of Latvia
Company representation (86 10) 65 12 97 28 Suite 15-B, CITIC Building, [email protected] in the PRC Fax: (86 10) 65 12 97 29 19 Jianguomenwai Avenue, Baltika Breweries Beijing Beijing, 100004, People’s Representative Office Republic of China
78 Subsidiaries of Baltika Breweries
Baltika-Moskva, Ltd (495) 483 23 17 Dmitrovskoye shosse, 116, [email protected] room 1, 127253 Moscow
Terminal Podolsk Ltd (495) 580 57 39 Proezd Neftebazovsky, d. 8 [email protected] Podolsk Moscow Oblast
Baltika Deutschland (49) 40 72 81 39 28 HRB 84972 Glockengiesser- [email protected] GmbH Fax: (49) 40 73 09 38 03 wall, 26 20095 Hamburg, Germany
Baltika-Ukraina Ltd (380 44) 494 18 42, Ul.Krasnoznamennaya, [email protected] (380 44) 494 18 41 d.94/96 – office 4 Fax: (380 44) 494 18 40 03026 Kiev Ukraine
Baltika-Almaty Ltd (3272) 58 59 41 Legal address: Ul. Jandosova, [email protected] (3272) 58 59 42 96, Almaty Tel./Fax: (3272) 66 40 48 050042 Kazakhstan Physical location: Pr. Abaya, 153 – office 24 Almaty, 050009 Kazakhstan
ICS “BALTIKA” SRL (373 22) 23 84 60 Ul. Mitgropolita G. Benu- [email protected] Fax: (373 22) 23 81 68 lescu-Bodoni, 57/1, office 412 Kishinev MD 2005 Moldova
Baltika Ltd (996 312) 69 23 21 Business Center - Bishkek [email protected] (996 312) 69 23 68 Tower, 8 Mikrorayon, d. 28 A Bishkek, Kirghiz Republic
Baltika-Bel Ltd Tel.: (375 17) 289 54 69 Ul. Storozhevskaya, d. 15, [email protected] Fax: (375 17) 209 73 24 office 322, 220002 Minsk Authors
Project Manager Marianna Volodina, Sergey Kalinchuk Design