RIMI BALTIC STRENGTHENING COMPETITIVENESS

CMD 2018 IMPROVING CUSTOMER SATISFACTION INDEX AND INCREASING COMPETITOR GAP

RIMI TOTAL

ESTONIA LATVIA CSI

74.0 CSI CSI CSI (+0.6) 71.2 73.0 79.1 (-0.2) (+0.2) (+1.8)

GAP +3.4 (+0.4) GAP +0.7 (+0.4) GAP +5.2 (-0.5) GAP +4.7 (+1.5)

All markets improving when adjusting for the data collection method in (+0.8)

() Numbers within brackets shows development for comparable stores from 2017 THE MARKET CONTINUES TO BE COMPETITIVE

• Continued good profitability Starting point • OBS fully launched in Estonia, 50% completed in Latvia • Focus on organic growth in Lithuania (after IKI acquisition was blocked)

• RIMI has very strong brand position in metropolitan areas • Fierce price competition and aggressive promotions continue Competitive landscape • E-commerce is growing in metropolitan areas • is expanding into Estonia and Latvia

• Price is #1, but sustainability, “healthy lifestyle“ and digital are growing in importance Key market characteristics • Market regulations are on the increase • Salary inflation is high

* OBS – One Brand Strategy 3 MARKET SHARE SLIGHTLY LOWER DUE TO OBS LAUNCH AND SLOW STORE EXPANSION…

Estonia Latvia Lithuania 2 431 MEUR 2 707 MEUR 4 295 MEUR

Other (0.0pp) Coop (+1.0pp) Other (-1.2pp) Rimi (-0.2pp) Other (-1.4pp) 18% 23% 23% 28% 25% Maxima (-1.5pp) 36% Prisma (-0.6pp) 7% Elvi (-0.3pp) 5% Lidl (+3.8pp) 7% Mego (+0.1pp) 6% 16% 19% Maxima (0.0pp) 7% 11% 27% 10% 15% Rimi (-1.1pp) 17% Top (+1.8pp) Rimi (-0.4pp) Maxima (-0.2pp) IKI (-0.6pp) Selver (+0.7pp) Norfa (+0.1pp)

Market shares, Estonia 2017 (vs 2016) Market shares, Latvia 2017 (vs 2016) Market shares, Lithuania 2017 (vs 2016)

*OBS – One Brand Strategy **SOURCE: government statistics, company annual reports & information in mass media ... IMPACTING SALES TREND IN 2018

7,0%

6,0% Market share affected by… 5,0% OBS* Estonia completed 4,0% Inflation OBS Latvia completed by Q2 2019 Food Too slow expansion, more a timing issue 3,0% Market Two large Hypermarkets closed during one year 2,0% as shopping center is being totally rebuilt. 1,0% Rimi sales Sales of Private label at lower value per Rimi LFL comparable item 0,0% Q3 Q4 Q1 Q2 Q3 2017 2018

* OBS – One Brand Strategy OBS HAS DELIVERED ON TARGET IN ESTONIA…

Status

Retail Sales  Positive trend, however somewhat behind assumptions

Margin %  Margin % higher than assumed

Shrink %  Shrink % better than assumed

Store wages & salaries %  Store wages higher than projected, positive trendline

Other store expenses %  Lower than assumed

Store Contribution MEUR  According to target ..AND WE ARE NOW LAUNCHING OBS IN LATVIA

- SLIGHTLY MORE CHALLENGING AS SUPERNETTO* HAS A STRONGER BRAND & LOW PRICE IMAGE

December Beginning of second January May phase of OBS Baseline: 44 hard Additional two (19 stores outside Riga in pilot stores 7 months) discount stores July Beginning of first December phase of OBS project July Four pilot stores (17 Riga stores in 6 One Rimi converted months) brand in Latvia

2017 2018 2019

OBS – One Brand Strategy *Supernetto=Rimi Baltic’s discount stores in Latvia WE ARE ACCELERATING ORGANIC GROWTH IN LITHUANIA…

“Growth 100” has been launched – target to operate a store network of 100 RIMI branded stores by 2023 with focus on

Continue upgrade of current 58 stores

Launch E-commerce …AND ARE WELL PREPARED FOR LIDL’S ENTRY INTO ESTONIA AND LATVIA

We expect Rimi Baltic Lidl to enter • We have a much stronger market position into Estonia in Estonia and especially in Latvia and Latvia in • We have a more proactive approach… 2020 at the • …planning a number of actions based on latest Lithuanian experience WE ARE LEVERA GING ICA’S EXPERIENCE TO DEVELOP 5 INITIATIVES ACROSS RIMI

CREATE GROWTH ENABLE GROWTH

1. Omnichannel 2. Personalized 3. Innovative and fast 4. Data & analytics 5. Digitalization of customer experience customer experience moving organisation driven business internal processes

• E-commerce is under • Only player in the Baltics • Planned implementation • Significant increase in • New shift planning tool development with one-to-one personal of agile and lean ways of analytics for promo and used in stores offers working in office, stores pricing • Completely rebuilt mobile • New handheld terminals and warehouses app and websites will be • First retailer to have mobile • Analytics used to available in stores launched in Q4 2018 payment in Lithuania improve personal offer algorithms, store assortments, etc.

Mission: Create the shopping experience of tomorrow CONTINUE TO STRENGTHEN COMPETITIVENESS AND DELIVER PROFITABLE LONG TERM GROWTH

Stable EBIT development with short term focus on: Accelerating sales in comparable stores Increase new store openings, especially in Lithuania Secure successful One Brand Strategy in Latvia Continue activities to counter Lidl entry into Estonia and Latvia Improve analytics in promo and pricing Launch first pilots in E-Commerce Progress DC project - intense construction phase