Purcari Wineries Annual Report 2019 WorldReginfo - 3b4f9430-bef8-4c6f-b141-3c90f1e30e59 2 Purcari Annual Report 2019 Purcari Annual Report 2019 3 WorldReginfo - 3b4f9430-bef8-4c6f-b141-3c90f1e30e59 Disclaimer This presentation and its contents do not, and are not implied, with concerning the accuracy, completeness or results, performance, or achievements to be materially financial statements. The non-IFRS financial and operating intended to, constitute or form part of, and should not be reliability of such information, which is not intended to different from future results, performance or achievements measures used by the Company may differ from, and not construed as, constituting or forming part of, any actual be a complete statement or summary of the business expressed or implied by such forward-looking statements. be comparable to, similarly titled measures used by other offer or invitation to sell or issue, or any solicitation of any operations, financial standing, markets or developments The forward-looking statements included herein are companies. offer to purchase or subscribe for, any shares issued by referred to in this presentation. No reliance may be placed based on numerous assumptions and are intended only to the Company and its subsidiary undertakings (the Group) for any purpose whatsoever on the information contained illustrate hypothetical results under those assumptions. As The information presented herein is as of this date and the in any jurisdiction, or any inducement to enter into any in this presentation. Where this presentation quotes any a result of these risks, uncertainties, and assumptions, you Company undertakes no obligation to update or revise it investment activity whatsoever; nor shall this document information or statistics from any external source, it should should in particular not place reliance on these forward- to reflect events or circumstances that arise after the date or any part of it, or the fact of it being made available, not be interpreted that the Company has adopted or looking statements as a prediction of actual results, or a made or to reflect the occurrence of unanticipated events. form the basis of an offer to purchase or subscribe for endorsed such information or statistics as being accurate. promise or representation as to the past or future, nor as an shares issued by the Company, or be relied on in any way Neither the Company nor its directors, officers, employees indication, assurance or guarantee that the assumptions The distribution of this presentation in certain jurisdictions whatsoever. or agents accept any liability for any loss or damage on which such future projections, expectations, estimates may be restricted by law and persons who come into arising out of the use of any part of this material. or prospects have been prepared or the information possession of it are required to inform themselves about No part of this presentation, nor the fact of its distribution, or statements herein are accurate or complete. Past and to observe such restrictions and limitations. Neither shall form part of or be relied on in connection with any This presentation may contain statements that are not performance of the Group cannot be relied on as a guide the Company, nor its directors, officers, employees, contract for acquisition of or investment in any member historical facts and are “forward-looking statements”, to future performance. No statement in this presentation is affiliates, advisers, or agents accepts any liability to any of the Group, nor does it constitute a recommendation which include, without limitation, any statements preceded intended to be a profit forecast. This presentation does not person in relation to the distribution or possession of the regarding the securities issued by the Company, nor by, followed by or that include the words "may", "will", purport to contain all information that may be necessary presentation in or from any jurisdiction. does it purport to give legal, tax or financial advice. The "would", "should", "expect", "intend", "estimate", "forecast", in respect of the Company or its Group and in any event recipient must make its independent assessment and such "anticipate", "project", "believe", "seek", "plan", "predict", each person receiving this presentation needs to make an Investments in the Company’s shares are subject to investigations as it deems necessary. "continue", "commit", "undertake" and, in each case, similar independent assessment. certain risks. Any person considering an investment in the expressions or their negatives. These forward-looking Company’s shares should consult its own legal, accounting The information herein, which does not purport to be statements include all matters that are not historical facts. This presentation contains references to certain non- and tax advisors in order to make an independent comprehensive, has not been independently verified by Such forward-looking statements involve known and IFRS financial measures and operating measures. determination of the suitability and consequences of such or on behalf of the Group, nor does the Company or its unknown risks, uncertainties, and other important factors These supplemental measures should not be viewed in an investment. directors, officers, employees, affiliates, advisers or agents beyond the Company's control, and relate to events and isolation or as alternatives to measures of the Company’s accept any responsibility or liability whatsoever for / or depend on circumstances that may or may not occur financial condition, results of operations, or cash flows make any representation or warranty, either express or in the future, which could cause the Company's actual as presented in accordance with IFRS in its consolidated WorldReginfo - 3b4f9430-bef8-4c6f-b141-3c90f1e30e59 Purcari Annual Report 2019 7 Index 07 About Purcari Wineries 17 Message from CEO 18 Our strategy About Purcari 20 2019 Operational Results Wineries Management report 33 Board of directors and other officers 58 Annex 1 64 Annex 2 WorldReginfo - 3b4f9430-bef8-4c6f-b141-3c90f1e30e59 Purcari Wineries Plc Founded in 1827 by French colonists, Annual results 2019 Purcari Group is now... Awarded CEE winery of the year in 2015-2019 at Decanter London, “Wine Olympics” #1 Premium Wine brand in Romania, Moldova #1 Fastest growing large winery in Romania #1 Largest exporter of wine from Moldova 1,392 hectares of prime vineyards, top production assets Reputable shareholders alongside founder, Victor Bostan: Horizon Capital, Aberdeen Standard, East Capital, Fiera Capital, Franklin Templeton, Conseq, SEB, etc. WorldReginfo - 3b4f9430-bef8-4c6f-b141-3c90f1e30e59 Purcari Annual Report 2019 11 4 brands, covering a broad spectrum of segments Purcari wineries at a glance WorldReginfo - 3b4f9430-bef8-4c6f-b141-3c90f1e30e59 12 Purcari Annual Report 2019 Purcari Annual Report 2019 13 Purcari wineries at a glance Purcari wineries at a glance Sales ’10-19 Macro context Acquisitions RON Development Leading wine player in Romania and the CEE with a strong & expanding regional footprint Global economic activity Acquisition of 263 ha of Horizon Capital exit slowed. BREXIT, US-China vineyards and production 199 m through an ABB** Geographical breakdown of sales in value terms, 2019, % 2019 trade wars platform in Moldova Processed 35.000 tones 2018 168 m of grapes, historically the highest level. Strong economic Listing on Bucharest 2017 growth across CEE, 142 m Stock Exchange (BVB: especially Romania WINE) Profit sharing deal on 172ha Start of push into 2016 of vineyards in Romania 107 m brandy, sparkling Evolution of Purcari Group Purcari of Evolution (taken under operation)* 71 m Ukraine conflict, devalua- Relaunch of all 4 core 2014 tions across CIS; CIS share 60 m brands, marketing of sales down to ~10% shake-up 66 m 2nd Russian embargo, Strategy shift to CEE, 42% 23% 11% 6% 5% 3% 10% 2012 Group loses ~17% of 63 m away from Russia; business Romania defined as Romania Moldova Poland Asia CZ+SK Ukraine RoW 48 m key growth market 2010 45 m Horizon Capital invests into the company Located in a region with one of the richest wine heritages Global financial crisis Acquisition of Bardar, IFC invests into the Top 10 European countries by area under vines, kha 2008 1st brandy asset company 1st Russian embargo, 969 2006 Group loses ~80% of #1 CEE business 793 #4 Europe 705 Acquisition of Crama Focus on Moldovan 2004 Ceptura, 1st asset in exports to Russia Romania Acquisition of Purcari winery Foundation of Group 338 Acquisition of Bostavan, 1st asset in Moldova 147 192 106 103 92 69 66 Purcari grew business organically Note: Revenue for 2014 – 2019: IFRS financial statement issued in RON; 191 and via acquisitions, successfully Revenue for 2010 – 2013: IFRS financial statements issued in USD; adjusting to macro headwinds, *now 127ha, taken under joint operation (64ha) and direct lease (63ha) ES FR IT RO+MD PT GR DE RU HU BG refocusing away from reliance on ** On January 2020, Horizon Capital has returned as shareholders from their CIS to CEE latest fond, EEGF III WorldReginfo - 3b4f9430-bef8-4c6f-b141-3c90f1e30e59 14 Purcari Annual Report 2019 Purcari Annual Report 2019 15 Our Mission, Vision and Values Increasing number of medals won from year to year # of medals MISSION To bring joy in people’s lives, by offering them high quality, inspiring, ethical wines, and excellent value 56 for money. 44 VISION To become the indisputable wine champion in CEE, 23 25 acting as a consolidator of a fragmented industry. VALUES 15 Hungry We win in the marketplace because we want it more. 2015 2016 2017 2018 2019 Ethical Always do the right thing and the money will follow. Thrifty The only way we can offer better value for money. Decanter Concours Mondial Challenge de Bruxelles International du Vin Bordeaux Different We pride ourselves on taking a fresh look on things. Better We keep improving – both our wines IWSC Effervescents Mundus Vini and our people. du Monde Germany Unlike beer or spirits, wine production is more prone to quality fluctuations.