Altia is planning an initial public offering and listing on the Official List of Nasdaq Helsinki Press release 23 February 2018 at 8:00 am NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA, JAPAN, SOUTH AFRICA OR THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. Leading Nordic alcoholic beverage brand company Altia Plc (“Altia” or “the Company”) is planning to list its shares on the official list of Nasdaq Helsinki Ltd (“Nasdaq Helsinki”) (“Listing”). Altia operates in the Nordic countries, Estonia and Latvia, and it has production in Cognac, France. The Company produces, imports, markets, sells and distributes both own and partner brand beverages and exports alcoholic beverages to approximately 30 countries. The Company is the market leader in the overall Nordic spirits and wine markets measured in volume. Altia’s own core brands are Koskenkorva, Chill Out, Blossa, Larsen, O.P. Anderson, Renault, Xanté and Valhalla. Altia wants to advocate the development of a new, modern and responsible Nordic drinking culture. Continuous improvement and innovation are strongly present in the Company’s operations, and the Company’s systematic product development process has enabled the launch of numerous new products to the market. Finnish barley and local production are at the core of Altia’s business. The Company has created an operating model that is based on circular economy, for example at the Company’s Koskenkorva plant one-hundred per cent of the grain it utilises as a raw material is used by means of by-products and the Company’s own bioenergy plant. In 2017, Altia’s net sales were EUR 359 million, EBITDA margin was 11.2 per cent and comparable EBITDA margin was 11.8 per cent. Operating margin was 7.3 per cent and comparable operating margin 7.8 per cent. The Company had 703 employees at the end of 2017. The contemplated Listing is expected to consist of a share sale by the State of Finland, Altia’s sole shareholder, as well as an employee offering to the Company’s employees, in which the Company would issue new shares. The objective of the contemplated Listing is to enhance Altia’s possibilities to run its business, increase the transparency and recognition of the Company’s operations, and to provide the general public with an opportunity to invest in the Company. CEO Pekka Tennilä: “Altia is a brand house and a leading Nordic alcoholic beverage company in the wine and spirits markets. We have a stable market position in our core markets. We have developed our business operations systematically and in line with our strategy, and have turned the Company towards profitable growth. It is important for us to develop our Nordic quality brands and bring new, interesting product innovations to the market. If completed, the contemplated Listing would enable strategic flexibility. Moreover, it would mean more transparency and opportunities to develop the drinking culture in a responsible manner.” Chairman of the Board Sanna Suvanto-Harsaae: “Altia’s management has executed the Company’s strategy very successfully. The Company has been able to strengthen its market position in an extremely competitive industry and has improved its operational efficiency significantly. Even as a market leader the Company has succeeded in maintaining agility, flexibility and quality in its operations, and in launching consumer-friendly innovations to the market. We are very proud of Altia’s recent development. We believe the contemplated Listing would enable the Company’s competitiveness to improve even further.” Minister of Economic Affairs and responsible for the State's ownership steering, Mika Lintilä: “After a few decades, the State of Finland as an owner is once again able to offer a development track through a listing. The decision to further enable Altia’s growth and development represents actions of a responsible, contemporary owner. The entire Finnish general public has an opportunity to own a piece of a growth story based on domestic raw materials. I have full confidence in the Company’s management, strong financials and corporate governance in executing the Listing and operating as a public company.” Altia in brief Altia is a leading Nordic alcoholic beverage company in the wine and spirits markets. The Company’s product portfolio consists of iconic, beverage industry classics and new innovations. Altia’s Nordic core brands are Koskenkorva, Chill Out, Blossa, Larsen, O.P. Anderson, Renault, Xanté and Valhalla. The Company’s local heritage brands include Leijona and Jaloviina in Finland, Explorer and Grönstedts in Sweden, Brøndums and 1-Enkelt in Denmark and Saaremaa in Estonia. Key partner brands include, among others, Bollinger, Finlandia Vodka, Jack Daniel's, Codorníu, Pasqua, Nederburg, Tarapacá, Lindeman’s and Penfolds. Altia’s sales are balanced between wine and spirits product categories as well as the Company’s own and partner brands. The Company has the leading market position in wines and spirits in Finland and in spirits in Sweden, and it is also present in all its other core markets in the Nordics and Baltics. Altia Group comprises three segments: Finland & Exports, Scandinavia and Altia Industrial. Finland & Exports and Scandinavia segments comprise importing, sale and marketing of wine, spirits and other beverage product categories. The Finland & Exports segment operates in Finland, the Baltics and travel retail channels and conducts exports. The segment’s net sales in 2017 were EUR 134 million and comparable EBITDA margin was 14.6 per cent. The Scandinavia segment operates in Sweden, Norway and Denmark, and the segment’s net sales in 2017 were EUR 124 million and comparable EBITDA margin was 9.3 per cent. The Altia Industrial segment comprises the Company’s production of ethanol, starch and feed component, logistics, procurement and manufacturing operations as well as contract services. The segment’s net sales in 2017 were EUR 101 million and comparable EBITDA margin was 12.3 per cent. As a result of extensive streamlining, the Company has been able to create an integrated and efficient operating model. Altia’s head office is located in Helsinki, Finland. The Company has a distillery in Koskenkorva village in Finland, an aquavit distillery in Sundsvall, Sweden, alcohol beverage and technical ethanol plants in Rajamäki village in Finland and alcohol beverage plant in Tabasalu municipality in Estonia, as well as warehouse operations and offices in the Company’s home markets. Altia also has a cognac house with production, storage and cognac aging cellars in Cognac, France. The Company’s most significant customers and business partners are the Nordic state alcohol retail monopolies in Finland, Sweden and Norway (Alko, Systembolaget and Vinmonopolet), international alcoholic beverage companies, alcoholic beverage wholesalers, restaurants, travel retailers such as shipping and airline companies, grocery stores, and importers operating in export markets as well as industrial customers in Finland and Sweden. Altia’s strengths The Company has identified the following key strengths that the management believes to provide it with competitive advantage. Nordic market leader with iconic alcohol brands and a large wine portfolio Experience and scale that provide unique capacity to operate on the stable and profitable Nordic market Clear strategy that builds profitable growth Integrated operating model that creates economies of scale and synergies, and enables more sustainable production Experienced management team delivering on strategy effectively Strong profitability and stable cash flow, and an attractive dividend policy Altia’s strategy The purpose of the Company’s strategy and operations is developing a new, modern and responsible Nordic drinking culture, which the Company summarises in its purpose – “Let’s Drink Better”. The Company’s vision is to be an alcoholic beverage brand company that seeks growth through a strong understanding of consumer preferences and market development. The Company targets to be the key partner for the state retail monopolies and to create positive value development in all markets. Altia has an experienced management team executing its strategy which is focused on creating sustainable profitable growth. The growth strategy is based on growing the Nordic core brands, strengthening the strategic partnerships, channel expansion, executing a step change in wines, improving efficiency of the operations and active brand portfolio management. The Company’s innovation capabilities play a key role in growth. Altia pursues long-term improvement of the profitability through a continuous renewal of the Company’s selection of products and ways of working. Altia’s financial targets The Company’s Board of Directors has adopted the following financial targets: Profitable growth: Comparable EBITDA margin target to reach 15 per cent in the long-term Annual net sales growth of 2 per cent over time (CAGR) Dividend policy: Dividend pay-out ratio of 60 per cent or above of the result for the period The Company aims to pursue active dividend policy, and result of the period not considered necessary to grow and develop the Company will be distributed to the shareholders Capital structure: the Company’s target is to keep reported net debt in relation to comparable EBITDA below 2.5x in the long-term The capital structure should enable flexibility