Vilkyskiu Pienine

Earnings Release • Feb 29, 2016

The results of 12 months of 2015

VILKYŠKIŲ PIENINĖ AB GROUP

About the Company

Vilkyškių pieninė AB, was established in 1993 m. On the 31th of December 2015 the Group had 975 employees The production of Diary products is the core of Group business Companys's share capital amounts to 3,5 million EUR Shares issued by the Company have been included into the Current Trade List of Vilnius Stock Exchange. The shares are listed in the Official List Standards: ISO 9001:2000 and ISO 22000:2000

Companies of the group

Vilkyškių pieninė AB

Parent Company Established in 1993 Main activities: The production of cheese, cream, whey

"Modest" AB

The subsidiary Company Established in 1992 Main activities: The production of melted smoked cheese, cheese with mould, Mozzarella, other kinds of cheese

Kelmės pieninė AB

The subsidiary Company Established in 1993 m. Main activities: The production of fresh dairy products.

"Pieno logistika" AB

The subsidiary Company Established in 2013 Main activities: Rent of buildings

Short history of the Company

1993	Company established
	1999-2000 the fully computerized and automated technological line of cheese production started to work in Vilkyškiai
2001	company acquired Taurage workshop form Mažeikiai subsidiary of Pieno Žvaigždės AB
2006	acquired "Modest" AB
2006	the Company have been included into the Current Trade List of Vilnius Stock Exchange
2007	implement development of main technological line of cheese production in Vilkyškiai
2008	acquired Kelmės pieninė
2008	installed the whey processing shop in Vilkyškiai
2008	These certificates of the standards ISO 9001:2000 and ISO 22000:2000 were presented to Vilkyškių pieninė AB
2011	the company began to participate in one of the largest food exhibitions: "Anuga" in Germany and "SIAL" in France
2011	brand of the company was changed. Vilvi trademark began to used in Export markets
2012	the second cheese plant development was implemented in Vilkyskiai.
2013	operations of liquid dairy products packaging line were started, that enables to package products in Tetra Top packaging.
	The building of milk truck washes, garage, warehouse, workshop with household and auxiliary facilities, administrative
	offices, engineering networks, parks and access was put into operation.
	Whey products plant extension was completed and that allowed to process up to 600 tons recycled product per day. At the
	end of the year, the whey ultrafiltration project was implemented. This is a new technology, that allows to breake the whey
	into its components.
	Verslo žinios in conjunction with the market research company "Nielsen" selected Vilkyškių pieninė AB / Vilkyškių brand as
	the most successful brand and gave a nomination of "Brand of the Year 2013".
2014	AB Vilkyškių pieninė completed investment project "Milk processing company modernization" , during this project company
	established new milk product tanks and a new cheese cutting equipment. For this project company recieved 0,11 million
	EUR from EU funds.
	Construction works of logistic warehouse started in Kelmes pienine factory .
	2005-2015 Company use the support of European Union and other fonds, involve in social projects

Significant events in 2015

• Vilkyškių pieninė has renewed its spoonable functional yogurts line which as initially introduced in 2012. Functional yogurts have been given a new name – YOGA – along with a refreshed packaging design. These alterations are intended to provide consumers with a better understanding of the benefits of these functional yogurts.
• The company has participated in an exhibition "Gulfood 2015" in Dubai.
• Vilkyškių pieninė has been granted the "Brand of the year 2015" award. "Brand of the year" contest is organized by the business magazine "Verslo žinios" and market research company "Nielsen". The prupose of the contest is to select the brand that has been performing most outstandingly during the period of one year. The contest aims at evaluating brands that perform in four industries: food and groceries, drinks, household and personal care products. The "Brand of the year" award has been granted to Vilkyškių pieninė for the second time (first award – in 2013).

In 2015, Vilkyškių Pieninė introduced a unique new dairy additive, viz. crispy roasted buckwheat, and was recognised by World Dairy Innovation Awards, which took place in Amsterdam as part of the ninth Global Dairy Congress, as one the best in the category "Best dairy ingredient", i.e. it became one of the three finalists. The judging panel considered as many as 220 entries from 30 countries in 18 categories. In each category the winner and three finalists have been announced.

For the purpose of entering Islamic markets and having our products appreciated by buyers, the production process of AB Vilkyškių Pieninė and AB Modest has been certified according to the requirements of the Halal rules. A Halal certificate was issued on 30 January 2015. Halal products are associated with product safety, healthiness, quality and ecology. Therefore, these products are frequently consumed by people of other confessions as well.

In summer 2015, AB Vilkyškių Pieninė carried out film project "Movies on your doorstep" and provided fellow-countrymen with the opportunity to watch quality non-commercial movies in three towns – Vilkyškiai, Tauragė and Kelmė. During the whole summer, residents Tauragė region had the opportunity to watch movies that won awards in international festivals and competitions. The repertoire included movies that the festival audience liked most of all.

We seek to be an active member of the community, to contribute to more active social life in our county and to strengthen mutual relationship and communication. There is a shortage of cultural and educational events in regions; therefore, we do our best to promote the dissemination of culture in our region, and first of all we take care of people living close to us.

Vilkyškių pieninė company has just expanded its range of drinking yoghurts with a desert selection of tine MURR products. The company has introduced MURR yoghurt cocktails in Lithuanian, Latvian, and Estonian market. The yoghurts come in both classic tastes, such as vanilla, banana, and a mix of a world-famous Pina Colada cocktail with yoghurt. These new products were developed for those who prefer light and low-calorie deserts, as well as those who like to enjoy an exquisitely sweet drink, or those wishing to try something different (not just a regular drinking yoghurt). The cocktails come in packaging of 2 sizes, 330 grams and 750 grams.

Vilkyškių pieninė company took yet another original step in order to present its yoghurts of IMUNIA series. This marks a new approach on improvement of immunity. These yoghurts offer exquisite taste, and natu-

ral ingredients used many years ago by village people and bringing health benefits, including ginger, lemon, honey, birch leaves, and linden blossoms. The company has just introduced 3 flavours, including yoghurt with honey and birch leaves extract, yoghurt with honey and linden blossom extract, and yoghurt with honey, lemon, and ginger. This yoghurt comes in handy 2-camera containers of 140 grams.

In October 2015, Vilkyškių pieninė AB for the third time took part in one of Europe's leading international food fairs, ANUGA, in Cologne, Germany. The spacious stand featured presentations of fresh products, cheese and ingredients (concentrate of whey proteins) used in the food industry.

• In November 2015, the trade fair Food Ingredients Beijing 2015 took place in China. Our participation in this trade fair coincided with an important event of Lithuania and China signing a protocol that permits the export of dairy products. With account of the needs of this market, appropriate ingredients (concentrate of whey proteins) were presented at the fair.

• In December 2015, with a view to finding new contacts for the whey products (concentrate and permeate of proteins) made by Vilkyškių pieninė AB, the company took part in the fair Food Ingredients Paris 2015 that brings together many representatives of food industry producers and wholesalers.

• The yogurt with Lithuanian forest berries and valuable extracts of remarkable flavour is another surprise from Vilkyškių pieninė. The distinctive features of these yogurts are the especially delicious jams from sweet and juicy raspberries, blackberries, a gem of Lithuanian forests, and elderberries, a new discovery for many. Adding a subtle flavour to the berries, the valuable extracts are widely used in natural medicine and are good for one's health. The company has presented three combinations of flavours: yogurt with raspberries and hawthorn extract, yogurt with blackberries and ginseng extract, and yogurt with elderberries and guarana extract. This yogurt is offered in convenient two-cup chamber packages of 140 g.

• Vilkyškių pieninė AB extended its cooperation with the Kaunas basketball club Žalgiris. Launched in 2009, the cooperation between the company and Lithuania's greatest title-winning club was prolonged for another two years.
• In December 2015, Kelmės pieninė AB prepared an investment project "Increasing the competitiveness of the company's productive activities" which was submitted to the National Paying Agency in order to obtain EU support. The requested amount of support constitutes EUR 4 mln. The project implementation period is 2016–2017. The key aim of the project is to increase the competitiveness of the company through the modernisation and enlargement of the production base and the introduction of innovative technologies and solutions.

Shareholders

Shareholder	Shares	Ownership interest
Gintaras Bertašius	6,067,206	51%
UAB Orion Asset Management, Multi Asset Selection Fund	2,035,729	17%
Other shareholders	3,840,065	32%
Capital in total:	11,943,000	100%

Other shareholders 32%

Gintaras Bertašius

51%

17% UAB Orion Asset Management, Multi Asset Selection Fund

Trading in the issuer's securities on the regulated markets

Main financial indicators

	2011 m.	2012 m.	2013 m.	2014 m.	2015 m.
Revenue (thousands EUR)	84,028	85,658	105,547	109,660	84,445
EBITDA (thousands EUR)	5,377	4,661	6,978	6,218	3,888
EBITDA margin (%)	6.4%	5.4%	6.6%	5.7%	4.6%
Net profit (thousands EUR)	3,082	2,223	3,768	3,207	1,175
Profit margin (%)	3.7%	2.6%	3.6%	2.9%	1.4%
Quantity of purchased milk, t	197,536	204,898	208,380	253,947	235,257
Profit (loss) per share (EUR)	0.26	0.19	0.32	0.27	0.10
Net financial debt (thousands EUR)	13,108	15,554	15,787	16,181	22,215

Net profit (thousands EUR) Profit (loss) per share (EUR)

Quantity of purchased milk, t Net financial debt (thousands EUR)

EBITDA margin (%) Profit margin (%)

Sales markets

(Thousands EUR)	2014		2015
Lithuania	34,574	32%	31,391	37%
European Union	40,932	37%	38,593	46%
Other countries	6,804	6%	14,461	17%
Russia	27,350	25%	0	0%
Total:	109,660		84,445

37 % Lithuania

Income from sold production

(Thousands EUR)	2014		2015
Fermented cheese	52,262	48%	40,244	48%
Cream	21,099	19%	16,944	20%
Whey products	6,563	6%	3,666	4%
Sour cream	4,230	4%	3,528	4%
Curd products	10,737	10%	9,506	11%
Jogurt	5,409	5%	4,786	6%
Other income	9,360	9%	5,770	7%
Total income:		109,660	84,445

48 % Fermented cheese

Vilkyškių pieninė AB

Vilkyškiai, Pagėgių sav. 277160980 tel. tel. +370 441 55330 faks. +370 441 55242 info@vilkyskiu.lt www.vilkyskiu.lt

Contacts Gintaras Bertašius Director General tel. +370 441 55330 gintaras@cheese.lt

Vilija Milaševičiutė Economics and Finance Director tel. +370 441 55102 vilija@cheese.lt