Vilkyskiu Pienine

Earnings Release • Nov 30, 2017

The results of 9 months of 2017

VILKYŠKIŲ PIENINĖ AB GROUP

Significant events in 9 months of 2017

• Since the beginning of the year Vilkyškių pieninė AB started export to the Chinese market. Mozzarella cheese, which is produced in the company, is the first cheese made in Lithuania and exported to China.
• Vilkyškių pieninė AB updated and expanded the range of products. The new curd spread with black pepper of "Vilkyškių" line and the new "Murr" line yoghurt drink of watermelon and mango - Arizona were introduced. Also the new yogurt of "Vilkyškių" line with blackberries and rasberry taste yogurt drink was introduced. Vilkyškių pieninė AB "Murr" slurry line added the new taste of maple syrup and "Vilkyškių" line added the new taste of blackcurrant. New "Murr" line yoghurt desserts were also introduced: it's the most favourite dessert tastes - bananas and especially recently discovered coconut water!
• Fresh products line of "Kelmė" was updated. This brand is for the purpose to compete on the the market of traditional fresh dairy products by offering high quality and best price for customers. The line is for Lithuanian and Latvian markets.
• New brand GymON protein cocktails for athletes. Whey Protein Concentrate is widely used in the sports nutrition industry. Three flavors of cocktails were introduced: vanilla, strawberry and chocolate. Cocktails are intended for people who seek to grow muscle mass, restore strength after exercise or control their weight. Own website www.gymON.eu has been created so customers can purchase the product directly from the producer - Vilkyškių pieninė AB. For sales in Western Europe, the site is designed not only in Lithuanian but also in English and German. GymOn communication projects (on-line marketing, events sponsorship, product sampling) have been started. The main purpose is to build brand popularity.
• From June, trade of GymON products by Amazon platform was started. The products are sold through the Fullfilled by Amazon (FBA) system, when customer service is provided by Amazon. The target Market - Germany.

Significant events in 9 months of 2017

Achievements

• In March, VILKYŠKIŲ curd spread with greenery has been announced to be the most popular product in curd spreads category in competition "Most Popular Product 2016". 32 suppliers and producers took place in the competition. Winners have been selected by evaluating highest sales during 2016. Most popular product had to meet the additional quality criteria. State Food and Veterinary Service together with State Consumer Rights Protection Authority monitored if nominated product had not gained any penalties for quality or safety during the last 24 months.
• On April 21, Vilkyškių pieninė AB has been declared as the Lithuanian investor of the year 2016. The title has been gained for investing in the development of the production base in Taurage, allocating 26 million eur to investments and creating new work places in region.

Exhibitions

• In February, the company traditionally participated in the international exhibition in Dubai, Gulfood 2017, in the United Arab Emirates. At the exhibition hosted meetings with current and future customers, several new contracts were signed.
• On April 6-9 "GymON" products were presented at the international sports exhibition in Germany, Frankfurt - FIBO.
• On May 17 19 Vilkyškių pieninė AB participated in the largest Asian food exhibition in Shanghai "SIAL China 2017"
• On June 25-27, New York Summer Fancy Food Show, the largest food industry exhibition in North America, was held in New York. During the exhibition, Vilkyškių pieninė AB introduced cheeses for the American market, had meetings with new possible customers.

Main financial indicators

	9 months of 2015	9 months of 2016	9 months of 2017
Revenue (thousands EUR)	60,080	64,402	87,075
EBITDA (thousands EUR)	2,697	4,533	9,488
EBITDA margin (%)	4.5%	7.0%	10.9%
Net profit (thousands EUR)	627	2,240	6,276
Profit margin (%)	1.0%	3.5%	7.2%
Quantity of purchased milk, t	171,179	181,131	188,764
Profit (loss) per share (EUR)	0.05	0.19	0.53
Net financial debt (thousands EUR)	22,898	29,003	29,167

Quantity of purchased milk, t Revenue (thousands EUR)

EBITDA (thousands EUR) Net profit (thousands EUR)

Sales markets

(Thousands EUR)	9 months of 2016		9 months of 2017
Lithuania	21,814	34%	18,731	21%
European Union	34,777	54%	51,997	60%
Other countries	7,811	12%	16,347	19%
Total:	64,402		87,075

Income from sold production

(Thousands EUR)	9 months of 2016		9 months of 2017
Fermented cheese	30,343	47%	38,519	44%
Cream	13,945	22%	29,394	34%
Whey products	3,449	5%	4,563	5%
Sour cream	2,135	3%	1,571	2%
Curd products	6,635	10%	6,097	7%
Yogurt	3,505	6%	3,096	3%	Curd products 7%
Butter	1,757	3%	1,447	2%	Other income 3 %
Other income	2,633	4%	2,388	3%
Total:	64,402			87,075	9 months of Sour cream 2 %

Consolidated statement of financial position

Thousand EUR
	30 09 2017	31 12 2016
Assets
Property, plant and equipment	52,642	49,065
Intangible assets	6,970	7,020
Long-term receivables	287	342
Non-current assets	59,899	56,427
Inventories	10,074	10,373
Trade and other receivables Prepayments	11,886 547	6,968 365
Cash and cash equivalents	111	229
Current assets	22,618	17,935
Total assets	82,517	74,362
Equity
Share capital	3,463	3,463
Share premium	3,301	3,301
Reserves	5,081	5,129
Retained earnings	21,926	16,977
Total equity attributable to the shareholders of the Company	33,771	28,870
Non-controlling interest	48	45
Total equity	33,819	28,915
Liabili ties
Interest-bearing loans and lease liabilities Derivative financial instruments	20,834 88	21,611
Government grants	2,672	154 2,942
Deferred tax liabilities	1,628	820
Non-current liabilities	25,222	25,527
Interest-bearing loans and lease liabilities	8,333	8,697
Current tax liabilities	-	71
Derivative financial instruments	88	83
Trade and other payables, including derivatives	15,055	11,069
Current liabilities	23,476	19,920
Total liabilities	48,698	45,447
Total equity and liabilities	82,517	74,362

Consolidated income statement

Thousand EUR	01.01.2017- 30.09.2017	01.01.2016- 30.09.2016	01.07.2017- 30.09.2017	01.07.2016- 30.09.2016
Revenue Cost of sales Gross profit	87,075 -71,901 15,174	64,402 -56,975 7,427	30,205 -23,037 7,168	26,845 -22,071 4,774
Other operating income Distribution expenses Administrative expenses Other operating costs	198 -3,437 -4,348 -111	190 -2,999 -1,999 -133	65 -1,499 -2,804 -35	60 -936 -794 -40
Result from operating activities	7,476	2,486	2,895	3,064
Finance income Finance costs	24 -417	6 -525	2 -122	1 -127
Net finance expenses	-393	-519	-120	-126
Profit before income tax	7,083	1,967	2,775	2,938
Income tax expense	-807	273	-317	-162
Profit for the period	6,276	2,240	2,458	2,776
Attributable to: Shareholders of the Group Non-controlling interest	6,273 3	2,239 1	2,456 2	2,775 1
Net profit (loss) for the year	6,276	2,240	2,458	2,776
Basic earnings per share (EUR)	0.53	0.19	0.21	0.23

Consolidated statement of cash flows

Thousand EUR	2017.01.01-	2016.01.01-
Cash flows from operating activities	2017.09.30	2016.09.30
Profit for the year	6,276	2,240
Adjustments:
Depreciation of property, plant and equipment	2,266	2,287
Amortization of intangible assets	61	59
Amortization and write down of grants Profit (loss) from disposal of property,	-315	-299
plant and equipment	-19	2
Income tax expense	807	-273
Interest expenses, net	393	517
	9,469	4,533
Change in inventories	299	3,553
Change in long-term receivables Change in trade and other receivables and	55	89
prepayments	-5,106	-1,741
Change in trade and other payables	3,730	14,395
	8,447	20,829
Paid interest	-563	-530
Paid profit tax	-69 -42	-8
Other financial expenses		-113--
Net cash from operating activities	7,773	20,178
Cash flows from investing activities
Acquisition of plant and equipment	-4,555	-26,690
Acquisition of intangible assets	-11	-49
Proceeds from sale of plant and equipment	67	1
Acquisition of the subsidiary's shares	-	-3
Loans granted Loans repaid	- -	- -
Interest received	-	-
Net cash flows used in investing activities	-4,499	-26,741
Cash flows from financing activities	2,146
Loans received Repayment of borrowings	-4,150	22,803 -16,052
Dividends paid	-1,433	-41
Government grants received	45	25
Net cash flows from financing activities	-3,392	6,735
Increase (decrease) in cash and cash equivalents	-118	172
Cash and cash equivalents at 1 January	229 111	154

Additional information

About the Company

Vilkyškių pieninė AB was established in 1993 On the 30th of September 2017 the Group had 925 employees The production of Diary products is the core of Group business Companys share capital amounts to 3.5 million Eur The Company issue is included in the Official List of AB NASDAQ OMX Vilnius. The ISIN code of the securities: LT0000127508, Ticker symbol: VLP1L. Standards: ISO 22000:2005 and FSSC 22000

Companies of the Group

Vilkyškių pieninė AB

Parent Company Established in 1993

The production of cheese, cream, whey "Modest" AB

The subsidiary Company Established in 1992

The production of melted smoked cheese, cheese with mould, mozzarella, other kinds of cheese

Kelmės pieninė AB

The subsidiary Company Established in 1993

The production of fresh dairy products

"Pieno logistika" AB

The subsidiary Company Established in 2013

Rental of buildings

Short history of the Company

Shareholders

Shareholder	Shares	Ownership interest
Gintaras Bertašius	6,067,206	51%
Multi Asset Selection Fund	1,765,459	15%
Other shareholders	4,110,335	34%
Capital in total:	11,943,000	100%

Other shareholders

34%

Gintaras Bertašius

51%

15% Multi Asset Selection Fund

vilkyškių pieninė ab share price variation and omx vilnius indexes comparing 2016 october - 2017 september

VLPIL

Vilkyškių pieninė AB

Vilkyškiai, Pagėgių sav. 277160980 tel. +370 441 55330 fax. +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