Vilkyskiu Pienine

Earnings Release • May 31, 2018

The results of Q1 2018

VILKYŠKIŲ PIENINĖ AB GROUP

Significant Events during Q1 2018

• The most significant event during Q1 2018 Vilkyškių pieninė AB Group was awarded "Lithuanian Export Prize 2017". The Company was recognized as the most contributing to the growth of the economy and exports.
• In Lithuanian competition "Most Popular Product 2017" Vilkyškių pieninė AB was awarded in three dairy product categories. Vilkyškių curd spread with greenery in curd spread category, Vilkyškių strawberry drink yogurt 750 g in drink yogurt category and Memel Blue cheese 100 g in cheese with mould category. Experts confirmed that products marked with label "Most Popular Product 2017" are absulutely safe and high quality. The prizes are awarded to products that have the highest sales in supermarkets Maxima, IKI, RIMI and Norfa.
• The Company traditionally took part in the international exhibition of food industry Gulfood 2018 in Dubai, The United Arab Emirates.

Vilkyškių pieninė AB introduced to market renewed product - "Vilkyškių" line curd in new packaging. "Vilkyškių" 500 g curd differentiates itself with very comfortable packaging. The packaging can be opened and closed multiple times therefore the product remains fresh longer even if it is not consumed from the first time. The new product will allow the Company to have better positions in curd category in local market.

GymON product line was complemented by 2 new products: 100% pure, highly soluble protein suitable for both sport and daily nutritional enrichment. This product will extend not only product consumption situations, target audiences, but also marketing channels. A new tropical flavor was added to the blue line (cocktails with flavors). According to 2018 tastes, this taste will be one of the most popular in both product updates and consumer choice.

Main Financial Indicators

(Thousands EUR)	Q1 2016	Q1 2017	Q1 2018
Revenue	16,714	27,818	20,975
EBITDA	14	1,964	1,278
EBITDA margin (%)	0.1%	7.1%	6.1%
Net profit (loss)	-565	1,042	124
Profit (loss) margin (%)	-3.4%	3.7%	0.6%
Quantity of purchased milk, t	55,884	56,684	60,074
Profit (loss) per share (EUR)	-0.05	0.09	0.01
Net financial debt	24,263	30,896	29,991

Quantity of purchased milk, t

Revenue (thousands EUR)

EBITDA (thousands EUR)

Net profit (thousands EUR)

Sales Revenue by Markets

(Thousands EUR)	Q1 2017		Q1 2018
Lithuania	6,299	23%	6,939	33%
European Union	16,933	61%	9,644	46%
Other countries	4,586	16%	4,392	21%
	27,818		20,975

Sales Revenue by Products

Consolidated statement of financial position

Thousand EUR	2018.03.31	2017.12.31
Assets Property, plant and equipment Intangible assets Long-term receivables	53,936 6,943 191	54,447 6,961 254
Non-current assets	61,070	61,662
Inventories Trade and other receivables Prepayments Cash and cash equivalents Current assets	14,021 7,853 676 103 22,653	9,656 8,491 1,005 317 19,469
Total assets	83,723	81,131
Equity Share capital Share premium Reserves Retained earnings Total equity attributable to the shareholders of the Company Non-controlling interest	3,463 3,301 5,067 22,527 34,358 51	3,463 3,301 5,105 22,367 34,236 51
Total equity	34,409	34,287
Liabilities Interest-bearing loans and lease liabilities Derivative financial instruments Government grants Deferred tax liabilities	19,224 - 5,545 1,486	20,123 - 5,686 1,528
Non-current liabilities	26,255	27,337
Interest-bearing loans and lease liabilities Current tax liabilities Derivative financial instruments Trade and other payables, including derivatives	10,767 104 120 12,068	7,974 121 118 11,294
Current liabilities Total liabilities Total equity and liabilities	23,059 49,314 83,723	19,507 46,844 81,131

Consolidated income statement

Thousand EUR	2018.01.01- 2018.03.31	2017.01.01- 2017.03.31
Revenue Cost of sales	20,975 -19,195	27,818 -24,929
Gross profit	1,780	2,889
Other operating income Distribution expenses Administrative expenses Other operating costs	76 -1,050 -479 -37	64 -917 -684 -61
Result from operating activities	290	1,291
Finance income Finance costs	1 -209	9 -111
Net finance expenses	-208	-102
Profit before income tax	82	1,189
Income tax expense	42	-147
Profit for the period	124	1,042
Attributable to: Shareholders of the Group	124	1,042
Non-controlling interest	-	-
Net profit (loss) for the year	124	1,042
Basic earnings per share (EUR)	0.01	0.09

Consolidated statement of cash flows

Thousand EUR	2018.01.01- 2018.03.31	2017.01.01- 2017.03.31
Cash flows from operating activities Profit for the year	124	1,042
Adjustments: Depreciation of property, plant and equipment	1,115	757
Amortization of intangible assets Amortization and write down of grants	20	21
Profit (loss) from disposal of property,	-147 12	-105 10
plant and equipment	-42	147
Income tax expense Interest expenses, net	208	102
	1,290	1,974
Change in inventories Change in long-term receivables	-4,365	2,737
Change in trade and other receivables and prepayments	63 951	55 -3,606
Change in trade and other payables	681	963
	-1,380 -126	2,123 -175
Paid interest Paid profit tax	-20	-
Other financial expenses	-	-18
Net cash from operating activities		1,930
Cash flows from investing activities Acquisition of plant and equipment Acquisition of intangible assets Proceeds from sale of plant and equipment Acquisition of the subsidiary's shares Government grants received Loans repaid Interest received	-1,526 -92 -2 11 - 6 - -	-2,498 -2 32 - - - -
Net cash flows used in investing activities	-77	-2,468
Cash flows from financing activities Loans received Repayment of borrowings Dividends paid	2,550 -1,161 -	1,985 -1,539 -
Net cash flows from financing activities	1,389	446
Increase (decrease) in cash and cash equivalents Cash and cash equivalents at 1 January	-214 317	-92 229
Cash and cash equivalents at 31 March	103	137

Additional information

About the Company

Vilkyškių pieninė AB was established in 1993 On the 31th of March 2018 the Group had 928 employees The production of Diary products is the core of Group business Companys's share capital amounts to 3.5 million Eur The Company's 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

Since 2018 production of dry products: whey and milk powder (in Taurage)

"Pieno logistika" AB

The subsidiary Company Established in 2013

Rental of buildings

Short history of the Company

Vilkyškių pieninė AB became winner in competition

"Most popular product 2017" "Lithuanian Export Prize 2017" was presented to Vilkyškių pieninė AB

The end of investment project for whey drying factory

to Vilkyškių pieninė AB Beginning of investment project for whey drying factory

Acquired "Pieno logistika" AB

"Vilvi" brand was launched in Export markets Company began to participate in "Anuga" and "SIAL" exhibitions

Acquired "Modest" AB Vilkyškių pieninė AB became the listed company

Certificate of the standard FSSC 22000 was presented

Vilkyškių pieninė AB has been declared as "The brand of the year"

Vilkyškių pieninė AB has been declared as "The brand of the year"

Start of active marketing activity

Certificates of the standards ISO 9001:2000 and ISO 22000:2005 were presented to Vilkyškių pieninė AB Acquired Kelmės pieninė AB

Export license to EU was granted

Company established

1993

2000

2006

2008

2010

2011

2013

2015

2016

2017

2018

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 AB Vilkyškių pieninė share price and OMX Vilnius indexes comparison 2017 April - 2018 March

OMX Vilnius 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