Romanian consumer goods market, 2006-2011

billion RON 2006 2007 2008 2009 2010 2011 % 11/06Turnover 14,6 19,9 26,2 28,9 29,8 31,4 116%

Net profit 0,37 0,38 0,23 0,10 0,19 0,05 -

# of stores 226 320 423 551 680 827 266%

# of employees 28.400 40.400 50.200 53.000 55.000 57.000 101%Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation

Turnover Net profit # of stores # of employees

15.000

30.000

45.000

60.000

2006 2007 2008 2009 2010 2011

225

450

675

900

226320

423551

680

827

0,1

0,2

0,3

0,4

2006 2007 2008 2009 2010 2011

8

16

24

32

14,6

19,9

26,228,9 29,8 31,4

bn. RON

billion RONbillion RON Turnover Net profit # of stores # of employees

1 Kaufland 5.586 168 71 10.500

2 Metro 4.963 95 32 6.000

3 Carrefour 4.031 134 25 6.950

4 Selgros 3.408 87 19 4.250

5 Real 3.009 (121) 25 5.780

6 Penny Market 1.750 5 128 2.500

7 Lidl 1.679 (283) 129 2.350

8 Auchan 1.578 (19) 9 3.300

9 Cora 1.378 40 8 3.670

10 Mega Image 1.221 13 105 4.300

11 Billa 1.128 1 61 2.750

12 Profi 934 13 108 2.500

13 Carrefour Market 522 1 45 1.400

14 Interex* 164 (70) 12 475

15 Dm Drogerie Markt 91 (18) 50 300

*Interex has exited the market on Nov. 15th 2012 *Interex has exited the market on Nov. 15th 2012 *Interex has exited the market on Nov. 15th 2012 *Interex has exited the market on Nov. 15th 2012 *Interex has exited the market on Nov. 15th 2012 *Interex has exited the market on Nov. 15th 2012

Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation Source: CMG Romania, Propaganda calculation

Others2,5%

Profi3,0%Billa

3,6%

Mega Image3,9%

Cora4,4%

Auchan5,0%

Lidl5,3%

Penny Market5,6%

Real9,6%

Selgros10,8%

Carrefour12,8%

Metro15,8%

Kaufland17,8%

Top 15 players on the market

31.12.2011

+430.000 m² of new stores in 3 years

square meters Dec 2008 Dec 2011 %Kaufland 213.000 359.800 69%

Carrefour 162.500 192.200 18%

Selgros 170.000 188.000 11%

Metro 163.000 180.000 10%

Real 138.500 177.800 28%

Lidl 77.000* 135.300 76%

Penny Market 63.000 106.000 68%

Auchan 63.000 96.200 53%

Mega Image 25.700 75.400 193%

*former retailer Plus, before the acquisition by Lidl *former retailer Plus, before the acquisition by Lidl *former retailer Plus, before the acquisition by Lidl *former retailer Plus, before the acquisition by Lidl

Source: Revista Piața, Propaganda calculation Source: Revista Piața, Propaganda calculation Source: Revista Piața, Propaganda calculation Source: Revista Piața, Propaganda calculation

December 2011 December 2008Growth

sale

s ar

ea

«HOT» SPOTS

Key cities/counties# of stores Dec 2008 Dec 2011 +Bucharest 167 552 385

Brașov 80 159 79

Constanța 50 113 63

Prahova 18 81 63

Argeș 34 83 49

Timiș 34 80 46

Cluj 60 105 45

Galați 23 68 45

Sibiu 20 61 41

Brăila 10 46 36

Source: Revista Piața Source: Revista Piața Source: Revista Piața Source: Revista Piața

4845

12

34

1359

13

Bucharest

2008500

13502011

ROMANIAN URBAN SHOPPER

33%

20% 31%

16%

P➤ first to test new products➤ prefers hyper & supermarkets➤ seeks product variety➤ chooses brand quality➤ spends above average➤ up-to-date with ads➤ most of them women

opposite of addictedchooses in rush, relying on instinct

doesn`t seek value for moneysingle men, <40, smokersinfluenced by packaging

shops in the neighborhoodspends the most

67% are marriedrational, informed, aware

seeks best price, but avoids cheapspends slightly under average

common in Banat & Transilvaniaattentive of product label & content, watches ads

engages in price comparison between stores

➤ 40% are over 50➤ low income, education➤ spends more than others➤ needs additional info, staff advice➤ doesn`t distinguish brands➤ unwilling to pay more for quality➤ prefers traditional shops, markets

➤

➤

➤

➤

➤

➤

➤

➤

➤

➤

➤

➤

➤

➤

FAST-FORWARD

BALANCED

ADDICTED

PASIVE

Source: ISRA Center

Attitudinal segmentation

TRENDSin modern retail

private TMs

downtrading

+100% It`s estimated that the FMCG market will double its value over the next 8-10 years, to €15-16 bn.

strengthening Top players will further extend their market share and national selling networks.

proximity The growing importance of proximity retail will accelerate the already significant trend of downsizing store areas.

Global «depresion», stagflation and sluggish consumption will push shoppers to migrate on lower price segments (downtrading).

made in RO The crisis will also help local brands and «made in RO» products to gain even more popularity.

With consumers getting more sophisticated, private trademarks will have new grounds to conquer: premium & de luxe segments.

Private trademarks

BrandsKaufland K-ClassicCarrefour 1, Carrefour, Tex, Reflets de FranceReal TiP, real Quality, real Bio, real SelectionPenny Boni, Karat, TOP ApetitLidl Pilos, Baconi, CombinoCora Cora, Winny, Tradiția Gustului

Auchan Auchan, Mieux Vivre Environment, Rik & Rok, Produs Economic, Mmm, Mieux Vivre Bio, In extenso

Mega Image 365, Bio, Care, Delhaize, Eco, Gusturi Românești, Le BoucherBilla Clever, MY, BillaSource: GfK, Ziarul FinanciarSource: GfK, Ziarul Financiar

9%Ratio for RO is only

Significant growing potential

28% 21% 19% 30% >30%

of total FMCG market(modern + traditional)Count for

1701057251362218

1.22188461248633526613,1

2,3

-14,0

-2,9-1,8-7,4

4.2772.9982.3831.7851.2881.128

2006 2007 2008 2009 2010 2011RON m

TURNOVER

NET PROFIT

# OF STORES

# OF EMPLOYEES

75%

25%2012

??

?

F CUS

FINANCIAL SCREENSHOT ABOUT

THE MARKET

MAIN DRIVER - PRICEis still the main driver of the market. Many have expanded their market share over the past years using the price tool. Price is a

sensitive issue both when holding on to your actual customers, as well as when you are conquering new market.

LOW PROFIT MARGINSGood profit margins are a tough nut to crack. Many retailers work

on only a few digits margins, with the performers Kaufland and Carrefour not exceeding 3.5% in 2011.HOT AREAS - BUCHAREST

Capital Bucharest is by far the fastest growing retail market in Romania over the past years, with the number of stores

quadrupling since 2008. Brasov, Constanta and Ploiesti follow right behind Bucharest.

LARGEST SUPERMARKETMega Image is the largest supermarket by market share, its slice of

almost 4% of the market allowing it to compete 1 on 1 with ˝big guys˝ like hypermarkets and discounters.

BOOMING EXPANSIONThe company´s turnover incresed by 151% in just three years,

replicating the exponential development of the number of stores, which multiplied fivefold, from 36 in 2008 to 170 at the moment.

Mega Image ended a 4 year loss streak when reporting a RON 2.3m profit in 2010.

GOOD PRIVATE TRADEMARKSDelhaize & Mega Image have managed to impose themselves and

their own ´´homemade´´ products on the private trademarks segment, even with premium and de luxe products, or so-called

´´exotic´´.AVERAGE SALES/STORE

The average sales per store rate kept a constant pace and remained at around RON 12m over the past 4 years, which means

expansion plans are in perfect sync with return on investment.

FINANCIAL SCREENSHOT ABOUT

MEGA IMAGE