During the first half of 2003, Wimm-Bill-Dann's sales rose 17.3% compared to the same period in 2002. Gross profit increased by 17.6% year-on-year, with gross margins rising to 30.3% in the first half of 2003 from 30.2% during the same period last year. Net income was down 21% compared to last year while EBITDA showed a slight increase year-on-year.

Commenting on today?s announcement, Sergei Plastinin, CEO of Wimm-Bill-Dann Foods OJSC, said: «We are pleased with the pace of sales growth in the first half of the year, despite the rising commercial cost base and a challenging competitive environment. We have demonstrated our ability to continually develop and market new and innovative products, while expanding our consumer base. Going forward, we see our leading position and tight focus on controlling costs as key to improving profitability.»

Key Operating and Financial Indicators of 1H 2003

Wimm-Bill-Dann sales reached US$472.6 million in the first half of 2003, compared to US$402.9 million in the first half of 2002.

Sales in the Dairy Segment increased 17.4% from US$274.1 million in the first half of 2002 to US$ 321.7 million in the first half of 2003, while the average selling price increased by 8.5% from US$0.59 per 1 kg. in the first of half 2002 to US$0.64 per 1 kg. in the first half of 2003. This increase was primarily due to the higher share of value added products in the sales mix. Gross margins in the Dairy Segment increased from 28.2% in the first half of 2002 to 28.4% in the first half of 2003. The variation is primarily due to an increase in the average price and a slight decline in raw milk prices year on year.

Sales in Wimm-Bill-Dann?s Juice Segment increased 17.0% from US$128.8 million in the first half of 2002 to US$150.6 million in the first half of 2003. The average selling price fell slightly from US$0.57 per liter in the first half of 2002 to US$0.56 per liter in the first half of 2003, due primarily to a change in the product mix, favoring lower priced brands. This resulted in a slight decrease in the juice gross margins from 34.8% in the first half of 2002 to 34.6% in the first half of 2003.

Selling and distribution expenses increased in the first half of 2003 in both absolute terms (rising 36.8%) and as a percentage of sales. This was due to an expected increase in personnel, marketing and transportation costs. In addition, we recorded a US$5 million provision for bad debt. General and administrative expenses, including personnel, legal and consulting services increased by 27.2% as a result of the company?s expansion and tougher requirements imposed upon Wimm-Bill-Dann as a public company.

Net income was impacted negatively by increased costs for the first six months of 2003 and stood at US$17.7 million. EBITDA in the first half of 2003 increased slightly year on year and amounted to US$47.1 million. EBITDA margin was 10.0% compared to 11.6% in the first half of 2002.

Reconciliation of EBITDA and EBITDA margin to US GAAP Net Income and Net Income margin

EBITDA is a non-U.S. GAAP financial measure, which represents net income before interest expense, income taxes, depreciation and amortisation adjusted for minority interest and should not be considered in isolation as an alternative to net income, operating income or any other measure of performance under U. S. GAAP. Further, EBITDA as presented above may not be comparable to similarly titled measures reported by other companies. We believe that EBITDA, which is commonly used financial indicator of a company?s operating performance and debt servicing ability, is a relevant measurement to assess performance which attempts to eliminate variances caused by the effects of differences in taxation, the amount and types of capital employed and depreciation and amortisation policies. EBITDA margin is EBITDA expressed as a percentage of sales. Reconciliation of EBITDA and EBITDA margin to net income and net income as percentage of sales, the most directly comparable U. S. GAAP financial measures, is presented in the table above.

Financial ratios of Wimm-Bill-Dann Company for the first half of 2003 year.
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Wimm-Bill-Dann Foods OJSC
16 Yauzsky Boulevard, Moscow, Russia
Phone: +7 095 733-97-26/9727
Fax: +7 095 733-97-25
web: https://www.wbd.com
E-mail: kiryuhina@wbd.ru

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Wimm-Bill-Dann, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to conform them to actual results. We refer you to the documents Wimm-Bill-Dann files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, acquisition strategy, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.