During the first quarter of 2003, Wimm-Bill-Dann’s sales increased by 13.4% compared to the first quarter of 2002. Gross profit increased by 16.3%, with gross margins rising to 29.3% compared to 28.6% last year. Net income decreased by 26%, primarily due to the combined effect of a temporary slowdown in juice sales growth as well as costs associated with expansion in the dairy segment. EBITDA showed a slight decrease year-on-year.

Commenting on the announcement, Sergei Plastinin, CEO of Wimm-Bill-Dann Foods OJSC, said; “The first three months of this year saw continued growth in sales and improvement in gross margin. Over recent months, we have developed and launched a number of programmes such as better supply chain management, newly designed IT infrastructure and investment in technology and new equipment to enhance operational cycle and improve our cost structure. We are also in the process of improving our brand and product portfolio, launching new products and increasing efficiency of our distribution and sales channels.”

Key Operating and Financial Indicators of Q1 2003

In the first three months of 2003, Wimm-Bill-Dann’s sales amounted to US$223.9 million, compared to US$197.4 million during the same period last year.

Sales in Wimm-Bill-Dann’s dairy segment in the first quarter increased by 16.7% from US$136.2 million in 2002 to US$159 million in 2003. Gross margins in the dairy sector grew to 26.7% from 25.4% last year due to a 5% drop in the cost of raw milk compared to last year, favorable price increases for sterilized milk and a higher share of value-added products in the product portfolio.

Sales in Wimm-Bill-Dann’s juice segment increased by 6% from US$61.2 million in the first quarter of 2002 to US$64.9 million in the first quarter of 2003. Although sales slowed down in the first quarter following an exceptionally strong fourth quarter, we were able to improve our average price by 4.4% compared to the previous quarter. Pricing and volume growth were partially offset by increases in the cost of raw materials and the increased share of lower priced brands in the overall product portfolio. Gross margins in the juice division remained flat at 36%, the same as last year.

The company’s increased geographical coverage and investments in brand promotion continued to be the main cost drivers. Selling and distribution costs increased substantially, from US$21.8 million during the first quarter of 2002 to US$32.2 million this year. During the first three months of 2003, US$9.5 million was spent on the personnel portion of selling and distribution expenses, and US$10 million on marketing and advertising, US$6.8 million on transportation costs and US$1.2 million on warehousing.

During the first three months of 2003, general and administrative expenses were US$17.7 million. Net income decreased from last year and was US$7.1 million. EBITDA decreased slightly to US$21.6 compared to US$21.8 million during the first three months of 2002.

Reconciliation of EBITDA to US GAAP Income before provision for income taxes and minority interest

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.