Contents 1. Recommendation 2. Astartas snapshot 3. Competitive - PowerPoint PPT Presentation

Contents 1. Recommendation 2. Astarta’s snapshot 3. Competitive advantages 4. Deficit in Sugar Market 5. Forecasts 6. Value drivers 7. Valuation

Contents 1. Recommendation 2. Astarta’s snapshot 3. Competitive advantages 4. Deficit in Sugar Market 5. Forecasts 6. Value drivers 7. Valuation

2 1. Recommendation  Recommendation: BUY  Upside: 17.7 %  Target Price 24,6 eur=98,28 pln 120 100 80 60 40 20 0 16.08.06 16.02.07 16.08.07 16.02.08 16.08.08 16.02.09 16.08.09 16.02.10 16.08.10 AST Target Price Source: WSE, BI-5 estimates

3 2. Astarta’s Snapshot ASTARTA’s Business Description Astarta-Kiev is a vertically integrated holding 190 thousand hectares under lease Breakdown of Revenues, 2010 5 production units 1% Sugar 8% Crops 19% Cattle farming 72% Other Source: Astarta-Kiev

4 3. Competitive advantages ASTARTA ‘s benefits:  90 % of own sugar beet production;  Diversified portfolio Plants’ capacities strategy; Yields  Modernization and expansion of assets Gas consumption  Pricing power implies 7% premium Source: Astarta-Kiev

5 4. Deficit of Sugar Production in Ukraine 3000 Deficit in sugar market 2500 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011Е Тotal sugar production in Ukraine,th.tons Total output of Astarta's sugar,th.tons Тotal sugar consumption in Ukraine,th. tons Source: State Statistic Committee of Ukraine

6 5. Forecasts Revenues, th. euro Net profit, th. euro Net profit margin,% 547,1 460,4 382,8 320,1 239,5 184,5 175,7 158,5 129,1 104,7 76,0 75,5 2010E 2011E 2012E 2013E 2014E 2015E Source: BI-5 estimates

7 6. Astarta’s main value drivers Production volumes growth 193 million EUR Capex program Financial solvency Reinforcing its market position Source: Astarta-Kiev

8 7. Valuation Perpetuity growth = 4 % Target Price= EUR 24,6 DCF Model Upside=17,7% WACC in perpetuity = 13 % BUY Source: BI-5 estimates

CONTENTS Assets geography Situation in Ukrainian milk Cost of Equity Astarta’s Structure market Calculation Market Based Average Gas consumption Astarta’s Production Valuation Crop yields Astarta vs. Astarta’s Achievements in Forecast of prices Ukraine the Dairy Sector Expansion and GDP and inflation Forecast of costs Modernization forecasts Market Share Expansion Ratios Profitabibility margin Growth in basic Key Targets Income Statement confectionary Tough situation in world Growth Potential Balance Sheet sugar market Solid demand in world Growth Provision Cash Flow Statement sugar market Bioethanol production Basis for DCF-analysis Astarta’s consumers projections Biodiesel production Discounted FCFFs Investment risks projections

Company’s snapshot

11 Assets geography • 31 ths ha of agricultural land • Narkevychi sugar plant sugar beet processing capacity: 3,800 t/day • 27 ths ha of agricultural land • 3,500 of cattle • Zhdanivsky sugar plant sugar beet processing capacity: 3,200 t/day • 3,000 of cattle • 130 ths ha of agricultural land • Globyno sugar plant • Kobelyaky sugar plant sugar beet processing capacity: 5,500 t/day • Veselopodilsky sugar plant sugar beet processing capacity: 7,000 t/day • Yaresky sugar plant sugar beet processing capacity: 3,000 t/day • 17,500 of cattle sugar beet processing capacity: 4,500 t/day Source: Astarta- Kiev

12 Astarta’s Structure Astarta Holding N.V. (the Netherlands) ANCOR Investments Limited (Cyprus) LLC Firm “ Astarta- Kyiv” (Ukraine) LLC Agricultural LLC Agricultural « Poltavazernopr LLC « Volochysk- « Khmilnytske » « Dovzhenko » company « Dobrobut company LLC IPC Agro» oduct LLC Source: Astarta-Kiev

13 Astarta’s Production (ths tons) 2009 2008 2007 2006 2005 0 200 400 600 800 1000 1200 1400 1600 1800 Milk Grain and oil crop Sugar Source: Astarta-Kiev

14 Astarta’s Achievements in the Dairy Sector ths heads ths tons 30 60 50 20 40 30 10 20 10 0 0 2005 2006 2007 2008 2009 2010 Heads of cattle,ths heads Heads of cows, ths heads Milk production, ths tons Source: Astarta-Kiev

Industry perspectives

16 GDP and Inflation Forecasts 5 11,2 4,5 11 4 10,8 3,5 10,6 Inflation rate 3 GDP Growth 10,4 2,5 10,2 2 10 1,5 9,8 1 9,6 0,5 0 9,4 2010 2011 2012 Ukraine GDP Inflation rate Source: World Bank, BI-5 estimates

17 Profitability margin, % 35 30 25 20 15 10 5 0 -5 -10 -15 2004 2005 2006 2007 2008 2009 sugar beet crops and oilseeds Source: Ukrstat

18 Growth in Production of Basic Confectionary in Ukraine 1200 1000 800 600 400 200 0 2005 2006 2007 2008 2009 2010 Sweet biscuits and wafers, tons Sugary foods containing cocoa, tons Sugary products without cocoa, tons Source: Ukrkonditer

Tough situation in world sugar market 19 mln ton % 39 180 160 38 140 37 120 36 100 35 80 34 60 33 40 32 20 31 0 2008-2009 2009-2010 2010-2011 stocks (mln ton) prod (mln ton) cons (mln ton) ratio % Source: FAO

20 1 Solid demand in world sugar market growth rate mln 10,0 1 940 1 930 8,0 1 920 6,0 1 910 4,0 1 900 2,0 1 890 0,0 1 880 2009 2010 2011 2012 -2,0 1 870 -4,0 1 860 world gdp growth rate developing countries gdp growth rate population growth, million Source: World Bank

21 Ethanol production (mln m3 ) 120 100 80 60 40 20 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Brazil EU Source: USDA

22 Biodiesel production (mln m3) 16 14 12 10 8 6 4 2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Ukraine, Russia Brazil EU Source: USDA

23 Situation in Ukrainian Milk Market mln tons mln heads 12 4,5 4 10 3,5 8 3 2,5 6 2 4 1,5 1 2 0,5 0 0 2004 2005 2006 2007 2008 2009 Milk Production by Dairy farms (mln tons) Milk Production by Households (mln tons) Number of Cows (mln heads) Source: State Statistic Committee of Ukraine

Competitive advantages

Average natural gas consumption 25 (cubic meters per ton of beet processed) 70 60 50 40 30 20 10 0 2007 2008 2009 Ukraine Astarta Source: Astarta-Kiev

Crop yields Astarta vs. Ukraine 26 (average 2007-2009) 50 45 40 35 30 25 20 15 10 5 0 Sugar beet Wheat Barley Corn Sunflower Soybeans Astarta average Ukraine average Source: Astarta-Kiev

OUTLOOK

Expansion and Modernization 28 Land bank expansion Equipment fleet strengthening EUR 193 million Capex program The number of livestock growth for 2010-2015 New companies acquiring Biomass methanization Source: Astarta-Kiev

Market Share Expansion 29 Sugar Market Astarta's Share in 2009 Astarta's Share in 2015E Increase from 25% 17,7% 17,7% to 25% until 2015 Raw Milk Market Astarta's Share in 2009 Astarta's Share in 2015E 2% 5% Increase from 2% to 5% until 2015 Source: Astarta-Kiev

30 Key Targets 1 4 Sugar beet harvested, Grain and oil crops harvested, ths ths tonnes tonnes 6000 1500 4000 4000 1000 1000 1800 2000 350 500 0 0 2010E 2015E 2010E 2015E Sugar produced, ths 2 tonnes 1000 5 600 Land in operation, ths ha 500 280 350 0 300 2010E 2015E 300 250 Milk production, ths 200 3 200 tonnes 150 150 100 100 100 50 50 50 0 0 2010E 2015E 2010E 2015E Source: Astarta-Kiev

VALUATION

Growth Potential 32 Millions of Operating cash flows Euro 160,0 140,0 120,0 100,0 80,0 60,0 40,0 20,0 0,0 2011E 2012E 2013E 2014E 2015E Sufficient for debt burden reduction Strong cash generating power Source: BI-5 estimates

33 Growth Provision Change in Working Capital Capex Millions Millions of Euro of Euro 80 70 63 66 60 59 56 60 50 50 43 46 37 36 40 36 40 30 20 20 10 0 0 2011E 2012E 2013E 2014E 2015E 2011E 2012E 2013E 2014E 2015E Source: BI-5 estimates

34 Basis for DCF-analysis Cost of debt, % 6,5 Cost of Equity, % 13,8 Risk-free Rate, % 6,8 Beta 0,62 4 Perpetuity Growth, % 13 WACC in perpetuity, % Debt Ratio Reduction's effect on WACC 35,0 30,0 25,0 20,0 13,7 13,8 13,1 15,0 12,1 11,4 10,0 Debt ratio 5,0 WACC 0,0 2011E 2012E 2013E 2014E 2015E Source: BI-5 estimates

35 Discounted FFCFs Millions of Euro Discounted FCFFs at January 1, 2011 60 50 40 30 20 10 0 2011E 2012E 2013E 2014E 2015E Enterprise Value, EUR '000 739637 Less net debt, EUR '000 -124901 Equity value, EUR '000 614736 Target price on January 1, 2011 24,6 Upside, % 17,7 Source: BI-5 estimates

36 Cost of Equity Calculation 1 CAPM 21,9% Risk-free rate 6,8% Build-up 2 Equity Risk 13,8% 6% Premium Method Company 1% Specific Risk Source: BI-5 estimates