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09.09.2002

Wimm-Bill-Dann Foods OJSC announces interim 2002 financial results

Moscow, Russia, September 9, 2002. Wimm-Bill-Dann Foods OJSC [NYSE: WBD] today announced its financial results for the six months ended June 30, 2002.

During the first half of 2002, Wimm-Bill-Dann Foods demonstrated strong revenue, gross profit growth and widening geographical coverage. Sales were up 21.5% compared to the same period last year, gross profit improved 35.8% compared to the same period last year. Gross margin increased to 30.2% in 1H 2002 from 27.1% in 1H 2001, EBITDA increased by 1.5%, net income level was maintained.

Commenting on today’s announcement, Sergei Plastinin, CEO of Wimm-Bill-Dann Foods OJSC, said: “The first six months of 2002 saw a continuing increase in sales momentum and underlying gross profit, which reflects our determination to grow our business steadily and profitably. We are on track with our national expansion plans. A expected, this has resulted in a temporary increase in costs compared to last year. We currently own 19 production facilities spread across diverse geographical regions, and I believe we already have an unmatched presence in the market place. We remain committed to becoming a truly nation-wide dairy and juice manufacturer of choice with a vision towards investing for the future.”

Key Operating and Financial Indicators of 1H 2002

	2002 H1	2001 H1	Change
Sales volumes, thousands tons	688.2	578.6	18.9%

	US$ `mln	US$ `mln

Sales	402.9	331.6	21.5%
Gross profit	121.8	89.7	35.8%
Gross margin, %	30.2%	27.0%	3.2%
Selling and distribution expenses	(50.6)	(24.3)	108.2%
General and administrative expenses	(29.8)	(25.3)	17.8%
Operating income	38.4	38.2	0.5%
Financial income and expenses, net	(7.0)	(2.9)	141.4%
Net income from continuing operations	22.4	23.1	(3.0%)
EBITDA	46.7	46.0	1.5%

Wimm-Bill-Dann sales amounted to US $402.9 million in the first half 2002 compared to US $331.6 million in the first half 2001.

Sales in Wimm-Bill-Dann’s Dairy Segment grew 15.2% from US $237.9 million in the first half 2001 to US $274.1 million in the first half 2002, which is primarily due to increase in our dairy products sales volumes. Sales in Wimm-Bill-Dann’s Juice Segment increased 37.5% from US $93.6 million in the first half 2001 to US $128.7 million in the first half 2002, which is primarily due to increase in our juice products sales volumes.

Cost of sales showed a positive evolution as a percentage of sales in the first half 2002. The company benefited from certain volume discounts and synergies leading to economies of scale.

Gross margins in the Dairy Segment increased from 25.7% in the first half of 2001 to 28.2% in the first half of 2002. The variation is primarily due to a decline in raw milk prices. Gross margins in the Juice Segment increased from 30.9% in the first half of 2001 to 34.8% in the first half of 2002. The variation is primarily due to a shift in demand towards lower priced brands and a change in production technologies.

Selling and distribution increased in the first half of 2002 both in absolute terms and as a percentage of sales due to higher transportation costs, personnel expenses and advertising and marketing expenses.

The rise in transportation expenses reflects increasing transportation tariffs, growth in the number of routes serviced, as well as group’s expanded geographical coverage. Personnel expenses as part of both selling and distribution and general and administrative expenses increased due to overall wage and salary increases, reflecting current market rates, and an increase in the number of our employees. The increase in advertising and marketing expenses is due to an enhanced and competitive advertising strategy and a rise in TV-advertising rates.

Net financial income and expenses grew due to an increase in debt servicing charges and current bank charges. The company’s debt retirement program undertaken at the end of the first quarter of 2002 had a positive effect on our interest expenses in the second quarter of 2002 and we expect this trend to continue for the upcoming months.

As a result of a combination of various cost increases, EBITDA margin in the first half of 2002 was 11.6% versus 13.9% in the first half 2001.

The company’s management will discuss its half-year 2002 results in a conference call on September 9th, 2002 at 5 pm Moscow time (9 am EDT in New York). Please refer to the attached list for details of the call.

For further enquiries contact:

Wimm-Bill-Dann
Kira Kiryuhina,
Manager, Public Relations Department
Tel: +7 095 733 9726
Email: kiryuhina@wbd.ru

Shared Value Ltd
Marina Boughton,
Partner
Tel: +44 207 321 5019
Email: mboughton@sharedvalue.net

WIMM-BILL-DANN FOODS

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)
AND JUNE 30, 2002 (UNAUDITED)

(Amounts in thousands of U.S. dollars)

		Six months ended June 30, 2001		Six months ended June 30, 2002
		(unaudited)		(unaudited)

SALES	$	331,551	$	402,866

COST OF SALES		(241,900)		(281,104)

Gross profit		89,651		121,762

SELLING AND DISTRIBUTION EXPENSES		(24,286)		(50,556)
GENERAL AND ADMINISTRATIVE EXPENSES		(25,282)		(29,761)
OTHER OPERATING EXPENSES		(1,928)		(3,024)

Operating income		38,155		38,421

FINANCIAL INCOME AND EXPENSES, NET		(2,859)		(7,032)

Income before provision for income taxes and minority interest		35,296		31,389

PROVISION FOR INCOME TAXES		(8,737)		(7,400)

MINORITY INTEREST		(3,471)		(1,575)

INCOME FROM CONTINUING OPERATIONS		23,088		22,414

Income from discontinued operations		103		–

NET INCOME	$	23,191	$	22,414

EBITDA	$	46,034	$	46,702

WIMM-BILL-DANN FOODS

CONSOLIDATED AND COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 2001 AND JUNE 30, 2002 (UNAUDITED)

(Amounts in thousands of U.S. dollars)

			December 31, 2001		June 30, 2002
					(unaudited)

CURRENT ASSETS:
	Cash and cash equivalents	$	6,919	$	103,214
	Trade receivables, net		25,271		34,471
	Inventory, net		89,501		84,357
	Taxes receivable		34,917		44,661
	Advances paid		13,069		23,110
	Other current assets		10,118		7,394
Total current assets			179,795		297,207

PROPERTY, PLANT AND EQUIPMENT, net			155,009		180,226

GOODWILL, net			11,179		14,951

NET INVESTMENT IN DIRECT FINANCING LEASES – long-term portion			4,076		3,883

INVESTMENTS			2,319		3,345

OTHER ASSETS			339		8,580

Total long-term assets			172,922		210,985

	Total assets	$	352,717	$	508,192

CURRENT LIABILITIES:
	Trade accounts payable	$	53,938	$	61,409
	Advances received		2,088		4,179
	Short-term loans		91,928		49,975
	Long-term loans, current portion		8,099		2,871
	Bonds payable		16,832		15,900
	Taxes payable		14,279		18,630
	Accrued liabilities		9,098		8,507
	Government grants – current portion		2,545		2,545
	Other payables		5,097		6,550
Total current liabilities			203,904		170,566

LONG-TERM LIABILITIES:
	Long-term loans		5,163		7,201
	Deferred taxes		3,929		3,775
	Government grants – long-term portion		13,348		12,882
	Other long-term payables		17,986		23,605
Total long-term liabilities			40,426		47,463

Total liabilities			244,330		218,029

MINORITY INTEREST			23,376		20,690

SHAREHOLDERSТ EQUITY:
	Common stock		24,063		29,908
	Share premium account		7,850		164,053
	Retained earnings		53,098		75,512
Total shareholders’ equity			85,011		269,473
Total liabilities and shareholders’ equity		$	352,717	$	508,192

CONFERENCE CALL DETAILS

A conference call to discuss the results will be held at 09.00 New York time / 14.00 London time / 17.00 Moscow time, on Monday, September 9, 2002. The UK dial-in number is: +44 20 8781 0598 and US dial-in number is +1 703 925 2400; participants should quote ‘Wimm-Bill-Dann’. Please dial in 5 minutes prior to the start of the conference call to allow time for registration. A recording of the conference call will be available for one week, commencing one hour after the live call has finished, on Freephone 0500 637 880 (within UK only) +44 20 8288 4459 (UK) and, +1 703 736 7336. Access code for both calls: 168242.

Wimm-Bill-Dann Foods OJSC
16 Yauzsky Boulevard, Moscow, Russia
Phone: +7 095 733-97-26/9727
Fax: +7 095 733-97-25
web: http://www.wbd.com
E-mail: kagan@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.
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