BELUGA GROUP announces operating results for Q1 2021

• The company's overall sales grew by 5.6%
  
• Sales of the company's own products increased by 1.9%
  
• Sales of imported brands showed positive trend of 31%

In Q1 2021, BELUGA GROUP, the largest Russian alcohol company, continued demonstrating upward momentum: total sales reached 3 380K 9L cases, a 5.6% increase over the same period in 2020.

Sales of the company's own products are 1.9% up, totaling 2 854K 9L cases. In Q1, the most popular brands were Beluga and Beluga Hunting (+23%), Arkhangelskaya vodka (+31), Fox & Dogs whiskey (84%), as well as still and sparkling wines Golubitskoe Estate and Tête de Cheval (+95%).

Sales of imported brands, which the company represents exclusively in Russia, showed double-digit growth. These sales increased by 31% to 526K 9L cases. In the spirits, Barceló rum, Torres brandy, the whiskeys Glenfiddich, and Monkey Shoulder, along with the portfolio of American company Sazerac showed the most significant growth. Imported wine brands demonstrated positive trend +28%, the main drivers were Familia Torres, Mateus, and Cono Sur.

Export operations increased very strongly +41% in comparison to the same period last year. Beluga keeps strengthening its positions in the world. Sales to European countries increased by 39%, to the USA - by record-breaking 59%.

Alexander Mechetin, Chief Executive Officer of BELUGA GROUP, commented on the results: 'In the 1Q, the company showed growth to the high sales figures of the previous year - in March 2020, the demand for alcoholic beverages increased due to the pandemic. Among the positive highlights, I would like to emphasize a significant share of premium high-margin products in the company's sales mix, as well as a gradual recovery in exports. The company's solid performance is the result of our systematic development, which is part of a strategy that includes diversification and monitoring at all stages of production and distribution of our alcoholic beverages.

During the reporting period, we continued to develop our own and imported brands. In January, we launched our own brand of Devil's Island rum, the production process of which, from sugarcane harvesting to aging, takes place in the Dominican Republic - the birthplace of rum. We are working on extending lines of popular brands; in particular, we have launched a premium product that is part of the Golden Reserve collection - the 8 YO Golden Reserve Export Edition Russian brandy. Our winery - Golubitskoe Estate, has presented a number of novelties, including the super-premium vintage Golubitskoe Estate Noble Selection wines, only available at famous restaurants of Moscow and Saint Petersburg. Since January, we have been the exclusive distributors of the world-renowned first single-varietal French wines JP. Chenet and the premium Argentinian wines Trivento, brands that boast a great potential in Russia.

In addition, I would like to mention our brands' success in international rankings. Two our brands are included in the list of the World's Top 100 Spirits Brands 2021 by Impact: Belenkaya - which is in the World's Top 15 Vodka brands, and Arkhangelskaya - in the World's Top 20 Vodka Brands. Moreover, according to the Annual Brands Report 2021 from Drinks International, Beluga ranks as the world's sixth Bestselling and seventh Top Trending vodka brand.

The company is strengthening its position abroad: exports are growing and have increased 41% compared to last year. A good start and signs of demand recovery are appearing in the Middle East, the CIS, and partially in Asia and East Europe. During Q1, the super-premium vodka Beluga - the company's flagship brand - demonstrated 59% growth in the USA; it also did quite well in Germany, Israel, and Poland. Compared to last year, the shipment of the brand to Switzerland has increased twofold, to Spain - fivefold, to Hungary - threefold.

I would like to add a few words about WineLab: sales are up by 29%. The high result is due to the harmonious growth of both traffic and the average ticket - each increased by 13%. The number of outlets reached 665. The chain's strategic focus is on e-commerce, which demonstrates acceleration. In Q1 2021 the volume of click & collect sales grew 3.7 times compared to the same period last year, the share of e-commerce in the chain's sales is 3.5% against 1.2% last year. The respective e-commerce share in Moscow and Saint Petersburg has increased from 3.5% to 8%. More than 25,000 electronic orders are picked up by customers in WineLab stores every month.

Finally, I should say that we are looking ahead with confidence, the company will continue to adapt flexibly to market challenges, develop new brands in popular categories with a focus on the premium segment, and improve operational efficiency, doing our best to boost the profitability and sustainability of the business in the interests of our customers, employees, and shareholders.'

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