BELUGA GROUP announces operating results for Q1 2020

• BELUGA GROUP demonstrates stable performance in challenging environment
• The company's overall sales increased by 19%
  
• The sales of the company's own brands grew by 17%
  
• The sales of imported brands increased by 40%

In Q1 2020, the company's overall sales amounted to 3 201K 9L cases, a 19 % growth over the same period in 2019. The sales of the company's own brands also saw a 17% increase, rising to 2 800 K 9L cases. In the Vodka category, sales were primarily driven by Belenkaya and Arkhangelskaya Severnaya Vyderzhka; in the Russian Brandy category, by Zolotoy Rezerv; in Whiskey, by Fox & Dogs; and in Gin, by Green Baboon.

The company also demonstrates significant upward momentum in imports of exclusive partner brands within Russia. These sales increased by 40% to 401K 9L cases. In the spirits, Barcelo rum and brands in the William Grant & Sons portfolio showed the most significant growth. Sales of imported wine brands increased by 39%, with the best dynamics shown by Torres, Masi, Barefoot, and Faustino wines.

Alexander Mechetin, Chief Executive Officer of BELUGA GROUP, commented on the results of Q1 2020: "The company's business model and the diversification strategy we chose have allowed BELUGA GROUP to adapt to new market conditions with considerable flexibility. Our brand portfolio allows us to offer consumers strong brands in any price segment and category of alcoholic drinks. Self-isolation dictates new conditions and instills a new reality in which people communicate and interact primarily online, leading to the digitalization of traditionally offline entertainment, like people meeting friends in an online bar. Thus, sales previously made through the HoReCa channel have now transferred to retail, allowing it to grow.

Naturally, the health and safety of our employees, partners and consumers is a priority, so, in order to protect people and prevent the virus from spreading, we have implemented additional preventive measures at all facilities of the Group, including production facilities and retail stores. I would like to praise our team for being able to maintain a high level of efficiency through remote working, as well as, of course, the employees in our factories, sales department, and stores, who produce, supply, and sell our products. The sales department has recorded a steadily high demand for our products, and we do expect positive sales dynamics in Q2.

Let me emphasize the fact that BELUGA GROUP is a socially responsible business. In the current challenging environment, we have been supporting local communities — in particular, the most vulnerable social groups in Primorsky Krai, the region where our company started its operations 20 years ago.

The situation in the country and in the world is hard to predict, and we have yet to find out what consequences the crisis triggered by the pandemic may bring. The company's top managers continue the development of a more flexible business model that will allow for proactive responses to a rapidly changing situation."