2015

KAZAKHSTAN FMCG TRENDS

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CONTENTS

1 MACROECONOMIC OVERVIEW

2 KAZAKHSTANI SHOPPER

3 FMCG SECTOR DEVELOPMENT

Regions Importance │ Channels Importance │ Key Players │

Top Categories

4 FOOD AND BEVERAGES

Confectionery │ Dairy │ Baby Care │ Beverages │Alcohol

5 NON FOOD

Personal Care │ Home Care

6 FMCG SLOWDOWN ANALYSIS

7 METHODOLOGY.

ECONOMIC UPDATE

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2015 GDP GROWTH

GDP Growth Rate vs LY, %

26,4% 10,1% 16,2% 7,8%

XX% XX% XX%

XX%

XX%

XX%

XX%

XX%

2011 2012 2013 2014 2015

Nominal Growth Physical Volume Deflator

XX%

XX%

XX%

XX%

XX%

2015 Forecast

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Comment

KAZAKHSTAN GDP STRUCTURE

0% 20% 40% 60% 80% 100%

2014

2013

2012

2011

2010

SERVICES GOODSXXXXXX XXXXXX

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STRUCTURE OF FOREIGN TRADE TURNOVER

OTHER

MACHINERY &EQUIPMENT

ANIMAL & VEGETABLEPRODUCTS

CHEMICAL PRODUCTS

METALS

MINERAL PRODUCTS

OTHER

MINERAL PRODUCTS

METALS

ANIMAL & VEGETABLEPRODUCTS

CHEMICAL PRODUCTS

MACHINERY EQUIPMENT

EXPORT IMPORT

XX Category X

Category X

Category X

Category X

Category X

Category X

Category X

Category X

Category X

Category X

Category X

Category X

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

XX

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GOVERNMENT BUDGET SPENDING Spending Share, 2014 │ Change vs LY, %

SOCIAL CARE & SERVICES

EDUCATION HEALTH SERVICE

PUBLIC SECURITY

GOVERNMENT SERVICES

DEFENSE OTHER Category X

XX

XX XX

XX

XX XX

XX

Comment

Category X Category X

Category X

Category X

Category X

Category X

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GOVERNMENT BUDGET REVENUE Income Share, 2014 │ Change vs LY, %

XX%

XX%

XX%

XX%

XX%

XX% XX%

Category X

SOURCE X

2014

XX% XX% XX%

0% 20% 40% 60% 80% 100%

Other Transferts Income TaxesSource X Source X

Category X

Category X

Category X

Category X

Category X

Category X

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XXXXXX XXXX

~ $XX.

XXXXXX XXXX ~ $XX

XXXXXX XXXX ~ $XX

XXXXXX XXXX ~ $XX

XXXXXX XXXX ~ $XX

XXXXXXXXXXX XXXXXXX

~ $XX.

XXXXXX XXXX ~ $XX

XXXXXX XXXX

~ $XX.

XXXXXX XXXX ~ $XX

XXXXXX XXXX ~ $XX

ANTI-CRISIS PROGRAM OF GOVERNMENT The overall package of measures is ~ $XX

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The plan includes three main strategic directions:

DE-DOLLARIZATION PLAN OF THE ECONOMY FOR 2015-2016

• XXXXXXXXXXXXXXX • XXXXXXXXXXXXXXX • XXXXXX. • XXXXXXXXXXXXXXXXXX • XXXXXXXXXXXX, • XXXXXXXXXXXXXXXXXXXX

XXXX XXXX XXXX

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DEMOGRAPHIC PROFILE OF POPULATION, 2014

Urban population

POPULATION

XXXXXX

XX%

XX% XX%

XX%

XX% XX%

0 - 15 16 - 62 63+ 0 - 15 16 - 62 63+

XX%

URBAN POPULATION EMPLOYED PEOPLE

UNEMPLOYMENT RATE

XXX XX%

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AVERAGE NOMINAL INCOME PER CAPITA

Source: Agency of Statistics of Kazakhstan

XX XX

XX XX XX

XX XX

XX

0

100

200

300

400

500

600

700

800

900

0%

1000%

2000%

3000%

4000%

5000%

6000%

7000%

8000%

2010 2011 2012 2013 Q1'14 Q2'14 Q3'14 DEC'14

TENGE (Thous.) USD

Comment

CONTEMPORARY SHOPPER

Main Input

Fact X

Fact X

Fact X

Fact X

Fact X

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XX

XX

XX XX

Source: Nielsen Shopper Trends Base: All shoppers (n=1000)

AGE OF A MAIN SHOPPER SHOPPER ROLES

SHOPPER PORTRAIT: “XXXXXXXXX”

XX XX

XX

XX

XX

XX

XX

XX

• Comment X

• Comment X

• Comment X

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We have identified 6 Global Shopper Segments

Source: Nielsen Shopper Trends survey 2014

FMCG SECTOR DEVELOPMENT

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FMCG MARKET DEVELOPMENT VALUE SHARE AND GROWTH RATES, MAT TY vs MAT LY | URBAN KAZAKHSTAN

Source: Nielsen retail audit data in cities with a population of more than 10 thousand people; based on data for 54 product categories

FMCG XX

XX%

XX%

XX%

XX% XX

XX XX

XX

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FMCG MARKET DYNAMICS URBAN KAZAKHSTAN

Source: Nielsen retail audit data in cities with a population of more than 10 thousand people; based on data for 54 product categories

0%

7%

-7% -5%

-1% -1%

5%

11%

13%

9%

7%

11%

5%

1%

9%

21%

0%

2%

8% 7%

14%

20%

23%

21% 20%

26%

20%

14%

Volume Change Unit Value Change Nominal Growth

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REGIONS IMPORTANCE VALUE SHARE AND CHANGE MAT TY vs MAT 2YAGO, % | URBAN KAZAKHSTAN

Source: Nielsen retail audit data in cities with a population of more than 10 thousand people; based on data for 54 product categories

WEST XX%

SOUTH XX%

EAST XX%

CENTER XX%

NORTH XX%

ALMATY XX%

ASTANA XX%

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CHANNELS IMPORTANCE VALUE SHARE AND CHANGE MAT TY vs MAT 2YAGO, % | URBAN KAZAKHSTAN

Large Stores

(>100 sq. m.)

Medium and Small

Store (<100 sq. m.)

Drug Stores Kiosk and Pavilions

Open markets

Source: Nielsen retail audit data in cities with a population of more than 10 thousand people; based on data for 54 product categories

XX% XX% XX% XX% XX%

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TOP FMCG MANUFACTURERS VALUE SHARE, MAT TY| URBAN KAZAKHSTAN

Source: Nielsen retail audit data in cities with a population of more than 10 thousand people; based on data for 54 product categories

LACTALIS GROUP INC.

CARLSBERG GROUP

MARS INC.

PEPSICO

BRITISH AMERICAN TOBACCO

PROCTER & GAMBLE

EFES BREWERIES INT.

COCA COLA CO.

PHILIP MORRIS INT.

JAPAN TOBACCO INT.Manufacturer X

Manufacturer X

Manufacturer X

Manufacturer X

Manufacturer X

Manufacturer X

Manufacturer X

Manufacturer X

Manufacturer X

Manufacturer X

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TOP CATEGORIES IN FOOD AND BEVERAGES VALUE SHARE AND GROWTH RATES, MAT TY vs MAT LY | URBAN KAZAKHSTAN

Source: Nielsen retail audit data in cities with a population of more than 10 thousand people; based on data for 37 product categories

XX

C

ateg

ory

C

ateg

ory

C

ateg

ory

C

ateg

ory

C

ateg

ory

C

ateg

ory

C

ateg

ory

C

ateg

ory

C

ateg

ory

C

ateg

ory

XX

XX

XX XX

XX XX

XX XX XX

WINNING IN THE NEW ENVIRONMENT

KAZAKHSTAN FMCG 2015

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KEY TRENDS TO WATCH IN 2015

ECONOMY DRIVES RETAIL SLOW DOWN

SAVINGS VS. LOYALTY

BACK TO MEDIUM& SMALL STORES