HOOP Reports Stronger Q3 Results

The consolidated net sales revenue posted by the HOOP Group in the third quarter of 2006 topped the figure for the previous year by 30% and reached PLN 187m. During the period, the Group generated net profit of more than PLN 6.2m, relative to PLN 5.2m year-on-year, with promotion and marketing spending higher by over PLN 6m.

Cumulative sales revenue exceeded the level recorded for the first three quarters of 2005 by 18% and amounted to over PLN 490m. The net profit increased from PLN 9.9m to PLN 18.4m, or by nearly 90%.

“We are consistently improving our margins. In Q3 2006, the gross margin rose from 31% to 33% and the operating margin from 5.9% to over 7%,” says Marek Jutkiewicz, Vice-President of HOOP S.A.’s Management Board. “The growth follows from the measures taken with a view to optimising the product mix as well as from control of direct production costs and general and administrative expenses. Selling costs, including television advertising expenses, were the only cost category significantly on the rise during the year. Considering the sales result, we can say that the advertising expenditure was fully justified.”

Mr Jutkiewicz also emphasises the gradual improvement in the results recorded by Megapack, a Russia-based subsidiary in which HOOP S.A. holds a 50% stake. “The stronger financial performance of the Russian company is attributable for instance to more effective distribution and a long-term contract for beverage production services,” adds Marek Jutkiewicz.

In the third quarter, the sales revenue generated by HOOP S.A., the parent undertaking, stood at PLN 125.5m, relative to PLN 90.7m in Q3 2005. The net profit rose to PLN 5.5m, from PLN 3.9m posted in the third quarter of 2005.

In October 2006, HOOP S.A. finalised the purchase of 100% of shares in Paola, a major producer of condensed fruit juice. The value of the transaction amounted to PLN 23m. Part of the amount will be covered with HOOP S.A.’s own funds, and the remainder will be offset against the selling price of HOOP S.A. shares to be sold to the existing shareholders of Paola. Paola’s and HOOP S.A.’s results will be consolidated as of the fourth quarter of 2006.

“The acquisition of Paola is consistent with the strategy pursued by the HOOP Group, which envisages development through acquisition of companies from the market segments which are complementary to HOOP S.A.’s scope of business,” says Marek Jutkiewicz.

Further enquiries:

Tomasz Jankowski

Chief Financial Officer


Tel. (+48 22) 338 17 20

E-mail: [email protected]

Company Profile:

The HOOP Group’s operations focus on production, trade and distribution of non-alcoholic carbonated and non-carbonated beverages and mineral water. The Group’s business activities are spread across Poland and, through subsidiary undertakings, also the Russian Federation.

The HOOP Group comprises the following production companies: HOOP S.A. (the parent undertaking), Paola S.A. (acquired in October 2006), PPWM Woda Grodziska Sp. z o.o., and OOO Megapack. OOO Megapack and its subsidiaries operate in the beverage production and distribution segment in the Russian Federation, mainly in Moscow. Beverage distribution companies operating in Poland include four subsidiary undertakings: Pomorskie Centrum Dystrybucji HOOP Sp. z o.o., Transport-Spedycja-Handel-Sulich Sp. z o.o., Maxpol Sp. z o.o. and Bobmark International Sp.z o.o.

HOOP S.A.’s product offering comprises nearly 100 items. The most popular HOOP beverage brands include HOOP Cola, Zozole, Shrek, Flip, and the mineral water brands are Arctic, Grodziska and Nałęczów Zdrój. Based on agreed recipes, the Company produces also private label beverages for external companies, mainly major retail chains.

HOOP S.A. is a leading Polish producer of carbonated and non-carbonated beverages. In the first half of 2006, its share in the carbonated beverages market in volume and value terms was 11.3% and 8.29%, respectively, while the share in the non-carbonated beverages market in value and volume terms reached 9.23% and 10.97%, respectively. In the category of PET-bottled beverages, HOOP S.A. holds the leader’s position with a 20% share in the domestic market, representing more than double the share of the second largest player.

In the first half of 2006, the HOOP Group generated more than PLN 303m in sales revenue, 12% more than in the corresponding period of the previous year. The net profit for the first six months of 2006 was in excess of PLN 12m, which represents a 160% improvement year-on-year.