1. Changellenge Cup Russia 2011
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2. Goal Strategy Distribution Logistic Summary Appendix
The achieving the Goal of Doubling Inmarko Sales in Monetary Term in Russia
with building NEW Distributional Network in Central, North-West, South, and North Caucasus regions
is impossible without NEW Distribution and Logistic Strategy
X2 ↑ sales in $ in Russia
means X2.4 ↑ in West*
Strategy Results: NEW Distributional Network**
Inflation**
“2012-2015”
Main points:
 OWN retail
network
↑ in 1.3 times development
 M&A actions
Essential Growth**
 100% regions
covering
 Key Accounts
relationship
development
↑ in 1.09 times
 HoReCa
relationship
Distribution
development
 Usage of rail
transport in
cross-regions
↑ in 1.85 times transportations
* West Russia **Calculation of sales growth due to exogenous factors – see Appendix #1.1 **Look Big Map in Appendix#9

3. Goal Strategy Distribution Logistic Summary Appendix
The analysis of current problems in D (further – “D”) suggests itself the possible ways to
solve the problems
What do we have: Current problems in D What should we do: Actions
Complex Distribution scheme CHANGE IT (D Reconstruction -Own Network Expansion)
Missed Regions 100% regions coverage
Contracts with non efficient distributors Changes in Distributors Portfolio
(with low CCFOT)
Distributors not interest in sales increase System of Distributors Stimulations
Own Network Expansion
Small Shelf Share Categorical Management Projects*
Development of OWN RETAIL NETWORK*: Development of NEW CHAINS of sales:
Non standard Kiosks*: GIANT ICE CREAM HoReCa Projects*:
In MSk & SPb Partnership with Academy of Hospitality
NOBODY has ever done it! Exclusive contracts with café and
restaurants
Standard Branded Kiosks Network
In big cities
Competition with IceBerrry! Sochi 2014 Project:
Sell Ice Crème during Olympic Games:
New way of Distribution*: ICE CRÈME CARS → HUGE increase in sales!
“AVON-model Project”
In MSk & SPb
NOBODY has ever done it!
•More about the project - see Appendix #7-8

4. Our goal Strategy Distribution Logistic Summary Appendix
Strategy of expanding OWN Network and reducing the levels of D to 2
Tula Plant Scheme of D: Target Distribution by channels
 Less D Levels 2015:
• X5 Retail Group
• Lenta  Direct Shipments to Key in accordance with Market needs
• OKey Accounts, Ice Crème Cars
Central D Center • Magnit  Distributors: only for
Tula • Achan dealing with TT and far
• HoReCa Suppliers regions
incl. Metro  Delivery to kiosk should be
Own Warehouses: Cash&Carry) flexible
•MSK  Logicians services use only
•SPb* for transportation!!!
•Stavropol* Distributors**
•Krasnodar*
Kiosks Network Traditional Trade
Traditional trade
SPB Key accounts
Cross Regions Shipment
Modern trade
Ice Crème Cars Inter Region Shipment
MSK
A c t i o n s b y D i s t r i c t s
MSK&SPb Central District North-West District South District North Caucasus Region
Arktica Acquisition OWN Kiosks Arktica Acquisition Santa Acquisition NEW Distributiors:
# Chechnya
OWN Kiosks “Ice crème car” Project Magnit contacts # Dagestan
Distributors #
“Ice crème car” Project # Murmanskaya oblast’ Sochi 2014
# Karelia
*Due to Arktica and Santa Acquisitions ** The criterias of choosing the Distributor – see appendix #3
*** Means that Shipment could be both from own warehouses or Distributor warehouses

5. Our goal Strategy Distribution Logistic Summary Appendix
D system changing steps to achieve the goal of doubling sales in Russia by 2015: Timeline
2012 2013 2014 2015
2015 Result**
ARCTICA: Attack SPb market
1. Acquisition* 1. Sales Increase: 9%
SANTA: foothold on SOUTH market
+ 16500 pallets
Review of Distributors Portfolio.
Change ZERO to DISTRIBUTOR #18 CHANGE if necessarily + CCFOT Control
2. Distributor
2. Sales Increase: 0.5%
Change
+500 Pallets
Review of Distributors +8% CCFOT
DISTRIBUTOR #1, #5, #22 Portfolio. ADD if necessarily
3. Distributor 3. Sales Increase: 2%
+ 8900 pallets in
Murmansk, Petrozavodsk,
Contract with MAGNIT in Groznyi, Mahachkala
South Region
4. Work with 4. Sales Increase: 4.5%
CATEGORIAL MANAGEMENT PROJECTS 40% Shelf Share
5. Contracts with 5. Sales Increase: 10%
HoReCa 5% of Sales through HoReCa
In MSK and SPb In Big cities
GIANT ICE CREAME GIANT ICE CREAME
6. 6. Sales Increase: 2%
Development of branded kiosks network
7. Sales Increase: 2 %
7. In MSK and SPb by Summer 2012 In big cities by Summer 2014
*The Calculations why acquisitions is more profitable – see in Appendix #10 **See Excel Calculations

6. Our goal Strategy Distribution Logistic Summary Appendix
Logistics should be structured in terms of effectiveness and low costs:
VS
Refrigerated truck Refrigerated rolling stock
Criteria of choosing the way of transportation: The Choice:
1. COST of transportation Rolling Stock*
2. Speed of Delivery Truck
3. Well developed railway system in a region Rolling Stock
4. Well developed highways system in the region Truck
*Cost comparison The FINAL choice:
Routes Costs (rolling Costs (truck), For cross regions For inter region
stock), rub.1 rub.2 transportation transportation
Tula-SPb 24114 30150
Tula-Stavropol 44200 52400
Tula-Krasnodar 38000 46500
Tula-Murmansk 66743 71520
* Calculation of Transportation coats see in Table or in Appendix #6

7. Our goal Strategy Distribution Logistic Summary Appendix
Doubling Inmarko Dustribution Strategy:
X2 ↑ sales in $ in Russia
Sales in Monetary means X2.4 ↑ in West* Main Points
Term in Russia OWN retail network development:
 Kiosks Network
Need only 1.85 times increase through  ICE CRÈME CAR Project
NEW Distribution NEW Logistic M&A actions:
Strategy Strategy  Acquisition of “Arctica” to attack SPb
Market
 Acquisition of “Santa” to Foothold the
TARGET: increase in sales in value in 2.4 times
South Market
(Forecast Value Share:32%)
Russian ice-cream market *(sept. 2011 – trend Dec.2015)
100% regions covering:
10 ADD in Portfolio Distributor #22, #
9
Nestle
Average price (euro/kg)
8
Key Accounts relationship
7 32% development:
6 Iceberry  Exclusive Contracts
5  Categorical management Projects
Talosto Inmarko-
4 Unilever
3
HoReCa relationship development:
2 Russki Holod  Contracts with StarBucks, Chocoladnitsa,
1 Cofe House, e.t.c
0
0 10 20 30 40 50 60 70 80
Sales volume (th. tons) Logistic Strategy:
Circle size means Value Share of manufacturer
Main Points:
31,67% - forecast Value Share of Inmarko in 2015
 Usage of Rolling Stocks are preferable in
* Calculation of Value Share – see Appendix #1.2
cross regions transportation

8. Our goal Strategy Distribution Logistic Summary Appendix #1
Appendix#1.1. Calculation of necessarily growth in Sales on West of Russia if Total
Sales will grow up in 2 times
 Structure of sales: 60% west, 40% - east Volume, Inmarko (west),
 Growth of east in 2011/2015 – 1.3 th. tons
60
 Required growth of west (in volume term) – 1.85
50
 Required growth of west (in value term) – 2.4 times 40
30
20
Growth of the West market 2011 2012 2013 2014 2015 Total 10
Growth in value 1 1,24 1,24 1,24 1,24 2,40
0
Growth in volume 1 1,19 1,16 1,16 1,15 1,85 2011 2012 2013 2014 2015
Volume, Inmarko (European Russia), th tons
Exogenous drivers of growth 2011 2012 2013 2014 2015
Total
Inflation 0 0.044 0.071 0.076 0.08
Average consumption 5.08 5.22 5.22 5.22 5.22
Consumers' share in total population 0.55 0.56 0.57 0.58 0.59
Population 145.3 145 144.7 144.4 144.1
Annual exogenous growth 1 1.090021 1.08787 1.092607 1.096338 1.420432
Appendix# 1.2. Value Share Evolution: Inmarko
2011 2012 2013 2014 2015
Sales in East (Inmarko), bn euro 0,11 0,13 0,14 0,15 0,16
Sales in West (Imarko), bn euro 0,17 0,21 0,27 0,33 0,41
Sales in Russia (Inmarko), bn euro 0,29 0,34 0,40 0,48 0,58
Russian market, bn euro 1,28 1,40 1,53 1,67 1,82
Inmarko share 22,40% 24,28% 26,43% 28,88% 31,67%

9. Our goal Strategy Distribution Logistic Summary Appendix#2
Appendix#2. Sales by regions and channels, dynamics
Share of sales channel (%) 2011 2012 2013 2014 2015
Traditional trade 75% 75% 74% 74% 74%
Key accounts 10% 11% 12% 13% 14%
Modern trade 15% 14% 14% 13% 13%
Distribution by channels 2011 Distribution by channels 2011:
Increase the Key Account Share
Traditional trade Key accounts Traditional trade Key accounts
Modern trade Modern trade
Volume, Inamrko (europe), th. tons 2011 2012 2013 2014 2015
NWFD (w/o St.Pb.) 3,07 3,66 4,25 4,92 5,67
CFD (w/o Moscow) 16,02 19,10 22,20 25,68 29,59
SFD 2,75 3,28 3,82 4,41 5,09
NCFD 1,86 2,21 2,57 2,97 3,43
St.Petersburg 0,54 0,64 0,75 0,87 1,00
Moscow 3,58 4,26 4,96 5,73 6,61

10. Our goal Strategy Distribution Logistic Summary Appendix #3
Appendix#3. Capacity sufficiency
 The capacity of Tula’s DC is enough
 The needs of capacity in North-West and South are covered by Arktika’s
and Santa’s warehouses. In case of seasonal peak, the capacity can be
freed by reducing the inventory period (through VMI or more
sophisticated planning)
2011 2012 2013 2014
Production in Tula (monthly), th. tones 2,68 3,13 3,59 4,08
Average stock level in Tula, th. pallets 10,73 12,54 14,37 16,34
max Capacity of DC in Tula, th. pallets 20 25 30 35
Inventory period DC, Tula, days 30 30 30 30
Inventory period DW, days 30 30 30 30
Capacity requirements, pallets 2011 2012 2013 2014 2015
NWFD (w/o St.Pb.) 920 1 097 1 275 1 475 1 700
CFD (w/o Moscow) 4 806 5 730 6 659 7 703 8 878
SFD 826 949 1 062 1 181 1 306
NCFD 557 640 716 796 880
St.Petersburg 162 187 212 238 266
Moscow 1 073 1 240 1 404 1 576 1 762

11. Our goal Strategy Distribution Logistic Summary Appendix #4
Appendix #4. Description of Inmarko and its most strong competitors in all three districts
Nestle Iceberry Russkiy Kholod Talosto Inmarko
Factories Zhukovsky 1 Vologda Barnaul St.Petersburg Tula
Moscow Volkhov Omsk
Shakhty
Moscow
Branches Branches in the Powerful branches 14 branches Branches in such 9 branches
biggest cities in in Moscow and throughout Russia big cities as throughout Russia
Russia Saint-Petersburg (Kursk, Vologda, Moscow, (Moscow, Qazan,
(St.Petersburg, Astrakhan, St.Petersburg, Tula etc.)3
Moscow, Samara, Moscow etc.) Krasnodar,
Nizniy Novgorod, Yekaterinburg,
Perm etc.) Rostov-on-Donu
Storage facilities Large national or Common Big distribution
Low-temperature Own warehouses
regional distribution center center in Moscow
warehouses in in Tula, Omsk and
warehouses and rented storage
St.Petersburg, several rented
located near facilitiesMoscow, storage facilities
clients Yekaterinburg and
Krasnodar
Fleet Own specialized Own 20 units of Own specialized Own big Own specialized
trucks and rented refrigeration trucks and rented specialized fleet trucks and rented
ones machines ones ones
1Company closed factory in Timashevsk in 2011 and transferred equipment to factory in Zhukovsky

12. Our goal Strategy Distribution Logistic Summary Appendix #5
Appendix #5. Description of local competitors of Inmarko in CFD, NSFD, SFD
St.Petersburg St.Petersburg Alter-West
Petro-Kholod Khladokombinat #1
Factories St.Petersburg St.Petersburg Troizk
Essentuki Frankfurt (Germany)
Kalisz (Poland)
Branches Well-developed The only branch in 6 branches in
branches throughout St.Petersburg European Russia (Orel,
Russia from Kaliningrad, Kolomna,
Kaliningrad to Kaluga, Moscow,
Vladivostok Troizk)
Storage facilities Big warehouse in 4 modern warehouses in Well-equipped
St.Petersburg with St.Petersburg warehouse in Troizk
capacity of 23000 tons
of products. There are
railway facilities.
Fleet Own specialized trucks Own specialized trucks Own specialized trucks

13. Our goal Strategy Distribution Logistic Summary Appendix #6
Appendix #6 Usage of refrigerated rolling stock in several routes
Routes: Tula-St.Petersburg, Tula-Stavropol,
Tula-Krasnodar, Tula-Murmansk.
One refrigerated rolling stock can carry 35
tons of ice-cream. According to JSC Refservice
(the subsidiary of the Russian Railways) and
Tkvsm ltd. (forwarding agency) the transportation
of 35 tons of ice-cream costs in average 50 rubles
per km.
Routes Distance, Transportation Transportation
km. costs (rolling costs (truck),
stock), rub.1 rub.2
1,2 Transportation costs
Tula-St.Petersburg 844 24114 30150
were derived from JSC
Tula-Stavropol 1547 44200 52400 Refservice and Tkvsm ltd.
(forwarding agency).
Tula-Krasnodar 1330 38000 46500
Tula-Murmansk 2336 66743 71520
Thus it is more profitable to use refrigerated
rolling stock in those routes than trucks.
NB! It is important to mention that in short routes it is more beneficial for company to use
refrigerated trucks in order to decrease time of ice-cream transportation (Ex. Distance between Tula and
Moscow is just 194 km.). In some routes (Ex. Tula-Arkhangelsk, Tula-Murmansk) highway is at very poor
quality, so refrigerated rolling stock is also more preferable.

14. Our goal Strategy Distribution Logistic Summary Appendix #7
Appendix#7. Distribution through HoReCa
• Active usage of partnership with the Academy of
hospitality to promote ice-cream in market HoReCa (Ex.
lobbying in state structures).
• Exclusive contracts with developing café chains in Russia such
as Starbucks.
• Development of own ice-cream café chains Ben & Jerry’s
in big cities such as Moscow, St.Petersburg, Sochi etc.

15. Our goal Strategy Distribution Logistic Summary Appendix #8
Appendix#8. Special Projects
GIANT ICE GREME Project:
Special kiosk in Shape of different Ice Crème.
• Main Goal: to attract new consumers
• Plus such a kiosks can provide higher brand recognition
• Also we can use kiosks instead of outdoor Ads
• We can make a PR project: competition between students from
architect Universities named “The constriction Best Project of Ice
Crème House!”
ICE CRÈME CAR Project
• Special Trucks with Ice Crème in Moscow and Saint-
Petersburg: experimental project
• In Summer time their mobility allows us to sell Inmarko
Ice Crème not only in Moscow and Spb, but in it’s Suburbs
too.
Categorical Management Project:
• Project in cooperation with key accounts: merchandising of Ice Crème
according to value share of manufacturer
• Pluses for Inmarko: get the maximum place on Shop “Shelf”
• Pluses for Key Accounts: huge growth in sales of all category of Ice Crème

16. Our goal Strategy Distribution Logistic Summary Appendix #9
Appendix#9. Target Distribution
map with main logistic paths
- Factory
- Inmarko’s
Warehouse Network
- Our Distributors
Network
- Key accounts
- HoReCa
- Kiosks
- Ice Cream Lorries
- Sochi 2014
- Long-haul carrying

17. Our goal Strategy Distribution Logistic Summary Appendix #10
Appendix#10. Logistics services + own sales network vs. Distributor (ex. NWFD)
Logistics services and use of own sales network
RUR tons places/per day
Sales manager salary 30 000
Tula-St.Pete 30000 50
6500 10 7
Month costs
Sales manager 64 1920000
Operational expences 1920000
Number of big races/month 65 1947977,517
Number of small races/day 14 2110308,977
Cost, RUR (month) 7 898 286
Distributor
Volume, tons 3246,6292
Value, RUR 584031262
% 16,175
Costs, RUR (year) 94467056,6 To run the branch is less expensive if there are no
Costs, RUR more than 65 sales managers *
(month) 7 872 255
*branches on the basis of Arktika and Santa