Ekaterina Zhilkina Ilya Nikiforov Kirill Komarov Nikita Kurilenko IB CLUB MSU,

Group &
OJSC Kalina deal analysis
WashigtonP

policy and assets in Russia.
OJSC Kalina. Business description.
OJSC Kalina.

Market Position.

OJSC Kalina. Valuation.

Key Outputs of M&A Model

2

4

3

5

6

7

Our position

1

Risks and Mitigations.

8

Deal analysis.

9

Appendix.

10

an appropriate strategy.
Determine the segments of the market to target

in terms of offering, size, and geography.
Assemble a team with bandwidth to actively work the process.

Identify
Identify acquisition opportunities in all market segments of interest.
Develop "communication" plan.
Initial contact and screening for interest.

Negotiate
Determine key issues and quickly identify any potential "deal breakers".
Design optimal deal structure.
Negotiate price, terms and conditions.
Strategic, operational, financial and legal due diligence.
Purchase agreements and related documents.

Valuation date: 30.09.2011

All calculations are done using the consolidated financial statements of Unilever Group due to informational accessibility and in accordance with learning purposes.

revenues (after Procter & Gamble and Nestlé) and the world's largest maker of

ice cream.

The company owns more than 400 brands, although its 25 largest brands account for over 70% of total sales. Unilever focuses resources on 13 "billion-euro brands", each of which has annual sales in excess of €1 billion.

Acquisitions of leading national brands worldwide.

Unilever Group has more than

half of its turnover in emerging countries (53%).

The goal – to double the volume of business around the world by 2020.

In 2010 Unilever Group spent on acquisitions €1252 mln, in 2009 – €409 mln.

Acquisition policy and assets in Russia.

Unilever operates on Russian market since 1992

Unilever became the top foreign investor in Russia according to Alpha Bank in 2010.

Total investments of the company in the Russian economy are close to €1 bln.

In 2010 it has 7 Russian factories:
Moscow: margarine factory.
St. Petersburg: sauce factory (Baltimore), tea-packing factory, perfume and cosmetics.
Tula: food factory, ice-cream factory (In Marco).
Omsk: ice-cream factory.

Kalina

Unilever

Key assets locations:

Unilever Group in Russia:

Acquisition policy:

mln €

in the world, its annual growth rates on average are

10-15%.

Estimated by Euromonitor International, the volume of Russian perfumery and cosmetics market in 2011 (projected to Euromonitor, 2010) should reach 392 billion rubles.

Against national players:
the leading position in terms of sales in the cosmetics market of Russia and CIS countries.
Wide distribution network.
Strong consumer loyalty to brands.

Against foreign players:
cost benefits.

OJSC Kalina. Market Position.

Kalina is in the top 10 players on the Russian Cosmetics Market:

Competitive advantages:

global brands give 20 % decrease in operating expenses
New

markets give 5 % synergy for sales
Synergy of COGS – 5 %

Sensitivity analysis of Premium / Synergy

Revenue
Synergy

OpEx
Synergy

the local portfolio of the Group.

To strengthen competitive position

in Russia – high potential growing market

- To take leading position in skin care and hair care segments in Russia

- To start operating in oral care segment