Kofola has presented us with promising quarterly results, which we focus on this time in an interview with CFO Martin Pisklák.

Before we start with the interview itself, let's take a brief look at Kofola's results:

Kofola reported a 15.34% year-on-year revenue growth to CZK 1.81bn in 4Q 2022, in line with expectations. For the whole of last year, revenue grew by 18.7% to CZK 7.88bn, meeting management's guidance. On the operating profitability front, Kofola beat its revised target by almost 3%, with EBITDA for 2022 finally reaching CZK 1.11bn (-1.6% y/y), beating market expectations. In 4Q 2022 alone, EBITDA profit grew by 62% yoy to CZK 230mn. The forecast was for a lower figure.

Interview with CFO Martin Pisklák:

Can you briefly introduce yourself to our investor community at Bulios?

I have been with Kofola since 2010. I started as head of controlling, then
from 2015-2019 I was CFO of Radenska and Studenac in the Adriatic region. Since 2020 I am back in the Czech Republic and I manage the finances of the entire Kofola Group. Before joining Kofola, I worked in transaction advisory at PwC. On a personal level, I can say that I am a happy father of two children, whom my wife and I are raising in the Novojičín region.

How would you describe 2022 for Kofola?

As difficult, at least for the third time in a row, but with a happy ending. For that, a big
thanks to all our employees. With Covid fading away, Kofola started to take off at the end of
2021. We increased wages, launched marketing projects and kick-started investments. January 2022 was a strong month and everything was going well. But the uncertainties associated with the Russian invasion of Ukraine made the whole year significantly more difficult - raw materials and energy soared to heights that were unbelievable for us at the time, and it took us a lot of work to maintain profitability above CZK 1 billion.

The latest quarterly results are surprisingly quite good. What is behind this?

Very good sales results in November and December and also falling electricity prices
in those months. Energy in particular was significantly cheaper than we projected
at the end of the third quarter. We were also helped by our fragrant and healthy Fresh and
Herbs segment, both LEROS, a producer of herbal teas and coffee, and UGO, which operates
over 60 Salaterias and Freshbars.

Have you implemented any cost-saving measures that have contributed to the promising results?

Of course. And that is the strength of Kofola, our ability to be flexible and responsive to what is happening around us. We are making adjustments in technology and work processes to save energy. It confirms that our sustainable approach to business and life is essential. Our efforts, which result in less plastic consumption and easier recycling, are not only environmentally friendly but also economic. In Slovakia, the successfully introduced deposit system for PET bottles and cans is already bearing fruit. The measures have not avoided staff savings; we have had to cut the dividend compared to previous years.

Total sales in the last quarter of last year increasedby 15.3% year-on-year
to CZK 1.81 billion. How was this achieved?

It is a combination of growth in both quantity and price. It should be mentioned that to some extent, some
anti-poverty measures, especially in Slovakia, still affected our results in the fourth quarter last year. October was weak, November and December were strong. Overall, our sales in the last quarter did not surprise us. On the other hand, the
UGO brand performed very well, starting a very interesting growth trend in both Salaterias and Freshbars.

Has the company dealt with expensive energy and the cost of the necessary
raw materials, or is this something that will continue to worry you?

This is something we cannot help but worry about. The worst thing is the impossibility of reliable long-term development planning. It forces us to be even more flexible, for example we did the first revision and update of the 2023 budget in January. We are constantly monitoring developments and turning over every penny.

''I am not too worried about us internally, but what is important for us is how our consumers will cope with this situation and the expensive energy.''

Are you seeing any downward trend in terms of consumer sales of your
beverages or is everything normal?

The volume decline in January 2023 was down 3% versus 2022. January months are
historically our weakest months in terms of sales, so it will be significant how
the entire first quarter ends. We are working with several scenarios for a decline in litres sold of our beverages. Even a 10% drop would not surprise us. But I hope it will be less
- somewhere in the 3-5% range. We are doing our best - we are preparing new products for the season
like Rajec Tea Ice Herb and others.

Can you reveal the strategy or any plans for 2023? Do you have plans
to expand into other markets?

We assess acquisition opportunities constantly and very carefully. To expand internationally requires a confluence of several circumstances - a strong and quality target, available financing, the ability to align expectations with the seller and not being overpaid by other bidders. Organically, our brands are not set up for foreign expansion. We sell traditional and local products.

"Kofola will probably never sell in Germany. But, for example, Semtex or UGO have potential in foreign markets."

I have read that you are entering 2023 with a promise to achieve
an overall EBITDA target of CZK 1.10 billion to CZK 1.25 billion. How do you plan
to achievethis?

We intend to do what we do well, both in the core beverage business and
in Leros and Ug. We are confident that there will be no further turbulence in energy prices and the general materials and inflation situation will stabilise. In any case, we are confident and we are set for growth.

• Did you enjoy today's interview? If so, be sure to follow us, my guest today was Martin Pisklak.

Please note that this is not financial advice.