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Vostok – Service 20 Years on the European & Russian Markets Group Overview

Vostok – Service 20 Years on the European & Russian Markets Group Overview. 2012. Disclaimer.

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Vostok – Service 20 Years on the European & Russian Markets Group Overview

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  1. Vostok – Service 20 Years on the European & Russian Markets Group Overview 2012

  2. Disclaimer This presentation is for discussion purposes only. The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. The material available in this presentation may contain forward-looking statements, which are subject to risks, uncertainties and assumptions. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “future” or “continue”, the negative of these terms and other comparable terminology. Such forward-looking statements are based on current plans, estimates. Forward-looking statements are based on known and unknown risks, assumptions, uncertainties and other factors. Actual results, performance and achievements may differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. We do not assume responsibility for the accuracy or completeness of any forward-looking statement and you should not rely on forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements to conform them to actual results or revised expectations.

  3. Vostok - Service: Group Profile • Vostok Group manufactures and distributes safety garments and accessories for the industrial protective clothing market in Europe, Russia and CIS • Vostok Group is the undisputed market leader in Central and Eastern Europe and Eurasia • More than 30% of the Russian PPE market • Largest PPE distributor in the dynamic markets of Central and Eastern Europe (Czech Republic, Hungary, Belarus/Ukraine, Poland) • Leading presence in Scandinavia. Expansion plans focus on select West European markets with greater than average growth potential • Sales volume in 2012 projected to reach $1 billion. Average growth during 2010-2012 is approximately 18% percent per year • The Company has wide distribution network with branch offices in 56 Russian regions plus 260 retail stores across the county and distribution operations, and in 11 major cities in Europe. Our printed catalogue reaches 10,000 clients • The company has several production facilities in Russia as well as in Italy and Hungary. • Vostok also distributes products of major global companies including Ansell, Honeywell and 3M among others • Founded in 1992 and headquartered in Moscow, Russia

  4. Russia & CIS: Large & Growing PPE Market Favorable Trends Russia & CIS Market Size $Bn • Russian economy is focused mostly on oil and gas, metal & mining and heavy industry which require large budgets for PPE and worker safety • The fundamental trends driving the strong growth of Russia’s market: • Ongoing integration of Russia into the global economy • More stringent legal requirements for worker safety • Greater awareness of bottom-line benefits of worker safety by Russian businessmen • Prior to 2008 Russian PPE market was growing at around 15% per year reaching $1.5Bn in 2008 • During 2009 growth slowed due to the global financial crisis, but the market quickly recovered to pre crises levels by 2011 • Comparable spending on safety equipment per worker in Russia is lagging behind EU and US; Russian companies looking to catch up Large Growth Potential Comparable PPE Spending per Worker $300-$1,000 $50-$100

  5. Vostok Group Companies

  6. Brands & Trading Partners Major Partners Company-Owned Brands

  7. Extensive & Diverse Customer Base • Among its 10,000 active customers, Vostok Service supplies some of Russia's largest and fastest-growing companies with protective clothing and equipment Select Corporate Customers • Extensive long term and proven relationship with largest energy, chemical, mining and heavy-industrial companies Our largest client represents only 3% of total sales which helps to mitigate key customer risk and ensure stable flow of revenues

  8. Sales & Distribution Geography: Central Europe, Russia & CIS Branch Office Structure (56 branches) • Extensive system of regional distribution offices based in 11 cities in Italy, Czech Republic, Slovakia, Poland, Hungary, Romania and Germany • Branch offices in 56 regions of Russia covering 170 cities in Russia & CIS with population of more than 100 thousand people • More than 260 retail stores and exhibition rooms • Actively servicing more than 10,000 customers in virtually every branch of economic activity Regional Branch Vostok Retail Stores Sales Force Rep Offices • Actively seeking local & regional customers • Exploring new opportunities • Capturing retail customer Warehouse • Current system allows to actively capture local retail and corporate customers • Cost of ~$2mm per branch to set up and a year to get breakeven Extensive sales network with instant access to large and growing markets, which will take a lot of time and significant capital commitment to replicate

  9. Catalogue Marketing • Vostok publishes and distributes annual catalog with more than 2,000 products • 450,000 copies are printed annually and distributed directly to end users, prospective customers or handed our during trade exhibitions

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