OUR BUSINESS MODEL

Our successful business model.

Utilising global fast-moving consumer goods (FMCG) best practices and local insight has resulted
in the creation of a leading spirits business in Central and Eastern Europe, with an award-winning
portfolio of products.

Global FMCG best practices

Procurement

Business processes

Group buying power

The Group operates a central buying function based in
Switzerland with the objective of sourcing raw materials
on the most competitive terms

Performance management
We have cascaded accountability for profitability
throughout the Group

Multi-location sourcing options

The Group has circa 329m litres of bottling capacity at its
two bottling sites (located in Poland and Czech Republic)
in addition to an ethanol alcohol distillery providing around
40% of the Groups alcohol requirements
Quality improvement
We constantly aim to ensure that product quality is of the
highest standard and seek to improve where the opportunity
arises, whether this is new packaging or improved liquids
Cost reduction
The Group strives to reduce production cost without
compromising product quality

Systems
The Group has invested in its IT systems and will continue
to do so to ensure they support the business
Efficient balance sheet
The capital structure following the IPO has been established
to provide an efficient balance sheet which can support the
growth ambitions of the Group

Production

Portfolio expansion

Targeted capital investment

The Group has invested over 44m in the last five years
in state-of-the-art production technology and plant

Professional key account management

We train our sale teams to operate world-class account
management processes

Training
We provide regular training on both operational processes
as well as English language courses for our employees

Wholesale and on-trade coverage

We employ dedicated sales teams serving the differing
needs of on-trade and wholesale customers

World-class practises
We operate to the highest professional standards across
our production environment

Marketing effectiveness tools

All marketing activity is carefully planned and monitored
to ensure maximum effectiveness

Source
1. Nielsen, total Poland, total off trade, total vodka, flavoured
vodka & vodka based liqueurs MAT Dec 2013.
2. Zoominfo, Nielsen & Dunnhumby off trade retail sales data,
Dataservis on trade retail sales data MAT Dec 2013.
3. IRI: Total Italy, total off trade, total spirits MAT Dec 2013.
4. Internal SSG sales data MAT Dec 2013.

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Working capital management

We monitor our investment in working capital and ensure
that we have efficient and sufficient working capital
to support the business and its growth

Stock Spirits Group Annual Report 2013

World-class brand management

We maintain detailed long term brand plans for all our core
brands and measure our performance against these plans

Local Insights

Sales & marketing

Portfolio analysis
We undertake detailed reviews of our product portfolio to
ensure that we have profitable products that meet consumer
needs at all price points
Effective and efficient new product development
We operate a world-class NPD process to bring high quality,
profitable products to market expediently
Financial resources
We ensure that our brands enjoy the necessary ongoing
marketing support

A leading spirits business in

Central and Eastern Europe
We have more than
25 brands and export
internationally to more
than 40 countries worldwide
We have fully-owned operations
in Poland, Czech Republic, Italy
Slovakia, Croatia and Bosnia
& Herzegovina
No.1 in Poland in spirits, vodka
and vodka-based liqueurs1
No. 1 in Czech Republic in spirits,
bitters, rum, vodka and vodkabased liqueurs2

Consumer insight
Consumer trends
We undertake extensive market research to understand
emerging consumer trends globally as well as in our individual
local markets, and seek to develop new products that match
these trends ahead of our competitors

No. 1 in Italy in vodka-based

liqueurs and limoncello3

Our six millionaire brands4:

Consumption occasions
Stocks local marketing teams regularly interview consumers
to understand what products they prefer to purchase and
consume on various occasions and how they wish to enjoy
their drinks
Consumer motivation
We have developed a deep understanding of consumer
motivation with particular focus on younger adult drinkers
to sustain future revenue streams

Stock Spirits Group Annual Report 2013

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