Presentation:III QUARTER of 2011

FINANCIAL RESULTS

Warsaw, November 2011

I. PKM Duda: General information

II. III quarter of 2011: Financial resultsII. III quarter of 2011: Financial results

III. Implemenation of Duda 2012 Programme

2

� One of the biggest companies in Poland operating in the meat sector

� The capital group consisting of approximately 30 companies whichactivities are as follows:

� slaughtering, dissection and distribution of meat (pork, beef, game)and processed meat,

� breeding pigs,

� cultivating cereal and other plants,

I. PKM Duda – general information

� cultivating cereal and other plants,

� producing processed meat,

� The country leader in the segment of distribution and slaughtering of redmeat,

� One of the most modern production plant in Poland

Revenue: 1 587 mln zł

Profile: food industry

Employing: approx. 1 800 people

3

CG PKM Duda structure

4

II. III quarter of 2011: Financial results

5

Consolidated financial results

Consolidated income from sales

390444

+14%

IIIQ 2010 IIIQ 2011

Export income

(in millions of PLN)

6684

+28%

IIIQ 2010 IIIQ 2011

Income (in millions of PLN)

Consolidated income from sales

PKM Duda between 2004 and IIIQ 2011 (in millions of PLN)

6

134128133

174

216

180

234239231

265261

284289

327341

369

318

343

382

419

386

446

369374

334337

390394

343

406

444

+14%

Consolidated financial results

Working capital net (in thousands of PLN)

51 476

65 393

Current liquidity ratio

1,151,15+13,9mln zł

7

According to the strategy, the company focused on improving the situation regarding liquidity and strenghtening of the working capital.

IIIQ 2010 IIIQ 2011 IIIQ 2010 IIIQ2011

Consolidated financial results

Total debt ratio

58,3%

57,9%

IIIQ 2010 IIIQ 2011

-0,4 pkt %

Net Debt/ EBITDA

IIIQ 2010

IIIQ 2011

2,6

8

The Group is consequently reducing its debt, especially the interest debt. This will result in creating the basis for the stable financing of the current business activities and further development of the Group. These actions show in the balance, where the positions regarding debts are being reduced. This fact is also confirmed in the level of

the total debt indicator (reduction by 0,4 % p.) and a stable level of the net debt indicator/ EBITDA for the last 12 months (Q3 2010 the indicator was negative due to the loss on the operating level)

IIIQ 2010 IIIQ 2011 IIIQ 2011

(- 1,3)

Consolidated financial results

Interest debet

454 873

344 461323 285

264 249 263 309 265 436300 000

400 000

500 000

9

264 249 263 309 265 436237 430

0

100 000

200 000

300 000

30.06.2009 31.12.2009 30.06.2010 31.12.2010 31.03.2011 30.06.2011 30.09.2011

Consolidated financial results

Net results (in millions of PLN)

7,4

8,8

IIIQ 2010 IIIQ 2011

+20%

EBITDA (in millions of PLN) EBIT (in millions of PLN)

22,8

20,7

IIIQ 2010 IIIQ 2011

13,513,2

IIIQ 2010 IIIQ2011

-2%

-9%

10

PKM Duda and Production Segment

Pork:

� High prices of raw material – for the first time in history

the prices did not decrease in September

� very low pig supply – july – july: reduction by 9%;

� lower number of pregnant sows – july – july: reduction by 14,6%

Market conditions in 3 Q 2011Prices of pork livestock [PLN/kg]

3

3,5

4

4,5

5

5,5

1 5 9 13 17 21 25 29 33 37 41 45 49 532011 2010

11

� poor summer resulting in low demand for pork meat

� decreasing slaughter margins – withholding slaughter by plants

� increasing import of ready pork elements (in the first eight months of

the year + 7% - source MRiRW)

� improvement of the results of the production site in Grąbkowo:

revenues by 19% / slaughter by o 19% / purchase of livestock on the

home market by 30%

2011 2010

Average prices of livestock purchase (IIIQ 2010 and

2011)

8,7

6,07,4

12,7

9,010,2

+46,0% +50,0%

+37,8%

0,0

2,0

4,0

6,08,0

10,0

12,0

14,0

Bulls Cows Heifers

-10%

0%

10%

20%30%

40%

50%

60%

Źródło własne

PKM Duda and production segment

Beef

� historic record prices of slaughter cattle

� margin decrease

�necessity to redirect orientation to the EU markets as the

main export direction in relation to the declaration of

Market conditions in 3 Q 2011

12

Źródło własne

opening the Turkish market for live cattle import

�returning to Spanish market, entering Portugese market

� slaughter increase for 3Q by 8 %

Game meat

� maintaining large demand on German market

� good exchange rates

�positive perspectives for future periods

+19%

561,6470,3

I-IIIQ 2010 I-IIIQ 2011

Revenues (in millions of PLN)

PKM Duda and production segment

EBITDA (millions of PLN) EBIT (millions of PLN)

19,3

I-IIIQ 2010 I-IIIQ 2011

11,5

I-IIIQ 2010 I-IIIQ 2011

- 16%

9,2

13

+24%

23,1

Volume of pig slaughtering in Grąbkowo (in

thousands)

760637

I-IIIQ 2010 I-IIIQ 2011

PKM Duda i segment produkcyjny

19%

I-IIIQ 2010 I-IIIQ 2011

14

Purchase of pigs by PKM DUD in the domestic market

in 2010 and 2009 (in thousands)

Purchase of pigs by PKM DUD in the domestic market

in IIIQ 2011 and 2010 (in thousands)

211 938 276 596

IIIQ 2011

64 658

100 000

200 000

IIIQ 2010

624 713 726 875

102 162600 000

700 000

2009 2010

+30%

+16%

szt.

szt.

Plant Segment

+ 42%

37,7

26,5

I-IIIQ 2010 I-IIIQ 2011

Revenues (PLN

million)� maintaining good situation in agriculture

� high prices of cereal and rape (high world demand for ‘energy plants’)

� direct and supplementary payments

� positive results from the segment restructurization

� Sales of AGRO-HOP and Wizental according to plan

Market conditions in 3 Q 2011

15

EBITDA (PLN

million)

7,7

3,4

I-IIIQ 2010 I-IIIQ 2011

+126%

EBIT (PLN million)

6,7

I-IIIQ 2010 I-IIIQ 2011

+260%

1,9

Animal agriculture segment

Market conditions in 3 Q 2011

� according to forecasts, fodder price decrease (fattening by

approx. 10%, for piglets 3%) influenced lowering production

costs in the segment

� maximum exploiting own-source pig supply – ongoing

modernization improves own-farm power in 2012

� PKM Duda – technological avant garde!

improving results of test production activities supporting

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improving results of test production activities supporting

better quality - confirming first positive results (meat quality,

fodder exploiting) as a result of the so-called

pharmacological castration – increase in sales of KF piglets;

significant improvement of animal welfare

2%

53,552,5

I-IIIQ 2010 I-IIIQ 2011

Revenues (in

millions of PLN)

Animal farming segment

EBITDA (millions of PLN) EBIT (millions of PLN)

10,014,5

I-IIIQ 2010 I-IIIQ 2011

4,4

IIIQ 2010 IIIQ 2011

-31% - 59%10,8

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Market conditions in the first quarter of 2011

Trade segment

� further changes in the consumption structure – less processed meat, more fresh meat, mainly poultry

� intensifying actions leading to consolidation of retail stores into shopping networks

� „shrinking” market – closing down stores, deterioration of financial situation of customers

� reversing the trend of quantity sales accompanied by

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� reversing the trend of quantity sales accompanied by decrease in consumption of processed meat and red meat, the records on sales show the increase

� development of HoReCa

� dynamic increase in revenue

� developing territorial range

� new prestigeous clients

� diversifying product portfolio

� intensifying sales through vthe new channel: TELEMARKETING

Service segment

+7%

700,9653,7

Revenues (millions of PLN)

I-IIIQ2011I-IIIQ 2010

25,2

30,8

EBITDA (millions of PLN)

17,5

23,3

EBIT (millions of PLN)

-18% -25%

19

I-IIIQ 2011I-IIIQ 2010 I-III 2011I-IIIQ 2010

Distribution and service segment

20

Revenue from customers structure according to the segments (I-IIIQ 2011)

Wyniki segmentów GK PKM Duda

Contribution of segments to operating revenue

(I-IIIQ 2011)

Contribution of segments to EBITDA (I-IIIQ2011)

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Część 3Realizacja Programu Duda 2012Part 3Implementation of Duda 2012 Programme

Duda 2012 Programme Results

12,5 m

2,6 m

9,8 mln

23

PRO effects have been bringing increaling benefits amounting to PLN 23,3 m which is 28% of thegeneral budget declared for 2010-2014 (PLN 80 m)

PRO effects have been bringing increaling benefits amounting to PLN 23,3 m which is 28% of thegeneral budget declared for 2010-2014 (PLN 80 m)

Realization 3Q2011 Budget 2011

Realization

1-3Q

ActivitiesArea

� Optimization of purchasing processes across the Group and the launch of

tendering procedures for the following categories of purchase in accordance with

the timetable:- maintenance of production department - automobile parts and other materials associated with the maintenance of

vehicle fleet

Duda 2012 Programme:Initiatives to be implemented in 2011

Building purchase

organization

Current activities

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� Accepting concept of central warehouse for the plant in Grąbkowo, the main

advantages: central storage / reducing storage costs and greater liquidity of

materials � Maintenance / reduction of employment

� Reducing the cost of maintaining personnel

� Gradual increase in outsourcing workers.

� Implementation of periodic review of results at the level of business units in

companies of the RMC Group

� The development of SAP BW for sales planned in CM Makton

� Running the BI project to build the concept of the RMC Group

Optimizing

employment costs

Development of

managerial

information system

ActivitiesArea

Costs/ margin

balance

� Reduction of production costs - optimization of the process and production costs

� Purchasing policy to be adapted to market needs - reducing raw material costs

� Portfolio optimization - maximizing the profitability of offe

� Optimization of transportation costs by optimizing routes and reducing unit costs.

� Developing new rules for sorting carcasses to the client - increasing the profitability of

Current activities

Duda 2012 Programme:Initiatives to be implemented in 2011

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� Developing new rules for sorting carcasses to the client - increasing the profitability of sales,

� Developing new rules for sorting carcasses for dissection - the increase in return on sales,

� The introduction of the principles of budgeting, sales, production and buying based on the principle of ‘just in time’ - minimizing operating costs and increase return on sales

� Developing and implementing a performance report, capacity utilization, increasing sales profitability, minimize production costs,

� Implementation of an alternative calculation rules - increase the profitability of sales,

� Developing and implementing new rules for buying pig livestock - increasing the profitability of sales,

� Development and implementation of production standards for the elements.

Duda 2012 Programme.Results - summary.

Tasks fulfilledArea

Distribution

� Improving the efficiency of purchasing goods

� Optimization of the process and the introduction of targeted telemarketing sales

� Optimization of employment in accounting and HR departments.

� HCR revenue growth of 40% Vs. IIIQ 2010

� Expanding portfolio of network clients.

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Disinvestments

� Expanding portfolio of network clients.

� Stół Polski brand revitalization - the start of the project

� Sales growth-September 2011 to January-September 2010 by 3%

� The increase in revenues for 3Q 2010 to 3Q 2011 by 7.3%

� Sales of agricultural companies Wizental Sp. z o.o. for PLN 5,5. m.

Agrohop Sp. z o.o. for the amount of EUR 3,76 m.

Legal notes

- This document on PKM Duda has been prepared by PKM Duda (the "Company").

- This document does not represent a complete or exhaustive image of the Company. This document and the

associated slides and their descriptions may contain statements that relate to the future. The forward-

looking statements are not guarantees of fulfillment of expectations of future performance and involve risks,

uncertainties and therefore the actual financial situation of the Group in the future may differ materially

from the expectations expressed or implied.

- The Company presents its own image, prepared in accordance to the best knowledge and belief, provided

that it is not possible to provide complete information. Implementation of the events referred to in this

document is subject to the satisfaction of several conditions that may occur impossible to meet. document is subject to the satisfaction of several conditions that may occur impossible to meet.

- Regarding the comprehensiveness or accuracy of the information presented in this document, no warranties

or representations shall be created. The Company is not responsible for any reason whatsoever arising from

any use of this document. This document has been prepared solely for information and publicity, and does

not constitute an offer to buy or sell or offer securities or financial instruments or to participate in any

commercial venture. This document does not constitute an offer or invitation to purchase or subscribe for

any securities in any jurisdiction, and nothing contained therein shall not constitute a basis for any

agreement, commitment or investment decision, nor should it rely on it in connection with any contract,

commitment or investment decision.

2727

HeadquartersPolish Meat Concern DUDA S.A. ul. Kłobucka 25, 02-699 Warsaw

tel. (+48) 22 319 94 00

www.pkmduda.pl