During the first three months of 2005, Wimm-Bill-Dann’s sales rose by 17.0% to US$325.7 million, compared to US$278.3 million in the first quarter of 2004. Gross profit increased by 15.7% compared to the same period last year, while gross margins declined to 25.7% in the first three months of 2005 from 26.0% in the same period of 2004. Operating income increased by 26.3% year-on-year from US$7.6 million to US$9.6 million. Adjusted EBITDA* increased by 17.2% year-on-year from US$18.6 million to US$21.8 million. Adjusted EBITDA* margin remained flat at 6.7%. Net income decreased to US$ 2.9 million in the first quarter of 2005 from US$5.3 million in the first quarter of 2004.

Commenting on today’s announcement Sergei Plastinin, Chief Executive Officer of Wimm-Bill-Dann Foods OJSC, said: «Traditionally, the first quarter is the most challenging one throughout the year. Despite this, our sales continued to demonstrate stable growth: our dairy sales were up 18.4% largely due to regional expansion, the launch of new innovative products and the strengthening of the already existing product range. Following the success of Imunele, our immune system booster, we launched Imunele Forte, a new product enriched with probiotics and vitamins. We also initiated an awareness campaign to focus people’s minds on healthier lifestyles. During the first quarter we almost doubled the output of Lamber cheese, following increasing consumer demand for this product. Our operating income grew 26.3%, while our net income decreased mainly as a result of substantial decline in foreign currency translation gain as compared to the first quarter of 2004 due to the change in the exchange rate dynamics».

Key Operating and Financial Indicators of 3m 2005

* Note: See Attachment A for definitions of Adjusted EBITDA and Adjusted EBITDA margin and reconciliations to net income.

Wimm-Bill-Dann’s sales reached US$325.7 million in the first three months 2005 compared to US$278.3 million in the same period 2004.

Baby Food as a separate business unit came into effect as of January 1, 2005. Prior to 2005, Baby Food was part of the Dairy Segment. Juice and Water segments were merged into a singe Beverages Segment as of March 1, 2005.

Sales in the Dairy Segment increased by 18.4% from US$195.9 million in the first three months of 2004 to US$232.0 million in the first three months of 2005, while the average selling price rose by 15.5% from US$0.71 per 1 kg in the first three months of 2004 to US$0.82 per 1 kg in the same period of 2005. This increase was primarily driven by ruble price increases. Gross margins in the Dairy Segment declined from 22.8% in the first three months of 2004 to 22% in the same period of 2005. This change was primarily driven by the increase in raw materials costs mostly due to the 14.1% year-on-year increase in the weighted average US dollar price of raw milk and higher packaging and personnel costs.

Sales in the Baby Food Segment increased by 41.5% from US$14.7 million in the first three months of 2004 to US$20.8 million in the first three months of 2005, while the average selling price rose by 19.7% from US$1.22 per 1 kg in the first three months of 2004 to US$1.46 per 1 kg in the same period of 2005. This increase was primarily driven by ruble average price growth. Gross margins in the Baby Food Segment rose from 32.7% in the first three months of 2004 to 35.1% in the same period of 2005.

Sales in the Beverages Segment (combined Juice and Water Segments) increased by 7.7% from US$67.7 million in the first three months of 2004 to US$72.9 million in the same period of 2005, while the average selling price increased by 7.8% from US$0.64 per liter in the first three months of 2004 to US$0.69 per liter in the same period of 2005 primarily due to ruble price increases. Gross margin in the Beverages Segment increased to 35.2% in the first quarter 2005 from 34.0% in the same period last year.

Selling and distribution expenses decreased as a percentage of sales from 14.7% during the first three months of 2004 to 13.7% in the same period of 2005. Advertising and marketing expenses decreased as a percentage of sales from 4.5% in the first quarter of 2004 to 3.9% in the first quarter of 2005.

General and administrative expenses increased as a percentage of sales from 7.8% during the first three months of 2004 to 8.3% in the same period of 2005. This increase was primarily caused by rising personnel expenses mostly due to additional personnel in the Baby Food Segment and in the Dairy Segment in key regions, as well as the recruitment of additional managers at the holding company level in 2004.

Financial expenses in the first three months of 2005 totaled US$3.9 million compared to US$1.8 million financial income in the same period of 2004. Foreign currency translation gain decreased from US$7.5 million to US$1.7 million in the first three months of 2005. Interest expenses stayed almost flat at US$5.5 million.

Attachment A

*Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to US GAAP Net Income

Adjusted EBITDA is a non-U. S. GAAP financial measure. The following table presents reconciliation of Adjusted EBITDA to net income (and Adjusted EBITDA margin to net income as a percentage of sales), the most directly comparable U. S. GAAP financial measure.

Adjusted EBITDA represents net income before interest, income taxes and depreciation and amortization, adjusted for interest income, currency remeasurement gains, bank charges and other financial expenses and minority interest. Adjusted EBITDA margin is Adjusted EBITDA expressed as a percentage of sales.

We present Adjusted EBITDA because we consider it an important supplemental measure of our operating performance. In particular, we believe Adjusted EBITDA provides useful information to securities analysts, investors and other interested parties because it is used in the «debt to EBITDA» debt incurrence financial measurement in certain of our financing arrangements.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as substitute for analysis of our operating results as reported under U. S. GAAP. Since we adjust EBITDA for recurring items in order to calculate Adjusted EBITDA, we particularly caution users that Adjusted EBITDA is not an alternative to net income, operating income or any other GAAP measure, nor to EBITDA. Moreover, other companies in our industry may calculate Adjusted EBITDA differently or may use it for different purposes than we do, limiting its usefulness as a comparative measure.

Adjusted EBITDA also should not be considered as an alternative to cash flow from operating activities or as a measure of our liquidity. In particular, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.

WIMM-BILL-DANN FOODS
Consolidated Statements of Operations (unaudited)
(Amounts in thousands of U.S. dollars, except share and per share data)

WIMM-BILL-DANN FOODS
Consolidated Balance Sheets
(Amounts in thousands of U.S. dollars)

WIMM-BILL-DANN FOODS
Consolidated Statements of Cash Flows
(Amounts in thousands of U.S. dollars)

Wimm-Bill-Dann Foods OJSC
16 Yauzsky Boulevard, Moscow, Russia
Phone: +7 095 733-97-26/9727
Fax: +7 095 733-97-25
web: https://www.wbd.com
E-mail: kagan@wbd.ru

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Wimm-Bill-Dann, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to conform them to actual results. We refer you to the documents Wimm-Bill-Dann files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, acquisition strategy, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.