Netherlands: Efes Breweries International N.V. said unaudited sales volumes expanded 31% in January-September 2006

Efes Breweries International N.V. (“EBI” or “the Company”) announced November 27 its unaudited consolidated financial results as of and for the 9 months ended 30 September 2006 prepared in accordance with IFRS.

“We maintained our dynamic and profitable growth in the first nine months of 2006” commented Ahmet Boyacioglu, CEO and Chairman of the Board of Management. “EBI’s favorable financial performance also indicates the successful integration of the Krasny Vostok Brewing Group into EBI system in Russia which is expected to be completed by the year-end.”

Financial Summary
EBI’s consolidated sales volume in the first nine months of 2006 was up 31% y-o-y, reaching 9.1 million hectoliters. EBI acquired the Krasny Vostok Brewing Group (“KV Group”) in Russia in February 2006 and disposed its 50% shareholding in the Romanian Joint Venture Interbrew Efes Brewery (“Efes Romania”) in August 2006. Excluding the sales volume of the KV Group brands in 2006, EBI’s organic volume growth in the first nine months of 2006 was 9%.

EBI improved its top line growth to 32% in YTD 3Q2006 with revenues reaching US$ 496.1 million. Excluding the impact of the KV Group brands, the revenue growth was 15%. The increase is mainly due to local currency price increases, through effective pricing policy in spite of unfavorable brand mix impact due to increased volume of economy brands, as well as positive foreign currency effect.

EBI’s Gross Profit increased by 34% in YTD 3Q2006 compared to the same period of previous year by reaching US$ 241.8 million. Gross Profit margin expanded to 49%. Inclusion of the KV Group into EBI’s operations results in a lower cost base and economies of scale which offset the negative impact on the average price of EBI due to inclusion of KV Group brands in EBI’s brand portfolio.

There has been a slight decrease in EBI’s Profit from Operations margin as a result of the integration of KV Group in EBI’s operations in YTD 3Q2006, which also impacts EBI’s EBITDA margin for the first nine months of 2006. EBI’s EBITDA in YTD 3Q2006 was US$ 97.4 million, indicating a 27% increase over YTD 3Q2005 and an EBITDA margin of 19.6%. Year end EBITDA margin of EBI is expected to be lower than that of YTD 3Q2006, due to overall seasonality effect, integration of KV Group and disposal of Efes Romania.

In YTD 3Q2006 EBI’s financial expense also increased over the comparable period of previous year. The rise is mainly due an increase in total interest expense as a result of the US$ 500 million Bridge Loan Facility sourced in February 2006 in order to finance the Krasny Vostok acquisition and minority buy-out in Russia. The increase in the interest expense was partly offset by the foreign exchange gain in the period. The foreign exchange gain is fully attributable to the depreciation of USD (EBI’s reporting currency) versus Euro and major local currencies where EBI operates.

In YTD 3Q2006 EBI’s Net Income increased by 62% over the comparable period of previous year and reached US$ 24.8 million. Besides the above mentioned factors, net income was also positively affected by the decrease in Minority Interest, due to the acquisition of certain minority shareholding in February 2006 and the change in the accounting of the put-option relating to Moscow Efes Brewery (“MEB”), EBI’s operating subsidiary in Russia.

EBI’s net financial debt as of 30.09.2006 was US$ 529.7 million. This increase in the level of net financial debt was primarily the result of the above mentioned Bridge Loan Facility.

In September 2006 EBI secured a 3 year syndicated term loan amounting to US$ 500 million which was collectively sourced with Anadolu Efes. EBI utilized the US$ 300 million portion of the syndicated term loan in October 2006 to partly repay the Bridge Loan Facility.

Sales Volume Breakdown by Geography
Russia: 72%
Romania: 6%
Kazakhstan: 8%
Moldova: 10%
Serbia: 4%

Sales Revenue Breakdown by Geography
Russia: 78%
Romania: 3%
Kazakhstan: 9%
Moldova: 7%
Serbia: 3%

In November 2006 EBI increased its capital by US$ 300 million in the form of a Rights Issue to existing shareholders. Following the completion of the Rights Issue, Anadolu Efes (70.2%) and EBI’s public minority shareholders (29.8%) maintained their level of shareholding in EBI. EBI used US$200 million of the net proceeds to pay down the outstanding portion of the Bridge Loan Facility. Therefore towards the year-end 2006 EBI’s net financial debt has come down to levels which conform with EBI’s long term financial management policy.

In August 2006, EBI completed the sale of its 50% shareholding in Efes Romania to InBev S.A. (“InBev”).

In November 2006, EBI announced that the acquisition of 7.5% shares of EL&EL Limited (“EL&EL”) in MEB was completed and that as a result of the transaction, the effective ownership of EBI in MEB increased from 83.4% to 90.9%. The acquisition will be financed by part of the proceeds from the Rights Issue completed in November 2006.

Performance by Country

Russia:
Following the KV Group acquisition in February 2006, EBI solidified its #4 position in the Russian beer market and as of September 2006 EBI’s total volume market share was 9% (AC Nielsen YTD September 2006).

At the end of 3Q2006 EBI’s capacity in Russia increased to 19.7 million hectoliters in a total of 5 breweries. The acquisition of the KV Group in February brought an additional 10 million hl capacity and the completion of the capacity increase in EBI’s Ufa brewery contributed by an additional 2 million hl in June. EBI is also able to self supply the majority of its malt and pre-form requirements in 2006 with 139,500 tons of annual malt capacity and 1.3 million per day pre-form production capacity after the acquisition of the KV Group.

EBI has an important strategic advantage to seize the growth opportunities in the market, due to the location of its breweries, through better serving the highly developed Central, Volga and Ural regions as well as the emerging Far Eastern region.

EBI currently manages a brand portfolio consisting mainly of 11 brands: Warsteiner (Super Premium), Efes Pilsener, Amsterdam Navigator, Zlatopramen, Bavaria Premium (Premium), Stary Melnik (Upper Mainstream), Solodov, Sokol (Lower Mainstream), and Beliy Medved, Krasny Vostok, Zhigulevskoe (Economy).

In the first nine months of 2006 EBI’s Russian business recorded a total volume growth of 41% over the comparable period of previous year and reached 6.6 million hl. Excluding the sales volume of KV Group brands, EBI’s organic sales volume growth was 9% compared to the same period of previous year and outpacing the estimated market growth.

Russia is the largest market of EBI, delivering 72%, 78% and 83% of sales volume, net revenue and EBITDA, respectively in the first nine months of 2006.

Kazakhstan:
EBI is the second largest brewer in Kazakhstan, with a market share of 18% in 3Q2006 (AC Nielsen August-September 2006). Sales volume increased by 19% in YTD 3Q2006 compared to previous year and reached 0.74 million hectoliters.

Moldova:
In Moldova, EBI’s beer sales volume increased by 19% in the first nine months of 2006 over the comparable period of previous year, while the collective sales volumes (including soft drinks) grew by 11% in the first nine months of 2006, reaching 0.92 million hl. In Moldova EBI is the leading brewer with 65% market share (MEMRB YTD September 2006).

Serbia:
Serbia was the only market where the sales volume was down in YTD 3Q2006, although EBI maintained its market position. Sales volume in Serbia was 0.38 million hectolitres in the first nine months of 2006, representing a 13% decline vs. YTD 3Q2005.

Consolidation Principles
The consolidated financial statements include Efes Breweries International N.V. and the companies which it controls (“Subsidiaries”) except for Interbrew Efes Brewery in Romania. Interbrew Efes Brewery which was a jointly controlled entity and was disposed of in August 2006, is recognized by using the proportionate consolidation basis (50%) until 31.07.2006 and is not included in EBI’s consolidated financial thereafter.

The Krasny Vostok Brewing Group, which EBI acquired in February 2006, is fully consolidated in EBI’s financials starting from March 2006 and not included in the financials prior to that date. Following revised IAS 32 (Financial Instruments: Disclosure and Presentation), the put option, which has been granted earlier to EBRD on the shares of Moscow Efes Brewery (‘Efes Russia’), EBI’s operating subsidiary in Russia, has been regarded as liability (‘Put Option Liability’) in EBI’s Consolidated Financial Statements, to be stated at fair value. The Put Option Liability of US$ 76.6 million has been presented in non-current liabilities as ‘liability for puttable instruments’ in the consolidated balance sheet.

In order to give effect to the recognition of Put Option Liability, in addition to the effective ownership of 83.4%, a further 8.8% and thus a total of 92.1% interest in Efes Russia has been consolidated. Excess of the Put Option Liability over the fair value of net assets of Efes Russia has been recognized as goodwill.

Efes Breweries International N.V. is a leading brewing group in the countries in which it operates across the Commonwealth of Independent States ("CIS"), Eastern Europe and the Balkans, and in particular has a strong presence in Russia. Currently it markets and sells beer products in the Russian Federation, Kazakhstan, Moldova, Romania, and Serbia & Montenegro and has nine breweries in total.

The Company is a majority-owned subsidiary of Anadolu Efes Biracilik ve Malt Sanayii A. Ş. ("Anadolu Efes"), which is the leading brewer in Turkey and is listed on the Istanbul Stock Exchange. Anadolu Efes, together with its direct and indirect subsidiaries and affiliates (collectively "Efes Beverage Group"), produces and markets beer, bottled water, malt and soft drinks, including Coca-Cola trademark beverages across Turkey, Eastern Europe, the Balkans and the CIS.

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