Wimm-Bill-Dann Foods OJSC Continues to Post Strong Revenue and Substantial Volume Growth Across All Segments in Third Quarter and Nine Months of 2010

Wimm-Bill-Dann Foods OJSC [NYSE: WBD] today announced its financial results for the third quarter and nine months ended September 30, 2010.

Highlights for the third quarter and nine months of 2010

• Group revenue increased 18.8% year-on-year to US$1,895.9 million in the first nine months of 2010, and 22.3% year-on-year to US$640.9 million in the third quarter of 2010, driven primarily by strong volume growth across all business segments
• Group gross profit grew 4.5% to US$576.6 million in the first nine months of 2010 from US$551.9 million in the same period last year, and 6.5% to US$200.8 million in the third quarter of 2010 from US$188.6 million in the third quarter of 2009
• Group gross margin declined 420 basis points year-on-year to 30.4% in the first nine months of 2010, as a result of continued pressure of raw milk costs
• EBITDA¹ was US$239.6 million in the first nine months of 2010 compared to US$246.6 million in the same period of 2009
• Net income declined to US$92.7 million in the first nine months of 2010 from US$109.4 million in the first nine months of 2009

"Yet again we delivered strong volume growth in each of our business segments,” said Tony Maher, Wimm-Bill-Dann’s Chief Executive Officer. "Our strong sales growth and stable bottom line, despite record raw milk prices, are a testament to our ability to adjust our sales mix, the power of our brands and the strength of relationships with our suppliers, our customers and our consumers.”

"We saw a robust 15% jump in group volumes in the third quarter and 10% increase for the first nine months of the year. The unusually hot summer led to an unprecedented spike in raw milk prices which has affected all players. Our long-term supplier relationships allowed us to manage this challenge better than others and our unrelenting focus on cost and supply chain management helped us reduce the impact on our margins. In particular, we were pleased by our ability to deliver sequential improvement in our dairy gross margins of 60 basis points during the third quarter.”

"Group revenue increased 22.3% in the third quarter of 2010 from the same period a year ago to $640.9 million, driven by volume growth across all of our business segments.”

"We are also very pleased with the recently announced agreement with PepsiCo. This transaction is a great vote of confidence in the Russian market and recognizes the value of Wimm-Bill-Dann’s strong, high-growth platform and product portfolio, while bringing tremendous value to our shareholders. PepsiCo is a global leader in the food and beverage industry and we are excited about the opportunities that this deal brings. Together we will be the largest FMCG company in Russia with a comprehensive portfolio of products and an unmatched distribution network that will deliver benefits to our shareholders, customers, suppliers and employees,” concluded Mr. Maher.

Dairy

Sales in the Dairy Segment increased 18.2% to US$1,318.0 million in the first nine months of 2010 from US$1,115.4 million in the same period of 2009. Sales growth was driven primarily by strong volumes as well as pricing. The average dollar selling price increased 14.2% to US$1.20 per 1 kg in the first nine months of 2010 from US$1.05 per 1 kg in the same period last year. We continued to see a pressure from raw milk costs through the third quarter of 2010. Our raw milk purchasing price increased year-on-year in US dollar terms 40.8% in the first nine months, and 53.5% in the third quarter of 2010. As a result, our gross margin in the Dairy Segment declined to 23.9% in the first nine months of 2010 from 31.1% in the same period last year. However, gross margin improved to 25.6% in the third quarter of 2010.

Beverages

Beverages continued to outperform the market winning market share and accelerating volume growth. Sales in the Beverage segment increased 15.3% to US$349.8 million in the first nine months of 2010 compared to US$303.4 million in the same period of 2009. The growth was driven by solid volumes, offset partially by mix effect. The average dollar selling price decreased 1.9% to US$0.74 per liter in the first nine months of 2010 from US$0.75 per liter in the same period last year. Gross margin in Beverages increased to 43.7% in the first nine months of 2010 from 39.2% in the same period last year due to improved efficiency and lower input costs. Gross margin in Beverages increased to 44.4% in the third quarter of 2010 from 40.1% in the third quarter of 2009.

Baby Food

The Baby Food Segment demonstrated traditionally strong volume growth and improved market position. Sales in Baby Food increased 29.1% to US$228.2 million in the first nine months of 2010 from US$176.8 million in the same period last year driven mainly by growth in volumes. The average dollar selling price increased 6.1% to US$1.87 per kg in the first nine months of 2010 from US$1.76 per kg in the first nine months of 2009. Gross margin in the Baby Food Segment decreased to 47.5% in the first nine months of 2010 from 49.0% in the first nine months of 2009 due to slight changes in mix.

Key Cost Elements

In the first nine months of 2010, selling and distribution expenses increased 16.7% to US$317.8 million from US$272.3 million in the same period last year, mainly due to higher transportation and personnel expenses. At the same time as a percentage of sales, selling and distribution expenses decreased to 16.8% in the first nine months of 2010 from 17.1% in the first nine months of 2009. General and administrative expenses decreased 1.7% to US$95.4 million in the first nine months of 2010 from US$97.1 million in the same period last year. General and administrative expenses, as a percentage of sales, decreased to 5.0% in the first nine months of 2010 from 6.1% in the same period of 2009.

Operating profit decreased 12.9% year-on-year to US$154.2 million in the first nine months of 2010.

EBITDA declined 2.8% year-on-year to US$239.6 million in the first nine months of 2010. EBITDA margin declined to 12.6% in the first nine months of 2010 compared to 15.5% in the same period last year.

In the first nine months of 2010, financial expenses decreased 8.8% to US$29.0 million compared to US$31.8 million in the same period of 2009. However, in the third quarter of 2010, financial expenses increased to US$16.9 million compared to US$5.9 million in the third quarter of 2009. This was mainly due to increased interest expense which amounted to US$14.6 million in the third quarter of 2010 compared to US$7.7 million in the third quarter of the last year.

Our effective tax rate increased to 24.9% in the first nine months of 2010 from 24.1% in the same period of 2009.

Net Income

In the first nine months of 2010, net income decreased 15.2% year-on-year to US$92.7 million.

Attachment A
Reconciliation of EBITDA and EBITDA margin to US GAAP Net Income

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

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 noncontrolling interests. EBITDA margin is EBITDA expressed as a percentage of sales.

We present EBITDA because we consider it an important supplemental measure of our operating performance. In particular, we believe 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.

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. Moreover, other companies in our industry may calculate EBITDA differently or may use it for different purposes than we do, limiting its usefulness as a comparative measure.

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

Some of the information contained in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Wimm-Bill-Dann Foods OJSC, 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 Foods OJSC files from time to time with the U.S. Securities and Exchange Commission, specifically, the Company's most recent Form 20-F. These documents contain and identify important factors, including those contained in the section captioned "Risk Factors" in our Form 20-F, 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, and risks associated with our competitive environment, acquisition strategy, ability to develop new products or maintain market share, brand and company image, operating in Russia, volatility of stock price, financial risk management, and future growth.

NOTES TO EDITORS

Wimm-Bill-Dann Foods OJSC was founded in 1992 and is the largest manufacturer of dairy products and a leading producer of juices and beverages in Russia and the CIS. The company produces dairy products (main brands include: Domik v Derevne, Chudo, Imunele, Bio Max and more), juices (J7, Lubimy Sad, 100% Gold), Essentuki mineral water and Rodniki Rossii natural water, Zdraivery kids’ brand and Agusha baby food.

The company has 38 manufacturing facilities in Russia, Ukraine, Central Asia and Georgia with over 16,000 employees. In 2005, Wimm-Bill-Dann became the first Russian dairy producer to receive approval from the European Commission to export its products into the European Union.

In 2010, Standard & Poor's Governance Services confirmed on WBD its governance, accountability, management, metrics, and analysis (GAMMA) score "GAMMA- 7+”. The score is the highest among Russian companies and reflects the effective work of the Board of Directors and, in particular, the real influence of independent directors in the decision-making process and the adherence of the controlling shareholders to the highest standards of corporate governance.

¹ Note: See Attachment A for definitions of EBITDA and EBITDA margin and reconciliations to net income.