Wimm-Bill-Dann Foods OJSC Announces Double Digit Revenue Growth for 2008 and Remains Focused on Maintaining Strong Financial Foundation

Wimm-Bill-Dann Foods OJSC [NYSE: WBD] today announced its financial results for the full year and the fourth quarter ended December 31, 2008.

Highlights of full year 2008:

• Group revenue grew 15.8% to US$2,823.6 million
• Gross profit increased 16.5% to US$913.0 million
• Operating income rose 14.6% to US$245.1 million
• Net income decreased 27.3% to US$101.7 million
• Unprecedented ruble devaluation in the latter part of 2008
• Underlying net income excluding foreign currency remeasurement effect increased 15.0% to US$146.0 million
• EBITDA¹ grew 20.1% to US$361.0 million, and EBITDA margin improved to 12.8% from 12.3%
• Operating cash flow rose 231.8% to US$321.2 million
• Free cash flow grew 227.9% to US$135.8 million

On a constant currency basis (in rubles), revenue grew 3.2%, operating profit increased 28.3% and EBITDA rose 24.0% in the fourth quarter of 2008 compared to the same period of 2007.

"Wimm-Bill-Dann achieved solid growth and profitability in 2008, a reflection of the resilience of the business, both in terms of the strength of our market position and our focus on improving the already solid fundamentals of the company,” said Tony Maher, Wimm-Bill-Dann’s Chief Executive Officer. "We continue to face the significant headwinds of the current unprecedented global economic turmoil, but despite these challenges, we achieved double-digit revenue growth across all our business segments in 2008, highlighted by the continued significant growth in our baby food segment. We also strengthened our already solid financial foundation, generating US$321.2 million in operating cash flow, and recently repaid our US$130 million bond, reflecting our strong liquidity position and improving our already healthy debt levels.”

"All of our business segments continue to post solid results, with total revenue for 2008 of US$2.8 billion, representing growth of 16%, all of which is purely organic. Our Dairy Segment delivered sales of US$2.1 billion in 2008, up over 13% year-over-year. In our Beverage Segment, we achieved sales growth of over 14% to US$473.2 million for the year. Our Baby Food Segment sales in 2008 totalled U$254.5 million, an increase of 48% in comparison to 2007.”

"Our gross profit in 2008 was US$913 million, up 16.5% from a year ago. EBITDA continued to show solid improvement as well for the year. We reported EBITDA of US$361 million for 2008, up 20.1%, driven by top-line growth across all our business segments and tighter cost management.”

Mr. Maher concluded, "Despite undeniable challenges in the near-term, the opportunities for the company over the long-term continue to be excellent. Therefore, we remain focused on delivering on our long-term strategy and maintaining our strong financial foundation.”

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

Dairy

Sales in the Dairy Segment increased 13.1% to US$2,095.9 million for the full year of 2008 from US$1,852.5 million in 2007. The growth was organic, driven primarily by pricing and offset by volume decline. The average Dollar selling price rose 25.9% to US$1.42 per kg in 2008 from US$1.13 per kg in 2007 driven mainly by average ruble price growth – a result of launching new high-margin products. Our raw milk purchasing price grew 21.5% year-on-year in ruble terms (25.2% in US dollar terms) for the full year of 2008. In the fourth quarter of 2008, our raw milk purchasing price decreased 14.6% year-on-year in ruble terms (22.6% in US dollar terms). The gross margin in the Dairy Segment stayed almost flat at 29.1% for the full year of 2008, and improved to 28.9% in the fourth quarter from 26.9% in the same period of 2007.

Beverages

Sales in the Beverages Segment increased 14.3% to US$473.2 million for the full year of 2008 from US$414.1 million in 2007, driven primarily by a healthy balance of price, volume and mix. The average dollar selling price increased 9.9% to US$0.93 per liter in 2008 from US$0.84 per liter in 2007. The gross margin in the Beverages Segment decreased to 39.1% in 2008 from 39.8% in 2007, due to concentrate cost pressure in the first half of 2008. The gross margin improved to 40.7% in the fourth quarter of 2008 from 37.9% in the same period last year.

^* Underlying net income here and after means net income excluding foreign currency remeasurement effect and adjusted for respective tax amount.

Baby Food

Sales in the Baby Food Segment increased 48.2% to US$254.5 million for the full year of 2008 from US$171.8 million last year, driven by a healthy balance of volume and price. The average selling price rose 18.4% to US$2.29 per kg in 2008 from US$1.94 per kg in 2007. The gross margin in the Baby Food Segment increased to 46.9% in 2008 from 45.1% in 2007.

Key Cost Elements

For the full year of 2008, selling and distribution expenses increased 25.8% to US$488.1 million, primarily, due to further geographic expansion and entering new markets in remote regions. Selling and distribution expenses, as a percentage of sales, grew to 17.3% in 2008 compared to 15.9% last year. General and administrative expenses decreased 5.3% to US$171.4 million in 2008. General and administrative expenses, as a percentage of sales, declined to 6.1% in 2008 from 7.4% in 2007.

Operating profit increased 14.6% to US$245.1 million in 2008. EBITDA grew 20.1% to US$361.0 million. EBITDA margin improved to 12.8% in 2008 compared to 12.3% in 2007.

For the full year of 2008, financial expenses grew 502.4% to US$101.5 million from US$16.9 in 2007. This was mainly due to currency remeasurement loss incurred in the latter part of 2008 as a result of the weakening of the ruble against the dollar, impacting mainly US$250 million syndicated loan taken out in the second quarter of 2008. In the fourth quarter of 2008, we saw unprecedented devaluation of the ruble against the dollar. The average exchange rate grew 13.2% to 27.21 rubles per US dollar in the fourth quarter of 2008 from 24.04 rubles per US dollar for the first nine months of 2008. As a result, in the fourth quarter of 2008, currency remeasurement loss amounted to US$57.5 million compared to currency remeasurement gain of US$4.1 million in the fourth quarter of 2007. Currency remeasurement loss amounted to US$61.4 million in 2008 against currency remeasurement gain of US$18.1 million in 2007. Currency remeasurement loss is not a cash item.

Our effective tax rate increased slightly to 27.8% in 2008 from 27.5% in 2007.

Net Income

Net income decreased 27.3% to US$101.7 million in 2008 from US$140.0 million in 2007.

Underlying net income excluding foreign currency remeasurement effect and adjusted for respective tax amount increased in 2008 by 15.0% year-on-year to US$146.0 million, and by 12.6% year-on-year in the fourth quarter of 2008 to US$32.5 million.

Debt and Cash Flows

As of the end of 2008, our net debt decreased 27.5% year-on-year to US$396.2 million, the lowest level since the first quarter of 2007.

As a result of tight working capital management, our operating cash increased 231.8% to US$321.2 million in 2008 from US$96.8 million in 2007. Free cash flow grew 227.9% to US$135.8 million in 2008. As of the end of 2008, our cash balance increased 728.8% year-on-year to US$277.3 million, which enables us to repay our short-term debt using internal funds.

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 minority interest. 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.

Note: The Company has filed 20-F for FY 2007 to the SEC. The report can be also downloaded from our web site www.wbd.com

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, Neo, 2Bio, 33 Korovy, Chudo and more), juices (J7, Lubimy Sad, 100% Gold), Essentuki mineral water and Agusha baby food. The company has 37 manufacturing facilities in Russia, Ukraine, Kyrgyzstan, Uzbekistan and Georgia with over 18,000 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 2008, Standard & Poor's Governance Services assigned on WBD its governance, accountability, management, metrics, and analysis (GAMMA) score "GAMMA- 7+”. The score 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.