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Investing in Bulgarian Farmland - High Growth & Low Volatility

Discover the high growth potential and low volatility of investing in Bulgarian farmland. Find out why Bulgarian farmland is undervalued compared to other EU countries and how it provides reliable cash flow from rents.

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Investing in Bulgarian Farmland - High Growth & Low Volatility

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  1. Investor dayMay 2016

  2. ATERA at a glance

  3. Main characteristics of ATERA BSE ticker: 6A6 (former ATERA) Bloomberg ticker:6A6:BU

  4. Why invest in Bulgarian farmland? (1/2) • High growth and low volatility Calculations: Advance Terrafund Performance of MSCI EM EE, Bulgarian farmland and SOFIX *MSCI EM Eastern Europe index covers large and mid cap companies from the region **SOFIX is the official BSE index, based on the market cap of the 15 most liquid companies

  5. Why invest in Bulgarian farmland? (1/2) • BG farmland is seriously undervalued in comparison with the farmland in EU • Low correlation to traditional retail investments • Reliable cash-flow from rents Average prices in EU countries with liberal farmland markets in EUR/ha Source: EUROSTAT, Agriculture,Averagefarmlandprices – 2009

  6. 272% land price growth for 10 years Bulgarian farmland market Source: Ministry of Agriculture and Food Supply, System for AgriMarket Information and National Statistical Institute

  7. What is a REIT? Real Estate Investment Trust (REIT) characteristics:

  8. Our organizational structure

  9. Our shareholder’s structure • Number of ordinary shares - 85 110 091 • Total number of shareholders - 1 652 • 27% foreign ownership of the market cap Source: Shareholders’ Book as of March 31, 2016

  10. Our business model

  11. Our land investments Source: Advance Terrafund as of December 31, 2015

  12. Our farmland by planning regions • Total 23 387ha of agricultural land • Average land portfolio price 2367 €/ha Source: Advance Terrafund as of March 31, 2016

  13. The most fertile soils are 1, 2, 4 Danube River Danube Valley • Legend • Chernozems (Black soils) • Grey forest soils • Planosols • Smolnitza & Cinnamonic forest soils • Cinnamonic forest soils • Brown forest soils • Mountain meadow soils Source: INSTITUTE OF SOIL SCIENCE “N. POUSHKAROV”

  14. Our farmland by regions in ha Source: Advance Terrafund as of March 31, 2016

  15. Our leased land Source: Advance Terrafund as of April 30, 2016 Page 15

  16. Our land banking • Land banking - sale of agricultural land, which is concentrated or consolidated in one village, while still acquiring separated land plots in other villages • Total acquired farmland since foundation 46 700 ha versus 23 300 ha total sold • Land consolidation - the company has finished 4 projects and participates in 11 other projects Land sales of ATERA Source: Advance Terrafund as of April 31, 2016

  17. Farmland market • Factors: • Increased bank financing for farmers = increased indebtedness • The world grain storage is the highest for the last 30 years World production and consumption of wheat in million tones production consumption Source: www.sinor.bg • Wheat and corn prices - the lowest for the last 8 years • Above factors are expected to push down slightly the farmland price Page 17

  18. Land portfolio turnover Source: Advance Terrafund

  19. Our key financial indicators • Total raisedcapital since foundation EUR 65.7 mn • Total distributed dividendssince foundation EUR 66.4mn • Net income distribution for dividends ~100% • No debt financing Source: Advance Terrafund

  20. Dividend yield The dividend yields of ATERA exceed these of SOFIX* *SOFIX is the official BSE index, based on the market cap of the 15 most liquid companies Source: REUTERS

  21. Performance of SOFIX and ATERA Since its foundation ATERA totally outperforms SOFIX* *SOFIX is the official BSE index, based on the market cap of the 15 most liquid companies Source: www.Infostock.bg

  22. Attachment ATERA’s balance sheet All amounts are in thousands BGN

  23. Attachment ATERA’s income statement Amounts are in thousands BGN unless indicated otherwise

  24. Attachment GDP growth in CEE countries Weaker GDP growth forecasts in Bulgaria compared to the other CEE countries

  25. Attachment Stock exchange markets in CEE Bulgarian market in Q1 2016 could not compensate the drop in 2015 Source: Karoll Capital Management

  26. Contact Atanas Dimitrov Investor Relation Director Advance Terrafund REIT adimitrov@karoll.bg 1 Zlatovruh Str. 1164 Sofia BULGARIA Tel: +35924008332 www.advanceterrafund.bg

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