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Investing in Bulgarian Farmland: Opportunities and Advantages

Discover the high growth, low volatility, and undervalued nature of Bulgarian farmland. Learn about ATERA, a top performer in the market, and the benefits of investing in this lucrative sector.

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Investing in Bulgarian Farmland: Opportunities and Advantages

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  1. February 2018

  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 *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 Calculations: Advance Terrafund Performance of MSCI EM EE, Bulgarian farmland and SOFIX

  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 European countries in EUR/ha Source: Media publications 2016

  6. 224% 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 - 1 866 • 23% foreign ownership of the market cap Source: Shareholders’ Book as ofDecember 31, 2017

  10. Our business model

  11. Our land investments Source: Advance Terrafund as of December 31, 2017

  12. Our farmland by planning regions Total 21 941 ha of agricultural land Source: Advance Terrafund as of December 31, 2017

  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 December 31, 2017

  15. Our leased land Source: Advance Terrafund as of January 31, 2018 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 47 700 ha versus 25 800 ha total sold • Total sales on leasing and deferred payment until now – 2 222 ha Land sales of ATERA Source: Advance Terrafund

  17. Farmland market • Factors: • World grain storage – 268 ml. t. – new record, 4% above 2016 • Russia with historic yield of wheat – 82 ml. t. – 17% growth • World wheat and corn prices – at low levels • All-time record production of wheat in Bulgaria in 2017 – 5.8 ml. t. • Lower production of barley with 14% and of rape seed with 7% • Higher production of sunflower with 9% and of corn with 8% • Lower wheat price with 6% compared to February 2017 • Lower corn price with 9% compared to February 2017 • Forecast: • World grain and oil seed prices will remain at low levels • Increased demand for farmland purchases from investors and farmers • Rents increase Page 17

  18. CAPafter 2020 • Budget reduction for agriculture in the EU due to Brexit, immigration, security • Most of the EU countries insist the direct payments per ha to be kept • Demand for more autonomy when defining the ceiling for direct payments for the different states • Implementation of measures for management of the risk and the financial instruments • Bigger focus on “genuine” farmers, young entrants and small family farms • It is expected till the mid-2019 to be clarified the priorities for CAP after 2020 Стр.18

  19. Land portfolio turnover Source: Advance Terrafund

  20. Our key financial indicators • Total raisedcapital since foundation EUR 65.7 mn • Total distributed dividendssince foundation EUR 78.2mn • Net income distribution for dividends ~100% • No debt financing Source: Advance Terrafund

  21. Dividend yield ATERA earns the second highest dividend yield of all most liquid companies at BSE for the period 2012-2016

  22. 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

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

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

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

  26. Attachment Stock exchange markets in CEE Bulgarian market slows its growth compared to 2016 Source: Karoll Capital Management

  27. Contact Atanas Dimitrov Investor Relation Director Advance Terrafund REIT adimitrov@karoll.bg 1 Zlatovruh Str. 1164 Sofia BULGARIA Tel: +35924008332 www.advanceterrafund.bg This presentation provides only information about the activity and the structure of the Company and do not represent a recommendation or an offer for buying or selling the shares of Advance Terrafund REIT.

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