Review of operating and financial performance of EMF Group for the period ended 30 September

2006and outlook for year-end

November 15th,2006

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We are the leading, independent regional lifestyle group...

Key player on the lifestyle market

Offering media and entertainment, toys and accessories, branded shoes and fashion products

Active in wholesale trade in Poland and in the region

Growing sales and stable margins

Further growing into Poland and expanding internationally

Operator of the largest network of retail stores in

Poland

During the first three quarters of 2006 sales grew by 20.9% year on year, gross margin amounted to 41% - an increase of 1.6% on

prior year period.

Operator of 283 retail outlets in Poland and 1 SMYK store in Germany*, totalling 132 300 sqm of net retail area.*

Marketing and distribution of leading cosmetics and optical brands in Poland, Slovakia and Czech Republic.

Plans to open above 120 new stores in Poland in the near future, expanding into neighbouring countries, in particular Ukraine and

Germany.

Manager of the biggest portfolio of premium brands

in the region

Above 40 premium brands (including premium international - Zara, Boss, Esprit, Aldo, Mango, Mexx, Palmers, Chanel, Dior, Shiseido,

Salvador Dali, Givenchy, Guerlain, Kenzo, Cerruti, etc. – and proprietary brands).

* as at end of Sep’06, area provided excludes language schools network and includes Zara Polska.

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…which manages a large portfolio of leading international and Polish brands...

*On September 22, 2006, EMF signed an agreement to sell 100% in Galeria Centrum.

*

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… and consequently implements its strategy, based on four key pillars …

Organic growthInternet sales

International expansion

Business model extension

Organic growth

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39

55 n/a

34 28 690

49 21 777

12 31 183

3955 n/a

35 29 085

49 22 956

12 31 183

35

58 n/a35 29 573

54 25 363

13 31 940

62 26 784

13 31 899Galeria Centrum

3Q 20062005

Media & Entertainment

Total ***

Net retail areaOutlets

1Q 2006 2Q 2006

Outlets Outlets Outlets

EMPiK

EMPiK Foto

Language schools

Smyk

Franchised brands**

75 40 525* 76 40 956* 77 42 041* 81 43 491*

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57 n/a

35

30 124

264122 176

266124 180

272128 917

284132 298

Fashion & Beauty

Capex spent during the first three quarters of 2006 amounted to almost PLN 54 Mio.

Net retail area

Net retail area

Net retail area

* Total retail area of EMPiK and EMPiK Foto

** Including Zara Polska

*** Excluding 29 stores in Ukraine, 50 Sephora Polska stores and 59 coffee bars operated by Coffeeheaven.

Organic growth of existing business translates into further extension of network of outlets and retail area…

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…further strengthening of key position in Poland and launching of international expansion…

Source: Company

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58.0%

Galeria Centrum – LFL

2005

Media & Entertainment

Growth rate

3Q 2005 3Q 2006

Growth rate

EMPiK – LFL

Franchise brands – LFL

11.5%

Fashion & Beauty

41.4%Smyk – LFL

EMPiK Retail 494 755 316 364 365 015160 445Smyk

67 816 40 441 54 102Other Media & Entertainment

204 598 132 944 147 247Franchise brands

195 820 128 762 135 989Galeria Centrum

58 054 58 054 -Zara

97 349 143 144

5.0%

Sales SalesSales

… and continued growth of sales, also in LFL

8.2% -0.3%

9.1%

2.4%

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EMF continues its business model extension …

New businesses in EMF subsidiaries

1. New brands in Ultimate Fashion: Spring, Palmers and Boss

Shoes & Accessories

2. New brands in Optimum Distribution: SergioTacchini, Protest,

Sun Valley & Bourjois, Matis, Ingrid Millet

3. New products in EMPIK: Coffee Bars, ticket sales, selling of services (e.g. language

courses),selling of mobile equipment and services

4. New products in SMYK: Bear Factory concept development in Smyk existing chain

5. New products in language schools: courses for corporates and

English for children (Kids Love English)

Organic growth

International expansion

Internet sales

Business model extension

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… and managing of its portfolio

Investment/Sales

Business model extension

Business model extension

1. Sale of Galeria Centrum

• Investment agreement with Vistula & Wólczanka S.A. signed on September 22nd 2006.

• Share price equal to PLN 10 Mio and repayment of debt of PLN 20.9 Mio plus accrued interest – in total PLN 30.9Mio

2. Reasons for sale

• GC operation too small to achieve quick profitability and lack of synergy with other group companies

• High estimated outlays to achieve the scale effect (ca PLN 50 MIO in course of the next two years)

• Net loss in 2006 (in spite of improved results)• The sale will enable allocation of funds (ca PLN 80

MIO) and focus management on higher return projects.

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Ukraine

• Empik signed an agreement to purchase, 65% in BUKVA (27 outlets all over Ukraine). In 2011 Empik can exercise call option and purchase the remaining 35%.

Currently Empik is looking for the possibilities to open next 2-3 stores in 2007.

• SMYK signed an agreement to buy 65% in Paritet Service – owner of two “Kinderland” stores in Kiev (a brand of stores for mothers and children). In 2011 and 2012 Smyk can exercise call option and purchase the remaining 35%.

Currently the stores are renovated to SMYK format.

In 2007 next 2 to 3 outlets are planned to be opened.

• EMF plans to launch franchise operation in Ukraine ( e.g.. just extended franchise agreement with ALDO)

Germany

• Pilot Smyk store was opened in Berlin in March 2006.

A further 2 agreements for new stores in 2007 have been signed and additional 2 agreements are under negotiation.

EMF continues its international expansion plan

International expansion into the region

International expansion

International expansion

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EMF Group further develops Internet sales

Empik.com

• Launching Empik.com in the end of 2005

• Fast development of EMPIK.com in 2006; at present over 2 MIO products available

• Currently EMPIK.com is one of 5 most frequently visited

e-commerce websites in Poland (source: megapannel of PBI/Gemius)

• Empik.com has been awarded as the best store in its categories by WPROST in October 2006

• Round PLN 15-20 MIO sales expected in 2006

• Important element of strategy in the existing stores (ordering system „info point”)

Internet salesInternet sales

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EMF financial results for the first three quarters of 2006*

3Q 2005 3Q 2006

* bez perfumerii Sephora ** bez Zara

Continuing operations

Sales 640 673 704 148

Gross margin 40.0% 41.0%

EBITDA 71 965 44 667

EBITDA margin 11.2% 6.3%

EBIT 38 413 20 892

EBIT margin 6.0% 3.0%

Net profit on continuing operations 34 410 17 335

Net profit margin 5.4% 2.5%

Net loss on discontinued operations

(25 765) (7 417)

Total net profit 8 645 9 918* Continuing operations do not include results of Galeria Centrum.

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EMF financial results for the first three quarters of 2006, after adjusting for one-off items, show further improvement in profitability Results from continuing operations only, that is excluding Galeria Centrum

After adjusting for one-off items – including in Q3 of 2005 the result on sale of ZARA shares and

various impairment charges*

Translates into EMF financial results on comparable basis:

3Q 20063Q 2005

Total sales excl. ZARA 582 619 704 148

Sales revenue growth +20.9%Gross margin excl. ZARA

39.4% 41.0%

EBITDA 34 342 44 667

EBITDA Margin 5.4% 6.3%

EBIT 14 523 20 892EBIT Margin 2.3% 3.0%

Net profit 10 435 18 223

Net profit margin 1.6% 2.6%*for additional information please refer to interim consolidated financial statements of EMF Group and Directors’ Report

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1. Organic development

• In October sales’ growth in continuing operations (i.e. excl. Galeria Centrum) amounted to 29% compared to the prior period of 2005

• In October 2006 5 outlets have been opened with net retail area of over 2.500 sqm

Internet salesInternet sales

Continuation of EMF strategy - preliminary results for October 2006

Organic growth

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1. Organic growth

• In November & December we are planning to open 7 additional outlets with net retail area of over 3.000 sqm

• In 2006 we plan to open 40 outlets with net retail area of over 18.600 sqm

• Additional 9 outlets with net retail area of over 4.000 sqm, to be opened in Złote Tarasy moved to 1Q 2007

• The majority of lease contracts for 2007 have been finalized

• Further positive sales development in existing chain

2. Business model development• Letters of intent with 1-2 new franchise and

license brands • Planned closing of both transactions in Ukraine• Planned closing of Galeria Centrum transaction

Internet salesInternet sales

Continuation of EMF strategy – Outlook for Q4

Organic growth

Business model extension

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3. International expansion

• Planned signing of the next two leases for SMYK stores in Berlin for 2007

• Planned signing of 3 – 5 leases for Empik/SMYK stores in Ukraine

4. Internet sales

• First full Christmas trading of empik.com

Internet salesInternet sales

Continuation of EMF strategy – Outlook for Q4

International expansion

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