1. Distribution Channels (B2B) Financing Prepared by: Michał Rostek, Channel Finance Head land line: +48 22 690 38 08, mob: +48 698 990 246, e-mail: michal.rostek@citigroup.com

2. 2  Easy to destroy, difficult to support: B2B relationship between Seller and Buyer is very sensitive  Communication: Once a bank is introduced to discuss financial support for B2B relations it always should be performed with participation of Seller and Buyer representatives from Finance as well as Sales/Marketing, Procurement/Purchase  Balance: Appropriate amount and tenor of financing  Common sense: In order to consider the Bank’s financial support to be a long term solution, financing structure introducted into B2B relationship must bring value to all three counterparties: Seller, Buyer, Bank. Otherwise one of the counterparties will exit the structure very quickly and the structure will collapse Channel Finance Distribution Channels (B2B) Financing Experiences with B2B financing:

3. 3 EPD- Early payment discount  Allows for effective decrease in payment terms offered by the Seller to distributors by commercial credit refinancing by the Bank. As a result Seller obtains payment of the invoices soon after an invoice issue date yet keeps unchanged payment terms for distributors. Bank takes over Buyers financing EPT- Extended payment terms  Allows for adjustment of distributors financing period to the actual cash generation cycle in the given distribution channel by extending financing period offered by Seller by additional credit offered by the Bank. EPD+ EPT combination  This structure allows for transfering of total financing of selected distributors in a given Buyers channel to the Bank. Seller receives means soon after an invoice issue date. Buyer obtains financing matched to the actual cash generation cycle in a given distribution channel. Channel Finance Distribution Channels (B2B) Financing Financing structures options:

4. 4 Channel Finance Distribution Channels (B2B) Financing Is B2B financing a difficult business for banks in Poland?:

5. 5 Channel Finance Distribution Channels (B2B) Financing Is B2B financing a difficult business for banks in Poland? (continued):

6. 6 Thank you. Channel Finance Distribution Channels (B2B) Financing