Q3 2011presentation used when presenting at Kepler NL for large group of French investors

1. Royal Wessanen nv
Kepler CM French investors field trip
8 December 2011
Q3 2011 published: 27 Oct. 2011

2. 2

3. Content
 Highlights Q2 2011 4.
 Markets 11.
 Strategy 13.
 Segment overview 19.
 Grocery; HFS; Frozen Foods; ABC
 Financial details 29.
 Q2 performance
 Cash flow; net debt; 2011 guidance
3

4. Q3 2011 highlights
 Another quarter with progression
 Autonomous revenue growth 8.0%
 Grocery up 7.5% and ABC 53.5%
 Grocery continues to perform well showing growing sales and
strengthening position of its brands
 HFS working hard to implement multiple improvements
 Autonomous growth (7.1)%
 Focus at Frozen Foods on both sales growth and managing
operating costs. Innovations gaining traction
 ABC showing a very strong performance this quarter
 Benefiting from strongly increased distribution of RTDs
4

5. Going forward
 Strategy is clear, we are more focused, and in better shape
 Different businesses response with different speed to strategic
initiatives
 Going forward, we are cautiously optimistic
 A strong team in place
 Execution of strategy is progressing
 To deal with element of uncertainty
 Persistently subdued European economic environment
 Consumer confidence remains fragile
 Firmly determined
 To improve performance step-by-step
 To further solidify our positions and brands
5

6. Bridge - revenue growth
In € mln
200
Autonomous
revenue growth
8.0%
2.8%
190
5.2%
Reported
revenue growth
(0.8)%
180 (1.9)% 0.5%
(4.8)%
170
160
Q3 2010 Volume Price/mix Trading Currency Divestments Q3 2011
days
6

7. Q3/9M 2011 key figures
In € million Q3 2011 Q3 2010 9M 2011 9M 2010
Revenue ¹ 174.3 173.4 548.8 539.7
Autonomous growth 8.0% 3.5%
Normalised EBIT ¹ 6.2 1.6 25.0 18.9
As % of revenue 3.6% 0.9% 4.6% 3.5%
EBIT ¹ 5.4 1.6 20.9 17.4
Net result ² 8.1 1.0 18.0 2.8
Earnings per share (EPS) ² 0.11 0.01 0.24 0.04
Operating cash flow ¹ 4.2 9.2 0.9 12.9
7
¹ Continuing operations; ² Attributable to Wessanen equity holders

8. Q3 2011 financials
 Normalised EBIT €6.2 mln, clear increase year-on-year
 Driven by strong performances at Grocery and ABC
 Increased margins and operational leverage
 Reported EBIT of €5.4 mln
 Includes exceptionals of €(0.8) mln
 Income taxes €3.8 mln positive
 Recognition of tax carry forward losses in US;
deferred tax asset of €4.7 mln at quarter-end
 Operating cash flow €4.2 mln
 Negative impact of €9.2 mln due to discontinuation
factoring of debtors
 Net debt fell to €35.9 mln
 Leverage ratio 0.9x (Q2 2011: 1.1x)
• Additional data available in appendix (e.g. on net debt / cash flow / exceptionals)
8

9. Cash flow Q3 2011
In € mln
13.9 (10.7)
Derivatives
0.5
and FX (1.5) Net Investments
Decrease
working 4.9
capital
Discontinuation
(9.2) Factoring
France Grocery
Cash flow
from 8.5
earnings
Reduction
3.2
of net debt
Sources Uses
9

10. Net debt and leverage ratio
In € mln
250
Net debt
200
150
100
€35.9 mln
50
0
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
5
Leverage ratio
4
3
2
0.9x
1
0
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
10

11. Organic food market is still attractive
 Organic food engaged mainstream consumers
 Penetration 70% → consumption per capita low
 Mainstream consumer willing to pay price premium (~20%)
 Consumers seek clear consumer benefits from organic
 Organic food industry dynamics become similar to
conventional ‘FMCG’ markets
 Consumer price based on perceived value
and consumer benefits
 Private label has become more a price reference point
 ‘Organic’ image builder for grocery
 One single European certification
11

12. Organic food market review
 European market growth modest in 2010, despite
 Loyal group of traditional organic food customers, and
 Ever growing group of mainstream consumers becoming engaged
 Clear impact by economic downturn and low consumer confidence
 Particularly HFS impacted, while grocery markets fared better
 Total European organic market ± €19 bn in 2010
 Historically, growth ± 10% up to 2008
 Countries where we are active grew estimated 2% to € 14 billion
 Part of growth attributable to catering and categories (fresh, meat) we are hardly involved in
 Per capita consumption still low in the countries where we operate
 Organic, on average, 2.6% of total spending on food/beverages
• 1.7% for UK; 3.3% for Germany and Italy
12

13. Our Vision
“To make our organic brands most desired in Europe”
13

14. Our Mission
“Our organic food, your natural choice”
14

15. Roadmap focused on 3 different business models
Business Description Countries, Brands & Entities
Sourcing/developing, marketing France: Bjorg
Brands and selling of own brands to Benelux: Zonnatura, Biorganic, Merza
in grocery UK: Kallo, Whole Earth
• Including distribution to distribution Germany: Whole Earth, Culinessa, Bjorg
Grocery centers and/or stores Italy: Bjorg
Sourcing/developing, marketing France: Bonneterre, Evernat
and selling of own brands to HFS NL: Ekoland, De Rit, Fertilia
Brands • Via wholesaler in Germany Molenaartje
in HFS • Direct to stores (France, NL) Germany: Allos, Tartex, De Rit
Sourcing, category management, France: Bonneterre, Biodistrifrais
Whole- sales and distribution to HFS stores NL: Natudis, Kroon
sale • Focus on full range product portfolio Belgium: Hagor
and high share of products per store
In HFS
15

16. Requiring strong central steering and different
organisation and governance model
Nature of Corporate Guidance
Operational Operator
in
en n
an o
e ss siti
Strategic W ra n Strategic
development t Orchestrator Maximize value creation
by
Strategic Strategic adapting governance model,
guidelines Architect decision rules and
effciency and effectiveness HQ
Financial support functions
Financial
Holding
Stand-alone Shared business Same business
Shared skills
business systems systems
Degree of Business Integration
16

17. European brand-platform-category map
France Netherlands Germany UK Other Europe
Consumer Benefit
Platform
Grocery HFS Grocery HFS Grocery HFS Grocery HFS Grocery HFS
Organic Nutrition
– Dairy alternatives
– Biscuits (nutrition)
– Bread replacers
– Cereals
– Tea
– Spreads (nutrition)
Organic Taste-Indulgence
– Spreads
– Biscuits
– Cereals
– Juices TBD TBD
Organic Taste-Cooking
– Condiments
– Bouillon, Stock & Gravies TBD TBD TBD TBD
– Meal components
– Ready meals
Organic Basics
TBD TBD TBD TBD TBD TBD TBD TBD
– Multi categories
17

18. Strategic objectives 2011-2013
 Top-line growth
 Market share gains in core categories and brands
 Add-on acquisitions
 Improve EBIT-margins
 Increase gross margins (central sourcing savings, richer product mix)
 Manage non-core brands for cash
 Increase capacity utilisation own factories
 Reduce overhead costs
 Grow our export business and aim to establish footprint in other
European countries
 Improve operational performance / Establish cross-country organisation
 Raise the overall talent bar / Increase people engagement
18

19. Wessanen Europe Grocery
 Revenue growth remained robust, growing by 5.3% to Revenue (in € mln)
€57.5 million
7.5%
 Continued focus on core brands, making further progress
in areas such as brand activation, innovations and
operational excellence
 Bjorg continues to gain market share 57.5
 Zonnatura launched sizeable 360º activation 54.6
campaign
* Focus on organic teas and its natural taste
 Range of soy milks relaunched under Kallo brand
♦ Autonomous third party revenue growth
* Diary alternatives European core category
* 1 strong brand, therefore phased out So Good EBIT (in € mln)
 Bjorg launched on German market
* Its nutritional positioning complementary to
indulgence of Whole Earth
 Normalised EBIT up to €3.8 million
4.0
 Increased revenue and higher gross margin % 2.2 2.2
3.8
Q3 10 Q3 11
♦ Reported, ♦ Normalised 19

20. Grocery examples of activation
Kallo soy launch activity
Dairy alternatives key category
Kallo core brand, phased out So Good
Yearly award magazine „Lebensmittel Praxis“
Whole Earth Inka Taler (4 varieties)
Criteria based on:
Quality/Design/Distribution/Communication/Sustainability
Bjorg commercial
Based on success of Q2 airing, repeated in
September
Results: increased awareness, higher sales
20

21. Zonnatura 360°campagne
Television Outdoor - busshelter
 Sponsoring GTST  Nationwide coverage
Radio campaign  Week 43-44
 Week 43-45  Week 43-44
In-store
 Retail promotions
 Week 43-47
Tastings
Site
In-store tastings tea / bars
 Consumer activation
In week 44
Social media
Free sampling
 From week 43
Margriet Winterfair
 Week 46-47
21

22.  Rebuilding
22

23. Wessanen Europe HFS
 Revenue down 19.9% Revenue (in € mln)
 Divestment TOL UK (12.2% impact)
 Autonomous revenue (7.1)% (7.1)%
 >2% decline due to weak performance Kalisterra
• Divested as of 1 October
 Brands performing satisfactorily 68.3
 Focus on brand activation and innovations 54.7
 Brands such as Allos, Bonneterre, De Rit
 At wholesale activities working hard on implementing ♦ Autonomous third party revenue growth
multiple improvements, several yet to translate in EBIT (in € mln)
tangible results
 Focus on operational excellence and expanding
Dutch own format stores
1.4 1.4
-2.5 -0.5
Q3 10 Q3 11
♦ Reported, ♦ Normalised 23

24. HFS examples of activation
Allos cookies
New range of cookies launched
Available in German HFS stores
New GooodyFooods store
Opened early October in Zaandam
4th store, new ones in the pipeline 24

25. Frozen Foods
 Autonomous revenue growth 0.8% Revenue (in € mln)
 Branded up due to Belgian out-of-home,
export 0.8%
 Somewhat lower volumes at Dutch retail and
out-of-home
 Private label about stable
27.3
 EBIT decreased to €0.2 million 27.1
 Increased raw material prices
 Marketing spending in line with last year
♦ Autonomous revenue growth
 In October, Bicky Double Chicken burger introduced
in Belgian out-of-home EBIT (in € mln)
 Further extension of Bicky range
 Supported by TV commercials and online
1.1
0.2
Q3 10 Q3 11
♦ Reported 25

26. Frozen Food examples of activation
Bicky Double Chicken burger
Introduced in October in Belgian out-of-home
Further extension Bicky range
Newly designed carton box
Supported by TV commercials and online campaign
Online campaign in Flanders (Dutch) and Wallonia (French)
26

27. American Beverage Corporation
 Very strong Q3, driven by success Daily’s RTD pouches Revenue (in € mln)
 Development right packaging concepts
 Change distribution strategy to serve grocery
chains 53.5%
 Consistent execution
 Attractive price-value positioning
37.7
 Daily’s bag-in-a-box and premixes doing well either
26.5
 Little Hug stable sales
 Continued competitive activity
♦ Autonomous revenue growth
 Active pruning/de-emphasising lower margin
products EBIT (in € mln)
 20-count doing well / new packaging
 Revitalisation continues
 2011: EBIT of US$10-12 mln, excluding impairment
reversal and any non-recurring items
6.2 5.2
 2012: further revenue and earnings growth
-0.7 -0.7
Q3 10 Q3 11
♦ Reported, ♦ Normalised 27

28. ABC examples of activation
28

29. Q3 performance 9M performance
Revenue (in € mln) Revenue (in € mln)
3.5%
8.0%
539.7 548.8
174.3
173.4
♦ Autonomous third party revenue growth ♦ Autonomous third party revenue growth
EBIT (in € mln) EBIT (in € mln)
25.0
20.9
5.4
17.4 18.9
6.2
1.6 1.6
Q3 10 Q3 11 9M 10 9M 11
♦ Reported, ♦ Normalised ♦ Reported, ♦ Normalised 29

30. Revenue Q3 2011 €174.3 mln
ABC WE Grocery
Revenue €37.7 mln Revenue €57.5 mln
Normalised EBIT €5.2 mln Normalised EBIT €3.8 mln
21% 33%
Frozen Foods
Revenue €27.3 mln 15%
Normalised EBIT €0.2 mln
31%
WE HFS
Revenue €54.7 mln
Normalised EBIT €(0.5) mln
Non-allocated & eliminations
Revenue €(2.9) mln
Normalised EBIT €(2.5) mln
30

31. Revenue 9M 2011 €548.8 mln
ABC WE Grocery
Revenue €94.6 mln Revenue €185.2 mln
Normalised EBIT €10.4 mln Normalised EBIT €16.2 mln
17%
33%
Frozen Foods 15%
Revenue €84.0 mln
Normalised EBIT €2.1 mln 35%
WE HFS
Revenue €194.2 mln
Normalised EBIT €3.8 mln
Non-allocated & eliminations
Revenue €(9.2) mln
Normalised EBIT €(7.5) mln
31

32. Bridge - revenue
In € mln
180
€2.9 €(13.6)
€11.2 €0.2 €174.3
175 €173.4
170
165 €0.2
160
Q3 2010 Grocery HFS Frozen ABC Inter- Q3 2011
Foods segment
eliminations
32

33. Bridge - normalised EBIT
In € mln
10
8
€5.9 €6.2
6
€(0.1)
€1.6 €(1.9)
4
€1.6
€(0.9)
2
0
Q3 2010 Grocery HFS Frozen ABC Corporate Q3 2011
Foods entities
33

34. EBIT - from normalised to reported
Q3 2011 Q3 2010
Normalised EBIT 6.2 1.6
Grocery Release restructuring provisions 0.2 -
HFS Mainly exchange loss deferred in equity (2.0) -
ABC Minor asset adjustments 0.2 -
ABC Net reversal impairment losses 0.8 -
EBIT 5.4 1.6
34

35. Financial guidance 2011
 Net financing costs €3-4 mln
 2010: €(8.3) mln; 2009: €(19.9) mln
 Effective tax rate around 25-30%
 Excluding recognition of deferred tax assets regarding
tax carry forward losses
 2010 impacted by country mix and non-deductible impairments,
partly compensated by recognition tax losses
 Depreciation and amortisation (excl. impairments) about €14 mln
 2010: €(14) mln
 Capex about €10-11 mln
 2010: €11.5 mln
 Non-allocated expenses (incl. corporate) around €10 mln
 2010: €(12.3) mln (normalised €(10.2) mln)
35

36. Royal Wessanen nv