~NEW THEME~

Unilever NV Buy Unchanged

Netherlands Food Producers & Processors

¤53.95 Acquiring for growth CBS 930.2

¦ The Slim-Fast and Ben & Jerry’s acquisitions are the latest stage in Unilever’s quest to enhance the 14 April 2000 growth rate of its Foods portfolio. The price of doing so is near term ROIC (though not cash) Reuters: UNc.AS Bloomberg: UN NA dilution, but we can live with this trade-off given the importance of kick-starting its anaemic top line.

¦ Two major deals: Unilever has spent over $2.6bn to acquire two US food businesses, Slim-Fast (nutritional products) and Ben & Jerry’s (ice cream).

¦ Going for growth: Both are brand leaders in strong growth businesses, which Unilever should be able to leverage internationally through its existing network.

¦ But at a price: Paying nearly 14x EBIT for Slim-Fast means that ROIC will not exceed WACC before 2004. Price Performance However, should it meet its business case, this will prove money well spent. 98 99 00 80 ¤ 70 Figures and forecasts

60 Year to December ¤m 1999A 2000F 2001F 2002F 50 Sales 40977 45437 48125 50563 40 EBITDA 5720 6452 7106 7874

30 Operating Profit 4572.0 5352.9 5956.0 6664.0 Pre-tax Profit 4341.0 3882.5 4258.0 5343.0 20 Net Profit 2771.0 2180.8 2356.2 3059.0 Price Relative Tax Rate (%) 31.5 34.7 34.4 33.8 Interest Cover (x) 326.6 27.7 22.3 31.7 Analysts Earnings per Share ¤ 2.81 3.21 3.55 4.03 Julian Hardwick Dividend per Share ¤ 1.27 1.47 1.60 1.73 +44 20 7678 7228 Performance data Free Cash Flow per Share ¤ 2.39 2.41 2.93 3.57 [email protected] Relative Local Market (%): Price to Cash Flow Rel.(Local) 98 104 110 129 Richard Workman 29.7(1m) -4.0(3m) -34.1(12m) Enterprise Value/EBITDA (x) 8.4 7.4 6.7 6.1 +44 20 7678 7262 Relative Local Sector (%): PER (x) 19.2 16.8 15.2 13.4 Rebecca Wood 4.5(1m) -1.7(3m) -4.7(12m) PER Relative (Local)64656771 +44 20 7678 7259 Relative Euro Market (%): Yield (%) 2.3 2.7 3.0 3.2 Duncan Fox - Sales 33.3(1m) -1.1(3m) -28.6(12m) Yield Relative (Local) 110.1 120.8 138.2 210.5 +44 20 7678 1611 Relative Euro Sector (%): Lucie-Anne Brailsford – Sales Price range(12m): ¤72.65-40.99 Mkt Cap: ¤48,622m Next Results: May 10.8(1m) 2.3(3m) -6.4(12m) +44 20 7678 5993

Please refer to terms relating to the provision of this research at the end of document Acquiring for growth Acquiring in new categories Unilever has announced two significant acquisitions in US Food, for a total consideration of more than $2.6bn: Slim-Fast, which takes it into the new category of nutritional products, and Ben & Jerry’s, which takes it into the US super-premium ice cream category. Though rather different in scale, they share several characteristics: strong brands in growth categories that can be leveraged internationally through Unilever’s sales and distribution network. They therefore not only give its US Foods business more muscle, but critically also contribute to Unilever’s pursuit of faster top-line growth in the Foods area. These deals represent the third strand of Unilever’s growth strategy; besides weeding out its underperformers and concentrating more of its resources behind its existing leading brands, Unilever is clearly signalling a willingness to acquire in new categories that offer superior growth.

Slim-Fast Foods A rapidly growing business Slim-Fast is the market leader in the US, with a 45% share, of the $1.3bn nutritional supplement and weight management category. This market has been growing at around 20% pa, reflecting the growing problem of obesity and increasing consumer interest in better health. Slim-Fast itself has sales of $611m, which have increased at 25% pa over the past two years, and EBIT of $125m, which has risen by 28% pa. It has increased its share from 29% in 1996, and is well ahead of the number two player, Abbott, which has around 25% of the market.

In a large and increasing market The market Slim-Fast addresses is part of a wider range of food and pharmaceutical categories, aimed at meeting consumer health needs. Nutritionally balanced meals (such as the Slim-Fast powders, ready to drink products and bars) represent around 20% of the $6.8bn market for products providing daily health benefits, such as weight management, energy, appearance and reduced stress, which is growing at over 20% pa. Given the prevalence of excess weight and obesity (typically 40% or more of the population) and consumers’ increasing concern about nutrition, it seems likely this will remain an area of strong growth for the foreseeable future.

The business is attractive to Unilever on several grounds:

High margins... Profitability: EBIT margins of 20.5%, achieved on gross margins of c.51% and after an advertising to sales ratio of 23%, are symptomatic of a tightly- run and well-managed business. Indeed, in some areas, Slim-Fast may have lessons for Unilever; for example, its heavy use of contract manufacturing, which accounts for 44% of sales.

...with considerable potential in Growth prospects: The US business should be capable of sustaining strong the US double-digit sales growth over the next four to five years and high single digit growth thereafter. Slim-Fast’s US penetration is currently around 26% of households, vs the 45% of the population which suffers weight problems, which suggests significant upside. In addition, only around 2% of all households are heavy users and a further 5% regular, hence there is

2 ABN AMRO FOOD PRODUCERS & PROCESSORS SECTOR RESEARCH considerable scope to increase usage among existing consumers as well. Unilever should help here by using its impulse and product skills to enhance penetration.

International opportunity: Currently just 6% of Slim-Fast sales, or $37m, Non-US market underdeveloped are made outside the US, a reflection of the management’s focus on maximising the US opportunity and the absence of an international infrastructure. While the market outside the US is clearly undeveloped, we see no reason why Slim-Fast should not build a significant sales base, particularly in Europe, given the common consumer concerns which lie behind the success of the business in the US. Though there will be some investment required to establish the brand, this process should be facilitated by using Unilever’s existing sales and distribution network.

Building a functional foods presence: While Unilever has one or two toes Giving Unilever a significant presence in functional foods in the functional foods market, notably “Take Control”, it clearly needed to establish a larger presence if functional foods are to make a meaningful contribution to its growth going forward. Slim-Fast takes Unilever right into the heart of the functional foods market and brings products, formulation skills and R & D know-how that could be applied elsewhere in the group.

Slim-Fast P&L ($m) 1999 2000F 2001F 2002F 2003F Sales US 574 685 780 875 980 ROW 37 50 100 140 185 Total 611 735 880 1015 1165 EBIT margin % US 21.0 20.0 20.0 20.0 20.5 ROW 11.0 2.0 4.0 8.0 14.0 Total 20.5 19.7 20.2 20.1 21.0 EBIT ($m) US 121 137 156 175 201 ROW 4 1 4 11 26 Synergies 0 7 18 18 18 Total 125 145 178 204 245

Tax ($m) -50 -58 -71 -82 -98

Net Profit ($m) 75 87 107 123 147

Invested Capital ($m) 1740 1740 1740 1740 1740 ROIC (%) 4.3 5.0 6.1 7.0 8.4 Source: Company, ABN AMRO estimates

A demanding price The downside in acquiring a growth business is the price you have to pay. Given its financials and market position, we expect that Unilever would have received competition from the likes of Heinz, Kellogg and Nestle for Slim-Fast, and the price reflects both that fact and its growth prospects. Unilever is paying $2.3bn, which amounts to 3.8x 1999 sales, 17.3x 1999 EBITDA and 18.4x 1999 EBIT. However, it is able to claim a tax benefit on the amortisation of the c.$2.1bn goodwill; this has a NPV of $560m, reducing the effective consideration to $1.74bn. This takes the exit

3 ABN AMRO FOOD PRODUCERS & PROCESSORS SECTOR RESEARCH multiples down to 2.9x sales, 13.0x EBITDA and 13.9x EBIT. While this is not out of line with other deals in this area (Kraft paid 2.5x sales and 26.5x EBITDA for Balance Bar in January), there is no denying that this represents a demanding price.

Cash-accretive, but returns- Excluding goodwill amortisation of some $107m pa, we expect Slim-Fast to dilutive be modestly dilutive for the six months it is likely to be consolidated in 2000 and modestly accretive in 2001, though in each case the impact is less than 1%. When goodwill amortisation is included, however, the deal dilutes by around 1.5% in 2001, and does not become accretive until 2003. However, most negative is the issue of returns: on 1999 profits, the ROIC is initially just 4.3%, and is not projected to reach the group’s WACC of 8.5% until 2003. That implies a near doubling of EBIT to c.$245m between 1999 and 2003.

Profits growth is likely to be sales- What does Slim-Fast need to do to reach this target? We expect US sales driven growth to trend down from the better than 20% pa growth recorded over the past two years to something more like 12% pa by 2003. However, non- US sales should increase dramatically, with a target of a fivefold rise to $185m by 2003, giving a compound growth rate for group sales of around 17.5% pa.

Given Unilever’s intention to manage the business as a stand-alone entity, the business case assumes synergies of only $18m, which should come through fully in 2001. These are mainly in the area of transport and raw materials and packaging. While we would expect underlying US margins to be little changed at around 20-21% going forward, non-US margins are likely to reflect the impact of the investment necessary to establish the brand in Europe. Even by 2003, we would expect non-US margins still to be below the US level. The effective tax rate is likely to be 40%.

Targets are achievable given We have ignored for these purposes the incremental capital Unilever is Slim-Fast’s record expected to invest in the business, notably the $75m capital expenditure budgeted for a West Coast manufacturing facility and the returns that investment should realise. Our projections for Slim-Fast are illustrated in accompanying table. Clearly, the targets Unilever has set are achievable, but they require the business to sustain its record of strong top-line growth. The biggest risk is probably of competitor incursions into what is clearly an attractive area, which would both reduce the top-line growth and put pressure on margins. Here, the strength of the brand, its strong ties with medical practitioners and its technical skills are all important, though not insurmountable, barriers to entry.

Ben & Jerry’s A strong brand in a growth While entering the super premium ice cream category is hardly the category dramatic shift for Unilever that its move into nutritional products represents, this deal shares many of the same characteristics as Slim-Fast. Ben & Jerry’s (B & J) brings a strong brand in a growth category with obvious international potential. It is also another expensive deal.

4 ABN AMRO FOOD PRODUCERS & PROCESSORS SECTOR RESEARCH A fragmented market The US packaged ice cream market is highly fragmented, with private label holding a 23% share, Dreyer’s 16% and Unilever’s Breyer’s 15%. Ben & Jerry’s, Haagen-Dazs and Blue Bell, a Texas-based regional player, each have around 5% of the market. The super premium category accounts for around 12% of the US packaged ice cream market, compared with the premium category, where Unilever currently operates, which represents over 50%, with the balance represented by low price products.

B & J leads the super-premium The super premium category has been growing at around 5% pa, and Ben & category... Jerry’s are market leaders with Haagen-Dazs, with around a 36% share. Both, however, have lost share following Dreyer’s successful incursion into this category with the Dreamery, Starbucks and Godiva brands, which has taken it to around 25% from a virtual standing start three years ago.

...and gives Unilever leadership of Ben & Jerry’s takes Unilever into the super premium category and brings it the US market leadership of the overall packaged ice cream market. Strategically, it was probably also important not to let it go to Dreyer’s, which made an alternative offer, given Nestle’s 18% stake. The business case for the deal rests on Unilever’s ability to increase profitability in the US and to leverage the brand internationally.

B & J had sales in 1999 of $237m and EBIT of $13.5m, giving a margin of 5.7%. While this was not much different from Unilever’s own 6.5% EBIT margin in North American ice cream (a function of higher butter fat prices and competitive pressure from Dreyer’s, which took several points of share from Breyer’s), it is well below the 12.2% Unilever achieved in Europe and the double digit margins other super-premium brands enjoyed in the US.

Ben & Jerry’s P&L ($m) 1999 2000F 2001F 2002F 2003F Sales US 211 234 257 283 311 ROW 2635445362 Total 237 269 301 336 373

EBIT 13.5 18.8 27.1 37.0 46.7 Margin % 5.7 7.0 9.0 11.0 12.5

Tax -5.4 -7.5 -10.9 -14.8 -18.7

Net Profit 8.1 11.3 16.3 22.2 28.0

Invested Capital 326 326 326 326 326 ROIC (%) 2.5 3.5 5.0 6.8 8.6 Source: Company, ABN AMRO estimates

Unilever aims to double EBIT Unilever plans to double EBIT margins by 2003, although its scope for margins... manoeuvre in the near term is limited by its commitment not to undertake any forced head count reduction or physical restructuring over the next two years. Even so, Unilever sees opportunities to improve manufacturing efficiencies and there should be some synergies in procurement and transport. A key issue is likely to be distribution, where B & J’s reliance on

5 ABN AMRO FOOD PRODUCERS & PROCESSORS SECTOR RESEARCH distribution by independents and its competitors results in a gross profit per gallon estimated at 60% of that achieved by Dreyer’s products, which go through its own DSD system.

...and grow sales internationally On the sales front, Unilever is expecting double-digit top line growth on the assumption of share gains and continued category growth. However, the greatest opportunity lies in expanding its international presence, which currently accounts for just 11% of total sales. Leveraging the brand onto its existing distribution network in Europe and Latin America is likely to be a priority. In addition, around 10% of sales come from B & J‘s 170 mainly franchised scooping shops, a channel that could be expanded and which offers opportunities for other Unilever ice cream products.

Also cash-accretive but returns- Unilever is paying $326m for B & J, which represents exit multiples of 1.4x dilutive sales, 14.3x EBITDA and 24.1x EBIT. Net assets are around $65m, giving rise to a goodwill amortisation charge of $13m pa, for which there is no tax offset. It expects the transaction to be accretive to earnings, excluding goodwill, in 2001, and including goodwill in 2002, but for the ROIC to exceed WACC only in 2003. We have modelled how profits must develop to reach these targets in the accompanying table. In effect, EBIT needs to increase approximately 3.5 times compared with the 1999 base, a function of both sales growth and higher margins.

This deal undoubtedly strengthens Unilever’s ice cream business in one of its key markets. However, it will have to work hard to make the deal pay within the timeframe it has outlined. We suspect the greatest risk here is that of a clash between the socially aware, offbeat B & J approach and the more mainstream, structured Unilever culture. However, Unilever is well accustomed to managing brands that carry very different values and appeal to widely varying audiences, and we see no reason B & J cannot find a home within its disparate brand umbrella.

6 ABN AMRO FOOD PRODUCERS & PROCESSORS SECTOR RESEARCH Unilever NV P&L account Old New Old New Old New Old New Old New Current Current Current Constant Constant Constant Constant Constant Constant Constant Constant (¤m) 1999 2000F 2000F 2001F 2001F 2002F 2002F 2003F 2003F 2004F 2004F Europe 18,790 19,618 19,662 20,030 20,178 20,532 20,730 21,129 21,384 21,838 22,128 N America 8,838 9,782 10,256 10,106 11,174 10,503 11,695 10,961 12,290 11,488 13,018 Africa and Middle East 2,298 2,645 2,645 2,894 2,894 3,165 3,165 3,457 3,457 3,776 3,776 Asia/Pacific 6,723 7,920 7,920 8,587 8,587 9,259 9,259 9,991 9,991 10,797 10,797 L America 4,328 4,955 4,955 5,293 5,293 5,715 5,715 6,221 6,221 6,806 6,806 Total Continuing 40,977 44,919 45,437 46,909 48,125 49,173 50,563 51,758 53,342 54,704 56,524 Discontinued 00000000000 Total Sales 40,977 44,919 45,437 46,909 48,125 49,173 50,563 51,758 53,342 54,704 56,524 %chg 1.3 9.6 10.9 4.4 5.9 4.8 5.1 5.3 5.5 5.7 6.0

Europe 2,263 2,464 2,465 2,648 2,654 2,906 2,920 3,160 3,193 3,440 3,480 N America 973 1,142 1,226 1,238 1,439 1,390 1,624 1,550 1,818 1,770 2,065 Africa and Middle East 251 301 301 344 344 390 390 440 440 510 510 Asia/Pacific 660 882 882 985 985 1,103 1,103 1,320 1,320 1,495 1,495 L America 425 479 479 534 534 627 627 750 750 900 900 Total Continuing 4,572 5,268 5,353 5,749 5,956 6,416 6,664 7,220 7,521 8,115 8,450 Discontinued 00000000000 Op. profit pre-exceptionals 4,572 5,268 5,353 5,749 5,956 6,416 6,664 7,220 7,521 8,115 8,450 %chg 6.7 15.2 17.1 9.1 11.3 11.6 11.9 12.5 12.9 12.4 12.4

Restructuring Charges -232 -1,381 -1,381 -1,538 -1,538 -1,223 -1,223 -829 -829 -429 -429 Exceptional Credits -37 40 40 40 40 40 40 40 40 35 35 Total charge -269 -1,341 -1,341 -1,498 -1,498 -1,183 -1,183 -789 -789 -394 -394 Operating profit 4,303 3,927 4,012 4,251 4,458 5,233 5,481 6,431 6,732 7,721 8,056

Associates 52 64 64 67 67 72 72 76 76 84 84 Spec Chems sale profit00000000000 Loss on disp. of fixed asst.00000000000 Net interest -14 -105 -193 -90 -267 -33 -210 26 -151 116 -61 Amortisation 10 42 105 46 170 50 174 55 179 60 184 Pre-tax 4,341 3,886 3,778 4,228 4,088 5,272 5,169 6,533 6,478 7,921 7,895 Pre-tax (Norm) 4,610 5,227 5,224 5,726 5,756 6,455 6,526 7,322 7,446 8,315 8,473

Tax 1,369 1,302 1,266 1,416 1,369 1,766 1,732 2,189 2,170 2,654 2,645 Tax Adj 0 -83 -83 -92 -92 -73 -73 -50 -50 -26 -26 Tax net 1,369 1,385 1,348 1,509 1,462 1,840 1,805 2,238 2,220 2,679 2,671 Underlying rate (%) 31.5 33.5 33.5 33.5 33.5 33.5 33.5 33.5 33.5 33.5 33.5

Profit after tax 2,972 2,501 2,429 2,719 2,626 3,433 3,364 4,295 4,258 5,242 5,224 Profit after tax (Norm) 3,156 3,476 3,474 3,808 3,828 4,293 4,340 4,869 4,952 5,529 5,635

Minorities 201 249 249 270 270 305 305 340 340 375 375

Net profit 2,771 2,252 2,181 2,449 2,356 3,128 3,059 3,955 3,918 4,867 4,849 %chg -5.9 -18.7 -21.0 8.7 8.0 27.7 29.8 26.4 28.1 23.1 23.8 Net profit (Norm) 2,955 3,227 3,225 3,538 3,558 3,988 4,035 4,529 4,612 5,154 5,260 %chg 3.3 9.2 9.3 9.6 10.3 12.7 13.4 13.6 14.3 13.8 14.1

Preference dividend 20 40 40 40 40 40 40 40 40 40 40 No of Shares 1,045 991 991 991 991 991 991 991 991 991 991

EPS (¤) 2.63 2.23 2.16 2.43 2.34 3.11 3.04 3.95 3.91 4.87 4.85 EPS (Norm) (¤) 2.81 3.21 3.21 3.53 3.55 3.98 4.03 4.53 4.61 5.16 5.26 EPS (Norm) (Fully Dilu.) (¤) 2.74 3.13 3.12 3.43 3.45 3.87 3.92 4.40 4.48 5.02 5.12 DPS (¤) 1.27 1.47 1.47 1.60 1.60 1.73 1.73 1.87 1.87 2.02 2.02 Source: ABN ANRO estimates

7 ABN AMRO FOOD PRODUCERS & PROCESSORS SECTOR RESEARCH Forecasts Impact on forecasts is modest Given the significant goodwill hit, our stated EPS forecasts fall by around 2% in 2000 from ¤2.20 to ¤2.16, and by 3% in 2001 from ¤2.40 to ¤2.34. However, on a normalised basis, the figures barely change, falling from ¤3.13 to ¤3.12 in 2000 and increasing from ¤3.43 to ¤3.45 in 2001. By 2004, we estimate the acquisitions should add around 2% to normalised EPS.

But both should add to top-line Slim-Fast and Ben & Jerry’s are hardly transforming acquisitions for growth and EPS Unilever, as these numbers demonstrate. However, should they meet their targets, they could well add as much as 50bp pa to the group’s top-line growth rate over the next five years, and usefully add to EPS by 2002. Another one or two more deals of the Slim-Fast scale would clearly make Unilever’s task, of ratcheting up its underlying sales growth to something more like 5% pa, considerably easier.

For the moment, with the shares trading on a 2000 EV/EBITDA of 7.5x, vs its European peers on over 9x, the market remains understandably sceptical. The Unilever management has a lot on its plate with the major restructuring programme, announced in February. Moreover, while the Q1 figures look set to deliver the anticipated profits, Unilever’s underlying sales performance (we estimate an increase of 1.6%) will inevitably compare unfavourably with Danone’s 8.1% and Nestle’s 4.5% top-line growth. However, we expect Unilever to continue be a beneficiary of any shift away from new economy stocks and believe the management will deliver on its sales and margin targets. Should that be the case, the shares offer significant upside.

8 ABN AMRO FOOD PRODUCERS & PROCESSORS SECTOR RESEARCH ABN AMRO Company Data Set

Income Statement (¤m) Year to December 1996A 1997A 1998A 1999A 2000F 2001F 2002F Sales 39839.7 42925.8 40437.0 40977.0 45437.2 48125.2 50563.2 Other Income 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Operating Costs (28959.0) (31016.2) (29154.3) (32369.8) (35799.8) (37737.9) (39309.4) Personnel Costs (6178.6) (6600.5) (6059.8) (2887.2) (3185.7) (3281.3) (3379.7) EBITDA 4702.0 5309.0 5223.0 5720.0 6451.7 7106.0 7874.0 Depreciation & Amortisation (1009.0) (1060.0) (938.0) (1148.0) (1098.8) (1150.0) (1210.0) EBIT 3693.0 4249.0 4285.0 4572.0 5352.9 5956.0 6664.0 Net Interest (298.0) (103.9) 156.1 (14.0) (193.0) (267.0) (210.0) Other Items / Associates, before tax 40.0 39.0 37.0 52.0 63.7 67.0 72.0 Exceptional Items (281.3) 2812.0 124.5 (269.0) (1341.0) (1498.0) (1183.0) Pre-tax Profit / (Loss) 3153.7 6996.1 4602.6 4341.0 3882.5 4258.0 5343.0 Tax (1148.0) (1899.0) (1515.0) (1369.0) (1348.4) (1461.8) (1805.0) Minorities (97.0) (140.0) (144.0) (201.0) (248.6) (270.0) (305.0) Associates, after tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Goodwill Amortisation 0.0 0.0 0.0 0.0 (104.7) (170.0) (174.0) Other after Tax Items 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Profit / (Loss) 1908.7 4957.1 2943.6 2771.0 2180.8 2356.2 3059.0 Preferred Dividend (7.0) (7.0) (7.0) (20.0) (40.0) (40.0) (40.0) Net Attributable Profit 1901.7 4950.1 2936.6 2751.0 2140.8 2316.2 3019.0 Retained Earnings 1088.9 3880.2 1574.5 2015.1 1273.4 1383.7 2011.8 Gross Margin (%) 84.5 84.6 85.0 93.0 93.0 93.2 93.3 EBIT Margin (%) 9.3 9.9 10.6 11.2 11.8 12.4 13.2 Pre-tax Margin (%) 7.9 16.3 11.4 10.6 8.5 8.8 10.6 Effective Tax Rate (%) 36.4 27.1 32.9 31.5 34.7 34.3 33.8

Cash Flow Statement (¤m) 1996A 1997A 1998A 1999A 2000F 2001F 2002F EBITDA 4702.0 5309.0 5223.0 5720.0 6451.7 7106.0 7874.0 (Increase) / decrease in Working Capital 73.0 291.0 (475.0) 116.0 (286.5) (172.7) (156.6) Increase / (decrease) in Provisions 208.0 597.0 7.0 (8.0) 459.9 512.2 407.3 Other Non-Cash (172.0) 179.0 (366.0) 96.0 0.0 0.0 0.0 Gross Operating Cash Flow 4811.0 6376.0 4389.0 5924.0 6625.1 7445.5 8124.7 Net Interest (paid) / received (266.0) (195.0) 192.0 57.0 (193.0) (267.0) (210.0) Taxes (paid) (1149.0) (1899.0) (1261.0) (1919.0) (1348.4) (1461.8) (1805.0) Preferred Dividend (paid) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Net Operating Cash Flow 3396.0 4282.0 3320.0 4062.0 5083.6 5716.7 6109.7 Capital Expenditure (1279.0) (1259.0) (1254.0) (1237.0) (1546.9) (1582.0) (1600.0) Free Cash Flow 2117.0 3023.0 2066.0 2825.0 3536.7 4134.7 4509.7 Ordinary Dividend (paid) (856.0) (1081.0) (1174.0) (7336.0) (1605.4) (1749.9) (1889.9) Acquisitions (1445.0) (1306.0) (323.0) (488.0) (3446.3) (650.0) (665.0) Disposals 248.0 6580.0 575.0 88.0 162.8 162.0 165.0 Equity Financing 17.0 43.0 (128.0) (260.0) 0.0 0.0 0.0 FX and Other 332.0 (731.0) (268.0) 287.0 0.0 0.0 0.0 Movement in Net Debt or Cash 413.0 6528.0 748.0 (4884.0) (1352.1) 1896.8 2119.8 Free Cash Dividend Cover (x) 2.5 2.8 1.8 0.4 2.2 2.4 2.4 Cash Interest Cover (x) 18.1 32.7 21.8 221.0 34.3 27.9 38.7

Balance Sheet (¤m) 1996A 1997A 1998A 1999A 2000F 2001F 2002F Tangible Fixed Assets 10667.9 9096.9 8188.0 8821.0 9066.3 9014.2 9031.9 Intangibles & L-T Financial Assets 178.3 148.8 431.1 785.0 3635.3 3840.3 4050.0 Inventories 5251.6 4709.3 4747.0 5124.0 5681.7 6017.8 6322.7 Trade Receivables 4177.0 3852.6 3722.8 4214.0 4672.7 4949.1 5199.8 Other Current Assets 1977.1 2467.7 3015.4 3471.0 3848.8 4076.5 4283.0 Cash and Liquid Assets 2270.3 8862.3 10382.9 5473.0 2861.3 3345.1 4363.3 Total Assets 24522.3 29137.7 30487.2 27888.0 29766.1 31243.1 33250.7 Shareholders’ Equity 6965.5 11223.8 4748.4 7762.0 8325.0 8853.5 9948.4 Other Equity 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Equity 6965.5 11223.8 4748.4 7762.0 8325.0 8853.5 9948.4 Minority Interests 460.6 471.5 407.9 579.0 681.7 792.6 925.8 Provisions 4090.4 4308.2 4314.1 4582.0 4582.0 4582.0 4582.0 Long-term Debt 2888.3 2616.5 2279.0 1853.0 1853.0 1853.0 1853.0 Other long-term Liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Trade & Other Current Liabilities 8460.3 9093.3 16413.0 10176.0 11388.4 12226.0 13005.5 Short-term Borrowings 1657.2 1424.4 2324.7 2936.0 2936.0 2936.0 2936.0 Total Liabilities 24522.3 29137.7 30487.1 27888.0 29766.1 31243.1 33250.7 Net (Debt) or Cash (2275.3) 4821.4 5779.2 684.0 (1927.7) (1443.9) (425.7) Net Gearing (%) 32.7 (43.0) (121.7) (8.8) 23.2 16.3 4.3

9 ABN AMRO FOOD PRODUCERS & PROCESSORS SECTOR RESEARCH Per Share Values (¤) 1996A 1997A 1998A 1999A 2000F 2001F 2002F EBITDA 4.24 4.78 4.71 6.35 7.16 7.88 8.74 EBIT 3.33 3.83 3.86 5.07 5.94 6.61 7.39 EPS 1.72 4.48 2.58 2.81 3.21 3.55 4.03 Free Cash Flow 1.90 2.17 1.81 2.39 2.41 2.93 3.57 Dividend (Gross) 0.80 1.02 1.15 1.27 1.47 1.60 1.73 Dividend (Net) 0.80 1.02 1.15 1.27 1.47 1.60 1.73 Net Asset Value 6.31 10.16 4.29 7.43 8.40 8.93 10.03 Number of Shares (y/e) (m) 280.00 1120.00 1120.00 901.25 901.25 901.25 901.25

Valuation Perspective 1996A 1997A 1998A 1999A 2000F 2001F 2002F Enterprise Value/EBITDA (x) 10.0 8.9 9.0 8.3 7.3 6.6 6.0 Earnings Growth (%) 385.3 160.0 (42.5) 8.8 14.5 10.4 13.6 PER, High 20.3 12.8 30.0 26.6 PER, Low 14.5 7.6 19.0 17.5 PER, Current 31.3 12.0 20.9 19.2 16.8 15.2 13.4 Free Cash Flow per Share (% Change) 14.1 (16.8) 32.3 0.8 21.6 21.8 P/FCF (x) 28.3 24.8 29.8 22.6 22.4 18.4 15.1 Dividend Growth (%) 12.5 27.8 12.9 10.0 16.3 9.0 8.0 Dividend Yield (Gross) % 1.5 1.9 2.1 2.3 2.7 3.0 3.2 Dividend Yield (Net) % 1.5 1.9 2.1 2.3 2.7 3.0 3.2 NAV (% Change) 372.3 (59.8) (57.7) 74.6 13.1 6.3 12.4 P/NAV (x) 2.2 5.4 12.7 7.3 6.4 6.0 5.4 Return on Equity, post-tax (%) 28.7 54.5 36.9 44.3 27.1 27.4 32.5 Return on Capital, post-tax (%) 18.6 22.3 22.5 27.3 26.0 27.7 29.3 Share Price, High 35.00 57.26 77.37 74.70 Share Price, Low 25.00 34.07 49.01 49.15 Share Price, Avg. 28.34 46.10 65.29 64.12 Price rel. Local Sector (%) (1.1) 8.6 0.3 (3.9) Price rel. Local Market (%) 1.5 16.1 (1.1) (40.2) Price rel. European Sector (%) 22.4 32.4 (1.1) (2.7) Price rel. European Market (%) 13.7 37.0 3.7 (42.1) Datastream indices are used to calculate relative price performance, based on calendar year.

Figures & forecasts (NLG m) 1996A 1997A 1998A 1999A 2000F 2001F 2002F Sales 87795 94596 89111 90297 100115 106038 111410 EBITDA 10362 11699 11510 12605 14216 15657 17349 Operating Profit 8138.3 9363.6 9442.9 10074.9 11794.4 13123.3 14683.3 Pre-tax Profit 6949.7 15417.3 10142.8 9565.9 8554.7 9382.0 11772.7 Net Profit 4206.1 10923.9 6486.8 6106.2 4805.1 5191.7 6740.2 Earnings per Share NLG 3.80 9.87 5.68 6.18 7.08 7.82 8.88 Dividend per Share (Net) NLG 1.76 2.25 2.54 2.79 3.24 3.54 3.82 Free Cash Flow per Share NLG 4.20 4.79 3.98 5.27 5.31 6.45 7.86 Current Values are converted at the rate of ¤0.453768 to the NLG

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