Shareholders Meeting Royal Wessanen nv

1
Shareholders MeetingRoyal Wessanen nv

• Amsterdam, March 31, 2004

2
Item 2

• Annual Report of the Executive Board for 2003

3
Note on forward looking statements

• This presentation contains certain statements
  that are neither reported financial results nor
  other historical information. These statements
  are forward-looking statements within the meaning
  of the safe-harbor provisions of the US federal
  securities laws. These forward-looking statements
  are subject to risks and uncertainties that could
  cause actual results to differ materially from
  those expressed in the forward-looking
  statements. Many of these risks and uncertainties
  relate to factors that are beyond Wessanens
  ability to control or estimate precisely, such as
  future market conditions, the behavior of other
  market participants and the actions of
  governmental regulators. Readers are cautioned
  not to place undue reliance on these
  forward-looking statements, which speak only as
  of the date of this presentation.

4
Main priorities 2003

• Increase predictability
• Reliable forecasts
• Balance sheet investigation TOL NA
• Improve financial performance
• Operation Phoenix
• Turnaround TOL NA
• Build on the Roots-program fundamentally alter
  the organizational structure
• Strategy development
• Launch of new strategy focus on second pillar
  Premium Taste next to Health

5
Wessanen fourth quarter results show first signs
of recovery

• Net income1 in the 4th quarter increased by more
  than 250 from EUR 2.4 million to EUR 8.6 million
• EBITAE total European activities increased by 35
  from EUR 3.3 million to EUR 4.5 million
• TOL NA loss decreased from EUR 6.3 million in Q3
  to EUR 3.1 million in Q4, due to measures taken.
  

1 Before amortization of goodwill exceptional
items
6
Positive progress Operation Phoenix

• Operation on track to generate annualized cost
  savings of EUR 100 to 115 million by the end of
  2004
• Recent announcement (January 2004) closure
  Telford facility concludes Phoenix announcements
• Realized in 2003 EUR 5.3 million savings,
  reduction of 400 jobs
• Expected Q1 2004 EUR 5 million extra savings

7
End of 2003 Wessanen embarked on seven strategic
initiatives
US Specific
Build on the Roots program
1
Bundling Branded Business
2
Building a European Platform
Europe Specific
3
Repositioning of Beckers
4
Aligning Dailycer/Delicia with Branded Business
5
Strategic Pillars for Health Premium Taste
Global
6
Transatlantic Alliance
7
8
Build on the Roots program TOL NA (1)
US Specific
Europe Specific
Global

• As presented in November 2003 our distributor
  business will be split into two distinctive
  national controlled business entities
• Business Management
• Distribution Warehouse management

9
Build on the Roots program TOL NA (2)
US Specific
Europe Specific
Global

• Business Management
• Start of initiatives aimed at cutting the tail
  complexity reduction
• Implementation National Supplier Program to
  strengthen commercial power
• New management team for this unit started

10
Build on the roots program TOL NA (3)
US Specific
Europe Specific
Global

• Distribution Warehouse Management
• Development of future distribution concept
  network is at a final stage
• Performance improvement initiatives started,
  related to customer service levels and
  operational excellence

11
Build on the Roots program TOL NA (4)
US Specific
Europe Specific
Global

• Implementation of the new organization
• The first phase of the new organizational
  structure will be completed and implemented in
  April
• Monthly meetings with top 20 managers and
  Wessanen top management are set to monitor
  progress and decide on next steps
• New CEO for TOL NA

12
Bundling Branded Business TOL NA is on track
(5)
US Specific
Europe Specific
Global

• ANSB, Liberty Richter and ABC are brought under
  one management
• Review of our total brand portfolio is at a final
  stage - brand selection focus will be decided
  in April
• Decision has been made to integrate three
  IT-systems and the total back-office

13
European initiatives (1)
US Specific
Europe Specific
Global

• Building a European platform
• Top line growth focus on aligning brands and
  building a platform for product development
  concept leverage
• Cost synergies implementation of Sourcing
  program and elimination of duplicating functions
• New European governance model
• The new structure will be decided on end of April

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European initiatives (2)
US Specific
Europe Specific
Global

• Repositioning of Beckers portfolio
• Repositioning strategy process will be finalized
  in May
• Aligning of Dailycer and Delicia with our branded
  business focus
• Strategic scenarios are determined
• Final decisions will be made end of 2004

15
Two Global initiatives are making progress
US Specific
Europe Specific
Global

• Strategic Pillars for Health Premium Taste
• Choices and options for growth and value creation
  within both pillars are being developed.
• Transatlantic Alliance
• A dedicated and qualified team is formed to
  further develop transatlantic alliances. The team
  is currently working on a business plan.

16
Balance sheet investigation

• Charges taken in Q2 2003 (EUR 14 million) were
  appropriate
• Remedial actions taken to secure reliable
  financial accounting and reporting
• Auditing process delayed due to investigation
• Adoption of financial statements 2003 not on
  agenda of today's AG will take place in separate
  AGM

17
Outlook

• Full year 2004
• Substantial increase EBITAE to at least EUR 70
  million (at constant exchange rates), due to
• Q1 2004
• Positive trend of last two quarters continues

• Cost savings Phoenix
• Margin improvement through brand development and
  Phoenix procurement savings

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Item 3

• Annual figures 2003

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2003 Financial performance
1 Operating result before goodwill amortization
and exceptional items 2 Beforegoodwill
amortization and exceptional items
UNAUDITED
20
Wessanen total
UNAUDITED
21
Financial management
1 Year-end ratio 2002 changed as a result of
changes in accounting policies regarding dividend
UNAUDITED
22
Financial results North America

• Autonomous sales growth 2003 5,7
• EBITAE improved during year as a result of
  measures taken
• Build on the Roots- program developed to
  bring TOL NA back to acceptable profit levels

1 Operating result before goodwill amortization
and exceptional items
UNAUDITED
23
North American activities
UNAUDITED
24
Financial resultats Europe

• Sales growth almost flat due to market
  developments
• EBITAE growth, mainly at Cereals and TOL EU

1 Bedrijfsresultaat vóór afschrijving goodwill
bijzondere posten

• Phoenix brings in necessary cost savings to
  improve results and increase brand support

UNAUDITED
25
European activities
UNAUDITED
26
Building blocks Operation Phoenix as per
November 21, 2003
UNAUDITED
27
Actuals Operation Phoenixas per Februari 18, 2004
UNAUDITED
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Item 4

• Corporate Governance
• Code Tabaksblat applied

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Basic principles

• Comply with Dutch Corporate Governance Code to
• Promote transparancy in behalf of the forming of
  opinion and exercising control by stakeholders
• Against acceptable costs and burden for the
  organization.

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Where did the Wessanen governance deviate?

• Employment contracts of Board members
• Listing of remuneration policy at Shareholders
  Meeting
• Trust objectives, Articles of Association and
  compilation of Board
• Number of Supervisory Board positions per Board
  member
• Accessibility of events, regulations and minutes
  via website

31
What changes are being made (1)

• Regarding Executive Board
• Current employment contracts are renegotiated and
  aligned with Code
• Remuneration policy to be approved by AGM
• Regulations Executive Board specified in line
  with Code

32
What changes are being made (2)

• Regarding the Supervisory Board
• Number of Supervisory Board positions per member
  decreased in line with Code
• Regulations Supervisory Board specified in line
  with Code
• Present, although not compulsory by Code
• audit committee
• selection-, appointment- remuneration committee

33
What changes are being made (3)

• Regarding the Trust
• Chairman of Supervisory Board resigned from Board
  of Trust
• Elimination of the restrictions in the
  cancellation of share certificates and as such
  the function as protective measure of the Trust
• Protection for minority shareholders

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What changes are being made (4)

• Dissolution of information
• All relevant regulations and documents available
  through website
• All analyst meetings regarding (quarterly)
  results accessible on website through audio
  replay
• Minutes available on website
• All documents, where possible, available in
  English and Dutch

35
Other changes (5)

• Changed, although not compulsory by Code
• Abolishment of the Preference Shares Trust
• Altering current binding nomination into
  non-binding nomination for appointment members
  Executive and Supervisory Board
• Abolishment Combined Meeting

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Conclusion

• All existing protective measures abolished and as
  such a considerable increase of the influence of
  financiers
• Due to executed changes strong improvement of
  transparency to support the forming of opinion
  and control of shareholders
• More than in line with Dutch Corporate Governance
  Code

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Item 5

• Appointment of a member of the Executive Board
• Alec C. Covington

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Alec C. Covington

• Term of employment 4 years
• Basic salary EUR 493,000.- (USD 600,000)
  annually
• At the outset of the employment 125,000 options
  and 25,000 restricted shares against the closing
  market price of February 13, 2004 (EUR 9.47)
  (sign-on)
• Possible bonus performance-linked and based on
  quantifiable criteria
• At premature termination of the employment
  maximum of 12 months salary
• After 4 year retention bonus of USD 500,000.-

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Item 6

• Remuneration policy Executive Board

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Remuneration elements Executive Board

• Fixed base salary 3rd quartile level relative to
  European general food industry (above market
  average)
• Variable compensation
• cash bonus, based on
• autonomous sales growth, in combination with ROS
• primary working capital days
• a personal agenda
• 2004 40-50 of base salary / max. 100

41
Remuneration elements Executive Board

• Variable compensation (continued)
• Stock Option Plan
• options on shares, exercisable after three years,
  only when profitable in the first year
• vesting of options conditional on the achievement
  of Total Shareholders Return (TSR) measured
  against 8 peers (CSM, Danone, Hain, Heinz, Kraft,
  Numico, Nutreco, United Natural Food)

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Remuneration elements Executive Board

• Variable compensation (continued)
• Restricted Share Plan
• restricted shares conditional to Wessanen making
  profits in the year of the grant
• Pension
• For NL participation in the Wessanen Pension
  Plan 1998 or fixed amount
• Retirement age 62 years

43
Board remuneration in 2003
as of July 1, 2003 until October 1, 2003
UNAUDITED
44
Proposal granting options restricted shares
Executive Board

• Max. 68,750 options and 18,333 restricted shares
• As per April 5, 2004, against the closing price
  of April 2, 2003
• based on the compilation of the Executive Board
  at the time of the composition of the
  remuneration report

45
Item 7

• Supervisory Board remuneration
• Reduction fixed remuneration (currently EUR
  25,000 annually) to EUR 20,000 annually
• Introduction payment of EUR 2,000 per committee
  meeting attended
• Chairman EUR 30,000 annually (was EUR 37,500)
  and EUR 3,000 per committee meeting

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Item 8

• Amendment Articles of Association
• Abolishment issuing preference shares
• abolish the restrictions upon the transfer of
  ordinary shares(5-rule) with protection for
  minority shareholders
• Abolishment Combined Meeting

47
Item 9

• Granting the Executive Board powers with respect
  to the issue of shares and the restriction or
  exclusion of the pre-emptive right

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Item 10

• Authorization to acquire own shares and
  depositary receipts

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Item 11

• Questions and closing

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