Consolidated key figures of the Lotus Bakeries Group

iM e s s a g e f r o m t h e Ch a i r m a n a n d t h e CEO2007 was a good year for Lotus Bakeries.Turnover rose considerably, especially in the second halfof the year. Internal growth of 5% in the first half and of14% in the second half was above expectations.Structurally our products are well placed in the market.We have a portfolio of tasty, highly reputed productswith a heavy emphasis on convenience. Many productssuch as gingerbread also have strong “health” profiles.Lotus and Peijnenburg are both very strong brands radiatingseriousness and solidity, identities which againproved their very great worth in 2007.Lotus caramelized biscuits continued on their way tobecoming an internationally recognized product. Turnoverwas also helped by the poor summer weather, whichresulted in very high summer sales in the Benelux andneighbouring countries.strengthening of commercial organizations on exportmarkets.Another major task area is increasing product innovationby developing new and innovative products in 2008. For2008 we are also planning major investments to expandour production capacity for caramelized biscuits and gingerbreadand to make productivity improvements. Thisconstant improvement of our efficiency and productivityis essential for maintaining our competitiveness in orderto extend our position in the international biscuits market.Lotus Bakeries’ management and employees have set towork with determination and commitment to implementthese plans and are - as in the past - strongly motivatedto achieve the company’s strategic ambitions.Organizationally 2007 was a good year. Following thetakeover of Koninklijke Peijnenburg in mid-2006 we haverapidly grown into a tight, well-streamlined organization.The associated adaptations at group level have proceededvery successfully.The integration of the Lotus Bakeries Netherlands organizationinto that of Koninklijke Peijnenburg took placevery rapidly and efficiently, with major savings in theNetherlands.Another feature of 2007 was the very marked upwardmovements in many raw materials prices. The unprecedentedsharp and fast rises for essential ingredients likegrains, syrups and margarines are structural in nature.Lotus Bakeries therefore adjusted its prices as fast aspossible in the course of the fourth quarter of 2007. Thiswas necessary and timely.2008 faces us with new and major challenges. The biggestof these will be handling consumer reactions to ourhigher prices and the strong rise of the euro against theUS dollar and most other foreign currencies. Lotus Bakerieswill cushion these effects by further increasing itscommercial efforts: more advertising and furtherMatthieu BooneCEOKarel BooneChairman7