24/03/2009

ROLAND VERMOOTESALES DIRECTOR

STORECHECK SEMINAR

24/03/2009

Key driver…USP…

� To consider each brand as a self-financed business unit

� To develop a strong USP as a technological barrier to competetion

� To continously develop new products by:� Identifying universal consumer needs and offering a solution

� Inventing new product concepts rather than using existing ones

� Using a high degree of innovation, never ‘me-toos’

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Key driver…Obsession…

� Raw materials : choice, selection and controls

� Tests before a new launch

� Freshness panel and Summer stop

Quality

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Group Key figures

� 7,4 billion € turnover in 2008� 20.000 employees� > 50 products � Present in 7 categories:

pralines/spreadable/industrial pastry/chocolatesnacks/dairy/drinks/pocket confectionery

� 15 plants� 100% family owned company� Self financed projects� Leadership in :Italy, Germany & France

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REGULAR ASSORTMENT- 15 PRODUCTS/BRANDS- 40 CONSUMER PACKS

Ferrero Belgium : Key brands

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TurnoverIn million euros

growth ..

� N° 2 in the chocolateconfectionery market

� Leader with Nutella, Ferrero Rocher and Kinder Seasonalproducts

� In 20 years Ferrero has multiplied by > 3 its turnover

� Double digit growthwith same productportfolio

1987 1991 1997 2002 2006 2007 2008

30.8

45.5

58.9

73.3

98.3

108.0

113,7

Ferrero Belgium : Key figures

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Ferrero Belgium : market results

BRING GROWTH IN THE MARKET !

TOP 16 (+3) : TURNOVER FOOD COMPANIES

TOP 7 (+5) : ABSOLUTE GROWTH

TOP 4 (+7) : RELATIVE TURNOVER GROWTH

TOP 1 : GROWTH INDEX( Share of growth/marketshare €)

N° 1 N° 2 N°1 & 2 N° 2 ….

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MARKET LEADER PRALINESEXPERTISE IN SEASON-MANAGEMENT

EXPERTISE IN PROMOTIONMANAGEMENT

Ferrero Belgium : know-how

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Ferrero Belgium : Organisation<2003 Status

KAM+FIELD

=

EXPERIENCE

COMMITMENT

COVERAGE

SERVICE

PROMO DRIVEN

TRADE MARKETING=

PROMO MANAGEMENT+ COMMERCIAL PLAN

KAM + FIELD

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CASE « SUMMER »

DIAGNOSTIC

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1 ECONOMIC STATUS : FERRERO, A COMPANY WITH 2 DYNAMICS

2 TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

3 CONSUMER STATUS : TOP BRANDS WITHIN CATEGORY, BUT ……

REASON WHY ??

4 SHOPPER STATUS : CATEGORY WITHOUT LIMITS, BUT…..

STATUS

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Turnoversplit Ferrero 2006

91

135

103

71 7066

41

93

113

160

147

111

January February March April May June July August September October November December

� Ferrero monthly turnover driven by season: 80% of turnover in 8 months

� But fixed costs during 12 months : sales force, warehouse, housing, ...

� Organisation: peaks and downs, technical unemployment,…

� Date sensitive business

� Monthly P&L

79,4%

20,6%

Turnover '06

SPLIT TURNOVER FERRERO

April-julyAugust-March

1 ECONOMIC STATUS :FERRERO, A COMPANY WITH 2 DYNAMICS

24/03/2009

1

Expertise and strengthduring season

N°1 and driver of the category

REGULAR ASSORTMENT- 15 PRODUCTS/BRANDS- 40 CONSUMERPACKS

FRESHNESS POLICY

SUMMERSTOP

ECONOMIC STATUS : FERRERO, A COMPANY WITH 2 DYNAMICS

24/03/2009

……

Confectionery and sweet products represents +/- 12% of FMCG turnover but during

summer months dynamism drop-off (+/- 10%) :

- less SKU’s => space on shopfloor/shelf/….

- less rotations linked to consumption habits …or abilities

- trade priority : soft drinks, barbecue…..

OUTPUT SUGAR&CHOCOLATE CONF. MARKET €: Index vs average

94

108

125121

8883

6569

8993

108

134

123

w1-5 w6-9 w10-13 w14-17 w18-21 w22-25 w26-29 w30-33 w34-37 w38-41 w42-45 w46-49 w50-01

Sugar&Choc Market '06

TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER2

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HIGH TOP OF MIND , STILL INCREASING, BUTLOW RECRUITING …..

KINDER BUENO: CANDYBAR FOR YOUNG ADULTS

TOPPER WITHIN CANDYBARS, BUT LINKED WITHKINDER CHOCOLATE AND SURPRISECHILDREN IMAGE

3 TOP BRANDS WITHIN CATEGORY, BUT ……FEW WITHOUT CHOCOLATE (quality risk) AND …

THE SUMMER PRALINES (without chocolate)OF FERRERO: LOW AWARENESS

CHOCOLATE SNACK

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4 SHOPPER: CONFECTONERY, A CATEGORY WITHOUT LIMITS

When you see, you buy! What is the closure rate?

Only 48% of confectonery shoppers plan it!

45%

30%

20%

6%

0% 20% 40% 60%

the actual product that waspurchased

a particular type

only the purchase ofconfectionery in general

only the brand

in percent of cases

28%

32%

12%

2%

9%

17%

0% 5% 10% 15% 20% 25% 30% 35%

always (6)

never (1)

%

Very often (5)

sometimes (3)

often (4)

Nearly never (2)

BUT CONFECTIONERY SHOPPER HAS NO EXCITEMENTSDURING SUMMER TIME

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CASE « SUMMER »

OBJECTIVE

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Objectives:

360° Project evolving the whole company

Create during the summer months, additional turnover for the category without hurting regular business

Using the « Marketing Mix summer project » for brand building on the regular brands

Create category dynamism : concept

AND

Create internal and external « goodwill » and « breakthrough » for the trade marketing dpt

1

2

3

4

5

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CASE « SUMMER »

THE PROJECT

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1 PRODUCTS: BESIDES OUR REGULAR RANGE, IN-OUT FOR 4 MONTHSSPECIFIC SUMMER PRODUCTS

2MIX MEDIA ADVERTISING SUPPORT: USING NEW COMMUNICATION TOOLS TO COMMUNICATE PRODUCT DYNAMISM

4

ACTION PLAN :

3 NO PROMOTION SELLING BUT CONCEPT SELLING

DEVELOPPING FLOOR CONCEPTS : FROM HYPERMARKET TO PROXIMITY

5 DYNAMICS OF ALL : FERRERO-TEAM

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SUMMER TASTE: IN-OUT PRODUCTS TO BRING DYNAMISM

SUMMER PRODUCTS: NO PROBLEMS WITH QUALITY WHEN SUMMER HEAT

1 PRODUCTS: BESIDES OUR REGULAR RANGE, IN-OUT FOR 4 MONTHSSPECIFIC SUMMER PRODUCTS

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Targeted projects with limited investments to create awareness and trial

2MIX MEDIA ADVERTISING SUPPORT: USING NEW COMMUNICATION TOOLS TO COMMUNICATE DYNAMISM OF PRODUCTS

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SUMMER APPROACH WAS THE OPPORTUNITY FOR TRADE-MARKETINGTO DEEPEN A RELATIONSHIP WITH TRADE :

Before:

- Contacts where based on promotion and seasonal discussion- No launches in the last 5 years- Not perceived as full 360° supplier

Now:

- Relationship based on facts and figures has been built : adding value to the category- Ferrero is now not only perceived as the company of Nutella, Christmas andEastern but also as a full 360° supplier

- Shopper love to eat confectionery products also in summer time

3 NO PROMOTION SELLING BUT CONCEPT SELLING

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PRODUCTS PRESENTATION DECLINED FOR ALL CHANNELS

PROXIMITY

HYPER SUPER

4 DEVELOPPING FLOOR CONCEPT FROM HYPERMARKET TO PROXIMITY

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CASE « SUMMER »

RESULTS

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Turnover increased with 49% in 2 years, better split of turnover between months

Increase of warehousing activities : +28% of cartons, +17% of pallets movement…

79,4%

20,6%

76,4%

23,6%

Turnover '06 Turnover '08

SPLIT TURNOVER FERRERO

April-julyAugust-March

April-JulyAugust-March

+28%

+49%

Turnover increase 08 vs 06

ECONOMIC STATUS :FERRERO, A COMPANY WITH CHANGING DYNAMICS1

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TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

OUTPUT NIELSEN €: CHOC.&SUGAR CONF. Index vs Avg

121

85 83

6569

8993

108

134

123121

8187

8177

8893

107

130

115

w14-17 w18-21 w22-25 w26-29 w30-33 w34-37 w38-41 w42-45 w46-49 w50-01

Sugar&Choc Market '06

Sugar&Choc Market '08

The gap versus average decreases during april-june

2

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TRADE STATUS: CATEGORY NEEDS FOR DYNAMISM DURING SUMMER

MARKETGROWTH IN APRIL-JUNE

• Market of Choc & Sugar Confectionery increased by 9% (vs + 5% YA)

• Chocolate Confectionery now represents 11% of FMCG (vs 10% before –still 1% gap)

Output 06 Output 08 Growth %Market 57,90 63,1 5,2 m 9,0%Ferrero 4,2 6,5 2,3 m 54,8%

Share 7,3% 10,3% 44,0%

Output in Million €

2

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+ 19 % Output Open Market

+ penetration: 12.7->16.4

+ 166.000 new consumers

+ purch.frequency 2.6=>3…

+ 40% Output Open market

+ penetration: 11.7=>15.7

+ 180.000 new consumers

+ 53%=>59% repeaters

+…

Results :

2ND BRAND IN MARKET

CONSUMER/SHOPPER STATUS : TOP BRANDS WITHIN CATEGORY3/4

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Marketing

SupplyChain

IT

PromoAnalyses

Finance

Management

P&L

Nielsen

GFK

TradeMarketing

Ferrero Belgium : Trade Marketing Team

LISTEN

UNDERSTAND

COLLECT

ANALYSE

STRUCTURE

INFORM

NOURISH/FEED

INVOLVE

ADDED VALUE

Quality

Promotion

Price

Shelf

Distribution

COMMERCIAL PLANKAM + FIELD