Corbion N.V. — Interim / Quarterly Report 2008

Nov 3, 2008

CSM nv Corporate Communications

P.O. Box 349 1000 AH Amsterdam The Netherlands

Nienoord 13 1112 XE Diemen

T +31 (0)20 590 62 16 F +31 (0)20 590 62 17 E communications@csm.nl

Trading Update

CSM TRADING UPDATE THIRD QUARTER 2008

Diemen, The Netherlands, November 3, 2008

• In our first half-year results statement we indicated that our Bakery Supplies markets had started to be influenced by recessionary pressures and that customer behaviour was being affected by the price increases that had followed from the unprecedented rise in raw material costs.
• These trends have intensified during the third quarter and we anticipate a challenging environment in the periods to come as demand weakens in our markets.
• Down trading and downscaling is affecting Bakery Supplies volumes, but particularly so in Europe where volumes fell by 6% in the third quarter.
• CSM is responding by adapting to the changing consumer environment by accelerating the launches and offering of value for money products.
• We expect PURAC to make substantial progress with its full year results for 2008.
• We are accelerating moves to drive efficiency improvements including headcount reduction.
• Sales for the first nine months were €1,886.7 million (2007 €1,833.6 million). Organic growth was 9.5%, driven by pricing growth of 11.5% and volume decline of 2%.
• Our EBITA for the first nine months is €95.7 million (2007 €104.8 million) with €27 million generated in the 3rd quarter (2007 €35 million). Currency translation has a significant impact on our reported results. On a constant currency basis our EBITA for the nine months would have been €103.9 million, with €28.8 million generated in the 3rd quarter.
• We expect EBITA before exceptional items for the full year to be 10 –15% below the €153.7 million delivered in 2007. Approximately half of the decline in EBITA is due to currency movements.
• CSM intends to publish future trading updates on a quarterly basis.

Commenting on the third quarter results, Gerard Hoetmer, CEO of CSM, said:

"At our first half year results statement we indicated that we would be affected by the developing recessionary environment. We see evidence of downscaling and down trading by customers as well as de-stocking effects. Our pricing power has helped us to deliver an organic sales growth of 9.5% in the year to date. We see raw material prices weakening significantly over the last few weeks, which due to timing differences with our existing cover positions is likely to negatively affect our results in the 4th quarter. We believe that CSM is continuing to gain share in many of our markets, but clearly we have to cope with negative economic trends. The Bakery Supplies businesses particularly in Europe in Germany and the UK are facing difficult market conditions; in these countries consumer confidence has fallen sharply. Consequently, profitability in the third quarter has been below the level achieved in the corresponding period in 2007 and we expect a similar pattern in the fourth quarter.

We are taking measures to react effectively to the current market situation. We have accelerated our launches of innovative new products to respond to the changes in consumer behavior. We are adapting our product portfolio including more value for money propositions reflecting the changing trends. In most of our markets we do expect to further increase market shares as a result of our more customerorientated organisation and increased innovation power.

We are continuing our cost reduction programmes with closures and efficiency improvement steps, leading to a reduction in 200 (FTE) employees in various locations (Germany, France and US) by the end of 2008. This drive for improved efficiency will continue in 2009. The purchasing savings programmes also continue to deliver improvements, these cost savings will accelerate in 2009 and beyond as we speed up the process of driving efficiency improvements."

Sales
in millions	2008	2007	2008	2007
	Q1-Q3	Q1-Q3	Q3	Q3
Bakery Supplies North America (US\$)	1278.6	1113.1	432.8	390.6
% change	14.9		10.8
Bakery Supplies North America (€)	840.5	828.5	287.2	284.6
% change	1.4		0.9
Bakery Supplies Europe (€)	801.2	770.5	269.9	265.4
% change	4.0		1.7
PURAC (€)	245.0	234.6	82.4	77.2
% change	4.4		6.7
Total Sales (€)	1886.7	1833.6	639.5	627.2
% change	2.9		2.0

Organic sales growth for the year-to-date was 9.5%, driven by pricing growth of 11.5% and volume decline of 2%. Currency movements and divestments had a negative impact of 6.5%.

Organic sales for Bakery Supplies North America in the first nine months was 14.4%, driven by pricing growth of 15.4% and volume decline of 1%. Currency movements and divestments had a negative impact of 12.6% and 0.3% respectively.

Organic sales for Bakery Supplies Europe in the first nine months was up 4% driven by pricing growth of 10% and volume decline of 6%, which is influenced by the planned discontinuation of unprofitable business. Acquisitions added 2.3% to turnover, whilst currency movements had a negative impact of 2.4%.

Organic sales growth of our continuing business at PURAC was 11.6% in the first nine months broadly in-line with the performance of the first-half and reflecting volume growth of 6% and pricing growth of 5.6%. Currency movements and divestments had a negative impact of 4.7% and 0.8% respectively.

in millions	2008 Q1-Q3	2007 Q1-Q3	2008 Q3	2007 Q3
Bakery Supplies North America (US\$)	71.7	75.9	23.1	22.9
Bakery Supplies North America (€)	47.1	56.5	15.3	16.6
Bakery Supplies Europe (€)	37.7	44.5	10.1	18.3
PURAC (€)	23.2	15.0	5.9	4.1
Holding costs (€)	-12.3	-11.3	-4.3	-4.0
EBITA (€)	95.7	104.8	27.0	35.0

EBITA for the first nine months and third quarter was as follows:

On a constant currency basis first nine months EBITA for 2008 would have been €103.9 million whilst Q3 for 2008 would have been €28.8 million.

Bakery Supplies North America delivered EBITA of US\$23.1 million in the 3rd quarter, a slight improvement from the US\$22.9 million achieved in the 3rd quarter of 2007. The corrective action being taken at Brill is taking effect, with EBITA in the 3 rd quarter being in-line with last year. Our other companies in North America continue to develop well given the challenging environment.

Bakery Supplies Europe delivered EBITA of €10.1 million in the 3rd quarter compared with €18.3 million achieved in the 3rd quarter of 2007. Price increases to compensate for higher raw material costs and fast shifting consumer behaviour are putting pressure on volumes. An unfavourable product mix also adds to a resultant pressure on profitability. All three business units, artisan, industry and frozen are witnessing volume declines although the downward pressure is the strongest within artisan. As expected and indicated with our half-year results we clearly see weakness in our profitability in Germany leading to a €4 million lower EBITA compared with Q3 2007. The recessionary environment in the UK with a sharp reduction in consumer spending has had a significant impact on our 3rd quarter results. In the UK, a national survey points to the in-store bakery market declining in volume by 3.9% over the last twelve weeks. CSM is market leader within the in-store segment. With the impact of the recessionary environment expected to continue to influence our European business in the 4th quarter we expect our EBITA for the year to be substantially below last year.

PURAC delivered EBITA of €5.9 million in the 3rd quarter against €4.1 million in 2007. As indicated with our first half results we expected that the second half of 2008 would show a less spectacular improvement in our results due to a lagging effect of passing on increased raw material costs. There is also a negative impact from a strike at a Canadian potassium mine which impacts our sales of potassium lactate. We anticipate that the strike will have a clear negative impact on PURAC's EBITA in the 4th quarter. Nonetheless, we expect PURAC to make substantial progress with its full year results for 2008.

Our cash flow will remain strong based upon our underlying cash generation, capital expenditure being in line with depreciation and an improvement in our working capital versus the first-half of 2008. Despite the turbulence in the financial markets we remain in a position of being well capitalised with a financial strength that leaves us well placed to execute our strategy. As far as our dividend is concerned, the stability of our cash flow will allow us to fulfil our commitments to shareholders as explained in our dividend policy.

There will be a conference call for investors and analysts at 14 o'clock CET when the management board will be available to respond to questions.

---------------------------------------------------------------------------------------------------------------------------------

Dial-in details Conference call title: Trading Update November 2008 Participants code: 3939026 Telephone numbers: The Netherlands +31 20 794 8507 United Kingdom +44 207 190 1492

For more information, please contact:

Press: Sonya Richardson, Director Communications, tel. +31 (0)20 5906216 Analysts: Ian Blackford, Investor Relations Manager, tel. +31 (0)20 5906349 / mobile +44 (0)7767 227506

Background information:

CSM is the largest supplier of bakery products worldwide and is global market leader in lactic acid and lactic acid derivatives. CSM produces and distributes an extensive range of bakery products and ingredients for artisan and industrial bakeries and for in-store as well as out-of-home markets. It also produces a variety of lactic acid applications for the food, chemical and pharmaceutical industries. CSM operates in business-to-business markets throughout Europe, North America, South America, and Asia, generates annual sales of € 2.5 billion and has a workforce of around 8,700 employees in 24 countries. CSM is listed on Euronext Amsterdam. For more information: www.csm.nl.