Corbion N.V. — Interim / Quarterly Report 2008

Aug 14, 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

Press Release

CSM MEETING THE CHALLENGE OF A TOUGH ENVIRONMENT

Diemen, the Netherlands, August 13, 2008 – The first half-year results demonstrate the increasing strength of CSM in its major markets. Underlying sales growth was 11%, and price increases fully offset the impact of higher raw material costs. PURAC in particular performed well. EBITA was held back by adverse currency movements and further restructuring costs, which masked an underlying improvement in profitability.

Key Facts First Half 2008

• Net sales increased from € 1,206.5 million to € 1,247.2 million (at constant exchange rates an increase of 11.4%). Autonomous sales growth was 11.2%.
• EBITA from continuing operations before exceptional items amounted to € 68.8 million compared with € 69.7 million in the first half of 2007 (at constant exchange rates: € 75.1 million, an increase of 7.7%).
• Further restructuring in Germany and in North America has slowed down the growth in profitability. Our restructuring is going beyond our 3-S Program and will go deeper and take additional time.
• The 3-S Program savings in the first half of 2008 were € 14 million higher than in the same period last year, bringing the total run-rate savings to € 112 million, already exceeding the 2008 target of € 110 million.
• The result before taxes from continuing operations increased by 6.2% to € 49.7 million.
• As a result of the positive outcome of a dispute with a foreign tax authority, a tax provision of € 38.7 million has been released.
• Implementation of the PURAC manufacturing footprint and bio-plastics strategy is on schedule.
• In a generally difficult financial climate, an additional financing arrangement of US\$ 385 million was concluded with a syndication of banks at attractive conditions, to finance further growth.
• Worse than expected economic and market conditions invalidate ROS comparisons and delay attainment of our ROCE target.

Key Figures

		1st half-year
millions of euros	2008	2007
Net sales from continuing operations	1,247.2	1,206.5
EBITA* before exceptional items	68.8	69.7
Exceptional items included in Operating result	-10.4	-8.7
EBITA*	58.4	61.0
Result before taxes from continuing operations	49.7	46.8
Result from discontinued operations**		141.9
Result after taxes	65.2	174.9
EPS (in €)	1.02	2.65
EPS from continuing operations (in €)	1.02	0.50
ROS before exceptional items (in %)	5.5	5.8
ROCE before exceptional items (including goodwill) (in %)	7.6	7.6

* EBITA: the operating result before amortization of intangible fixed assets.

** The result from discontinued operations for the first half of 2007 comprises the result of CSM Sugar and the result of the sale of CSM Sugar.

Gerard Hoetmer, CEO of CSM, on Strategy and the Market:

"I am pleased with the progress CSM has made in this volatile economic climate. We have been able to meet the short term challenges whilst working on our longer term strategic initiatives.

We have taken a leading role in implementing price increases, which were necessary to offset unprecedented increases in raw material costs. This often involved advising our customers on reformulations and different product designs.

At the same time our innovation centers worked hard on strategic innovations, resulting in the successful launch of amongst others a premium high quality croissant in Europe, the Hispanic range in BakeMark USA and in the further development of bio-plastics at PURAC. All in all, CSM has developed a more professional presence in the market, is more responsive to customer needs and hence is strengthening relationships with its customers.

The constant fine-tuning of our organization has considerably strengthened the foundation of our company, but we still have work to do. We are going to continue with our restructuring, beyond what was envisaged in our 3-S Program in order to ensure that we deliver on our strategic goals on being cost competitive and fulfill our growth ambitions. We are currently reorganizing at H.C. Brill in North America and at our German bakery organization in order to bring their performance up to company requirements. We expect to see clear improvements in the results at Brill in the second half of this year. The measures that we have taken in our German bakery organization are expected to lead to an improvement of the results in 2009 and beyond.

A good example of a successful restructuring is the turn-around at PURAC, with which I am very pleased. PURAC is clearly showing market leadership in new product launches, in continuously lowering the cost base, and implementing break-through changes in the production and product quality of bio-plastics. PURAC has proved to be able to increase prices to the required levels and is substantially improving profitability.

CSM is currently showing a strong performance under difficult market circumstances, which is an achievement our entire organization should be proud of. Continuing high raw material cost levels, negative currency effects and an economy that starts to show symptoms of a recession, create an even more difficult environment. We are nevertheless determined to further improve our activities, and consequently, improve our bottom line."

Financial Commentary on First Half 2008

Net sales

Net sales from continuing operations increased by € 40.7 million to € 1,247.2 million (first half 2007: € 1,206.5 million). The increase in net sales was impacted by negative exchange rate effects of € 96 million, due to the weaker US dollar and Pound Sterling. Acquisitions and divestments had a positive net effect of € 13 million. Autonomous sales growth was € 135 million (11.2%). The breakdown of the autonomous growth was as follows:

Bakery Supplies North America (BSNA)	15.2%
Bakery Supplies Europe (BSEU)	7.3%
PURAC	9.5%

Sales growth in the bakery activities was driven by increased prices as we successfully managed to fully offset the raw material cost increases. Growth at PURAC was driven by both price and volume increases.

EBITA

EBITA from continuing operations before exceptional items decreased by € 0.9 million to € 68.8 million. At constant exchange rates it would have increased by € 6.3 million or 7.7%.

The EBITA of BSNA was negatively impacted by H.C. Brill, where results came in US\$ 9 million lower compared with the first half of 2007, including write downs of slow moving and obsolete inventory of US\$ 5 million. EBITA of Brill in the first half of 2008 was better than in the second half of 2007. The improvement in results at Brill will be clearly visible in the second half of 2008.

Furthermore, as announced, we have taken measures in our German bakery operation in order to reverse its declining profitability. A number of initiatives, including management changes and a restructuring of the organization, are expected to lead to an improvement in EBITA in 2009 and beyond.

A very positive development in our bakery activities is the progress we are making in the out-of-home channel, where we are strengthening our position and growing our market share. The acquisitions of Titterington's and Kate's Cakes have been an important part of this success.

PURAC is benefiting from its continuing volume growth and cost saving initiatives, whilst unlike in previous years PURAC is now successfully passing on the cost increases in raw materials and energy to the market.

In its final year, our 3-S Program has delivered additional savings in the first half of 2008 of € 14 million compared with the same period in 2007. The current run-rate shows a saving of € 112 million, already exceeding the target of € 110 million.

Exceptional expenses amounted to € 10.4 million; the main charge taken was an amount of € 9.4 million for the reorganization of our German bakery operation.

Net financial income and charges amounted to negative € 5.3 million. The improvement of € 6.7 million compared with the first half of 2007 is caused by currency effects and incidental lower costs.

The tax charge was positively impacted by a large release from our tax provision amounting to € 38.7 million. We achieved a successful resolution of a dispute with a foreign tax authority. Excluding this release our tax burden amounted to 29.2%.

Balance Sheet

Capital employed excluding goodwill from continuing operations increased by € 74.9 million to € 875.9 million compared with December 31, 2007 (€ 801.0 million). The main movements were (in millions of euros):

•	Capital expenditure on fixed assets	25.2
•	Depreciation of fixed assets	-29.3
•	Working capital	107.5
•	Currency effects	-30.3
•	Acquisition of Harden Fine Foods	5.8

Working capital increased to € 343.8 million (December 31, 2007: € 236.3 million) due to an increase of inventories and lower current liabilities. Receivables came slightly down in days outstanding. The growth in inventory of almost € 47 million reflects higher raw material prices, the build up of inventory at PURAC to prepare for the closures of our European lactic acid factories and the increased sailing stock from Thailand to Europe. The release of a tax provision of € 38.7 million decreased our current liabilities.

Shareholders' equity decreased by € 14.4 million to € 943.3 million. The main movements were:

• the addition of the result for the first half of 2008 amounting to € 65.2 million;
• a decrease of € 57.2 million resulting from dividend payments;
• negative currency effects of € 22.3 million, due to the declining Thai Baht, Pound Sterling and US dollar.

Cash Flow / Financing

The cash flow from operating activities (continuing operations) amounted to negative € 11.9 million. The financing of the increased working capital was the main factor for the negative cash flow. The cash flow from investment activities consisted mainly of the acquisition of Harden Fine Foods (€ 7.6 million) and capital expenditure on fixed assets (€ 25.8 million).

Net debt increased by € 77.5 million to € 533.1 million (end of 2007: € 455.6 million). The net debt to EBITDA ratio of 2.7 is well under the maximum ratio of 3 we set for ourselves.

The recently concluded additional US \$ 385 million revolving credit facility in combination with the € 700 million revolving credit facility concluded last year means we have ample room to finance our growth ambitions.

Prospects for 2008

We have put enormous effort into strengthening our organization over the last years, the benefits of which are visible in our current results and will become more apparent in future results. Our restructuring and repositioning of CSM has been achieved in an increasingly turbulent environment, featuring significantly adverse currency movements, an unprecedented increase in raw material costs, extreme volatility in markets and the recent very sharp decline in economic confidence and activity.

Becoming a true market leader requires that all aspects of a business excel and become part of an integrated professional organization. Our reorganizations have been focusing on this. We realize, however, that these reorganizations need to go deeper and will take additional time. Our recent reorganizations in the US and Germany are examples of this awareness and show our determination to take all appropriate measures to strengthen market leadership. The improvements that PURAC has made towards true leadership, which are partly reflected in its first half 2008 results are the fruits of the reorganizations and tough choices we had to make over the last three years and clearly show that we are on the right track.

In the current challenging environment we have to be realistic about the attainment of our targets set in 2005. In particular the ROS calculation is very much distorted by currency and raw material changes and so invalidates comparison with the targets we had set in 2005. This environment also affects the ROCE targets, albeit to a lesser extent. We remain committed to delivering on our group target of at least 12% ROCE to which both Bakery and PURAC will contribute. Market and economic conditions will influence timing. We will elaborate on this target with our full year results.

Our mission is to create shareholder value and not to pursue short-term goals to the detriment of sustainable returns. The route to achieving the targeted financial results is through further developing our sustainable leadership positions in Bakery and in PURAC.

Bakery Supplies North America

Consistent with the outlook as indicated in our 2007 Annual Report, we will continue to improve our market position and results. In the current stagnating economic climate in the US we will continue to increase our prices to offset increasing costs. We do see pressure on volume growth in the market and we expect this to also continue for the remainder of 2008. We expect EBITA in US dollar to show growth in the second half of 2008 compared with the second half of 2007 especially as a result of the improved performance at Brill.

Bakery Supplies Europe

The transition of a country based organization to a truly European organization is developing as planned. Cross selling of products between different geographic regions and the European wide new product launches will further contribute to growth of our business. Declining consumer confidence in most of the European countries and the reaction of our customers to this will offset only part of the expected growth thanks to our stronger market position. We expect EBITA to improve but at a slower pace due to the reorganization of our German activities.

PURAC

The sales growth outlook of 8-10% for 2008 as indicated in our 2007 Annual Report has been realized in the first half and will continue in the second half of 2008, with price increases taking a larger share. The second half will show a less spectacular improvement due to increased raw material costs. Cost increases of more than 100% in various auxiliary materials are making further substantial price increases necessary. Although these price increases have already been announced to the market, the annual contracts entered into earlier 2008 will delay the benefit to results.

CSM Total

For 2008 we expect substantial sales increases as a result of the successful process of raising our prices to offset increased raw material costs. The difficult economic environment together with the sharp price increases for many of our products will affect market demand. However, in most of our markets we do expect to increase market shares as a result of our more customer-oriented organization and increased innovation power.

Capital expenditure for CSM total will be in line with depreciation and working capital will come down slightly as a percentage of sales, as indicated earlier.

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For more information, please contact:

Press: Mirko Creyghton, Director Communications, tel. +31 (0)20 5906320 / cell phone +31 (0)6 5352 7622 Analysts: Ian Blackford, Investor Relations Manager, tel. +31 (0)20 5906349 / cell phone +44 (0)7767 227506

Appendices

• 1. Business Developments in the Divisions
• 1. Consolidated Profit and Loss Account
• 1. Consolidated Profit and Loss Account from Continuing Operations before Exceptional Items
• 1. Consolidated Balance Sheet
• 1. Movements in Shareholders' Equity
• 1. Consolidated Cash Flow Statement
• 1. Key Figures
• 1. Breakdown 3-S Program
• 1. Segment Overview
• 1. Notes

Press Conference and Analyst Presentation (Webcast)

A press conference will be held at the premises of CSM (Nienoord 13, Diemen, the Netherlands) from 09.00 hours (CET) on Wednesday, August 13, 2008. The presentation that is provided for analysts and investors at the same location can be followed live via www.csm.nl from 11.00 hours (CET). The slides, used during the presentation can be downloaded from our website.

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 and 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 23 countries. CSM is listed on Euronext Amsterdam. For more information: www.csm.nl.

1. Business Developments in the Divisions

• Bakery Supplies

1st half-year millions of euros	before exceptionals 2008	before exceptionals 2007	2008	2007
Net sales	1,084.6	1,049.1	1,084.6	1,049.1
EBITA	59.3	66.2	47.9	61.6
ROS %	5.5	6.3	4.4	5.9
ROCE including goodwill %	7.9	8.8	6.4	8.2

• Bakery Supplies North America

1st half-year millions of US dollar	before exceptionals 2008	before exceptionals 2007	2008	2007
Net sales	845.8	722.5	845.8	722.5
EBITA	48.6	51.0	48.6	47.7
ROS %	5.7	7.4	5.7	6.6
ROCE including goodwill %	9.9	11.3	9.9	10.2

1st half-year millions of euros	before exceptionals 2008	before exceptionals 2007	2008	2007
Net sales	553.3	544.0	553.3	544.0
EBITA	31.8	39.9	31.8	35.8
ROS %	5.7	7.4	5.7	6.6
ROCE including goodwill %	10.2	11.4	10.2	10.2

Key Facts

• o Price increases fully offset higher raw material costs.
• o Further growth in strategically important out-of-home market.
• o Improving supply chain at H.C. Brill; re-assessment of inventory resulted in write offs of US\$ 5 million.

Main Developments

The increase in sales by approximately US\$ 123 million, or 17%, reflects the good progress we have made in raising our prices to fully offset the higher raw material prices. This major achievement has been the primary focus of our sales organization. Although the US market has been showing signs of decreasing consumption of some ingredients and finished products, we have managed to compensate this trend by increasing our market share based on our solid market position and successful innovations.

The lower EBITA is attributable to the lower results at H.C. Brill, US\$ 9 million behind last year, including the write down of slow moving and obsolete inventory of US\$ 5 million. As indicated earlier, we have taken substantial measures to improve the situation at Brill. We managed to improve service levels to our customers, we increased the efficiency of our supply chain organization and lowered our overhead costs.

As the issues at Brill materialized in the results of the second half of 2007, the improvements realized at Brill are not visible in EBITA in the first half of 2008 when comparing to the same period last year. We are positive about the developments at Brill and do expect EBITA in the second half of the year to be substantially better than in the first half of 2008.

The result of the acquired company Titterington's has been offset by the effect of the divestment of QA Products.

Working capital in the US grew by US\$ 12 million versus year end 2007 mainly due to increased raw material costs and increased selling prices. Working capital days outstanding were stable.

Capital expenditure amounted to US\$ 11.2 million (€ 7.3 million) versus depreciation of US\$ 13.1 million (€ 8.6 million). The most significant investments were made in the factories for frozen products, capacity expansion and the development of a new IT system.

• Bakery Supplies Europe

1st half-year	before	before
	exceptionals	exceptionals
millions of euros	2008	2007	2008	2007
Net sales	531.3	505.1	531.3	505.1
EBITA	27.5	26.3	16.1	25.8
ROS %	5.2	5.2	3.0	5.1
ROCE including goodwill %	6.3	6.6	3.7	6.5

Key Facts

• o Price increases fully offset higher raw material costs.
• o Restructuring of German operations expected to contribute to EBITA in 2009 and beyond.
• o Acquisition of Harden Fine Foods (UK).
• o Further growth in strategically important out-of-home market and in frozen products.

Main Developments

Sales growth in the first half of 2008 amounted to € 26 million or 5.2%. A reclassification of co-packing sales decreased sales by € 11 million. Net sales increase from the net effect of acquisitions was fully offset by the negative currency impact of the Pound Sterling. Autonomous sales grew 7.3%. This autonomous growth is fully attributable to increased prices, with volumes being slightly lower due to discontinuation of non-profitable business.

EBITA improved by € 1.2 million (at constant currencies the improvement would have been € 2.3 million), mainly due to the continued success of our cost reduction measures and acquisitions. The increased pricing fully offset the increased raw material costs.

The 3-S Program realized additional savings of € 7 million compared to 2007. The EBITA of our German operation was € 3 million lower compared with last year. Actions have been taken to address this situation. We expect the benefits of these actions to materialize in 2009 and beyond. The increased focus on innovation drove our R&D cost up by € 0.6 million.

Working capital in Europe increased by € 57.8 million, mainly due to increases in inventory and lower liabilities. In number of days outstanding, working capital increased slightly. Actions are being taken to improve this situation.

Capital expenditure of € 6.8 million was below depreciation of € 12.2 million. The majority of these investments are related to the construction of an innovation center in Bingen (Germany), energy savings and information technology.

In April, we announced the acquisition of Harden Fine Foods (HFF), a leading and successful supplier of mini-bite flapjacks, brownies, and cakes to in-store bakeries in supermarkets as well as out-of-home market segments. The acquisition of HFF, along with the acquisition of Kate's Cakes in the UK last year, reinforces CSM's position in the sweet treats and American style bakery products in Europe.

The effect of HFF on EBITA in the first half-year was negligible.

• PURAC

1st half-year	before	before
	exceptionals	exceptionals
millions of euros	2008	2007	2008	2007
Net sales	162.6	157.4	162.6	157.4
EBITA	17.5	10.9	18.5	4.4
ROS %	10.8	6.9	11.4	2.8
ROCE including goodwill %	11.7	6.2	12.4	2.5

Key Facts

• o 5% volume growth of continued products; all market segments are contributing.
• o Sales prices of continued products increased by 5.5%.
• o Implementation of PURAC manufacturing footprint and bio-plastics strategy on track.
• o New lactic acid factory in Thailand is performing well.
• o Successful first production in our small-scale lactide and D- lactic acid plant in Spain.

Main Developments

Autonomous sales growth of 9.5% in the first half-year was more or less equally attributable to volume and pricing and in line with our expectations. Sales grew in all our three market segments: Meat & Poultry, Food & Nutrition and Chemicals & Pharma. New product launches supported this growth; sales from new products amounted to 10%.

EBITA improved considerably from € 10.9 million last year to € 17.5 million this year, mainly due to higher volume and cost savings. The 3-S Program generated an additional € 2 million in savings in the first half-year. Increased prices more than offset increases in raw materials and energy costs. The negative effect of a lower US dollar exchange rate versus the euro was partly compensated by the favorable development of the Thai baht compared to the euro. Total currency impact was negative € 0.8 million.

Working capital increased by € 25.3 million, of which approximately half is due to increased inventory. Inventory has been built up to cater for the closure of the European Lactic Acid factories. Producing in Thailand also implies that the inventory of sailing stock will permanently remain on a higher level. This being said working capital control remains a core issue for PURAC management. Working capital will show improvement in the second half of 2008.

Both capital expenditure and depreciation amounted to € 11.6 million in the first half of 2008. The most important investments were related to the finalization of the Thailand plant and the lactide production in Spain.

Mid July, we announced the signing of a Heads of Agreement with Avebe on the sale of the Dutch gluconic acid activities. This intended sale is in line with the plans we disclosed in the second half of 2007 with respect to the supply chain footprint of Europe and the discontinuation of non-strategic activities. Final discussions with Avebe are taking place. We expect to finalize the transaction by the end of September 2008.

2. Consolidated Profit and Loss Account

millions of euros

	1st half-year
	2008	2007
Continuing operations
Net sales	1,247.2	1,206.5
Costs of raw materials and consumables	-725.7	-679.7
Production costs	-162.4	-176.9
Warehousing and distribution costs	-103.2	-96.3
Gross profit	255.9	253.6
Selling expenses	-97.9	-103.5
Research & development costs	-17.1	-14.6
General and administrative expenses	-83.9	-72.6
Other costs	-2.0	-6.4
Other proceeds		2.3
Operating result	55.0	58.8
Financial income	5.2	7.8
Financial charges	-10.5	-19.8
Result before taxes from continuing operations	49.7	46.8
Taxes	15.5	-13.8
Result after taxes from continuing operations	65.2	33.0
Discontinued operations
Result after taxes CSM Sugar1		4.0
Result from sale of CSM Sugar after taxes		137.9
Result after taxes from discontinued operations		141.9
Result after taxes	65.2	174.9
Per ordinary share in euros
Earnings from continuing operations	1.02	0.50
Diluted earnings	1.02	0.50
Earnings from continuing and discontinued operations	1.02	2.65
Diluted earnings	1.02	2.64

1 The result from discontinued operations of CSM Sugar comprises the divisional result excluding financial income and charges. Taxes are specifically allocated to the division on the basis of the nominal tax rate in the Netherlands.

3. Consolidated Profit and Loss Account from Continuing Operations before Exceptional Items

millions of euros
Half-year		30-6-2008			30-6-2007
	Before exceptional items	Exceptional items	Total	Before exceptional items	Exceptional items	Total
Net sales	1,247.2		1,247.2	1,206.5		1,206.5
Costs of raw materials and consumables	-725.7		-725.7	-679.7		-679.7
Production costs	-165.6	3.2	-162.4	-173.1	-3.8	-176.9
Warehousing and distribution costs	-102.1	-1.1	-103.2	-95.7	-0.6	-96.3
Gross profit	253.8	2.1	255.9	258.0	-4.4	253.6
Selling expenses	-97.9		-97.9	-102.5	-1.0	-103.5
Research & development costs	-17.1		-17.1	-14.4	-0.2	-14.6
General and administrative expenses	-73.4	-10.5	-83.9	-73.6	1.0	-72.6
Other costs		-2.0	-2.0		-6.4	-6.4
Other proceeds					2.3	2.3
Operating result	65.4	-10.4	55.0	67.5	-8.7	58.8
Financial income	5.2		5.2	7.8		7.8
Financial charges	-10.5		-10.5	-19.8		-19.8
Result before taxes from continuing operations	60.1	-10.4	49.7	55.5	-8.7	46.8
Taxes	12.3	3.2	15.5	-14.4	0.6	-13.8
Result after taxes from continuing operations	72.4	-7.2	65.2	41.1	-8.1	33.0

The exceptional items for the first half-year of 2008 can be specified for each division as follows.

Bakery Supplies Europe: a net negative total of € 11.5 million mainly due to restructuring of the German bakery operations, as well as costs arising from production transfer projects started in 2007 in France, Belgium, Italy and the Netherlands.

Bakery Supplies North America: exceptional costs due to the profit improvement plan of H.C. Brill were offset by a reversal effect of last year's decision not to close a factory, resulting in a net total of € 0 million.

PURAC: a net positive effect of € 1.1 million due to a release of redundancy provisions taken last year.

4. Consolidated Balance Sheet

before profit appropriation, millions of euros

	30-6-2008	31-12-2007	30-6-2007
ASSETS
Property, plant & equipment	493.1	519.8	588.7
Intangible fixed assets	758.4	771.6	749.7
Financial fixed assets	14.0	13.9	11.5
Deferred tax assets	36.8	43.6	70.4
Total fixed assets	1,302.3	1,348.9	1,420.3
Inventories	293.2	256.1	257.4
Receivables	340.3	325.6	341.0
Tax assets	33.9	69.8	12.2
Cash and cash equivalents	31.7	37.7	37.4
Assets held for sale	10.3	10.2
Total current assets	709.4	699.4	648.0
Total assets	2,011.7	2,048.3	2,068.3
LIABILITIES
Shareholders' equity	943.3	957.7	1,046.4
Provisions	132.5	131.6	128.5
Deferred tax liabilities	47.8	50.4	37.7
Non-current liabilities	515.4	484.5	407.8
Total non-current liabilities	695.7	666.5	574.0
Interest-bearing current liabilities	49.4	8.8	35.8
Trade payables	211.3	227.6	206.6
Other non-interest-bearing current liabilities	103.4	118.5	120.5
Tax liabilities	8.6	69.2	85.0
Total current liabilities	372.7	424.1	447.9
Total liabilities	2,011.7	2,048.3	2,068.3

5. Movements in Shareholders' Equity

	st half-year 1 2008	st half-year 1 2007	nd half-year 2 2007	Total 2007
Opening balance	957.7	844.9	1,046.4	844.9
Movement in hedge reserve	-0.5	2.4	-7.6	-5.2
Movement in translation reserve	-22.3	7.2	-9.3	-2.1
Result recognized in shareholders' Equity	-22.8	9.6	-16.9	-7.3
Profit half-year	65.2	174.9	27.9	202.8
Total result	42.4	184.5	11.0	195.5
Dividend	-57.2	-52.8		-52.8
Repurchase / sale company shares		-0.6	-99.9	-100.5
Movement in Option/Share plan reserve	0.4	0.4	0.2	0.6
Reclassification cumulative financing preference shares		70.0		70.0
Total transactions with shareholders	-56.8	17.0	-99.7	-82.7
Ending balance	943.3	1,046.4	957.7	957.7

before profit appropriation, millions of euros

6. Consolidated Cash Flow Statement

millions of euros

	1st half-year
	2008	2007
Cash flow from operating activities
Result after taxes	65.2	174.9
Adjusted for:
- Discontinued operations		-141.9
- Depreciation/amortization of fixed assets	32.7	35.6
- Impairment of fixed assets	-2.3	2.2
- Result from divestments of fixed assets		-0.6
- Result from sale of group companies and activities	2.0	4.0
- Option/Share plan	0.4	0.4
- Financial income and charges	5.3	12.0
- Taxes	-15.5	13.8
Cash flow from operating activities before movements in
working capital	87.8	100.4
Movement in provisions	2.1	-11.1
Movements in working capital:
- receivables	-19.6	-14.2
- stocks	-46.3	-13.7
- non-interest-bearing current liabilities	-32.2	0.8
Cash flow from business operations	-8.2	62.2
Net interest paid	-10.4	-12.2
Tax paid on profit	6.7	-4.9
Cash flow from operating activities – continuing operations	-11.9	45.1
Cash flow from operating activities – discontinued operations		-4.1
Cash flow from operating activities	-11.9	41.0
Cash flow from investment activities
Acquisition of group companies	-7.6	-60.9
Sale of group companies	-2.6	13.8
Capital expenditure on fixed assets	-25.8	-57.3
Divestment of fixed assets		2.9
Cash flow from investment activities – continuing operations	-36.0	-101.5
Discontinued operations		-0.8
Sale of discontinued operations		228.1
Cash flow from investment activities – discontinued		227.3
Cash flow from investment activities	-36.0	125.8
Cash flow from financing activities
Movement in interest-bearing debts	100.4	-155.8
Repurchase/sale of company shares		-0.6
Paid-out dividend	-57.2	-52.8
Cash flow from financing activities	43.2	-209.2
Net cash flow	-4.7	-42.4
Effects of exchange rate differences on cash and cash equivalents	-1.3	-0.4
Increase/decrease cash and cash equivalents	-6.0	-42.8
Cash and cash equivalents at start of calendar year	37.7	80.2
Cash and cash equivalents at close of half-year	31.7	37.4

7. Key Figures

millions of euros
-------------------	--

CONTINUING OPERATIONS		1st half-year
	2008	2007
Net sales	1,247.2	1,206.5
EBITA before exceptional items	68.8	69.7
EBITA	58.4	61.0
Operating result	55.0	58.8
Result after taxes	65.2	33.0
Earnings per share in euros 1	1.02	0.50
Cash flow from operating activities	-11.9	45.1
1 Cash flow from operating activities per share,in euros	-0.24	0.68
Depreciation/amortization fixed assets	32.7	35.6
Capital expenditure on fixed assets	25.9	55.4
ROS % 2	4.7	5.1
Result after taxes / net sales %	5.2	2.7
ROCE excluding goodwill % 3	14.3	15.5
ROCE including goodwill % 4	6.4	6.7
Number of employees at closing date	8,583	8,258

CONTINUING AND DISCONTINUED OPERATIONS	1st half-year
	2008	2007
Result after taxes	65.2	174.9
Earnings per share in euros 1	1.02	2.65
Number of employees at closing date	8,583	8,258
Shareholders' equity	943.3	1,046.4
Shareholders' equity per share in euros 5	14.55	15.87
Interest cover 6	5.9	6.8
Balance sheet total : shareholders' equity	1:0.5	1:0.5
Net debt position : shareholders' equity 7	1:1.8	1:2.6
Net debt position/EBITDA 8	2.7	1.5
Number of issued ordinary shares	62,031,279	72,831,132
Number of ordinary shares outstanding with third parties 9	61,842,201	65,954,687
Number of ordinary shares with dividend rights	61,842,201	65,954,687
Weighted average number of outstanding ordinary shares	61,838,868	65,955,737
Share price as at 30 June	22.19	26.25
Market capitalization as at 30 June	1,372	1,731
Highest price in half-year	25.90	29.72
Lowest price in half-year	17.65	24.94
Number of issued cumulative preference shares	2,983,794	2,983,794

1 Per ordinary share in euros after deduction of dividend on cumulative preference shares.

2 ROS % is EBITA from continuing operations divided by net sales x 100.

3 ROCE excluding goodwill % is EBITA from continuing operations for halfyear x 2 divided by the average capital employed excluding goodwill x 100.

4 ROCE including goodwill % is EBITA from continuing operations for halfyear x 2 divided by the average capital employed including goodwill x 100. This takes account of all acquisitions since 1978, the year when CSM started the diversification process.

5 Shareholders' equity per share is shareholders' equity divided by the number of shares with dividend rights.

6 Interest cover is EBITA before exceptional items divided by net interest income and charges.

7 Net debt position comprises interest-bearing debts minus cash and cash equivalents.

8 EBITDA is 'Earnings Before Interest, Taxes, Depreciation and Amortization' before exceptional items, or 'Operating result before depreciation and amortization of fixed and intangible assets before exceptional items.' (halfyear x 2)

9 Number of ordinary shares outstanding with third parties is the number of issued ordinary shares minus the repurchased but not yet withdrawn shares.

8. Breakdown 3-S Program

millions of euros
-------------------

		Total
	2005 2006 2007 2008				2008
Savings	15	55	85	110	110
Restructuring expenses	60	40	20		120

		Realisation
	2007 2008				Plan	Realisation
	1st half	2nd half	1st half	2nd half	2008	Last 12 months
Savinges per:
BSEU	16	25	23			48
BSNA	10	14	15			29
Bakery Supplies Total	26	39	38	0	75	77
PURAC	8	12	10		20	22
Sugar	5	6	5		12	11
Holding activities	1	1	1		3	2
Total	40	58	54	0	110	112
Split in:
Restructuring projects	29	38	38		65	76
Purchasing	11	20	16		45	36
						Cumulative
						2005 - 2008
Restructuring expenses	8	8	7		120	104
Cash out	7	11	5		80	74
FTE reduction	72	172	49			1,239

9. Segment Information per Business Area

millions of euros
1st half-year		Bakery Supplies		Bakery Supplies North		PURAC		Holding companies		CSM total –
	Europe			America						continuing operations
	2008	2007	2008	2007	2008	2007	2008	2007	2008	2007
P&L information
Net sales	531.3	505.1	553.3	544.0	162.6	157.4			1,247.2	1,206.5
EBITA	16.1	25.8	31.8	35.8	18.5	4.4	-8.0	-5.0	58.4	61.0
Operating result	15.0	25.4	30.2	34.3	18.1	4.2	-8.3	-5.1	55.0	58.8
Balance sheet information
Total assets	904.8	948.9	524.6	600.3	352.3	409.6	230.0	109.5	2,011.7	2,068.3
Total liabilities	292.8	365.2	119.2	123.3	64.0	77.4	592.4	456.0	1,068.4	1,021.9
Average capital employed excluding goodwill	284.7	211.7	238.9	272.3	277.7	320.2	16.2	-13.0	817.5	791.2
Goodwill (average)	595.0	581.1	387.6	432.2	21.4	31.0			1,004.0	1,044.3
Average capital employed including goodwill	879.7	792.8	626.5	704.5	299.1	351.2	16.2	-13.0	1,821.5	1,835.5
Capital employed excluding goodwill
as at 30 June	320.4	216.0	239.4	283.9	273.8	337.9	42.3	-24.4	875.9	813.4
Goodwill as at 30 June	596.8	580.1	376.9	438.0	21.4	21.4			995.1	1,039.5
Capital employed including goodwill
as at 30 June	917.2	796.1	616.3	721.9	295.2	359.3	42.3	-24.4	1,871.0	1,852.9
Depreciation of property, plant & equipment	11.0	13.3	7.0	8.1	11.2	12.0	0.1		29.3	33.4
Amortization of intangible fixed assets	1.1	0.4	1.6	1.5	0.4	0.2	0.3	0.1	3.4	2.2
Other information
Capital expenditure on property, plant &
equipment	6.8	14.6	7.3	10.9	11.1	28.6			25.2	54.1
Capital expenditure on intangible fixed assets					0.5	0.9	0.2	0.4	0.7	1.3
Impairment of fixed assets		-1.6	-2.3	2.9		0.9			-2.3	2.2
Average number of employees	4,039	3,584	3,579	3,519	990	1,011	49	40	8,657	8,154
Alternative performance measures
ROS (in %)	3.0	5.1	5.7	6.6	11.4	2.8			4.7	5.1
ROCE excluding goodwill (in %)	11.3	24.4	26.6	26.4	13.3	2.7			14.3	15.5
ROCE including goodwill (in %)	3.7	6.5	10.2	10.2	12.4	2.5			6.4	6.7
Alternative performance measures before exceptional items
EBITA	27.5	26.3	31.8	39.9	17.5	10.9	-8.0	-7.4	68.8	69.7
Operating result	26.4	25.9	30.2	38.4	17.1	10.7	-8.3	-7.5	65.4	67.5
ROS (in %)	5.2	5.2	5.7	7.4	10.8	6.9			5.5	5.8
ROCE excluding goodwill(in %)	19.3	24.8	26.6	29.4	12.6	6.8			16.8	17.7
ROCE including goodwill (in %)	6.3	6.6	10.2	11.4	11.7	6.2			7.6	7.6

CSM generates almost all of its revenues from the sale of goods.

Segment information:

For its primary segmentation CSM distinguishes between the bakery operations (Bakery Supplies),lactic acid operations (PURAC),and corporate activities.The bakery operations are subdivided into a European segment and a North American segment.

The bakery operations comprise the development,production and sale of bakery ingredients and products.The latic acid operations involve the production of latic acid and latic acid derivatives which are used in food,pharmaceutical and technical products.Corporate activities concern activities which cannot directly be allocated to one of the other segments,such as corporate finance,HR,and legal.

Information on the Use of Alternative Performance measures:

In the above table and elsewhere in the Interim Financial Statements a number of performance measures are presented which comply with the International Financial Reporting Standards (IFRS). Management is of the opinion that these so-called alternative performance measures might be useful for the readers of these Interim Financial Statements.CSM management uses these performance measures to make financial,operational and strategic decisions and evaluate performance of the segments.The alternative performance measures can be calculated as follows:

* EBITA is the operating result before amortization of intangible fixed assets.

* Return on sales (ROS) is EBITA divided by net sales x 100.

* ROCE excluding goodwill is EBITA for halfyear x 2 divided by the average capital employed excluding goodwill x 100.

* ROCE including goodwill is EBITA for halfyear x 2 divided by the average capital employed including goodwill x 100.

This takes account of all acquisitions since 1978, the year when CSM started its diversification process.

* Goodwill relates to magement goodwill,being the goodwill capitalized and the goodwill charged directly to equity since 1978.

10. Notes

Principles for the Valuation of Assets and Liabilities and Determination of the Result

This condensed interim financial information for the half-year ended June 30, 2008 complies with IFRS and has been prepared in accordance with IAS 34, "Interim financial reporting." The interim condensed financial report should be read in conjunction with the annual financial statements for the year ended December 31, 2007.

The figures in this half-year report have not been audited.

Accounting Policies

The accounting policies adopted are consistent with those of the annual financial statements for the year ended December 31, 2007, as described in the annual financial statements for the year ended December 31, 2007.

Acquisitions

On April 15, 2008 CSM acquired Harden Fine Foods, based in the UK (acquisition price: £ 6.4 million; annual sales ₤ 11 million). Harden Fine Foods operates production facilities in Bradford, Yorkshire (UK) and is a leading supplier of mini-bite flapjacks, brownies and cakes to in-store bakeries in supermarkets, as well as out-of-home market segments.

Preliminary acquisition figures:
----------------------------------	--	--

	Harden
millions of euros	Fine Foods
Net sales per year	13.9
Number of employees	210
Opening balance:
Property, plant & equipment	0.8
Intangible fixed assets	4.8
Inventories	0.5
Receivables	1.8
Cash and cash equivalents	0.6
Payables	-2.3
Deferred tax liabilites	-1.4
Identifiable assets minus liabilities	4.8
Goodwill	3.4
Acquisition price	8.2

Contingent Commitments

Third-party guarantees amounted to € 24.5 million as at June 30, 2008 (June 30, 2007: € 34.1 million).

Events after Balance Sheet Date

On July 14, 2008 CSM announced the signing of a Heads of Agreement following negotiations with Avebe to sell the PURAC gluconate production plant in the Netherlands (Ter Apelkanaal). The intended transaction comprises the transfer of all employees. The completion of the transaction is scheduled for September 30, 2008.