CFG_Informe_Anual_2010

ANNUAL REPORT 2010

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AF_CFG_Portadas-MEM2010-CHANNEL_ENG.pdf 1 14/06/11 15:29

Corporate Overview4 Campofrio Food Group in 20106 Letter from our Chairman

10 Board of Directors

Campofrio Food Group14 Our Vision16 Our Company24 Interview with our CEO28 Our Leadership Team30 Overview of CFG Operations

Growing Together as a Group34 Our Brands42 Our Products 54 Our Marketing Campaigns64 Expanding our Markets

Our Commitment70 To our People78 To our Society84 To our Investors and the Financial Community

On the CDAnnual Report PDF digital format Statements of AccountsAnalysis and Summarised Financial Statements

Corporate Overview

Campofrio Food Group in 2010

Groupe AosteFRANCE, SWITZERLAND AND ITALY

2010 saw strong volume growth ofGroupe Aoste brands, within a verychallenging environment. Moreover,the acquisition of César Moroni, theleading brand in the French chorizosegment, reinforced Groupe Aoste’sundisputed leadership position inthe dry sausage category.

CampofríoSPAIN

Campofrío’s successes in itsmarketing campaigns were oneof the major highlights in 2010.Pavofrio’s Elena Salgado ad wonthe EFI Gold for the most effectivecampaign and the Grand EFIduring the XII edition of theAdvertising Effectiveness Awards.In addition, Navidul reached arecord year for its pre-sliced productswith a growth of +35% while itsChristmas campaign sold 700,000legs of ham – an all time high.

NobrePORTUGAL

Nobre’s exemplary performancein the frankfurter category provedthat it is possible to successfullytake on the challenge of generatinggrowth and value in a highlymature category, by combiningrelevant innovation and efficientcommunication.

4 Campofrio Food Group Annual Report 2010

Interdependent Operating Companies’ (IOCs) Milestones

605

561

664

France

Volume (1.000 T.)

422 +1.9%*In the second year following the mergerbetween Campofrio Alimentación and GroupeSmithfield Holdings, volume sales haveincreased totalling to 422,403 tons.

Net sales (M€)

1,830 +0.4%The company’s consolidated net sales totalled1,830 million euros. 2010 shows a return togrowth within the branded retail business:+0.5% in value and +1.4% in volume. Processof stabilizing top line is over, we expect topline growth in 2011.

EBITDA Margin (%)

8.9 +155bp

Net income (M€)

40 +186.4%Despite the fact that 2010 economic environmentremained challenging, Campofrio Food Groupincreased its net profit, mostly driven byoperations improvement and decrease infinancial cost .

OFCC (1) (M€)

105 +25.1M€Strong cash generation mainly due to improvedoperating results and decrease in workingcapital.

Key Financial Indicators

Net Sales Breakdown (M€)

FiorucciITALY AND USA

The integration of our new IOC in Italy, CesareFiorucci in 2011, represents a major stepforward in our vision to become the undisputedleader in the processed meats business inEurope. Fiorucci is a unique opportunity forCFG to enlarge its footprint in a very significantEuropean market. The combination of thestrengths of CFG and Fiorucci, will build up areferential and even more solid company in Italy.

CFG Deutschland GERMANY

The successful launch of a range ofCampofrío branded Spanish products byCFG Deutschland was another exampleof the company’s ability to position itselfin the premium segment of the Germanprocessed meats market.

Caroli Foods GroupROMANIA (Joint Venture)

Through Caroli Foods Group, the result of thejoint venture between Tabco-Campofrío andCaroli Foods, Campofrio Food Group now holdsthe number one position in the Romanianprocessed meats market. Caroli Foods Group’sscale and know-how offers the broadest rangeof products that cater to Romanian consumers’needs and tastes.

Imperial Meat ProductsBELGIUM AND LUXEMBOURG

Growth in our core brands in a marketdominated by private label, was one ofImperial Meat Products’ key achievementsin 2010, thanks to Marcassou’s and Aoste’sunique positioning, distinctive innovationand powerful marketing campaigns.

Stegeman THE NETHERLANDS

Two innovation projects, the introduction of thenext generation of spreads with beef tapenadeand a completely new, reclosable packagingunder Stegeman Alledag brand, havecontributed to an excellent year for Stegeman.

* Variance vs. 2009 restated figures

(1)Net Cash from Operating activities (-CAPEX and other collections & payments)

Rest of the World

Spain(Processed meats)

Campofrio Food Group Annual Report 2010 5

Letter from our ChairmanPedro Ballvé highlights the strategies that havecontributed to Campofrio Food Group’s excellentresults in 2010.

“With the right strategies in place and with strong local brands in each ofthe markets and categories present, Campofrio Food Group continues to meet its objectives and consolidate its position in 2010.”

Dear Shareholder,

2010 was a year of consolidation and growth for Campofrio Food Group. Duringthese twelve months, the company has strengthened its position and created morevalue for all its stakeholders despite a climate of uncertainty in consumption andstronger competition.

It is precisely within this challenging environment when corporate leadership comesto front. Building on our strong position in Europe, we have worked hard to obtainsatisfactory results in terms of growth and profitability in 2010.

Last year was marked by two important operations that enabled us to expand ourpresence in two European markets: France and Romania. Through the acquisitionof Salaisons Moroni, the leading company in France in the production of “chorizo”dry sausages, and its integration into our interdependent operating company in thatmarket, Groupe Aoste, we have reinforced our leadership in the dry cured meatssegment in France. Meanwhile in Romania, with the joint venture between Tabco-Campofrío and Caroli Foods, the resulting company, Caroli Foods Group, is now theleading company in the Romanian processed meats market, both in terms of salesand market share.

In addition to the above operations, on April 4, 2011, Campofrio Food Group acquiredCesare Fiorucci, whose brand Fiorucci is the leader in the Italian processed meatssector. With this initiative, Campofrio Food Group has gained significant presence inItaly and has added to its brand portfolio a well recognised Italian brand marketedin several other countries such as the USA and the UK.

These three operations are important steps forward towards achieving our visionand reinforcing our commitment to invest in leader brands with excellent productofferings, and at the same time in companies that generate value for the Groupand provide new platforms for future development.



These endeavours, in the context of an uncertain environment, confirm that inthe recent years, Campofrio Food Group has done its task of leading the growth andprofitability of the processed meats sector in Europe. Thanks to this, the Group hasexpanded its area of consolidation and currently has seven companies that operateinterdependently with strong market positions. Occupying the number one positionin their markets, we have Campofrío (Spain), Groupe Aoste (France), Stegeman(the Netherlands), Fiorucci (Italy), Nobre (Portugal); in second position we haveImperial Meat Products (Belgium); and with an important presence in the premiumsegments of the German market, CFG Deutschland. Additionally, our joint venturein Romania, Caroli Foods Group, is the leader company in the Romanian processedmeats market.

Along with the efforts in 2010 to increase the company’s expansion and to reinforceits strategic position in different markets, channels and segments, Campofrio FoodGroup has continued to consolidate its business structure, resulting in a stronger,more solid company, which has been able to deliver in 2010 (two years earlier thanexpected) the €40 million synergies identified during the merger.

As a result of the work done this year, the company’s consolidated turnover in 2010has reached €1,830 million. This was achieved despite the intense price competitionwithin the fast moving consumer goods sector, especially in the processed meatsmarket. This demonstrates the strength of our brands which have grown by 1.4%vs. 2009 in volume in the retail channel, and which have gained market shares,contrary to branded sales which in general, declined in most markets.

In 2010, the company recorded a consolidated net profit of €40.1 million, representingan increase of 186% over the €14 million achieved in the previous year. Similarly,Campofrio Food Group’s EBITDA has significantly improved at €163.4 million, anincrease of 21% over the previous year, while EBITDA margin was 8.9%, 155 basicpoints better than in 2009.


These figures all show that the business model we adopted a few years ago is anefficient one. It has allowed us to improve profitability and margins, and consequentlyto become increasingly competitive. In addition, through a corporate culture whichemphasizes cost discipline, the company’s net debt in 2010, despite the aforementionedacquisitions and 16% higher investments amounting to €53.9 million, is lower thanin previous years. Specifically, at the end of 2010, the Group’s financial debt stood at€356 million, €54 million less than in 2009, which has resulted in a substantialimprovement in operating cash flow.

This data confirms that Campofrio Food Group continues to meet its objectives andthat the strategies we designed have allowed us to become a company with a uniqueEuropean footprint. Thanks to the work carried out, we have consolidated our positionin 2010, with strong local brands in each one of the different markets and categories.But above all, we have achieved in challenging times such as those experienced bythe sector in 2010, an increase in customer confidence through closer collaboration,and by satisfying the needs of the 250 million consumers who trust our products,already a strong basis to guarantee the company’s potential future growth.

With this same confidence, with one of our most important assets, our brands, andwith the commitment of all our employees, we hope to continue to create value forall our stakeholders, striving to enhance our growth both in the markets closest to us,the EU-27, as well other countries where we operate through exports. With yoursupport, dear shareholders, we will continue to lay the groundwork which will enableus to achieve our vision of Campofrio Food Group not only being the leader in theEuropean market for meat products, but also the leader in growth and profitabilityin this sector, in addition to becoming one of the leading food companies in Europeby 2015.


Pedro Ballvé LanteroChairman

Board of DirectorsInformation on board members’ roles and responsibilities


Robert A. Sharpe II

Chief Executive Officer

Pedro Ballvé Lantero

Chairman of the Board of Directors

Yiannis Petrides

Vice Chairman of the Board of Directors

Member of Appointments andCompensations Committee

Chairman of Strategy and Investment Committee

Chairman of Audit Committee

Guillermo de la Dehesa Romero

Member of the Board of Directors

Member of Audit Committee

Chairman of Appointments and Compensations Committee

Juan José Guibelalde Iñurritegui





Joseph W. Luter IV


Member of Strategy and Investment Committee

Karim Michael Khairallah



Charles Larry Pope


Member of Appointmentsand Compensations Committee

Luis Serrano Martín



Member of Strategy and Investment Committee

Caleb Samuel Kramer


Member of Strategy andInvestment Committee

Alfredo Sanfeliz Mezquita

Secretary non-member of the Board of Directors

Secretary of Committees

CampofrioFood Group

Campofrio Food Group

Our Vision Innovating our Future


United by our desire to provide consumers thepleasure of everyday tasty moments which contributeto a healthy and enjoyable lifestyle, our commitmentto lead and own transformative change in themeat based product sector and our passion to exceedthe expectations of all those who put their trust in us,we shall leverage the talent of our people andthe heritage of our products and brands to becomeone of Europe’s most admired and successfulfood companies within the first decade of ourexistence as Campofrio Food Group.

OUR MISSION

By inspiring a high level of commitment to our vision of becoming one of Europe’smost admired and successful foodcompanies, we will enable the alignmentof our People, Products, Processesand Prestige toward the fulfillment ofthis shared destiny.

PeopleWe will attract and retain the most knowledgeable, talented,committed and passionate people who together will challengethe status quo to bring added value to our consumers,customers, partners and shareholders.

ProductsWe will be industry innovators, tirelessly seeking to provideour consumers products which perfectly answer their desirefor taste, quality, health, choice and value, earning theirpreference and their loyalty.

ProcessesWe will benchmark our success, assuring that everyoneof our processes ranks among the elite and that we leadour industry in brand market share, own label productperformance, quality, growth, customer satisfaction and profitability.

PrestigeWe intend to transform our industry and will lead changeby example. Our commitment to both performance and high ethical and environmental standards will allow us to beregarded as an employer of choice and earn the admirationof all stakeholders.



Our Company

We have one of the strongest brand portfolios in the industry,with most of our brands leaders in their respective localmarkets. We sell a wide range of quality, flavourful meatproducts in traditional charcuteries, in modern retail and foodservice: cooked and roasted ham, dry cured ham, drysausages, poultry, frankfurters, mortadella, bacon, pâtés,meal components, pizzas, spreads, prepared meals and freshand semi-processed fresh meats.

Our European presence is significant with our seven localinterdependent operating companies (IOCs): France,Switzerland and Italy through Groupe Aoste, Spain throughCampofrío, in Germany through CFG Deutschland, Italy andthe USA through Fiorucci, Belgium through Imperial MeatProducts, Portugal through Nobre and in the Netherlandsthrough Stegeman. Additionally we have an importantpresence in Romania through our joint venture with CaroliFoods Group.

Because of these companies, we are able to extend ourpenetration to all 27 EU members, using export teamsto respond to growth opportunities in other markets, and todeliver our goal: to become one of the leading Europeanfood companies by 2015.


As one of the largest companies in the processed meats sector,we are, in many ways, the industry standard because of our in-depth knowledge of our customers and consumers whichallows us to generate growth opportunities in all markets.


Our Timeless LegacyOur seven IOCs combine to make up Europe’s largestprocessed meats company: Campofrio Food Group, wherethe identity, tradition and history of each and every one ofits local companies live on. The history of our Group is basedon the respect of these values of passion, hard work andthe commitment to bring the best product quality, valuesembedded by our founders.

Our consumers recognise us as a trustworthy companyoffering products with the taste and quality they have cometo rely over the years, and as a company capable of settingtrends and surprising them with food solutions tailored fornew moments of consumption.


Our Timeless Legacy


CampofríoQuality, innovation and passion for detail

Conservera Campofrío was founded by Don José Luis Ballvéin 1952 in the charming and monumental Northern Spanishtown of Burgos.

What started as a small slaughterhouse diversified intoprocessed meat products in 1960 and since then has grown to become the market leader in this sector, thanks to Don José Luis’ commercial savvy and passion for detail.

When he died in 1985, one of his sons, Pedro Ballvé, tookon the leadership of the company. Pursuing the tradition ofwork well done and with a strong belief in innovation, PedroBallvé led Campofrío into a new era: the company enteredthe stock market in 1988 and, two years later, began itsinternationalization with the opening of a production plantin Moscow. 2000-2008 was a period of consolidation forCampofrío with the acquisition of Navidul, the leading playerin the cured ham business.

Today, speaking of Campofrío means leadership in theprocessed meats market in Spain and a company thatconsumers associate with a tradition of quality andinnovation.

1952

1969 1970


Groupe Aoste Tradition and excellent quality

Aoste owes its name to the small region located close to the French Alpswhere Groupe Aoste made dry cured ham for the first time. This was in 1976when Michel Reybier founded the business and built its first factory.

The early success of the Aoste dry ham factory prompted the rapid expansionand growth of the company and two years later, a dry sausage factory in Maclaswas built where the Justin Bridou brand, today’s market leader in dry sausages,was born.

Eventually, the acquisition of St Symphorien factory in 1990 where Cochonou,the pioneer in the dry sausage was produced, followed. In 2006 Jean Caby,leader in cooked sausages was incorporated into the Groupe Aoste family.

Strengthening its undisputed leader position in the dry sausage segmentin France, César Moroni, the market leader in the French chorizo marketwas merged into Groupe Aoste in July of 2010.

Today, Groupe Aoste’s passion for tradition and excellent quality liveson and has made it the leader in dry meat products in France.

1904

1976

NobreOver 90 years of undisputed “delicatessen” success

With a history going back more than 90 years, Nobre’stradition is deeply rooted in the Portuguese town of Rio Maior,where Marcolino Pereira Nobre opened a delicatessen porkproducts shop in 1918.

After several years of successful activity, the business wasexpanded and Nobre’s first slaughterhouse in Portugal wasbuilt in Rio Maior in April 1957. With advanced technology,modern processes and a mission focused on providingthe best quality products, Nobre achieved high levelsof productivity and delivered business growth. As aconsequence of this success, the 1970’s saw the constructionof a modern factory, equipped with the latest technologyand highly organised logistics.

The quality and choice of its products have made Nobre theundisputed market leader in the processed meats sector inPortugal, a position it has proudly kept throughout the years,a leadership that has been consolidated with the integrationof Campofrío Portugal in 2009.


1960 1964



FiorucciA story of passion

The beginnings of Fiorucci can be traced back to the 1860’s when Innocenzo Fiorucciwho owned a meat shop in Norcia would come to Rome during the winter to sellthe typical dry sausage from Norcia, called Norcino. Some years later, based on thesuccess of this venture, Innocenzo settled in Rome and opened a shop specialisingin the traditional preparation of cured meats.

Building on their father’s legacy, the next generation of the Fiorucci family throughthe vision of one of Innocenzo’s sons Cesare, expanded the business by creatinga chain of Norcinerie (Norcia meatshops) which soon won popularity in Rome.Cesare was known and admired for the passion he had for his business, which wasdemonstrated in the quality and excellent taste of his products.

Capitalizing on the success of the Norcinerie, in 1950 Cesare Fiorucci created anindustrial model capable of both meeting the need for increasing production andsafeguarding recipes that have been, so carefully, handed down through generations.In 1968, Cesare laid the foundation stone for the Santa Palomba Plant which is wherethe company’s headquarters lie and this gave birth to Salumificio Cesare Fiorucci.

Cesare’s son, Ferruccio, guided the company after the death of his father and has builtit to its current dimension. In the 1980’s, already the leader in the Italian market,Fiorucci opened offices abroad, setting out to conquer the Northern American marketand acquiring new production facilities in the zones of origin of its specialty meats.

In 2011, Cesare Fiorucci became part of the Campofrio Food Group family.

1950


Imperial Meat ProductsHalf a century of tradition

By the end of the Second World War and using the little money he hadinherited from his mother, Jozef de Spiegeleire started cycling from village tovillage to sell sausages. In 1953 he opened his first workshop in Lovendegem,smoking the sausages the way his father and his grandfather had taught himand producing them only during the winter months in a coal-heated room.

With his wife and his sister-in-law in charge of sales, Josef’s workshopexpanded quickly and in the late 1950’s, acquired a freezer, a large coldstorage and became the very first to have an air conditioned sausage dryingroom in Europe, a novelty at that time, which attracted visitors from all over.

Together with a friend, in 1966, Jozef de Spiegeleire founded ChamplonSalaisons in the South of Belgium, with the idea of producing the “realArdennes pure pork sausage” under the Marcassou brand, which soonobtained the acclaimed “appellation d’origine” label. Twelve years laterImperial Company was born with the acquisition of the Cornby plant.

The family sold the business in 1994 and Dacor, a cooked ham and pâtéproducer was integrated into the group, now called Imperial Meat Products.

1966

1954



1916

1962

Stegeman150 years of craftsmanship

From a one-man business to market leader, Stegeman hasbeen the leading processed meats company in the Netherlandssince it was founded by John Stegeman in 1858 as a familybusiness.

It all started as a butcher shop selling cured meat sausages.Finding success early on, the number of butcher shops wasrapidly expanded and in 1916, Stegeman remodelled an old canning factory and thus extended its range from meatsto soups. It was in 1962 when Stegeman flourished andexpanded rapidly offering a wider product range of curedmeats.

Today, 150 years later, despite modern processes of production,the craftsmanship of butcher John Stegeman still forms thefoundation of the company - attention to quality and traditionlive on.


“The future we envision for CampofrioFood Group features growth andconsolidation, lead by our brandswhich, as in 2010, continue to gainmarket share, demonstrate theirleadership and remain the best optionfor our customers and consumers.”


Interview with our CEORobert A. Sharpe II, CEOof Campofrio Food Group,comments on 2010:

In an environment of shrinking consumption and

reduced merger and acquisition (M&A) activity,

Campofrio Food Group surprised the market with its

acquisition of Salaisons Moroni and Cesare Fiorucci

and the merger between Tabco-Campofrío and Caroli

Foods. What is the rationale for these deals?

Each of these three transactions illustrate a key elementof our growth strategy: investing in brands, productcategories and geographies where we believe superiorgrowth and margins can be generated. Salaisons Moroniis the leader in France of the high growth chorizosegment within the attractive dry sausage category.Cesare Fiorucci is the world’s leading brand in Italiandeli meats and in Romania, the newly merged CaroliFoods leads the industry in a market we expect togrow significantly throughout the next decade. We atCampofrio Food Group have always said that we willseize opportunities of this kind whenever we believethe value equation will clearly be favourable to CampofrioFood Group. Of course, part of this value equation isthe utilization of one of our core competencies: ourproven capacity to capture synergies in merger deals,as illustrated by the 40 million euros generated in justtwo years from the Campofrio Food Group merger.

With these recent transactions, you have reinforced

your commitment to brands. Doesn’t this contradict

the trend in the market where private labels and

unbranded products are on the rise?

Today, more than 250 million consumers enjoy ourbrands and our products, and they continue to do sodespite the difficult economic environment we currentlyface. In these turbulent times, shoppers continue tochoose the value, safety and taste of our brandedproducts. In 2010, our branded sales volume climbedby 1.4%, contrary to the overall market trend ofdeclining sales of branded products.

Moreover, at Campofrio Food Group, we not only havethe leading brands in the processed meats industry,we also enjoy an optimum sales balance between ourown branded sales and our production of private labelproducts, enabling us to be tremendously competitiveby appealing to all customers across all channels and segments.

What do you believe is the reason behind your brands’

positive performance?

I believe it is due to the fact that the consumer isincreasingly well informed and demanding. In difficulteconomic times, shoppers become even morediscriminating, which tips the balance in favour ofproducts that offer both great taste and an attractiveprice-value ratio. We worked very hard on this area in2010, offering consumers, through our trusted brands,products that would meet their needs in the threeessential areas of taste, health and convenience. Tothese, we added a fourth cornerstone that is crucialin the current environment offering them in additionthe best value for money proposal in the market.

We are convinced that our strategic brands will continueto gain market share, and that their development willbe a key driver of CFG’s growth. We continue to supportthem with both great innovation and increasedinvestment in communication. We are also enhancingthe effectiveness of our marketing tools as well asdeveloping new ones, such as on-line media.


What is the secret formula for making

that equation work?

It is the company itself: Campofrio Food Group isthe culmination of the ambition, passion and skillsof its human resources, 8,500 people who are highlycommitted to achieving our goals. Being able toleverage a company benefiting from a unique Europeanfootprint which, apart from its size, offers the strongestlocal brands in a wide variety of markets, channels andsegments provides obvious advantages. For example,we continue to develop collaborative relationships withleading retailers and foodservice customers, with whomwe mutually work to provide unique solutions toconsumers’ evolving needs.

Another area of focus for us is the development andlaunching of new products. In the past two years thesenew products have had a very material impact on thecompany’s growth, accounting for 6% of our volumeand 8% of our net sales. In this regard, it is worthmentioning that during this period, we developed aunique inter-company innovation process, which wecall i-Share. This system allows us, on one hand,to share knowledge and know-how across differentcountries and areas of the company for the purposeof developing and providing solutions for newconsumption occasions. On the other hand, it allowsus to track and measure the returns generated bythese new product introductions and our investmentsin R&D.

Can you give examples of milestones achieved

by each of those strong local brands?

We have 16 brands, the majority of which are leadersin the categories where they compete. We grew in 2010because we made significant progress in most of ourstrategic brands, thanks in large part to our new “frontend” strategy approach. This strategy, enables us tofocus on the strongest “business cells” of our company,delivering competitive advantage through a coordinatedapproach. It enables us to go deep into understandingof each “business cell”, (product category by channeland country) thus generating clear growth opportunities.

We regard every milestone as an achievement for theentire Group, but if I had to choose one, not for eachbrand, but for each of our interdependent operatingcompanies, I would highlight the growth of our brands.In Spain, in an extremely challenging economicenvironment, our brands increased their market shareby 4 percentage points. Meanwhile, in France, our retailvolume growth was 3% for Aoste and 4% for JustinBridou. In Portugal, net sales of Nobre frankfurtersrose by 6%, cementing Nobre’s top-ranked hold onthis segment. In the Netherlands, Stegeman improvedits market lead both in traditional and modern retailchannels, while Imperial Meat Products not onlyrepeated this success in Belgium, but also enjoyedsignificant growth in the food service channel. CFGDeutschland continued to tighten its hold on thepremium segment of the German processed meatsmarket. In Italy and Romania, the major news, withoutdoubt, consists of the growth opportunities pavedby the purchase of Fiorucci and the creation of CaroliFoods Group.




Do you have any other opportunities on the horizon

in the short term?

At Campofrio Food Group, we believe that one of theadvantages of our market position is the ability it givesus to seize opportunities arising from the currentenvironment, which, while complicated, may enhanceour growth prospects if managed properly.

We are convinced that our biggest opportunity inthe short term is to become larger, stronger and at thesame time, more agile. We can grow larger not onlythrough acquisitions and mergers, but also by fosteringour brands' organic growth, as we did in 2010;strengthening our cost discipline and reinforcing ourpenetration in our flagship market, the 27-memberEuropean Union. However, we can also becomestronger by capitalising on the Group’s size and byextracting value from our skills working with retailers togenerate joint returns. Similarly, size is no hindranceto being more agile than the rest of the industry and,in our case, as seen in 2010, this agility encouragesus to bring other successful concepts to market andto be sufficiently flexible to adapt to changing consumerneeds before our competitors can do so.

What does the near future hold for

Campofrio Food Group?

We envision only one possible future for the short,medium and long term. That future is a future of growthand consolidation, which will enable us to lead growthand profitability in the processed meats industry in Europe.

We are working hard towards that objective, and whilewe are aware that the current economic environmentis challenging, we are also convinced that our solidbusiness model will allow us to achieve the targets we have set for our Group.

We consider that Our People are one of the mainpillars of our company. It is above all thanks to theirentrepreneurial spirit and their quality, that we havebeen able to achieve our objectives in 2010.


Our Leadership Team

Eric DebarnotSenior Vice PresidentBusiness & Customer Development

Bruno KeerisCEOImperial Meats Products

Frédéric SebbanSenior Vice PresidentStrategic Sourcing

Javier ArrónizSenior Vice PresidentHuman Resources

Olivier MaesCEOGroupe Aoste, France

Fernando ValdésCEOCampofrío, SpainNobre, Portugal


We are led by a solid leadership team with an extensive experience ofand a deep knowledge not only in the meats sector, but of the fast movingconsumer goods industry in general. This know-how and experience hasbeen key to our successes in the last two years, and will drive us to achieveour vision: to be one of the leading European food companies by 2015.

Karl-Heinz KieselSenior Vice PresidentOperations

Alfredo Sanfeliz MezquitaSenior Vice PresidentLegal Affairs & General Counsel

Emmanuelle BelySenior Vice PresidentCorporate Development& General Counsel

Paulo SoaresSenior Vice PresidentFinance & Information Systems

Robert A. Sharpe IIChief Executive OfficerCampofrio Food Group

Wouter MeijerinkCEOStegeman

Athos MaestriCEOFiorucci

Dirk JacxsensCEONorthern European DivisionCFG Deutschland, Imperial, Stegeman




Overview of CFG Operations

Italy and USA

Volume: 46,638 T.

Sales: 267.3 M€

Manufacturing Plants: 5

Cooked and Roasted Ham,Mortadella, Dry Sausages,Frankfurters, Dry Cured Ham,Poultry and Bacon.

Germany

Volume: 5,602 T.

Sales: 49.8 M€

Sales & Marketing Office

Cooked Ham, Dry Cured Ham,Dry Sausages, Poultry,Frankfurters and Pâté.

Spain

Volume: 217,202 T.

Sales: 736.5 M€


Cooked Ham, Dry Cured Ham,Dry Sausages, Frankfurters,Poultry, Cold Cuts, Mortadella,Bacon, Pâté, Pizzas,Ready Meals, Fresh and Semi-processed Fresh Meat.

France, Switzerland and Italy

Volume: 114,649 T.

Sales: 639.7 M€


Cooked Ham, Dry Cured Ham,Dry Sausages, Frankfurters,Poultry and Pâté.

Our CategoriesDRY CURED HAM DRY SAUSAGES

COOKED HAM FRANKFURTERS


Portugal

Volume: 32,351 T.

Sales: 108.2 M€


Cooked Ham, Dry Cured Ham,Dry Sausages, Frankfurters,Poultry, Bacon, Pizzas, ReadyMeals and Meal Components.

Romania (Joint Venture)

Volume: 31,023 T.

Sales: 77.5 M€


Cooked Ham, Frankfurters,Pâté, Boiled & Smoked DrySausages, Mortadella, Poultry,Cold Cuts, Boiled and SmokedRomanian Specialties, DryCured Ham.

Belgium & Luxembourg

Volume: 22,339 T.

Sales: 147.9 M€


Cooked Ham, Dry Sausages,Poultry, Pâté and Dry CuredHam.

The Netherlands

Volume: 30,261 T.

Sales: 143.3 M€


Cooked Ham, Dry Sausages,Liver Sausages, Spreads andMeal Components.

MORTADELLA AND COLD CUTS PÂTÉ

POULTRY PIZZAS AND READY MEALS

Growing Together

as a Group

Our BrandsTons of Reasons to Love our Brands

We are able to connect with our consumers in adifferentiated way through our brands, taking great carein building them and in nurturing the values that havemade us the local leaders in our markets and in eachof the product categories we compete in.

The perceived added value of our brands is what hasenabled us to grow in the midst of 2010’s complex andchallenging environment. Sales volumes of our brandedbusiness grew by 1.4%, contrary to the industry trend,where sales of branded products have declined.Branded net sales in the retail segment accounted for59% of net revenue in 2010.

In a climate where shoppers have become increasinglyrational and where price has become the key driver inthe purchase decision, our brands have proved to beour main line of defence. They have found their wayinto more homes and connected more and better withconsumers, as demonstrated by the unprecedentedlevels of spontaneous awareness in 2010.

Aside from our strong local brands, we also have multi-country brands, already well known acrossvarious European countries and internationally, suchas Aoste, Campofrío, Fiorucci, and Justin Bridou.In 2010, we have seen the further development of thesebrands: the Campofrío range of Spanish products wassuccessfully launched in Germany and in Belgium,while the Aoste brand continues to carve a significantniche in the pâté market in Spain.

Our extensive brand portfolio isone of the Group’s strategic assets. Our market leadership positionis reinforced through the attributesand strengths of our brands.


COMMERCIAL BRANDS IN OUR IOCs

OUR MULTI-COUNTRY BRANDS

OUR LOCAL BRANDS

Dry Cured Ham, Iberian Ham, Iberian Dry Sausages.

Frankfurters, Bacon.

Dry Sausages.

Cooked Ham, Poultry,Frankfurters, Dry CuredHam, Dry Sausages,Bacon, Ready Meals, Meal Components.

Dry Sausages, Dry Cured Ham,Pâté.

Frankfurters,Dry Sausages,Cooked Ham.

Dry Sausages.

Dry Sausages.

Dry Sausages, Liver Sausages,Spreads and MealComponents.

Dry Sausages.

Cooked Ham, Frankfurters, Pâté,Boiled & Smokedand Dry Sausages,Mortadella, Poultry,Cold Cuts, Boiled andSmoked RomanianSpecialties.

* Oscar Mayer and Weight

Watchers are franchised brands.

(Joint Venture)

Dry Cured Ham,Dry Sausages,Cooked Ham,Poultry, Pâté.

Cooked Ham,Poultry, Frankfurters,Mortadella, ColdCuts, Dry CuredHam, Dry Sausages,Bacon, Pâté, Pizzas,Ready Meals.

Dry Sausages,Dry Cured Ham.

Cooked Ham, DrySausages, Poultry,Pâté, Frankfurters.

Cooked andRoasted Ham,Mortadella,Dry Cured Ham,Dry Sausages,Frankfurters,Poultry, Bacon.



Through Aoste Selection, we expanded the Aoste brand’spenetration of the premium dry ham and sausage segmentsin France with a new line of high quality, traditionalcharcuterie.

We leveraged Cochonou’s traditional positioning to launcha line of flavourful and attractively priced pâtés under this brand.

In Imperial Meat Products, Aoste’s “Maître Charcutiers”positioning has increased the brand’s quality image, not onlyin deli products, but also in self-service through the launchof new product ranges such as Aoste pâté and Aoste Cuisine.

The success of the Campofrío Spanish range in Germany wasone of the major highlights in CFG Deutschland in 2010, withan impressive growth of 8% in value.

Our Brands

Growing our Brands in 2010

We continued to place significant resources in growing anddefending our brands, increasing marketing and promotionalinvestments by 3% in 2010, an effort which made themstronger, more dynamic and more competitive.

We are building the foundations for sustained growth through a clear and focusedpositioning, and through the broadening of our product ranges in segments where weidentified growth opportunities. We are as well penetrating new geographies using ourrange of authentic “heritage” products.


We continue to streamline our branded product range towards a slimmer, more focused portfolio, and strengthen our ‘specialist’brands by enriching them with the addition of new product formatsand ideas for new moments of indulgence.

Navidul is synonymous of consistently high quality in theSpanish cured ham segment – the ham you don’t gamblewith. It is Spain’s most popular brand of dry ham, a positionit has earned through its reputation for offering consumersa wide range of dry cured hams and sausages, from thetraditional Jamón Serrano, Jamón Ibérico to EmbutidosIbéricos. This positioning as a specialist brand has beenreinforced in all categories by launching new products andformats in 2010.

Marcassou is brand leader in the smoked dry sausagesegment in Belgium. Its products are known to be made in a traditional way, of the finest natural ingredients. We build on this reputation to introduce new products in whole pieces,slices and snack formats.

In the bacon and hotdog categories in Spain, Oscar Mayerhas enjoyed an enviable, brand leading position. In 2010,we leveraged on this situation to launch new formats, whichcontributed to a sales growth of 9.8% in bacon and 5.2%in frankfurters.

Revilla is Spain’s chorizo brand par excellence. It consolidatedits category leading position, thanks to new pre-slicedpresentations, which have proven very popular.

By reinforcing our sub-brands and European concepts, we have made them successes in their own right, particularly in markets where we have strong cross-category brands.

Growth in the Campofrío and Nobre umbrella brands wasunderpinned by strong performances in the Naturíssimosrange – the naturally healthy charcuterie.

The dry sausage snacking sticks demonstrate the agility withwhich the Group has translated one market’s success to another,from France, Belgium, Germany, The Netherlands, Spain andmost recently in Portugal.

Our Brands


Our Brands

Three More Reasons to Trust our Products

We have added two new flagship brands to our portfolio,César Moroni in France and Fiorucci in Italy (this in 2011).Both these brands benefit from strong consumer recognitionand are leaders in their respective market segments.

In addition, a third brand, Caroli, result of the mergerbetween Tabco-Campofrio and Caroli in Romania,was incorporated into the Campofrio Food Group brandportfolio. Caroli is yet another leading brand, which offersopportunities for consolidation and growth.

Over 150 years of experience and a corporate philosophyof tradition and innovation have made the Fiorucci brandthe leader in the processed meats business in Italy. It reachedmore than 80% brand awareness among consumers, andhas an image of high quality and tradition.

Fiorucci is present in all the most important deli meatcategories: dry ham, mortadella, cooked and roasted ham,dry sausage, frankfurters, poultry, bacon and other curedmeat specialties, offering unique, authentic Italian products.


Our strategic commitment to maintaining leading brands isone of the guarantees of growth at Campofrio Food Group.


This French brand dates back over 50 years and hasbeen the leader in the chorizo segment in France. Frenchconsumers associate the César Moroni name with tradition,adapted to the local taste and above all, to value for money.

Powerful synergies are already planned for 2011 tosignificantly increase the weighted distribution ofthe chorizo range and to reinforce advertising andpromotional effectiveness, levers which are expectedto further grow the business.

One of the leading brands in Romania, it has a well-balancedportfolio, being present in all cold cuts segments. Consumersand retailers associate the Caroli product portfolio with qualityand exquisite taste, which is why Romanian shoppers haveplaced their trust in the brand for decades.

More than one million shoppers choose our products everyday. Consumers, regardless of their motivations or lifestyles,trust us because of the taste and quality of our food andour ability to provide relevant solutions for improving theirquality of life.

Just as tradition is an integral part of the history of each oneof our companies, innovation is one of the drivers of ourgrowth. We continuously study and investigate market andcategory trends to gain profound consumer insights.

We have made significant efforts to develop a transversalinnovation process, optimising best practices and sharingknowledge. Through this unique platform, we haveestablished a network for seeking out and capturingbest practices at each of our companies, enabling usnot only to share said practices, but to capitalise on localexperience and knowledge and thus accelerate theintroduction of new products.

Our innovation strategy in 2010 remained focused onanticipating fundamental consumer trends and staying aheadof the competition, by developing new solutions for what arecurrently the four main drivers of consumer decision-makingin the choice of products: taste, health, convenience andaffordability or value for money.

Our ProductsRecipes of Tradition and Innovation

One of our major goals as a company is to offer to consumersthe enjoyment of flavourful moments, helping them to achieveand maintain a satisfying healthy lifestyle.



tradition & innovation

Sharing our Knowledge, Building InnovationThe creation of the CFG i-Share was one of the highlightsof our innovation process in 2010. Why i ? Because eachone of us has a role to play in innovation, as we share theresponsibility of building a faster growing company. AndShare, because innovation is a sharing and social processwhich starts with collaboration among the companies.

We have also created the concept of R&D Centres ofExpertise to identify and manage innovation projects atgroup level, which require high levels of group expertiseand know-how within the IOCs. The three Centres are locatedin Aoste (France), Burgos (Spain) and Ghent (Belgium).

Campofrio Food Group’s R&D Centres of Expertise werecreated with the ambitious task of becoming an industrybenchmark, and the aim to bring the company’s core valuesof diversity, entrepreneurial spirit, commitment and a focuson teamwork into each innovation project.

The impact of new product launches inlast 2 years is now constantly monitored:

• 6% of our volumes and 8% of our net sales were generatedby new products.

• Of the net sales on new products, 86% was on branded.

• 12% of our branded net sales has been generated by thesenew products.

• The net sales per kg. of our new products is 33% higherthan the average net sales per kg. of the total CFG business.

This clearly reflects the growing impact of our increasedfocus on new product development.


Our Products

With CFG i-Share, we have been able to:

• Capitalise on key synergies and share best practicesacross our companies.

• Leverage knowledge of market trends, category insightsand consumer behaviors.

• Foster pan-European initiatives in both innovation andbrand development, always from the standpoint ofoperating excellence in marketing and sales processes.

• Facilitate the monitoring and tracking of our innovationprojects and the return on R & D investments.

Sharing ConceptsOur most notable example of the successful sharing ofbest practices in new product launches is in the snackscategory, where we leveraged our proven skills and agilityfor transferring products and concepts between IOCs.

The successful rollout of snacking products in previous yearsbrought about new snacking ideas such as the CampofríoMini duo pack for convenience stores, and new varieties suchas flavoured smoked salami under the Marcassou brand.

Moreover, the know-how acquired by our R & D teams inthe snacks category enabled us to identify new consumerneeds and to tap into market niches, such as Justin Bridou’sLes Billes, small sausage round bites that offer consumers

“rounded” eating moments that are the perfect excuse forsharing a snack.

Similarly, in 2010, we broadened our snacks range, this timeaddressing a new segment: children. We offered severalproducts and formats, with the addition of nutritional values,for the youngest members of the family. These includeCampofrío’s Jamoninos and Pavoninos, small cooked hamand cooked turkey bites, whose packaging design featureslicensed images of Disney cartoon characters; Campofrío MiniPizzas, which have made us the first company in the industryin Spain to develop the snack concept for this product range;and Mickey Sausages, a 100-percent chicken product thatlets kids enjoy a “good snack” in the company of their best

“friends” in Belgium.

Campofrío continues to reinforce its position in the snackingmarket with the introduction of Pavofrío turkey snack bar, aperfect solution for those who want a tasty and healthy snack.Each bar contains only 24 kcal and is a natural source ofprotein. These bars come in 4 delicious flavours: natural,roasted, orange with raisins and pineapple.


snacks you love

anywhere, anytime


Our Products

Flavourful Moments

In the area of taste and pleasure, we have drawn on our expertise to design and formulate products that are tailored to local tastes.

The success of Aoste Selection in 2009, a range of tastyand premium processed meats, convinced us to expand thisrange in 2010 to include dry sausages, chorizo, and Viandedes Grisons (sliced cured beef). The authenticity of theserecipes paved the way for their successful entry into thismarket niche and further reinforced Aoste’s leading positionin the premium dry cured ham and dry sausage categoriesin the French processed meats market.

In the Netherlands, we have repositioned our Stegemanbrand evolving around the central brand theme: enjoyingtaste and variations. The assortment includes new recipesand varieties of sausages, cold cuts and spreads next to someold time favourites.

Inspiring new consumers and attracting a younger user groupare the main objectives. Not only does the characteristicpackaging design differentiate the brand from its competition,it also encourages consumers to try different taste variations.

By presenting various sub-segments of product and priceoptions, the new Stegeman positioning offers consumer andretail solutions for everyday use as well as special occasions.


Our Products

Healthy Lifestyle

As a company, we seek to bring not only enjoyment and taste,but also health and wellbeing through our products, as webelieve that variety, balance and nutrition are inseparable fromtaste and pleasure.

Within the health arena, two consumer megatrends are rising in the European market: The Natural Trend and theLight Trend.

Our strong efforts to bring the Naturíssimos conceptto market, first launched in Portugal under the Nobre brand,have converted Naturíssimos into a true benchmark forconsumers who are careful about their eating habits.

We continue to expand the concept both in Portugal andSpain, offering consumers products that encapsulate theessence of natural foods and are therefore prepared withfew or no additives, or with less fat and lower salt content.

In the past 12 months, consumers have given these launchesan extremely warm welcome and the Naturíssimos range,now appreciated by more than 1 million households, hasgrown considerably in both countries. In Spain, we expandedthe range to include deli turkey products and frankfurters,while in Portugal we launched new line extensions in poultryand frankfurters.

The second of the health trends that Campofrio Food Grouppursued in 2010 centred on light products, whose popularityis also clearly on an upswing. We introduced several productsthat were very well accepted in the market: Campofrío ChickenFranks Light, a sub-segment using chicken and turkeyrecipes that feature a 30-percent reduction in fat content.

Along the same lines, we launched a range of pre-sliced,wafer-thin cooked ham, turkey and chicken, all with a30- percent reduction in calorie content, under the NobreLight brand in Portugal. Meanwhile, in the French market,under Justin Bridou, the leading dry sausage brand in France,we expanded our offer to include a 100-percent poultry drysausage featuring a new taste with less fat.

Another “light” product launched in 2010 was AosteEdelsalami Leischterr Genus. We began offering our Germanconsumers a salami made from an original Mediterraneanrecipe, using a traditional curing process, while providing theadded value of being lower in fat than other salami productsin the market.

In Romania, we introduced Chicken Ham, a super premiumproduct sold under the Sissi brand, in 650 g and 3 kg. packs.



Our Products

The Easy Life

The demand for products which offer more practical andconvenient solutions has grown significantly. We continueto respond to this growing need, by offering more functionalpackaging and relevant formats, not only for ready mealsolutions but for new eating occasions.

We launched Campofrío Vuelta y Vuelta Roasted range:delicious, low-fat roasted medallions made from fresh chickenor turkey breasts in a special marinade, a dish which maybe prepared in only two minutes. The demand for readymeals in canned format saw an increase in Portugal, and we responded with two new recipes: Nobre Beef Stewand Nobre Meatballs.

Dry cured ham in new formats such as Navidul Dry CuredHam Strips, was also made available in the market – a time saving kitchen helper for consumers.

Exciting convenience food solutions for our consumers inRomania were launched, under the Caroli brand such usSunculita Taraneasca, a traditional Romanian-style smokedspeciality, whose significant traditional taste make it an idealingredient for use in both sandwiches and cooked meals.Another excellent example is Carnati Semiafumati, a traditional Romanian recipe and a perfect option for family barbecues.

In the Netherlands, we offered Stegeman Alledag, pre-slicedmeats for everyday consumption, in a new resealable packagethat helps to lengthen the life of the product.



Our Products

Smart Shopping

52 Campofrio Food Group Informe Anual 2010

During periods of shrinking consumer demand as experiencedwithin the present downturn, in which households cut theirshopping budgets, price becomes a critical factor influencingpurchasing decisions. At Campofrio Food Group we continuedto address this challenge by expanding the range of many ofour brands under the Value for Money concept.

Our Value for Money range is an application of our strategy toaddress the many fundamental needs of our consumers, frompremium products to more affordable, without havingto trade out of their beloved CFG brands. Not only have wedesigned new packaging formats to achieve lower retail saleprices, we have specially customised formulations to help ourconsumers through this economically challenging periodwhile preserving our own margin levels.

This early success inspired us to introduce new formatsunder one of the most iconic chorizo brands in Spain: Revilla.Its reputation as a brand of chorizo spans over 50 years andit is renowned for its taste and quality. A new range of Revillapre-sliced salami, chorizo, chorizo de Pamplona, andsalchichón, priced at only one euro was our response toconsumers’ need to enjoy the same quality of dry sausages ina new and affordable format. Moreover, we put Iberian curedham within reach of all budgets, marketing our pre-slicedPaleta Ibérica Navidul at a retail price of 2 euros.

The success of this concept has been reinforced by clearlymaking its recommended retail sale price (of 1 or 2 Euros),an initiative that received the support of more retailers inSpain and Portugal and that consumers welcomed.

Combining the Value for Money concept with the desire toenjoy authentic meat products whose origins are synonymouswith quality (regional specialties), other one-euro formatssuch as Chorizo de León and Salchichon de Payes, werelaunched under the Navidul brand.

We also introduced traditional French pâtés under theCochonou brand, which addressed two variables shapingconsumers purchasing decisions: value for money and taste.Meanwhile, in Romania, our Romanian Salami and SalamiSemenic made a major impact, joining the leading salamisin the market at a price within reach of all shoppers.

Campofrio Food Group Informe Anual 2010 53


Our Marketing CampaignsConnecting with People We Love

Sharing food you love, sharing good times


The use of social networks was an important part of ourstrategy to establish stronger ties with consumers and createan individual connection with them.

These initiatives, combined with point-of-purchase activities,have resulted in increased awareness levels for our brands,in the growth of our branded business’ sales, and in marketshare gains in 2010.

In an environment driven by intense competition, bothfrom branded and private label products, we have furtherstrengthened our marketing campaigns in order to get evencloser to our consumers.

We have leveraged all communication channels, drawing onour experience and expertise, to create effective and impactfulmarketing campaigns that have successfully establishedemotional bonds between our brands and our consumers.

The excellent quality and taste of our products, our in-depthinsight into providing solutions that are relevant to consumersand our ability to connect with them, are what have made ourbrands leaders in their markets.

Our Marketing Campaigns

Four Senses - Naturíssimos This uniquely touching short film tells a true story, the oneof the children of a blind couple who wanted to offer theirparents a truly memorable silver wedding anniversary. Tomark this special day, they chose to share with their parentsunique experiences based on a valuable lesson: our parentstaught us there are two ways to look at life. You can live yourlife regretting all that you are missing, complaining aboutthe things that life did not give you, or you can make themost of what you have.

On the website (www.campofrioylos4sentidos.com) viewerscould continue to enjoy this tribute to people who live lifewithout one of their senses, but who make more sense oftheir lives day by day. This campaign was awarded the topprize at the prestigious Iberoamerican Advertising Festival,El Ojo, and demonstrates the ability of the Campofrío brandand its Naturíssimos sub-brand to connect emotionally withits viewers. Spontaneous levels of brand awareness for theCampofrío brand reached an all time high of 79%.

Frankfurters as they should tasteNobre, leader in the Portuguese frankfurter market, launchedan advertising campaign for this category for the first time inmany years. It is an advertisement that brings back preciousmoments of childhood, and enjoying Nobre frankfurtersis certainly one of these simple, nostalgic and flavourfulmoments. This campaign has made 2010 a significant yearfor frankfurters in Nobre, both in terms of sales and brandimage.


Luftig Fein pure Mediterranean flavourThe full flavoured Mediterranean flare of Aoste WaferThin Slices is captured in this new advertising campaign,which transmits the product’s excellent premium quality.To support this television campaign, in-store sampling wasdone during its launch and a new website implemented.Aoste’s brand recognition and awareness in Germanyrose 3 points to 42%.

The best times with BridouAs the leader in the single dry sausage market in France andwith awareness at record levels, Justin Bridou’s newadvertising campaign has reinforced the brand values ofmodernity and conviviality associated with Justin Bridou;a brand that gives you the occasion to share good timeswith the people you love. This campaign not only broughtawareness levels of the brand to an all-time high, it alsocontributed to a significant increase in sales of Justin Bridouin the the single dry sausage segment.


Dolls - PavofríoLast year’s Elena Salgado campaign won a host of awards,which in addition to best advertisement of the year, includedthe EFI Gold for the most effective campaign, in thecommunication and marketing category and the Grand EFI,both awarded by the Spanish Advertisers Association in 2010in the XII edition of the Advertising Effectiveness Awards.Building on the theme and its resounding success, we soughtonce again to pay homage to the “unique” women in oureveryday lives.

Dolls highlights the small things far removed from stereotypeswhich make every woman different, a message which issummed up in the claim at the end of the ad: Pavofrío,because being different is what makes us unique.

Maître CharcutiersFilled with ingenuity and humour, this Belgian campaignsought to transmit the key attributes of Aoste, a brand builton tradition, which can only be found at the finest “maitrescharcutiers”. The Aoste brand posted a spectacular growthof 13.5% in Belgium in 2010, due to the combined effect of this campaign and to the new product portfolio. The campaign also reinforced the perception of Aoste inBelgium as trustworthy, tasty and authentic, thanks to a well coordinated communications effort on the website and in-store.



Blue Helmets - Frankfurters, Pizzas, Snacks and Cooked Ham The much lauded Campofrío Blue Helmet campaign, airedtowards the end 2009, continued with new creative sequelsfor the Campofrío franks, pizzas, snacks and cooked hamproducts. The new ads revolve around the adventures ofSpanish Blue Helmets and their foreign colleagues at theUN International Base and are a tribute to those preciousthings we specially miss when away from home... like thegood taste and enjoyment of Campofrío products.

The Blue Helmets campaign has received variousrecognitions, the EFI Silver for the most effective campaign,in the communication and marketing category, the Grand EFI,both awarded by the Spanish Advertisers Association in2010 and the Silver Sol, at the El Sol Advertising Festivalin San Sebastián.

T-Moty - FiníssimasThis campaign is a continuation of the very unique advertisingstyle for Campofrío Finíssimas that started with the multi-award winning Vegetarians campaign. The ad tells the story ofthe arrival of a robot called T-Moty in a household where hemakes himself so at home he ends up stealing the limelightfrom the head of the family. The rub is that the robot starringin this advertisement can do almost anything... except enjoyCampofrío’s Finíssimas, a pleasure reserved for humans.




Reaching out to our Consumers On-line

Capitalising on the growingpopularity of Internet tostrengthen our connection withour consumers, we launchedpromotional initiatives using on-line media and developedWeb 2.0 profiles, with enhancedpresence in blogs and on-linechat forums.


Aoste On the NetIn France, the new Aoste interactive website providesconsumers a wealth of useful information about Aosteproducts, which include new and tasty recipes.

It also builds consumer loyalty by offering discountcoupons, on-line. The prime example of the loyaltybuilt up for this brand is the Gourmet Club (http://www.club-gourmet.aose.fr/), an on-line communityfor the most sophisticated consumers.

These initiatives continue to reinforce Aoste’s image as a truly premium brand with a long-standing heritage andauthentic flavour.

Navidul School of Iberian Ham and On-line StoreThe Navidul School of Iberian Ham (www.escueladeliberico.es)website provides abundant and detailed information on theworld of Iberian ham, ranging from how it is prepared tothe art of slicing and news and updates about the ham sector.Consumers can find recipes from world-renowned chefsusing Spanish cured ham as the main ingredient. To increasethe reach of the school, there is a dedicated channel onYouTube where behind-the-scenes footage from this initiativecan be viewed.

For ham lovers looking for top quality ham without having toleave their homes, we launched the new Navidul on-line store(www.comprarjamonnavidul.com) where consumers can buyhams on-line or even find the perfect gift with the ham: a Navidul ham with holder and knife included.

Campofrío At the 2010 World CupThe 2010 FIFA Football World Cup was the biggest sportingevent in Spain. To capitalise on the popularity of this event,a promotional campaign was created on Facebook forCampofrío pizzas, targeted at the younger population.

The results demonstrate the power of new media. Throughout the campaign, in which as many as 60,000people participated, sales of Campofrío pizzas increased by 16%.

Christmas CampaignsDecember 2010 was an excellent month for our dry hamand dry cured products, as demonstrated by the record sales achieved. The weak consumer spending at the start of the year was offset by our proactive approach towards our customers and consumers, and by the successfulChristmas campaigns.

The Navidul Christmas 2010 campaign was a huge success.The strategy of promoting sales of whole hams, the widerange of Christmas baskets offered, the introduction ofpromotions for exports and the care taken in developing in-store initiatives drove sales of whole hams to record levels.

In Nobre, we drew on the popularity of cured ham andCampofrío’s track record in putting together Christmascampaigns that capture consumer interest, using point-of-sale and merchandising initiatives. Like in Spain, we havehad very successful results due to the attractive offer, whereconsumers buying whole leg of ham enjoyed a free hamholder and knife.


In 2010, we developed and launched a broad range ofpromotional activities aligned with our brands’ overall strategies,with the objective of influencing the consumer’s decision atthe point-of-purchase.


Close to You at the Point-of-Purchase

Football PromotionsAoste Stickado in CFG Deutschland launched a rafflepromotion giving away portable TVs for buyers of the 70gStickado pack and the 50g Mini-salami pack during the WorldCup. The idea behind this activity is to offer consumersenjoyable moments watching the World Cup with both AosteStickado and their portable TV set. The initiative delivered itsgoals: to win over new customers and to boost sales. We alsomanaged to increase market penetration, develop our brandsand, in parallel, increase spontaneous awareness, all of whichwas helped by the various samplings undertaken throughoutthe World Cup.

Campofrío is a leading brand, which won its own particular‘championship’ when Spain won the World Cup. It did so bysupporting the Spanish team, through a sponsorship of theSpanish national team coach Vicente del Bosque.


Year Round In-store PromotionsIn France, we combined the breadth and variety of ourprocessed meat products, with highly effective point-of-salemerchandising to promote our new pack assortments, whichproved irresistible.

By marketing specially-prepared sliced products underthe Aoste and Justin Bridou brands to offer consumersa convenient raclette pack (raclettes are a long-standingtradition in France) the promotions proved very effectiveas the sale of these products increased by 40% duringthe period.

Under the Aoste brand, we launched a campaign designedto boost the sales of sliced, cured ham products during themelon season. This activity, supported by shopper marketinginitiatives, drove revenue growth of dry cured ham by 15%throughout the campaign, as well as an increase of 2percentage points of Aoste’s market share year-on-year.

We reinforced the positioning of Jambon d’ArdenneMarcassou in the Deli Counter with a very well roundedcampaign, which combined regional media advertisingand in-store promotions. In addition to raising the product’svisibility, we gave away a 100g pot of Bister Mustard toeveryone buying the ham on promotion. During the weekthat the promotion ran, sales volumes exploded with a 166% growth.

In 2010 the Caroli décor project raised the visibility of Caroliproducts in traditional stores. This was a joint effort withthe storeowners, providing them with display materials thatimproved the placement of our products on their shelves,consequently securing strategic facings for both Caroli andCampofrío products in Romania.


Expanding our MarketsExports

We consider our export activity to be fundamental to achieving our vision: becomeone of the leading European food companies in 2015. Through exports, we are ableto extend our European footprint and establish our reputation as the food companythat offers the best processed meat specialties from all over the continent.

In parallel, we made significant inroads in what we haveidentified as medium-potential markets. Leveraging the strongpresence of some of our interdependent operating companiesin those markets, we developed a specific product rangetaking into consideration the local tastes and preferences.This strategy resulted in substantial increases in export salesto Equatorial Guinea, the Dominican Republic and CapeVerde, clearly an indication of the relevant route to marketapproach in place.

In 2010, our export strategy was focused on core markets,those which we view as more strategic and which offered ahigher probability of rapid market penetration. The resultsof our export sales in 2010 demonstrated that we are on theright track. Despite an intense competition (by a challengingsituation in served domestic markets), sales to core marketssuch as Sweden, Finland and Switzerland increasedsignificantly. This was made possible through the collaborationamong the export teams of our various IOCs, exchanging in-depth knowledge of the markets and sharing experiences.


the best European meat specialities

Within the EU-27 and in our home markets, our businessgrowth objective is linked to brand building, in line with ourgoal of being the recognised brand leader in export. In 2010,we launched the Spanish product range under the Campofríobrand in Belgium and Germany. The unified packaging lookand the consistent brand positioning of our Spanish rangehas resulted in its positive sales evolution in the last year andin a recognition of the Campofrío brand beyond Spain.

A new Campofrio Food Group Export Catalogue, featuring a complete selection of our most popularly exported meatproducts, was launched in 2010. Building on our successfulrollout of typical ‘made in Spain’ meat specialties, we haveidentified a range of “heritage products” from each homemarket (France, Belgium, Italy and Portugal), all of which are proving as popular as the Spanish products.

It is worth highlighting that in 2011, Fiorucci, the leadingbrand in the Italian processed meat industry with 150 yearsof experience and with a strong position in the Italian exportmarket became part of Campofrio Food Group. With its high-quality and traditional Italian deli meats, already best-sellers in major markets, such as the USA, France and the UK, Fiorucci will certainly be another strong asset to the Campofrio Food Group export product range.

Our desire to be at close reach of our consumers at differentmoments of consumption and in all channels is demonstratedby our initiatives in the Food Service and Out-of-home channels.

We pride ourselves in being able to provide practical andinnovative solutions for customers such as hotels, restaurants,bars, theme parks and leisure centres, catering, andinstitutions, with our brands as a reassurance of quality andfood safety.

Our business model allows us to grow in these channels bysatisfying the needs of our customers with a variety of highquality, conveniently prepared meat products in various formats.

Leveraging the Group’s expertise, we share best practices andexchange insights to develop new product ideas that are notonly tasty and convenient but healthy and affordable as well.

With this strategy in place, our net sales volume in the foodservice and out-of-home channels increased by 12% in 2010despite a decrease in out-of-home consumption in most ofour markets.

We achieved these positive results in particular, thanksto the following initiatives:

• In Campofrío, one of the most successful “Food ServiceSolutions” is the introduction of the Ready Mealsconcept Cocina Ensamblaje which provides the cateringchannel with different varieties of meats, garnishes andpre-prepared sauces to create their own recipesand optimise their time in preparing “Hot Lunches orDinners” in a convenient, hassle-free and quick way.The success of this concept was such that food servicesales in Campofrío grew by 20% in volume and 12%in value in 2010.

• In addition, we developed a line of special recipes for theelderly, soups and purees made with natural ingredientswhich are served in institutions such as hospitals andnursing homes.


Expanding our Markets

Food Service and Out-of-home


• The Oscar Mayer Cart used in various convenience outlets,gas stations, bars, restaurants and shopping centres isprobably one of the most innovative on-premise activitiesundertaken in 2010. These attractive carts with “deliciousanywhere, anytime Oscar Mayer hot dogs” bring us evencloser to our consumers.

• Similarly, our snacking products are a big hit in vendingmachines in Belgium, while our Croc’sec de Cochonousausage bites have become the perfect snack solutionand a best seller in the French railway network.

• We have also developed specific solutions for leading fastfood chains. Chiffonnade, under the Aoste brand in France,offers a range of possibilities for the preparation ofsandwiches, salads and tapas with different recipes of dry ham, coppa, rosette and cooked ham.

Our recent acquisition of Fiorucci will further strengthen our food service and out-of-home business. In recent years,Fiorucci has been able to develop a strong presence in thesechannels, which will generate new opportunities for futuregrowth through the exchange of know-how and knowledgewithin the Group.

OurCommitment

Our people are our most important asset and we consider theirprofessional development as key to the achievement of ourcompany vision. We employ about 8,500 people from our seveninterdependent operating companies, who, with their distinctcultures, have become a cohesive and strong team thatcontinues to grow.

Our corporate cultureOur People are a fundamental part of our structure and oneof the pillars on which our successful strategies will rest.We are very aware that when our various departments andcompanies work together, we grow together as a company,as a team, and as individuals. Our human resources peoplehave worked hard to build the value of teamwork asdemonstrated by our company’s slogan Working Together,Growing Together.

The spirit of our organisation is reflected in our core values:diversity, commitment, entrepreneurship and building person-to-person relationships. All these make us a unique groupwith the vision to be one of the leading companies in the foodsector in Europe by 2015.

To realize this goal, we are led by two strong managementgroups:

• The Leadership Team, comprising senior leading executivesof our Group.

• The Management Team, comprising the secondmanagement tier of the company.

In June of last year in Madrid, the management andleadership teams met and laid the foundations to our motto:Working Together, Growing Together.

The Management Team Meeting has been an intensive,informative, interactive and empowered meeting with peoplebelonging to the Management Committees of Groupe Aoste,Campofrío, CFG Deutschland, Imperial Meat Products, Nobre,Stegeman and the Corporate Office.

During these days, the power of WE was unleashed. We, as aunique company, with the competitive advantage of achievingour growth objectives, sharing best practices and obtainingcost synergies; with the experience to anticipate the emergingneeds of our consumers and customers; and the know-how toleverage our collective knowledge in order to lead andtransform the entire “We, as a Team”.


To our People


Management Team Meeting, June 1, 2010

The CFG Code of Ethics and Core Values


OUR CODE OF ETHICS

Trust and ReliabilityOur behaviour and the consistent quality of ourproducts have helped to create an atmosphereof trust and credibility amongst our customers,consumers and partners.

SafetyWe constantly strive to provide optimum conditionsin terms of health, safety and hygiene for ouremployees.

IntegrityWe encourage moral integrity and good faith towardsany member of our organisation or any third party.

Social ResponsibilityWe maintain a high social commitment towardsthe sustainability of our environment and qualityof life of the community.

OUR CORE VALUES

Leveraging DiversityRespecting and honouring diversity is thecornerstone to bring change, improvement,renovation and reinvention.

Fostering EntrepreneurshipEntrepreneurship will ignite change, make us bolderand accelerate speed to market.

Demonstrating CommitmentOur demonstration of commitment shows thatresponsibility wins both trust and respect and willguide us to success.

Building RelationshipsBuilding relationships and placing value onteamwork builds loyalty and confidence and willoptimise the way we do business.

Our Code of Ethics establishes the fundamentalprinciples and behaviours needed to ensure “honestyall the way.” These and our Core Values are key to ourstrong corporate culture and are vital to achievingour objectives through fully responsible behaviour.

Professional Development and Training In CFG, we consider professional enrichment and internalgrowth as key to retain talent and build a highly qualified andmotivated team. In 2010 we created a Career Committee,wherein each company identifies in their organisations, thepeople with the most potential, and prepares them for biggerresponsibilities within the group. In addition, we leverage ourpresence in different markets by offering opportunities forinternational rotation.

One of the examples that best reflects our commitment totalent without borders is the Peak Project, an initiative whichprovides a Group-wide program that contributes to thetransformation of the organisation. This project will generateefficiency, consistency in processes, standardisation ofsolutions and infrastructures and provide a common workinglanguage within the group, all through a single tool: SAP.

The Transformation Program Office (TPO) is another internaltool which has been used since the creation of the CampofrioFood Group. It continues to be used not only for corporatedevelopment projects such as mergers and acquisitions, butalso for projects which require fundamental changes or deeptransformation in the functional areas.

We believe that investment in personnel training isfundamental. Last year, we devoted significant resources totraining, through many different initiatives such as classroom-based courses, lectures and e-learning modules, aimed atimproving people skills and values.

Recruitment and SelectionWe constantly search for professionals who possess thevalues we promote: initiative, involvement, teamwork andcollaboration. Our reputation, as a leading European companywith international and local brands, is one of our main assetswhen it comes to attracting talented individuals.

Our Human Resources team’s recruitment process drawsfrom four main sources: internal promotion, the job banks ofvarious educational institutions and chambers of commerce,international employment sites, and the CVs that candidatessend through various media to our companies.

Every newly hired employee is an asset and each one iswarmly welcomed to the group with a breakfast meeting withthe head of the local company and, in the case of thecorporate team, with the Chairman of the Board of CampofrioFood Group.


Internal Communication Our internal communication processes within the companyhave played a key role in building the team’s cohesiveness.We encourage constant dialogue amongst our people and wehave undertaken several initiatives that have enabled theconstant flow of information among our IOCs, in spite of thedistance. The work of the Management Team Meeting hasbeen essential, becoming the main channel of informationthat is transmitted downstream to the other levels of theorganisation.

We communicate through:

• Breakfast Meetings with the CEO: Employees are keptupdated on the latest news and projects within thecompany and can contribute ideas and give opinions.

• Intranet Vitae: where we post all the relevant news relatedto the industry and our company. Many websites of interestto our people, such as Health and Welfare, Learning Englishor Travel can also be found in the intranet.

• Top Executives’ Meetings: Periodically, the company’s topexecutives hold meetings to discuss business results andshare best practices on common issues.

• Internal meetings: Departments share their initiatives withother areas of the company. This exchange of knowledge isfurther strengthened with the publication of the Cross LOSNewsletters, which are circulated internally in the variousCFG factories.

• Internal Corporate magazines (Mundo, Instants Gourmands,Meating Place...): Update on interesting developmentswithin Campofrio Food Group as well as country specificnews and features.


Labour Relations We are committed to creating a good working environmentand to ensuring that this attitude is cultivated amongst ourworkers. Our labour relations conform to current legislation ineach country and foster an ongoing dialogue with the differentunion representatives.

In 2010, we have successfully concluded key negotiations andhave also developed comprehensive plans for Equality such asour commitment to the integration of employees with disabilities.


We have also launched initiatives in line with thoseconducted in previous years such as flexibility in workschedules helping to reconcile the work and the familylife of our employees.

All these efforts have paid off, as was shown by the resultsof the working environment surveys conducted whereinour employees have expressed satisfaction about theirworkplace.

• Improved knowledge of our employees through specifictraining plans for health and safety at work: prevention ofspecific physical problems related to the workplace,emergency response, first aid and ergonomics analysis,among other things.

• Providing regular medical checks; prevention campaigns oncommon diseases, such as influenza vaccination; raiseawareness of healthy habits with various initiatives such asthe cancer prevention campaign Prevenir: The BestDecision of Your Life.

• Working with mutual partners and organisations specialisingin Occupational Health and Safety; sharing knowledgeand identifying measures that will enable us to continueimproving health and safety in the future.


Health and Safety at WorkAs indicated in the group’s Code of Ethics, employeehealth and safety is one of our main concerns.

In 2010 we have strengthened our prevention of occupationalrisks:

• Updated safety standards, including health, safety andenvironment.

• Strict supervision and compliance of all activities relevant tothe Health and Safety Programme of the company; thesethen are captured in the occupational health and safetymanuals.

• Reinforced the training of Prevention Teams of our IOCs.

The commitment to this Health and Prevention Plan and theefforts made by the company in the implementation of thesemeasures have resulted in the reduction in the percentage ofdays lost from industrial accidents and occupational illnesses.

All these efforts have been publicly recognised. The AnnualAward for Occupational Health and Safety was granted bythe Junta de Castilla y Leon in Spain to Campofrío for havingdeveloped the best preventive practices in our JamonesBurgaleses factory.


Campofrío Spain was a finalist in the HR Excellence BestTeam of the Corporate Research Foundation Institute,for its innovation in talent management programmes,reducing absenteeism, promoting a culture ofcommitment and the management of training for allemployees.


Being Europe’s largest processed meats company, we areconstantly committed to improve the lives of the people whotrust us. Our most important commitment to our consumersand to society is to provide high-quality food, a commitmentwhich we believe can only be secured with business principlesbased on long term sustainability.

As early as 2009, we started working on Corporate SocialResponsibility by launching initiatives such as theEnvironmental Sustainability program and communitydevelopment projects. In March of 2011, this project hasreached a bigger scale, involving the interdependentoperating companies. Our philosophy on sustainability, ourconcern for the environment and for the community andour fundamental approach to business is summed up in ourrecently launched TREES initiative, where Together, we areResponsible for Ensuring Environmental Sustainability.

To Our Society

Together,Responsible forEnsuringEnvironmentalSustainability


Environmental CommitmentWithin our Environmental Sustainability Program, thefollowing initiatives have been reinforced:

• Energy Efficiency Plan (EEP): A common project whoseobjective is to cut consumption of the three main energysources used by the company: power, fuel (gas and fuel-oil)and water by 10% in 2015.

• Efficiency in packaging materials: Streamlining andreduction of the use of packaging materials in all ourproducts.

• Transport: An energy saving initiative linked to the fuelconsumed to transport our merchandise; this programincludes a number of measures including improvement ofthe pallet layout, rationalisation of the distribution network,optimisation of truck loading capacity (double deck),elimination of unprofitable routes.

• Scaling back our carbon footprint: Apart from thereduction in carbon emissions brought about by theimprovements made to the logistics set-up, we embarkedon other initiatives designed to make us moreenvironmentally-friendly as a business. An example is theCO2 Action Program by Campofrío in Spain, a project whichfalls under the umbrella of the Fundación Entorno, aSpanish organisation whose objective is to promotesustainable development.



• Pan-European environmental protection programs:

Through our company in Belgium, Imperial Meat Products,we participate actively in the “Generation of biogas fromorganic waste project”, a EU initiative.

• “Think Green” Project: Internal communications to raiseemployee awareness of the need to save our naturalresources was launched in Campofrío Spain. Within thisproject, a contest among employees: Your Top Idea, waslaunched in 2010 to encourage our people to givesuggestions on how to improve the environment. Last year’swinning top idea is now one of the actions in place: theinstallation of motion sensors in low-traffic areas of ourfacilities to rationalise power consumption.

• Our green philosophy also extends to good citizenshiptowards our “neighbours”: Imperial Meat Products hasimplemented projects for the further reduction of noiselevels at plants located close to residential areas.


Community DevelopmentWe encourage our employees to take a more active role inthe communities that we are part of.

• Every year, for the last 11 years, our employees fromGroupe Aoste volunteer to participate in the Telethon,France’s biggest charity event of the year organisedannually by AFM, the French association againstmyopathies.

• Commitment to our workers is a pledge that all our IOCshave adhered to in their long-standing history. The bestexample of this legacy is the Fundación Laboral SonsolesBallvé in Spain created 37 years ago. In 2010, thischaritable foundation helped the families of 264 ofCampofrío’s workers in Spain by providing medical andpsychological support for their disabled members, as well asother guidance, often aimed at their integration into societyand the workforce.

• Participation of Campofrío in the Because I’m a Girl initiativesponsored by PLAN, an international NGO which works toprotect children’s rights. Because I’m a Girl is a socialmovement to unleash the power of girls through bettereducation.

• Campofrío continued to participate in the ADO program,Spain’s Olympic sports association. We have extended oursponsorship of this initiative until 2012, the year of theLondon Olympic Games.

• Through Imperial Meat Products, we extended our strongcommitment to the less privileged nations by participating tothe 4th World Program.

• In addition, Imperial Meat Products continued to donatedirectly to the Belgian Cancer Society, an association whereall donations are supervised by an external auditor.

• Nobre, in what is now a long-standing tradition of thiscompany, gave away its annual Christmas food basketsto numerous needy families, and continued to donateproducts to the Food Bank against Hunger.

Providing relevant food solutions Addressing consumer needs includes providing them withproducts that are tailored to meet their dietary requirementsin accordance to their tastes and food habits. It also meansproviding them the information on our products with totaltransparency.

• Gluten-free products: Celiacs remain a priority for us. Weexpanded our range of gluten-free products and today, themajority of our products are suitable to celiac sufferers.

• Low-salt products: Lowering the salt content of ourproducts and developing specific low-salt products toprovide an alternative to consumers whose diets dictate alow salt intake, has been one of our key ongoing projects ininnovation.

• Elderly patients’ foods: In 2010 we relaunched the productline targeted for the elderly by offering a range of cookedand pureed recipes with textures and nutrients specificallyconceived for them.

• Food labelling: we are committed to our policy of totaltransparency regarding the nutritional content of ourproducts. Our packaging contains detailed product labellingnutritional content (proteins, carbohydrates, fats, fibre, salt,vitamins and minerals) Recommended Daily Allowance(RDA).


Corporate GovernanceLast February 24, the Board of Directors of the companyappointed one of its members, independent member YiannisPetrides, as President of the Audit Committee for a statutoryperiod of four years.

It is worth noting that in relation to the Audit Committee, The Board of Directors has proposed, for approval in the nextShareholders Meeting, statutory amendments to strengthenits competence and adapt its functions to those indicated bylaw. Specifically, it was proposed:

• Encourage the assumption by the auditors of the group of companies of the auditing obligations of the companiesforming such group.

• That a written document be required from the externalauditors or audit firms stating their independence fromthe entity or entities linked to it directly or indirectly, anddeclaring information of any additional services providedto these entities by said auditors or companies, or bypersons or entities connected to these, pursuant to Law19/1988, of July 12 on Statutory Auditing.

• That the committee supervises the preparation and presentation of regulated financial information.

In addition, and in accordance with Article 528.2 of theCapital Companies Act, Campofrio Food Group has beenworking towards creating an Electronic Shareholders Forum.In order to facilitate communication with and amongshareholders, the forum will be available on the companywebsite (www.campofriofoodgroup.com) prior to the holdingof shareholders’ meetings and can be accessed, with theproper safeguards, both by individual shareholders andvoluntary associations which can be constituted inaccordance with the regulation in force.

As a result, the Board of Directors has proposed to theShareholders’ General Meeting the amendment of the Rulesof the Shareholders’ Meeting, so that it can avail itself of theregulation of conditions of access and operation of theaforementioned Electronic Shareholders Forum.

To Our Investorsand the Financial CommunityFinancial community and share price performance2010 was marked by the increasingly prominent role playedby the emerging economies relative to developed economies.The former, less affected by the financial crisis, generatedhigher growth prospects and are making an increasingcontribution to growth of the global trade.

The more developed economies are suffering from the effectsof lower savings rates, due, among other reasons, to theefforts made by the various governments to roll out counter-cyclical economic measures in order to counteract the depthand scope of the crisis. This is being offset by the lessdeveloped economies, such as China, in turn promptingcurrency issues.

This situation was exaggerated in Europe by the sovereigndebt crisis, a delayed reaction to the financial crisis, whichhas had far-reaching effects on the euro. This led to theintroduction of exceptional measures, including the rescue ofthe Greek, Irish and Portuguese economies, with a knock-oneffect on other peripheral euro zone economies similarlyfacing serious budget deficit and competitiveness issues.

Against this backdrop, exacerbated by the collapse of theproperty market, Spanish GDP has notched up seven straightquarterly contractions while unemployment accounts for over20% of the active population. Moreover, the lack of investorconfidence triggered sharp swings in the country riskpremium, making financing more costly for corporates(corporate debt being the largest component of Spanishindebtedness) and the public sector alike.

All this led to a correction in the stock market, with thebenchmark Spanish index, the Ibex-35, ending the year17.5% lower. The Ibex Small Cap Index, meanwhile,registered an even wider loss of 18.3%. In contrast,Campofrio Food Group’s share price rallied during the year,ending 12.59% higher.

Despite an ultimately strong performance, Campofrio FoodGroup’s share price got off to a weak start in 2010, affectedby the knock-on effects of the Greek situation, tension anduncertainty which indeed affected all markets, causing theshare price to lose its long-run floor support of €6.00,marking an intra-day low on 12 February of €5.95. The shareprice went up from there to rally to €7.13 on 16 April, only tolose ground once again to €5.96 (intra-day low on 7 May) inthe wake of renewed uncertainty over the Greek rescuepackage.

The trend began to turn around from this date, with buyersoutnumbering sellers, driving the shares to €7.50, ultimatelythe high point of the year. Having hit this high, the share pricethen traded sideways for a long time, range-bound between€7.00 and the ultimate close of €7.42.

As a recognition of the work performed so far, the company’srating attributed by Standard& Poor’s was upgraded from B+to BB- and Moody’s did the same in Q1/2011 from B1 to Ba3.


4,770,881 company shares changed hands during the yearon the continuous market, down 56.78% versus 2009 tradingvolumes. Block trading volumes, meanwhile, reduced by28.10% to 931,606 shares.

The company’s year-end market value was €758.47 million.One of the milestones of 2010 was the Ibex committeedecision to include Campofrio Food Group in the IbexMedium Cap Index from 3 January 2011, a promotion whichhas prompted its exit from the Ibex Small Cap Index.

Shareholder and investor relationsCampofrio Food Group’s shareholder and investors relationare characterised by transparency, which is why thecompany encourages a permanent two-way flow ofinformation. Campofrio Food Group has put in place severalcommunication channels in order to handle and resolveshareholder and investor queries.

One of the main channels used by the company is itscorporate website (www.campofriofoodgroup.com) whichprovides information on the Group and is kept duly up to date.The content is provided in English and Spanish for financialdisclosures, while corporate information content can beviewed in as many as eight different languages.

For shareholders looking for more precise or specificinformation, the Investor Relations Department has twochannels: a dedicated phone line (+0034) 91-4842700 and adedicated e-mail address ([email protected]).

Under the framework of this policy based on transparencyand fluid communication, in 2010 Group continued to meetregularly with the equity research analysts that cover CampofrioFood Group in Spain. The research houses that currentlyfollow the company most closely include Ahorro Corporación,Banesto, BBVA, BPI, Caja Madrid, Banco Sabadell, Interdin,JB Capital Markets, La Caixa and Venture Finanzas.

CFG Investor’s DayLast March 9, 2011, Campofrio Food Group held its Investor’sDay, attended by leading analysts and investors of thecompany, as well as numerous representatives from thefinancial community. Robert A. Sharpe II, CEO of the Group,presented the 2010 financial results, an analysis of theEuropean processed meats sector, the milestones achievedin 2010 by the group and the strategy of CFG for the nextthree years.

Paulo Soares, Chief Financial Officer, explained the financialresults in more detail while Dirk Jacksens, Olivier Maes andFernando Valdés, CEOs for Northern Europe, Groupe Aoste,Campofrío Spain and Nobre, respectively, highlighted theirbusiness results and the strategies developed in theirrespective markets in the last year.

During this meeting, the achievement of synergies worth €40million from the merger, two years earlier than expected, werealso highlighted.


Campofrio Food Group’s share price performance relative to the Ibex Small Cap Index (rebased to 100)

Campofrio Food Group’s share price performance

CFG SM Equity

IBEXS INDEX

5

6

7

8

9

10

4-1-2

010

4-1-2

011

4-2-2

011

4-3-2

011

4-4-2

011

4-5

-2011

4-2-2

010

4-3-2

010

4-4-2

010

4-5-2

010

4-6-2

010

4-7-2

010

4-8-2

010

4-9-2

010

4-10-2

010

4-11-2

010

4-12-2

010

0

20

40

60

80

100

120

140

160

4-1-2

010

4-3-2

010

4-5-2

010

4-11-2

010

4-7-2

010

4-1-2

011

4-3-2

011

4-5-2

011

4-9-2

010

Campofrio Food Group Shareholders

13%4% 5%

17%

37%

24%

SmithfieldFoods

Caja Burgos

Free Float

Díaz Family

Oaktree Capital

Ballvé Family

Campofrio Food Group Investor’s Day, March 9, 2011


www.groupeaoste.frwww.cochonou.frwww.justinbridou.frwww.aoste.frwww.jeancaby.fr

Groupe Aoste523 Cours du Troisième MillénaireParc Mail69800 St. PriestFrancePhone: +33 472 14 85 00

www.campofrio.eswww.aquisabemosvivir.com

Campofrío AlimentaciónAvda. Isla Graciosa nº 1 - 3ª plantaEdificio Áncora28703 S.S. de los Reyes - MadridSpainPhone: +34 914 84 27 00

www.aoste.deCFG Deutschland Im Teelbruch 6745219 EssenGermanyPhone: +49 205 48 78 70

www.fioruccifood.it

www.fioruccifoods.com

FiorucciViale Cesare Fiorucci, 1100040 Loc. Santa PalombaPomezia (Roma)ItalyPhone: +39 06 911 931

Fiorucci Foods1800 Ruffin Mill RoadColonial Heights, VA 23834USAPhone: +1 804 520-7775


www.imperial.bewww.marcassou.bewww.justinbridou.be

Imperial Meat ProductGrote Baan 200B-9920 LovendegemBelgiumPhone: +32 9/370 02 11

www.nobre.ptNobreAvenida dos Combatentes, s/n2040-344 Rio MaiorPortugalPhone: +351 243 90 92 00

www.stegeman.nlStegemanRigastraat 177418 EW DeventerThe NetherlandsPhone: +31 570 50 55 05

www.caroli.roCaroli Foods GroupBucharest, bdTimisoara no. 26ZBuilding ANCHOR PLAZA, corp C, et.5, sector 6RomaniaPhone: +40 21 444 08 09

(Joint Venture)

This report has been produced using materialsand techniques respectful of the environment.

© Campofrio Food Group, S.A.

DesignAddison

PhotographyCFG Image Bank, Adam Lubroth,Getty Images, Shutterstock

PrintingTf Artes Gráficas

Legal Deposit: M-26334-2011

Should you have any questions or doubts, please contact the:

Investor Relations Department Campofrio Food Group, S.A.Avda. de Europa, 24 Parque Empresarial La Moraleja28108 Alcobendas (Madrid), Spain

Phone: +34 914 84 27 00 Fax: +34 916 61 53 45 Email: [email protected]

If you are a shareholder and wish tomake any suggestions or comments,please contact us at the above e-mailaddress. By means of this channel youmay exercise your right to information as a shareholder.

Documents

CFG_Informe_Anual_2010