The newsletter for customers, partners and business contacts of the Franke Group October 2007

Franke international

Esteemed customers,

I am delighted to welcome Defy Appliances Limited of South Africa as a new member of the Franke family.Defy is by far the largest producer and distributor ofdomestic kitchen appliances in South Africa and othercountries in sub-Saharan Africa. Defy has large syn-ergies with our activities to date in South Africa and isan excellent fit with our expansion strategy.

Turnover was encouraging in 2007, although revenuewas below expectations as it was adversely affected by steel price increases, much of which we had to ab-sorb. We nevertheless made substantial investmentsthis year, upgrading production facilities, pursuing expansion and improving our logistics capabilities.

Thank you for your valued attention.

Sincerely yours,

Michael PieperPresident & CEO Franke Group

Editorial Franke takes over Defy, South Africa’s leading manufacturer of domestic kitchen appliances

Major expansion of position on the African continentDefy Appliances Limited, South Africa's largest and leading manufacturer of domestic kitchen appliances, with a workforce of 3,000, has been part of the Franke Group since the beginning of August. This strategically important acquisition underlines Franke's ambition to expand its presence in the burgeoning African market,opening up further attractive prospects south of the Sahara.

"It was just a perfect match", says Wolfgang Kemmeling,the Franke Group executive responsible for Kitchen Systems, reflecting on the final takeover in August ofDefy Appliance Limited, South Africa's leading manu-facturer of domestic appliances. There were clear parallels both in the companies’ structures and aboveall in the philosophy of both organizations, as quality,innovation and reliability had always been the over-riding considerations determining the actions of bothmanufacturers.

Defy produces and sells stoves and ovens as well aswashing machines, refrigerators, freezers and extractorhoods. This traditional company has just celebrated its100th anniversary, and has a share in these productmarkets of around 40% in South Africa.

Defy currently has a work-force of 3,000 – 600 justin sales and service – witha healthy profit of aroundCHF 406 million in the financial year ending 31 March 2007.

Congratulations Alinghi

Sharing a spirit of excellence – determined to lead not to follow

Team Alinghi have defended the 32nd America’s Cupin a final 5-2 score over Team New Zealand on July 3,2007 in one of the most thrilling races seen during the whole competition. Franke had Team Alinghi sup-ported as a "Official Supplier". During the years 2006and 2007 more than 500 enthusiastic Franke custo-mers headed for Valencia, Spain, to follow the races.

The Defy production facility in Durban is one of three plants in South Africa.

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The extensive product range is produced in three largeworks located in Durban, East London and Ladysmith(South Africa). There are also nine company-owned regional sales branches in South Africa and five othersales outlets across the African continent.

Franke is no stranger to the South African kitchen equipment market. The world market leader has beenoperating its own sink production facility in Durban very successfully since 1999, and has been active in the water boiler market since 2005 (Water Heating Systems) with its own production and sales in Midrand,South Africa. A joint venture with the South AfricanDawn-Group provides further scope for opening upmore markets in Africa.

"Defy is the ideal complement to the Franke Group, and is a strategically very important key investment forFranke to form a base for expansion over the comingyears as a leading supplier of kitchen systems, both in southern Africa and in the countries south of theSahara", explains Wolfgang Kemmerling.

New tap puts sink in its best light Light plays an increasingly important role in themodern kitchen. It has become a key design feature, as well as lighting the spaces and work-surfaces. Because light can make a room inviting, and if skilfullydeployed, can create the right atmosphere in thekitchen of an evening.

So light is the feature that has made the elegant newFranke single-lever mixer tap from the Belaqua rangethe object of attention. Fine LED lights are integrated inthe spout of this stylish new tap, creating a fascinatinglight effect around the sink. One touch of the buttoncreates an interesting and relaxed working atmosphere,as well as lighting up the working area. To make surethere are no slugs in the lettuce!

The new Franke entry-level export hit

All in One: new sink with global career prospectsThe impulse behind the new "All in One" export concept was to develop a sink to delight customers everywhere,that could be successfully marketed worldwide.

New Eisinger Techno Line, with clean geometrical styling

Kitchen aesthetics in harmony with the architectureWith its straight minimalist design, the new built-in kitchens incorporate the spirit of the time, with its globalemphasis on clear, geometrical and aesthetic styling. Distinguished yet comfortable – high-grade yet easy-care.

The global picture is that mainly low-cost sinks havemass sales potential in most markets.

The new sink needed an attractive price and a time-less modern and functional design, able to satisfy dif-fering customer desires and needs in different regions.To make working conditions as efficient as possible,the sink has a generous bowl and practical fittings,such as a fixable cutting board, a functional tap with a high spout, a dish rack and the built-in draining bowl basket. Designed for quick and easy DIY installa-tion, and of course all materials and workmanship ofthe accustomed, reliable Franke quality.

By the beginning of August, everything was ready toship the first "All in One" complete "Galley" sink sets.

The dealer is also issued with a complete marketingpack to ensure the sink is successfully marketed. Pos-ters, display stands, flyers and a video help to conveythe neat concept quickly to potential customers, and to clinch the sale.

This reversible new sink set also gives the dealer an attractive entry-level model in the range that is simpleand cost-effective to store – thanks to the practicalstacking boxes – and addresses a broad target groupwithout incurring installation costs. From singles households to young families and holiday homeowners, for example.

An idea whose time has come.

Franke Kitchen Systems

André Rudolf, Product Manager at Eisinger, puts it thisway: "For us, design is not an end in itself, it is what we do. For years we have been tracking trends in archi-tecture and design and applying them to kitchen pro-ducts. The new Techno Line is a case in point."

The exclusive design of this new range of sinks andworktops is remarkable principally for its love of dis-tinctive, expressive details. Such as the tight 5mmradius emphasizing the stringent character of its lineswhilst remaining easy to clean – unlike sinks with zero radius.

The other eye-catcher is the new square strainer basketvalves that ideally complement the new bowl geometry.Then there is the new elegantly concealed and re-markably hygienic overflow valve – an innovation thatrecently earned Eisinger one of the internationally renowned Red Dot Design Awards 2007.

An extravagant selection of complete sink module variants perfectly complements the new Techno Lineproduct range. These modules can be combined withother Eisinger lines as desired – for example with thePure Line or Square Line sinks.

And for a kitchen environment with a unique and un-mistakable character we recommend the new solidstainless steel Techno Line worktops. Precision designed to the millimetre, and perfectly fitted, that'swhat makes dream kitchens come true.

Franke Foodservice Systems

Franke Washroom Systems offers a wide range oftouch-free fittings for optimum sanitary hygiene. Thesanitary solutions specialist supplies both sanitarytaps and stainless steel accessories with infra-red proximity electronics. Various touch-free products have been developed this year to match the XINOX®,STRATOS and CHRONOS equipment ranges, productssuch as soap dispensers, hand dryers and paper toweldispensers. The infra-red sensor technology controlsthe supply of soap, hot air and paper towels, so thereis no need for anyone to touch the accessories.

The electronic Protronic washing and urinal flushing fittings also have touch-free water flow control. Theopto-electronic sensor technology has an integral

microchip for automatic, efficient water flow control.The urinal flushes automatically after use, and userscan wash their hands afterwards without touching the tap.

One design highlight in the touch-free washroom is the "All-in-one" sanitary module. The system enablesvarious wash station combinations to be integratedinto the room-height installation modules, which canbe clad with stainless steel or glass. All control andfitting components for water, soap and hot air can beintegrated into the modules if desired. The only visibleitems are the wall outlets for water and soap, the hotair outlet and the opto-electronic sensors.

Franke Washroom Systems

State-of-the-art electronics for Franke Washroom Systems products

Touch-free: clean solutions for washroomsTouch-free solutions provide convenience and hygiene in public sanitary facilities with high traffic levels. That is why planners and operators are increasingly going for the touch-free option when fitting out institutional sani-tary facilities. Franke Washroom Systems demonstrates its competence in this field too, with numerous new developments.

New furniture store with proven Franke Foodservice Systems solution

The perfect equipment menu for IKEA restaurants IKEA Switzerland opened its 7th and most unusual furniture store so far in St. Gallen on 26 September. Once again, the equipment for the self-service restaurant comes from Franke Foodservice Systems.

As part of a complex spanning the new FC St. Gallenfootball stadium and a shopping centre with around 50 shops, IKEA has built a home furnishing store with a floor area of 26,343 square metres, and a sales areaof 13,490 square metres with 22 tills. The "MinergyLabel" certified building has an area of 5,000 m2 ofsolar cells on the roof.

The restaurant was planned and equipped jointly withFranke Foodservice Systems. Although the building andthus the restaurant space differed from the usual IKEAlayout, Christian Rudolph, head of IKEA FOOD Swit-zerland, created a kitchen that met IKEA’s internationalstandards in almost all respects, avoiding increasedcosts for planning and for designing new furniture.

The Foodservice space is divided into four differentareas. The customer restaurant with 425 covers is self-

service only, to offer customers inexpensive eating –in the IKEA idiom. In the staff restaurant the workforceof around 250 can choose from a varied and balancedrange of food. In the bistro, right beside the tills, IKEAoffers customers another refreshment opportunity – ata pleasing price, as ever. To complete the picture, theSwedish Shop offers a selection of traditional Swedishtakeaway specialities such as herring, crispbread andmeatballs.

Franke Foodservice Systems and IKEA have jointly developed standardized equipment for each of theseareas, which is now supplied to twelve countries andmanufactured on three continents.

ImprintPublished byFranke Holding AG, CH-4663 Aarburg, Tel. +41 (0)62 787 31 31, Fax +41 (0)62 787 30 37www.franke.com

Chief editor Natascha Widmer, Elke OelkuchFranke Kitchen Systems Peter Gnehm, Angelika SchmidleFranke Foodservice Systems Dirk FriedleinFranke Washroom Systems Waltraud RüfFranke Coffee Systems Jeannine Zumstein

McDonald’s Germany cultivates new target groups

Franke joins in celebration of the 300th McCafé in CologneIn August 2007 McDonald’s Germany opened its 300th McCafé in Cologne, integrated in a restaurant completelyredesigned both internally and externally. This new flagship outlet was duly inaugurated with a press conferenceand a big launch party. Franke had good reason to join in the celebration, with Franke Sinfonia coffee machines in service in all 300 McCafés.

The opening of the 300th

McCafé is another mi-lestone for McDonald’s inits shop-in-shop concept:"We are aiming at con-tinued growth withMcCafé in coming years,cultivating new targetgroups for McDonald’s",says Bane Knezevic, CEOof McDonald's Germany.The two Franke Sinfonia

coffee machines, an important part of the concept andtailored precisely to the requirements of McCafé, are tobe found in all 300 McCafés. The coffee is ground andbrewed fully automatically, but the milk is frothed byhand. The steam tap incorporated in the Autosteamfunction ensures consistent milk froth. A probe mea-sures the temperature of the milk in the frothingpitcher. As soon as the frothing milk reaches a certaintemperature, the steam supply switches off automati-cally, and the frothing process is complete.

Barista – the espresso machine maestro

The barista (plural baristi (male) or bariste(female)) is to coffee what the barkeeper is to cocktails. He or she is an espresso machine artist skilled in preparing and serving coffee.

"Barista" is the Italian word for bartender. The termhas been adopted in English, with a slight shift inmeaning. Whereas in Italy the barista serves drinksof all kinds, in English the term barista relates topeople skilled in preparing and serving espresso-based drinks – mainly in coffee shops. "Barista" is a long-established term in the world of coffee,and is gaining ground in common parlance. InAmerica for example, every third person knowswhat the word means.

The accomplished barista needs to know aboutcoffee blends, roasting, operating and maintainingthe espresso machines, frothing milk, etc, for which training courses are available. The compe-tent barista is ably supported by the Franke Sinfonia and Evolution machines, both equippedwith automated milkfrothing, ideal for pre-paring the Latte Artmilk froth essential for the perfect coffee.This technical advanceensures consistentLatte Art quality, andsimplifies handling forthe barista, so he orshe can concentrate on creating the perfectcappuccino.

The final of the first German McCafé Barista Contestwas also held in the Franke Coffee Systems "Coffee-rama" in Aarburg in spring of this year. ChristinGrundmann of Oldenburg conjured up an exoticcreation of her own with the Franke Sinfonia,adding chocolate and chilli. She outshone all 2,000 McCafé Baristi with her professional know-ledge and skill.

The opening of the 300th McCafé in Cologne was alsothe premiere for Kraft Foods' exclusive 100% Arabicaespresso blend, bearing the quality seal of the Rain-forest Alliance for sustainable production. The seal withthe green frog certifies that the beans come only fromfarms that meet high social, ecological and economicstandards.

At least 1,000 guests daily enjoy the fresh cuisine à laMarché™ in Singapore, even if it means queuing. Afterall, you get to experience an unusual ambience for Sin-gapore: a 500-year-old chalet from the BerneseOberland, a nostalgic cable car from Saas-Fee and lotsof photographs bringing Swiss mountain atmosphere toSingapore.

'Exotic made in Switzerland' operates in an area of 675m2 in Singapore; five large market stalls with morethan ten stands offer classics such as pasta, vegetable,

First Marché restaurant in Asia builds on successful format

Marché VivoCity Singapore:Franke Sinfonia sets the tone with coffeeMarché International opened its first own Marché™ market restaurant in Asia in March of this year. Marché VivoCity is a Mövenpick Group enterprise located on the coast of the leisure island of Sentosa in Singapore, driving the Group’s international expansion. The Franke Sinfonia is part of the team.

Coffee drinks are tastefully decorated with the frothed milk. Christin Grundmann winner of the first German McCafé Barista Contest

with the Franke Sinfonia.

There are three basic Latte Art techniques, pouring (illustrated), drawing and carving.

Franke Coffee Systems

soup, grilled fish, bread and cake, and fresh pressedjuice. And the Franke Sinfonia is there again to providethe best coffee. The same coffee machine has longbeen in service with Marché™ in Switzerland, where ithas established its reputation with its high quality andperformance.

The operation in Asia builds on the same successfactors that have made Marché International the widelyacclaimed trendsetter in Europe. The products used areof high quality, and market-fresh. The food is preparedin the presence of the guests.

This Marché™ format is well received in Singapore too.For example "Rösti", made of freshly boiled and peeledpotatoes, soon proved a hit, and now sells better thanin a Marché™ in Switzerland!