© The Delos Partnership 2007 page 1 Integrated Enterprise Leadership Priority and Senior Team Reviews

© The Delos Partnership 2007 page 2 IEL Process Steps ACTIONACTION Week 1Week 2Week 3Week 4InnovationReviewInnovationReview CustomerDemandReviewCustomerDemandReview SupplyPlanReviewSupplyPlanReview PriorityReviewPriorityReview Stage 1 Stage 2 SeniorTeamReviewSeniorTeamReview Stage 5 Stage 7 Stage 3 SupportReviewSupportReview Stage 6 Stage 4

© The Delos Partnership 2007 page 3 Two Leadership Stages Prioritisation Family Summary  Major Changes  Main Assumptions  Threats & Opportunities  Decisions Taken  Decisions to Take  Recommendations, Implications, Costs Alignment to Business Plan Innovation Status Senior Team Review Continuously reviewing the balance between strategy and operations Continuously reviewing the operational projection and strategic fit

© The Delos Partnership 2007 page 4 Priority Review Objectives  To resolve issues around demand supply and innovation plans - timing and resources  To provide proposed financial statement  To facilitate what-ifs and provide basis for decisions (facts not opinions)  To provide issues for resolution by Senior Team

© The Delos Partnership 2007 page 5 Reviewing the Gap Aspiration

© The Delos Partnership 2007 page 6 Agreement on Strategic Actions Strategic Plan WhereAm I now ? WhereAm WhereAm I going ? WhereAm Where Do I Want to Go ? Where What Am I Going To do ? Choices

© The Delos Partnership 2007 page 7 Priority Review Requirements  Updates on Innovation, Demand, Supply and support plans  Financial statement of all the plans  External events/Risks  Governmental  Competitive Internal events  Launch threats  Supply constraints  Alternatives for evaluation  Proposals from prior stages to go forward to STR

© The Delos Partnership 2007 page 8 Alternatives to test Sales volumes Supply plans Overtime Capacity change (up or down) Service level strategy Phasing of development plans Timing and size of capital expansion Price/Volume effects Manufacturing strategy Marketing strategy Outsource/In source ONE SET OF NUMBERS

© The Delos Partnership 2007 page 9 Teamwork A common vision and shared strategy allows: Common goal Common objectives Agreed targets Consensus on performance measurement

© The Delos Partnership 2007 page 10 Problem FINANCEHRIT FINANCIAL IMPLICATIONS DEVELOPMENT FunctionalAgendas SUPPLY DEMAND

© The Delos Partnership 2007 page 11 Team Solution DEVELOPMENT FINANCEHRIT DEMAND SUPPLY BUSINESS IMPLICATIONS IntegratedApproach

© The Delos Partnership 2007 page 12 Priority Review Outcome  Decisions on capacity short term etc. where they can be made  Options for Senior Management Team to review  Review of current financial picture  Options for closing the gap  Numbers to form the basis of next year’s budget

© The Delos Partnership 2007 page 13 Prioritisation Led by Integrated Enterprise Leadership Director/Manager May mean a series of meetings to discuss options May require simulation capability for review of numbers Multiple sets of numbers based on one set of plans!

© The Delos Partnership 2007 page 14 IEL Process Steps ACTIONACTION Week 1Week 2Week 3Week 4InnovationReviewInnovationReview CustomerDemandReviewCustomerDemandReview SupplyPlanReviewSupplyPlanReview PriorityReviewPriorityReview Stage 1 Stage 2 SeniorTeamReviewSeniorTeamReview Stage 5 Stage 7 Stage 3 SupportReviewSupportReview Stage 6 Stage 4

© The Delos Partnership 2007 page 15 Objectives for Senior Team Review Make decisions on major issues Delegate issues to the right level Review the long-term picture not short term crises Review process based performance measures Review and develop long-term strategy Make it the meeting for the Executive

© The Delos Partnership 2007 page 16 Agenda for discussion Current Business situation  Plan versus Budget/Business Plan  Plan versus last plan (volume/value) Strategic Review [1/quarter] Assumptions on which plan is based Issues for Resolution  Innovation development issues  Supply/Demand Allocation issues  Major Capacity changes required  Outsourcing  Capital Expenditure Plans  HR/IT support issues  Reorganisation requirements Performance measures Review of IEL process against assessment criteria

© The Delos Partnership 2007 page 17 Financial review by family and in aggregate Major Changes New Product XYZ included in Forecast Tender for country ABC included Major Assumptions Market Growth of 5 % Competition will reduce price by 5 % We Win Tender Major Threats Competitor ABC introduces competitive product Decisions Required Investment of Eur 0.5 m in Additional capacity for New Product Move to three shift working to meet demand Major Opportunities New emerging market in XYZ region Decisions Taken To discontinue product ABC

© The Delos Partnership 2007 page 18 Financial justification for XYZ project Year 1Year 2Year 3Year 4Year 5 Volume Sales Contribution Inc Overheads0.5 Cash Flow Wkg Capital Cap Expenditure 4 Net Cash Flow Net Present 15 % =

© The Delos Partnership 2007 page 19 Forecast must be supported by assumptions JulAugSepOctNovDecJanFebMarAprMayJun NUMBERS ! ASSUMPTIONS

© The Delos Partnership 2007 page 20 Integrated Enterprise Leadership -3-2 Demand Plan120 Actual Demand Difference512 Cum Diff416 Months Last Demand Plan120 New Demand Plan Difference Cum Diff Months Q4Q Supply Plan125 Actual Supply Difference Cum Diff Last Supply Plan New Supply Plan Difference Cum Diff Q4Q Stock Plan Actual Stock Difference Last Stock Plan8691 New Stock Plan Difference Q4Q1 Family AX Senior Team Focus MPS Focus

© The Delos Partnership 2007 page 21 The Core Measures and Financial Effect

© The Delos Partnership 2007 page 22 Delos ROCE model ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects

© The Delos Partnership 2007 page 23 Leverage our Product P and Product L assets Protect and expand our Product Family F franchise Grow our Product Family B business Develop / acquire innovative products and technologies Achieve a profitable leadership position in key countries  Derive 70% of company sales from top 10 markets by 2006  Maintain our leading position in S. America & France, Canada, UK, and Italy  Optimize public policy, regulatory, and communications to drive growth  Finalize Corea market strategy by 2003  Articulate a new Branding strategy  Meet timelines on bulk mfg. facility and packaging outsourcing for Bd  Acquire market knowledge in key countries  Develop/acquire Product Bk  Ensure launch of Bd Child by 2008  Develop ATO strategy  Develop Product P end- game strategy that maximizes Industrial utilisation  Accelerate the conversion from extP to intP  Consolidate and optimize ATO strategy to support Product P end-game and extP conversion  Slow competitor XX uptake in US  Develop comprehensive product delivery strategy  Institutionalize the Technology Visioning process  Ensure appropriate upstream / downstream balance  Ensure full alignment of Sales, Development, Legal Affairs and Marketing activities  Implement Goodwill optimization organization  Maximize existing assets for Product Fa and Fc  Ensure leadership in Family F delivery systems Ensure optimal capacity, quality and customer satisfaction  Develop/ Upgrade Quality systems to ensure 50% yearly reduction in rejects and rebuild  Maximize utilization of existing capacity  Achieve Delos Platinum level at all sites  Implement Delos Global Integrated Enterprise Leadership  Explore continuous improvement approaches Defend, and then expand, our leadership position through sustainable profitable growth. Launch Product N and Product M in 2005; >50% of sales from new products by 2012  Achieve all critical path milestones to ensure 2005 launches  Complete Product N and product M pre- launch activities  Upgrade sales and marketing competencies for adult markets  Develop trust and transparency between IO and R&D groups  implement programs to accelerate the product development process. Maximize our key assets  Continue to develop and implement e-strategies to enhance the effectiveness of Company corporate strategy.  Align our capacity and capital investment with our strategy. Rapidly upgrade our technical and leadership competencies  Aggressively fill the competency and values gap  Become a truly global organization  Empower through broad spans of control in a flat organization  Differentiate rewards and career opportunities based on performance Regain our leadership position in product development and approval Reliably supply quality XXX Foster a culture that demands excellence Continue to lead in marketing and sales

© The Delos Partnership 2007 page 24 Priority and Senior Team Reviews Long-term - not short-term Strategic - not tactical Assumption based - not opinion based Formal - not informal rumours Team based decisions - not functional Forward looking - not backward looking Decisions – not request for information

© The Delos Partnership 2007 page 25 Delos IEL Process ACTIONACTION Week 1Week 2Week 3Week 4 Stage 7

© The Delos Partnership 2007 page 26 Action plans Chairman XXXXXXXInnovation meeting Note taker XXXXXXXDate : 21/03/06 Timekeeper XXXXXXX ItemActionDate 1.Outsource product ABCGL24/5 2.Focus on XYZ strategicRW30/6 Market sector, and prepare Strategy to develop……… ……. Review of process

© The Delos Partnership 2007 page 27 Plan to Execution Plan Execution Plan the Sale Sell the Plan Plan the Work Work the Plan Vision and Strategy

© The Delos Partnership 2007 page 28 Process Ownership SalesOpsR & DFinanceMktg New Product Process NPD Owner Supply side process Supply Owner CustomerDemand Process Demand Owner Innovation Owner Innovation process Management Team Support: Finance, IT,HR,QA, …. Support Owner Horizontal Owners Act at the interface with the functions, to provide the link with other processes The process Managers are responsible for managing the process within the « vertical » function.

© The Delos Partnership 2007 page 29 Process Owners Assure and guarantee the quality of the major processes in the organisation Innovation Demand Supply Support Integration Strategy Analysing the environment, and ensuring best practise is adopted SalesOpsR & DFinanceMktg New Product Process NPD Owner Supply side process Supply Owner CustomerDemand Process Demand Owner Innovation Owner Innovation process Management Team Support: Finance, IT,HR,QA, …. Support Owner

© The Delos Partnership 2007 page 30 Senior Team Review Strategic direction Update on Projects/Demand and supply Latest Financial Forecast Issues requiring resolution Performance Measures Decisions on issues Actions to meet plan Agreed changes to strategic direction Revised annual plan Proposals for improving process Inputs Outputs Agenda 1.Current Plan versus Business Plan 2.Plan versus last plan (volume/value) 2.Strategic Review [1/quarter] 3.Assumptions on which plan is based 4.Issues for Resolution 5.Performance measures 6.Review of IEL process against assessment criteria Agenda 1.Current Plan versus Business Plan 2.Plan versus last plan (volume/value) 2.Strategic Review [1/quarter] 3.Assumptions on which plan is based 4.Issues for Resolution 5.Performance measures 6.Review of IEL process against assessment criteria

© The Delos Partnership 2007 page 31 Framework for Process Review Process Name : Process owner : Inputs:Purpose:Outputs: People:Culture/Behaviour:Measures: System/module:Requirements: Expected Actions: Link to other processes :

© The Delos Partnership 2007 page 32 The Delos Model For Business Integration Innovation Innovation Vision Strategy Prioritisation Prioritisation Demand Support Supply

© The Delos Partnership 2007 page 33 Integrated Enterprise Leadership 1.Formal process leading to effective decisions 2.Facts rather than opinions 3.Organised common-sense 4.Long-term rather than short-termist 5.Performance measurement based rather than “making it” against the budget 6.Ownership and responsibility for the numbers 7.A Rolling financial plan – giving time to adjust rather than panic at year end 8.Team-based decision making based on common goals and objectives 9.Strategy set and communicated and delivered 10.Requires democracy for the planning phase, and adherence to plan for the execution phase

© The Delos Partnership 2007 page 34 Prerequisites for successful process 1.Common agreed process 2.Prepared agendas 3.Right attendees 4.Focussed discussion 5.Actions identified and being taken 6.Honesty and realism throughout 7.Elimination of other meetings 8.Commitment to formal process 9.Commitment to follow the plan 10.If you can’t do it say so – Silence is approval.

© The Delos Partnership 2007 page 35 Typical Barriers 1.Data not available 2.Geography 3.“My calendar is already overloaded” 4.Poor meeting discipline 5.“Lack of time” 6.We are an entrepreneurial organisation

© The Delos Partnership 2007 page 36 Typical solutions 1.Start with Pilot information 2.Plan ahead with meeting calendar 3.Allow time between meetings for preparation 4.If you don’t need a meeting don’t have one 5.Look for informal meeting time which is wasted 6.Recognise reality – a formal process allows greater flexibility