1. The Transformation of Sara Lee and its Finance Function Theo de Kool Chief Financial and Administrative Officer

2. 2 Sara Lee at a Glance Headquartered in Chicago Fiscal 2007 net sales of $12.3 billion Market cap of ≈ $12.0 billion 52,000 employees Operations in over 40 countries Products marketed in over 180 countries

3. 3 Portfolio of Leading Brands

4. 4 2004 – Sara Lee Needed to Change Sluggish historical performance Depressed P/E multiple versus peers Lower brand and R&D support versus peers Not set up to meet evolving customer needs Lack of leverage of scale Portfolio mix frustrating to investor base

5. 5 Transformation in a Nutshell FROM Holding company Flat financial trends Lack of brand building 2 - 4% sales growth Operating margin expansion TO Integrated operating company Growth cycle Focused portfolio GOALS

6. 6 Strategic Framework KEY STRATEGIES OPERATIONAL EXCELLENCE  Procurement  Information Systems  Continuous Improvement CUSTOMER EXCELLENCE  Innovation  Sales CONSUMER FOCUS  Innovation  Marketing PEOPLE  Talent Management  Culture RESULTS

7. 7 FY04 The Need for Change FY05 Outperform Market Sustainable Advantage Outperform Market Sustainable Advantage Focus on Core Accelerate Growth Focus on Core Accelerate Growth Execute the Transformation Build Capability Execute the Transformation Build Capability FY06 FY07 FY08 – FY10 Roadmap

8. 8 Focus Portfolio  HBI spin-off  European Meats  Direct Selling  U.S. Retail Coffee  Apparel Europe  Courtaulds  Nuts and Snacks Focus - Combined sales of $8.4 billion (43% of FY04 sales base) - Proceeds of $3.7 billion - 100,000 employees

9. 9 Focus Portfolio Organizational Structure Organize around:  Customers  Consumers  Geographic Markets Reorganize

10. 10 Focus Portfolio Organizational Structure Operational Efficiencies  Centralized procurement  Continuous improvement  Centralized IS/SAP Improve

11. 11 Procurement FROM No management of global spending Focus on material fulfillment No involvement with business planning Dependency on commodity market price volatility Supplier base of 60,000+ vendors No supplier involvement in new product and process innovation TO Full responsibility of total global spending Deep category expertise in all spending areas Fully integrated in business planning Disciplined risk management approach to protect margins 70% of spending with top 200 strategic supply partners Business process integration of key supply partners

12. 12 International Enabling Technology (I/S) FoodserviceFood & BeverageCorporate Sales and operations planning Innovation Business planning Pricing/trade spending PROCESSES Order-to-cash Trade management Procure-to-pay Forecast-to-deliver Continuous Improvement Methodology to Eliminate Waste (CI)

13. 13 Process Inputs Platforms FUNNEL Project Rationalization Occurs TUNNEL Project Will Be Launched Marketing Supply Chain Sales Consumer Customer Consumer CI Focus: Innovation Process

14. 14 Continuous Improvement Training 16000 14000 12000 10000 8000 6000 4000 0 FY08 111234567891012111234567891012111234567891012 2000 Actual Target FY07FY06

15. 15 IS: Pre-Transformation N.A. Foodservice SLC Processes Order Management Sales Manufactu- ring and Supply Chain PlanningFinance N.A. Meats N.A. Bakery Coffee & Tea Intl Household & Body Care Intl Bakery Intl Latin America Asia Shared Services ManugisticsLawson SAPJDE (old version) Sys/21 Imrex QADJBAManMan PrismSpreadsheet/Manual Other

16. 16 IS: Future State Centralized IS Strategy & Business Process Definition Business Units SAP Other Retail Template Retail Template Foodservice Template Foodservice Template Manufacturing Template Manufacturing Template Transactions, Financial Reporting, HR, Master Data & Business Intelligence DSD Template Order Management Sales Manufactu- ring and Supply Chain PlanningFinance

17. 17 From – To FY07 $12.3 billion(+7%) $850 million(+5%) $0.68 $0.57 $622 million(+8%) $1.7 billion $17.40 (25.6x) 52,000 FY04 $19.6 billion(+7%) $1.6 billion(-5%) $1.59 $1.55 $922 million(-3%) $4.7 billion $23.17 (14.6x) 150,000 Net Sales Adj. Operating Inc. Diluted EPS, reported Diluted EPS, continuing ops. MAP Net Debt Stock Price (P/E ratio) Employees

18. 18 Operating Margin

19. 19 CFO Office at a Glance Chief Financial and Administrative Officer TreasuryTax Financial Planning & Analysis Accounting/Corporate Control Investor RelationsCFO’s Operations Procurement Information Systems/ Continuous Improvement

20. 20 Finance Role In Transformation Conceptualize and model transformation Drive divestiture process (i.e. carve-outs) Restate historical financial data Provide insights for course adjustments Develop and implement new capital structure Build new capabilities (i.e. IS, CI, Procurement) Explain and “sell” transformation to the Street

21. 21 Finance Organizational Concept Three major, interdependent roles –Centers of Excellence –Shared Services –Functional Experts Centers of Excellence Shared Services Functional Experts

22. 22 ROIC Operating margin Cost control Allocation of capital Focus of Financial Management

23. 23 Drive functional excellence –Focus on value-added work/decision support –Reduce reporting cycle time dramatically –Continuous Improvement Finance Transformation

24. 24 Reduce complexity –Reduce legal and reporting entities –Standardization of reports and measures –Decrease allocations –Fewer internal charges –No silos, no “us vs. them” Finance Transformation

25. 25 Transformation: Lessons Learned 1.Change is the only constant factor 2.Communicate, communicate, communicate 3.Expect turnover in staff 4.The Street demands restated financials 5.There will be disruption 6.Under-promise & over-deliver