1. €316.5 mil €120 mil Euroland Foods S.A Projects vs. Capital and Strategy J.Flock, EuroMBA, International Finance 3/14/11

2. Agenda Describe background of Euroland Foods S.A. Analysis of Euroland Foods S.A. current financial condition Describe current and recent market conditions and strategy implications Present the financial measurements and the corresponding tests Management proposals Ranking of projects Final Recommendations

3. History of Euroland Foods Verdin Family farm began in Belgium in 1924. Balanced approach to business enabled growth and success Mainly been focused on dairy products and specifically promoting the ROLLY brand. Ice Cream has been the main product upon which Euroland Foods has grown.

4. Financial Analysis Problem Areas Additional Problem Areas

5. Strategy and the Market Where to Generate Income? New Products? Upgrade Facilities?

6. Financial Measurements How is the project risk determined? Expect Free Cash Flows Payback Years IRR NPV at Corp. Equivalent Annuity Strengths and Weaknesses of each? These measurements are great local, per project but bad global, all projects The measurements do not consider strategic intent Good, shows cash estimate ; bad no accounting for risk and not good for showing efficiency project returns Good, shows clear point in time when investment is paid for; bad, doesn’t rank lower growth projects that need longer payback well Good, shows return rate clearly of project, can then rank based on risk; bad cannot evaluate reinvestment rate and dependent on Beta Good, clearly shows a value of future cash flows at the hurdle rate; bad if project IRR to WACC spread is high inflated value portrayed Good at ranking projects apples to apples that have differing time runs; bad still based on NPV at Corp wacc

7. Test : IRR Market Expansion 12% Product Innovation 10% Efficiency 8% How good of a measurement is this, when only one project fails?

8. Test : Payback Years New Product or New Markets 6 Yrs Product or market extension 5 Yrs Efficiency 4 Yrs This measurement negates all infrastructure projects

9. Management Proposals 120 million limit Investment Return This measurement bias’ view to the strategic Acquisition

10. Ranking Projects by Strategy Strategic Priority? Financial Return Priority? Pugh Matrix This graphically attempts to align strategy with risk

11. Recommendations Project Investments Automation Conveyer System21 million Euro Expand Plant Nuremburg15 million Euro Inventory Control System22.5 million Euro Eastward Expansion30 million Euro Artificial Sweetener27 million Euro Environmental Fix6 million Euro Total121.5 million Euro