1. What We Do
Where We Are
Our Options
Game Plan
Real Option
Steenland Chocolate
Nat Chaturaphat
Puneet Grover
Markiyan Kychma
Luis Portela
Krista Yang

2. What We Do
Where We Are Steenland and Gina
Our Options
Synergy
Game Plan
- Steenland’s market leader position
Real Option - Gina’s customised products, large coins
Efficiency
- Cost efficiency: remove unprofitable products
- Channel network
Revenue of €10m in 2006, promising 30% growth in sales
volume
Capacity: Steenland: 100% utilisation, Gina: 25% utilisation
Leveraging Core Competencies
Strong points:
- Superior quality
- Recognised B2B brand and reliable partners
- Alliances and key accounts
How it can be used:
- Acquire new customers
- Focus on premium niche
Boost sales:
-Through more aggressive marketing
- Product innovation

3. What We Do
Where We Are Turnaround Results
Our Options
Game Plan
Judging the turnaround result by benchmarking with
Real Option industry peers
Financial ratios
RoA,RoIC, RoS, RoE are still relatively low
Asset utilisation is good and improving
Leverage and liquidity ratios within industry norm
Ratio Hershey Lindt & Sprüngli Steenland
Return On Assets 15% 11% 2%
Return On Invested Capital 23% 17% 10%
Return On Sales 10% 8% 1%
Return On Equity 45% 21% 4%
Cost of Goods Sold To Sales 56% 52% 57%
Net Margin 10% 8% 2%
Inventories Days Held 77 91 46
Accounts Receivable Days 36 108 88
Accounts Payable Days 13 30 35
Current Ratio 0.93 2.01 1.88
Total Debt / Common Equity 172% 19% 59%

4. What We Do
Where We Are Product Portfolio
Our Options
Game Plan
Steenland Gina
Real Option Coins Personalized coins
82% of volume, market share 20%, core leader in this segment, Steenland &
product, higher margins for customized Gina together have 80% share, almost
and incensed products a monopoly.
Bars Medallions
2% of volume, thin margin for all makes large coins which Steenland
companies, but they make a bit more profit cannot make
as they are catering to a particular niche
Cigarettes: 8% of volume, one of 3
suppliers, but dying market

5. What We Do
Where We Are Industry Analysis: Markets
Our Options
Game Plan
Chocolate promotional gift market lies
Real Option between the promotional and chocolate
markets
Generic Chocolate Industry
Promotional Gifts Market Regional variation of market:
Total market: $18 Billion
Saturated: UK, Belgium
Demand according to consumer trend,
Reaching maturity: US, France, Italy
Strong need to be aware of upcoming
trends. Growth region: China, India, E. EU
Food gifts constitute 3.8% of the
promotional gifts
Popular distribution channel:
Highly fragmented market and most of
Western Europe: Supermarkets and
the production takes place in Asia
large retail chains
Eastern Europe: Traditional grocers
US: Convenience stores
Largest segment: Moulded bars and
boxed chocolates

6. What We Do
Where We Are Industry Analysis: Confectionary Market Trend
Our Options
Game Plan
The global market for confectionery grew at a steady rate over the
Real Option past five years, and this trend is expected to continue throughout the
forecast period, with good performances from the Chinese, Polish and
Indian markets driving global revenues upwards. The global market is
expected to reach a value of $107.6 billion by the end
of 2010
CAGR: 1.9% (2005 – 2010)
Rest of the
Asia Pacific world 6%
17%
US
Europe
26% Source: Data monitor 51%
Global confectionary market by Type Confectionary Market by Geography

7. What We Do
Where We Are Industry Analysis: Successful Growth
Our Options
Game Plan
Real Option Arcor Group Argentina-based confectionary corporation
- Vertical integration
- International expansion by M&A of local production
- Establish strong distribution foothold then marketing
- Concentrate on large accounts
- Product innovation
Chocolate House USA-based
Strong brand
Product innovation
Madelaine USA-based Subsidiary synergies
Customer service Move from retail focus to wholesale
Customization Constant incremental improvement
Wide product line
HR management
Following market trend

8. What We Do
Where We Are Cost Structure and Margin
Our Options
Game Plan
Real Option
Competitors are more
efficient with raw
materials and/or direct
labour
Reducing raw material
cost by vertical
integration
Reduce direct labour
by offshoring,
nearshoring
Steenland purchases liquid chocolate from third parties, such as Barry
Callebaut, hence it pays extra 5% for raw materials compared to others, who
own chocolate production
Steenland’s products are relatively customised, hence more labour intensive

9. What We Do
Where We Are Two approaches
Our Options
options
Game Plan
Real Option Given these macro, meso, and micro factors, the investors of Steenland
can approach their investment with two views:
Harvesting and Planting

10. What We Do
Where We Are What is Harvesting
Our Options
options
Game Plan
Real Option
Objective explore the best opportunities
with the available capacity,
optimising its utilization
Time frame 3 years
Growth and expansion through new clients, by exploring growing markets and new key
accounts
Production Market gifts market, focused on
no extra investments in capacity or chocolate promotional gifts segment
relocation
Product focus on promotional
Investment gifts and licensed
gifts market specialized sales products
force, focused on big accounts New product development
use core capabilities and techniques

11. What We Do
Where We Are What is Planting
Our Options
options
Game Plan
Real Option
Objective leverage on our core
capabilities to explore the
whole of the chocolate
promotional gifts market
Time frame 5 years
Growth and expansion through new clients, new growing markets and new products
development
Market gifts market, focused on
Production
investments in relocation and extra chocolate promotional gifts segment
capacity in new Asian markets (low
Product broader product range of
labour cost countries)
promotional gifts and licensed
products, responding to market
Investment needs
extended gifts market focused sales
effort, extended production capacity New product development
investment in extra technology

12. What We Do
Where We Are Stakeholders, Time, and Real Option
Our Options
options
Game Plan “Harvesting” and “Planting” views can potentially
Real Option
create a conflict of interest between
stakeholders.
Investors only harvest and owners only plant ?
- Not if you put Time in between them -
Harvesting gives investors fast return and provide
company with cash to grow.
Planting provides the company with a growth plan
but also provide exiting investors with a future
plan they can sell. Both gain from lower risk.
“Timing
and
Planting sequencing
Harvesting Real Option Stage is the key
Stage Intermediate to a
evaluation:
divest or invest? unified
Exit effort to
success”
Year 1 Year 2 Year 3 Year 4 Year 5

13. What We Do
Where We Are Harvesting Stage: Marketing
Our Options
Game Plan Segmentation chocolate promotional gifts market segment
Real Option
Positioning high quality producer of flat shape chocolate gifts
Targeting large companies and promotional gifts distributors; retailers
for licensed products
Measures Objectives
Segmentation
according to Expand sales force by hiring promotional Increase sales by an average of 20%, with
gifts specialists a focus on the most profitable products and
decision maker geographic markets
benefits: high Sales effort focused on large corporate and
quality promotional gifts accounts and growing Create long lasting partnerships and
stamped markets (Asia-Pacific and China) costumer relations with gift products
chocolate gifts
Product development based on current Faze out lower margin products and
technologies diminish dependency on seasonal products
Coin and bar shaped New flat shaped products
Promotional gifts for airlines, hotel chains, casinos, Flat moulded products shaped on costumer demand
coffee and food retail chains, financial institutions indented for promotional purposes and events
Special editions of collectables for events like Soccer Utilization of Gina’s more flexible production method
World Cup or Olympic games as a tool for development of these products

14. What We Do
Where We Are Harvesting Stage: Channels and Sales Force
Our Options
Game Plan Small vs. Large New vs. Existing Other Channels
Large and accounts Division into new & existing clients Online services to its
Real Option
are handled by direct is essential because existing clients for quicker
sales force. clients require sales force which is service. Additionally,
Small accounts are good at maintaining relationships. Steenland should
passed on to New clients require sales force register itself with the
distributors. which is aggressive and agencies for
convincing. promotional gifts.
Large Accounts:
Direct Sales force
Mature market: New market:
UK, US, EU China, India, East EU
Focus: Maintain old clients Focus: Pursue new clients and
1 key account manager maintain existing ones
3 Sales Managers and 3 sales
representatives to acquire new
accounts and 1 to maintain existing

15. What We Do
Where We Are Harvesting Stage: Operations
Operations
Our Options
concept for the
Game Plan harvesting stage
Production Synergy is to exploit
Real Option Steenland operated at 100% utilization rate in 2005. Together with current capacity
Gina, a combined capacity, of 3200 ton/year, will be again fully
and
utilized by 2008.
capabilities.
Supply Chain benefits from centralized planning and purchasing.
Therefore higher bargaining power and less personnel.
Given current production limitations, Steenland’s product will be
limited to flat chocolate items.
Costs Steenland’s facilities remains as is, focusing on the production of generic
Reduction in seasonality of coins. Gina, with its flexible capabilities, will focus on customized and
demand decreases inventory, possibly new products.
ICC and improves payment Generic
pattern. Steenland Produce/
coins Transport
Factory Package
The risk of high complexity
cost managed through Receive
efficient production planning Order
and delaying variation. Gina Produce/
Transport
Customized Factory Package

16. What We Do
Where We Are Harvesting Stage: Human Resource
Our Options
Game Plan
The most important issue during the harvesting Four Important
Real Option stage is how to motivate Steenland’s employees, Issues:
especially sales people. 1 Culture Change
2 Motivation
Motivating Process:
3 Performance
Clear and reasonable targets
Sound monitoring system Management
Training and developing program 4 Compensation
Fair rating standard and Benefits
Attractive reward and recognition program
Reward system: Incentives:
Base Salary Stock option
For full time direct for sales managers
labours Bonus
based on company-wide performance for staffs
Salary per hour Commission
For part-time for sales representatives; high commission fee
employees

17. What We Do
Where We Are Harvesting Stage: Results
Our Options
Balance Sheet 2008
Game Plan Free Cash Flow 2008
Fixed Assets Net Income 1,062,524
Real Option Tangible
Financial Depreciation 150,000
276000 Interest 283,182
Current Assets
Inventory 3649865 Gross Cash Flow 1,495,707
Recievable 3410148
Bank, Cash 600000
7660013 Inventory (852,865)
Total Assets € 7,936,013 Recievable (392,318)
Equity
Short-term debt (3,949)
Share Capital 90000 Investment 0
Premium 188000
Retained Earning 2559301
FCF 246,574
Revaluation reserve 1233982
4071283
Liability (3949) 0
Return rate 0.15
Provision 157770 Inflation Rate 0.04
Long-term debt 1657180
Short-term debt 2049780
3864730 Company Value 2,577,823
Total Liabilities € 7,936,013
Benchmarking Steenland Hershey's
ROA 13.39%
ROE 26.10%
Compare to our competitors, ROIC 25.41% 22.99%
Hershey’s, our debt ratio and Time interest earned 5.30
Debt Ratio 48.70% 41.02%
D-E ratio are still in the D-E Ratio 91.05% 172.55%
reasonable range.

18. What We Do
Where We Are 2008: Decision, Decision, Decision
Our Options
Game Plan
In 2008, the company is at Real Option
Real Option full capacity, and valued at Here, investors have an option; to divest
2.58M. profitably, or to continue – “planting”
ROE increases from 4% to Decision criteria
26.10% in three years as a •Target ROE, derived from the industry
result of increase in net benchmarking
income. •Environmental factors such as industry trend and
market growth
•Plain Vanilla’s portfolio situation - ROIC must at
Value for Potential Investors least match the investor’s rate of required return
Company Strength
• increased margins and sales
• new streams of revenues
• opened new markets and increased client base
• market focus and expertise
Future Growth Opportunities
• investment plan for new products
• cash to finance in part from new revenue
stream
• new Asian market opportunities for capacity
expansion

19. What We Do
Where We Are Planting Stage: Marketing
Our Options
Game Plan
Real Option
Segmentation chocolate promotional gifts market segment
Positioning high quality and flexible solutions provider of chocolate promotional gifts
Targeting large companies and promotional gifts distributors; retailers for licensed products
Measures Objectives
Broader product range to respond to market Become a reference solution provider in the
needs chocolate promotional gifts market segment
New product development based on extra Increase sales of high margin products
technology
Increase the market by broadening possible
Continued sales effort to boost orders, product range
building on market expertise gained and
leveraging the increased capacity Extend market knowledge to build on
created competitive advantage
Increased market feedback required from
sales people Use market information in order to be on
the forefront of market developments

20. What We Do
Where We Are Planting Stage: Operations
Our Options
Operations
Game Plan Investing in Production concept for the
Relocation of the Dutch and German production facilities to either planting stage is
Real Option Poland or Turkey, as low cost countries. Selection criteria are
to increase
suitability of M&A target, raw material accessibility, transportation
reliability, and favorable macro factors. capacity and
capabilities
As new markets strengthen, offshored production caters to and reduce
regional demand. Steenland moves from a centralized system in cost.
the harvesting stage to a networked structure in the planting stage.
Offshoring comes with exchange rate risks, which must be
hedged.
Inventory
Offshoring production to
countries with less reliable
infrastructure an workforce
Supply Chain exposes us to high risk of
Industry benchmarking unreliability. Higher level of
suggests room for inventory will be required.
improvement in the cost
structure. Vertical
integration provides an
expensive but sustainable
improvement of margin.

21. What We Do
Where We Are Planting Stage: Human Resource
Our Options
Game Plan Non-Financial Reward
Financial compensation Four Important
Top managers: Issues:
Real Option should not be the only
motivator for •More recognition; more 1 Culture Change
employees, but respected. 2 Motivation
•Celebration Lunches 3 Performance
company care about the
•Awards
needs of their Management
•Special Recognition
employees Clubs 4 Compensation
•Promotions and Benefits
Shift and sales Sales and staffs:
managers: Sales:
•Access to top executives
•Increased decision when they close the large
authority contracts
•Increased recognition
Staffs:
•Reasonable and
organized promotion
•Clear career path

22. What We Do
Where We Are In a nutshell …
Our Options
Game Plan 1: Harvest 2006 to 2008
Growth through aggressive marketing effort
Real Option
Expand market to chocolate promotional gift market
Maintain current production capacity
Investment in sales force and organization
2: Decision Divest or Plant? 2008
3: Plant 2008-2010
Growth through optimized supply chain and marketing
Improve cost structure
Product Innovation
Planting
Capacity-led growth with product innovation
Harvesting Real
Maintain capacity
Option
for sales-led
nat
growth Exit
Year 1 Year 2 Year 3 Year 4 Year 5

23. What We Do
Where We Are
Balance Sheet 31-12-2004 2005
Our Options
Fixed Assests
Game Plan
Tangible 665,358 637,000
Financial 83,615 89,000
Real Option 748,973 -22,973 726,000
Current Assets
Inventory 1,346,868 -49,868 1,297,000
Recievable 2,569,939 29.04% -216,939 2,353,000 23%
Bank, Cash 183,509 585,000
4,100,316 4,235,000
Total Assets
4,849,289 4,961,000
Equity
Share Capital 90,000 90,000
Premium 187,778 188,000
Retained Earning 79,885 393,115 473,000
Revaluation reserve 1,634,018 (200,018) 1,434,000
1,991,681 2,185,000
Liability
Provision 751,410 (148,410) 603,000
Long-term debt 673,924 (16,924) 657,000
Short-term debt 1,432,274 83,726 1,516,000
2,857,608 2,776,000
Total Liabilities
4,849,289 4,961,000

24. What We Do
Where We Are
2006 2007
Our Options
Fixed Assests Fixed Assests
Game Plan Tangible Tangible
Financial Financial
Real Option 576,000 426,000
Current Assets Current Assets
Inventory 2,047,000 Inventory 2,797,000
Recievable 2,672,830 Recievable 3,017,830
Bank, Cash 675,000 Bank, Cash 585,000
5,394,830 6,399,830
Total Assets Total Assets
5,970,830 6,825,830
Equity Equity
Share Capital 90000 Share Capital 90000
Premium 188000 Premium 188000
Retained Earning 831,078 Retained Earning 1,496,777
Revaluation reserve 1,233,982 Revaluation reserve 1,033,964
2,343,060 2,808,741
Liability 1000179.6 - Liability 537729.2712 -
Provision 454,590 Provision 306,180
Long-term debt 1,657,180 Long-term debt 1,657,180
Short-term debt 1,516,000 Short-term debt 2,053,729
3,627,770 4,017,089
Total Liabilities Total Liabilities
5,970,830 6,825,830

25. What We Do
Where We Are
Budget 2005 (euro*1000) 2004 GrowthF2005 Growth R 2005 GrowthF2006
% Growth %
F2007 F2008
Our Options
Revenues 8,850 13% 9,975 14% 10,121 15% 11,621 13% 13,121 13% 14,827
Game PlanDecrease stock
Increase / 194 -128% (55)
Production (Gross Margin) 9,044 10% 9,975 11% 10,066 11,621 13,121 14,827
Real Option
Production Costs(Variable)
Chocolate & Packaging 5,190 10% 5,690 8% 5,613 6,480 7,317 8,268
as % of revenues 57.4% 57.0% 55.8% 55.8% 55.8%
Direct Labour 1,918 9% 2,100 10% 2,113 2,439 2,754 3,112
as % of revenues 21.1% 24.5% 27.6% 31.2%
Total 7,108 10% 7,790 9% 7,726 8,920 10,071 11,380
as % of revenues 78.1% 76.8% 76.8% 76.8%
Contribution Margin 1,936 13% 2,185 21% 2,340 2,701 3,050 3,447
Fixed Costs
Personel 521 10% 575 596 575 575 575
Online website 5 5 5
Sales 309 -29% 220 220 420 420 420
Housing 451 -4% 435 435 435 435 435
Other 401 -10% 360 459 360 360 360
Depreciation 89 46% 130 141 150 150 150
Total 1,771 -3% 1,720 4% 1,850 1,945 1,945 1,945
EBIT 165 182% 465 197% 490 756 1,105 1,502
Interest ### 134 12% 150 24% 166 242 283 283
EBT 31 916% 315 945% 324 514 822 1,219
Tax 9 956% 95 97 156 156 156
Net Profit 22 900% 220 931% 227 358 666 1,063

26. What We Do
Where We Are
Our Options
Game Plan
Assumptions:
1. We assume that the 8 sales reps can get total 1.5M contract each year due to good motivation program.
Real Option
2. We assume that the proportation of variable cost to total sales is the same
3 We assume that we do not increase managers; the personal wages are similar
4. We plan to increase the on line website service for business customers; therefore, the initial cost will be 5,000 each year
5. We assume that the extract 8 reps total salaries will be 170,000; and the maintance cost will be 30,000. They increase the total sales cost
6. We do not plan to move to the new factory. Housing cost is the same
7. Other cost and depreciation cost will maintain the same as those in 2005
8. Interest rate will be 8% in each year
9. Tax expence is refering to the data showed in the slides
10. When increasing 1M sales, inventory increases 0.5M
11. We assume that receivable to sales has the same proportion in each year.
12. We assume that cash to sales has the same proportion in each year.
13 We do not raise any capital through shareholders
14. We do not issue any dividends
15. Tax provision decreases equally each year
16. Leverage finance by borrowing short-term and long-term debts; and payback debts when we have extract cash