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Strategic Review - Focus. Execute. Deliver. Corporate Express - Press Conference 09h30 CET Amsterdam, 1 October 2007. “Safe Harbour” Statement under the Private Securities Litigation Reform Act of 1995.

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strategic review focus execute deliver

Strategic Review - Focus. Execute. Deliver.

Corporate Express - Press Conference 09h30 CET

Amsterdam, 1 October 2007

safe harbour statement under the private securities litigation reform act of 1995
“Safe Harbour” Statementunder the Private Securities Litigation Reform Act of 1995

Statements included in this press release, which are not historical facts are forward-looking

statements made pursuant to the safe harbour provisions of the Private Securities Litigation

Reform Act of 1995 and the Securities Exchange Act of 1934. Such forward-looking statements

are made based upon management’s expectations and beliefs concerning future events

impacting Corporate Express and therefore involve a number of uncertainties and risks,

including, but not limited to industry conditions, changes in product supply, pricing and

customer demand, competition, risks in integrating new businesses, currency fluctuations, and

the other risks described from time to time in the Company’s filings with the US Securities and

Exchange Commission, including the Company’s Annual Report on Form 20-F filed with the

Securities and Exchange Commission on March 9, 2007. As a result, the actual results of

operations or financial conditions of the Company could differ materially from those expressed

or implied in such forward-looking statements. Shareholders and other readers are cautioned

not to place undue reliance on these forward-looking statements, which speak only as of the

date on which they are made. The Company undertakes no obligation to update publicly or

revise any forward-looking statements.

agenda for today
Agenda for today
  • Introduction
  • Strategy assessment
  • Key strategic priorities
  • Transforming the company
  • Closing remarks
strategic review process
Strategic Review process
  • 1999-2003
  • 2004-2007
  • March-September 2007

Reshaping business portfolio

Broaden product portfolio of businesses

Strategic review

Key

strategic

moves

  • Increased focus on office products
  • Adding categories to create single source offer
  • Shift organisation to category focus
  • Focus on mid­market
  • Private brands, preferred supplier, global sourcing
  • Detailed assessment together with external advisors, including Deutsche Bank and JPMorgan:
  • Do we have a sound strategy?
  • How can we improve performance?
  • What operational changes are needed to deliver?
  • Which strategic options do we have?
  • Acquisitions in Australia, Scandinavia, North America, Spain
  • Divested ASAP Software and Veenman Germany
  • Sold IT and Paper Merchanting businesses
  • Acquired office products business

- Corporate Express

- SAMAS OP

- USOP OP

M&A activity

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

which strategic options do we have
Which strategic options do we have?

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

Stand-alone

We have considered a wide range of options

We concluded that the stand-alone scenario is in the best interest of our shareholders and other stakeholders

Based on the strategic review’s conclusions, we today announce a series of strategic initiatives and management and organisational changes to create value and growth as a stand-alone global player

Merger

Sale

Break-up

key issues
Key issues
  • Key questions
  • Key issues
  • Do we have a sound strategy?
  • How can we improve performance?
  • What operational changes are needed to deliver?
  • Corporate Express has the right strategy and is well positioned but has been lacking in execution…
  • …we should further increase FOCUS and improve how we EXECUTE our plans...
  • …we need to change our organisation and leadership to be able to unlock full potential and DELIVER shareholder value

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

changes in board composition
Changes in Board composition

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

CEO Executive Board

  • Frans Koffrie has stepped down with immediate effect
  • Peter Ventress new CEO

Chairman Supervisory Board

  • Paul van den Hoek decided to step down at the end of today
    • Previously scheduled to step down at AGM in April 2008
  • Frank Meysman to succeed
    • Supervisory board member as of 2006
new leadership peter ventress 1960 appointed as new ceo effective immediately
New leadership - Peter Ventress (1960) Appointed as new CEO, effective immediately

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

Joined Corporate Express in 1999

1999-2000

President Corporate Express France Image SAS

2001-2002

Regional president Corporate Express Europe

2002 - 2005

President of Corporate Express Canada and member of North America management team

  • Realised sales growth of +16% and EBITDA growth of +50%

2005 - September 2007

President Corporate Express Europe

  • Excluding ATG sales growth of +9% and EBITDA tripled (based on 4 quarter rolling)
  • ATG acquired in September 2006

Member of the Executive Board since 2007

introduction

INTRODUCTION

FOCUS. EXECUTE. DELIVER.

overview corporate express
Overview Corporate Express
  • Pure-play contract supplier within office products industry
  • Leading global player
  • Extensive logistical backbone
  • Sophisticated eCommerce platforms
  • Strong brands
  • Over 18,000 employees
  • Company description
  • Global footprint
  • #1 position in US, Australia, Norway, Sweden, Benelux and Germany
  • Top 3 position in Canada, Austria, New Zealand, Ireland and Italy
  • Present at over 300 locations in 20 countries in Europe, North America and Australia
  • Annual revenues of EUR 5.6 billion1

1 Last 4 quarters, excluding ASAP Software

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

h1 2007 performance as reported
H1 2007 performance as reported
  • Sales up 2.4% to EUR 3,194 million
    • 7.0% at constant rates
  • Organic growth Corporate Express +3%
    • Office Products North America down 2%
    • Office products industry US facing challenging environment
    • US operations stable after disruptions in sales force and customer service
  • OP Europe and OP Australia showing good performance
  • Printing systems reporting a good first half
  • Operating result EUR 108 mln
    • (4.2%), at constant rates flat
  • Operating result before special items EUR 119 mln
    • (16.7%), at constant rates (13%)
trading update q3 2007 results q3 2007 to be published tuesday 6 november
Trading update Q3 2007 resultsQ3 2007 to be published Tuesday 6 November
  • Organic growth Q3 2007

Office Products North America

Organic growth (1%)

Q2 2007 (3%)

Q1 2007 (1%)

Office Products Europe

Organic growth +7%

Q2 2007 +5%

Q1 2007 +6%

  • CEUS organisation stabilised; enhanced morale
  • ‘Simplify and Sell’ approach paying off
  • Continue to gain market share

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

strategy assessment

STRATEGY ASSESSMENT

FOCUS. EXECUTE. DELIVER.

key actions to deliver shareholder value
Key actions to deliver shareholder value

Focus

  • Launch 4 key strategic priorities to deliver profitable growth
    • Increase share of wallet
    • Improve category offering
    • Grow mid-market share
    • Strengthen geographic footprint

Execute

  • Transform into a more operationally focussed and sales driven organisation
  • Creation of one global management team to improve operational execution significantly
  • Clear and specific targets, KPI’s and accountability

Deliver

Global Office Products:

  • Average annual organic sales growth of at least 6% for 2008-2010
  • Given business model, EBITDA margin of at least 7%

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

strategic direction 2007 2010
Strategic direction 2007-2010
  • 2004-2007
  • March-September 2007
  • 2007-2010

Broaden product portfolio of businesses

Focus. Execute. Deliver.

Strategic Review

  • Adding categories to create single source offer
  • Shift organisation to category focus
  • Focus on mid­market
  • Private brands, preferred supplier, global sourcing

Key

strategic

moves

  • Do we have a sound strategy?
  • How can we improve performance?
  • What operational changes are needed to deliver?
  • Which strategic options do we have?
  • Increase share of wallet
  • Improve category offering
  • Grow mid-market share
  • One global management team
  • KPI’s, accountability

M&A activity

  • Acquisitions in Australia, Scandinavia, North America, Spain
  • Divested ASAP Software and Veenman Germany
  • Strengthen geographicfootprint

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

a leading player
A leading player …
  • Pure-play contract OP supplier with distinct B2B model
  • Large global footprint
  • Scale benefits

- Merchandising, sourcing

  • Exchange best practices

- Private brands, product range extension, Pick-to-Voice, eCommerce, Saleforce.com

  • Scalable platform- Logistics and distribution infrastructure

- Sophisticated eCommerce platforms

  • Leading B2B market positions in key markets

- #1 in US, Australia, Norway, Sweden, Benelux and Germany

- Top 3 positions in Canada, Ireland, Austria, New Zealand and Italy

  • Present at over 300 locations in 20 countries in Europe, North America and Australia
  • Alliances in Europe, Latin America and South-East Asia
  • Only player able to service customers globally

- Strong sales growth with global accounts

Strong competitive position

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

in an attractive market
… in an attractive market…
  • Close link with white-collar employment
  • Leverage of distribution, IT, eCommerce and sales force infrastructure
  • Little risk of disintermediation
  • High barriers to entry
    • Different infrastructures (IT, logistics)
    • Sourcing, multiple suppliers
  • Operational leverage of fixed cost base
  • Attractive Return on Capital Employed

Attractive market

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

with continued focus on office products
…with continued focus on Office Products…
  • The group has been streamlining and focussing the business
  • ASAP Software, USA (Aug-07)
  • Veenman, Germany (Sep-07)
  • Reselling of desktop software, USD 992 mln in revenues
  • Selling and servicing non-impact printing equipment, EUR 36mln in revenues

Recent

disposals

  • Davenport, Canada (Aug-07)
  • Educational Experience, Australia (Oct-06)
  • ATG, Norway, Sweden, Denmark (Sep-06)
  • Coastwide Laboratories, USA (May-06)
  • Ofiexpress, Spain (Jan-06)
  • Office Supply and Furniture distribution, CAD 71mln in revenues
  • Educational supplies
  • Office Products distribution, EUR 300 mln in revenues
  • Facilities distribution, USD 45 mln in revenues
  • Office Products distribution, EUR 13 mln in revenues

Recent acquisitions

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

and a streamlined operational infrastructure
…and a streamlined operational infrastructure…

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

but with room to drastically improve execution
…but with room to drastically improve execution
  • Decentralised organisation and unfocused go-to-market models

…leading to unsuccessful execution and poor sales performance

…however, with successful sourcing, merchandising, logistics and eCommerce

  • Identified challenges
    • Under-utilized position with larger clients
    • Limited penetration in mid-market
    • Increasing complexity in category offering
    • Sub scale or absent in some geographies

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

key strategic priorities

KEY STRATEGIC PRIORITIES

FOCUS. EXECUTE. DELIVER.

4 key strategic priorities
4 key strategic priorities

Increase share of wallet

Improve category offering

Growmid-market share

Strengthen geographic footprint

Introduction

Strategy assessment

Key strategic priorities

Transforming the company

Closing remarks

transforming the company

TRANSFORMING THE COMPANY

FOCUS. EXECUTE. DELIVER.

to become a fully operational driven company
To become a fully operational driven company
  • Peter Ventress (CEO): ”We have to transform radically our management structure and our ability to execute.”
  • Decentralised structure no longer appropriate
  • Organisation has to mirror our unique position as global pure play B2B office supplies company
  • Transform into a more operationally focussed and sales driven organisation
  • Creation of one global management team to improve operational execution significantly

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

quite simply we have to be better at the basics
“Quite simply, we have to be better at the basics”

Focus.

  • On operations and sales driven culture
  • Stronger focus on results, accountability and clearer measures

Execute.

  • We have to do significantly better than before
  • Be closer to the business
  • Clear and specific targets and key performance indicators (KPI’s)

Deliver.

  • Capitalising on our strong global position as pure-play B2B
  • Average annual organic sales growth of at least 6% for 2008-2010
  • EBITDA margin of at least 7%

It is all about Focus. Execute. Deliver.

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

new management team strong operational focus
New management teamStrong operational focus

President USA

President Europe

President

Australia

EVP Merchan-dising

SVPOperations

SVP

People & Organisation

SVP

IT

Jay Mutschler

Peter Damman

Grant Harrod

Ron Lalla

Tim Beauchamp

Not yet filled

Dick Dijkstra

Supervisory Board

Executive Board

Peter Ventress (CEO)

- 1960

George Dean

  • 1947
  • To retire as planned

after AGM in April 2008

Floris Waller (CFO)

- 1958

Executive Management Group

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

enabling corporate express to deliver strategy
Enabling Corporate Express to deliver strategy
  • Additional performance initiatives
  • Objective
  • Creation analytical performance culture
  • Further strengthen HR organisation
  • Close capability gap
  • Share best practices
  • Reassigning roles in management of sales and logistics
  • Continue IT initiatives
  • Strengthen individual accountability and improve performance
  • Strengthen people, processes and capabilities to support strategy implementation
  • Fill in short-term capability gaps
  • Ensure strong talent base
  • Improve cost efficiency of business
  • Refocus its activity and resources towards sales
  • Create a more integrated, effective IT backbone

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

closing remarks

Closing remarks

FOCUS. EXECUTE. DELIVER.

key actions to deliver shareholder value1
Key actions to deliver shareholder value

Focus

  • Launch 4 key strategic priorities to deliver profitable growth
    • Increase share of wallet
    • Improve category offering
    • Grow mid-market share
    • Strengthen geographic footprint

Execute

  • Transform into a more operationally focussed and sales driven organisation
  • Creation of one global management team to improve operational execution significantly
  • Clear and specific targets, KPI’s and accountability

Deliver

Global Office Products:

  • Average annual organic sales growth of at least 6% for 2008-2010
  • Given business model, EBITDA margin of at least 7%

Introduction

Strategy assessment

key strategic priorities

Transforming the company

Closing remarks

slide30

.

FOCUS. EXECUTE. DELIVER.

4 strategic priorities to deliver profitable growth
4 strategic priorities to deliver profitable growth
  • Key initiatives

% customers

% customers

  • Share of wallet potential with clients
  • Grow market share
  • Capture customer value potential
  • Continue logistics/supply chain initiatives

% wallet

% wallet

  • Too broad product offering in some countries
  • Earn the right to expand offering
  • Adjust category offering
  • Standardise category approach
  • Full leverage private brands
  • Currently only 20% of sales
  • Poor execution
  • Too limited accountability
  • Refine, test and rollout mid market model
  • Focused approach, increased accountability

# customers

% wallet

  • Certain geographies subscale or absent
  • Limited presence in emerging markets
  • Opportunity to attain leading positions
  • Build selective beach heads
  • Conduct fill-in M&A

% at customers

# customers

% wallet

  • Opportunity
  • Identified challenges
  • Priority

 Increase share of wallet

 Improve category offering

 Growmid-market share

 Strengthen geographic footprint

Introduction

Strategy assessment

Key strategic priorities

Transforming the company

Closing remarks

increase share of wallet
“Increase share of wallet”

% customers

% wallet

Opportunity

Key actions

  • Further penetration of large and strategic accounts
  • Increase number of large and strategic customers served
  • Focus on customer need
  • Drive commercial excellence program
    • Improve go-to-market model and differentiate depth of sales approach
    • Create transparency on customer potential
    • Improve and intensify customer acquisition
  • Initiatives to reduce supply chain costs already being rolled-out
  • Reduce sourcing and supply chain costs

Introduction

Strategy assessment

Key strategic priorities

Transforming the company

Closing remarks

improve category offering
 “Improve category offering”

Opportunity

Key actions

  • Align a country’s offering with a cascading offering staircase
    • ‘Right to expand offering’ needs to be earned based on clear KPIs
    • When a country’s offering is broader than it should be, offering needs to become more focused
    • Categories should be managed in a coordinated way across CE
    • Fully leverage private brands programme
  • Cross-sell selected extended categories
  • Rationalise and standardise assortment
  • Centralise sourcing
  • Refocused and targeted marketing & sales approaches

Step 3: “Selectively offer ‘indirects’ if attractive”

Extended facilities

and/or

Project furniture

and/or

Other hardware

and/or

Marketing print

and/or

PPE and work wear

and/or

Single source

Services

and/or

Other product lines

3a

Step 2: “Cross-sell OP-

related products”

3b

% customers

Basic facilities

and

Basic print

and

Basic catalog furniture

and

Basic Office Equipment hardware

2a

3c

2b

Step 1: “Focus on the

core”

3d

3e

2c

Office supplies

Paper

Computer supplies

3f

2d

1

3g

% wallet

Introduction

Strategy assessment

Key strategic priorities

Transforming the company

Closing remarks

grow mid market share
“Grow mid-market share”

Opportunity

Key actions

  • Further exploit above–average gross margins and market growth of mid-market
  • Reinvigorate mid-market initiative in US
    • Increase contacts with high-potential prospects and inactives
    • Build out operational metrics dashboard
    • Monitor handoffs to identify where processes are broken
  • Further increase sales and reduce costs to serve
  • Reduce implementation issues around mid-market model roll-out
  • Refine and roll out mid-market model in Europe
    • Refine mid-market model in Germany and apply “quick fixes” (where required) in other mid markets
    • Implement mid-market model in priority markets

# customers

% wallet

Introduction

Strategy assessment

Key strategic priorities

Transforming the company

Closing remarks

strengthen geographic footprint
“Strengthen geographic footprint”

Opportunity

Key actions

  • Attain leading positions across Europe
  • Pursue opportunities in countries where currently present, but not in a leading position
  • Focus on strong organic growth in countries where already in leading position
  • Create viable growth options in high growth emerging markets
  • Create beach heads in selected cities in emerging markets over time

% at customers

# customers

% wallet

Introduction

Strategy assessment

Key strategic priorities

Transforming the company

Closing remarks

implementation underway key milestones defined
Implementation underway, key milestones defined

Roadmap to roll out strategic priorities

  • 2007
  • 2008
  • 2009

1

Increase share of wallet

Sales excellence

programme

Capture customer value potential

Phased roll-out (country by country)

Continue logistics/supply chain initiatives

Continued implementation

Grow market share

Continued efforts

2

Improve category offering

Readjust category offering

Country plans

Phased roll-out (country by country)

Category

approach

Standardise category approach

Pilots

Roll-out

3

Quick wins in US

Grow mid-market share

Phased roll-out in US

Quick wins in Europe

Phased roll-out in Europe

4

Strengthen geographic footprint

Businesscases

Conduct fill-in M&A

Targeted M&A

Introduction

Strategy assessment

Key strategic priorities

Transforming the company

Closing remarks