ANNUAL REPORT2010

Omega Pharma is listed on NYSE Euronext BrusselsISIN code: B3003785020Reuters OMEP.BR – Bloomberg OME BBShares outstanding (15 March 2011): 24,231,080

FORWARD-LOOKING STATEMENTSThis document contains forward-looking information which is based on current internal estimates and expectations as well as market expectations. Forward-looking statements contain inherent risks and apply exclusively on the date they are made. The actual result may differ substantially from those included in the forward-looking statements. Differences between expectations and reality may vary signifi cantly considering the reduced visibility which is inherent in the current political and economic environment, as well as its potential impact on generics, cost structures, taxes, consumer spending et cetera.

The corporate governance statement, the consolidated fi nancial statement and the statutory fi nancial statement, are included in part 2 of this brochure, which starts at page 3. The pages of this second part follow a separate numbering.

TABLE OF CONTENTS

PART 1Corporate profi le 1

A continuing story of entrepreneurship and growth in OTC 2

Key events 2010 4

2010 Performance 6

Interview with the chairman and the CEO 8

Board of directors, Executive committee 12

OTC, a growing market 14

Corporate strategy 18

Unique business model 20

Excellence in marketing & innovation 22

Organize & manage for success 28

Operational excellence 30

Geographic expansion 32

Responsibility in business and to society 34

PART 2: 2010 ANNUAL REPORT

1

Omega Pharma is active in the fi eld of health and personal care products

to which the end-consumer has access without a medical prescription (Over-The-Counter or

OTC products). With its innovative quality products, Omega Pharma aims to offer consumers

the possibility of pursuing a healthy lifestyle and experiencing a greater sense

of well-being.

Omega Pharma profi les itself in this respect as the preferred partner of the pharmacist,

for whom the marketing of OTC products represents an important part of their income.

Since its creation in 1987, Omega Pharma has established a remarkable and impressive

record of accomplishment. From its Belgian headquarters, it developed a strong position

in Europe and beyond, including in South America, South-East Asia, and the Middle East.

More than 2,000 enthusiastic employees contribute on a daily basis to the further growth and

internationalization of the Group, which today is directly active in 35 countries.

The sophisticated acquisition strategy and continued focus on selected market segments has

resulted in the Group — with its current geographical spread — being ranked 13th

in the global market for over-the-counter medicines and personal care products. Thanks to its

renewed brand strategy and its unique business model, based,

among other concepts, on continuous product innovation, a varied mix of products and brands,

experienced and talented employees, and operational excellence, Omega Pharma is ready for

the future.

In pursuing its goal, Omega Pharma pays considerable attention to all of its stake-

holders, including its employees, customers, suppliers, shareholders, and fi nanciers.

Entrepreneurship, ambition, creativity and innovation, commitment, and mutual respect are

highly valuated in the fulfi lment of our mission and vision.

With the slogan ‘By pharmacists, for

pharmacists’ the founders of the Company began to build a Consumer

Health organization in which the relationship with the pharmacists

plays a major role.

Start of the acquisition processes on the Belgian home

market.

Expansion into Portugal.

Expansion into Greece.

Omega Pharma is founded by two

pharmacists, including Marc Coucke, the

current CEO.

Initial Public Offering (IPO).

Management buy-out by

Marc Coucke.

Introduction in the Bel20

index.

Start of the internationalization

process.Acquisition of Chefaro, the OTC

division of Akzo Nobel, with operations in the UK, Spain, Germany and the

Netherlands. Expansion into France through the

acquisition of Pharmagiène.

One-for-ten share split

2

19982000

2003

1987 11994

20022

A CONTINUING STORY OF ENTREPRENEURSHIP AND GROWTH IN OTC

Expansion into the CEE and CIS through

the acquisition of Bittner Pharma.

Various smaller acquisitions: Aurora

(Australia, New Zealand, Singapore), Interdelta

(Switzerland), Altermed (Czech Republic and Slovakia), O+A Pharma

(Hungary), Hipocrate (Romania), Fischem (Turkey) and Cinetic

Laboratories (Argentina).

Introduction of the fi ve pillar

strategy. Enhanced efforts in R&D. Add-on

acquisitions to strengthen brand portfolio.

Acquisition of Wartner Europe.

Acquisition of 60 OTC brands from Pfi zer.Expansion into Italy and Scandinavia via

acquisitions.

Inclusion of Silence in the brand portfolio

through the acquisition of Persee Médica.

Formalisation of the 50/50 joint venture with the Modi-Mundipharma

group in India.

Arseus carve-out via separate IPO.

Sale of 24 per cent interest in

Arseus, which Omega Pharma has held

since the IPO.

3

20000444

2006066

200992220

2007220 2200008088

20010

Omega Pharma is since 2002 included in the Bel20. In March 2011, NYSE Euronext celebrated the twentieth anniversary of this Belgian stock index with a special

opening bell ceremony.

© Mathieu Paternoster

fi ve pillarstrategy

4

KEY EVENTS 2010

The introduction in 2010 of the fi ve pillar strategy marked the start of a new phase for Omega Pharma. This strategy will signifi cantly widen the scope of our product mix optimization process. The fi ve pillars refer to product categories that generate 51 per cent of the Group’s turnover. Read more on pages 28-29.

Modi Omega Pharma, the Company’s joint venture in India, started its operations with the launch of the fi rst series of Omega Pharma products on the Indian market. Modi-Mundipharma, the Indian joint venture partner, opened a brand-new pharmaceutical manufacturing plant for Omega Pharma products aimed at the Indian market. Read more on page 31.

In 2010, Omega Pharma revitalized its product development and marketing operations. The year marked the fi rst national launches of innovative products including

Dermalex Repair (eczema, skin care), XLS Medical (slimming), and Paranix Double Action

(anti-parasite). Read more on pages 22-26.

Omega Pharma has further strengthened its brand portfolio. In October 2010, the Company acquired Laboratoire de la Mer,

including Physiomer, a premium brand in the cough-and common cold category. The Laboratoire de la Mer portfolio offers great

opportunities to be rolled out to additional geographic markets within Omega Pharma’s current territory. Omega Pharma’s Swedish

subsidiary acquired the ACO-branded vitamin and nutritional supplement range from Johnson & Johnson Consumer Nordic.

PREPARATIONS IN FIRST HALF; STRONG PERFORMANCE IN SECOND HALF OF 2010

5

(in million euro) 1H2010 Evolution 2H2010 Evolution FY2010 Evolution

Western Europe

Turnover 175.7 0% 162.4 +7% 338.1 +3%

EBITDA* 35.4 -9% 38.7 +56% 74.1 +17%

As % of net sales 20% 24% 22%

Belgium

Turnover 124.6 +11% 128.1 +11% 252.7 +11%

EBITDA* 18.2 +24% 17.8 +12% 36.0 +18%

As % of net sales 15% 14% 14%

Emerging Markets

Turnover 46.4 +13% 63.9 +4% 110.3 +8%

EBITDA* 4.3 -59% 13.6 -22% 17.9 -36%

As % of net sales 9% 21% 16%

France

Turnover 76.7 -8% 78.8 +7% 155.5 -1%

EBITDA* 9.1 -6% 9.9 +10% 19.0 +2%

As % of net sales 12% 13% 12%

Corporate

EBITDA* -7.0 +12% -4.0 -2% -11.0 +6%

Total Group

Turnover 423.5 +3% 433.1 +8% 856.6 +5%

EBITDA* 60.1 -11% 75.9 +21% 136.0 +4%

As % of net sales 14% 18% 16%

Geographic spread of the 2010 consolidated turnover

Western Europe39 %

France18 %

EmergingMarkets

13 %

Belgium30 %

* Operating result (EBIT) increased with depreciations and amortization, before non-recurring items and after corporate cost.

6

2010 PERFORMANCE

PIVOTAL YEAR BETWEEN INVESTMENTS AND RETURN

EVOLUTION ALREADY NOTEWORTHY BETWEEN 1ST AND 2ND HALF OF 2010

TURNOVER: FROM 23 TO 857 MILLION EURO SINCE IPO IN 1998

INVESTMENTS START TO PAY OFF IN 2ND HALF OF 2010

SOLID OPERATING CASH FLOW*

1200

1000

800

600

400

200

1998

Annual turnover in million euro (OTC operations, adjusted for Arseus carve-out in 2007)

IPO

23

814 857

1999

Star

t in

tern

atio

nalis

atio

n

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

110 115 120 125 130 135

136

130

130

126

120

140 million euro

2010

2009

2008

2007

2006

* Operating result (EBIT) increased with depreciations and amortization, before non-recurring items and after corporate cost — referring to OTC operations (2006 and 2007 adjusted for carve-out of Arseus in 2007).

1H10 1H102H10 2H10

500

450

400

350

300

250

200

150

100

50

0

WesternEurope

Sales (year-on-year growth) +5% EBITDA* (year-on-year growth) +4%

EmergingMarkets

Belgium

France

million euro

+13% -59%

+3%-11%

+8%+21%

+4% -22%

-7% +10%

+11% +12%

+7% -56%

-8%-6%

+11%

+24%

+0%-9%

7

STRATEGIC PRODUCT CATEGORIES GROW FASTEST…

DOUBLE DIGIT SALES GROWTH FOR THE TOP 5 BRANDS

ANNUAL DIVIDEND INCREASE

…AND REPRESENT 51 PER CENT OF TOTAL SALES

FOCUS ON OWN BRANDS

Total sales of the fi ve strategic pillars

2010: 438.2 million euro2009: 409.8 million euroGrowth: +7 per cent

2009 sales (in million euro)

2010 sales (in million euro)

Phytosun(aromatherapy)

ACO (Nordics,skin care)

XLS(slimming)

Wartner(wart removal)

Paranix(anti-parasites)

+24%

+14%

+14%

+12%

+19%

16

24

24

29

29

20

27

27

33

35

0.000

0.200

0.400

0.600

0.800

1.000

1.200

1998

0.020

Gross dividend per share (in euro)

1999

0.033

2000

0.050

2001

0.080

2002

0.120

2003

0.180

2004

0.240

2005

0.320

2006

0.400

2007

0.500

2008

0.600

2009

0.800

2010

1.000

Generics20%

Derma21%

Parasites8%

Other OTC29%

Own brands65%

Generics20%

Other15%

Multi-locals4%

Classics12%

Cough& Cold

6%

(in million euro)

contribution to 2010 turnover

Multi-locals +7%

Classics +1%

Derma +6%

Parasites +16%

Cough & Cold +8%

30

51

32

55

77

95

179

66

94

168

CONVERSATION WITH THE CHAIRMAN AND THE CEO

“The richest

product pipeline

ever.”

8

Lucas Laureys, chairman of the board of direc-tors, and Marc Coucke, CEO, look back on 2010 and discuss the strategy and the future prospects for Omega Pharma.

In 2010, Omega Pharma achieved its own fore-casts and performed slightly better than what the fi nancial market expected. Are you satisfi ed with the results?MARC COUCKE: In this pivotal year, the strong second half of the year ultimately enabled us to maintain our gross EBITDA margin at the 2009 level. Everything went as planned. Today, we have a strong organization and a rich product pipeline for the future. We are therefore defi nitely satisfi ed with the results achieved.

On 30 June 2010, the situation appeared more challenging. How do you explain the difference in the performance level between the fi rst and the second half of the year?MARC COUCKE: Early in 2010, we moved our invest-ments in brand protection, innovation, and product development into a higher gear. As expected, these efforts did not yield an immediate return in the fi rst half of the year. However, our goal of a favour-able overall evolution certainly occurred during the second half.

Efforts in the fi eld of innovation started to bear fruits in the second half. Can you tell us what you actually invested in?MARC COUCKE: We invested mainly in brands, R&D, and innovation. When we roll out existing brands in new countries, it is crucial to invest in licenses to ensure that our products and brands are protected in these markets. If we intend to build genuine top brands and to sustain their leadership, we must ensure that these top brands are the innovation leaders in their markets. Take Silence for instance. Silence is the fi rst self-care product that is genuinely effective against snoring. As a matter of fact, Silence virtually created the market for anti-snoring products. However, such a position inevitably attracts competitors. The challenge is to

continuously improve the product in order to maintain and

strengthen our leadership position. To this end, we are now developing the second generation of Silence. We have integrated consum er needs and feed back

into our product devel-opment objectives. The

product is now easier to administer, with a better taste,

and a more pleasant feeling in the throat. We invested in a new formulation for both the foam and an innovative spray technology. That investment includes, of course, the corresponding patents and licenses for the R&D work involved.

Will deprecations and amortization related to the higher investment level increase next year?MARC COUCKE: Depreciations and amortization will indeed increase in the coming years. However, the investments are related to our top brands —

Marc Coucke,CEO

Lucas Laureys,chairman of the board

of directors

9

those with top margins — which can be reasonably expected to make up a larger portion in our product mix. It is intended that the growth of the margin exceeds the increase in depreciations and amortization. That is basis of the fi ve pillar strategy.

Can you tell us something more about the fi ve pillar strategy?MARC COUCKE: The fi ve pillars refer to the fi ve areas in which we wish to specialize: Derma, Cough and Cold, Parasites, Classics, and Multi-locals. In fact, this strategy aims to optimize the product mix. We intend to grow the turnover of products with a high margin faster than that of the other products. Consequently, the average gross margin will improve. Moreover, this strategy also implies that the available resources for invest-ments and marketing will be less widely dispersed or fragmented, but rather more concentrated on these top brands. That should also contribute to a further improvement of the margin. In 2010, the average gross margin of the Group was 53 per cent, but for the fi ve pillars it was 72 per cent. The internal sales growth of the Group was 4.6 per cent last year, but products from the fi ve strategic cat-egories posted a 7 per cent internal sales growth. These fi gures tell the story.

Should we thus expect a strong improvement of margins?MARC COUCKE: The fi ve pillar strategy should indeed lead to a step-wise margin improvement over the 2011-2014 period. For 2011, we antici pate achieving at least stable margins. This forecast is based on the information about environmental factors as they stand today. If the Belgian govern-ment would decide to stimulate the use of generic medicines even further, then we would do nice business through our partnership with Eurogenerics. Yet, because of the lower margin for generics, this

would also involve a mathematical impact on our Group margin expressed as a percentage of sales. The 18 per cent EBITDA margin of the second half of 2010 should therefore not automatically be extra polated to 2011. It gives a good indication of our intrinsic capabilities. We believe that there are plenty of opportunities in this area in the long-term. Nevertheless, in the short-term, we are mainly going to focus on the things that need to be done: build our brands and further strengthen our innovation leadership in each of the fi ve strategic categories.

In 2010, Omega Pharma announced its intention to carry out additional acquisitions in order to strengthen its position in the Emerging Markets. However, we did not hear any related news in 2010. What can we expect now?MARC COUCKE: The OTC-market in the Emerging Markets is growing signifi cantly faster than in Europe and North-America. Therefore, Omega Pharma needs to expand its presence in the growth regions. We are actively investigating opportunities, including those in Latin America. But there is no immediate pressure. We wish to take the right decision: that

10

means choosing the right target at the right price. Please note that we are continuously enhancing our organizations in the emerging markets where we currently operate. Internal evolutions are sometimes the most economical way to strengthen our position in these Emerging Markets.

Can Omega Pharma fi nd the right balance bet-ween its operating activities with a short-term focus and its long-term strategy?LUCAS LAUREYS: I am sure that everyone prefers and works towards a perfect balance between short and long term, but companies do not always grow at an even and predictable pace. Major strategic steps alternate with periods of integration, consolidation and preparation for the next major leap. If one cuts the story of Omega Pharma into small pieces, then he would indeed see an alternation of great leaps and sometimes glitches and hesitations. But, when looking from a wider perspective, one recognises that Omega Pharma is an exceptionally impressive growth story; especially in the Belgian context. In less than a quarter of a century, a small enterprise with a local radius of action and a hand full of brands has grown into a group with operations in 35 countries and a wide, rich brand portfolio. At the IPO of Omega Pharma, I was invited to become the Company’s fi rst independent director, and I was instantly fascinated by the oppor-tunities of its unique business model and the great entrepreneurial spirit of the founder and his team.

Did the Company grow too fast?LUCAS LAUREYS: That is impossible to judge. A company cannot defi ne its growth pace according to a theoretic model. It has to exploit opportunities when they present themselves. That is what entre-preneurship is all about. During its fi rst thirteen years Omega Pharma was only operating in Belgium.

The decision to enter a market outside of Belgium was preceded by careful deliberation and thorough preparation so that the Company could achieve this step when the opportunity occurred, in 2000. One can distinguish similar processes throughout Omega Pharma’s history. Once Omega Pharma had successfully established operations in almost each Western European country, it entered the fi rst market beyond this region, in 2007 — i.e. only four years ago. Omega Pharma has constructed a solid international platform, before major multinational corporations had rediscovered the sector.

Geographic expansion is often achieved through an acquisition, but doesn’t that involve risks?LUCAS LAUREYS: Omega Pharma consciously opts for the buy-and-build model which implies the acquisition of profi table companies that are then used as platforms for rolling-out the Company’s key brands on the new local markets. When appropriate, recently acquired local brands are included in the international portfolio. This is entirely different from the Greenfi eld approach, where a new organi zation has to be set up in each country. Omega Pharma’s model requires a very specifi c, almost unique, approach from management and the board. The board has to ensure that the Company can handle each acquisition, both from an organizational and a fi nancial point of view. It has to make sure that the required investments are done in order to achieve long-term projects. When everything runs according to plan, enterprising is fun and congratulations come automatically. But, not every acquisition in the past has been an instant success. Management and its staff have also made great efforts and demonstrated endurance and commitment in diffi cult times. They have never accepted that this would inhibit the Group’s overall growth. Its fi nancial health has never been compromised. They can be proud of their record of accomplishment.

“A growth story also

has intervals in which

the next step forward

is properly prepared.”

11

Is Omega Pharma capable of focussing simulta-neously on improving profi tability and geographic expansion?LUCAS LAUREYS: That is the way that the board has outlined and it is the only logical way to go. The Group has reached an appropriate critical mass in its key markets. The board has requested management to give priority to ben-efi ting from economies of scale and optimizing its current brand port-folio. Management has responded to this request from the board of directors by developing the fi ve pillar strategy and by placing an increased focus on operational excellence. We are closely moni-toring the implementation. Yet, we also believe that growth through acquisitions remains an essential compo nent of our strategy. We believe that this is the way to become operational in new growth markets, provided that each acqui-sition actually represents a contribution to the Group and that it can be managed without useless fragmentation of resources.

Does Omega Pharma have an appropriate man-agement structure?LUCAS LAUREYS: Certainly. Each member of the management team should have the highest degree of expertise, experience and work ethics. But, it is equally important for the team to function in perfect cohesion, where everyone can, wants and dares to make its personal contribution. The board of directors wishes to support and sustain the uniquely entrepreneurial spirit of Omega Pharma, which was a key factor in building the Company. Composing a team that is capable of combining strategic thinking with hands-on operational man-

agement, that dares to take risks without going too far and that maintains control at all times, is not always obvious. Recently, the executive commit-tee was restructured and strengthened with a fi fth member: Christoph Staeuble. He brings relevant

international experience in sales and marketing. He started working for

the Group in March 2010 and has proven to be a perfect fi t into the team. There is excellent interaction between management and the board of direc-tors. The board com-mittees allow us to closely monitor what is

happening in the organi-sation and how it is evolv-

ing. The board of directors itself was also strengthened in

2010 with two new members. Karel Van Eetvelt, who knows the environment of our customers — often independent entrepreneurs and SMEs — and Chris Van Doorslaer, who has the expe-rience in the fi eld of internationalization on con-tinents where Omega Pharma is not (yet) present today. In short, Omega Pharma is more than ade-quately equipped for the future.

As a fi nal question, can you please comment on the Company’s dividend policy?LUCAS LAUREYS: In the early years, reinvesting the profi ts rightly prevailed over paying out dividends. But, today, Omega Pharma has reached a dimen-sion and maturity that justifi es rewarding share-holders by paying out part of the profi ts each year. The board has decided to give effect to this expec-tation, provided that it does not compromise the Company’s future growth.

12

LUCAS LAUREYSChairman of the boardMember of the audit committee and of the appointment and remuneration committee°1945 (Belgium). Holds a degree in Economic Sciences (RUG, Ghent), Postgraduate in Business Management (Vlerick Management School), MBA Sales & Marketing (Leuven). From 1971 to 2006, Managing Director (responsible for Sales & Marketing) of Van de Velde NV, a listed company, lingerie manufacturer based in Schellebelle (Belgium). From 1997 to date, also Chairman of the board of directors of this listed company. Director of Topform International, a listed lingerie manufacturer in Hong Kong and independent director at Delta Lloyd Bank (Belgium).

JAN BOONEMember of the boardMember of the audit committee and of the appointment and remuneration committee°1971 (Belgium). Holds a degree in Applied Economic Sciences (KUL, Leuven), and a Special Auditing Degree (Licence Spéciale en Révisorat) (UMH, Mons). He started his career in the audit department of PricewaterhouseCoopers. He was member of the executive committee at Omega Pharma from 2000 to 2005. Since 2005, he is active at Lotus Bakeries, and is currently the Managing Director of Lotus Bakeries (Belgium). Since then he is also an executive director at Lotus Bakeries. He is also an independent director at Durabrik (Belgium).

BENOIT GRAULICHMember of the boardMember of the audit committee and of the appointment and remuneration committee°1965 (Belgium). Degree in Law, Business Management and Finance (KUL, Leuven) and in Fiscal Sciences. He is a Partner of Bencis Capital Partners, and an independent director at Lotus Bakeries NV (Belgium), Vande Velde NV (Belgium), and Wereldhave NV (Belgium). He previously held various positions at Ernst & Young (Belgium), Artesia Bank (Belgium) and Pricewaterhouse (Belgium).

MARC COUCKEMember of the boardChief Executive Offi cer, member of the executive committee°1965 (Belgium). Pharmacist (RUG, Ghent) and postgraduate in Business Management (Vlerick Management School). Founder and driving force of the Company. Also CEO until 30 September 2006, then Chairman from 1 October 2006 to 11 March 2008. He has been CEO again since 11 March 2008. He is still the inspirer of the Company and determines to a large degree the strategy. He is also a director of Arseus NV and Enfi nity NV (Belgium).

SAM SABBEMember of the boardChief Strategy Offi cer, member of the executive committee°1965 (Belgium). Degree in Law (RUG, Ghent). Previously worked as a banker at Artesia Bank (formerly Paribas Bank Belgium), mainly in Corporate Banking where he gained extensive experience in the fi eld of mergers and acquisitions. Active as Chief Financial Offi cer at Omega Pharma between September 1999 and April 2007, and as Executive Vice President between April 2007 and October 2007. Chief Strategy Offi cer since 11 March 2008. Actively involved in all Omega Pharma’s major acquisitions during this period. Responsible for strategy, M&A, Legal, Human Resources, Investor Relations, Public Relations and a number of operational activities. Director of Ecuphar NV (Belgium).

II7

I6

321

BOARD OF DIRECTORS

These pages provide an overview of the mandate holders or their permanent representatives (if the mandate is held by a legal entity). Further information on the board of directors, the board committees and the executive committee is included in the corporate governance statement (part 2, pages 4-10).

VIVIII

13

4 5

CHRIS VAN DOORSLAERMember of the boardMember of the audit committee and of the appointment and remuneration committee°1961 (Belgium). Civil Engineer (electrotechnical – mechanics) (RUG, Ghent), Master in General Management (Vlerick), Master of Business Administration (Flanders Business School), Laureate in Export Management (UAMS). Chief Executive Offi cer Cartamundi. He started his career at Unilever and fulfi lled afterwards several management functions at Fiskars. Member of the board of directors of Miko NV. Member of the Advisory Board of Ingobyi vzw.

KAREL VAN EETVELTMember of the boardMember of the audit committee and of the appointment and remuneration committee°1966 (Belgium). Degree in Physical Education (KUL, Leuven). Managing Director Unizo. He started his career as cabinet staff at the cabinet of the president of the Flemish Government Gaston Geens and fulfi lled several functions at Bouwunie, the Union of SME-construction company. Further, he is regent at the National Bank of Belgium, member of Group 10, member of the daily management of the Social Economical Board of Flanders, president High Board of Independents and SME, vice-deputy Ueapme, Director of Zenito, ADMB, Sporta, HUB and Huize Eyckerheide.

BARBARA DE SAEDELEERChief Financial Offi cer, member of the executive committee°1970 (Belgium). Graduate in Marketing and Degree in Business and Financial Studies, specialising in Quantitative Business Economics, (Vlekho). Started her career in 1994 with Paribas Bank Belgium (subsequently Artesia Bank and Dexia Bank Belgium), in Corporate Banking and developed to become Regional Director Corporate Banking for East Flanders. Has worked at Omega Pharma since June 2004 as Group Treasury Manager and subsequently Head of Finance. Appointed Chief Financial Offi cer with effect from 16 April 2007.

JAN CASSIMANVice President, head of innovation and business development, member of the executive committee°1962 (Belgium). Degree in Industrial Pharmacy (RUG, Ghent), and Marketing Management (EHSAL). Started his career at Pfi zer, and subsequently fulfilled various management positions at Qualiphar, Novartis and Synthelabo (Sanofi ). From 2000, he fulfi lled European and international OTC management positions for Sanofi , based in Paris. He has worked with Omega Pharma since July 2003. Since February 2005, he has been an executive committee member as Business Development & Marketing Services Director. Was CEO from 1 October 2006 until 11 March 2008. He is responsible for Innovation and Business Development.

CHRISTOPH STAEUBLEVice President, head of sales and marketing, member of the executive committee°1967 (Switzerland). Master in Economics, Business Administration and Psychology. He has built an international career in the Procter & Gamble Group, with various management functions in Sales, Marketing and Finance. Started at Omega Pharma in March 2010 as Group Marketing Manager. In February 2011 he is appointed Vice President, Head of Sales & Marketing, and is since then member of executive committee.

EXECUTIVE COMMITTEE

14

OTC, A GROWING MARKET

Omega Pharma operates in the Over-The-Counter (OTC) health market. This market covers health and personal care products to which the end-consumer has direct access without a medical prescription.

50-75 BILLION EURO AND GROWINGThe value of the global OTC market is estimated between 50 and 75 billion euro, depending on the selection criteria and the distribution universe. Industry analysts expect the global OTC market to grow 5 to 6 per cent annually in the coming years. In 2010, the OTC market outperformed the overall pharmaceutical market in terms of sales growth for the fourth consecutive year.

GROWTH BASED ON SOCIAL TRENDS AND EMERGING MARKETSThe following social trends are driving the global OTC market growth:• Ageing populations (with increasing medical

needs);• Contemporary lifestyle (more personal welfare

ailments, more attention to youthful appearance, health and well ness);

• Empowered consumers (lead ing to more self care);

• Supportive legislation (self care as an alternative for government-sponsored pres cription-only pharmaceuti cals and therapies);

• Increased attention for OTC from pharmacists (in order to offset decreasing margins from pres-cription-only medicines);

• Growing number of distribution outlets (pharma-cies, pharmacy and self care corners in general retail outlets).

These trends are also valid in the emerging markets in South-East Asia, Latin America and Central an Eastern Europe (including the CIS countries), where the following additional trends further enhance the growth perspectives:• Higher disposable income (providing greater

access to healthcare and personal care);• Emergence of a new middle class (with greater

aspirations in the fi elds of health, wellness and beauty);

• Slowly developing social welfare system (remain-ing barriers to medical consultation and prescrip-tion-only medicines leads consumers to select self care as the fi rst option).

15

Notes:

• The size of the circles indicates the current size of the market (in value).

• Last year’s growth rate is plotted on the X axis.

• The expected average growth rate for the next three years is plotted on the Y axis.

LONG-TERM GROWTH DRIVEN BY THE EMERGING MARKETS

OMEGA PHARMA OPERATES IN GROWTH SEGMENTSThe main segments of the OTC market are expected to witness mid-digit growth, and Omega Pharma is operating in the main segments.

Share of the global OmegaOTC market OTC market segments Value growth (%) Pharma

20.6% Cough-and-cold products 10.1% ✔

16.7% Analgesics 5.6%

14.6% Digestive products 7.9%

14.3% Vitamins, minerals, supplements, tonics 5.6% ✔

8.8% Skin care products 8.9% ✔

3.7% Eye care products 5.9% ✔

21.4% Other OTC products 4.2% ✔

100.0% Total OTC 6.8%

20

15

10

5

0-4 -2 0 2 4 6 8 10 12 14 16 18

OTC value growth by region: long term vs short term

Global 3 year average growth: 6.6%

Late

st y

ear

grow

th (

%)

Global latest year growth: 6.2%

Global

Rest of World

CEE

South-East Asia/China

Japan

North America

Latin America

Source: IMS Health 2010

Europe

16

Company FY2010 OTC Sales (in million euro)

OTC sales as % of total Major Brands

Johnson & Johnson 10 509 24% Neutrogena, Band Aid, Listerine, RoC

Procter & Gamble 8 278 15% Oral B, Prilosec OTC, Vicks, Actonel

GSK 5 776 18% Alli, Panadol, Sensodyne, Nicorette, Zantac

Bayer 6 005 17% Aspirin, Aleve, Supradyn

Novartis 4 469 12% Prevacid, Maalox, Cibavision, Voltaren, Lamisil

Reckitt Benckiser (1) 2 715 28% Strepsils, Nurofen, Gaviscon, Scholl, Durex

Sanofi Aventis (2) 2 217 7% Doliprane, Lactacyd, Aspégic

Pfi zer (3) 1 997 4% Advil, Centrum, Caltrate, ChapStick

Taisho (2009-2010) 1 413 61% Avalon, Lipovitan D, Livita, Pabron

Pierre Fabre (2009) 1 292 68% Drill, Galénic, Avène, Ducray, Klorane

Boehringer Ingelheim (2009) 1 261 10% Zantac, Antistax, Buscopan, Dulcolax

Merck (4) 967 3% Claritin, CustomFit, Bain de Soleil, Lotrimin

Omega Pharma 857 100% Paranix, Wartner, ACO, XLS, Phytosun

Boiron 526 100% Oscillococcinum, Homéoplasmine, Camilia

Merck KgaA 497 6% Bion, Nasivin, Flexagil, Femibion, Seven Seas

The data included in the table above is derived from annual reports, press releases or other documents available on the websites of the corresponding companies mid-March 2011. (1) Includes SSL since November 2010 (FY2009 sales SSL: 535 million euro).(2) Includes Chattem (FY2009 sales: 475 million euro) and Oenobiol.(3) Includes Wyeth OTC (FY2009 sales: 2150 million euro).(4) Includes Schering-Plough OTC (FY2009 sales: 1009 million euro) but Pfi zer only provides separate reporting for OTC North-America.

CONSOLIDATION AMONG MAJOR MARKET PLAYERSDue to the improved growth prospects of the OTC market compared to the pharmaceutical market, many companies again attach a greater strategic importance to their OTC operations. In 2009-2010, four major M&A transactions occurred, involving key players in the industry. Below Omega Pharma in the ranking still are numerous smaller national companies which operate almost exclusively in their home markets.

17

Generic medicines in Belgium

Omega Pharma focuses on the OTC sector, with one local

exception. In 1999, Omega Pharma entered into a partnership

with Eurogenerics (EG), a subsidiary of the German company

Stada. The co-promotion agreement stipulates that Omega

Pharma handles the distribution of EG’s generic medicines on

the Belgium market. Whereas the EG team informs physicians/

prescribers about the products, Omega Pharma’s generic team

covers the Belgian pharmacies and assures the availability of

EG products on the pharmacy shelves.

This approach was an immediate success for both partners.

In 1999, the penetration of generic medicines on the Belgian

market was well below ten per cent of the total value market.

Along with EG, Omega Pharma has signifi cantly contributed to

a gradual increase of the generic medicines market in Belgium,

where the penetration of low-priced medicines had increased

in recent years to approximately 40 per cent and generics to

approximately 15 per cent of the volume market. This is still

below the European average, which is estimated at 50 per cent.

EG and Omega Pharma now have a 60 per cent volume share

and a 50 per cent value share of the Belgian generic medicines

market, and are therefore the unquestioned market leader.

The relatively low penetration level of generic medicines in

Belgium, as well as the pipeline of pharmaceutical products

coming off patent in the coming years, suggest attractive

perspectives for the Belgian generic medicine industry in

general, and for the EG products in particular.

The evolution of the Belgian market for generic medicines and

the further role for Omega Pharma in this market (cf. part 2,

page 36) may have a signifi cant impact on the turnover and

profi tability of the Group.There is a trend in the OTC market for products based on natural ingredients. Physiomer is one of the many Omega Pharma brands that responds to this trend in the growing segment for cough-and-cold products.

18

Prevalin is the fi rst line of defense against hay fever and allergic rhinitis. It offers an effective impermeable barrier against allergens. Prevalin is a striking illustration of how Omega Pharma innovates its product assortment and its marketing approach.

19

OMEGA PHARMA’S CORPORATE STRATEGY INCLUDES THE FOLLOWING KEY COMPONENTS:

1 ADHERENCE TO OUR UNIQUE BUSINESS MODEL

2 EXCELLENCE IN OTC MARKETING AND INNOVATION

3 ORGANIZE AND MANAGE FOR SUCCESS

4 EXHIBIT CONSISTENT OPERATIONAL EXCELLENCE

5 EXPLORE GEOGRAPHIC EXPANSION

CORPORATE STRATEGY

1

20

OMEGA PHARMA, A UNIQUE BUSINESS MODELA passion for OTC

FOCUS ON OTCOmega Pharma is one of the few companies that mainly concentrates on the OTC market and is poised to enter the worldwide top ten ranking in this promising industry. Most of the other major players are divisions of larger companies which only realize between 5 per cent to 20 per cent of their turnover in the OTC market. Omega Pharma’s focus on OTC implies that all of the Company’s top talents and resources are allocated to the OTC business, in disciplines including innovation, product development, sales and marketing.

STRONG SALES AND MARKETING ORGANIZATION CAPABLE OF IMPLEMENTING EFFECTIVE PUSH/PULL STRATEGYIn many countries where Omega Pharma is oper-ating the Company has the largest pharmacy sales force. Omega Pharma’s extensive sales organiza-tions and experienced marketing department enable the Company to conduct its marketing both via pharmacies and trade (push) as well as directly to the end-consumer (pull). This combina-tion approach ensures optimum strength. The most important brands are often supported by TV advertising campaigns. Omega Pharma is also expert in designing in-store promotion materials for the pharmacy and other outlets.

WELL-TARGETED SEGMENTSOmega Pharma carefully selects the segments of the OTC market where it choses to compete. The high number of product categories in the OTC market would imply enormous resources for any company

that wishes to play a signifi cant role in each single segment. Instead, Omega Pharma targets the seg-ments with the most promising structural growth prospects and where the Omega Pharma products have a competitive advantage. These segments include skin care and hair care products, cough and could therapies, anti-parasite products, nutritional supplements, … Considering its current business size and marketing and innovation skills, Omega Pharma both has the ambition and the capabilities to compete in sizeable key segments of the OTC market, e.g. cough and cold, whereas the Company focused until 2009 mainly on niche segments.

CONSUMER-DRIVEN INNOVATIONOmega Pharma is convinced of the importance of innovation that responds to unmet consumer needs. We aim to identify and understand the consumer’s needs in the area of personal care and wellness as no other. We strive to be the best in translating these insights into value-adding concepts, solutions and products. The continuous infl ow of innovation at Omega Pharma is either the result of in-house development activities or partnering with universities and private institutions, as well as licensing and acquisitions.In the OTC sector, new products are too often merely the result of a life cycle management strategy for a pharmaceutical product that has come off-patent. While these products may prove very useful, they cannot be labeled innovative just because they are (re-)launched in an OTC version. At Omega Pharma innovation is consumer-driven rather than purely technology-inspired. We consider technology to be a means to an end: the consumer needs.

21

PARTNERING MODEL FOR MANUFACTURING AND SUPPLYOmega Pharma applies a partnering model for the manufacturing of its products. This histori-cally grown situation has become a well-chosen strategy. In the start phase Omega Pharma did not have the resources to invest heavily in manufac-turing facilities. Later, when the Company started its internationalization process and acquired key OTC brands (Wartner, Silence,…), the diversity of the product portfolio did not justify investing in proper manufacturing facilities for each galenic form (tablets, ointments, …). Omega Pharma has started to prepare for streamlining its in-house manufacturing plants, with the aim to eliminate ineffi cient overlaps of skills and techniques while improving cost-effi ciency. Complementing its main

internal operations (in Belgium, France, the Neth-erlands and Austria), Omega Pharma has a selec-tive network of strategic outsourcing partners in Europe. In 2010, Omega Pharma’s Indian joint venture partner started local manufacturing of the Company’s products for the Indian market. On the one hand, the growing geographic coverage of Omega Pharma makes manufacturing and supply more complex than before. On the other hand, this expanded dimension leads to economies of scale and the consequent opportunity to improve gross margins. This explains why manufacturing and supply operations — both internal and with out-sourcing partners — are managed centrally. Product quality, business continuity, fl exibility, agility and cost-effi ciency are key themes in this area.

Farmatint is a hair dye that contains only natural ingredients. The product is already on the market in Spain, Portugal and Greece, but additional market launches are being prepared.

2

22

EXCELLENCE IN OTC MARKETING AND INNOVATION

Omega Pharma creates value by relentlessly pioneering

innovative solutions for unmet consumer needs in health

and personal care

Society at large is currently going through a vast transitional phase. Our environment is rapidly changing: the climate, demographics, the availa-bility of natural resources, the political, economic, and social paradigms are all rapidly shifting. New nations and markets are emerging. New technolo-gies are being developed. All of these factors have a major impact on everyone everywhere, i.e. how we behave, how we live together, and how we organize our lives.

Omega Pharma analyses the impact on the end-consumer and identifi es relevant key trends for the sector in which we are operating. Based on these insights, we imagine creative solutions for previously unmet needs. We subsequently apply our skills and talents to develop value-creating concepts and products that address relevant consumer needs.

The consumer has become more self-confi dent and wants to make his or her own choices. While advice remains important, the consumer wants to assume full responsibility of the ultimate decision. In our industry, this general trend translates into the growing importance of self-care, and even self-service within the pharmacy.

Whereas patients traditionally did not question the therapy they were prescribed, they now often have an outspoken opinion about the need or use of medical procedures, and even about the intake of chemical substances into their body. They increasingly prefer less invasive, more natural

solutions. They want to learn more about disorders and how they are caused, instead of exclusively relying on third party opinion.

Omega Pharma understands the ‘new consumers’ and involves them when conceiving solutions. Solutions often go beyond products alone, and fre-quently imply collaborating with all players in the OTC value chain: healthcare professionals, primary care givers, and pharmacists, among others.

Respect for the consumer is also refl ected in Omega Pharma’s push/pull marketing approach. Pull-marketing communication includes educational content on disorders and how they are caused, enabling consumers to understand their situation and to discuss it with their pharmacist, doctor, or care giver. Push-communication to healthcare professionals helps them to fulfi l their roles regarding their patients and customers even better.

23

CASE STUDIESThe following case studies accurately illustrate Omega Pharma’s philosophy.

OBESITYOur changing lifestyle has resulted in changed eating habits. Obesity — among adults, adolescents and even children — is now a social problem that continues to expand. In the traditional medical treatment spectrum, many fi nd gastric rings and other surgical procedures and prescription-only medicines either too invasive or are afraid that they may involve unwanted side effects. At the other end of the spectrum is an amalgam of products and potions with questionable effi cacy. Omega Pharma has developed XLS Medical, a range of slimming products (with the legal status of medical device) with proven effi cacy as demonstrated in clinical trials, yet without the side effects that can accompany classical pharmaceutical products.

When introducing XLS Medical in its initial markets, Omega Pharma has involved consumers, pharma-cists, dieticians, GPs, and other healthcare pro-fessionals, and has enabled positive interaction between all of them. The result is an optimal solu-tion for the consumer. In Belgium, for example, the XLS Medical bus toured the country to educate health care professionals on how to appropriately discuss overweight problems with their patients in a non-stigmatizing and non-patronizing manner. Marketing messages were not limited to the product, but also covered healthy eating and life-style tips. Because of its success, this approach has now been extended to the other countries where XLS Medical will be marketed.

ALLERGYAir pollution is causing respiratory allergies in a growing number of people. Omega Pharma’s innovation department identifi ed an effective OTC medicine (legal status: medical device) to treat respiratory allergies – Prevalin – and has further improved the product. Prevalin is indicated for treating seasonal allergic rhinitis (hay fever) and non-seasonal (perennial) allergic rhinitis. Pharmaceutical treatment options include anti-histamines, decongestants, and nasal cortico-steroids. While most of these medicines provide

fairly adequate symptom relief, they are often associated with side effects including

headache, drowsiness, dry mouth and irritation of nose and throat. On the other hand, traditional natural remedies are often less effective. Prevalin fi lls the gap. While Prevalin cannot entirely replace pharmacotherapeutical pro-ducts that relieve acute symptoms during an allergic reaction, it does offer a natural protection for allergic rhinitis. It also has proven benefi ts as a complementary therapy when an

allergic rhinitis reaction is triggered. Prevalin contains natural ingredients,

and it is based on patented formulation and application technologies. It provides a

Beside pharmacists and consumers, Omega Pharma also involves dieticians,

nutritionists and doctors in the intro-duction programme for XLS Medical.

Omega Pharma toured the country in a truck that is transformed

into an educational centre.

24

physical impermeable bar-rier against allergens. Pre-valin offers clinically proven bene fi ts and induces no harmful side effects. Learn more about the product on www.prevalin.com.

An increasing number of people is also confronted with skin disorders. Omega Pharma has built on its Dermalex expertise to develop new OTC versions to treat eczema and irritation caused by an allergic reaction. Their clinically proven effi cacy differentiates them from non-medicated skin care products (dermocosmetics) on the one hand. On the other hand, the new Dermalex products do not contain any corticoids which are associated with side effects. In the second half of 2010, these new versions of Dermalex Repair have been launched in 13 countries. Omega Pharma has spent great efforts in educating health care professionals (dermatologists, pediatricians and pharmacists) about the products, their mode of action and their benefi ts. This approach has clearly paid off. The success has both inspired other local operating companies to launch Dermalex Repair in 2011, and it also fuelled the development of additional OTC versions to treat rosacea (red spots on the facial skin) and psoriasis. Both novelties yielded exceptional results in clinical trials.

Dermalex Repair is well under way to become the second top brand in Omega Pharma’s medicated skin care product portfolio, next to Wartner. Wartner is the reference of choice for consumers who wish to remove warts by using cryotherapy (freezing) without intervention from a physician. In 2011, the Wartner assortment will be complemented with a new version which even

further optimizes the freezing capacities. Wartner is marketed by Omega Pharma in 30 countries. Since 2006, over 26 million unit packs have been sold. Wartner is the Number One anti-wart brand in the world even though it was, until recently, only present in the cryotherapy subsegment. Over half of the market is made up of liquid products, mainly based on salicylic acid, which are rubbed onto the warts. Although these products are less effective than cryotherapy, many consumers seem to prefer them for treatment of small warts at an early stage. Omega Pharma intends to exploit the market leadership of Wartner in this segment as well, and has developed a TCA-liquid pen to this end. Other line extensions include new treatment options for corns, fungal nail infections and cold sore (fever blisters). 2010 test market results offer promising perspectives.

The

Dermalex Repair launch

campaign started with a two-day international scientifi c symposium,

attended by 28 dermatologists from 16 different countries.

Wartner is the biggest anti-ward brand in the World. The classic version is further improved and now provides even lower temperatures for freezing warts.

25

PARASITESVarious factors, including global warming leads to a growing number of insects and parasites, or extends the period during which one is con-fronted with these nasty little creatures. Certain species of insects recently appeared in regions where they had never been known before. Omega Pharma has the product knowledge and the insight into the consumer’s needs for developing effective, safe, and user-friendly solutions. The Paranix and Jungle Formula product ranges include

solutions against mosquitoes, head lice, ticks, and even more exotic insects. Omega Pharma not only offers the best product, but integrates it into a total solution for the consumer, by involving the pharmacists and other relevant stakeholders. In Belgium, for example, last year Omega Pharma initiated an educational project on head lice in schools, with active involvement of teachers,

pharmacists, parents as well as the children themselves. This campaign was one of the fi rst built on the new communication platform that positions Paranix as the partner of mums and kids to solve head lice problems. A cartoon character of a head lice helps to educate mums about the problem and how to solve it, while it also helps to put the kids at ease. The introduction of the new communication platform ran parallel with the market introduction of the upgraded Double Action version of Paranix, available as a spray, a lotion and a mousse. The improved formula remediates the problem in one go, by both suffocating the head lice and dehydrating head lice ánd their eggs, thus preventing relapse. In addition, a new shampoo version has been developed and is now ready to enter the market. It offers superior effi cacy and the highest convenience.

In France, Clément Thékan is the number one OTC brand for small animals and pets, with quite a number of products in the parasite category. Omega Pharma will analyse whether it can exploit the brand’s reputation with its expertise in parasite treatments, for other countries as well.

SLEEPING PROBLEMSLife is often hectic and our fast-paced lifestyle often ignores our biological clock or rarely allows us to genuinely disconnect from our daily worries and concerns. A growing number of adults are regularly facing sleep problems over a longer period of time. Nevertheless, at the same time, an increasing number of these individuals do not want to rely on or remain on pharmaceutical sleeping pills and tranquillizers for long periods for fear of habituation. The traditional cup of warm milk before going to bed is not an effective solution

26

for everyone — nor are the various alternative remedies. Omega Pharma has recognized the situation and has developed a food supplement therapy — Silence Calm & Sleep — based on a unique concept: A tablet with relaxation-enabling compounds to be taken at supper time, and another tablet with valerian compounds to be taken immediately before going to bed. The double-intake concept and the proven effi cacy based on clinical studies differentiate Silence Calm & Sleep from traditional natural remedies, while its non-habituation nature differentiates it from prescription-only sleeping medications.

In the same brand range, the Silence anti-snoring product has now been upgraded, integrating user feedback. From a technical point of view, the formula has been further improved and the product’s effi cacy is now substantiated with the fi ndings of a clinical study by a renowned sleep

lab. Findings indicate that the new formula is three times as effective as the previous formula and its closest competitor. Home use tests in Belgium reveal that 90 per cent of couples state that the snoring has been reduced or even stopped. User-friendliness has also been improved. User feedback indicated the need for an improved fl avour. The new mint/mandarin fl avour has successfully passed a consumer

taste test panel. In addition, a new spray technology has been applied in the second

generation version. The spray vial is held upside down, leading to a better spraying capability and improving the mixture of the propellant spray and the foam. The resulting improvement in user-friendliness motivates consumers to spray 2-3 times at a time, also enhancing overall effi cacy. This has been substantiated in home use tests. Based on consumer feedback, Omega Pharma has identifi ed patented solutions that further improve the product and the consumer experience.

MANY OTHER OPPORTUNITIESThe above-mentioned case studies represent only a small number of recent examples of Omega Pharma’s approach for innovation, product devel-opment, and marketing. The rich product and brand portfolios in the various markets where Omega Pharma is operating, offer a tremendous and as yet untapped potential for conceiving new and improved solutions addressing important needs in society. Just think of the huge potential in fertility — an increasing societal problem —with our expertise, experience, and heritage of a brand like Predictor. Traditionally synonymous with pregnancy tests, the Predictor brand may have a second life in the fertility market. Omega Pharma’s experts are already preparing the future today.

The introduction of the improved version of the anti-snoring product Silence is

supported by TV advertising.

The legal status of OTC products

The OTC portfolio of Omega Pharma includes products

with a legal status of medicine, medical device, nutritional

supplement, cosmetic product, or biocide. A number of our

products do not have a specifi c legal status.

Medicine

Products with the legal status of medicine are subject to

strict registration conditions. Their safety and effi cacy need

to be underpinned by the fi ndings of exhaustive clinical trials.

This regime is applicable for both prescription-only medicines

and for medicines that are available over-the-counter (OTC).

Several OTC medicines were initially only available with a

doctor’s prescription. When years of market experiences

supported their safety profi le, the regulator allowed them to

be made available without a doctor’s prescription. Well-known

examples are pain relief products and gastric acid inhibitors.

Omega Pharma has a relatively limited number of products

with the status of OTC medicine.

Medical device

Products with the legal status of medical device are also subject

to precise conditions. When their safety and effi cacy profi le

is suffi ciently documented in scientifi c literature, specifi c

clinical trials are not always required. Medical devices are

mainly products that play a role in the diagnosis, prevention,

monitoring, treatment, or alleviation of a disease, an injury, or

a handicap, which do not achieve their principle action in the

human body by pharmacological, immunologic, or metabolic

means. There are several classes of medical devices. Well-

known examples of ‘invasive’ medical devices are pacemakers

and stents. Omega Pharma has mainly non-invasive medical

devices in its portfolio, including Wartner (for freezing warts),

Silence (a throat spray against snoring), Predictor (pregnancy

tests and blood pressure meters), Paranix (products to

eradicate lice, and XLS Medical (slimming products).

Nutritional supplements, cosmetic products, and biocides

Specifi c legal conditions are applicable as well for products

with the status of nutritional supplements, cosmetic products,

or biocides. These relate mainly to their product quality and

safety. Examples of nutritional supplements in the Omega

Pharma assortment are: Davitamon vitamin products and

the Bional range of products. For slimming products (the XLS

range) Omega Pharma increasingly opts to apply for the status

of medical device, which involves more stringent requirements

than for nutritional supplements. Most anti-insect products

under the Paranix brand also have the legal status of medical

device, while the Jungle Formula assortment consists mainly

of biocides. Almost all skin care products in the group have

cosmetic status (ACO, Dermalex, Bodysol, et cetera).

Clinical trials

Until a couple of years ago, manufacturers of nutritional

supplements and cosmetic products could include all kind

of claims in their marketing communication, even though

these claims were not supported by the fi ndings of clinical

trials. These practices are now limited as a result of recent

European legislation. Since Omega Pharma is convinced of the

quality of its products, the Company has voluntarily decided

to conduct clinical trials, enabling it — in contrasts to most of

its competitors — to make specifi c claims. A recent example

is the range of slimming products of XLS Medical, which has

been effectively tested in clinical trials: a positive exception

for this specifi c market segment! This is a good illustration

of the evidence-based approach for product development at

Omega Pharma.

27

The Phytosun decongestant nasal spray has the legal status of medical device, class I.

3

28

MANAGING FOR SUCCESS

The fi ve pillar strategy

Omega Pharma is operating in a very promising OTC market. The Company has the expertise, the skills, and the brand portfolio required for building success. Omega Pharma attracts and retains top-quality employees with a passion for OTC. At Omega Pharma, they fi nd a professional environment where OTC is at the core of the business and where initiative and entrepreneurship are stimulated. Their toolkit is a portfolio of strong brands: regional brands with the potential to span the globe, as well as national brands with a strong heritage and an international reputation.

The average gross margin of Omega Pharma stands at 53 per cent of the turnover. However, this average margin refers to a highly diverse mix of products and brands. Please note that the distribution of generic medicines in partnership with the Belgian subsidiary of Stada represents 20 per cent of the 2010 consolidated turnover and that generics are per se characterized by a lower gross margin. Excluding this factor leads to a gross margin of 61 per cent, and when the distribution of all non-proprietary brands are excluded this goes up further to 70 per cent. Even within our portfolio of proprietary brands, the centrally managed brands outperform our local brands and post a gross margin of 72 per cent. This opens splendid perspectives: by improving the product mix, the average gross margin would — from a pure mathematically point of view — go up. But that is not all. The more development and marketing work that is carried out centrally, the more effi cient our efforts in these areas become.

Given these numerous challenges and tremendous opportunities, there is much work to be done, so much left to achieve! Hence, the importance to ensure that there is an organizational framework

in which all available resources are optimally aligned to those objectives. In 2003, Omega Pharma introduced the concept of the star brands as a way to have the businesses in the various countries concentrating on its top fi ve brands. At a later stage, when the Group’s product portfolio had evolved suffi ciently, this concept was widened to the other corresponding categories of the fi ve star brands. The gross margin surpassed the 50 per cent threshold in that era.

The introduction of the fi ve pillar strategy marked 2010 as the start of a new phase; a phase which signifi cantly widens the scope of the product mix optimization process. Instead of focusing on brands that represent 15 per cent of the consolidated turnover of Omega Pharma, the fi ve pillars refer to product categories that generate 51 per cent of the Group’s turnover. With this approach, each incremental improvement has a major impact on the Group as a whole. The fi ve pillar strategy therefore accelerates the streamlining process.

29

DERMAProducts categories: (1) cosmetics and general skin care products, and (2) medicated skin care productsTrends: ageing population and related needs, consumer preference for natural products and ingredientsCosmetic brands: ACO, Bodysol, Claire Fisher, SantangelicaMedicated skin care products: Wartner, Dermalex, Septivon

COUGH AND COLDProducts: cough syrups and lozenges, anti-allergy products, homeopathic products, aromatherapy solutionsBrands: Prevalin, Phytosun, PrevalinTrends: natural products and ingredients, aromatherapy

PARASIETENProducts: repellents and products against head lice, ticks, mosquitoes, and other insects—both for human medicine and veterinary use (pets)Brands: Para (umbrella brand), Paranix, Nix, Duo LP Pro, Parazeet, Jungle Formula, Paravet (pets)Trends: effectiveness and ease-of-use

CLASSICSThe Omega Pharma brands with a strong heritage and a high brand awareness:XLS: slimming productsPredictor: pregnancy tests, self-diagnostic productsDavitamon: multi-vitamin productsSilence: anti-snoring product and sleeping aids

MULTI-LOCALSStrong local brands that have the potential to be rolled out to other countries:T.LeClerc: coloured cosmeticsFarmatint: natural hair colouring products Bional: nutritional supplements Trend: growing eye care category

4

30

OPERATIONAL EXCELLENCE

Covering each line of the P&L

For many years Omega Pharma has positioned itself as a ‘sales and marketing company’. While the Company does excel in these areas, management is convinced that the Company is capable of excel-ling in each business discipline and that it is an imperative to pursue this wider ambition.

Marketing, sales, innovation, and product develop-ment are business disciplines that support top-line growth and contribute to improved gross margin. As already mentioned above, over time, manufacturing and supply also offer opportunities to improve gross margin. A centralized department is safeguarding the optimum balance between in-house manufacturing and outsourcing (approxi-mately 30/70). It also coordinates quotations from our outsourcing partners for the various national markets, thus ensuring the best offers at all times. At the same time, Omega Pharma is exploring how to streamline packaging specifi cations for each product across the various markets, e.g. reducing multiple container sizes and capsule blister versions. Each single achievement in this area allows the Group to combine manufacturing batches for several countries and to benefi t from economies of scale. Multi-country versions for printed packaging materials may lead to even further optimization in the future. Along with these projects, Omega Pharma is improving the interconnection between the ERP systems of its local operating companies. This approach requires effort and time, but will yield important benefi ts when fully implemented.

Continuous improvement: some examples

Several local operating companies of Omega Pharma have local

brands of sun protection products. While product formulas

were highly comparable, they were not yet fully identical

because of historical reasons. This situation prevented the

Group from benefi ting from economies of scale. In 2010,

however, Omega Pharma decided to implement one single set

of product formulas for its sun protection products across all

countries where the Group is operating. ACO, the Swedish

subsidiary renowned for its skin care expertise, supplied the

standard formula set. As a consequence of standardizing the

formulas for these products and since sun fi lters are a major

component for this type of products, Omega Pharma has also

identifi ed a single preferred supplier who offers an optimum

price/quality ratio.

In 2009, the supply chain execution team in Ireland assumed

the role of ‘supply hub’ for the centrally managed brands of

the Group. This implies that the Irish organization coordinates

the outsourcing of manufacturing of these products for all

Group companies. Because of its central role in the Group, the

organization in Ireland can better identify opportunities for

improvements and cost optimization. Again, in 2010, a number

of projects have been successfully implemented and additional

projects are scheduled for 2011 and beyond.

With the implementation of the fi ve pillar strategy in 2010,

the scope has considerably expanded for this organization. This

also implies that each single improvement in the supply and

procurement process will have a bigger impact on group-level.

Omega Pharma also continued to map its internal manufac-

turing capabilities. Historically, the capabilities of each plant

were centred on brands for the local market. When plant X was

located in a country where Y is a key national brand, it would

manufacture all galenic forms that are available in the assort-

ment of brand Y. This brand-centred manufacturing approach

logically implied quite some overlaps in capabilities and often

resulted in the under-utilization of capacity. Omega Pharma

now has an accurate overview of all capabilities for each plant.

This will enable the preparation of a product form-centred

manufacturing organization.

31

A passage to India

In April 2009, Omega Pharma and the Indian company Modi-Mundipharma set up a 50/50 joint venture with the aim to market a range of Omega Pharma products on the Indian market.

In order to keep consumer prices at a competitive level and having maximum fl exibility, the partners decided for local manufacturing and the Indian joint venture partner started to convert one of its pharmaceutical plants (for tablets) and build two new plants (for aerosol products and soft gel capsules) for this purpose. It also modifi ed one of its cosmetic manufacturing plants for this purpose. The fi rst plant received all permits and became operational in March 2010; the last one in Sep-tember 2010. The aerosols and the soft gel plant work exclusively for Modi Omega Pharma. In 2010,

time and efforts were spent to establish consist-ent quality and meet all regulatory requirements for all products. Product batches from all Modi-Mundipharma plants now meet the highest quality standards, as specifi ed in internationally accepted GMP protocols, ISO 22000:2005 and ISO 13485:2003. In addition to the products for the local Indian market, Omega Pharma has also commissioned a number of batches to supply other markets — i.e. Silence for Singapore, and a number of Bional SKUs. This approach may be step-wise extended, with focus on (a) neighbouring countries to India and (b) soft gel capsules.

End 2010, the Modi Omega Pharma products were available in approximately 11,000 retail outlets; Modi Omega had agreements with 325 distributors and had 88 sales people in the fi eld. These numbers have continued to grow considerably since. March 2011, the retail coverage includes 22,000 outlets; 450 distributors are involved and approximately 200 sales representatives promote the Modi Omega Pharma product assortment. In 2010, Omega Pharma generated in India a modest turnover of 0.35 million euro but this amount is expected to evolve rapidly over the next few years.

LAUNCH SCHEME MODI OMEGA PHARMA (INDIA)2010: Silence, Bodysol (skin care, hand sanitizer), Flessixx, Salvecol, Charbon de Belloc, Vitosera, Wartner.2011: Paranix, Bodysol (baby care, anti-acne products), Jungle Formula, Bional Prostanol, Vitosera for men, Dermalex (body moisturizer, eczema treatment, sun protection), Physiomer, Prevalin.2012: XLS Medical.

MODIOMEGA

The joint venture partner built new state-of-the art facilities in India to manufacture the Omega Pharma products.

5

32

GEOGRAPHIC EXPANSION

Seeding for growth

During the fi rst thirteen years of its history, Omega Pharma focused exclusively on its home market in Belgium. Only when management decided that the Company had the required maturity and critical mass, did it consider entering new geographic markets.

In 2000, the Company embarked on its internatio-nalization process.

Omega Pharma fi rst entered the French market through the acquisition of the then-listed company Pharmygiène. Today, France remains the second largest individual market for Omega Pharma, after Belgium.

By 2006 Omega Pharma had operations in eighteen Western European countries.

In-depth analysis of the OTC market revealed that the driving factors for the Western European market were also being established in other geographic regions. Ageing population, higher disposable income, changes in lifestyle, informed consumers, et cetera also applied to Central and Eastern Europe, South-East Asia, and Latin America. Industry analyst forecast considerable higher market growth for the latter regions than for North America and Western Europe.

After careful consideration and analysis, Omega Pharma decided in 2006 to enter the Emerging Market. The fi rst step was the acquisition of the Austria-based company Bittner Pharma, which mainly markets its product in Austria, Russia, Ukraine, Poland, and the Baltic States. Several smaller acquisitions followed later — in Central and Eastern Europe as well as in Australia and South America. Omega Pharma opted to acquire

small existing companies with a proven track record. By adding Omega Pharma brands to their existing local brand portfolios, the Group creates local OTC platforms that are capable of delivering sustainable growth. By 2009, this careful but steady approach brought Omega Pharma into the top league of the worldwide OTC sector (ranking 13th) just in time before ‘entrance tickets’ would have become too high. Also in 2009, the Indian joint venture between Omega Pharma and Modi-Mundipharma started its operations.

In less than ten years Omega Pharma has trans-formed itself from a local Belgian company into an international group with direct operations in 35 countries. Omega Pharma intends to continue its geographic expansion, with its main focus now on Latin America (Brazil, Mexico, et cetera).

33

Segment Country Presence since 2010 sales (in million euro) Evolution vs 2009 Ranking in the group

Belgium 1987 25 252.72.7 +11% 1

France 2000 155.5 -1% 2

Denmark 2004 3.5 -22% 23

Finland 2004 7.7 +10% 16

Germany 2000 23.5 -5% 8

Greece/Cyprus 2003 20.0 -18% 11

Ireland 2000 3.1 +7% 24

Italy 2004 49.0 +4% 4

Luxembourg 1987 6.1 +1% 17

Netherlands 2000 55.6 -3% 3

Norway 2004 16.2 +14% 13

Portugal 2002 19.0 -10% 12

Spain 2000 47.4 +9% 6

Sweden 2004 48.2 +24% 5

Switzerland 2009 13.6 +19% 14

United Kingdom 2000 23.2 +10% 9

Weestern Europe

Adriatic (Serbia, Slovenia, Croatia,Bosnia, Montenegro) 2009 5.6 +284% 19

Argentina 2009 1.8 +25% 29

Australia & New-Zealand 2008 9.5 +41% 15

Austria 2006 3.5 +14% 22

Baltics (Estonia, Latvia, Lithuania) 2006 2.2 +20% 28

CIS 2006 2.3 +14% 27

Czech Republic 2008 6.1 +13% 18

Hungary 2008 4.1 +27% 21

India 2009 0.3 +551% 31

Poland 2006006 2 52.5 -18% 26

Romania 2008 3.0 +22% 25

Russia 2006 26.2 -20%-20 7

Slovakia 2008 1.6 +13% 30

Turkey 2008 5.45.45.4 +1911 4%4%4% 20

Ukrainee 2006 21.21.21.999 -7% 10

Emergingng Markets ts

34

RESPONSIBILITY IN BUSINESS AND TO SOCIETY

Omega Pharma fully assumes its responsibility to act in accordance with proper conduct to society and with the accepted business practices in those areas in which it operates.

The Company conducts its business with respect of applicable legislation and generally accepted standards in the fi eld of corporate governance, marketing practices, and general business integrity. Omega Pharma seeks only business partners whose policies regarding ethical, social, and environmental issues are consistent with its own high standards in these areas. The Company respects all of its stakeholders. It ensures that its products meet all applicable regulatory and quality standards.

The Omega Pharma products are designed to help people dealing with minor ailments, in staying healthy, looking good, and feeling happy. Omega Pharma hopes that its business conduct inspires people to be entrepreneurial and to put passion into everything they do.

The Company express this view in part by supporting community initiatives that promote a healthy life-style and embody our corporate values.

The Company’s sponsorship of the Pro Tour cycling team Omega Pharma-Lotto is the most prominent expression of this policy. In 2005, Omega Pharma became co-sponsor with its vitamin brand Davitamon of a professional cycling team with then top rider Johan Museeuw. Later, the Company became the structural title sponsor, together with the offi cial Belgian lottery, of a Belgian cycling project that involves a professional team as well as a structure to foster young talents. Davitamon was followed by Predictor, and later Silence, as the title sponsor brand. In 2010, Omega Pharma decided to use its

corporate brand name as title sponsor. Cycling is one of the most challenging and inspiring of all sports disciplines with almost mythical proportions. It is a discipline that enables ordinary people to identify with their sporting heroes. It illustrates the importance of taking initiatives, of endurance, of starting again after having fallen. It invites people to watch the race, but to also to start exercising themselves.

In line with this intention, Omega Pharma also supports the biannual Davitamon Classic; one of the

Last year, Philippe Gilbert won two famous classic races : the Amstel Gold race and the Giro di Lombardia. In 2011, he could already make the victory gesture in a number of races, including a stage in the Tirreno Adriatico.

Professional sports motivates people to start exercising themselves and to adopt a healthy lifestyle.

35

biggest one-day cycling sports events for amateur riders in Belgium. The 2009 edition attracted over 7,000 participants of all age classes who rode one of the trails ranging from 25 to 145 kilometres along the picturesque landscape of the Flemish Ardennes. By supporting the Davitamon Classic, Omega Pharma also expresses its involvement with the community where its corporate headquarters are located.

A similar initiative is the Omega Pharma Half Marathon running race, with almost 1,000 participants for its fi rst edition in 2010.

Similar initiatives are supported in other countries and communities where the Group is operating.

Omega Pharma companies also demonstrate their community involvement and their role in society in a variety of other areas, including clean energy projects (e.g. solar panel installations at four sites), equal gender HR policies, et cetera.

The local operating companies of Omega Pharma also support

various humanitary campaigns. In the Netherlands, for example, Davitamon

supported an initiative that offers youth in poor countries the opportunity to

participate in sports.

In 2011, Omega Pharma will expand the corporate services building. The new

construction will incorporate installations for renewable energy. The roof of the

adjacent warehouse is already equipped with solar panels.

36

2010 annual REPORT

Corporate governance statement 3

Consolidated financial statement 17

Statutory financial statements 66

2010 annual REPORT

Statement

We hereby certify that, to the best of our knowledge, the consolidated financial statements as of December 31, 2010, prepared in accordance with International Financial Reporting Standards, as adopted by the European Union, and with the legal requirements applicable in Belgium, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole, and that the management report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Marc Coucke, CEO Barbara De Saedeleer, CFO31 March 2011

2

3

CORPORaTE GOVERnanCE STaTEMEnT

1. Board of directors 4

2. Specialised committees of the board of directors 7

3. Executive committee 8

4. Remuneration report 9

5. Corporate governance charter 11

6. Internal control and risk management systems 11

7. External supervision 12

8. Shares and shareholders 12

9. Relevant elements in case of a public takeover bid 15

10. Annual information 16

CORPORaTE GOVERnanCE STaTEMEnT

4

The board of directors of the Company adopted a corporate governance charter on 23 December 2005, in which it undertook to apply the provisions of the Belgian Corporate Governance Code of 9 December 2004. On 9 March 2010, the board of directors of the Company approved the new corporate governance charter based on the provisions of the Corporate Governance Code of 12 March 2009, and also confirmed that the Company uses this code as a reference code. This charter can be found

CORPORaTE GOVERnanCE STaTEMEnTon the Company’s website. Any future changes to the charter will also be announced on the website. The reference code is available online: http://www.corporategovernancecommittee.be/en/2009_code/latest_edition/default.aspx

This statement contains the actual information concerning the application of corporate governance in the Company.

ThE bOaRd Of diRECTORS 1

COMPOSiTiOn Of ThE bOaRd Of diRECTORS

The board of directors comprises minimum three and maximum ten members, who must not necessarily be shareholders.

The members of the board of directors are appointed by the general shareholders’ meeting. When a director’s position becomes vacant, the remaining board members have the possibility of provisionally filling the vacancy. The procedure for the appointment of a new director is included in the terms of reference of the appointment and remuneration committee,

which are part of the corporate governance charter. The articles of association of the Company provide a nomination right to Couckinvest NV in the appointment of the members of the board of directors, by which half of the directors plus one should be appointed from the candidates exclusively nominated by Couckinvest NV. No use has been made of this nomination right in practice. The terms of office for new or renewed board appointments have been set at not more than four years. No age limit is set for directors.

On 31 december 2010, the board of directors was composed as follows:

Appointment Termof Independent Audit andremuneration thecurrentName director committee committee appointment

Lucas Laureys NV X X Until 5 May 2014 (permanent representative: Lucas Laureys)

Mercuur Consult NV X X X Until 5 May 2014 (permanent representative: Jan Boone)

Benoit Graulich BVBA X X Until 5 May 2014 (permanent representative: Benoit Graulich)

Chris Van Doorslaer X X X Until 5 May 2014

Karel Van Eetvelt X X X Until 5 May 2014

Marc Coucke Until 2 May 2011

Couckinvest NV Until 2 May 2011 (permanent representative: Marc Coucke)

Sam Sabbe BVBA Until 2 May 2011 (permanent representative: Sam Sabbe)

The mandates of Marc Coucke, Couckinvest NV (permanent representative: Marc Coucke) and Sam Sabbe BVBA (permanent representative: Sam Sabbe) expire immediately after the general shareholders’ meeting of 2 May 2011.

The board of directors will present proposals to the general shareholders’ meeting of 2 May 2011 to resolve:• The reappointment of Marc Coucke as director until the general shareholders’ meeting to be held in 2015. • The reappointment of Couckinvest NV (permanent representative: Marc Coucke) until the general shareholders’ meeting to be held in 2015. • The reappointment of Sam Sabbe BVBA (permanent representative: Sam Sabbe) until the general shareholders’ meeting to be held in 2015.

Subject to approval by the general shareholders’ meeting of 2 May 2011, with effect from that date the board of directors will be composed as follows:

CORPORaTE GOVERnanCE STaTEMEnT

5

Independent Non-executive TermoftheName director director currentappointment

Lucas Laureys NV X Until 5 May 2014 (permanent representative: Lucas Laureys)

Mercuur Consult NV X X Until 5 May 2014 (permanent representative: Jan Boone)

Benoit Graulich BVBA X Until 5 May 2014 (permanent representative: Benoit Graulich)

Chris Van Doorslaer X X Until 5 May 2014

Karel Van Eetvelt X X Until 5 May 2014

Marc Coucke Until 4 May 2015

Couckinvest NV Until 4 May 2015 (permanent representative: Marc Coucke)

Sam Sabbe BVBA Until 4 May 2015 (permanent representative: Sam Sabbe)

Note: From this point on in the section, the board members are identified by the names of their permanent representative.

The curricula vitae of the board members can be found in the first part of this brochure.

funCTiOninG Of ThE bOaRd Of diRECTORS

The board of directors is charged with the management of the Company with a view to the Company’s long-term success by providing entrepreneurial leadership while assessing and managing the Company’s risks. The board of directors’ detailed role and operation is described in terms of reference that are part of the corporate governance charter.

There were nine meetings in 2010, including one in accordance with the written-decision-making procedure. All directors were present at all meetings. Jean-Louis Duplat participated in the three board meetings that took place in 2010 prior to the end of his board term. This provided an attendance record of 100 per cent.

In addition, the independent directors also met in the absence of the executive directors.

The board meetings mainly consisted of discussing the results, the supervision of the executive committee, and the implementation of the strategy. The board also considered a number of important investment decisions. Furthermore, the board decided to issue 21,000 subscription rights (warrants) under the existing continuous warrant plan of 1 April 2003. All board decisions in 2010 were made unanimously.

COnfliCTS Of inTEREST

In 2010, the procedure of article 523 of the Belgian Company Code was applied twice. In accordance with the applicable provisions, the contents of the minutes of the decisions concerned are presented below, specifying the grounds for justification, explanation and pecuniary effects of the conflicts of interests.

Board of directors of 9 March 2010 (Granting discharge to the members of the executive committee in office during the 2009 financial year for fulfilling their mandate during the course of the financial year)

‘Three directors, specifically Couckinvest NV, Marc Coucke and Sam Sabbe BVBA, state in advance that they might have a conflict of interest, in the sense of article 523 of the Belgian Company Code, in granting discharge to Couckinvest NV and Sam Sabbe BVBA respectively, in their capacity as member of the Company’s executive committee during the 2009 financial year. For Couckinvest NV and Sam Sabbe BVBA, this conflict of interest arises from the fact that, one the one hand, they are directors of the

Company and, on the other, were members of the executive committee during the 2009 financial year. For Marc Coucke, this conflict of interest derives from the fact that he is a director of both the Company, on the one hand, and reference shareholder of Couckinvest NV, on the other.The directors concerned will notify the Company’s statutory auditor of their conflicts of interest.Marc Coucke, Couckinvest NV, and Sam Sabbe BVBA will not further participate in the deliberations or voting on the discharge to be granted, and each leave the meeting, when the discharge of respectively Couckinvest NV and Sam Sabbe BVBA is decided.

Description of the decision and the grounds for justification:The intended decision refers to granting discharge to each of the executive committee members individually for the way they have executed their duties as executive director during the 2009 financial year.During the course of the 2009 financial year, the board of directors regularly obtained full insight into all the minutes and decisions of the executive committee and, on this basis, the board could reasonably determine that each of the individual members of the executive committee had properly fulfilled their mandate for the 2009 financial year.

The pecuniary consequences of granting discharge are as follows:The discharge means that none of the executive committee directors can be held personally financially accountable by the board of directors for errors and violations committed during the performance of their mandate.In separate voting (per member of the executive committee), the board of directors unanimously decides to grant discharge to each of the members of the executive committee separately (Couckinvest NV, Sam Sabbe BVBA, BDS Management BVBA, Jan Cassiman BVBA, Limestone NV, MDS BVBA and Mr. Scheepens) for the way they have performed their office and mandate during the 2009 financial year.’

Board of directors meeting of 13 April 2010 (Remuneration for the executive committee members)

‘The board of directors then discussed the proposed remuneration for the executive committee members for the 2010 financial year.

Two directors, specifically Couckinvest NV and Marc Coucke, state in advance that they might have a conflict of interest, in the sense of article 523 of the Belgian Company Code, with respect to the decision to grant a fixed and variable remuneration to Couckinvest NV, in its capacity as CEO. The other directors confirm that they do not have a conflict of interest,

6

in the sense of article 523 of the Belgian Company Code, in approving the remuneration for the executive committee members since, in the opinion of the directors, this decision falls under the exceptions provided in article 523 of the Belgian Company Code. All directors also confirm that they have no conflict of interest in the sense of article 524 of the Belgian Company Code since, in the opinion of the directors, the decision falls under the ‘de minimis’ provision provided in article 524, §1, 3, 1° and 2° of the Belgian Company Code.Marc Coucke’s conflict of interest in the sense of article 523 of the Belgian Company Code ensues from the fact that he is both a director of the Company, on the one hand, and reference shareholder of Couckinvest NV, on the other. For Couckinvest NV, this conflict of interest results from the fact that it is a director of both the Company, on the one hand, while it is remunerated as CEO, on the other.The directors concerned will notify the Company’s statutory auditor of their conflict of interest.Marc Coucke and Couckinvest NV will not further participate in the deliberations, or voting on the award of the remuneration for the CEO. The directors concerned will leave the meeting when this item is deliberated and decided upon. Marc Coucke and Couckinvest NV consequently leave the meeting.

Description of the decision and the grounds for justification:The board of directors considers that, in view of the important role of the CEO within the executive committee, an appropriate market-level remuneration is justified for the CEO.The board believes that a fixed fee amounting to 600,000 euro for the 2010 financial year is a reasonable remuneration for the CEO’s performance.The board also believes that it is in conformity with market practices to grant the CEO the possibility for a variable remuneration. The variable remuneration component is calculated on an annual basis and based on the same criteria for all executive committee members. The following criteria will be monitored: turnover, EBITDA (as an amount and as a percentage), gross margin as a percentage, free cash flow, continuous growth on a quarterly basis, a kicker on sales and EPS (with a bonus of maximum 125%). In view of the role of the CEO In the executive committee and in the Company, the board of directors believes it is in line with market practices to grant a variable remuneration for the 2010 financial year to the CEO for a maximum amount of 300,000 euro (in which the possible impact of the kicker on sales and EPS is taken into account).

The pecuniary consequences of granting discharge are as follows:The CEO’s mandate will be remunerated at an amount of 600,000 euro for the 2010 financial year. The board of directors unanimously approves the CEO’s remuneration of 600,000 euro for the 2010 financial year. The board of directors also decides to provide the CEO with a variable remuneration of no more than 300,000 euro for the 2010 financial year.Marc Coucke and Couckinvest NV now return to take part in the further deliberations and decisions.’

EValuaTiOn Of ThE bOaRd Of diRECTORS

The board of directors is responsible for a regular review of its own effectiveness, with a view to continuously improve the management of the Company. In this context, under its chairman’s leadership, the board of directors evaluates its size, its composition and its performance every three years. The main criteria that are taken into account for this evaluation are competences, experience and availability of the directors. Special attention is given in the evaluation process to (i) the evaluation of the functioning of the board of directors and its committees, (ii) the verification whether matters that are of importance to the Company are thoroughly prepared and discussed, (iii) the evaluation of the actual contribution and presence of each director, and (iv) the evaluation of the current composition of the board of directors and its committees and, when required, an adjustment of the composition.

There are also regular and individual evaluations of the members of the board of directors performed by the appointment and remuneration committee and possibly by other persons, internal or external to the Company. Special attention is given in this context to the evaluation of the chairman and his role in the board of directors.

Based on the results, the appointment and remuneration committee, if applicable, will draw up a report analysing the strengths and weaknesses of the members of the board and, where appropriate, provide recommendations for the appointment of new directors or for (not) renewing a director’s appointment.

Finally, an evaluation of the interaction and cooperation between the non-executive directors and the executive committee members takes place on a regular basis. This evaluation takes place in absence of the executive directors.

The above-described formal evaluation procedures will be applied in the course of 2011.

7

SPECialiSEd COMMiTTEES Of ThE bOaRd Of diRECTORS

2

An audit committee and an appointment and remuneration committee have been created within the board of directors. The terms of reference of both committees are an appendix to the corporate governance charter. These committees have an advisory role. The board of directors is responsible for final decision-making. The committees report after each meeting to the board of directors.

audiT COMMiTTEE

COMPOSiTiOn Of ThE audiT COMMiTTEE

The audit committee consists of members of the board of directors and has a minimum of three members. All members of the audit committee are non-executive directors and the majority should be independent directors.In 2010, the audit committee consisted of Jan Boone (chairman), Benoit Graulich and Lucas Laureys, and with effect of 14 June 2010 also of Chris Van Doorslaer and Karel van Eetvelt, as a consequence of which the audit committee met all provisions of the Belgian Corporate Governance Code that was applicable in 2010. Until 3 May 2010, Jean-Louis Duplat was also a member of the audit committee.The board of directors has ensured that the audit committee had an adequate level of relevant knowledge and expertise for efficiently fulfilling its function. All audit committee members have had an economic formation and/or have a wide experience in economic or financial functions. The chairman of the audit committee has moreover had a special formation in auditing and has experience as auditor.

funCTiOninG Of ThE audiT COMMiTTEE

The audit committee met four times during 2010 and all members attended these meetings. The statutory auditor also attended the audit committee meetings.The audit committee mainly evaluated the various processes of the financial reporting and evaluation and advised on the external and internal audit. During 2010, the audit committee has also analysed the annual and interim financial reporting. The audit committee has also reviewed the Company’s internal control and risk management systems (cf. page 12 of this document) and the risks to which the Company can be exposed (cf. pages 33-37 of this document). Adjustments have been made when required. Finally, the audit committee also paid attention to the expiry in May 2011 of the mandate of the statutory auditor and to the procedure for reappointing the statutory auditor.The audit committee makes a report of each meeting, which is each time commented at the next meeting of the board of directors.

EValuaTiOn Of ThE audiT COMMiTTEE

Every three years, the audit committee reviews its terms of reference, evaluates its own effectiveness and makes recommendations where appropriate to the board of directors.These formal procedures will be applied in the course of 2011.

ThE aPPOinTMEnT and REMunERaTiOn COMMiTTEE

COMPOSiTiOn Of ThE aPPOinTMEnT and REMunERaTiOn COMMiTTEE

The appointment and remuneration committee consists of members of the board of directors and has a minimum of three members. All members of the appointment and remuneration committee are non-executive directors and the majority should be independent directors.In 2010, the appointment and remuneration committee consisted of the following members: Benoit Graulich (chairman), Lucas Laureys and Jan Boone. With effect of 14 June 2010, Chris Van Doorslaer and Karel van Eetvelt are also members, as a consequence of which the appointment and remuneration committee met all provisions of the Belgian Corporate Governance Code that was applicable in 2010. Until 3 May 2010, Jean-Louis Duplat was also a member of the appointment and remuneration committee.

funCTiOninG Of ThE aPPOinTMEnT and REMunERaTiOn COMMiTTEE

The appointment and remuneration committee met four times in 2010, and all members attended these meetings.During 2010, the appointment and remuneration committee issued recommendations on the remuneration of the executive committee members and on the appointment of Chris Van Doorslaer and Karel Van Eetvelt as independent directors in the sense of article 526ter of the Belgian Company Code. Moreover, the appointment and remuneration committee has also dealt with the procedures for developing a remuneration policy and for determining the remuneration level for non-executive directors and executive committee members, in conformity with the applicable provisions in this field.The appointment and remuneration committee makes a report of each meeting, which is each time commented at the next meeting of the board of directors.

EValuaTiOn Of ThE aPPOinTMEnT and REMunERaTiOn COMMiTTEE

Every three years, the appointment and remuneration committee reviews its terms of reference, evaluates its own effectiveness and makes recommendations where appropriate to the board of directors.These formal procedures will be applied in the course of 2011.

CORPORaTE GOVERnanCE STaTEMEnT

8

ThE ExECuTiVE COMMiTTEE 3

The executive committee is responsible for the management of the Company and exercises the powers delegated by the board of directors to the executive committee. The role and responsibilities of the executive committee are contained in the terms of reference of the executive committee, which are part of the corporate governance charter.

COMPOSiTiOn Of ThE ExECuTiVE COMMiTTEE

The board of directors has set up an executive committee in the sense of article 524bis of the Belgian Company Code.

The members of the executive committee are appointed for an indefinite period by the board of directors on the basis of recommendations of the appointment and remuneration committee.

At present, the executive committee is composed as follows:

Name Permanentrepresentative Function

Couckinvest NV Marc Coucke Chief Executive Officer

Sam Sabbe BVBA Sam Sabbe Chief Strategy Officer

BDS Management BVBA Barbara De Saedeleer Chief Financial Officer

Jan Cassiman BVBA Jan Cassiman VP, Head of Innovation and Business Development

Christophe Staeuble Management & Consulting Christophe Staeuble VP, Head of Marketing and Sales

Note 1: From this point in the section, the mandate holders are identified by the names of their permanent representatives.

Note 2: Limestone NV, represented by Georges De Vos, was member of the executive committee until 1 February 2011.

The curricula vitae of the executive committee members can be found in the first part of this brochure.

funCTiOninG Of ThE ExECuTiVE COMMiTTEE

The executive committee is responsible for the management of the Company. The committee must propose a business strategy to the board of directors and then implement this strategy, based on the related decisions of the board, and taking into account the Company’s values, its risk appetite and key policies. The role and functioning of the executive committee are described in detail in its terms of reference, that are part of the corporate governance charter.

In principle, the executive committee meets each week and regularly reports to the board of directors. The board of directors receives the minutes of each executive committee meeting.

CORPORaTE GOVERnanCE STaTEMEnT

9

REMunERaTiOn REPORT 4

PROCEduRE fOR ThE dEVElOPMEnT Of ThE REMunERaTiOn POliCy and fOR ThE dETERMinaTiOn Of ThE REMunERaTiOn lEVEl

fOR ThE nOn-ExECuTiVE diRECTORS

For the non-executive directors, a remuneration policy is proposed that consists purely of a fixed remuneration component, excluding any performance-related components (e.g. bonuses or equity-related long-term incentive plans). The appointment and remuneration committee submits a proposal for the remuneration of non-executive directors to the board of directors. Each year, these proposed emoluments are presented for approval to the annual shareholders’ meeting.

The annual shareholders’ meeting of 2010 has decided to grant a global fixed annual remuneration to each non-executive director, and to provide no longer for a separate remuneration for the membership of specialised committees. The annual shareholder’s meeting set the remuneration of the chairman at a higher level, taking into account his special role and responsibilities in the board.

fOR ThE MEMbERS Of ThE ExECuTiVE COMMiTTEE

The appointment and remuneration committee has performed a study into the remuneration of executives at companies whose share is included in the main Belgian share index (Bel20), and has also taken the relevant trends in the field of legislation and corporate governance into consideration. The appointment and remuneration committee holds the opinion that this study does not require any further external verification. Based on this study, and in order to have the ability to attract qualified and skilled professionals for the executive committee, the appointment and remuneration committee has forwarded its recommendations concerning the remuneration policy and the remuneration level to the board of directors. In its recommendations, the appointment and remuneration committee has proposed that in addition to a fixed remuneration component, the variable remuneration component should form a significant part of the total remuneration. The appointment and remuneration committee also holds the opinion that a long-term incentive should be incorporated in the form of warrants. Based on the aforementioned recommendations, the board of directors has set the 2010 remuneration policy for the executive committee members.

No significant remuneration changes occurred in 2010.

REMunERaTiOn POliCy fOR ThE ExECuTiVE COMMiTTEE

The remuneration of the executive committee members consists of a fixed component, a variable component that is related to the Company’s performance, as well as warrants, that offer executive committee members the possibility of participating in the Company in the longer term.

The fixed remuneration component of the executive committee is determined annually. The duties performed and the market conditions are taken into account when determining the fixed remune ration component. The appointment and remuneration committee makes a recommendation in this respect to the board of directors, which has to approve this remuneration component.

In addition to the fixed remuneration component, which is in-line with market practices, the board of directors also determines an annual bonus plan, based on the advice from the appointment and remuneration committee, in order to align the objectives of the executive committee to those of the Company.

The variable remuneration component is for all executive committee members calculated on an annual basis and is based on the same criteria, which are mainly related to turnover and profitability. These criteria are strictly quantitative and their evaluation is made against objective financial data. A scoring scale is developed for all criteria enabling to modulate the remuneration to the degree a particular criterion has been met. At the end of the financial year, the achieved results are compared to the preset criteria for calculating the amount of the variable remuneration. The applicable criteria are evaluated at mid-year with the aim to possible adjust the remuneration policy for the next years. In 2010, the objective criteria were: turnover, EBITDA (as an absolute amount and as a percentage of sales), gross margin as a percentage of sales, continuous growth on a quarterly basis, free cash flow and a kicker on sales and earnings per share (EPS) (which provided in the possibility of maximum bonus of 125 per cent, except for the CEO for whom the bonus is limited to a maximum of 300,000 euro). For competitive reasons, no specific figures can be disclosed for these criteria. The board of directors also reserves the right to adjust the evaluation criteria for individual executive committee members or for the entire executive committee on the basis of individual or group performance within or outside these criteria. The variable remuneration component is paid entirely in cash.

Where appropriate, the warrants are issued under warrant plan 3, approved by the board of directors on 1 April 2003. Subject to the payment of the exercise price, each warrant grants the right to a single share of the Company. The warrants can be exercised at the rate of 25 per cent per year, commencing from the fourth calendar year following the calendar year in which the warrants were offered. The exercise price of the warrants is equal to the average of the rates during the 30 days prior to their issue. The position of the director involved is taken into account when determining the number of warrants to be granted.

For 2011 and 2012, no significant changes to the remuneration policy for the executive committee members are envisaged.

CORPORaTE GOVERnanCE STaTEMEnT

10

REMunERaTiOn POliCy fOR nOn-ExECuTiVE diRECTORS

The remuneration for the non-executive directors amounts to:

Name Annualremuneration** Committeeremuneration Otherremuneration

Lucas Laureys * 60 000 — —

Jan Boone 30 000 — —

Benoit Graulich 30 000 — —

Chris Van Doorslaer 30 000 — —

Karel Van Eetvelt 30 000 — —

* Chairman of the board of directors.** The mentioned amounts equal the full cost to the Company. No social security nor retirement benefit expenses are due by the Company.

Executive committee members who are also members of the board of directors of the Company do not receive any remuneration for the exercise of their board mandate.

ThE REMunERaTiOn Of ThE ExECuTiVE COMMiTTEE

ThE REMunERaTiOn Of ThE CEO

The gross remuneration* of the CEO amounts to** (in euro):

Name Statute Fixedgross Variablegross Pension Other Total remuneration remunerations

Marc Coucke Management 600 000 156 000 — — 756 000 company

Fixedgross Variablegross Pension Other Total remuneration remuneration

Other members of the 1 534 000 353 000 — — 1 887 000 executive committee

* The total amounts are equal to the total cost Incurred by the Company. There are no social security or pension plan contributions payable by the Company.** All remunerations for 2010 were also payable in 2010, with the exception of the variable remuneration that was paid in 2011.

There are no long-term cash incentive plans for the CEO.

REMunERaTiOn Of ThE OThER ExECuTiVE COMMiTTEE MEMbERS

The gross cash remuneration * of the other executive committee members amounts to** (in euro):

* The total amounts are equal to the total cost Incurred by the Company. There are no social security or pension plan contributions payable by the Company.** All remunerations for 2010 were also payable in 2010, with the exception of the variable remuneration that was paid in 2011.

There are no long-term cash incentive plans for the executive committee members.

ShaRES and waRRanTS

ShaRES

No shares have been granted in 2010 to the executive committee members.

waRRanTS

Warrants granted during 2010 to the executive committee membersNo warrants have been granted in 2010 to the executive committee members.

Warrants exercised during 2010 by the executive committee members or cancelled during 2010No warrants have been exercised in 2010 by the executive committee members, nor were any warrants held by the executive committee members cancelled during the course of 2010.

11

CORPORaTE GOVERnanCE ChaRTER 5

GEnERal

The board of directors approved the original version of the corporate governance charter on 23 December 2005, and updated it on 11 March 2008.The current corporate governance charter and its appendices were approved by the board of directors on 9 March 2010 and are based on the provisions of the Belgian Corporate Governance Code of 12 March 2009. The main amendments and additions concern the duties of the board of directors, the role, composition and functioning of the audit committee, and the duties of the executive committee.

POliCy COnCERninG TRanSaCTiOnS and OThER COnTRaCTual RElaTiOnShiPS bETwEEn ThE COMPany and iTS bOaRd MEMbERS OR MEMbERS Of ThE ExECuTiVE COMMiTTEE, whiCh aRE nOT COVEREd by ThE COnfliCT Of inTERESTS RulES

All members of the board of directors and the executive committee, or their permanent representatives, are expected to avoid actions, positions or interests that are contrary to, or appear to be contrary to the interests of the Company or any of the companies of the Omega Pharma group. Furthermore, the board of directors must approve all transactions between the Company and the persons identified above. When the persons identified are faced with a possible conflict of interest with respect to

a decision or transaction of the Company, moreover, they must notify the Chairman of the board of directors as quickly as possible. This policy document is part of the corporate governance charter. No such notification has been made in the course of 2010.

TRadinG COdE wiTh RESPECT TO EquiTy TRanSaCTiOnS

Without prejudice to other applicable laws and regulations on insider dealing and market manipulation, the board of directors has drawn up a trading code to prevent privileged information being illegally used by insiders.This trading code is part of the corporate governance charter.

REfEREnCE COdE

The Company believes that it complies with all provisions of the 2009 Belgian Corporate Governance Code, with the exception of the required percentage that a shareholder must hold to submit proposals to the general meeting. While the 2009 Belgian Corporate Governance Code provides a threshold of 5 per cent, the Company uses a threshold of 10 per cent. The Company believes that its proposal, in view of the annual rotation of its shares, prevents investors with a short-term view would impact too strong on the strategy of the Company, which focuses on continuity and sustainable achievements in the medium to long term.

inTERnal COnTROl and RiSk ManaGEMEnT SySTEMS

6The Company strives to develop its business by pursuing a sustainable policy in the area of internal control and risk management and has, for this reason and according to IFRS 7, examined and defined the risks and uncertainties to which the Group is subject to (see pages 84 - 91 for more details). In this context, the Company tries to provide internal control mechanisms at various levels.

Important roles in internal control and risk management are currently played by the audit committee (see page 38 for more details) and the statutory auditor (see below).

In the course of 2010, the audit committee has – in consultation with of the statutory auditor - analysed each of the identified risks and uncertainties according to the COSO Enterprise Risk Management model. Where appropriate, this list has been updated and complemented, as reflected in the current version on the pages 84-91 of this document. In a next step, all identified risks and uncertainties have been split out into individual

components, which have been grouped in four risk categories: strategic, financial, operational and legal risks. The identified risks were then ranked by priority. Subsequently, the audit committee has listed for each risk component one or more responsive actions to reduce the impact and probability of the related risk. For each responsive action, a responsible person or department has been identified.

In addition, the Company has appointed a compliance officer to control compliance with the trading code relating to equity transactions. Furthermore, the Company rolled out internal guidelines, ‘General Directives’, at group level. These general directives include amongst others the operational guidelines on human resources, treasury, insurance, risk management and control of business processes.

Finally, the shareholders have a right to ask questions during the general meeting, and the Company falls under the supervision of the Belgian Financial Services and Markets Authority (FSMA).

CORPORaTE GOVERnanCE STaTEMEnT

CORPORaTE GOVERnanCE STaTEMEnT

12

ExTERnal SuPERViSiOn 7In 2010, the external supervision was performed by the statutory auditor, PricewaterhouseCoopers Bedrijfsrevisoren, represented by Mr. Peter Van den Eynde, auditor. The general shareholders’ meeting of 5 May 2008 renewed the mandate of the statutory auditor until and including the annual shareholders’ meeting to be held in 2011. The annual shareholders’ meeting which will be held on 2 may 2011 will be proposed to approve the

reappointment as statutory auditor of PricewaterhouseCoopers Bedrijfs-revisoren, represented by BV BVBA Peter Opsomer, in its turn represented by its permanent representative Mr. Peter Opsomer, auditor. Details concerning the statutory auditor’s fee in 2010 are included in note 7.9 to the financial statements.

ShaRES and ShaREhOldERS 8

nuMbER Of ShaRES

On 31 December 2010, there were 24,231,080 voting shares, representing a total share capital of 16,467,228.26 euro. On 2 July 2010, 3,777 new shares were created and the share capital was increased with 2,566.85 euro as a consequence of the exercise of warrants.

liSTinG Of ThE ShaRES

All shares of Omega Pharma are listed on the continuous market of NYSE Euronext (Brussels).• ISIN code: BE003785020• Reuters: OMEP.BR• Bloomberg: OME BB

The Omega Pharma shares are part of the main Belgian share index (Bel20) since 1 March 2002, and are also part of the Next 150 index.

EVOluTiOn Of ThE ShaRE PRiCE

For the share prices from 26 July 1998 until and including 25 April 2000, the share split of 25 April 2000 has been retroactively taken into account.

199919980

10

20

30

40

50

60

70

80

90

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

The share from 1998 to date Omega Pharma

CORPORaTE GOVERnanCE STaTEMEnT

CORPORaTE GOVERnanCE STaTEMEnT

13

ShaRE PRiCE in 2010

• Closing price on the first trading day: 35.380 euro• Highest closing price: 38.915 euro (18 January)• Highest intraday listing: 39.205 euro (15 January)• Lowest closing price: 27.315 euro (1 October)• Lowest intraday listing: 27.110 euro (23 September)• Closing price on the last trading day: 35.900 euro• Average closing price 2010: 34.338 euro

TuRnOVER Of TRadinG in ThE ShaRE

• Total annual traded turnover in 2010: 454,399,434.12 euro• Average daily traded turnover in 2010 based on the closing price:

1,761,238.12 euro

TRadEd VOluME

• Total annual volume traded in 2010: 13,433,478 shares• Average daily volume traded in 2010: 52,068 shares• Annual rotation in 2010: 0.55 (on the basis of 24,231,080 shares out-

standing)

MaRkET CaPiTaliSaTiOn

• Based on the closing price on 31 December 2010: 869,895,772 euro.

waRRanTSOn 31 December 2010, there were 284,452 warrants giving the right to subscribe for securites. This situation was unchanged at the publication date of this annual report. These warrants are all part of the warrant plan 3. The board of directors holds the opinion that warrants, since they enable employees, service providers and important third parties to participate in the Company, represent an important stimulating factor for the further expansion and growth of the Company.For more details: see note 7.7 to the consolidated financial statements.

* Translated from Belgian franc in euro.

** Translated from Belgian franc in euro, and after splitting the shares from 1 into 10.

Financialyear Grossdividend

1998* 0.02 euro

1999** 0.033 euro

2000 0.05 euro

2001 0.08 euro

2002 0.12 euro

2003 0.18 euro

2004 0.24 euro

2005 0.32 euro

2006 0.40 euro

2007 0.50 euro

2008 0.60 euro

2009 0.80 euro

2010 1.00 euro

diVidEnd

The board of directors of Omega Pharma will propose to the annual shareholders’ meeting of 2 May 2011 to pay out a gross dividend of 1.00 euro (net 0.75 euro) per share for the 2010 financial year. The proposed dividend is 25% higher than in 2009 and represents a pay-out ratio of 33%. The share will be listed ex-dividend on 4 May 2011.

Since its IPO in 1998, Omega Pharma has increased its dividend year after year, but maintained the pay-out ratio at a comparable level.

The share in 2010

Omega Pharma

Bel20

- 40

- 35

- 30

- 25

- 20

- 15

- 10

- 5

0

5

10

15

20

25

30

35

40

FebJan Mar Apr May Jun Jul Aug Sep Oct Nov Dec

14

Dateofmostrecent Number PercentageShareholder notification ofshares ofthetotal

Couckinvest NV / Marc Coucke 22 September 2008 en 29 January 2009 7 271 746 30.01 % (transactions made public)

Omega Pharma NV (treasury shares) * 22 September 2008 934 994 3.86 %

Capital Research and Management Company 11 June 2010 1 225 543 5.06 %

Public 14 798 797 61.07 %

Total 24 231 080 100.00 %

finanCial SERViCES

Omega Pharma uses the following financial institutions to provide financial services to its shareholders: Bank Degroof, Dexia Bank, BNP Paribas Fortis, ING Bank België, KBC Bank and Petercam.

ShaREhOldER STRuCTuRE and nOTifiCaTiOn ThREShOldS

Based on the most recent notifications and the transactions that are made public, the shareholder structure is as follows:

* The number of treasury shares included in this table, is the number mentioned in the notification of 22 September 2008. Since then the Company has divested a number of treasury shares, which did not require a new notification as no threshold was passed. At the moment of publication, the Company holds 879,994 treasury shares.

The total free float (only excluding Couckinvest NV/Marc Coucke and the treasury shares) consequently amounts to 66.13%The notification thresholds for major shareholdings are set in the articles of association at 3 per cent, 5 per cent, 7.5 per cent and multiples of 5 per cent.

Notification forms can be downloaded from the website of the regulator FSMA (www.fsma.be). Shareholders who think they should issue a notification, can contact Chris Van Raemdonck, Investor Relations (+32/9/381.0331).

finanCial analySTS

The Omega Pharma share is covered by the sell-side analysts of 12 stock brokers. In alphabetical order:

Stockbroker Analyst

ABN Amro Mark van der Geest (Amsterdam)

Arkéon Finance Stephan Dubosq (Paris)

Bank Degroof Marc Leemans (Brussels)

Bank of America Merrill Lynch Jamie Clark (London)

Exane BNP Paribas Tim Heirwegh (Brussels)

ING Anthony Cruysmans (Brussels)

KBC Securities Jan De Kerpel (Brussels)

Kempen & Co Frederic van Daele (Amsterdam)

Petercam Jan Van den Bossche (Brussels)

Rabo Securities Philip Scholte (Amsterdam)

RBS Wim Gille (Amsterdam)

UBS David Kerstens (London)

CORPORaTE wEbSiTE

The Company’s documents which are made public are available free of charge on the Company’s website www.omega-pharma.be. These docu-ments can also be obtained free of charge from the Company’s registered

office. These are mainly the Company’s articles of association, its corpo-rate governance charter and annexes, its statutory and consolidated annual accounts, its annual report, its interim report and the press releases.

CalEndaR fOR ShaREhOldERS

• 14 April 2011 (5:40 p.m. CET) : Trading Update Q1 2011• 2 May 2011 (7:00 p.m. CET) : General meeting• 4 May 2011: Ex-dividend listing• 6 May 2011: Record date• 9 May 2011: Dividend payment• 4 August 2011 (5:40 p.m. CET) : Interim Results 2011• 13 October 2011 (5:40 p.m. CET): Trading Update Q3 2011

GEnERal ShaREhOldERS’ MEETinG

The annual general meeting of shareholders is held each year at the Company’s registered office on the first Monday of May at 7 p.m. If this day is a public holiday, the meeting is held at the same time on the following working day.The first coming general meeting is scheduled for 2 May 2011. The convocation, the agenda and the proxy form for each general meeting are included on the website www.omega-pharma.be under the section Press releases. The conditions for admission to the general meeting are included in the Company’s articles of association and are also stated in the convocations to each general meeting.

Shareholders who, individually or jointly, represent at least 10 per cent of the capital, can propose items for the agenda of a meeting, provided these proposals are submitted to the board of directors at least 90 days in advance.

15

RElEVanT ElEMEnTS in CaSE Of a PubliC TakEOVER bid

9

The information that Omega Pharma NV is required to provide in accordance with article 34 of the Royal Decree of 14 November 2007 governing the obligations of issuers of financial instruments that are allowed for trading on a regulated market, is listed below.

Capitalstructure

On 31 December 2010, there were 24,231,080 voting shares, representing a total share capital of 16,467,228.26 euro. All shares have equal rights and obligations. The shares are either nominative shares, bearer shares or dematerialised shares, within the restrictions provided for by law.

Restrictionsrelatedtothetransferofshares

The Company’s articles of association do not impose any other restrictions related to the transfer of shares other than those stipulated by the Belgian Company Code.

Holdersofsharesconferringspecialvotingrights

The Company has not granted any special voting rights to any holder of its shares.

Mechanismforthecontrolofanyshareplanforemployeeswhenthevotingrightsarenotdirectlyexercisedbytheemployees

The voting rights associated with shares to be acquired by the employees as a result of the stock option plans are exercised directly by the employees concerned.

Restrictionoftheexercisingofthevotingright

Each share confers the right to one vote. Each shareholder can exercise his voting right provided that he or she was validly admitted to the general meeting and that these rights have not been suspended. The rules for admission to the general meeting are included in article 32 of the articles of association and in the convocation to the general meeting.According to the articles 7 and 9 of the Company’s articles of association, the Company is entitled to suspend the exercising of voting rights conferred to shares (i) as long as the requested amounts payable for these shares have not been paid, and (ii) which belong to several owners until only one person has been identified to the Company as designated to act as the owner. Nobody can participate in voting at the general meeting with voting rights related to securities for which he has failed to submit in due time a legally specified notification of participation.

AgreementsbetweenshareholdersofwhichtheCompanyisawareandwhichmayleadtorestrictionsontransferofsharesand/ortheexercisingofvotingrights

The Company is not aware of any such agreements at the time this document was prepared.

Rulesfortheappointmentandreplacementofdirectorsandforthemodificationofthearticlesofassociation

The members of the board of directors are appointed by the general meeting. The Company’s articles of association also provide a nomination right for Couckinvest NV for the appointment of the members of the board of directors, by which half plus one of the directors should be appointed from the candidates exclusively nominated by Couckinvest NV. In practice, no use has been made of this nomination right. The Company’s articles of association can be modified by an extraordinary general meeting in accordance with the provisions and majorities stipulated in the Belgian Company Code.

Authorizationtoissueortopurchaseshares

The extraordinary general meeting of 7 July 2006 has granted the board of directors the authorization to increase the share capital in one or more times with a maximum amount of 16,296,833.81 euro, in a manner and under the conditions to be specified by the board of directors, for a five-year period starting on the date of publication of this decision in the Appendices to the Belgian Official Gazette. On 31 December 2010, the board of directors was still entitled to increase the capital by a maximum amount of 16,052,705.81 euro.The extraordinary general meeting of 9 June 2009 has granted the board of directors the authorization for a period of five (5) years, starting from the date of the authorization, to acquire the Company’s own shares, by purchase or exchange, directly or from a person who acts in their own name but for the account of the Company, at a price which may not be lower than 1 euro and not higher than the average of the closing prices of the 10 working days preceding the day of the purchase or the exchange, plus 10 per cent, and this in such a manner that the Company will never hold treasury shares of which the fraction value exceeds 20 per cent of the Company’s issued share capital. The board of directors is also authorised to dispose of those shares without being bound by the aforementioned time and price restrictions. These authorisations can also be used for the possible acquisition or disposal of Company shares by direct subsidiaries in accordance with article 627 of the Belgian Company Code.The board of directors has not exercised its right to repurchase the Company’s own shares during 2010. At 31 December 2010, the Company held 879,994 shares with a total book value amounting to 24,144,003 euro.

AgreementstowhichtheCompanyisapartyandwhichcomeintoeffect,aresubjecttomodifications,orlapseintheeventofachangeofcontroloftheCompanyafterapublictakeoverbid

The Facility Agreement, entered into on 1 December 2006 between Omega Pharma NV (as Company and Original Borrower), Omega Pharma Holding (Nederland) BV (as Original Borrower), certain subsidiaries of Omega Pharma NV (identified in the agreement as Original Guarantors), ING Bank NV (as Arranger and Agent), and the financial institutions (identified in the agreement as Original Lenders). The Note Purchase Agreement, entered into on 27 July 2004 between Omega Pharma NV and certain subsidiaries identified in the agreement on the one hand and the Purchasers on the other hand. Both agreements include clauses that come into effect in the event of a change of control over the Company. Warrantplan 3 also

CORPORaTE GOVERnanCE STaTEMEnT

16

includes a change of control clause. In accordance with Section 556 of the Belgian Company Code, the clauses identified above were approved by the general meeting. At the general shareholders’s meeting of 2 May 2011, the Company shall present the clauses that come into effect in the event of a change of control over the Company included in (i) the credit agreement with KBC Bank NV dated 24 august 2010 and (ii) the revolving credit facility agreement with Fortis Bank NV dated 23 August 2010, for approval.

AgreementsbetweentheCompanyanditsdirectorsoremployees,whichprovideforcompensationwhen,asaresultofapublictake-overbid,directorsoremployeesresignorareforcedtoresignwithoutavalidreason

No such agreements exist.

NotificationofshareholdersoftheCompanyintheframeworkofarticle74oftheLawrelatedtopublictake-overbids

The Company received a copy of the notifications of Couckinvest NV and Mr. Marc Coucke to the CBFA in accordance with article 74 of the Law of 1 April 2007 on public takeover bids. These notifications show that Couckinvest NV and Marc Coucke held, on 1 September 2007, more than 30 per cent of the Company’s shares, in mutual agreement. A copy of these notifications can be found on the Company’s website.

annual infORMaTiOn 10

In accordance with the Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets, a summary of the ‘Annual Information’ as referred to in Title 10 of this Law is included hereunder. The full documents listed in this summary are available on the corporate website. The Company wishes to emphasise that this information may have become outdated.

PROSPECTuSES

Omega Pharma has not issued a prospectus during 2010.

infORMaTiOn fOR ThE ShaREhOldERS

• Convocation to the general shareholder meeting of 3 May 2010 (27 March 2010)

• Proxy forms for the aforementioned general shareholder meeting (27 March 2010)

• Notifications of major shareholdings (1 April 2010, 15 June 2010, 9 July 2010, 16 August 2010)

• Change of the total number of shares outstanding of the Company (27 July 2010)

PERiOdiCal PRESS RElEaSES and infORMaTiOn

• Trading update for the fourth quarter of 2009 and the full year 2009 (21 January 2010)

• Publication of the 2009 annual results (10 March 2010)• Trading update for the first quarter of 2010 (15 April 2010)• Publication of the interim financial report for the first half of 2010

(26 August 2010)• Trading update for the third quarter of 2010 (19 October 2010)

OCCaSiOnal PRESS RElEaSES and infORMaTiOn

• Press release concerning the strengthening of the board of directors of the Company (26 March 2010)

• Press release concerning the start of exclusive negotiations with TCR Capital related to the acquisition of Laboratoire de la Mer (29 September 2010)

• Press release concerning the acquisition of Laboratoire de la Mer and the ACO Vitamineral brand (20 October 2010)

• Press release concerning the acquisition of Inibsa (29 November 2010)

CORPORaTE GOVERnanCE STaTEMEnT

17

18

COnSOlidaTEd finanCial STaTEMEnT

COnSOlidaTEd finanCial STaTEMEnT

Consolidated financial statements 20

Consolidated income statement 20

Consolidated statement of comprehensive income 21

Consolidated balance sheet 22

Consolidated statement of changes in equity 23

Consolidated cash flow statement 24

Report of the board of directors 25

Notes to the consolidated financial statements 28

1. General information 28

2. Summary of significant accounting policies 28

3. Risk management 34

4. Segment information 40

5. Income statement items 42

5.1 Turnover 42

5.2 Other operating income 42

5.3 Employee benefit expenses 42

5.4 Depreciations, amortization and changes in provision 43

5.5 Other operating expenses 43

5.6 Financial result 43

5.7 Income tax 43

5.8 Earnings per share 44

19

6. Balance sheet items 45

6.1 Intangible assets 45

6.2 Plant, property and equipment 47

6.3 Financial assets and other non-current assets 48

6.4 Inventories 48

6.5 Trade and other receivables 48

6.6 Cash and cash equivalents 49

6.7 Assets held for sale 49

6.8 Equity 49

6.9 Provisions 49

6.10 Retirement benefit obligations 50

6.11 Taxes, remuneration and social security 51

6.12 Financial debts and derivative financial instruments 52

6.13 Other current payables 58

7. Miscellaneous items 59

7.1 Contingencies 59

7.2 Off-balance sheet rights and obligations 59

7.3 Business combinations 59

7.4 List of consolidated companies 60

7.5 Significant events after balance sheet date 61

7.6 Related parties 61

7.7 Warrants; share-based payments 62

7.8 Dividend; share-based payments 63

7.9 Shareholder structure 64

7.10 Information on the statutory auditor’s remuneration

and related services 64

Statutory auditor’s report 65

20

* Taking into account the dilutive impact of outstanding warrants which are ‘in the money’.

The notes form an integral part of the consolidated financial statement.

(inthousandeuro) Note 2010 2009

Operatingincome 878677 822825

Turnover 5.1 856 610 813 763

Other operating income 5.2 22 067 9 062

Operatingexpenses (771150) (727170)

Trade goods (398 541) (379 349)

Trade goods purchased (396 066) (372 620)

Changes in inventories of raw materials, components, work in progress and finished goods (2 475) (6 729)

Services and other goods (226 759) (208 185)

Employee benefit expenses 5.3 (99 422) (99 415)

Depreciations and amortization 5.4 (21 366) (21 164)

Changes in provisions for liabilities 5.4 198 2 560

Other operating expenses 5.5 (25 260) (21 617)

Of which restructuring charges (20 460) (13 484)

Of which other (4 800) (8 133)

Operating result 107 527 95 655

Financial income 970 965

Financial expense (24 141) (26 276)

Financialresult 5.6 (23171) (25311)

Result excluding associates and before income tax 84 356 70 344

Result of associates (accounted for according to the equity method) 2 702

Gain on the sale of participation in associates 15 432

Resultofassociates 18134

Result from ordinary activities before income tax 84 356 88 478

Income tax 5.7 (15 251) (11 566)

Result after income tax 69 105 76 912

Of which attributable to non-controlling interests (369) 88

Of which attributable to the shareholders of the parent company 69 474 76 824

Total number of shares outstanding on 31 December 24 231 080 24 227 303

Of which treasury shares 879 994 879 994

Weighted average after deduction of treasury shares 23 349 203 23 347 309

Earnings per share (in euro) 5.8 2.98 3.30

Diluted earnings per share (in euro)* 2.94 3.26

COnSOlidaTEd inCOME STaTEMEnT 1COnSOlidaTEd

finanCial STaTEMEnT

21

Asat31December2009 Notes Fairvalue& Cumulative Retained Attrib.to Non- Total other translation earnings shareholders control- equity reserves adjustments ofparent ling(inthousandeuro) company interests

Fair value gains/(losses) on cash flow hedges 6.12 (9 014) (9 014) (9 014)

Fair value gains/(losses) on cash flow hedges - tax effect 6.12 3 063 3 063 3 063

Currency translation adjustments 3 191 3 191 3 191

Profit for the period 76 824 76 824 88 76 912

Totalcomprehensiveincomefortheperiod (5951) 3191 76824 74064 88 74152

Asat31December2010 Notes Fairvalue& Cumulative Retained Attrib.to Non- Total other translation earnings shareholders control- equity reserves adjustments ofparent ling(inthousandeuro) company interests

Fair value gains/(losses) on cash flow hedges 6.12 3 054 3 054 3 054

Fair value gains/(losses) on cash flow hedges - tax effect 6.12 (1 038) (1 038) (1 038)

Currency translation adjustments 5 211 5 211 5 211

Profit for the period 69 474 69 474 (369) 69 105

Totalcomprehensiveincomefortheperiod 2016 5211 69474 76701 (369) 76332

COnSOlidaTEd STaTEMEnT Of COMPREhEnSiVE inCOME

2COnSOlidaTEd

finanCial STaTEMEnT

22

The notes form an integral part of the consolidated financial statement.

(inthousandeuro) Note 2010 2009

Non-currentassets 1090896 987882

Intangible assets 6.1 997 948 905 319

Property, plant and equipment 6.2 46 123 43 244

Financial assets 6.3 1 940 1 940

Deferred income tax assets 6.11 36 164 29 028

Other non-current assets 6.3 8 721 8 351

Currentassets 350858 350570

Inventories 6.4 121 311 109 794

Trade receivables 6.5 141 721 164 223

Other current assets 6.5 53 730 51 324

of which income tax assets 8 249 22 534

Cash and cash equivalents 6.6 33 823 25 229

Assets held for sale 6.7 1 949

TOTAL ASSETS 1 443 430 1 338 452

EQUITY 6.8 718274 660518

Share capital and share premium 366 941 366 841

Retained earnings 376 016 325 219

Treasury shares (24 144) (24 144)

Fair value and other reserves 739 (1 284)

Cumulative translation adjustments (1 448) (6 659)

Equityattributabletotheshareholdersoftheparentcompany 718104 659973

Equity attributable to non-controlling interests 170 545

LIABILITIES 725156 677934

Non-currentliabilities 172317 369473

Provisions 6.9 4 643 4 475

Pension obligations 6.10 4 726 4 587

Deferred income tax liabilities 6.11 85 910 71 947

Borrowings (non-current financial liabilities) 6.12 70 693 258 332

Other non-current liabilities 738 61

Derivative financial instruments 6.12 5 607 30 071

Currentliabilities 552839 308461

Borrowings (current financial liabilities) 6.12 278 791 19 085

Trade payables 200 977 215 731

Income tax liabilities 26 386 35 076

Remuneration and social security 14 998 13 760

Other current payables 6.13 22 231 24 809

Derivative financial instruments 6.12 9 456

TOTAL EQUITY AND LIABILITIES 1 443 430 1 338 452

COnSOlidaTEd balanCE ShEET 3COnSOlidaTEd

finanCial STaTEMEnT

23

The notes form an integral part of the consolidated financial statement.

Notes Number Share Treasury Fair Cumul.- Retained Share- Non- Total of capital shares value transl.- earnings holders control- equity shares &share &other adjust- ofparent ling(inthousandeuro) premium reserves ments company interests

Amount at 31 December 2008 23 347 309 366 841 (24 144) 4 641 (9 850) 262 815 600 303 217 600 520

Totalcomprehensiveincomefortheperiodended31December2009 (5951) 3191 76824 74064 88 74152

Capital increases 6.8

Employee share options scheme 7.7 26 26 26

Dividend on treasury shares 7.8 528 528 528

Dividend 7.8 (14 536) (14 536) (14 536)

Share of movement in reserves of equity accounted investments 6.8 (412) (412) (412)

Attributable to non-controlling interests 240 240

Amount at 31 December 2009 23 347 309 366 841 (24 144) (1 284) (6 659) 325 219 659 973 545 660 518

Totalcomprehensiveincomefortheperiodended31December2010 2016 5211 69474 76701 (369) 76332

Capital increases 6.8 3 777 100 100 100

Employee share options scheme 7.7 7 7 7

Dividend on treasury shares 7.8 705 705 705

Dividend 7.8 (19 382) (19 382) (19 382)

Share of movement in reserves of equity accounted investments 6.8

Attributable to non-controlling interests (6) (6)

Amount at 31 December 2010 23 351 086 366 941 (24 144) 739 (1 448) 376 016 718 104 170 718 274

COnSOlidaTEd STaTEMEnT Of ChanGES in EquiTy 4COnSOlidaTEd

finanCial STaTEMEnT

24

(inthousandeuro) Note 2010 2009

Result excluding associates and before income tax 84 356 70 344

Taxes paid 5.7 (8 609) 6 060

Amortization of intangible assets 5.4, 6.1 10 240 8 949

Depreciations of tangible assets 5.4, 6.2 9 854 9 513

Amounts written off: inventories - receivables 5.4 1 613 3 137

(Profit)/loss on sale of fixed assets (13 579) (1 785)

Changes in provisions 5.4 (1 488) 386

Interests and non-cash financial items 5.6 20 334 22 233

Totaladjustmentsfornon-cashitemsandinterestspaid 26974 42433

(Increase)/decrease in other non-current assets (20) (141)

(Increase)/decrease in inventories 6.4 (5 641) 11 463

(Increase)/decrease in trade debtors 6.5 27 371 39 771

(Increase)/decrease in VAT receivables, income tax receivables and other receivables (excluding deferred charges) 6.5 1 411 (1 562)

(Increase)/decrease in prepayments and accrued income 70 (455)

Increase/(decrease) in trade creditors (22 768) 7 352

Increase/(decrease) in advance payments received 18 (106)

Increase/(decrease) in social security and taxation creditors (331) 161

Increase/(decrease) in other creditors (3 140) 1 910

Increase/(decrease) in accruals and deferred income 1 007 (3 461)

Totalchangesinworkingcapital (2023) 54932

Total cash flow from operating activities 100 698 173 769

Cash flow from divestments 52 500

Capital expenditure 6.1, 6.2 (42 451) (27 562)

Capital disposals 6.1, 6.2 778 4 609

Changes in the scope and transfers of opening positions 1 963 233

Investments in existing shareholdings (post payments) and in new holdings (78 345) (6 287)

Dividends received 2 250

Total cash flow from investing activities (118 055) 25 743

Proceeds from the issue of share capital 100

Dividend distribution 7.8 (18 605) (14 014)

Change in debts 6.12 59 412 (171 584)

Net interests paid 5.6 (16 416) (23 090)

Total cash flow from financing activities 24 491 (208 688)

Cash and cash equivalents at the beginning of the year 25 228 33 793

Effect of exchange rate fluctuations 1 461 612

Cash and cash equivalents at the end of the year 33 823 25 229

Total net cash flow of the period 7 134 (9 176)

The notes form an integral part of the consolidated financial statement.

COnSOlidaTEd CaSh flOw STaTEMEnT 5COnSOlidaTEd

finanCial STaTEMEnT

25

REPORT Of ThE bOaRd Of diRECTORS On ThE COnSOlidaTEd annual aCCOunTS

• Turnover growth of 5.3 per cent to 856.6 million euro.• EBITDA1 of 136.0 million euro represents 16 per cent of turnover.• Investments in organizations and innovation already yield return as of the second half of 2010: sales +8 per cent, gross margin +10 per cent

and EBITDA +21 per cent versus the same period in 2009.• Recurring net profit2 per share amounts to 3.25 euro compared to 3.12 euro in 2009.• Proposed dividend for 2010: 1.00 euro per share, up 25 per cent versus 2009.

Consolidated turnover in 2010 was 856.6 million euro, an increase of 5 per cent compared to 2009. Internal growth was 4.6 per cent, in line with previously published Company guidance.

SOlid SalES GROwTh fROM fiVE PillaR bRandS

Turnover from the products in the strategic categories (the five pillars) increased by 7 per cent to 438.2 million euro. Individual key brands including Paranix (anti-parasite treatment), Wartner (anti-wart treatment), ACO (dermo-cosmetics), XLS (slimming) and Phytosun Arôms (aromatherapy) posted double-digit sales growth. Turnover from the five pillar products represents 51 per cent of 2010 turnover; other OTC products 29 per cent and generics (distributed in Belgium only) 20 per cent.

SalES GROwTh in all SEGMEnTS, ExCEPT fRanCE whERE SalES RECOVERy OCCuRREd in SECOnd half Of 2010

Turnover in Western Europe was up 3 per cent compared to 2009 at 338.1 million euro. In Belgium, the turnover grew 11 per cent to 252.7 million euro. The Emerging Markets posted an 8 per cent increase in turnover, which was 110.3 million euro. The French organization initiated its turn-around in the middle of the year and achieved a turnover of 115.5 million euro (-1 per cent).

POSiTiVE iMPaCT On TuRnOVER fROM EnhanCEd EffORTS in R&d and bRand POliCy

The 5 per cent annual sales growth is composed of a 3 per cent growth in the first half and an 8 per cent increase in the second half of 2010. Beginning in the second half of 2010, Omega Pharma started to benefit from the revitalized and reviewed central innovation and brand policy.In the first half of 2010, Omega Pharma posted 423.5 million euro of sales. Sales in Western Europe grew 1 per cent. The strong performance in the Nordics, Italy, and the United Kingdom was slightly offset by weaker sales in Germany, Portugal, Spain and Greece. In Belgium, sales in the first six months were up 11 per cent, with solid sales growth for both OTC products and generics. In the Emerging Markets, sales grew 13 per cent in the first half, while turnover in France declined due to delayed restocking by wholesalers and the impact of the divestiture of the Marseille plant in October 2009.

In the second half of 2010, consolidated turnover grew 8 per cent to 433.1 million euro. Turnover in Western Europe was up 7 per cent, mainly as a result of successfully rolling out of centrally developed innovative products (XLS Medical, Paranix Double Action, et cetera). The Belgian organization continued its strong performance. In France, the new management achieved a turnaround with a 7 per cent increase of the turnover, mainly

nOTES TO ThE COnSOlidaTEd inCOME STaTEMEnT

from local leading brands including Phytosun Arôms and Clément-Thékan, as well as from global brands including XLS Medical and Dermalex. Sales grew 4 per cent in the Emerging Markets, even though sales in Russia and Ukraine had unfavourable comparatives (elevated influenza rates in the second half of 2009 correlated with high sales of Aflubin, versus a mild winter and a weak influenza season in 2010).

Other operating income amounted to 22.1 million euro which includes a positive non-recurring item related to the divestiture of Hydrasense, a brand for the Canadian market that originated from the recently acquired company Laboratoire de la Mer.

fixEd COSTS wEll COnTROllEd; MaRkETinG SuPPORT STREnGThEnEd

Trade goods and gross margin grew 5 per cent, i.e. in line with turnover. Gross margin was 458.1 million euro, representing 53 per cent of the annual turnover. Between the first and the second half of 2010, the gross margin evolved from 53 per cent to 54 per cent of turnover.

Services and other goods grew 9 per cent. This refers mainly to enhanced efforts in promotion and advertising in support of the five pillar products. It should be noted that these product were introduced in various Emerging Markets, as scheduled in the roll-out programme.

Employee benefit expenses remained flat at 99.4 million euro in spite of the 5 per cent sales growth, which illustrates improved efficiency. The increase in employee benefit expenses in Corporate (five pillar strategy) and in the Emerging Markets (roll-out programme) was offset by improved efficiencies in the other reporting segments.

PiVOT POinT bETwEEn inVESTMEnTS and RETuRn; EVOluTiOn alREady nOTiCEablE bETwEEn fiRST and SECOnd half 2010

EBITDA increased over 4 per cent, almost parallel to the growth in turnover, and was 136.0 million euro — i.e. 16 per cent of turnover. The EBITDA margin for the full year of 2010 breaks down to a 14 per cent margin for the first half of 2010 and 18 per cent for the second half. The revitalized and reviewed central innovation and brand policy focuses on high-margin products and brands, and this started to pay off in the second half of 2010.

1. EBITDA (Earnings Before Interests, Depreciations and Amortization): operating result increased with depreciations an amortization, excluding non-recurring items.

2. Result of the period, excluding results from associates and non-controlling interests, and adjusted for non-recurring items and their related tax impact (calculated at average corporate tax rate).

REPORT Of ThE bOaRd Of

diRECTORS

COnSOlidaTEd finanCial STaTEMEnT

26

For Western Europe, EBITDA amounted to 74.1 million euro (22 per cent of turnover). In the first half of 2010, the EBITDA margin was temporarily affected by higher launch-related marketing costs, but these efforts started to pay off in the second half, when a 24 per cent EBITDA margin was achieved. With an EBITDA margin consistently above 20 per cent of sales in 2010, Western Europe illustrated the positive impact of the growth of centralized brands within the framework of the five pillar strategy.Belgium had an EBITDA of 36.0 million euro — up 18 per cent versus 2009 and ahead of sales growth. Despite the weight of traditionally lower-margin generics, the EBITDA of the Belgian operations represents 14 per cent of the full year 2010 turnover (13 per cent in 2009).The EBITDA of 17.9 million euro in the Emerging Markets breaks down in 4.3 million euro for the first six months and 13.6 million euro in the second half of the year. In the first half, the organization mainly prepared product launches scheduled in the second half of 2010, and also made significant efforts in optimizing business and management structures. These efforts started to yield return in the last six months of 2010, when the EBITDA margin was restored to 21 per cent of sales, leading to a 16 per cent margin for the full year. In France, the 10 per cent increase in the EBITDA for the second half of 2010 largely offset the negative trend that was still visible in the first half of the year. On an annual basis EBITDA amounted to 19 million euro — up 2 per cent.

OPERaTinG RESulT: 13 PER CEnT Of TuRnOVER

Depreciations and amortization, changes in write-offs (DA) remained at their traditional level with 2.5 per cent of turnover.

Other operating expenses include 20.5 million euro restructuring charges, related to restructurings implemented and/or provisioned in the Czech Republic, France, Greece, Italy, the Netherlands and Russia. These non-recurring expenses were partly offset by the positive impact from the divestiture of Hydrasense (cf. Other operating income). Consequently, non-recurring items had a negative impact on the full-year result of 7.2 million euro.

The operating result was 107.5 million euro compared to 95.7 million euro in 2009; an increase of 12 per cent.

nET RECuRRinG PROfiT: +4 PER CEnT

The Financial result of -23.2 million euro is 8 per cent more favourable than in 2009 (-25.3 million euro). This can principally be attributed to the financial debt level that throughout 2010 was below 2009 on average, and to the favourable interest rates of the Company’s main credit facilities.

Since Omega Pharma divested its participation in Arseus, in November 2009, there was no contribution from associates in 2010. In 2009, this item had a total positive impact of 18.1 million euro. This is a key factor for appreciating the result from ordinary activities before income tax, which was 84.4 million euro in 2010 compared to 88.5 million euro in 2009.

Income taxes amounted to -15.3 million euro and represented 18.1 per cent of the profit before taxes, whereas this was -11.6 million euro and 13.5 per cent in 2009. This increase coincided with a settlement of a dispute with the Belgian tax authorities (cf. note 21 ‘Contingencies’ in the 2009 annual report), which exceeded the corresponding provision by 0.8 million euro.

The Result from continuing operations was 69.5 million euro.

The net recurring profit of the Group (i.e. adjusted for non-recurring items and corresponding tax impact, as well as for associates and non-controlling interests) was 75.8 million euro, an improvement of 4 per cent versus 72.8 million euro in 2009.

The result of the period amounted to 69.5 million euro.

The total number of shares outstanding increased slightly as a result of the exercise of warrants during 2010.

The net earnings per share was 2.98 euro or 2.94 euro on a fully diluted bases. The recurring net profit per share was 3.25 euro for 2010.

Further comments to the various elements in the income statement can be found in the notes 5.1 through 5.8, which are included further in this document and which form an integral part of the report of the board of directors on the consolidated annual accounts.

nOTES TO ThE COnSOlidaTEd balanCE ShEETOn ThE aSSETS SidE, ThE Main fluCTuaTiOnS REfER TO inTanGiblE aSSETS, inVEn TORiES and TRadE RECEiVablES.

Intangible assets amounted to 998.0 million euro. The increase of 92.6 million euro is mainly related to the acquisitions that were completed in 2010 on the one hand, and the strategic decision to enhance investments in R&D and brands on the other hand. The acquisitions of ACO Vitamineral, Inibsa, Laboratoire de la Mer, and the Goldshield brands represent 70.5 million of the increase over 2009. Investments in research and development were 16.7 million euro.

Inventories represented 121.3 million euro (+10 per cent). This increase is largely related to the acquisitions that were completed in 2010. At an identical consolidation scope, inventories grew 6 per cent which is aligned fairly with organic sales growth.

Trade receivables decreased to 141.7 million euro, which reflects a combi-nation of stricter management of outstanding invoices, factoring, and the geographic mix of the 2010 turnover, with a smaller portion of sales in countries traditionally characterized by longer payment terms.

The working capital was 62.1 million euro at the end of the period, representing 7 per cent of the turnover — in line with previous year.

On the equity and liabilities side, equity was mainly affected by the net profit.

The financing of the above-mentioned acquisitions led to an increase of the net financial debt (current and non-current financial liabilities reduced with cash and cash equivalents) from 291.3 million euro at 30 June 2010 to 330.0 million euro at the end of the period, and remains comfortably within covenants. (On 31 December 2010 the net debt/EBITDA covenant was 2.07x, whereas the maximum is 3.25x). Two main elements in Omega Pharma’s financing structure are a European syndicated loan and a US private placement. On 31 December 2010, the credit lines in use represented an amount of 156 million euro. Since the syndicated loan matures at the end of 2011, this amount was transferred from non-current financial liabilities to current financial liabilities. The second instalment of the US private placement matures in 2011. The corresponding amount of 130 million euro is transferred from non-current financial liabilities to current financial liabilities. Omega Pharma is investigating several refinancing options, including: syndicated credit facilities, a new US private placement, corporate bonds, et cetera. Two important bilateral

27

In order to finance the acquisitions made in 2010, additional credit lines were used, which resulted in an inflow of 59.4 million euro. In 2010, the Company paid 16.4 million euro in interest.

The combination of cash flow from operating activities, investing activities, and financing activities resulted in a cash inflow of 1.5 million euro. As a result, the cash and cash equivalents at the end of the period amounted to 33.8 million euro and correspond with the amount recognized in the balance sheet.

CORPORaTE GOVERnanCE STaTEMEnTThe corporate governance statement of the board of directors, including the statement on the internal control and risk management systems, forms an integral part of the report of the board of directors on the consolidated accounts. This statement is included in this document on the pages 3-16.

OuTlOOk (*)

Omega Pharma reiterates its outlook for turnover in 2011. Based on the reinforced organizations in the markets where the Group is operating, and a highly promising product pipeline, Omega Pharma is convinced that an annual turnover of at least 927 million euro can be achieved in 2011. This represents an increase of 8 per cent compared over 2010 and is a combination of internal sales growth and the sales contribution from businesses and brands acquired in 2010 and early 2011.

The five pillar strategy combined with continued efforts in the field of operational excellence will support a continued trend of improving margins over the 2011-2014 planning period. Based on the current external environmental factors Omega Pharma expects at least stable margins for 2011.

Since Omega Pharma intends to sustain the enhanced investments in R&D, brands, licenses and patents, a capex ratio of 4 to 4.5 per cent of the annual turnover is anticipated for the coming years.

As a consequence of the expanded geographic coverage and the evolving geographic mix, Omega Pharma anticipates taxable income in countries with higher effective tax rates than the average over the previous years. Therefore, Omega Pharma anticipates an effective tax rate of 15-20 per cent going forward.

(*) This forward-looking information is based on current internal estimates and expectations as well as market expectations. Forward-looking statements contain inherent risks and apply exclusively on the date they are made. The actual result may differ substantially from those included in the forward-looking statements. Differences between expectations and reality may vary significantly considering the reduced visibility which is inherent in the current political and economic environment, as well as its potential impact on generics, cost structures, taxes, consumer spending et cetera.

credit facilities of 75 million euro each, with maturity end in 2016, have already been approved.

Further comments to the various elements of the balance sheet can be found in the notes 6.1 through 6.13, which are included further in this document and which form an integral part of the report of the board of directors on the consolidated annual accounts.

nOTES TO ThE COnSOlidaTEd CaSh flOw STaTEMEnTThe consolidated cash flow statement starts from the result excluding associates and before income tax, as included in the consolidated income statement.

This amount is decreased by the outflow of cash for paid taxes in the amount of 8.6 million euro. This amount refers to all income taxes that have been effectively paid during 2010, while the amount in the income statement refers to the income taxes that have been accounted for in 2010.

Subsequently, the elements from the operating activities that do not have a cash flow effect are added back. Non-financial elements (mainly depreciations, amortization, and changes in provision) amount to a total of 6.6 million euro. In the income statement, a part of these elements are included in other operating expenses (restructuring charges), which explains the difference between both amounts.In order to obtain the cash flow from operating activities, the financial elements are also added back. The amount of 20.3 million euro refers almost entirely to interest paid on borrowings, and the remainder to other non-cash financial items. Part of the interest due in 2010 was effectively paid after balance sheet date, thus explaining the difference with the amount in the income statement.

For calculating the net cash flow from operating activities, further adjustments were made for changes in working capital. This is broken down into working capital adjustments in the narrow definition for which trade receivables, inventories, and trade payables are taken into account; and in working capital adjustments in the broad definition for which debts related to acquisitions, provisions, social security, et cetera are taken into account.

For 2010, this led to a net cash flow from operating activities of 100.7 million euro.

The total amount of cash flow from investing activities indicates an outflow of 118.1 million euro. There was no incoming cash flow from divestitures in 2010 since the Hydrasense divestiture was not yet paid as of the balance sheet date. Total capex amounted to 42.5 million euro. This is 5.0 per cent of sales, compared to 3.4 per cent in 2009. This increase refers to R&D, brands, licensing-in, and patents. It reflects the enhanced efforts in product innovation within the framework of the five pillar strategy. Capital disposals refer to the sale of equipment. Cash and cash equivalents from companies acquired in 2010 yielded a cash inflow of 0.8 million euro. Investments in existing shareholders and new business combinations mainly refer to payments for acquisitions that were completed in 2010 (cf. note 7.3), and to a lesser extent to post-payments for acquisitions that were completed in previous periods. No post-payments are involved for the 2010 acquisition.

In 2010, financing activities generated an inflow of cash of 24.5 million euro. The issue of new shares, resulting from the exercise of warrants, yielded an inflow of 0.1 million euro. The distribution of the dividend over the 2009 period represented a cash outflow of 18.6 million euro.

28

SuMMaRy Of SiGnifiCanT aCCOunTinG POliCiES 2

Omega Pharma NV (the ‘Company’) and its subsidiaries (together the ‘Group’) are vendors of high-added-value products and services to pharmacies and other medical sectors. The Group has activities in close to 40 countries.

The Company is a limited liability company, making or having made a public appeal on savings. The Company is incorporated and domiciled in Belgium, having its registered office at Venecoweg 26, 9810 Nazareth, with company number BE 0431 676 229.

nOTES TO ThE COnSOlidaTEd finanCial STaTEMEnTS

GEnERal infORMaTiOn 1

The Company’s shares are listed on the regulated market Euronext Brussels.

These consolidated financial statements have been approved for issue by the board of directors on 30 March 2011.

nOTES TO ThE COnSOlidaTEd

finanCial STaTEMEnTS

The principal accounting policies applied in preparation of these consolidated financial statements are set out below. These policies have been consistently applied by all consolidated entities, including subsidiaries, to all the years presented, unless otherwise stated.

baSiS Of PREPaRaTiOn

The consolidated financial statements of the Omega Pharma group have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRSs as adopted by the EU). The conso-lidated financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair value.

a)Thefollowingnewstandards,amendmentstostandardsandinterpre-tations are mandatory for the first time for the Group’s accountingperiodbeginning1January2010:

• IFRS 3 (revised), ‘Business combinations’ The new requirements are applicable to business combinations for which the acquisition date is on or after the beginning of the first annual period beginning on or after 1 July 2009;

• IAS 27 (revised), ‘Consolidated and separate financial statements’ (effective 1 July 2009).

b)Thefollowingnewstandards,amendmentstostandardsandinterpre-tations are mandatory for the first time for the Group’s accountingperiod beginning 1 January 2010, but are not currently relevant totheGroup:

• Amendments to IAS 39, ‘Financial instruments: Recognition and measurement’ on eligible hedged items (effective 1 July 2009);

• Amendments to IFRS 2, ‘Group cash-settled share-based payment transactions’ (effective 1 January 2010);

• Amendments to IFRS 1, ‘Additional exemptions for first-time adopters’ (effective 1 January 2010);

• Amendments to IFRS 1, ‘First-time Adoption of IFRSs’;• IFRIC 12, ‘Service Concession Arrangements’ (effective 30 March 2009);• IFRIC 15, ‘Agreements for the construction of real estates’ (effective 1

January 2010);• IFRIC 16, ‘Hedges of a net investment in a foreign operation’ (effective

1 July 2009); • IFRIC 17, ‘Distributions of non-cash assets to owners’ (effective 1 July

2009);• IFRIC 18, ‘Transfers of assets from customers’ (effective 31 October

2009);• ‘Improvements to IFRSs’ (2009).

COnSOlidaTEd finanCial STaTEMEnT

COnSOlidaTEd finanCial STaTEMEnT

29

c)NewStandards,amendments toexistingstandardsand interpreta-tionsthathavebeenissuedbytheIASBandendorsedbytheEUandaremandatoryfortheGroup’saccountingperiodsbeginningonorafter1 January 2011 or later periods andwhich theGroup has not earlyadopted,are:

• Amendment to IAS 32, ‘Classification of Rights Issues’ (effective 1 February 2010);

• IAS 24 (revised), ‘Related Party Disclosures’ (effective 1 January 2011);• Amendments to IFRIC 14, ‘Pre-payments of a Minimum Funding Require-

ment’ (effective 1 January 2011);• IFRIC 19, ‘Extinguishing Financial Liabilities with Equity Instruments’

(effective 1 July 2010); • Amendments to IFRS 1 providing a limited exemption from comparative

IFRS 7 disclosures for first-time adopters (effective 1 July 2010);• ‘Improvements to IFRSs’ (2010).

d)Newstandards,amendmentstoexistingstandardsandinterpretationsthathavebeenissuedbytheIASBbutthatarenotyetendorsedbytheEU,are:

• IFRS 9, ‘Financial instruments’ (effective 1 January 2013);• Amendments to IFRS 7, ‘Financial instruments: disclosures’ (effective

1July 2011);• Amendments to IAS 12, ‘Income taxes’ on deferred tax (effective 1

January 2012); • Amendments to IFRS 1, ‘First-time Adoption of IFRSs’ related to severe

hyperinflation and the removal of fixed dates for first-time adopters (effective 1 July 2011).

COnSOlidaTiOn

SubSidiaRiES

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets.

Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the statement of comprehensive income.

Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

aSSOCiaTES

Associates are companies in which the Group has, directly or indirectly, a significant influence but not the control to govern the financial and operating policies. This is generally evidenced when the Group holds between 20 and 50 per cent of the voting rights.

Investments in associates are accounted for by the equity method of accounting, from the date that significant influence commences until the date that significant influence ceases. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of the individual investments.

When the Group’s share of losses in an associate exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities of the associate identified at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment.

Profits and losses on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates, unless the loss provides evidence of an impairment of the asset transferred.

Where necessary, adjustments are made to the financial statements of associates to bring the accounting policies used in line with those used by the Group.

In case the financial statements of an associate have been prepared as of a date different from the Group, adjustments are booked for significant transactions or events that occur between that date and the date of the consolidated financial statements.

fOREiGn CuRREnCy TRanSlaTiOn

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in euros, which is the Company’s functional and presentation currency. To consolidate, the financial state-ments are translated as follows:• Assets and liabilities at the year-end rate. • Income statements at the average rate for the year.• Components of the equity at historical exchange rate.

Exchange differences arising from the translation of the net investment in foreign subsidiaries at the year-end exchange rate are recorded as part of the shareholders’ equity under ‘currency translation differences’.

30

fOREiGn CuRREnCy TRanSaCTiOnS

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement (in the financial result), except when, as from 1 January 2005, hedge accounting in accordance with IAS 32 and IAS 39 is being applied. In that case, the mark-to-market value is recognized in the income statement when related to fair value hedges, and in equity when related to cash flow hedges.

PROPERTy, PlanT and EquiPMEnT

Property, plant and equipment are valued at the acquisition value or production cost, increased with allocated costs where appropriate. Depreciation is calculated pro rata temporis on the basis of the useful life of the asset, in accordance with the following depreciation parameters:

Buildings 3 % - 4 %

Building fixtures and fittings 4 % - 20 %

Plant, machinery and equipment 4 % - 40 %

Furniture 20 % - 40 %

Computer equipment, software 20 % - 33 % - 40 %

Office equipment 20 % - 40 %

Vehicles 20 %

Other tangible fixed assets 25 % - 50 %

Virtually all assets are depreciated on a straight-line basis.

To the extent residual values are taken into account for calculating the depreciations, those residual values are reviewed annually.

Assets acquired under leasing arrangements are depreciated over the economic life time, which may exceed the lease term if it is reasonably certain that the ownership will be obtained at the end of the lease term.

aSSETS hEld fOR SalE

Assets for which the carrying amount will be recovered principally through a sale rather than through continued use, will be classified as held-for-sale, whenever the conditions under IFRS 5 are met.

They are measured at the lower of their carrying amount and fair value less costs to sell.

inTanGiblE aSSETS

GOOdwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is tested for impairment each time there is a triggering event, or at least annually. Goodwill is carried at cost less accumulated impairment losses. Impairment losses on goodwill are never reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

bRandS, liCEnSES, PaTEnTS, SOfTwaRE and OThER

Intangible assets are capitalised at cost.

Several externally acquired intangible assets with an indefinite useful life have been identified. It specifically concerns the important strategic brands for which, based on the relevant factors, no foreseeable limit to the period of time over which these brands are expected to generate cash flow can be determined. These intangibles are tested for impairment annually.

The costs of brands with a definite useful life are capitalized and generally amortized on a straight line basis over a period of twenty years.

RESEaRCh and dEVElOPMEnT

Research costs related to the prospect of gaining new scientific or techno-logical knowledge and understanding are expensed as incurred.

Development costs are defined as costs incurred for the design of new or substantially improved products and for the processes prior to commercial production or use. They are capitalized if, amongst others, the following criteria are met:

• There is a market for selling the product.• The economic benefits for the Company will increase when selling the

developed asset.• The expenditure attributable to the intangible assets can be measured

reliably.

Development costs are amortized using a straight line method over the period of their expected benefit, currently not exceeding five years. Amortization only starts as of the moment that these assets are ready for commercialisation.

iMPaiRMEnT Of nOn-finanCial aSSETS

Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount

Currency 31December2010 31December2009 Endof Average Endof Average month rate month rate rate rate

CHF 1.250400 1.380344 1.483600 1.510000

CZK 25.061000 25.284019 26.473000 26.434900

DKK 7.453500 7.447297 7.441800 7.446200

GBP 0.860750 0.857844 0.888100 0.890900

NOK 7.800000 8.004297 8.300000 8.727800

PLN 3.975000 3.994669 4.104500 4.327600

SEK 8.965500 9.537266 10.252000 10.619100

TRY 2.069400 1.996546 2.154700 2.163100

The curency rates for the main foreign currencies used as per 31 December are:

31

is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

bORROwinGS

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

finanCial aSSETS

The Group classifies its financial assets in the following categories: loans and receivables and available for sale financial assets. Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date.

lOanS and RECEiVablES

Loans and receivables are non-derivate financial assets with fixed or determinable payments that are not quoted in an active market and with no intention of trading. They are included in current assets, except for maturities exceeding 12 months after the balance sheet date. Loans and receivables are carried at amortized cost using the effective interest method.

aVailablE fOR SalE finanCial aSSETS

Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.

Available for sale financial assets are at initial recognition measured at fair value unless the fair value cannot be reliably determined, in which case they are measured at cost. Unrealized gains and losses arising from changes in the fair value are recognized in equity. When the related assets are sold or impaired, the accumulated fair value adjustments are included in the income statement as gain and losses.

Currently, the available for sale financial assets comprise only investments in shares that do not have quoted markets and for which the fair value cannot be determined reliably. Hence, they are carried at cost.

Any events or changes in circumstances that might indicate a decrease in the recoverable amount are considered carefully. Impairment losses are recognized in the income statement as deemed necessary.

dERiVaTiVE finanCial aSSETS and hEdGinG aCTiViTiES

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The method of recognizing the resulting gain or loss depends on

whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either:

(1) hedges of the fair value of recognized assets or liabilities or unrecog-nized firm commitments (fair value hedge);

(2) hedges of particular risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge);

(3) hedges of a net investment in a foreign operation (net investment hedge).

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

lEaSES – OPERaTinG lEaSES

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are expensed as incurred.

lEaSES – finanCE lEaSES

Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance lease.

Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding.

The corresponding rental obligations, net of finance charges, are included in the non-current (payable after 1 year) and current (payable within 1 year) borrowings. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

The property, plant and equipment acquired under finance leases is depreciated over the useful life of the asset, which may exceed the lease term if it is reasonably certain that the ownership will be obtained at the end of the lease term.

inVEnTORiES

Raw materials, consumables and goods for resale are valued at acquisition value using the FIFO method or net realisable value on the balance-sheet date, if lower. Work in progress and finished products are valued at production cost, which, in addition to the purchase cost of raw materials, consumption goods and consumables, also includes those production costs that are directly attributable to the individual product or product group and related production overhead.

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TRadE RECEiVablES

Trade receivables are valued at fair value. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the trade receivable needs to be impaired.

In case of transfer of trade receivables to a third party (through factoring), the trade receivables are not recognized any more in the balance sheet if the conditions mentioned in IAS 39 §15-37 and in IAS 32 §42-43 are met.

CaSh and CaSh EquiValEnTS

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts and are valued at acquisition value. Adjustments to the carrying amounts are made when the realization value on the balance sheet date is lower than the acquisition value.

ShaRE CaPiTal

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any Group company purchases the Company’s equity share capital (Treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes on transaction costs), is deducted from equity attributable to the Company’s equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

PROViSiOnS

Provisions for restructuring costs, legal claims, the risk of losses or costs which might arise from personal securities or collateral constituted as guarantees of creditors or third party commitments, from obligations to purchase or sell fixed assets, from the fulfillment of completed or received orders, technical guarantees associated with sales or services already completed by the Company, unresolved disputes, fines and penalties related to taxes, or compensation for dismissal are recognized when: the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognized for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date.

The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

EMPlOyEE bEnEfiTS

PEnSiOn ObliGaTiOnS

Group companies operate various pension schemes. The schemes are funded through payments to insurance companies, determined by periodic actuarial calculations. The Group has both defined benefit and defined contribution plans. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit obligation is calculated periodically by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in excess of the greater of 10 per cent of the value of plan assets or 10 per cent of the defined benefit obligation are spread to income over the employees’ expected average remaining working lives.

For defined contribution plans, the Group pays contributions to pension insurance plans. The Group has no further payment obligations once the contributions have been paid, as the guaranteed minimum return exceeds the legally required minimum return.

Contributions to defined contribution plans are recognized as an expense in the income statement when incurred.

ShaRE baSEd PayMEnTS

The Group operates an equity-settled, share-based compensation plan. The total amount to be expensed over the vesting period is determined by reference to the fair value of the warrants granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. It recognizes the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the warrants are exercised.

inCOME TaxES

Income tax expense as presented in the income statement include current income tax and deferred taxes. Current income taxes include the expected tax liabilities on the Company’s taxable income for the financial year, based on the tax rates applicable on the balance sheet date, and any tax adjustments of previous years.

Deferred income taxes are recorded according to the ‘liability’ method and are calculated on temporary differences between the carrying amount and the tax base. This method is applied to all temporary differences except for differences arising on investments in subsidiaries and associates where the timing of the reversal of the temporary difference is controlled by the Group and where it is probable that the temporary difference will not

33

reverse in the foreseen future. The calculation is based on the tax rates that are enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled. According to this calculation method, the Group is also required to account for deferred taxes relating to the difference between the fair value of the net acquired assets and their tax base resulting from acquisitions, if any.

Deferred income tax assets have been accounted for to the extent that it is probable that the tax losses carried forward will be utilized in the foreseeable future. Deferred income tax assets are written down when it is no longer probable that the corresponding tax benefit will be realized.

REVEnuE RECOGniTiOn

Revenue comprises the fair value of the consideration received or receiva-ble for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of trans-action and the specifics of each arrangement.

Revenue arising from the sale of goods is recognised when an entity has transferred the significant risks and rewards of the ownership of the goods to the buyer. Usually this occurs when the legal title is transferred to the buyer and when collectibility of the related receivable is probable.

Revenue from the sale of services is recognised in the accounting period in which the services are rendered.

Commissions received by the Company when acting as a principal or as an agent in a distribution agreement are recognised as revenue from rend-ering services.

The revenue resulting from the sale of a brand is recognized at the moment of the transfer of property to the buyer.

SEGMEnT REPORTinG

An operating segment is a group of assets and operations engaged in providing products or services that are the basis of the internal reports on the operating activities to the executive committee.

diVidEnd diSTRibuTiOn

Dividend distribution to the Company’s shareholders is recognized as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.

34

In conformity with IFRS 7, the following chapter gives a description of the principal risks and uncertainties to which the Group’s activities are exposed.

It is the Group’s policy to remain continuously focused on identifying all major risks, developing plans to prevent or alleviate risks, to manage them appropriately and reduce their consequences should they still occur. Despite this policy the Company is not positioned to provide a full guarantee that these risks will not occur or that they will remain without consequences should they occur.

An investment in the shares of the Group therefore involves substantial risks, which potential investors should carefully consider, and which include but are not limited to the following risks (mentioned at random):

buSinESS CyClE RiSk

The overall recession that manifested itself in 2008 and ran into 2010 has yielded important insights in how a weak economy can impact consumption of OTC products. The average consumer appeared to postpone or reduce his purchases of products occasionally needed, but kept the purchase of products for daily or regular use relatively unchanged. The assumption that Omega Pharma’s products usually only have low to moderate sensitivity to economic cycles was substantially and generally confirmed.

Yet, this past experience also revealed significant differences in the impact between various categories of OTC products, mutually between themselves, but also between different countries and geographic regions.For example, it appeared that consumption of innovative products, with a favourable price to quality ratio, was more resistant to recession than more expensively priced luxury products such as make-up. Omega Pharma coordinated its product mix to this, which meant the effect on turnover was relatively limited; however, the resulting gross margin was slightly lower.

In geographical terms, ignoring exchange rate differ ences, Omega Pharma’s operations in Belgium, the Netherlands, Scandinavia and the majority of the Emerging Markets were more resistant to recession than in other countries, such as France, Spain, Italy and the United Kingdom. There are also other countries in the middle. This can on the one hand be attributed to the extent to which the recession has affected these countries, and on the other hand to the sensitivity to the recession of Omega Pharma’s specific product mix in each of these countries. Although the Group’s operations have a significant geographical spread, and in spite of a diversified product mix, it cannot be excluded that changes in economies at both micro and macro level fundamentally affect the Group’s results.

unCERTainTy Of PROGnOSES

The Group makes use of all internally available information for developing forecasts for the sector in general and Omega Pharma in particular. Based on all this information, an estimate is made, which serves as the basis for developing the business plans for the Group. All local managers are involved in this process. No guarantee can be given that the prognoses included in these plans will occur as anticipated. In such an event, this may have a materially adverse effect on the Group’s business operations, financial position, prospects and/or operational results.

RiSk ManaGEMEnT 3

MaRkET PRiCE fluCTuaTiOnS

The future profitability of the Group is determined in part by the purchase prices for raw materials, components, and for operating expenses such as transportation costs. The commodity markets for the most important raw and ancillary materials seem to be relatively stable at the moment. Although there are many providers for these products and services on the market, the Group continues to closely monitor the situation in order to be capable of developing the required preventive measures should these markets become more volatile. In case of a fuelling inflation it cannot be excluded that the raw materials for OTC products become considerably more expensive which may significantly impact the Group’s profitability in a negative way.

inVEnTORy RElaTEd RiSkS

Given that the Group stores and markets a large assortment of products having a specific storage life and a trend-sensitive nature, in a market environment that is characterized by a high innovation pace, the emergence of a disruptive technology or a sudden change in customer preferences or a changing consumer confidence may lead to the need to write down part of the inventory. An inventory related risk of this kind might have an adverse effect on the Group’s business operations, financial position and/or operational results.

PROduCT RiSkS

The many products of Omega Pharma are produced in some own production entities and also by many contracting firms. One production error can bring about all kinds of problems, like withdrawal of a product or a brand, loss of market share, temporal unavailability of products, claims or product responsibility, impact of one product on the purchase behavior of the customers for all products, etc.

It is possible as well that the quick evolving legislation concerning the many categories of the Omega Pharma business (cosmetics, food supplements, medical devices, medicines, … ) can result in the impossibility to commer-cialize one or more products, or in the obligation to sell the products with weakened claims, which can lead to a loss of market share.

These product risks can thus have an important impact on the financial situation of Omega Pharma, as well on sales, gross margin, (impairment) amortizations, profitability as solvability.

innOVaTiOn RiSkS

Although Omega Pharma is far less dependent upon the result of Research and Development than traditional pharmaceutical companies, a regular inflow of innovative products and services remains a requirement for the continued favourable development of turnover. Omega Pharma has installed a specific function for in-licensing. Its task is to track innovations and establish third party contacts to provide support in the event of a significant innovation. This reduces the risk of a lack of innovation. The Group also performs specific product and service development activities in-house.

In the event that Omega Pharma is unable to maintain a high pace of innovation and thereby fails to create the innovative solutions required to

COnSOlidaTEd finanCial STaTEMEnT

35

meet the needs of the market, its business operations, financial position, prospects and/or operational results could be, materially adversely affected. The results of the Group can be impacted most by changes in the segments where the largest turnover is achieved, e.g. slimming, head lice treatment, wart removal, pregnancy tests, anti-snoring products, vitamins et cetera.

For the vast majority of the types of products marketed by Omega Pharma, a legal authorization is required prior to introducing these products on the market. In these procedures, it is verified whether the new product meets all valid requirements related to quality, safety and/or efficacy. Because not all new products are subject to such procedures, and because such procedures cannot capture all risks, it cannot be excluded that specific, previously unknown problems associated with innovative products occur which may lead to market withdrawal. This may have consequences for the operations, the financial situation, the prognoses and/or the results of the Group.

RiSkS Of REduCEd ECOnOMiES Of SCalE

The unfavorable economic cycle, increased competition or any other reason may cause a decrease of the sales volume of specific products. This may invoke a cost increase for these products (when sourced externally) or a negative profitability of the Group’s manufacturing sites (when sourced internally).

The unfavorable economic cycle, the cost reduction program or any other reason may cause a decrease of the sales volume in specific countries, which may negatively affect the leverage effect on profitability in such a way that the fixed costs of the organization in the related country is insufficiently covered.

RiSk Of inadEquaTE PROTECTiOn Of bRand and OThER inTEllECTual PROPERTy RiGhTS

Omega Pharma relies on a combination of trade marks, trade names, confidentiality and non-disclosure clauses and agreements and copyrights to define and protect its rights to the intellectual property related to its products. It is of great importance that Omega Pharma is able to continue using these brands and trademarks in the future and that it adequately protects all valuable intellectual property by keeping trade secrets or applying legal devices such as trademark and patent registrations. In the event that the above devices fail to fully protect the Group’s intellectual property rights in any of its key markets, third parties (including competitors) may be able to commercialise its innovations or products or use its know-how, which could materially adversely impact Omega Pharma’s business operations, financial position, prospects and/or operational results.

The other way round, Omega Pharma cannot guarantee that, uninten-tionally, its activities, or those of its licensors, will not occasionally infringe on the patents owned by others. The Group may spend significant time and effort and may incur significant litigation costs if it is required to defend itself against intellectual property rights suits brought against Omega Pharma or its licensors, regardless of whether the claims have any merit. If Omega Pharma is found to infringe on the patents or other intellectual property rights of others, it may be subject to substantial claims for damages, which could materially impact the Group’s cash flow, business operations, financial position, prospects and/or operational results. The Group may also be required to cease development, use

or sale of the relevant products or processes or it may be required to obtain a license on the disputed rights, which may not be available on commercially reasonable terms, if at all.

The Company has installed a specific function to manage Intellectual Property. This department is charged with the task of monitoring and ensuring that the existing rights of the Company remain intact and to assure that new brands, formulas, and technologies are adequately protected by all necessary trademark registrations, patents, etc.

RiSk Of REduCEd bRand RECOGniTiOn OR nEGaTiVE bRand iMaGE

The Omega Pharma trademarks and brands are important factors in determining the market position and competitiveness of the Group. The success of Omega Pharma is to an important degree based on the recognition and the positive image of the companies in the Group, as well as the brands and products of the companies in the Group. If brand recognition would considerably decrease, or if any other factor would negatively affect the reputation or the image of the companies and brands of the Group, its business operations, financial position, prospects and/or operational results could be materially adversely affected.

RiSkS Of dEPEndEnCy On a SPECifiC GEOGRaPhiCal MaRkET

France is the country where the Group generates the highest turnover from own OTC brands. Negative macroeconomic developments or weaknesses of the local organization of Omega Pharma in this country may have a significant impact on the results of the Group.

RiSkS Of dEPEndEnCy On CuSTOMERS

The Group generates its consolidated turnover by maintaining a large number of individual customers. This considerably reduces the risk of dependency on a few major accounts. In specific individual countries, though, including the Netherlands and the United Kingdom, the Group does generate an important part of the local turnover with a more limited number of customers, implying a higher risk of customer dependency in these countries. Moreover, the market situation may evolve and lead to an altered situation in other countries. Omega Pharma spares no effort to detect such alterations in the market at the earliest possible stage in order to develop an appropriate action plan in such an event, but cannot fully exclude any impact in such an event.

RiSk Of an alTEREd COMPETiTiVE landSCaPE

The future market share and turnover of the Group can be impacted by competition. Omega Pharma limits this risk by focusing on those market segments where it has a considerable market share and/or where it can further expand its position and where no or little transnational competitors are operating. Nevertheless, it can not be excluded that existing competitors beset the position of the Group or that new competitors emerge. This could bring the market position of the Group in peril. Over the past years the global OTC sector has been the subject of a considerable consolidation, which may continue in the future, thus possibly altering the competitive balances.

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RiSk Of ChanGES in RElEVanT REGulaTiOnS and Of an alTEREd diSTRibuTiOn landSCaPE

Omega Pharma is marketing its products to the end-consumer mainly through the pharmacy-channel, although the Group is also operating in large retail distribution and drug store chains in countries such as the United Kingdom and the Netherlands. In some countries, the trend to liberalise the market for OTC medicines has already led to measures authorising the retail sale of these products beyond the pharmacy under certain conditions.

Although Omega Pharma is not only marketing OTC medicines, but mainly food supplements, personal care products and medical devices, this trend may still impact the results of the Group. In many countries it is now authorised for one pharmacist to own and exploit several pharmacies. If this trend would continue, a significant alteration of the distribution landscape cannot be excluded, with possible impact on the market position, the turnover and the profitability of the Group.

SEaSOnaliTy RiSk

As the Group’s product range includes both typical summer and winter products as well as products that are consumed throughout the year, Omega Pharma’s annual turnover is relatively evenly spread between the various quarters. Nevertheless, because of seasonal factors, the turnover in a specific quarter may fluctuate significantly in comparison with previous or comparable quarters of previous accounting periods, which complicates the predictability of the annual results.

dEPEndEnCy On diSTRibuTiOn and liCEnSinG aGREEMEnTS

Over 65 per cent of the Group’s turnover is derived from proprietary products and brands.Nevertheless, distribution and licensing agreements, when terminated or altered, may have a significant impact on the evolution of the Group’s turnover and profitability – e.g. in Belgium, where the exclusivity agree-ment with Eurogenerics related to the distribution of generic medicines, stipulates a prolongation or termination option in the course of 2014.

dEPEndEnCy On ThE bElGian GOVERnMEnT POliCy RElaTEd TO GEnERiC MEdiCinES

Omega Pharma is the Belgian distributor of the generic medicines of Eurogenerics (EG), a subsidiary of Stada. As opposed to the proprietary products and brands of Omega Pharma, the EG products require a doctor’s prescription for retail supply. The turnover of these products depends to a large degree on the policy that the Belgian government is applying for generic medicines. On the one hand, the sale of these products may strongly fluctuate in function of the measures taken by the Belgian government to promote generic subscription with physicians. On the other hand, the Belgian government may determine the consumer price level, the trade compensation level and the allowance of the health insurance system in the price of these products – all which may significantly impact the turnover and profitability of these products.

RiSkS inhEREnT TO aCquiSiTiOnS

Since its IPO in 1998, Omega Pharma has acquired multiple companies. Acquisitions have been and are likely to remain an important part of the Group’s current growth strategy, even when no major acquisitions are expected in 2011. But also for minor (add-on) acquisitions there is a risk

that corporate cultures do not match, expected synergies are not fully realised, restructurings prove to be more costly than initially anticipated or acquired companies prove to be more difficult to integrate than foreseen.Furthermore, as Omega Pharma further grows through acquisitions, it may have to recruit additional personnel and improve its managerial, operational and financial systems. If the Group fails to address these challenges, this could adversely impact its business operations, financial position and/or operational results.

RiSk RElaTEd TO fiSCal diSPuTES

Cf. note 7.1 related to Contingencies.

dEPEndEnCy On kEy STaff

The performance of the Company is largely dependent on its ability to identify, attract, recruit, train, retain and motivate highly skilled staff. If the Company does not succeed in this mission, it can have a major negative impact on its operations, its results, and its financial situation.

PROduCT liabiliTy RiSkS

The products of Omega Pharma are subject to potential product liability risks – both of a general nature, as inherent to pharmaceutical products, medical devices and nutrients. Despite existing pre-marketing registration and control procedures, the use of these products may lead to complaints and/or claims related to safety, quality, labeling,… It cannot be guaranteed that the Group will not be subject to any such claims in the future. If the Group’s product liability insurance coverage is insufficient to cover such product liability claims, its business operations, financial position, prospects and/or operational results could be materially adversely affected.

iT RiSkS

Information systems are a central part of Omega Pharma’s business operations and the distribution and logistics services it offers. The failure of the Group’s information systems through breakdown, malicious attacks, viruses or other factors, could severely impair several aspects of operations including, but not limited to, logistics, sales, customer service and administration. Any such failure related to the operation of information systems, may have a material adverse effect on Omega Pharma’s business operations, financial position, prospects and/or operational results.

EnViROnMEnTal and SafETy RiSkS

The Group’s operations are subject to environmental and safety laws and regulations, which can continuously evolve. The cost of compliance with these and similar future regulations could be substantial.

ShaRE PRiCE RiSk

Just like any share, the Omega Pharma share is subject to fluctuations that are caused by internal and often also external factors. Although Omega Pharma aims for a balance between long-term view shareholders and investors with a shorter term perspective, it remains possible that at a given time an unbalanced situation occurs that increases the share’s volatility.

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finanCial RiSk

Omega Pharma has outstanding financial debts and must therefore be capable of repaying them. Over the years Omega Pharma has always generated a sufficiently high net free cash flow to repay or service its debts, thus meeting all covenants with its credit providers. The Group holds the opinion that it has applied a solid financial structure with an appropriate leverage over the past years, although the past recession has revealed that respecting bank covenants can become more difficult in a downturn economy. Since it cannot be entirely excluded that the recovering economy may be negatively affected by external (e.g. geo-political) factors, this situation may reoccur and may even coincide with the maturing of the Company’s debt (end 2011). In such a situation, a new financing facility may prove to be more difficult to obtain, or may invoke higher financial charges.

CuRREnCy ExChanGE RiSk

The Group incurs foreign currency risk on borrowings and interests that are denominated in US dollar (on the US private placement) and on its operating activities denominated in other currencies. Foreign currency risk from exchanging assets, equity and liabilities of foreign subsidiaries from foreign currencies into euro are not hedged.

The currency exchange risk on the US private placement, denominated in US dollar, is entirely hedged by cross currency swaps.

The Group’s risk management policy is to hedge between 75 per cent and 100 per cent of anticipated transactions.If the euro had strengthened (weakened) 10 per cent against the US dollar at 31 December 2010, the hedging reserve in shareholders equity would have been 0.915 million euro lower (1.120 million euro higher) – 2009: 0.766 million euro lower (1.088 million euro higher).The fluctuation in the US dollar has an insignificant influence on profit or loss, since the hedges that qualify as fair value hedge, are an exact mirror of the hedged item. More details about these hedges can be found in note 6.12.

Some of the Group’s activities are denominated in other currencies than the euro – mainly in the Scandinavian countries and the United Kingdom. The hypothetical effect of a 10 per cent strengthening (weakening) of the euro against the British pound, would have had an effect on profit or loss of 0.07 million euro (-0.07 million euro), while shareholders’ equity would be impacted by -1.822 million euro (1.822 million euro). If the euro has gained (lost) 10 per cent against the Swedish crown, this would have impacted profit or loss by 0.945 million euro (-0.945 million euro), while shareholders’ equity would be impacted by 0.422 million euro (-0.422 million euro). Also in countries like Russia and Ukraine, where the operating income of the Group in 2010 was largely realized in euro, there is an indirect currency exchange risk as each devaluation would make the products of the Group relatively more expensive for the local consumers.

inTEREST RaTE RiSk

The Group reviews at least twice a year the target mix between fixed and floating rate debt.The purpose of this policy is to achieve an optimal balance between cost of funding and volatility of financial results.

The Group’s interest rate risk arises mainly from long-term borrowings. As a result of the reimbursement of the first tranche of the US private placement loan as per July 28th 2009, and of a lower use of the syndicated loan, approximately 40 per cent of the borrowings were at floating rates at 31 December 2010. The Group entered into several interest rate swaps in respect of the US private placement and the syndicated loan.The Group manages its cash flow interest rate risk by using floating-to-fixing interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates.

If the market interest rates would have been on average 100 base point higher (lower) during 2010, profit or loss would have been 1.525 million euro lower (higher), in 2009 this was 3.366 million euro.

A change of 100 base points on interest rates would have impacted the hedging reserve in shareholders’ equity by 5.587 million euro (2009: 6.527 million euro).

uS PRiVaTE PlaCEMEnT hEdGES

Cf. note 6.12.

faiR ValuE RiSk

Cf. note 6.12.

CuSTOMER CREdiT RiSk

As the Group has a strict credit policy in place, exposure to credit risk is monitored and restricted.

The Group has no individual customers who represent a significant part of the consolidated turnover, nor of the trade receivables.

Trade receivables are relatively well spread over all reporting segments. Trade receivables for individual countries reflect the traditionally appli-cable payment terms in the corresponding countries, as far as they are in conformity with market practices. When not market-conform, provisions are created which are disclosed in the notes.

CaPiTal RiSk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, acquire and cancel treasury shares, issue new shares or sell assets to reduce debt.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by the equity. Net debt is calculated as total borrowings (including current borrowings, non-current borrowings and the value of the related financial derivatives) less cash and cash equivalents.

38

31.12.2009 Earliestcontractualmaturity(undiscounted)(inthousandeuro) <1year 1to5years >5years

Finance lease liabilities 844 3 374 1 778

Bank borrowings 11 241 284 383 18 051

Bank overdrafts 17 886

Trade and other payables 289 377

Total liabilities 319 348 287 757 19 829

31.12.2010 Earliestcontractualmaturity(undiscounted)(inthousandeuro) <1year 1to5years >5years

Finance lease liabilities 844 3 374 935

Bank borrowings 296 747 65 257 17 209

Bank overdrafts 1 618

Trade and other payables 264 591

Total liabilities 563 800 68 631 18 144

liquidiTy RiSk

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.As the amounts included in the table are the contractual undiscounted cash flows, these amounts will not reconcile to the amounts disclosed on the balance sheet for borrowings, and trade and other payables.

(inthousandeuro) 31December2010 31December2009

Total borrowings 358 940 277 476

Derivative financial instruments related to borrowings 5 607 30 071

Less: cash and cash equivalents and current financial assets (33 823) (25 229)

Net financial debt 330 724 282 318

Totalequity 718274 660518

Gearingratio 46% 43%

The gearing ratios at 31 December 2010 and 2009 were as follows:

Cf. Financial risk (page 35 of this document)

39

CRiTiCal aCCOunTinG ESTiMaTES and judGEMEnTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a signifi-cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

a. ESTiMaTEd iMPaiRMEnT Of GOOdwill and bRandS

The Group tests annually whether goodwill and brands have suffered any impairment, in accordance with the accounting policy stated on page 30. These calculations require the use of estimates which can be found in note 6.1.

b. inCOME TaxES

The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. The Group recognises liabilities for anticipated tax audit issues

based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. (See note 5.7)

C. faiR ValuE Of dERiVaTiVES

The fair value of the derivatives is determined by using valuation techniques. The Group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period combined with a discounted cash flow analysis. More information on the used assumptions can be found in note 6.12.

d. PEnSiOn bEnEfiTS

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include a.o. the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations. For more information on the used discount rate and other assumptions we refer to note 6.10.

40

SEGMEnT infORMaTiOn 4

All activities of the Group are situated in the OTC business (Over The Counter – i.e. non-prescription health care products).

The segments of these activities are identified following their geographical location. The segment reporting only consists of the geographical segments. The identification of the operating segments is done on the basis of the components that the management uses to assess the performance and to make decisions about the operating activities.

Western Belgium Emerging France Unallo- TOTAL(inthousandeuro) Europe Markets cated

Total turnover 347 689 236 437 102 787 160 561 847 474

Inter segment turnover (20 952) (8 757) (507) (3 495) (33 711)

Turnover 326 737 227 680 102 280 157 066 813 763

Operatingprofit/segmentresult 55796 25340 23295 11598 (20374) 95655

Financial result (25 311) (25 311)

Profit/loss for the year of companies at equity 18 134 18 134

Resultfromcontinuingoperationsbeforeincometax 55796 25340 23295 11598 (27551) 88478

Income tax (11 566) (11 566)

Netincomefromcontinuingoperations 55796 25340 23295 11598 (39117) 76912

Share of non-controlling interests (88) (88)

Net result of the period - Share of the Group 55 796 25 340 23 295 11 598 (39 205) 76 824

The segment results for the year ended 31 December 2010 are as follows:

Western Belgium Emerging France Unallo- TOTAL(inthousandeuro) Europe Markets cated

Total turnover 364 703 266 674 112 354 158 831 902 562

Inter segment turnover (26 655) (13 968) (2 022) (3 307) (45 952)

Turnover 338 048 252 706 110 332 155 524 856 610

Operatingprofit/segmentresult 57946 31220 3784 25748 (11170) 107528

Financial result (23 172) (23 172)

Resultfromcontinuingoperationsbeforeincometax 57946 31220 3784 25748 (34342) 84356

Income tax (15 251) (15 251)

Netincomefromcontinuingoperations 57946 31220 3784 25748 (49593) 69105

Share of non-controlling interests 370 370

Net result of the period - Share of the Group 57 946 31 220 3 784 25 748 (49 223) 69 475

At 31 December 2010, the Group is organized into four business segments: 1. Omega Pharma Western Europe: activities in Western Europe, excluding

Austria, Belgium en France;2. Omega Pharma Belgium: the activities in Belgium;3. Omega Pharma Emerging Markets: activities in Austria, Central and

Eastern Europe (including Russia, Ukraine, Czeck Republic, Slovakia, Hungary, Romania, Slovenia, Serbia and Turkey), Australia, New Zealand and Argentina;

4. Omega Pharma France: the activities in France.

The segment results for the year ended 31 December 2009 are as follows:

COnSOlidaTEd finanCial STaTEMEnT

41

Other segment items included in the income statement are as follows:

31December2010 Western Belgium Emerging France Unallo- TOTAL(inthousandeuro) Europe Markets cated

Depreciations and amortization 8 531 2 813 2 121 4 365 2 250 20 080

Write-down on inventories (1 737) 511 794 951 519

Write-down on receivables 195 118 922 (469) 766

Increase/(decrease) in provisions (91) (80) 84 (111) (198)

31December2009 Western Belgium Emerging France Unallo- TOTAL(inthousandeuro) Europe Markets cated

Depreciations and amortization 5 262 2 860 1 747 6 242 1 856 17 967

Write-down on inventories 387 790 (69) 1 986 3 094

Write-down on receivables 55 42 397 (388) 106

Increase/(decrease) in provisions (1 479) (274) 6 (813) (2 560)

The segment assets and liabilities at 31 December 2010 and capital expenditure for the year then ended are as follows:

Western Belgium Emerging France Unallo- TOTAL(inthousandeuro) Europe Markets cated

Non-current assets 440 825 39 090 251 686 177 938 78 343 987 882

Current assets 156 244 39 270 69 271 57 150 28 635 350 570

Total assets 597 069 78 360 320 957 235 088 106 978 1 338 452

Total liabilities 131 726 91 693 53 293 82 109 319 113 677 934

Capital expenditure 14 368 3 918 2 889 3 401 2 779 27 355

The segment assets and liabilities at 31 December 2009 and capital expenditure for the year then ended are as follows:

Western Belgium Emerging France Unallo- TOTAL(inthousandeuro) Europe Markets cated

Non-current assets 532 262 39 397 255 457 178 252 85 528 1 090 896

Current assets 187 797 25 137 70 067 54 481 13 102 350 858

Assets held for sale 1 575 373 1 948

Total assets 721 634 64 534 325 897 232 733 98 630 1 443 428

Total liabilities 159 830 79 004 50 668 80 894 354 759 725 155

Capital expenditure 27 450 3 101 4 016 5 692 6 790 47 049

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operation cash. They exclude deferred taxation related to the IFRS revaluation of the swaps.

Segment liabilities comprise operating liabilities. They exclude items such as corporate borrowings.

42

inCOME STaTEMEnT iTEMS 5

5.1 TuRnOVER

(inthousandeuro) 2010 2009

Sale of goods 799 591 764 145

Rendering services 57 019 49 618

Turnover 856 610 813 763

5.2 OThER OPERaTinG inCOME

(inthousandeuro) 2010 2009

Gain on disposal of fixed assets 147 169

Other operating income 21 920 8 893

Other operating income 22 067 9 062

Other operating income for 2010 includes a non-recurring element related to the divestiture of Hydrasense, a brand for the Canadian market which orginated from the French company Laboratoire de la Mer, that was acquired by Omega Pharma in October 2010.

5.3 EMPlOyEE bEnEfiT ExPEnSES

(inthousandeuro) 2010 2009

Wages and salaries 64 566 65 762

Social security costs 18 567 17 429

Pension costs - defined benefit plans* 1 714 1 961

Pension costs - defined contribution plans 1 281 1 276

Other employment costs (commissions, premiums, travel, …) 13 294 12 987

Employee benefit expenses 99 422 99 415

* See also note 6.10.

Full-timeequivalents 31December 31Decemberroundedatoneunit 2010 2009

Belgium, including corporate services 355 336

France 528 453

WesternEurope

Denmark 7 5

Finland 11 11

Germany 57 69

Norway 11 12

Sweden 68 62

Cyprus 4 4

Greece 72 75

Italy 46 45

Portugal 49 49

Switzerland 26 24

Spain 115 115

Ireland 31 33

Luxembourg 16 19

Netherlands 121 121

United Kingdom 19 16

EmergingMarkets

Austria 272 232

Poland 31 38

Latvia 10 10

Australia 14 17

New-Zealand 0 2

Czech Republic 48 56

Slovakia 9 11

Hungary 10 10

Romania 58 56

Turkey 23 15

Argentina 9 12

Singapore 1 4

Croatia 0 1

Russia 3 3

Slovenia 11 10

Serbia 8 9

India 87 10

Total 2 130 1 945

Segmentation of the 2010 turnover according to the five pillars reveals that 438.238 million euro (51 per cent) turnover is generated by the five pillars, while generics represent 174.603 million euro (20 per cent).

Turnover realised from rendering services includes the commissions received by the Company when acting as a principal or agent in the framework of a distribution agreement.

COnSOlidaTEd finanCial STaTEMEnT

43

5.6 finanCial RESulT

(inthousandeuro) 2010 2009

Financial income 969 965

Financial expenses (8 222) (6 483)

Interest expenses (16 469) (20 377)

Foreign exchange differences 551 584

Financial result (23 171) (25 311)

The financial result of -23.2 million euro is 8 per cent more favourable than in 2009 (-25.3 million euro). This can principally be attributed to the financial debt level that throughout 2010 was below 2009 on average, and to the favourable interest rates on the Company’s main credit facilities. Financial expenses also include commitment and utilization fees, varied bank costs and expenses related to factoring, non of which materially differ in size over the other. Currency exchange differences remained at a comparable level as previous year.

5.4 dEPRECiaTiOnS, aMORTizaTiOn and ChanGES in PROViSiOnS

(inthousandeuro) 2010 2009

Depreciations and amortization 20 080 17 966

Write-down on inventories 519 3 093

Write-down on receivables 767 105

Increase/(decrease) in provisions for current liabilities (336) (972)

Increase/(decrease) in provisions for pension liabilities 138 (1 588)

Depreciation, amortization and changes in provisions 21 168 18 604

(inthousandeuro) 2010 2009

Other operating expenses 4 800 8 132

Restructuring charges 21 751 11 947

Restructuring provisions (1 291) 1 538

Total other operating expenses 25 260 21 617

5.5 OThER OPERaTinG ExPEnSES

Amortization of intangible assets amounted to 10.2 million euro, an increase with 1.6 million euro compared to 2009. The depreciations of tangible assets increased from 9.4 million euro in 2009 to 9.8 million euro in 2010.

Restructuring charges and related provisions amounted to 20.5 million euro for 2010, compared to 13.5 million euro in 2009.

In 2010, a number of restructurings was implemented and/or provisioned in the Czech Republic, France, Greece, Italy, the Netherlands and Russia.

5.7 inCOME Tax

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated companies as follows:

The weighted average effective tax rate was 18.1 per cent (2009: 16.4 per cent).

(inthousandeuro) 2010 2009

Current tax expenses 14 628 6 846

Deferred tax 624 4 720

Total tax charge 15 252 11 566

(inthousandeuro) 2010 2009

Result excluding associates 84 356 70 344

Taxcalculatedatweightedaveragestatutorytaxrate 25238 18203

Income not subject to tax (9 362) (8 487)

Expenses not deductible for tax purposes 954 1 451

Other (1 579) 399

Tax charge 15 251 11 566

44

5.8 EaRninGS PER ShaRE

(inthousandeurounlessstatedotherwise) 2010 2009

Basicearningspershare

Profit attributable to equity holders of the Company 69 474 76 824

Weighted average number of ordinary shares (in thousands) 23 349 23 347

Basic earnings per share (in euro) 2.98 3.30

Dilutedearningspershare

Profit attributable to equity holders of the Company 69 474 76 824

Weighted average number of ordinary shares (in thousands) 23 349 23 347

Effect of warrants ** 290 286

Weighted average number of ordinary shares (diluted) (in thousands) 23 639 23 633

Diluted earnings per share (in euro) 2.94 3.26

Earningspersharebeforenon-recurringitems

Profit attributable to equity holders of the Company 69 474 76 824

Non-recurring items, after tax * 6 665 (4 158)

Profit before non-recurring items attributable to equity holders of the Company 76 140 72 666

Weighted average number of ordinary shares (in thousands) 23 349 23 347

Basic earnings per share before non-recurring items (in euro) 3.25 3.12

Dilutedearningspersharebeforenon-recurringitems

Profit attributable to equity holders of the Company 69 474 76 824

Non-recurring items, after tax * 6 665 (4 158)

Profit before non-recurring items attributable to equity holders of the Company 76 140 72 666

Weighted average number of ordinary shares (in thousands) 23 349 23 347

Effect of warrants ** 290 286

Diluted earnings per share (in euro) ** 3.22 3.07

In the calculation of the ratios based on the number of shares, the number of treasury shares is deducted from the total number of shares.

* The amount for 2009 refers to restructuring charges and the surplus value from the divestiture of the participation in Arseus. For 2010, the amount refers to the restructuring charges included in other operating income and to the revenue derived from the divestiture of the Canadian brand Hydrasense.

** Taking into account the diluted impact of the outstanding warrants ‘in the money’.

45

6.1 inTanGiblE aSSETS

Goodwill R&D Conces- Brands Soft- Other TOTAL sions& ware(inthousandeuro) patents

Yearendedat31December2009

Opening net book value 474 233 17 976 1 564 381 805 3 219 170 878 967

Exchange differences cost 2 326 379 (4) 253 72 3 026

Additions

Internal development 6 931 2 188 9 119

Purchased from third parties 4 885 1 893 6 431 923 217 14 349

Through business combinations 9 013 497 414 9 924

Disposals (217) (183) (146) (126) (51) (723)

Adjustments of local accounting practices in conformity with consolidation policies 1 069 693 (1 914) 1 835 (49) 1 634

Currency exchange differences depreciations (298) 4 (24) (54) (372)

Amortization charge

Amortization of the year (6 034) (335) (125) (2 076) (46) (8 616)

Through business combinations (498) (238) (736)

Amortization of disposals 192 184 15 125 516

Application of consolidation policy for depreciation for local accounting practices (488) (1 281) (1 769)

Net book value at the end of the period 486 641 23 814 3 327 386 471 4 825 241 905 319

Yearendedat31December2010

Opening net book value 486 641 23 814 3 327 386 471 4 825 241 905 319

Exchange differences cost 1 835 929 7 527 313 3 611

Additions

Internal development 10 752 1 807 12 559

Purchased from third parties 2 619 4 070 9 117 1 341 422 17 569

Through business combinations 48 054 3 387 1 492 23 966 76 899

Disposals (518) (1 493) (4 582) (2 219) (8 812)

Adjustments of local accounting practices in conformity with consolidation policies (24) 160 (791) 5 (650)

Currency exchange differences depreciations (838) 4 (68) (226) (1 128)

Amortization charge

Amortization charge (6 730) (948) (199) (2 291) (73) (10 241)

Through business combinations (1 087) (420) (1 507)

Amortization of disposals 518 1 493 2 219 4 230

Application of consolidation policy for depreciation for local accounting practices 103 (4) 99

Net book value at the end of the period 536 506 34 093 6 177 414 812 5 770 590 997 948

balanCE ShEET iTEMS 6

There are no liabilities secured on intangible assets.

COnSOlidaTEd finanCial STaTEMEnT

46

GOOdwill

Goodwill is tested annually for impairment and carried at cost less accu-mulated impairment losses.

Impairmenttestsforgoodwill

Goodwill is allocated to the Group’s cash-generating units (CGUs) identified as the four business units of the Group, being Western Europe, Belgium, Emerging Markets and France.

A summary of the goodwill allocation per business unit is presented below (in million euro).

Businessunit 2010 2009

Western Europe 212.864 163.992

Belgium 24.698 24.698

Emerging Markets 126.870 125.877

France 124.060 124.060

Corporate 48.014 48.014

Total 536.506 486.641

Autonomous Perpetualgrowth Grossmargin Discountrate 5year-growth(%) rate(%) (%) (%)

2010 2009 2010 2009 2010 2009 2010 2009

Belgium 2 2 2 2 25.22 25.45 10.2 10.2

France 3 3 2 2 64.29 60.46 9.17 9.17

Western Europe 2 2 2 2 59.32 65.9 10.1 10.1

Emerging Markets 6 4 2,5 2,5 88.59 70.25 10.36 10.36

Total 3.3 2.8 2.1 2.1 53.5 53.4 10.4 10.4

For the cash-generating unit with the smallest difference at this level, the calculated recoverable amount still exceeds the net book value with 16.7 per cent. No reasonably possible changes in a key assumption on which management has based its determination of the units’ recoverable amount would cause the units’ carrying amount to exceed its recoverable amount.

Brands

The net book value of all brands, including those with indefinite useful lives, are annually tested for impairment at the level of the CGU as defined above and using the methodology set out above.

For corporate star brands and local key brands, based on an analysis of all relevant factors, there is no foreseeable limit to the period of time over which these brands are expected to generate cash flows for the Company. These brands have been assigned indefinite useful lives. Experience learns that those brands can continuously appeal to new consumers, provided that a certain level of marketing support is maintained. The list of brands includes, for example, Poudres T.LeClerc, which is already marketed since 1881 and which has over the past years been introduced in new geographic markets.

The total book value of star brands and key brands totalled 414.81 million euro as per the end of 2010 (2009: 386.47 million euro).

In addition to the impairment testing, the indefinite life nature of the star and key brands is reviewed annually. Not only strategic considerations are taken into account but also the evolution of the net recoverable amounts. The net book value for each of the aforementioned brands separately is compared to its’ recoverable amount. The recoverable amount is deter-mined as the higher of the value obtained based on:• A discounted cash flow model, similar to the calculation of the goodwill

impairment.• A multiple method.

As far as the multiple method is concerned, the following multiples are applied, whereby the brand value equals the multiple times the annual sales of the related brand:

Brand Multiple

Star 3

Key 2.5

Other 2

Review revealed that these multiples still correspond with the ratios that have been used for acquisitions of comparable brands over the past years.

For all strategic brands, the recoverable amount exceeds the net book value, which corroborates the indefinite useful life nature of the brands.

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow projections with a five-year forecast horizon based on detailed financial budgets approved by management for year one. For year two till five the budget figures of year one are extrapolated taking into account an internal growth rate and a budgeted gross margin. Besides these rates, the model includes a number of assumptions, such as the rate of perpetual growth and a pre-tax discount rate.

An overview of the key assumptions for the value-in-use calculations is stated at the bottom of this page. Management determined gross margin and growth rates based on past performance and its expectations for the market development.

For the review of the parameters in the chart hereunder, the higher autonomous growth that has been achieved in 2010 both on group level as per cash-generating unit, has been taken into account, along with the assumption that the current recession will have a partial impact in the next period. As a consequence, we kept the 5 year average percentages at the 2009 level, except for the Emerging Markets, where the impact of the increasing economies of scale and group synergies has also been taken into account.

The value per cash-generating unit which is calculated in this manner, is compared with the net book value of the corresponding fixed assets. The recoverable amounts of the cash-generating units continue to exceed their net book value. As a result, no impairment of goodwill is required for 2010.

47

There are no liabilities secured on land and buildings.

* The adjustments for land and building (-4,575 million euro purchase value and 2,616 million euro accumulated depreciations) reflect the transfer of two buildings to assets held for sale (Cf. note 6.7).

6.2 PROPERTy, PlanT and EquiPMEnT

Land Plant, Furniture Leasing Other Assets TOTAL and machinery and &other tangible under buildings and vehicles similar assets construc-(inthousandeuro) equipment rights tion

Yearendedat31December2009

Opening net book value 15 012 14 472 4 207 7 977 8 098 308 50 074

Currency exchange differences on the purchase cost 38 106 (11) (4) 1 130

Investments

Purchased from third parties 230 975 968 79 1 338 297 3 887

Through business combinations 729 374 66 118 486 20 1 793

Divestments and disposals (1 226) (6 979) (1 441) (4 225) (3 181) (17 052)

Adjustments off local accounting practices in conformity with consolidation policies (11) 731 (2 000) (77) (304) (1 661)

Currency exchange differences on depreciations (9) (68) 4 2 (71)

Depreciations

Depreciations of the year (687) (2 661) (1 308) (426) (4 268) (9 350)

Depreciations of disposals 823 6 215 1 299 2 966 3 181 14 484

Application of consolidation policy for depreciation for local accounting practices 11 (542) 1 465 77 (1) 1 010

Net book value at end of the period 14 881 12 614 3 294 6 482 5 652 321 43 244

Yearendedat31December2010

Opening net book value 14 881 12 614 3 294 6 482 5 652 321 43 244

Currency exchange differences on the purchase cost 1 156 182 (13) (10) 12 328

Investments

Purchased from third parties 401 1 431 692 70 6 356 972 9 922

Through business combinations 1 305 1 770 64 15 3 154

Divestments and disposals (1 651) (1 212) (68) (28) (157) (3 116)

Adjustments of local accounting practices in conformity with consolidation policies (4 576)* (508) 2 673 (360) (2 771)

Currency exchange differences on depreciations (77) (107) 2 1 (181)

Depreciations

Depreciations of the year (654) (2 339) (1 137) (351) (5 358) (9 839)

Depreciations of disposals 1 543 1 100 48 2 2 693

Application of consolidation policy for depreciation for local accounting practices 2 622* (8) (19) 94 2 689

Net book value at end of the period 13 980 12 931 2 857 6 170 9 382 803 46 123

48

6.5 TRadE and OThER RECEiVablES

(inthousandeuro) 31December2010 31December2009

Trade receivables 149 549 171 845

Provision for impairment of receivables (7 828) (7 622)

Trade receivables - net 141 721 164 223

VAT receivables 5 377 5 526

Income tax receivables 8 249 22 534

Other receivables 24 170 5 980

Deferred charges 15 934 17 284

Other receivables 53 730 51 324

Total 195 451 215 547

Carrying Ofwhichnei- Ofwhichnotimpairedonthereportingdateand amount therimpaired pastdueinthefollowingperiods norpastdueat lessthan between30 between90 morethan(inthousandeuro) 31December 30days and90days and180days 180days

Trade receivables as of 31.12.2010 141 721 110 632 14 197 9 381 2 833 4 678

Other receivables as of 31.12.2010 24 170 24 170

Trade receivables as of 31.12.2009 164 223 131 709 14 730 9 686 5 441 2 657

Other receivables as of 31.12.2009 5 980 5 980

6.3 finanCial aSSETS and OThER nOn-CuRREnT aSSETS

31December 31December(inthousandeuro) 2010 2009

Cash guaranties 568 619

Financial assets available for sale 1 940 1 940

Receivables with a maturity later than 1 year 8 153 7 732

10 661 10 291

None of the cash guaranties require impairment adjustments.

The receivables with a maturity later than one year include up to 7.5 million euro for a deferred payment related to the sale of the Arseus participation.

6.4 inVEnTORiES

31December 31December(inthousandeuro) 2010 2009

Raw materials 9 053 8 719

Production supplies 7 102 6 618

Work in progress 3 215 1 462

Finished goods 13 850 16 117

Trade goods 88 091 76 878

Inventories 121 311 109 794

The main increase in inventories relates to trade goods. This increase can in part be attributed to the acquisition of Laboratoire de la Mer and to brands of Inibsa and ACO Vitamineral, that were acquired in the fourth quarter of 2010.Finished goods refer to goods manufactured by the Group, whereas trade goods refer to goods purchased from third parties.The sum of new write-off on inventories, and the write-back of existing provisions result in a charge of 0.519 million euro (2009: charge of 3.093 million euro).There are no liabilities secured on inventories.

49

6.6 CaSh and CaSh EquiValEnTS

31December 31December(inthousandeuro) 2010 2009

Short term investments 1 216 102

Cash at bank and in hand 32 607 25 127

Cash and cash equivalents 33 823 25 229

The vast majority of cash and cash equivalents is cash at bank and in hand – i.e. current bank accounts of the companies in the Group.

The cash at bank is well spread since it is held on accounts at different banks in different countries, with a positive overall rating.

(inthousandeuro) Land Building Total

Site in Gorredijk 65 1 510 1 575

Site in Weitensfeld 373 373

65 1 883 1 948

6.7 aSSETS hEld fOR SalE

The former manufacturing site of Bional Nederland BV in Gorredijk (the Netherlands) and the former production building of Richard Bittner AG in Weitensfeld (Austria) are no longer used in the normal course of business and are available for sale. According to IFRS 5 they are measured at the lower of their net carrying amount and fair value, and they are recognized in a separate account as assets held for sale.

The mutations of this balance sheet item are shown in the statement of changes in equity.There were no transactions of own shares during 2009 and 2010. On 31 December 2010 Omega Pharma still had 879,994 treasury shares.These shares are, in conformity with IFRS, deducted from the shareholders’ equity, but do no have any impact on the income statement. They represented a total amount of 24.144 million euro on 31 December 2010, which is the same amount as at 31 December 2009.On 31 December 2010, the board of directors was still entitled to increase the capital, in the framework of the authorised capital, by a maximum amount of 16,052,705.81 euro. (Cf. page 16 of this document).

6.8 EquiTy

6.9 PROViSiOnS

(inthousandeuro) Disputes Others TOTAL

Balanceat31December2008 3303 584 3887

Additions

Through business combinations 23 23

Other 536 2 689 3 225

Amounts used (appropriations) (774) (1 886) (2 660)

Currency exchange differences

Balance at 31 December 2009 3 065 1 410 4 475

Additions

Through business combinations 30 1 760 1 790

Other 577 250 827

Amounts used (appropriations) (1 418) (1 036) (2 454)

Currency exchange differences 5 5

Balance at 31 December 2010 2 254 2 389 4 643

The site in Gorredijk is included in the assets of the reporting segment for Western Europe, while the site in Weitensfeld refers to the Emerging Markets. It is expected that both assets can be sold in the course of 2011.The Company estimates that the sale of both assets could lead to a surplus value of 0.5 million euro.

50

Movements in net liability:

(inthousandeuro) 31December2010 31December2009

Netliabilityinthebalancesheetat1January 4587 6147

Expense 1 852 1 622

Pensions paid directly from pension reserve (70) (59)

Contributions (benefits - effective payments related to retirement benefit obligations) (1 650) (1 903)

Actuary movements 7 (1 220)

Net liability in the balance sheet at 31 December 4 726 4 587

6.10 RETiREMEnT bEnEfiT ObliGaTiOnS

The amounts recognized in the balance sheet are determined as follows:

(inthousandeuro) 31December2010 31December2009

Present value of funded obligations 34 602 27 381

Fair value of plan assets (26 280) (23 318)

Present value of unfunded obligations* 8 322 4 063

Unrecognized actuarial gains/(losses) (3 596) 524

Liability in the balance sheet 4 726 4 587

(inthousandeuro) 31December2010 31December2009

Current service cost 1 429 1 144

Interest cost on obligation 1 421 1 434

Expected return on plan assets (1 005) (956)

Net actuarial (gains)/losses recognized during the year 7 (1 220)

of which included in changes in provisions for retirement benefit obligations 138 (1 559)

of which included in other employment costs 1 714 1 961

* Difference between the financed liabilities (payments by Omega Pharma) and the fair value of the assets included in the pension scheme.

All defined benefit plans are final salary pension plans. The amounts pertaining to post employment medical plans are included in the liability but are not significant. There are no informal constructive obligations.

The assets comprise reserves of qualifying insurance policies and are not part of the Group’s own financial instruments.

The amounts recognized in the income statement are as follows:

51

The Group has various defined benefit pension plans. The most important plans are in the Netherlands, Germany and France.

The principal actuarial assumptions used were as follows:• The weighted average discount rate for 2009 amounted to 6.05 per cent and for 2010 to 5.11 per cent.• The weighted expected return on plan assets was 4.08 per cent for 2009 and 3.40 per cent for 2010.• The weighted expected general salary increase was 2.50 per cent for 2009 and 2.50 per cent for 2010.

Nether- Germany France TOTAL %oftotal(inthousandeuro) lands liabilities

Net liability in the balance sheet at

31.12.2010 1 683 63 1 728 3 474 73.50

31.12.2009 1 549 259 1 685 3 493 76.75

6.11 TaxES, REMunERaTiOn and SOCial SECuRiTy

(inthousandeuro) 31December2010 31December2009

Current income tax liabilities 18 489 27 227

Other current tax and VAT payables 7 897 7 849

Remuneration and social security payables 14 998 13 761

Taxes, remuneration and social security 41 384 48 837

Discrepancy Undistri- Financial Other Reclass TOTAL withtax buted instru- deferredtax(inthousandeuro) depreciation earnings ments liabilities

Balanceat31December2008 71909 2792 2345 3110 (11111) 69045

Result 2 422 (2 345) (268) (191)

Charged to equity

Acquisition of subsidiary

Transfers 2 985 2 985

Exchange rate differences 81 26 107

Balance at 31 December 2009 74 412 2 792 0 2 868 (8 126) 71 946

Result 5 041 (1 463) 3 251 6 829

Charged to equity 7 191 7 191

Acquisition of subsidiary

Transfers (159) (159)

Exchange rate differences 94 9 103

Balance at 31 December 2010 76 738 1 329 6 128 (8 285) 85 910

For current income tax receivables, see note 6.5.

dEfERREd Tax liabiliTiES

The reclass column in the charts for deferred tax liabilities and deferred tax assets features identical amounts as they refer to ‘netting’ of assets and liabilities included by local entities.

This reclassifications refer to ‘offsets’ as meant in IAS 12 §71.

52

Difference Employee Provi- Tax Financial Other Reclass TOTAL indepre- benefits sions losses instru- deferred ciationrates ments tax(inthousandeuro) assets

Balance at 31 December 2008 1 696 850 2 893 31 971 19 (11 111) 26 318

Result (1 067) 27 (1 319) (127) (19) (2 505)

Charged to equity 1 146 1 146

Acquisition of subsidiary 1 086 1 086

Reclass 2 985 2 985

Exchange rate differences (18) 16 (2)

Balance at 31 December 2009 611 877 2 676 31 844 1 146 0 (8 126) 29 028

Result (1 487) 108 (1 771) 9 293 6 143

Charged to equity (899) (899)

Acquisition of subsidiary 1 943 1 943

Reclass (159) (159)

Exchange rate differences (18) 14 112 108

Balance at 31 December 2010 (894) 985 2 862 41 249 247 0 (8 285) 36 164

dEfERREd Tax aSSETS

6.12 finanCial dEbTS and dERiVaTiVE finanCial inSTRuMEnTS

(inthousandeuro) 31December2010 31December2009

Non-current 77 038 288 464

Financial lease liabilities 4 141 4 737

of which with a maturity later than 1 year and no later than 5 years 2 913 2 762

of which with a maturity later than 5 years 1 228 1 975

Bank borrowings 66 552 253 656

of which with a maturity later than 1 year and no later than 5 years 51 491 245 663

of which with a maturity later than 5 years 15 061 7 993

Derivative financial instruments 5 607 30 071

Other amounts payable 738

Current 288 247 19 085

Financial lease liabilities 665 633

Bank borrowings 276 502 565

Bank overdrafts 1 618 17 887

Derivative financial instruments 9 456

Other amounts payable 6

Total 365 285 307 549

COMPOSiTiOn aCCORdinG TO duRaTiOn

More information is included in note 6.3. (page 46 of this document).

53

31December2010 31December2009Carryingamount Amount Effective Amount Effective(inthousandeuro) interestrate interestrate

Non-currentbankborrowings

Syndicated loan 79 177 2.31 %

French loan 14 000 1.61 % 14 000 2.02 %

US private placement 56 545 5.75 % 186 840 4.98 %

Fair value of the hedged part of the US private placement (4 477) (26 698)

Other 484 337

Total non-current bank borrowings 66 552 253 656

of which euro denominated 14 484 93 514

of which US dollar denominated 52 068 160 142

Currentbankborrowings

Syndicated loan 155 723 1.19 %

US private placement, in US dollar 129 976 4.53 %

Fair value of the hedged part of the US private placement (9 859)

Other 662 565

Total current bank borrowings 276 502 565

of which euro denominated 156 385 565

of which US dollar denominated 120 117

Total non-current and current bank borrowings 343 054 254 221

As demonstrated in the table above, the debt financing of the Group consists of two major borrowings: (1) a syndicated loan facility and (2) a US private placement.

(1) Omega Pharma entered into the syndicated loan agreement at the end of 2006. The initial amount of the syndicated loan facility was 600 million euro. However, due to the relatively limited use, Omega Pharma voluntary reduced the amount to maximum 450 million euro in the course of 2007.

On 31 December 2010, the credit lines in use represented an amount of 156 million euro. Since the syndicated loan matures at the end of 2011, this amount was transferred from non-current bank borrowings to current bank borrowings.

(2) The US private placement was closed in 2004, for an amount of 285 million US dollar. This US private placement is hedged for currency exchange differences and interest fluctuations between the US dollar

bank bORROwinGS

Note: bank overdrafts are not included in the table above.

and the euro. This results in a nominal principal amount of 231.519 million euro, which remains unchanged. After the reimbursement in 2009 of the first instalment of the US private placement, for 44.7 million euro, the current nominal amount is 186.84 million euro.

The second instalment of the US private placement matures in 2011. The corresponding amount of 130 million euro is transferred from non-current bank borrowings to current bank borrowings.

Omega Pharma investigates several refinancing options, including: syndicated credit facilities, a new US private placement, corporate bonds, et cetera. Two important bilateral credit facilities of 75 million euro each, with maturity end 2016, have already been approved.

Because of the hedges related to the US private placement, the corresponding derivative financial instruments are also included in the table above. Further comments can be found hereunder.

54

RECOGniTiOn Of ThE hEdGES RElaTEd TO ThE uS PRiVaTE PlaCEMEnT in ThE aCCOunTS

The US private placement consisted originally of four ‘Notes’ which correspond with an equal number of instalments (bullet tranches): 55 million US dollar in 2009, 160 million US dollar in 2011, 50 million US dollar in 2014 and 20 million US dollar in 2016. The first note was reimbursed in July 2009. The second note of 160 million US dollar will be reimbursed in July 2011.

Currency and interest rate risks are covered per individual tranche by cross currency swaps from US dollar fixed interest rates to euro fixed interest rates:• 100 per cent hedge of the currency risk in respect of all capital

instalments and interest payments • 90 per cent hedge of the interest risk.

The Group entered also into two cross currency swaps from US dollar fixed interest rate to euro floating interest rate, of which one swap is still remaining at end 2010.

As already mentioned, the nominal principal amount was 231.519 million euro on the contract date, the amount of the loan remaining at end of December 2010 is 186.84 million euro, of which 129.98 million euro will be reimbursed in July 2011.

These hedges are reflected in the first tabel at the bottom of this page.

The swap from US dollar fixed interest rate to euro fixed interest rate (third column) is qualified as cash flow hedge, while the swap from US dollar fixed interest rate to euro floating interest rate is qualified as fair value hedge.

For cash flow hedges, the effective part of the changes in fair value of the derivative financial instrument is recognized in equity on the balance sheet.

USPrivate Maturity Amountcoveredbyswapsfrom AmountcoveredbyswapsfromPlacementNotes date USdollarfixedinterestrateto USdollarfixedinterestrateto eurofixedinterestrate eurofloatinginterestrate

160 million USD 28 July 2011 135 million USD 25 million USD

50 million USD 28 July 2014 50 million USD

20 million USD 28 July 2016 20 million USD

230 million USD 205 million USD 25 million USD

Hedges Type Recognitionintheaccounts relatedto atthelevelof

Hedges by swaps from a) the fair value of the swap a) derivative financial instruments US dollar fixed interest rate Cash flow b) the effective part of the on the balance sheet to euro fixed interest rate hedge changes in fair value of the b) equity on the balance sheet derivative financial instrument

Hedges by swaps from a) the fair value of the swap a) derivative financial instruments US dollar fixed interest rate Fair value b) the change in fair value of on the balance sheet to euro floating interest hedge the hedged amounts b) financial expense in the income rate statement

For fair value hedges, both the fair value of the swap as the changes in fair value of the hedged amounts resulting from changes in currency rates and risk free interest rate is recognized in the income statement.

This is also reflected in the table at the very bottom of this page.

The swaps themselves are recognized as derivative financial instruments on the balance sheets. Initially, they are recognized at the fair value at the date when the derivative contract was committed.

On each closing date, they are revalued at the fair value of that moment.

The fair value of the interest swaps is calculated as the present value of estimated future cash flows. The fair value of the currency swaps is deter-mined using forward exchange market rates at the balance sheet dates.

The fair value of these instruments reflects the estimated amounts that the Group would receive on maturity date — when settling favourable contracts — or that the Group would have to pay — when terminating unfavourable contracts.

Two balance sheet items thus refer to the fair value of the swaps: (1) non-current derivative financial instruments, for an amount of 5.6 million euro, and (2) current derivative financial instruments, for an amount of 9.5 million euro. The amount of 5.6 million euro for the non-current derivative financial instruments breaks down in an amount of 4.9 million euro for the swaps of the US private placement, and 0.7 million euro for the other interest swaps in 2010.

The fair value is not only determined for the swaps, but also for the hedged amounts — i.e. some notes of the US private placement. The fair value of these notes is, along with the non-hedged bank borrowings, recognized in the balance sheet under non-current interest bearing financial liabilities (for an amount of 70.7 million euro) and current interest bearing financial liabilities (for an amount of 278.8 million euro). Within these total amounts, the US private placement notes represent respectively 56.5 million euro and 130.0 million euro.

55

(inthousandeuro) Liabilities

Balance at 31 December 2008 (4 555)

Fair value hedges 831

of which: gross amount, non-current 1 259

of which: deferred tax effect (428)

Cash flow hedges 5 950

of which: gross amount US private placement 6 468

of which: gross amount syndicated loan 2 546

of which: deferred tax effect (3 064)

Balance at 31 December 2009 2 226

Fair value hedges 270

of which: gross amount, non-current 603

of which: gross amount, current (194)

of which: deferred tax effect (139)

Cash flow hedges (2 016)

of which: gross amount US private placement, non-current (1 021)

of which: gross amount US private placement, current (208)

of which: gross amount syndicated loan (668)

of which: gross amount bilateral loan (1 157)

of which: deferred tax effect 1 038

Balance at 31 December 2010 480

The combined fair value effect of both swaps and notes is negligible: 6,405 euro.

The effect of the revaluation of both the underlying borrowing and the outstanding swaps, and taking the effect of deferred taxes into account, amounts to 0.004 million euro. This amount can be split into a gross amount of 0.006 million euro and -0.002 million euro for the deferred tax impact.

Hedgeofthesyndicatedloan

Beside the hedges related to the US private placement, two more interest swaps were closed during the year 2009 for the hedging of the interest risk

on the syndicated loan, respectively amounting to 50 million euro and 15 million euro. In 2010, a new interest rate swap for an amount of 50 million euro was closed for hedging the interest risk on the recently approved bilateral credit facilities. All three swaps convert a variable interest rate into a fixed interest rate, and are cash flow hedges. The effective part of the changes in fair value of the derivative financial instrument is recognized in equity on the balance sheet.

The fair value effect of the outstanding swaps, and taking into account the effect of deferred taxes, amounts to 0.476 million euro (gross amount of 0.721 million euro and -0.245 million euro for the deferred tax impact).

The effect of the revaluation is specified in the following chart.

56

addiTiOnal diSClOSuRES On finanCial inSTRuMEnTS

Legend:AfS Available for SaleLaR Liabilities and ReceivablesFLAC Financial Liabilities at Amortized CostHtM Hold to Maturityn.a. not applicable

Amountsrecognizedinthebalancesheet accordingtoIAS39 Amounts recognized Category Carrying Amor- Cost Fairvalue Fairvalue inbalance Fair inaccord. amount tized recog- recogn.in sheet value(inthousandeuro) with 31.12 cost nizedin profitor according 31.12 IAS39 2010 equity loss toIAS17 2010

Available-for-sale financial assets AfS 1 940 1 940 n.a.

Other non-current assets LaR 8 721 8 721 10 338

Trade receivables LaR 141 721 141 721 141 721

Other receivables LaR 24 167 24 167 24 167

Cash and cash equivalents LaR 33 823 33 823 33 823

finance lease liabilities n.a. 4 806 4 806 3 726

Bank borrowings FLAC 359 746 359 746 353 272

Derivative financial liabilities (hedge accounting) n.a. 727 534 193 727

Trade payables FLAC 200 977 200 977 200 977

Other non interest bearing liabilities FLAC 12 984 12 984 12 984

of which: aggregated by category in accordance with IAS 39

Available for sale AfS 1 940 1 940 n.a.

Held to maturity HtM

Loans and receivables LaR 208 432 208 432 210 049

Financial liabilities at amortized cost FLAC 573 707 573 707 567 233

57

Amountsrecognizedinthebalancesheet accordingtoIAS39 Amounts recognized Category Carrying Amor- Cost Fairvalue Fairvalue inbalance Fair inaccord. amount tized recog- recogn.in sheet value(inthousandeuro) with 31.12 cost nizedin profitor according 31.12 IAS39 2009 equity loss toIAS17 2009

Available-for-sale financial assets AfS 1 940 1 940 n.a.

Other non-current assets LaR 8 352 8 352 10 205

Trade receivables LaR 164 223 164 223 164 223

Other receivables LaR 5 978 5 978 5 978

Cash and cash equivalents LaR 25 228 25 228 25 228

finance lease liabilities n.a. 5 370 5 370 4 443

Bank borrowings FLAC 298 805 298 805 276 878

Derivative financial liabilities (hedge accounting) n.a. 3 373 2 771 602 3 373

Trade payables FLAC 215 732 215 732 215 732

Other non interest bearing liabilities FLAC 16 498 16 498 16 498

of which: aggregated by category in accordance with IAS 39

Available for sale AfS 1 940 1 940 n.a.

Held to maturity HtM

Loans and receivables LaR 203 781 203 781 205 634

Financial liabilities at amortized cost FLAC 531 035 531 035 509 108

finanCE lEaSES

Assets

The property, plant and equipment include the following amounts where the Group is a lessee under a finance lease:

31December 31December(inthousandeuro) 2010 2009

Cost - capitalized finance leases 8 949 8 959

Accumulated depreciation (2 779) (2 477)

Net amount of assets in leasing 6 170 6 482

The net amount of the finance leases concern following investments:

31December 31December(inthousandeuro) 2010 2009

Land 32 32

Buildings 5 909 6 208

Plant, machinery and equipment 6 8

Furniture and vehicles 223 234

Net amount of assets in leasing 6 170 6 482

58

Liabilities

Finance lease liabilities - minimum lease payments:

31December 31December(inthousandeuro) 2010 2009

Not later than 1 year 665 633

Later than 1 year and not later than 5 years 2 912 2 762

Later than 5 years 1 229 1 975

Present value of finance lease liabilities 4 806 5 370

31December 31December(inthousandeuro) 2010 2009

Not later than 1 year 780 750

Later than 1 year and not later than 5 years 3 170 2 862

Later than 5 years 1 250 2 037

Total minimum lease payments 5 200 5 649

Future finance charges on finance leases (394) (279)

Present value of finance lease liabilities 4 806 5 370

The present value of finance lease liabilities is as follows:

OPERaTinG lEaSES

The operating leases concern mainly buildings, warehouses and company cars.

The non-cancelable operating leases are payable as follows:

31December 31December(inthousandeuro) 2010 2009

Not later than 1 year 10 423 10 040

Later than 1 year and not later than 5 years 20 909 20 938

Later than 5 years 4 562 6 601

Operating leases - minimum lease payments 35 894 37 579

31December 31December(inthousandeuro) 2010 2009

Other payables 13 002 16 498

Accrued expenses 9 229 8 311

Other current payables 22 231 24 809

6.13 OThER CuRREnT PayablES

Other current payables include amongst others payables related to acqui-sitions completed in this and previous periods.

59

MiSCEllanEOuS iTEMS 7

7.1 COnTinGEnCiES

The disputes with the Belgian tax authorities relating to the 1998 warrant plan and the Luxembourg finance structure (reported in the annual report of previous periods) have all been settled. The settlement exceeded the corresponding accrual by 0.8 million euro, which thus represents the related tax cost for the period.

In 2010, a dispute with the Italian tax authorities has arisen related to fiscal treatment of royalties paid by Chefaro Pharma Italia SrL to the Group for the use of corporate intellectual property. The maximum liability for the period 2005 until 2010 is estimated at 7 million euro. Since sound arguments are available underpinning the market-based nature of the payments, the provision created in 2010 is limited to 2.4 million euro.

7.2 Off balanCE ShEET RiGhTS and ObliGaTiOnS

1. The bank loans of Omega Pharma SAS (France) are backed up by a Letter of Intent to the value of 60 (million) euro by Omega Pharma NV.

2. Omega Pharma NV has signed a liability statement on behalf of a number of subsidiaries in the Netherlands, Ireland, United Kingdom, Austria, Italy and Germany, i.e.:

Bional International BV Bional Nederland BV Chefaro Nederland BV Damianus BV Omega Pharma Holding Nederland BV Samenwerkende Apothekers Nederland BV Herbs Trading GmbH Wartner Europe BV Chefaro Ireland Ltd Omega Teknika Ltd Chefaro Pharma Italia SrL Deutsche Chefaro GmbH Paracelsia Pharma GmbH Chefaro UK Ltd

7.3 buSinESS COMbinaTiOnS

In 2010, the Group acquired a number of brands and companies, two of which are recognised as business combinations. The first is the acquisition of 100 per cent of the shares of Laboratoire de la Mer, for which 69 million euro in cash was paid. The second is the acquisition of the business of Inibsa (an asset deal), for which approximately one time sales (of 7 million euro) was paid. Laboratoire de la Mer is included in the consolidation circle as of 1 October 2010.

Bookvalue Fairvalue Fairvalue(inthousandeuro) adjustments

Non-currentassets 5048 27002 32050

Intangible assets 1 914 25 284 27 198

Property, plant and equipment 3 133 3 133

Other non-current assets 1 1

Deferred tax assets 1 718 1 718

Currentassets 11963 (851) 11112

Cash and cash equivalents 1 963 1 963

Other current assets 10 000 (851) 9 149

Non-currentliabilities 8980 8980

Deferred tax liabilities 7 191 7 191

Other non-current liabilities 1 789 1 789

Currentliabilities 6522 2514 9036

Net assets acquired 10 489 14 657 25 146

Goodwill 47 063

Total consideration 72 209

In conformity with IFRS 3, the purchase price allocation and the goodwill calculation were done on a preliminary basis and may still be modified within twelve months following the acquisition date.

COnSOlidaTEd finanCial STaTEMEnT

60

7.4 liST Of COnSOlidaTEd COMPaniES

Following companies are consolidated according to the global consolidation method:

ACO Hud AB 100 % Box 622 - 194 26 Upplands Väsby (Sweden)ACO Hud Nordic AB 100 % Box 622 - 194 26 Upplands Väsby (Sweden)ACO Hud Norge AS 100 % Okern Bus 95 - NO-0509 Oslo (Norway)ACO Pharma OY 100 % Gardsbrinken 1A - FI02240 Esbo (Finland)AdriaMedic SA 100 % Zare Ouest - 4384 Ehlerange (Luxembourg)Adriatic BST d.o.o. 100 % Verovškova ulica 55 - 1000 Ljubljana (Slovenia)Adriatic Distribution d.o.o. 100 % Ljubostinjska 2/C5 - 1100 Belgrado (Serbia)Aktif Kişisel Bakim ve Sağlik Ürünleri Dağitim Ticaret Ltd. Şirketi 100 % Şerif Ali Mah. Emin Sok 15, Y. Dudullu Ümraniye 34000 Istanbul (Turkey)Auragen Pty Ltd 100 % Units # 48, 49, 50 and 51, N°7, Narabang Way, Belrose NSW 2085 (Australia)Aurios Pty Ltd 100 % Units # 48, 49, 50 and 51, N°7, Narabang Way, Belrose NSW 2085 (Australia)Aurora Pharmaceuticals Ltd 100 % Units # 48, 49, 50 and 51, N°7, Narabang Way, Belrose NSW 2085 (Australia)Belgian Cycling Company NV 100 % Venecoweg 26 - 9810 Nazareth (Belgium) Bional France SARL 100 % Avenue de Lossburg 470 - 69480 Anse (France) Bional International BV 100 % Tolhusleane 11-15 - 8401 GA Gorredijk (the Netherlands)Bional Nederland BV 100 % Tolhusleane 11-15 - 8401 GA Gorredijk (the Netherlands)Biover NV 100 % Monnikenwerve 109 - 8000 Brugge (Belgium) Bittner Pharma LLC 100 % Novinskiy Boulevard 31 - 12342 Moskou (Russia)Carecom International SA 100 % Akara Building - 24 De Castro Street Wickhams Cay I Road Town Tortola (British Virgin Islands)Chefaro Ireland Ltd 100 % Farnham Drive - Finglas Road - Dublin 11 (Ireland)Chefaro Nederland BV 100 % Keileweg 8 - 3029 BS Rotterdam (the Netherlands)Chefaro Pharma Italia SRL 100 % Viale Castello della Magliana 18 – 00148 Roma (Italy)Chefaro Portuguesa Lda 100 % Edificio Neopark - Av. Tomás Ribeiro 43 PT-2795-574 Carnaxide (Portugal)Chefaro UK Ltd 100 % Hamilton House 4th floor - Mabledon Place, Bloomsburg WC1H 9 BB London (United Kingdom)Cinetic Laboratories Argentina SA 100 % Av. Triunvirato 2736 - City of Buenos Aires (Argentinia)Cosmea ACO AS 100 % Slotsmarken 18 - DK-2980 Hörsholm (Denmark)Cosmediet - Biotechnie SAS 100 % Avenue de Lossburg 470 - 69480 Anse (France)Damianus BV 100 % Keileweg 8 - 3029 BS Rotterdam (the Netherlands)Deutsche Chefaro GmbH 100 % Im Wirrigen 25 - 45731 Waltrop (Germany)

EMA SARL 100 % Rue André Gide 20, BP 80 - 92321 Châtillon (France) Herbs Trading GmbH 100 % Hauptplatz 9 - 9300 St. Veit an der Glan (Austria)Hidra IC VE Dis Ticaret Ltd. STI 100 % Şerif Ali Mah. Emin Sok 15, Y. Dudullu Ümraniye - 34000 Istanbul (Turkey)Hipocrate 2000 SRL SC 100 % 6A Prahova Street, sector 1 - Bucharest (Romania)Hud SA 100 % Zare Ouest - 4384 Ehlerange (Luxembourg)Interdelta SA 81,2 % Route André Piller 21 - 1762 Givisiez (Switzerland)Jaïco RDP NV 100 % Nijverheidslaan 1545 - 3660 Opglabbeek (Belgium)JLR Pharma SA 100 % Au Village 107 - 1745 Lentigny (Switzerland)JRO Pharma NV 100 % Monnikenwerve 109 - 8000 Brugge (Belgium)La Beauté International SARL 100 % Rue André Gide 20, BP 80 - 92320 Châtillon (France)Laboratoire de la Mer SAS 100 % ZAC de la Madeleine - Avenue du Général Patton - 35400 Saint Malo (France)Laboratoires Omega Pharma France SAS 100 % Rue André Gide 20, BP 80 - 92320 Châtillon (France)Medgenix Benelux NV 100 % Vliegveld 21 - 8560 Wevelgem (Belgium) Modi Omega Pharma (India) Private Limited 100 % 1400 Modi Tower - 98 Nehru Place - New Delhi - 110019 (India)Omega Alpharm Cyprus Ltd 100 % Kennedy Avenue - 1st floor - Office 108 12-14 1087 Lefkosia (Nicosia) (Cyprus)Omega Altermed a.s. 100 % Dražni 253/7 - 627 00 Brno (Czech Republic)Omega Altermed s.r.o. (Slovakia) 100 % Tomasikova 26 - 821 01 Bratislava (Slovakia)Omega Pharma GmbH 100 % Reisnerstrasse 55-57 - 1030 Vienna (Austria)Omega Pharma SAS 100 % Rue André Gide 20, BP 80 - 92321 Châtillon (France)Omega Pharma Australia Pty Ltd 100 % Units # 48, 49, 50 and 51, N°7, Narabang Way, Belrose NSW 2085 (Australia)Omega Pharma Baltics SIA 100 % Karla Ulmana gatve 119 - Marupe - Marupes district LV-2167 (Latvia)Omega Pharma Belgium NV 100 % Venecoweg 26 - 9810 Nazareth (Belgium) Omega Pharma Capital NV 100 % Venecoweg 26 - 9810 Nazareth (Belgium) Omega Pharma España SA 100 % Plaza Javier Cugat, 2 - Edificio D - Planta primera - 08174 Sant Cugat del Vallés (Spain)Omega Pharma Hellas SA 100 % 19 km of Athens – Lamia Nat. Road – 14671 Nea Erythraia (Greece)Omega Pharma Holding Nederland BV 100 % Keileweg 8 - 3029 BS Rotterdam (the Netherlands)Omega Pharma Hungary Kft. 100 % Ady Endre utca 19.III/312 - 1024 Budapest (Hungary)Omega Pharma International NV 100 % Venecoweg 26 - 9810 Nazareth (Belgium)Omega Pharma Kişisel Bakim Ürünleri Sanayi ve Ticaret Ltd. Şirketi 100 % Şerif Ali Mah. Emin Sok 15, Y. Dudullu Ümraniye - 34000 Istanbul (Turkey)

61

Omega Pharma Luxembourg SARL 100 % Zare Ouest - 4384 Ehlerange (Luxembourg)Omega Pharma New Zealand Ltd 100 % 183 Grenada Street - Arataki Tauranga 3116 (Nieuw-Zeeland)Omega Pharma Poland Sp.z.o.o. 100 % Dabrowskiego 247-249 – 93 232 Lodz (Poland)Omega Pharma Singapore Pte Ltd 100 % 100 Jalan Sultan - # 09-06 Sultan Plaza - Singapore 199001 (Singapore)Omega Pharma Ukraine LLC 100 % 9 Borispolskoya str., Kiev City 02099 (Ukraine)Omega Teknika Ltd 100 % Farnham Drive - Finglas Road - Dublin 11 (Ireland)Paracelsia Pharma GmbH 100 % Im Wirrigen 25 - 45731 Waltrop (Germany)Pharmasales Pty Ltd 100 % Units # 48, 49, 50 and 51, N°7, Narabang Way, Belrose NSW 2085 (Australia)Prisfar Produtos Farmaceuticos SA 100 % Rua Antero de Quental 629 - 4200-068 Porto (Portugal)Promedent SA 100 % Zare Ouest - 4384 Ehlerange (Luxembourg)

Richard Bittner AG 100 % Reisnerstrasse 55-57 - 1030 Wenen (Austria)Rubicon Healthcare Holdings Pty Ltd 100 % Units # 48, 49, 50 and 51, N°7, Narabang Way, Belrose NSW 2085 (Australia)Samenwerkende Apothekers Nederland BV 100 % Tinbergenlaan 1 - 3401 MT IJsselstein (the Netherlands)ViaNatura NV 100 % Monnikenwerve 109 - 8000 Brugge (Belgium) Wartner Europe BV 100 % Keileweg 8 - 3029 BS Rotterdam (the Netherlands)

Following companies have been removed from the consolidation circle in the course of 2010:

Altermed corporation d.o.o. Croatia (sold in 2010)Hipocrate Distribution Grup SRL SC (merged with Hipocrate 2000 SRL SC on 1 January 2010)

• In January 2011, Omega Pharma acquired Duo LP Prof, an anti-lice product that generated approximately 6 million euro sales in France in 2010.

• Georges De Vos, COO and member of the executive committee, left the Company in January 2011.

7.5 SiGnifiCanT EVEnTS afTER balanCE ShEET daTE

• Christoph Staeuble, Group Marketing Manager since March 2010, was appointed Vice President, Head of Sales & Marketing and became member of the executive committee in February 2011.

7.6 RElaTEd PaRTiES

Related parties refer to the members of the executive committee, the non-executive members of the board of directors and to Arseus NV, in which the Company held a 24 per cent participation until October 2009.

MEMbERS Of ThE ExECuTiVE COMMiTTEE and nOn-ExECuTiVE MEMbERS Of ThE bOaRd Of diRECTORS

* The total amount equals the full cost to the Company. No social security expenses nor retirement benefit expenses are due by the Company.

2010—Grossremuneration* Base Variable Total(inunitsofeuro) component component

Executive committee members, including the CEO 2 134 000 509 000 2 643 000

Non-executive members of the board of directors 180 000 180 000

Total 2 314 000 509 000 2 823 000

2009—Grossremuneration* Base Variable Total(inunitsofeuro) component component

Executive committee members, including the CEO 2 336 333 344 250 2 680 583

Non-executive members of the board of directors 150 000 150 000

Total 2 486 333 344 250 2 830 583

62

(inthousandeuro) 2010 2009

Saleofgoodsandservices 0 245

Sale of goods to Arseus companies 0 210

Sale of services to Arseus companies 0 35

Purchaseofgoodsandservices 0 124

Purchase of goods to Arseus companies 0 115

Purchase of services to Arseus companies 0 9

7.7 waRRanTS - ShaRE-baSEd PayMEnTS

Currently Omega Pharma has one warrant plan which still includes exer-cisable warrants. For each warrant that is exercised one new share with one voting right is being issued.

This warrant plan was approved on 1 April 2003 by the board of directors. In 2009 31,500 new warrants were granted for the benefit of employees, service providers and important third parties of Omega Pharma and/or its subsidiaries.

In 2010 16,000 new warrants were granted for the benefit of employees, service providers and important third parties of Omega Pharma and/or its subsidiaries.

VESTinG Of waRRanTS

Employees, important third parties and service providers can exercise warrants as from four years after the grant date, in annual instalments of 25 per cent.

The average vesting period is about five to nine years. The condition for vesting/exercising the warrants is, for employees, that they are still in service, and for important third parties and service providers, that the relationship with the Company is not terminated.

GRanTinG, ExERCiSinG and POTEnTial fuTuRE ExERCiSinG Of waRRanTS

(a) As a consequence of not being exercised with the scheduled annual instalments.

(b) As a consequence of leaving service (employees) or termination of the relationship with the Company (other warrant holders).

(c) By issuing an equal number of new shares Omega Pharma: cf. the effectively exercised warrants in the scheme hereunder.

2010 2009 Number Average Number Average exerciseprice exerciseprice ineuro ineuro

Outstanding on 1 January 334 430 31.25 335 305 31.88

Granted 16 000 30.66 31 500 26.99

Expired (a) and forfeited (b) (24 426) 39.49 (32 375) 33.63

Exercised (c) (3 777) 24.23 0 0

Outstanding on 31 December 322 227 30.57 334 430 31.25

aRSEuS nV

The table below includes the related party transactions between the Company and Arseus NV up to and including September 2009:

In the course of 2010, no warrants have been granted to the members of the executive committee nor to the non-executive members of the board of directors.

In the course of 2009, a total of 10,000 warrants have been granted to the members of the executive committee and no warrants have been granted to the non-executive members of the board of directors.

In the event of any requests for resignation of a member of the executive committee, a settlement will be applied that corresponds in most cases with the fixed remuneration component for one year. No other settlements are in place.

More detailed information is included in this publication in the chapter ‘Corporate governance statement’ under the sub-heading ‘Remuneration report’.

63

ExERCiSE SChEME fOR 2009 and 2010

On 31 December 2010, a total of 322,227 warrants were exercisable at an average exercise price of 30.57 euro per share, while that day the closing price of the share Omega Pharma amounted to 35.90 euro.

This means that, at that moment 255,913 warrants are exercisable (‘in the money’).If, hypothetically, all warrants would be exercised, the total number of voting rights would amount to 24,486,993 (24,231,080 + 255,913).

The most recent situation regarding the number of shares and the number of warrants is made available on the corporate website, in the Investor Center, under the header Info for shareholders.

waRRanT hOldERS in ThE bOaRd Of diRECTORS and ThE ExECuTiVE COMMiTTEE

See page 11.

RECOGniTiOn Of ThE waRRanT COST in ThE balanCE ShEET

The fair value of the warrants is recognized in the balance sheet under equity, spread over the vesting period (cf. the consolidated statement of changes in equity).

The fair value of the warrants is determined as follows:• As the warrant plans 1 and 2 were granted prior to 7 November 2002,

IFRS 2 does not require a specific calculation of the fair value.

2010 2009Expirydate Exercise Numberof Exercise Numberof Effectivelyofthewarrants priceper warrantsper priceper warrantsper exercised warrant instalment warrant instalment warrants

June 2010 34.68 61 179 3 777

June 2011 37.63 66 314 46.09 19 488

June 2012 31.10 57 551 30.83 61 051

June 2013 27.00 62 166 30.11 65 566

June 2014 30.37 66 173 30.11 65 573

June 2015 26.22 54 298 25.86 53 698

June 2016 28.24 11 725 26.99 7 875

June 2017 30.66 4 000

30.57 322 227 31.25 334 430 3 777

• The fair value of the warrants of warrantplan 3 granted until 2008 are determined using the Black-Scholes valuation model. The main compo-nents used in the model, are the share price at grant date, the exercise price shown above, the standard deviation of the expected share price returns (with volitality set at 40 per cent and the expected dividend yield at 0.50 per cent), the option life disclosed above, and the annual risk-free interest rate (5 per cent). In the Black-Scholes valuation model, these components form the basis for calculating the present value of the share ex-dividend and the exercise price. In this manner, which is also used often for the valuation of tradable call options, the fair value of the warrants is being determined.

• The warrants granted as from 2008 are valued according to the binomial

model.

RECOGniTiOn Of ThE waRRanT COST in ThE inCOME STaTEMEnT

The warrant cost is recognized in the income statement under employee benefit expenses.

For the calculation of this cost, the fair value of the warrants at grant date is spread over the period until the final vesting of the warrants.

For 2010, this cost amounted to 7,459 euro compared to 25,026 euro in 2009.

The dividend for the period 2009 (0.80 euro gross per share) was paid in 2010 and amounted to a total of 19.38 million euro. The dividend for the period 2008 (0.60 euro gross per share) was paid in 2009 and amounted to a total of 14.54 million euro. For 2010, a dividend of 1.00 euro gross per

7.8 diVidEnd – ShaRE-baSEd PayMEnTS

share will be proposed to the annual shareholder meeting of 2 May 2011. This represents a total dividend of 24.23 million euro, payable in 2011 and not reflected in this financial statement. The dividends on treasury shares are not suspended and paid out to Omega Pharma NV.

64

The audit committee of Omega Pharma NV confirmed that the above-listed additional services do not impair the independence of the statutory auditor.

7.10 infORMaTiOn On ThE audiTOR’S REMunERaTiOn and RElaTEd SERViCES

The statutory auditor is PricewaterhouseCoopers Bedrijfsrevisoren BCVBA, represented by Peter Van den Eynde.

Shareholder Dateofmostrecent Number Percentage notification ofshares ofthetotal

Couckinvest NV / Marc Coucke 22 September 2008 en 29 January 2009 7 271 746 30.01 % (transactions made public)

Omega Pharma NV (treasury shares) * 22 September 2008 934 994 3.86 %

Capital Research and Management Company 11 June 2010 1 225 543 5.06 %

Public 14 798 797 61.07 %

Total 24 231 080 100.00 %

* The number of treasury shares included in this table, is the number mentioned in the notification of 22 September 2008. Since then the Company has divested a number of treasury share in the context of acquisitions, which did not require a new notification as no threshold was passed. At the moment of publication, the Company holds 879,994 treasury shares.

The total free float (only excluding Couckinvest NV/Marc Coucke and the treasury shares) consequently amounts to 66.13%The notification thresholds for major shareholdings are set in the articles of association at 3 per cent, 5 per cent, 7.5 per cent and multiples of 5 per cent.

Notification forms can be downloaded from the website of the regulator FSMA (www.fsma.be). Shareholders who think they should issue a notification, can contact Chris Van Raemdonck, Investor Relations (+32/9/381.0331).

7.9 ShaREhOldER STRuCTuRE

Based on the most recent notifications and the transactions that are made public, the shareholder structure is as follows:

(induizendeuro)

AuditfeefortheGroupaudit2010

Omega Pharma Group 690

Audit fee for PricewaterhouseCoopers Bedrijfsrevisoren 243

Audit fee for parties related to PricewaterhouseCoopers Bedrijfsrevisoren 447

AdditionalservicesrenderedbytheAuditortotheGroup

Other engagements linked to the Auditor’s mandate 6

Tax advisory services 0

Other services 14

AdditionalservicesrenderedbypartiesrelatedtotheAuditortotheGroup

Other engagements linked to the Auditor’s mandate 0

Tax advisory services 49

Other services 48

65

As required by law and the company’s articles of association, we report to you in the context of our appointment as the company’s statutory auditor. This report includes our opinion on the consolidated accounts and the required additional information.

unqualifiEd OPiniOn On ThE COnSOlidaTEd aCCOunTS

We have audited the consolidated accounts of Omega Pharma NV and its subsidiaries (the “Group”) as of and for the year ended 31 December 2010, prepared in accordance with International Financial Reporting Standards, as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium. These consolidated accounts comprise the consolidated balance sheet as of 31 December 2010, the consolidated income statement, consolidated statement of comprehensive income of the period, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The total of the consolidated balance sheet amounts to EUR (000) 1.443.430 and the consolidated statement of income shows a profit for the year, group share, of EUR (000) 69.474.

The company’s board of directors is responsible for the preparation of the consolidated accounts. This responsibility includes: designing, imple-menting and maintaining internal control relevant to the preparation and fair presentation of consolidated accounts that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Our responsibility is to express an opinion on these consolidated accounts based on our audit. We conducted our audit in accordance with the legal requirements applicable in Belgium and with Belgian auditing standards, as issued by the “Institut des Reviseurs d’Entreprises/Instituut van de Bedrijfsrevisoren”. Those auditing standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated accounts are free of material misstatement.

In accordance with the auditing standards referred to above, we have carried out procedures to obtain audit evidence about the amounts and disclosures in the consolidated accounts.

The selection of these procedures is a matter for our judgment, as is the assessment of the risk that the consolidated accounts contain material misstatements, whether due to fraud or error. In making those risk assess-ments, we have considered the Group’s internal control relating to the preparation and fair presentation of the consolidated accounts, in order to design audit procedures that were appropriate in the circumstances, but

STaTuTORy audiTOR’S REPORT TO ThE GEnERal ShaREhOldERS’ MEETinG On ThE COnSOlidaTEd aCCOunTS Of ThE COMPany OMEGa PhaRMa nV aS Of and fOR ThE yEaR EndEd 31 dECEMbER 2010

not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. We have also evaluated the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by management, as well as the presentation of the consolidated accounts taken as a whole. Finally, we have obtained from the board of directors and Group officials the explanations and information necessary for our audit. We believe that the audit evidence we have obtained provides a reasonable basis for our opinion.

In our opinion, the consolidated accounts give a true and fair view of the Group’s net worth and financial position as of 31 December 2010 and of its results and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union, and with the legal and regulatory requirements applicable in Belgium.

addiTiOnal infORMaTiOn

The company’s board of directors is responsible for the preparation and content of the management report on the consolidated accounts.

Our responsibility is to include in our report the following additional information, which does not have any effect on our opinion on the conso-lidated accounts:

• The management report on the consolidated accounts deals with the information required by the law and is consistent with the consolidated accounts. However, we are not in a position to express an opinion on the description of the principal risks and uncertainties facing the companies included in the consolidation, the state of their affairs, their forecast development or the significant influence of certain events on their future development. Nevertheless, we can confirm that the information provided is not in obvious contradiction with the information we have acquired in the context of our appointment.

Antwerp, 31 March 2011

The statutory auditorPwC Bedrijfsrevisoren cvbarepresented by

Peter Van den EyndeBedrijfsrevisor

STaTuTORy audiTOR’S REPORT

STaTuTORyaudiTOR’S

REPORT

COnSOlidaTEd finanCial STaTEMEnT

66

67

STaTuTORy finanCial STaTEMEnTS

STaTuTORy finanCial

STaTEMEnTS

Stand-alone condensed income statement 68

Stand-alone condensed balance sheet 69

Appropriation of profits 70

68

STand-alOnE COndEnSEd inCOME STaTEMEnT

1

(inthousandeuro) 2010 2009

OPERATING INCOME 19 310 12 687

Turnover 18 998 12 396

Other operating income 312 291

OPERATING CHARGES 16 885 13 747

Goods for resale, raw materials and consumables 30 72

Services and other goods 11 818 9 540

Remuneration, social security and pensions 3 875 3 032

Amounts written off 852 791

Other operating charges 310 312

OPERATING PROFIT 2 425 (1 060)

FINANCIAL RESULT 9 796 (930)

PROFIT FROM ORDINARY ACTIVITIES BEFORE TAXES 12 221 (1 990)

EXCEPTIONAL RESULT 27 698 (13 186)

PROFIT FOR THE FINANCIAL YEAR BEFORE TAXES 39 919 (15 176)

RESULT TAXES (2 244) (31)

NET PROFIT FOR THE FINANCIAL YEAR 37 675 (15 207)

69

STand-alOnE COndEnSEd balanCE ShEET STaTEMEnT

2

(inthousandeuro) 2010 2009

FIXED ASSETS 1 161 303 1 087 922

Formation expenses 596 1 124

Intangible fixed assets 2 038 2 192

Tangible fixed assets 1 055 1 089

Investments 1 157 614 1 083 517

CURRENT ASSETS 63 278 91 753

Debtors due after one year 8 082 7 553

Debtors due within one year 27 639 55 293

Investments 24 095 24 095

Cash at bank and in hand 9 2 296

Deferred charges and accrued income 3 453 2 516

TOTAL ASSETS 1 224 581 1 179 675

CAPITAL AND RESERVES 673 265 659 721

Capital 16 467 16 465

Share premiums 350 474 350 376

Legal reserve 1 647 1 646

Not available reserve 24 095 24 095

Profit carried forward 280 582 267 139

CREDITORS 551 316 519 954

Creditors due after one year 56 864 266 840

Creditors due within one year 489 227 248 170

Accrued charges and deferred income 5 225 4 944

TOTAL LIABILITIES 1 224 581 1 179 675

70

aPPROPRiaTiOn Of PROfiTS3

(inthousandeuro) 2010 2009

Profitstobeappropriated 304814 286521

Profits for the year to be appropriated 37 675 (15 207)

Profit carried forward from the previous financial year 267 139 301 728

Transferstocapitalandreserves (1)

To statutory reserves 1

To other reserves

Resulttobecarriedforward (280583) (267139)

Profit to be carried forward 280 583 267 139

Profittobedistributedasdividends (24231) (19382)

Dividend 24 231 19 382

aCCOunTinG POliCiES

The accounting policies used for the statutory financial statements of Omega Pharma NV are the same as previous year. These accounting policies are in line with the Royal Decree of 30 January 2001 of the implementation of the Belgian Company Code.

STaTuTORy annual aCCOunTS Of OMEGa PhaRMa nV

In accordance with Article 105 of the Belgian Company Code, this annual report includes an abbreviated version of the statutory annual accounts of Omega Pharma NV. The annual report and the Auditor’s report have been filed and are also available for consultation at the registered office.

The Auditor has issued an unqualified opinion on the statutory annual accounts of Omega Pharma NV for the financial year 2010 as well as for the previous year.

Omega Pharma NVVenecoweg 26

B-9810 NazarethTel.: +32 (9) 381 02 00E-mail: info@omega-pharma.beWebsite: www.omega-pharma.beCompany number BE 0431 676 229