annual report 2006 · 2012. 10. 31. · annual report 2006 duvel moortgat dear shareholder, 2006...

ANNUAL REPORT 2006 DUVEL MOORTGAT

CONTENT

CHAIRMAN’S STATEMENT

KEY FIGURES

PRoFILE DUvEL MooRTGAT

STRUCTURE DUvEL MooRTGAT

STRATEGIC oBJECTIvES

REPoRT BY THE BoARD oF DIRECToRS

PoLICY ASPECTS

INFoRMATIoN FoR INvESToRS AND SHAREHoLDERS

CoRPoRATE GovERNANCE

FINANCIAL SECTIoN

2

4

8

14

20

24

48

52

58

66

" Duvel and jazz: a tasteful

combination."Duvel and jazz are often bracketed together because they have so much in common. Jazz is an art form, just as Duvel is. Both of them are to be savoured peacefully in order to enjoy them optimally. Both of them are mature and complex; have long-standing roots, but are nevertheless modern. Both the young and the old can interpret and experience them each in their own way. Even the Duvel glass is reminiscent of a saxophone or a string bass.

So it’s no wonder that jazz and Duvel often come across each other. The Duvel Jazz Lounge is present at big happenings such as the Blue Note Festival and Jazz Middelheim. Duvel also organises Jong Jazz Talent (Young Jazz Talent), a steppingstone for young musicians, and the ‘Jazz on the Terrace’ tour, where Duvel jazz bands treat the audience of the outdoors cafés to a free live show, and to a Duvel.

Furthermore, jazz lovers and Duvel lovers have something else in common: being true to their favourite music and beer. ‘If you find a note that sounds good, play the same note every night’, Count Basie once said. This goes for music notes, but for a Duvel just as well.

Michel Moortgat, Chief Executive Officer

FOREWORD �

ANNUAL REPORT 2006 DUVEL MOORTGAT�

Dear shareholder,

2006 has been an excellent year for Duvel Moortgat. All of our brands have improved. In virtually every country where the group is present, it has improved its market share. Thanks to this overall success, in 2006 we could book the largest turnover growth of the past ten years, 12,5 % to be exact.

Not only the existing brands booked a rise in turnover, the range was also extended. In September, the Brasserie d’Achouffe became part of the group. Everyone knows that the Chouffe beers of the Ardennes are self-willed. You should just take a look at the goblins on the labels, and at the large size of the bottle. The Chouffe beers are therefore promoting themselves as ‘bières de partage’ (beers to be shared), preferably consumed in the company of friends and family.

This characteristic makes them fit in perfectly with the rest of Duvel Moortgat’s beers. Because they, too, are being consumed more and more, both at home and in the pub. In Belgium, Duvel has reinforced its market position. That is an excellent performance, given the declining beer consumption in our country. The same goes for the Maredsous abbey beers, Bel Pils and Vedett. Vedett especially proves that a modern and innovative beer can be successful in a declining market.

Abroad, our specialty beers are also increasingly appreciated. In 2006, we took important steps in the United States. Recently, Duvel Moortgat has taken on the import of Duvel on the West Coast and the import of Maredsous in the entire country. Duvel Moortgat USA is now responsible for the sales of all the group’s brands in the entire United States. It goes without saying that this creates the possibility for many synergies with the beers from the Ommegang Brewery.

Thanks to all of these excellent performances on the national and international market, we can offer you a gross dividend per share of ¤ 0,72 over the whole of 2006.

The expansion of a brewery not only depends on the consumer. Thinking ahead is the message. Thinking and acting. The personnel and management of your company haven’t been sitting around doing nothing, as you can read from this annual report. Numerous efforts were done to further push sales: in marketing, recruiting new employees, and establishing subsidiaries in the United Kingdom and China. To be clear, the presence of Duvel Moortgat in China is still in its early phases. We are very aware that a lot of water will have to run through the Yellow River before all Chinamen are drinking Duvel.

CHAIRMAN’SSTATEMENTMichel Van Hemele, for Rubus nvChairman of the Board of Directors

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A different investment that indeed will render profit in the short run is the construction of the new brewery hall in Puurs. When it will be finished later this year, Duvel Moortgat will not just brew beer, but it will do so in a beautiful environment, with due attention being given to tradition and modern architecture.

Nevertheless, it is not architecture that is the theme of this annual report. Jazz is. After all, jazz fits Duvel perfectly, and vice versa. That is why in 2006, the promotional and sponsorship efforts have been focussing on jazz even more strongly than before. I can even see another analogy between jazz and Duvel, other than their both being a form of art. Drinking Duvel and listening to jazz both give pleasure, which could lead the consumer to forget that a lot of creativity and hard work has to be put into them.

I would like to express my thanks to the employees and management of our company, for the numerous efforts they have produced in the last year. It is thanks to them that we can present these outstanding results to you. Together with you, I am looking forward to their accomplishments in the course of 2007.

Michel Van Hemele, for Rubus nvChairman of the Board of Directors

CHAIRMAN’S STATEMENT


CONSOLIDATED KEY FIGURES IN ¤ - IFRS 2006 2005 2004Turnover 74.597.244 66.311.997 61.299.052Operating profit (EBIT) 16.272.418 14.511.471 13.181.898Financial profit (loss) -20.908 173.897 -70.442Ordinary profit before tax 16.251.510 14.685.368 13.111.456Extraordinary items 0 0 0Profit for the year before taxation 16.251.510 14.685.368 13.111.456Taxes 4.567.111 4.733.308 3.981.488Deferred taxes 992.044 248.949 717.292Group share of profits (losses) of affiliated companies 0 0 0Consolidated net profit after tax 10.692.355 9.703.111 8.412.676Group share of net profit after tax 10.682.462 9.703.111 8.412.676Minorities share of net profit after tax 9.893 0 0

Total assets (Balance sheet total) 134.604.910 111.264.269 102.856.474Shareholders’ equity (16) 81.733.312 73.718.936 66.521.692Net financial creditors (1) -7.974.538 -12.347.858 -6.654.630Net Assets (2) 73.758.774 61.371.078 59.867.062Fixed assets 79.861.695 63.510.060 61.104.168Depreciation 7.544.769 7.203.353 5.643.738Depreciation of goodwill 0 0 0

Working capital (3) 17.005.956 13.825.398 13.804.105

Operating cash flow (EBITDA) (4) 24.340.017 21.864.384 19.587.582Amounts written off / provision 522.830 149.560 761.946Cashflow (5) 18.759.954 17.056.024 14.818.360Remuneration, social security costs and pensions 13.085.361 11.083.459 10.497.816Number of employees 468 412 365

RATIO’S IN ¤ - IFRS 2006 2005 2004Liquidity / Current Ratio (6) 3,06 3,29 3,18Solvency / Debt ratio (7) 0,31 0,27 0,29Return on shareholders’ funds (8) 14,50 % 14,59 % 12,86 %RONA (9) 22,06 % 23,65 % 22,02 %WACC (10) 6,08 % 5,85 % 6,59 %EVA (11) 9.808.124 10.653.616 8.753.841

CONSOLIDATED KEY FIGURES PER SHARE IN ¤ - IFRS 2006 2005 2004Number of shares in issue as at 31/12 5.362.030 5.353.510 5.341.390Average number of shares in issue 5.318.089 5.296.334 5.302.391Weighted average number of ordinary shares (diluted) 5.409.280 5.360.828 5.320.255Shares held by the company 34.966 45.266 47.120Operating profit 3,06 2,74 2,49Ordinary profit before tax 3,06 2,77 2,47Consolidated net profit after tax 2,01 1,83 1,59Consolidated net profit after tax, diluted 1,98 1,81 1,58Cash flow 3,53 3,22 2,79Book value - Shareholders’ Equity 15,24 13,77 12,45Gross dividend 0,72 0,65 0,58Net Dividend 0,54 0,49 0,44Closing price at end of December 38,53 32,31 25,85

STOCK MARKET RATIOS IN ¤ - IFRS 2006 2005 2004Dividend 3.835.486 3.450.359 3.070.677Payout ratio % 35,87 % 35,56 % 36,50 %Dividend yield 1,40 % 1,51 % 1,68 %P/E ratio (12) 19,16 17,64 16,29P/CF ratio (13) 10,92 10,03 9,25P/B (14) 2,53 2,35 2,08Average growth in consolidated net profit over 3 years 12,77 % 15,34 % -PE/G ratio (15) 1,50 1,15 -

KEY TO FORMULAE

(1) Netfinancialcreditors - Total interest-bearing financial creditors - cash at bank and in hand - short-term investments(2) Netassets - Shareholders’ equity + interest- bearing financial creditors - cash at bank and in hand - short-term investments(3) Workingcapital - Current assets (exclusive of short-term investments and cash at bank and in hand) - non-financial creditors <1 year - accrued charges and deferred income liabilities)(4) Operatingcashflow(EBITDA) - Operating profit + depreciation + provisions for liabilities and charges + write-downs + depreciation of goodwill(5) Cashflow - Consolidated net profit after tax + depreciation + provisions for liabilities and charges + write-downs (6) Currentratio - Current assets/ short-term creditors(7) Debtratio - External capital / total assets (balance sheet total)(8) Returnonshareholders’funds - Consolidated net profit after tax / shareholders’ equity at end of previous financial yea(9) RONA-Returnonnetassets - EBIT / Net assets(10) WeightedAverageCostofCapital - Cost of shareholders’ equity + cost of external funds Costofshareholders’equity - Interest payable on 10-year OLO (31/12/04) + market risk premium * Beta coefficient Costofexternalfunds - Average interest rate payable on loans - tax saving(11) EconomicValueAdded - Capital employed (start of financial year)*return on capital - Capital employed (start of financial year)* cost of capital or net assets * (Rona - Wacc)(12) P/Eratio - Price-earnings ratio is the share price at 31st December divided by the ordinary net profit per share(13) P/CFratio - Price-cash flow ratio is the share price at 31st December divided by the cash flow per shar(14) P/B - Price-bookvalue ratio is the share price at 31st December divided by the shareholders’ equity per share(15) Price-earningstogrowth - This is the price to earnings ratio divided by the average growth rate of the consolidated net profit.(16) Shareholders’equity - Under Belgian Gaap: shareholders’ equity after dividend

�KEY FIGURES

CONSOLIDATED KEY FIGURES IN ¤ - BELGIAN GAAP 2004 2003 2002Turnover 71.428.593 65.920.537 58.074.336Operating profit (EBIT) 12.452.576 11.311.767 10.756.188Financial profit (loss) -890.209 -808.407 -799.344Ordinary profit before tax 11.562.367 10.503.360 9.956.844Extraordinary items -30.479 -341.739 -784.963Profit for the year before taxation 11.531.888 10.161.621 9.171.881Taxes 4.166.383 4.135.692 3.586.856Deferred taxes 0 0 0Group share of profits (losses) of affiliated companies 582.341 460.089 385.542Consolidated net profit after tax 7.947.846 6.480.634 5.912.588Group share of net profit after tax 7.990.473 6.641.094 5.953.897Minorities share of net profit after tax -42.627 -160.460 -41.309

Total assets (Balance sheet total) 93.041.349 86.312.904 74.127.580Shareholders’ equity (16) 59.008.852 53.736.056 50.314.124Net financial creditors (1) -4.208.555 -3.815.441 -6.398.982Net Assets (2) 54.800.297 49.920.615 43.915.142Fixed assets 55.602.381 54.020.935 42.971.797Depreciation 6.283.824 5.771.668 5.013.902Depreciation of goodwill 182.109 175.384 429.168

Working capital (3) 8.523.434 4.744.200 7.927.226

Operating cash flow (EBITDA) (4) 19.754.038 17.886.757 16.397.676Amounts written off / provision 835.529 627.938 198.418Cashflow (5) 15.249.308 13.055.624 11.554.076Remuneration, social security costs and pensions 10.575.579 9.435.181 8.266.553Number of employees 365 342 318

RATIO’S IN ¤ - BELGIAN GAAP 2004 2003 2002Liquidity / Current Ratio (6) 2,27 1,74 2,17Solvency / Debt ratio (7) 0,36 0,37 0,32Return on shareholders’ funds (8) 14,79 % 12,88 % 12,47 %RONA (9) 22,72 % 22,66 % 24,49 %WACC (10) 6,59 % 6,94 % 6,98 %EVA (11) 8.053.970 6.903.245 6.566.493

CONSOLIDATED KEY FIGURES PER SHARE IN ¤ - BELGIAN GAAP 2004 2003 2002Number of shares in issue as at 31/12 5.341.390 5.341.390 5.341.390 Average number of shares in issue 5.341.390 5.341.390 5.341.390Weighted average number of ordinary shares (diluted) 5.341.390 5.341.390 5.341.390Shares held by the company 47.120 31.920 31.920Operating profit 2,33 2,12 2,01Ordinary profit before tax 2,16 1,97 1,86Consolidated net profit after tax 1,49 1,21 1,11Consolidated net profit after tax, diluted 1,49 1,21 1,11Cash flow 2,85 2,44 2,16Book value - Shareholders’ Equity 11,05 10,06 9,42Gross dividend 0,58 0,53 0,50Net Dividend 0,44 0,40 0,38Closing price at end of December 25,85 20,61 17,00

STOCK MARKET RATIOS IN ¤ - BELGIAN GAAP 2004 2003 2002Dividend 3.070.677 2.814.019 2.654.735Payout ratio % 38,64 % 43,42 % 44,90 %Dividend yield 1,68 % 1,93 % 2,21 %P/E ratio (12) 17,37 16,99 15,36P/CF ratio (13) 9,05 8,43 7,86P/B (14) 2,34 2,05 1,80Average growth in consolidated net profit over 3 years 14,37 % 1,54 % 1,15 %PE/G ratio (15) 1,21 11,00 13,34

� ANNUAL REPORT 2006 DUVEL MOORTGAT

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" There are two kinds of music. Good music, and the other kind."Duke Ellington

PROFILE DUVEL MOORTGAT


DUVEL MOORTGATDuvel Moortgat is an independent brewer of specialty beers who, in the past 125 years, has grown into being a player on the international market, producing beers that are being enjoyed and respected all over the world.

PROFILE

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WHO WE ARE

Duvel Moortgat is an independent producer of specialty beers. The brewery has been operating since 1871. The Group has become an international player with production units in Belgium, the United States and the Czech Republic. The beers have acquired national and international recognition, and occupy a confirmed top position in the segment of strong blond ales.

Duvel Moortgat shares have been listed on the NextPrime segment of the Euronext Brussels stock exchange since early June 1999. Since March 1st 2005, Duvel Moortgat is also listed on the Bel Small Index.

WHAT WE DO

Duvel Moortgat brews an annual total of almost 500.000 hl of specialty beers. The Group has a portfolio of some ten beer brands: Bernard, Chouffe, Maredsous, Ommegang and Vedett are the core brands next to strong luxury blond ale Duvel.

37 % of the Group’s turnover comes from export or sales of beers produced in the foreign subsidiaries. Duvel is exported to over 50 countries all around the world. The four main export markets are The Netherlands, France, the United States and the United Kingdom.

THE KEY WORD: QUALITY

Quality has been the common feature throughout Duvel Moortgat’s existence: from the production planning and purchase of raw materials over the brewing process to the delivery to the on- and off-trade sector, the commitment to quality persists. Internal goals and external standards like HACCP provide a reference frame to permanently maintaining these high standards and exceeding them wherever possible. This way, Duvel Moortgat is constantly pushing itself in order to provide the consumer with premium quality beers, thus ensuring that every consumer can enjoy his or her beer in perfect circumstances, always and everywhere.

Long before the concept of ‘total quality insurance’ came into existence, Jan-Leonard Moortgat developed a quality reference in the brewery sector, through the concept and realisation of his beers. His passion proved to be hereditary and, in combination with innovation and entrepreneurship, lead to a number of beautiful and successful beers, of which not only Duvel, but also Maredsous, Vedett and the other Duvel Moorgat brands are the living proof.

The Duvel beer has been a characteristic example of the Duvel Moortgat’s driven approach for more than eight decades: foamy, powerful and rich in taste. Today, the strong Duvel position is joined by flourishing new brands, thus guaranteeing that this generation as well as the next ones will carry on the tradition and passion.


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Our main brands

VEDETT is a low fermentation blond premium beer with an alcohol content of 5.2% vol. Although it has been brewed since 1945 (originally under the name ‘Export’ and as ‘Vedett’ since 1965), it wasn’t until recently that it has been given a new impulse.

STEENDONK is a 4.5% vol. white beer. Lightly hopped, it owes its ‘white beer’ name to the cloudy appearance caused by the unmalted wheat used. As an excellent thirst quencher, Steendonk has conquered an excellent reputation in this specific market segment.

DUVEL is a high fermentation luxury beer with an alcohol content of 8.5% vol. Brewed using malted barley and hops, it undergoes secondary fermentation in the bottle. Duvel is the Group’s best-known brand and is the international reference for the ‘strong blond’ segment.

MAREDSOUS is the brand name of Duvel Moortgat’s abbey beers: two gold coloured beers with respective alcohol contents of 6% and 8 % vol., plus an 8% vol. dark version. The Maredsous abbey beers differentiate themselves from competing brands by their specific secondary fermentation in the bottle.

ANNUAL REPORT 2006 DUVEL MOORTGAT

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The Brasserie d’Achouffe’s CHOUFFE beers were added to the line of products at the end of 2006. This cheeky brewery produces unpasteurized beers, to which nothing is added nor extracted during the production process. They’re bottled in characteristic 75 and 150 cl bottles. The best-known goblin beers are La Chouffe, a gold coloured beer with an alcohol content of 8% vol. that undergoes secondary fermentation in the bottle or the barrel, and the dark version Mc Chouffe of 8.5% vol.

BERNARD is the umbrella name for a range of premium Pilsner beers (Bernard Light, Bernard Pilsner, Bernard Dark and Bernard Special), brewed using a traditional and natural method. Thanks to these beers, the Bernard brewery is nationally renowned as a niche player in the premium beers segment of the Czech Republic.

BELPILS is a 5% vol. low fermentation beer, bottled or cask conditioned after a long period of maturation. The hops used for this beer give it its characteristic taste and aroma. Bel Pils is the Group’s stylish luxury Pilsner and one of the on-trade markets most typical Pilsner beers.

THREEPHILOSOPHERS (9.8% alc. vol.), OMMEGANGABBEY (8.5% alc. vol.), HENNEPIN (7.7% alc. vol.), RAREVOS (6.5% alc. vol.) and OMMEGANGWITTE (5.1% alc. vol.), launched in 2004, are beers brewed by the Group’s American production unit, the Ommegang Brewery. With their specifically Belgian character, and together with Duvel, they respond to the American interest in specialty beers.


ANNUAL REPORT 2006 DUVEL MOORTGAT��

��STRUCTURE DUVEL MOORTGAT

" When there’s something we think could be better, we must make an effort to try and make it better."John Coltrane


STRUCTURE

The Duvel Moortgat structure, with a wide range of subsidiaries, joint ventures and holding companies reflect the group’s growing international activities . The operating activities of the Duvel Moortgat Group are divided into two business units: ‘productionandsalesofdrinks’ and ‘otheractivities’.

The ‘production and sales of drinks’ business unit is responsible for the brewing, bottling, conditioning and the sales of the various drinks. The business unit coordinates these activities in the following subsidiaries, joint ventures and investments:

duvel moortgat nv brews, bottles and sells the company’s own brands (Duvel, Bel Pils and Vedett), plus the Maredsous abbey beers brewed under licence from the Fromagerie et Brasserie Maredsous sa.

brasserie d’achouffe nv brews, bottles and sells various specialty beers, among which the blond La Chouffe and the dark Mc Chouffe in the typical 75cl-bottle are the most well-known. The Ardennes brewery was purchased by Duvel Moortgat in September 2006.

brewery steendonk nv is a joint venture between Duvel Moortgat and the Palm Breweries. Brewery Steendonk brews and bottles the Steendonk white beer.

rodinny pivovar bernard as in the Czech Republic bottles and sells a broad range of premium beers marketed under the ‘Bernard’ brand.

sladovna bernard as is the Bernard Brewery’s malting unit.

brewery belâme ltd (Brewery Ommegang) brews and bottles the Ommegang Ommegang Witte, Hennepin, Rare Vos and Three Philosophers in the United States.

moortgat horeca services nv is Duvel Moortgat’s central on-trade distribution point. It was formed in 1999 from the merger of the Group’s regional beer dealers in Antwerp and Brussels, plus beer dealer De Cuyper nv.

DUVEL MOORTGAT


Growth thanks to a consistent sales policy“In Belgium, the ‘food’ channel in the beer market is becoming increasingly important. In recent years, both Duvel and Maredsous have achieved a strong market position within the range of speciality beers. This trend has persisted last year, showing significant growth figures. The distinct positioning of our brands as quality products has contributed to their success. Another success factor is the sales strategy that is based on a consistent policy in terms of prices, promotions and increased attention towards Point-of-Sales (POS) through our sales teams. The most recent example of this success is the further introduction of Vedett in the supermarkets.”

Sophie Vandamme, Key Account Food Retail Belgium

The lfb group runs a chain of French theme cafés positioned as ‘beer villages’, with outlets in Strasbourg, Tours, Clermont-Ferrand, Grenoble and Nancy.

eura drinks nv imports and organises the distribution of waters and soft drinks.

Duvel Moortgat is a participant in the ‘European Economic Cooperation Association’ known as brewer’s special beers (bsb) eesv. BSB is a logistical distribution platform for specialty beers in The Netherlands.

duvel moortgat france sarl is the Group’s sales organisation in France. It is directly responsible for the sales of the beers to the on- and off-trade sectors.

duvel moorgat usa ltd is the Group’s sales and distribution organisation on the East Coast of the United States. Selling Duvel and the Ommegang Brewery beers, it is present in over thirty states.

groupement des bières speciales (gbs) geie, also a ‚European Economic Cooperation Association’, is the distribution platform for specialty beers in France.

belga bar (uk) ltd takes care of the exploitation of Bar Music Hall.

force de vente service (fvs) is a joint venture aiming specifically at the distribution of specialty beers through supermarkets in France. At the end of 2006, the partners decided by mutual agreement to dissolve the joint venture.

duvel moortgat uk ltd is the Group’s sales organisation in the United Kingdom. It is directly responsible for the sales of the beers to the on- and off-trade sectors.


the business unit ‘other activities’ includes all property interests and financial services of the duvel moortgat group.

moortgat immo services (mis) nv has been the Group’s property company since 2002. It includes the horeca outlets that used to be spread over various companies.

parallel nv owns hotel and catering outlets on the Waalse Kaai in Antwerp.

espace belge geie is a European joint venture that owns the ‘Bouillon Racine’ building in Paris. Duvel Moortgat holds a 23.4% share in Espace Belge.

moortgat financial services (mfs) nv provides financial support to the horeca outlets. MFS was converted into a financial institution in May 1999, in conformity with the Act of March 22nd 1993. Its outstanding loans portfolio stood at ¤ 2.056.000 at the end of 2006.

(*) More company details can be found on page 104.

Photo left: Nasheet Waits, right: Reggie Washington – Blue Note Records Festival-Ghent 2006


Organigram

BREWERY DUVEL MOORTGAT nv

Brewery Steendonk nv (2)

Rodinny Pivovar Bernard as (3)

Sladovna Bernard as (4)

Brewery Ommegang ltd (5)

Freya’s Deli Fruit nv (6)

Brasserie d’Achouffe nv (7)

DRC sa (18)

LFB Développement sa (19)

Groupement BièresSpéciales (Geie) (14)

Duvel MoortgatUSA ltd (13)

Duvel MoortgatFrance sarl (12)

BSB eesv (11)

Eura Drinks nv (10)

LFB Group

Belga Bar (UK) ltd (15)

FVS (16)

Duvel Moortgat (UK) Ltd (17)

Moortgat HorecaServices nv (8)

Moortgat FinancialServices nv (9)

Moortgat Immo Services nv (26)

Parallel nv (27)

L.D.V. Immo nv (28)

Espace Belgeà Paris Geie (29)

50% 100%

100%

50%

100%

100%

100%

100%

23,40%

9,14%

100%

92%

33%

51%

33,30%

100%

100%

100%

LFB – Expansion sas (20)

LFB – Strasbourg (21)

LFB – Clermont-Ferrand (22)

LFB – Tours (23)

LFB – Grenoble (24)

LFB – Nancy (25)

90%

99,95%

99,95%

90%

90%

50%

50%

100%8,26%

70%

100%

83,48%

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"Originality’s the thing. You can have tone and technique and a lot of other things but without originality you ain’t really nowhere. Gotta be original."Lester Young

STRATEGIC OBJECTIVES

ANNUAL REPORT 2006 DUVEL MOORTGAT�0

INCREASE BELgIAN MARKET LEADERSHIp IN SpECIALTY BEERS

Duvel Moortgat owns a broad range of quality beers and will reinforce its position as a market leader in the segment of specialty beers even further by making the right investments and marketing efforts.

FURTHER REINFORCE THE ‘DUvEL’ BRAND NAME BY pAYINg ATTENTION TO AN ExTENSION OF THE BRAND pORTFOLIO

With its particularly powerful brand name, Duvel remains the flagship of the Group’s expansion in Belgium and its export markets. The visibility of the brand will be further increased. In addition to its flagship Duvel, Duvel Moortgat develops other core brands: Bernard, Chouffe, Maredsous, Ommegang and Vedett.

ExpAND INTERNATIONALLY

The Netherlands, France, the United States and the United Kingdom are the Group’s priority export markets, while – in cooperation with local importers – the necessary support is also being given to the other countries to fully expand their potential.

The Bernard Brewery brands will be further developed both in the Czech Republic and across its borders.

Local market requirements are being satisfied optimally in the largest export countries, using local structures and people and a dynamic marketing policy.

Driven by quality, Duvel Moortgat is determined to occupy a leading position as a niche player in the profitable segment of specialty beers and premium brands, both in Belgium and in its priority export markets.

MISSION DUVEL MOORTGAT

STRATEGICOBJECTIVES

��STRATEGIC OBJECTIVES

STRIvINg FOR pERFECTION

Quality is the Duvel Moortgat’s Group’s greatest asset and this should remain so in the future. The Group is continuously striving for perfection, specifically in four strategic fields:

• Well-trained and motivated employees who carry out their work with a great sense of responsibility• A well thought-out purchasing policy that guarantees the superior quality of all beers• Using the most innovative technologies in order to ensure the highest product quality and to enable the Group to respond flexibly to the commercial needs of the home and foreign markets.• Logistical services

ExpANSION THROUgH A SCRUpULOUS TAKEOvER pOLICY

Duvel Moortgat remains interested in acquiring additional distribution channels and production companies, on the condition that they are profitable, offer high quality and are strategically complementary with the rest of the Group.

CORpORATE gOvERNANCE FOR THE BENEFIT OF THE STAKEHOLDERS

Proper management is a basic requirement to fully exploit the financial resources that the shareholders provide to the company, and benefits all stakeholders. The key concepts here are ‘profitability’, ‘cost control’ and ‘return on investment’.

The gloves are off“As the Duvel Moortgat Group keeps developing and growing, it requires its organisation to adjust itself to this expansion. This lead to the creation of a central purchasing department in 2006, a responsibility that I have taken on. What is the big challenge? To look for money-saving solutions in the purchasing department, which in the long run should result in an optimal cost control. This is not only the case for Duvel Moortgat. We will also search for increasing advantages in collaboration with the Ommegang, Achouffe and Bernard breweries. I am convinced that there are many interesting realizations to look forward too!”

Emmanuel Huon, Purchase Manager

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" Anyone can make the simple complicated. Creativity is making the complicated simple."Charles Mingus

REPORT BY THE BOARD OF DIRECTORS


1. 2006 : THE MOST IMPORTANT FACTS

As it did in the past years, in 2006 Duvel Moortgat added another chapter to its success story. The consolidated turnover rose by 12,5 %, which means a rise in turnover of no less than 64 % in the past five years. Moreover, since the first quotation on the stock market in 1999, the consolidated turnover has doubled. Since this steady growth is the result of a consequent group strategy, based on two pillars: a controlled expansion of the brands in existing markets on the one hand, and a geographic expansion on the other hand.

In 2006, Duvel consolidated its position as the strongest brand within the Group, with a global rise in turnover of 6,4 %.

REPORT BYTHE BOARDOF DIRECTORS

2006 has been an excellent year for Duvel Moortgat. All brands and all markets realised further growth. Moreover, the takeover of the Brasserie d’Achouffe enriched the product range.

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A CONTROLLED ExpANSION OF THE gROUp

In 2006, important steps in growth strategy were taken, of which the most important one was without a doubt the acquisition of Brasserie d’Achouffe in September. Since its foundation in 1982, this brewery has developed into a national and international success. It sells a range of speciality beers, of which the blond La Chouffe and the dark Mc Chouffe – in the typical 75cl-bottle – are the most renowned.

By taking over 100 % of shares of this successful brewery of local beers, Duvel Moortgat completed its portfolio of specialty beers. At the same time, the Group will be able to make the Chouffe beers develop further through its strong logistic and commercial network both at home and abroad.

A second important event in Belgium was the start of the new brewery hall’s construction works. This new brewery hall will replace the present, 30-year-old one as of the fall of 2007. The investment guarantees higher brewing volumes, preserving the high quality level.

A RISE IN THE FOREIgN SHARE OF THE gROUp TURNOvER

In 2006, the activities of Duvel Moortgat abroad gained more and more importance. While in 2000, the non-Belgian markets represented 20% of the consolidated turnover; in 2006 they already represented 37 %. In absolute figures, the foreign turnover during that period of time rose from ¤ 23,2 million to ¤ 27,6 million. Turnover in the priority export markets – The Netherlands, France, Great Britain and the United States – rose by 20,7 % in 2006. In the remaining export markets, turnover rose by 13,8 %.

The rise in the turnover figures is related to the further expansion of the structures abroad. After the establishment of the commercial organisation in the United Kingdom in 2005, in 2006 Duvel Moortgat UK was founded in order to further structuralize the development.

A STRUCTURED AppROACH OF THE CHINESE MARKET

Also in 2006, Duvel Moortgat Hong Kong was founded. this platform to the expansion in Asia has meanwhile been expanded with the first subsidiary Duvel Moortgat China, with its registered office in Shanghai. The Group was already present in China, but its structure wasn’t as organised. As of now, however, Duvel Moortgat will be better organised and professional in its approach there. For the time being, the activities in China will be limited, but the presence in this country is unmistakably a huge step towards the future.

EMpHASIZINg MAREDSOUS AS WELL

Abroad, Duvel Moortgat not only concentrates on Duvel, but it is increasingly emphasizing other brands, especially Maredsous. So far, the sales and marketing efforts concerning these abbey beers mainly focused on Belgium, but since 2006, it is also being investigated how they could be successful in the priority export markets. Although the first reactions are positive, the turnover figures remain modest at present.



2. INCOME STATEMENT: COMMENTARY

The consolidated annual account was prepared in accordance with the International Financial Reporting Standards (IFRS), as published by the International Accounting Standards Board (IASB), and its interpretation issued by the International Financial Reporting Interpretations Committee (IFRIC), as adopted by the European Union on December 31st 2006.

In the financial year 2006, the Duvel Moortgat Group realised a consolidated turnover of ¤ 74.6 million (increase of 12.5%). Brasserie d’Achouffe has been taken up in the consolidation for three months and realised a 2% increase.

TURNOvER BY BRAND

Turnover of the Group’s major beer brands realised an interesting rise compared to 2005. Duvel’s turnover globally rose by 6.4%. The Maredsous abbey beers rose by 19%. Bel Pils turnover equally rose by 19%. Vedett rose by 71.4%. In the Czech Republic, the sales of the locally brewed Bernard beers rose by 9.3%. The American micro brewery Ommegang realised a 27% rise in turnover.

TURNOvER BY MARKET

The turnover abroad rises by 18,8 % as a result of the various initiatives taken in the priority export markets. In Belgium, turnover rises by 9 %, in spite of a 1.1 % decrease in beer consumption. In the Netherlands, turnover rises by 11 %. In France, the Group realises a 17.5 % rise in turnover. In the United Kingdom, turnover rises by 39.6 %. In the United States, a 25.7 % rise in turnover is realised. The American beers Ommegang, Hennepin, Rare Vos, Three Philosophers as well as the Belgian Duvel beer and Maredsous abbey beers realised an increase in volume. The other countries, Japan and Italy amongs others, realised a 21.7 % growth. In the Czech Republic, turnover rises by 10 %.

The operating income rises by 12 % to ¤ 77 million.

The consolidated corporate results (EBIT) rises by 12.1% to ¤ 16.3 million. The second half of the financial year noted a stronger rise of the corporate results. Nevertheless, the exceptional depreciations to the amount of ¤ 300,000 of a disinvested stockroom influence the EBIT margin. The EBIT margin rises from 20.58 % (per 30 June 2006) to 21.74 %.

Modest yet ambitious“In 2006, Duvel Moortgat accomplished its largest growth figure in the past ten years. Moreover, the takeover of the Brasserie d’Achouffe meant the introduction of a new, strong brand. This success, however, should not imply that we will make things easy for ourselves! Duvel Moortgat will stay modest, but at the same time it is very ambitious. Just take a look at the countries where we want to establish further growth, such as the United States, our primary export market, and newcomer China. These are not obvious choices! We admit that, in absolute terms, we are still very small there, but this will not damp our enthousiasm.”

Michel Moortgat, Chief Executive Officer

��REPORT BY THE BOARD OF DIRECTORS

Duvel Moortgat’s Activities Abroad

Turnover by products

USA23,09%

Czech Republic16,90%UK

10,47%

The Netherlands21,54%

France19,00%

Other countries9,00%

Duvel64,43%

Others15,07%

Maredsous4,81%

Bel3,87%

Vedett3,43%

Bernard6,21%

Achouffe1,80%

Steendonk0,38%


The results of operating activities after net financing costs rise by 10.7% to ¤ 16.2 million. The net financing costs rise owing to negative results from the conversion of foreign currencies (¤ 424.000) and higher costs of debts (¤ 70.000), partially compensated by higher interest profits from current assets.

Profit from ordinary activities rises by 10.2 % to ¤ 10.7 million. The taxes on the result decrease partly due to the decrease of the notional interest from 32 % to 28 %.

The gross operational cash flow (EBITDA) rises by 11.3 % to ¤ 24.3 million.

During the General Meeting, the Board of Directors will propose that the gross dividend be raised from ¤ 0,65 to ¤ 0,72 per share. This corresponds to a pay out ratio of 36% of the consolidated net profit.

Changes in the consolidated financial statementsOn September 7th 2006, all the shares of Brasserie d’Achouffe were acquired. This brewery, located in Houffalize in the province of Luxemburg, is realising interesting results, selling mainly the blond La Chouffe beer and the darker Mc Chouffe. In 2006, turnover rose by 20.4% to ¤ 5 million compared to 2005. The net results amounted to ¤ 1 million and the EBITDA amounted to ¤ 2,2 million. This niche brewery perfectly fits Duvel Moortgat’s strategy. The brewery is consolidated as of October 1st 2006 and is taken up into the Group’s results for a period of three months. On December 31st 2006, Brasserie d’Achouffe had a equity of ¤ 4,9 million, 64% of the total liabilities. There are virtually no long-term debts. Liquid assets amount to ¤ 3,9 million. This takeover was financed for 50% with own resources.

As of July 1st 2006, Duvel Moortgat UK, with seat in London, is the commercial agent for the United Kingdom.

Photo left: David Murray, middle: Chucho Valdes, right: Bert Joris – Blue Note Records Festival-Ghent 2006


Consolidated key figures

(in ¤ 000) 2006 2005

Net turnover 74.597 66.312Operating profit (EBIT) 16.272 14.511Net finance costs -21 174Result of operating activities after net finance costs 16.252 14.685Profit from ordinary activities 10.692 9.703Net profit after taxation (Group share) 10.682 9.703Gross operational cach flow (EBITDA) 24.340 21.865

Evolution of key balance sheet figures and financial ratios(in ¤ 000) 2006 2005

Total assets 134.605 111.315Shareholder’s equity 81.733 73.719Minority interests 10 0Liquid assets 24.056 22.739Fixed assets 79.862 63.510Depreciation 7.545 7.203

Liquidity / current ratio (1) 3,06 3,29Solvency / Dept ratio (2) 0,31 0,27Operating margin (profit / sales) 21,8 % 21,88 %Profit on ordinary activities / sales 14,33 % 14,63 %EBITDA / sales 32,63 % 32,97 %

(1) Current ratio: current assets / short-term debts.(2) Debt ratio: debts / total assets.


A remarkable result“In 2006, there was an overall rise in sales: all products in our portfolio, in all markets. This is itself a remarkable result. The Belgian on-trade market also improved. It is the combination of the superior quality of our beers and the excellent commercial support of a team of motivated and enthusiastic sales persons that form the basis of our success.”

Olav Blanquaert, Sales Manager Horeca Belgium

Turnover, EBIT, profit and EBITDA by business unit

(in ¤ 000) Turnover EBIT Profit EBITDA 2006 2005 2006 2005 2006 2005 2006 2005

“production and sales of beers” business unit 73.032 64.759 14.359 13.380 9.196 8.992 22.364 20.670“other activities” business unit 1.565 1.553 1.913 1.131 1.496 711 1.976 1.195Total 74.597 66.312 16.272 14.511 10.692 9.703 24.340 21.865

Comparison of Group sales in geographical markets

(in ¤ 000) 2006 2005

Belgium 47.007 43.094The Netherlands 5.944 5.340France 5.242 4.462UK 2.889 2.069USA 6.371 5.069Czech Republic 4.662 4.239Other countries 2.482 2.039Total 74.597 66.312

Evolution of beer sales in Belgium 2005-2006

Sales in 2006 (HL) Evolution t.o.v. 2005

Pilsners 6.997.293 -1,1 %Geuze and Kriek beers 340.862 +1,4 %Thirst-quenching beers 560.404 -10.1 %Abbey beers and trappist beers 917.252 +3,0 %Tast beers 554.128 +1,4 %Total 9.369.939 -1,1%


3. FOCUS ON BRANDS AND MARKETS

duvel’s turnover rose globally by 6.4 %.

Being the market leader in Belgium, Duvel performed better than it did in 2005. Duvel increased its visibility in the top locations, and reinforced the brand image (see also the chapter on ‘Marketing’ on page 40). The fact that the beer succeeds in consolidating its market share despite a declining market, can mainly be attributed to Duvel being a strong segment in itself, and therefore does not have to compete in a larger group of beers.

THE IMpORTANCE OF A vISIBLE AND STRONg BRAND

In the Netherlands, Duvel was proclaimed ‘best-sold bottled specialty beer’ by the Alliantie van Biertapperijen (Alliance of Beer Pubs). Duvel’s popularity keeps on growing. On the other hand, sales were slowed last year by ongoing negociations with an important chain of supermarkets.

In France, Duvel’s numeric distribution grew strongly, both in the super- and hypermarkets. Several advertising campaigns added to the on-trade market growth. In both markets, there are still great growth possibilities.

Duvel’s turnover in the United Kingdom remained stable. Although growth in the on-trade sector slowed down slightly, this was compensated by a growth in the off-trade sector. To enhance sales in the on-trade sector, Duvel Moortgat established a commercial structure of its own in the UK: Duvel Moortgat UK.

DUvEL MOORTgAT USA TAKES OvER IMpORT

In 2006, in the United States, Duvel Moortgat nv strategically decided to fully take over control of the distribution of Duvel and Maredsous. Therefore, a contract has been concluded with the present importer. As of now, Duvel Moortgat USA is responsible for the sales of all the Duvel Moortgat Group’s brands on the American territory, with the exception of the Chouffe beers.

Step by step “Duvel Moortgat’s goal is as simple as it is ambitious. We want to be the leader in the specialty beers segment. In real terms, this means that Duvel Moortgat is active in three fields where we want to realize a strong growth, but not without building on a solid basis. A first field is that of the Belgian specialty beers, where Duvel is already the international reference in the ‘strong blond’ segment. In the future, we will also take a closer look at new countries showing potential. A second market is the Bernard Brewery in the Czech Republic, where we want to characterize ourselves more and more as a brewer of specialty beers. A third field is that of the ‘Belgian style beers’ in the United States. In all fields, we proceed in our own way – steadily and consistently – in order to realize our ambitious goals.”

Daniël Krug, Chief Operating Officer


The number of supermarkets and pubs where Duvel is sold and served, is growing. The efforts made in previous years promoting Duvel, continue to yield profit.

In the course of 2006, China’s market was thoroughly analysed. Based on these results, Duvel Moortgat decided to found the Duvel Moortgat China partnership, which now clearly defines the structure of Duvel Moortgat’s presence in China. Duvel’s position on the Chinese market – which is virgin territory when it comes to specialty beers – can now be further developed.

For a couple of years now, other promising markets are being emphasized. Particularly in Japan, the persistent efforts made by the local importer have lead to a nice growth in 2006.

gROWINg DEMAND FOR ABBEY BEERS IS SUppORTINg MAREDSOUS

The maredsous abbey beers have done remarkably well. Turnover rose by 19 %. What explains this success is obvious: the consumer is increasingly appreciating the authenticity and quality of the beer. In Belgium and the Netherlands moreover, Maredsous is benefiting from the popularity of the abbey of the same name, a popular crowd-puller.

Maredsous also showed a strong growth in France. Here, the Maredsous beers are only available in the on-trade sector, where there is still a lot of growth potential.

The consumers in the United Kingdom have acquired a taste for foreign beers, and are gradually switching to specialty beers. That is why in 2006, the on-trade sector started selling Maredsous.

The decision to fully take over control of distribution in the United States (see also aforesaid ‘Duvel’) will create synergies for Maredsous in those states where Duvel Moortgat is already present. At the moment, only the blond Maredsous (10 % alc. vol.) and the dark version of 8 % alc.vol. are being commercialised. A study will reveal if the 6 % alc. vol. version will be profitable.

A gROWINg gOBLIN BEER

The sales of the chouffe beers rose by 20.4 % in 2006. The Brasserie d’Achouffe realises 40 % of its turnover in Belgium and 60 % abroad. The beer is especially appreciated in the Netherlands and the United States.

The Chouffe beers not only appeal to the consumers because of their wicked ‘goblin character’, through their association with the Belgian Ardennes they also draw attention from this tourist region. This card is extra being played with the winter beer N’ice Chouffe, a dark heartwarming beer available from 1 december til it is out of stock.

vEDETT IS pRESENT MORE STRONgLY IN BELgIAN SUpERMARKETS

vedett’s turnover in Belgium rose by 71.4 %. This success has several reasons. First of all, there is a growing consumer’s interest. Furthermore, the drive and expansion of the on-trade team strongly contributed to this growth. Thirdly, the growing presence in supermarkets, supported by quality actions, made the increase in sales possible.

The further, ongoing growth of Vedett illustrates the importance of a visible and strong brand. At the same time it proves that an innovative beer can be successful in a declining market.

As of 2007, the Vedett’s Belgian success story will also be exported.


A BRUSH-Up FOR BEL pILS

The rise in turnover by 19 % of bel pils can mainly be attributed to the increasing sales in the on-trade sector in Belgium and France. The growing interest in this beer, despite the overall decline of lager consumption, can be explained amongst others by the consumer’s appreciation, as well as by the brush-up of the brand. The new labels, glasses and promotional material are paying off.

SYNERgIES IN THE AMERICAN MARKET

Turnover of the beers of the ommegang Brewery in the United States (Ommegang Abbey, Hennepin, Rare Vos, Three Philosophers and Ommegang Witte) rose by 26,9 %. Now that Duvel Moortgat USA is responsible for the sales of all brands of the Duvel Moortgat Group in the US (with the exception of Chouffe, see also above), several synergies will be created, both on the East and West Coast.

The range that the Ommegang Brewery offers, will be futher supplemented with Rodenbach, which Duvel Moortgat has been importing in the United States since 2005.

BERNARD IS ROWINg AgAINST THE CURRENT

Turnover of the bernard Brewery in the Czech Republic rose by 9,3 %, despite a hard market. Bernard succeeded in maintaining its identity against the bigger brewers, thanks to a non pasteurised beer in a swing-top bottle. The Bernard beers kept gaining popularity thanks to a number of purposeful efforts, like the replacement of the classic bottles by ‘personalised’ bottles showing the Bernard logo. In June 2006, Bernard Free, a non-alcoholic beer, was launched.

The Bernard growth strategy is based on two pillars, the first one being specialisation, meaning that the brewery is evolving more and more towards producing specialty beers. A second pillar is the export. At the moment, the export is mainly oriented towards Slovakia and Russia. In 2006, the Bernard brewery’s ambitions were given extra support by the further development of a professional management structure.

Local French cuisine embraces Duvel“Le Café des Fédérations, one of the most renowned ‘Bouchons Lyonnais’, has been serving Duvel for a few months now. A Bouchon Lyonnais serves a large number of traditional dishes prepared with chitterlings and other ‘cohonnailles’. Visiting Lyon without tasting this local cuisine, is like visiting Paris without seeing the Eiffel Tower. Yves Rivoiron, the owner and Chef de cuisine is proudly serving Duvel as an aperitif to the numerous customers, many of whom are American. Duvel is also served at local press conferences. In Le Café des Fédérations, an old enamel Duvel plate is to be found among a large number of valuable trophies and treasures. Anyone with an interest in ‘Le Fed’, can check it out at www.lesfedeslyon.com.”

Patrick Grevendonk, Director Duvel Moortgat France


4. INVESTMENTS

Belgium

The most important investment event of 2006 is without a doubt the construction of the new brewery hall in Puurs. The first six months of 2006 were all about the engineering, amongst others the development of the concept and obtaining the necessary permits. Construction started in August. The new brewery hall will be operational as of the fourth quarter of 2007. The investment amounts to ¤ 10,5 million.

The construction works were outsourced the the Van Roey company from Rijkevorsel. The procedural works will be executed by Steinecker, a company belonging to the Krones group. Krones had previously been responsible for the renovation of the bottling plant. The new construction has been designed for an initial capacity of 900,000 hectolitres, which can further be increased to 1,050,000 hectolitres. A lot of attention was given to the architectural qualities of the new brewery hall: the external use of copper is reminiscent of the old brewing kettles, which by now have all been replaced by stainless steel kettles. Visitors will be able to observe the activities from above, looking down from a footbridge that is directly connected to the new visitor centre (see below).

Much attention is being given to optimizing energy consumption. In the new design, the energy from cooking fumes and cooling processes in the brewery hall will be recuperated, resulting in a 30% decrease in energy consumption per hectolitre beer produced.

The renovations in the brewery hall are coupled with some smaller, related investments: renovation of the steam, condensation and water distribution of the whole site in Puurs, and the installation of new power generators.

ExTEND AND pROFESSIONALIZE THE BREWERY vISITS

In the second quarter of 2006, the new visitor centre in Puurs was implemented. It’s been open to the public since early 2007. This implies that Duvel Moortgat will be able to extend and professionalize the brewery visits. The brewery yearly welcomes over 13.000 visitors, thanks to the new visitor centre, this number will be further raised.

There is always room for improvement“When Duvel Moortgat is exploring new investments, we don’t limit ourselves to researching return and productivity. We always examine how we can improve quality and process control as well. The new brewery hall is a good example, and not just in the field of energy consumption. In the design process, for instance, we also took into consideration the recent as well as our own research results about the influence of the thermal impact on the development of specific ageing components. To put it briefly, whether it’s about a capacity or replacement investment, we always strive to execute it as a quality investment.”

Hedwig Neven, Chief Technical Officer


ATTENTION TO LOCAL TRADITIONS

Czech Republic

In 2006-2007, in the Bernard brewery in the Czech Republic, ¤ 750.000 are being invested in the rise in the fermentation and lagering capacity, where the Czech tradition of classic lagering in horizontal tanks is taken into account.

By adding a new bottle-cleaning machine and labelling machine worth ¤ 250.000, the bottling line has been modernized. The investment regarding the labelling is important because the standard 0.5 litre bottle are being replaced by personalised Bernard bottles. This replacement represents and investment of ¤ 230.000.

HIgHER RETURN IN THE USA

United States

The most important investment in the Ommegang brewery concerns the bottling line, more specifically the labelling and packaging the bottles in cardboard boxes. These measures yielding higher return amount to an investment of ¤ 350.000.

The fermentation and lagering capacity was raised from 10.000 to 13.000 hectolitres, by installing an additional fermentor.

A remarkable event in the past year“In late 2006, Duvel Moortgat USA consolidated distribution of the Duvel and Maredsous brands for the entire USA. We see this as an opportunity to better coordinate the efforts to further establish Duvel as the leading Belgian super premium brand in the US. With importing, distribution, and marketing of Duvel now under one roof for the entire country we expect to increase recognition and growth of the brand.The consolidation also allows for more distribution synergies between Duvel Moortgat USA’s import brands and Brewery Ommegang’s domestic brands. Where Duvel and Ommegang might previously have had separate distributors in some of the same geographic areas, especially in the Western US, we are now working to simplify the distribution network where it is to our advantage.”

Laurent Demunck, President Duvel Moortgat USA


5. SOCIAL REPORT

The Duvel Moorgat Group, including the fully consolidated subsidiary companies, employed 468 people at the end of 2006, of whom 286 are office workers and 182 manual workers. There are 119 female employees. The mother company employed 179 people, the subsidiaries consolidated using the equity method employed 179.

COMMUNICATION IS A pERMANENT MISSION

After a turbulent 2005 with a strike concerning the Generation Pact, 2006 proved to be a more socially quiet year. There was no need for new CAO negotiations, and no notable problems occurred. The communication between management and the social partners was normalized, and human resources continued to work on optimizing communication between the work floor and management, in which HR often functions as intermediary. Communication is always open to improvement, which means that all departments have an ongoing mission.

2006 was a remarkable year in terms of employment. Brasserie d’Achouffe joined the Group in September with 20 employees. The Brasserie holds on to its own identity, but nevertheless some employees showed concern regarding their future. An understandable reaction, given the Belgian social employment situation in 2006. However, Duvel Moortgat has no intention of cutting back on production in Achouffe, quite the contrary. As early as 2007, investments will take place in various fields, and already in the last three months of 2006, the staff have noticed that these are not empty promises. Various synergies have already been developed, and integration is already a success.

FURTHER ExpANSION MEANS ORgANISATION

Also in 2006, different new employees were recruited to further reinforce the commercial teams in Belgium, the Netherlands and France. The Group’s development also required new organisational steps, which translated into the creation of several additional positions, namely a project manager business development, and additional brand manager who will concentrate on Maredsous and Vedett, a purchase manager and a person responsible for the buildings. In China, all legal and HR preparations have been made to realise our commercial activities there.

“I believe that one of the most important challenges for the Duvel Moortgat Group’s team will be to keep improving. Our world is becoming ever more complex, and if our company wants to keep developing in a growing international context, the employees will play a key part in that. Duvel Moortgat sees training and formation as one of the keys to success, which has led to a total company training plan that we will initiate in 2007, thus aiming to gradually make it possible for each employee to take part in deciding on his or her training program.”

Lucien Beils, Human Resources Manager


All of these recruitments will result in an even more professional approach. In production, the knowledge quality also improved by recruiting high-skilled workers, which is the solution to the complex work in the bottling plant, and which enables Duvel Moortgat to anticipate the start up of the new brewery hall.

NO SMOKINg

The Group is known to produce a yearly action plan regarding safety and health issues on the work floor, but 2006 will earn its place in history as the year the no smoking work floor came into being. A solid informational campaign, coupled with a good follow-up and various supporting measures ensured that this is a successful new policy for Duvel Moortgat.

gROWINg DEMAND FOR COMMUNICATION TRAININg

As in recent years, the staff’s training continued to be an important pillar of the human resources policy in 2006. The manual workers mainly receive an on-the-job training, whereas the focus for the office workers – and especially the commercial teams – lies on coaching and support.

The externally organised trainings focussed on management, production techniques, quality, safety and environmental issues. There was also a remarkable demand for trainings on communication and management, which these days are very important, considering the growing production and consequently growing pressure, and the fact that the new brewery hall will put further demands on the employees.

In 2005, there was a successful project in the Netherlands regarding ‘commercial skills’, in cooperation with an external partner. In 2006, preparations for a similar project in Belgium, France, the United Kingdom and the United States were made to reinforce commercial skills in these countries as well. Its realization is planned for 2007.

Photo left: John Pattitucci, right: Cesaria Evora – Blue Note Records Festival-Ghent 2006


Summery of employee numbers on December 31st 2006

Fully consolidated subsidiaries 2006 2005 2004

Duvel Moortgat Manual 92 91 92 Administrative 87 84 78Brasserie d’Achouffe Manual 12 0 0 Administrative 8 0 0MHS Manual 6 7 6 Administrative 2 2 2DMF Administrative 7 6 4Brewery Ommegang Manual 13 10 9 Administrative 11 16 14Duvel Moortgat USA Administrative 10 8 0Belga Bar Administrative 37 18 0Duvel Moortgat UK Administrative 4 0 0Total 289 242 205

Subsidiaries consolidated using the equity method 2006 2005 2004

Steendonk Administrative 1 1 1Bernard Brewery Manual 38 39 35 Administrative 58 56 54Bernard Malt house Manual 21 22 22 Administrative 3 3 4LFB Administrative 58 49 44Total 179 170 160

Summery of employee numbers per country on December 31st 2006

Fully consolidated subsidiaries 2006 2005 2004

Belgium Manual 106 98 98 Administrative 92 74 69The Netherlands Administrative 7 9 9France Administrative 9 8 6USA Manual 13 10 9 Administrative 21 24 14UK Administrative 41 19 0Total 289 242 205

Subsidiaries consolidated using the equity method 2006 2005 2004

Belgium Administrative 1 1 1Czech Republic Manual 59 61 57 Administrative 61 59 58France Administrative 58 49 44Total 179 170 160


6. REAL ESTATE ACTIVITIES

In 2006, Moortgat Immo Services (MIS) successfully continued its familiar strategy: investing in the better horeca outlets by, together with the pub owner, aiming to create the right ambience. Thanks to this format – and to the quality of the beers served of course – previously closed down pubs were brought back to life. In doing this, MIS contributed to a more powerful image of both the brewery and its beers.

The strength of this approach lies in the very close cooperation with the pub owners. As MIS knows the property, it can use this know-how to judge both the requirements of the location and the consumers’ needs. Every time a property is let to a new tenant, that opportunity is seized to make an analysis of the decoration, the customers, the approach and the market position.

A QUESTION OF MUTUAL TRUST

A lot of attention is paid to the search for new pub owners. They have to be professional and possess a certain drive and personal project. Whoever meets these standards, can count on Duvel Moortgat’s full support and cooperation to develop a win-win situation.

A good cooperation also implies a clear definition of the partners’ rights and duties and well-informed candidates for pub ownership. This approach has made Duvel Moortgat a trendsetter in current legislation, which states that future proprietors have to be fully informed before they sign a contract.

Today, MIS manages some 80 horeca outlets in Belgium, most of which are situated in the vicinity of the brewery: Puurs, Willebroek and Bornem. The others are scattered over Flanders, and some are located in the Walloon part of Belgium. In the last 10 years, Duvel Moortgat has become increasingly present in the major cities, where they continue to search for top locations in Antwerp, Brussels and Ghent.

HIgH pROpERTY pRICES ARE SLOWINg DOWN ExpANSION

In 2006, the high property prices continued to slow down the expansion, and hampered the search for a balance between the purchase of a property and its cost-effectiveness. Finding suitable and well-located properties that can stand the test of the cost-benefit analysis is becoming increasingly challenging.

The right man in the right place“Moortgat Immo Services, being the real estate division in the Duvel Moortgat group, is the intermediary between the brewery and its horeca outlets. On the one hand MIS acts as ‘pater familias’ in watching over the productivity and property maintenance of the pubs. On the other hand it functions as a partner of the pub owners. MIS ensures that the pub owner is ‘the right man in the right place’, and provides him with the necessary means and know-how. The cooperation between Duvel Moortgat and the pub owners should be a win-win situation.”Bernard Moortgat, Director / Properties Manager


7. MARKETING

In 2006, the Duvel brand image has been intensively researched. There was also an analysis of the market position and the competition it is facing. Based on the conclusions drawn, the marketing policy has been further intensified.

INTENSIFIED pOSITIONINg AND A NEW CAMpAIgN

In order to convert the Duvel positioning into a strong publicity campaign, Duvel Moortgat has started cooperating with a number of new partners. This has resulted in a new campaign that will take off in 2007.

A gOAL-ORIENTED AND INTEgRATED SpONSORSHIp pOLICY

In the field of promotion, 2006 was characterized by the recruitment of new clients, which has amongst others resulted in an adjustment of the sponsorship policy. While in the past sponsorship was spread over very diverse fields, more attention is being given nowadays to initiatives fitting perfectly with the Duvel image, particularly steering towards jazz and contemporary art.

Moreover, these sponsorship activities were extended towards promotion and brand activation. For instance, in addition to the presence of Duvel in a number of prominent jazz events, the ‘jazz’ theme was further extended towards a specific on- and off-trade market publicity campaign, presenting jazz coasters, a special offer of jazz glasses in the supermarkets and small jazz concerts with Duvel tasting on the terraces of the Belgian outdoor cafés.

In order to coordinate these campaigns, a new employee responsible for sponsorship and brand activation joined the team.

An integrated marketing approach“In marketing, it is very important that all efforts made be perfectly attuned to one another. Each product sign and experience should confirm or enhance the added value, and it should also present a consistent brand image and experience. The latter is of high importance: drinking a Duvel is far more than just quenching your thirst. It is an experience. That is why, in 2006, we have further integrated our Duvel approach: communication, packing, publicity and events have been creating the same brand image. We are planning to elaborate this integrated approach to the other brands.”

Johan Van Dyck, Marketing Manager

��

pROMOTION IS LINKED CLOSER TO BRAND IMAgE

In Belgium as well as abroad, there has been a search for new synergies in promotion in 2006, striving for a balance between commercial impact and image. The supporting materials – the so-called Point of Sales (POS) and promotion materials – were innovated where necessary and were aligned with the brand image. They are of utmost importance in the export markets, where qualitative visibility at the right times and locations is fundamental.

In the previous year, extra efforts have been made in promoting maredsous, through precise promotions in the on- and off-trade sectors, combined with introductions in new businesses. The importance of the brand within the Duvel Moortgat range is growing.

In 2006, vedett has been mainly promoted in the on-trade sector. Its presence at the right locations and within a very specific target audience has lead to the further development of the brand. A lot of attention was given to its design. The promotional activity in which the Vedett consumer’s picture is taken and printed on Vedett bottles has been extended. At events, in pubs and in supermarkets, thousands of people were presented with their own personalised bottle of Vedett.

bel pils has been investigated and repositioned as a refreshing Belgian quality lager beer. The label design, the glasses and the POS materials were innovated and modernised, which lead to a positive effect on sales, and the reactions from Belgium and France were extraordinary positive.

The chouffe beers, which joined the range in 2006, have already earned an excellent reputation in Belgium, the Netherlands and the United States. The Chouffe marketing campaign will take off in 2007, keeping a close eye, however, that the identity of the brand is preserved. (See also the chapter on ‘Policy lines and actions’ on page 42)


Photo left: Dave Douglas, right: Jason Moran – Blue Note Records Festival-Ghent 2006


8. POLICY LINES AND ACTIONS IN 2007

As in previous years, in 2007 the main efforts concerning both brands and markets will be made in the continuous expansion of the group, which doesn’t prevent the group from applying some special accents.

BRANDS

Since duvel hasn’t been supported by a full-scale television advertising campaign since 2003-2004, a new commercial will be launched in spring 2007, in cooperation with the advertising agency TBWA. The commercial will focus on the emotional value of the Duvel product, which makes the link to previous campaigns.

Stimulated by the growing demand for the maredsous abbey beers both at home and abroad, its image will be optimized and internationalized.

The factors that constitute vedett’s success will be reinforced, focussing on innovation. The distribution, which is now mainly concentrated on the Brussels-Antwerp axis, will be reinforced with new pillars in Limburg, East- and West-Flanders and the Liège area.

So far, Vedett has been an exclusively Belgian success story, but in 2007 the brand will begin its internationalisation.

In 2006, the Brasserie d’Achouffe was purchased, and in 2007 the brewery will be integrated in the commercial structure of the group and synergies will be optimally developed, hereby maintaining the own identity and ‘unruly’ character of the chouffe beers.’Fun outside, serious inside’ will remain its motto. Production will stay in Achouffe, but here, too, there will be a search for synergies, for example in the field of complementary know-how. This way, Duvel Moortgat will put at the disposal of their new daughter company its knowledge and experience in the field of industrial water treatment.

When the brand is fully integrated, it will be further developed. In 2007, Brasserie d’Achouffe will celebrate its 25th birthday, which creates possibilities in the field of marketing and promotion.

Holland is preferring quality again“After several years of recession, in 2006 the Dutch once again started spending their money on enjoying life and on luxury goods. It was not only their occasional Duvel they ordered more often, the Maredsous abbey beers in the outdoors cafés were consumed twice as much compared to 2005, which is not so surprising: our very motivated team of sales representatives is of great support to the strongly growing number of pubs and restaurants selling our excellent beers. That is why the pub and restaurant owners take great pleasure in promoting our beers, and the enthusiastic reactions of the consumers keep on proving them right.”

Frank van Noort, Sales Manager The Netherlands


COUNTRIES

Now that Duvel Moortgat has made its first cautious moves in China, the efforts made here will further be intensified.

Since January 2007, Moortgat USA has been responsible for the sales of all brands of the Duvel Moortgat group in the United States (see also ‘Focus on brands and markets’ on page 31). The influence on the results will be noticeable as of 2007.

ORgANISATION

In 2007, the cost-effectiveness in the whole group will be further imposed, stimulated by the further growth both at home and abroad. In November 2006, Duvel Moortgat took on a purchase manager who will streamline the whole group’s purchase strategy.

MARKETINg

The marketing activities abroad will be intensified. While in previous years, due attention has been given to marketing and communication, the group mainly focussed on distribution. More attention to the brand’s image will support sales.

Photo left: Dr.John, right: Toots Tielemans – Blue Note Records Festival-Ghent 2006


INvESTMENTS

In 2007, Duvel Moortgat is planning a total investment of ¤ 20 million, spread over the production units in Belgium, the Czech Republic and the United States, the most important connecting thread being quality care and the use of Best Available Techniques (BAT).

Investments with regard to sustainable technology (*)

• various ecological projects, among which the installation of 600 m2 of solar cells integrated in the roof covering of the new brewery hall. They will have a peak capacity of 33 kW, enough to condition a secondary fermentation and storage cellar with a capacity of 100,000 crates.• The purchase and installation of a gas turbine fuelled by methane gas derived from the waste purification station. The generated energy will be used on the private electricity grid, and will provide 5% of the yearly electricity needs.

• Following the takeover of Brasserie d’Achouffe in 2006, its production and quality care will be optimized. Money will be invested in the industrial water purification technology, both in the brewery and the filling department. Moreover, the beer filtration techniques will be refined.

• Following the necessary preparatory work in the course of 2006, 2007 will see the construction of the machinery for the recycling of CO2. Its completion is planned for the end of the year. The machine will collect the CO2 that is released through natural fermentation as a side-product of the brewing process. After cleaning and purification of the gasses, they can be reused in internal processes. The internal recuperation will cover virtually all CO2 needs.

(*) For a complete overview of the efforts being made in the field of sustainable technology, we refer to the chapter ‘Duvel Moortgat and sustainable technology’ on page 48.

Other investments

Belgium

• The further finish of the new brewery hall (see also chapter ‘Investments’ on page 34)• The purchase and installation of fermentation recuperation, -storage and -dosage machinery.• The project of replacing the old Duvel crates will be continued at a rate of 200,000 to 250,000 crates a year. The old Maredsous crates will also be replaced.

Czech Republic

• The investment program 2006-2007 concerning the increase of the fermentation and lagering capacity by 100,000 hectolitres will be finished.

United States

• The fermentation and lagering capacity will be further developed through installing a new fermentor.• The replacement of the labelling machine, the installation of a bottle drying tunnel and the direct packing in carton packaging will drastically shorten the manipulation time for refermentation.


Choosing quality over quantity“2006 was a tough year for the UK Beer Industry with continued heavy discounting and aggressive promotions. At the same time, retailers in both On and Off premise are awakening to the opportunity that “speciality beers” represent. Our drinking culture is changing. Quality is becoming increasingly important over quantity and the UK consumer appreciates that “value for money” does not mean “cheapest”. Duvel is perfectly positioned to take advantage of the new trends and is now found in the very best bars and restaurants that influence consumer choice and style. We look forward to healthy growth in 2007.”

Nick Short, General Manager UK

REAL ESTATE ACTIvITIES

Despite the high real estate prices, Moortgat Immo Services keeps on the lookout for interesting and economically solid horeca outlets in the major cities. They also keep searching for professional pub owners with whom a productive cooperation can be founded. These activities focus exclusively on the Belgian market.

HUMAN RESOURCES

It is felt increasingly clearly that there is a need to keep developing our skills. In 2007 we will initiate a complete company training plan. Trainings in the field of communication, management and commercial skills will be organised, and of course there will be extra investments in training with a view to the occupation of the new brewery hall. It looks like it will be an exciting year.

With regard to social consultation, the theme of 2007 will be new collective bargaining. On the interprofessional level, the broad outlines have already been sketched. It is important that on the sectorial and company levels, too, a good balance is found, of which the further development of the Duvel Moortgat group will be able to benefit.

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" Jazz is played from the heart. You can even live by it. Always love it."Louis Armstrong

POLICY ASPECTS


Duvel Moortgat focuses its attention on producing respecting mankind and the environment. Whenever an investment or technical improvement is made, the term ‘sustainability’ predominates.

POLICYASPECTSDUVEL MOORTGAT AND SUSTAINABLE TECHNOLOGY

Duvel Moortgat is duly aware of its responsibility to society and the environment in general. One of the basic principle of Duvel Moortgat’s activities is the production carried out in such way that the environment, the security and the health of their employees and the population are respected.

The term ‘sustainable technology’ has been an important factor to the company for years, and is taken into account with each investment or technological alteration. Concretely, this means that in each case, there is a research of how the detrimental consequences to mankind and the environment can be minimized.

Below, you find a concise description of the efforts made by Duvel Moortgat in previous years, as well as a preview of some future realisations.

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INDUSTRIAL WATER

In 1993, an extremely effective industrial water purification plant was built, and further modernized in 1999, 2002 and 2006. In a split water system, the company’s industrial water is purified to a far higher standard than those imposed by Vlarem (Flemish regulations on environmental licences), before it is drained into surface water.

Concretely, the collected industrial water is purified through a combined anaerobic/aerobic system. The minimal amount of sediment hereby created, is being used in agriculture as a fertiliser. The methane gas produced in an anaerobic way will soon be used as a power supply for a local application of cogeneration (see below).

RENEWABLE ENERgY

• A pilot project of 600 m2 of solar cells has been integrated in the concept of the new brewery hall. It generates a maximal peak capacity of 33 kW peak, which means that 40% of the maturation stockrooms – along with 40% of the refermentation cellars – will be cooled through power generated through solar energy.• As of the end of 2007, the methane gas produced in an aerobic way from the industrial water treatment will be used to generate electricity and water. This electricity is destined for internal use, and will cover some 5% of the yearly electricity needs. The recuperated heat will be used to heat the industrial water, which will result in higher anaerobic returns and less sediment.

pREvENTINg EMISSION AND WASTE STREAMS THROUgH CLOSED CIRCUITS

• The generated fermentation energy is diverted through cooling systems to heat the administration buildings and rooms.• The heat created upon cooling of the immense maturation stockrooms is used to heat the refermentation cellars.• Heating steps in the course of the brewing process is powered by recuperated heat from the previously mentioned brewage, which is recuperated through steam condensation and the use of heat exchanging processes.• The CO2 created through the main fermentation, will be recuperated for internal use as of early 2008. This means that no external CO2 will have to be purchased, and that the brewery will be entirely self-sufficient in its carbonic acid consumption.

MISCELLANEA

Other examples of using sustainable technology in the company:

• the use of renewable materials such as crates, bottles and barrels;• risk analysis of processes and the development of safety measures;• an increasingly more efficient use of energy released in processes (process integration).

POLICY ASPECTS

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" You know what’s the loudest noise in the world, man ? The loudest noise in the world is silence."Thelonius Monk

INFORMATION FOR INVESTORS AND SHAREHOLDERS


1. EURONExT – STOCK ExCHANGE INFORMATION

Duvel Moortgat has been listed on Eurolist by Euronext Brussels since June 1999. On January 17th 2006, Duvel Moortgat was transferred from capitalization compartment C to compartment B (market capitalization between ¤ 150 million and ¤ 1 billion). Since March 1st 2005, Duvel has been part of the BEL Small Index. The current free float represents 23.90%.

Euronext code: BE0003762763Mnemo: DUVReuters: DUVE.BRBloomberg: DUV BB

StockExchangeInformation 2006 2005 2004 2003 2002

Best bid 40,00 25,45 25,85 22,92 23,50Lowest bid 32,00 34,00 20,29 14,60 14,52Last bid at the end of December 38,53 32,31 25,85 20,61 17,00Share evolution 16,14 % 19,99 % 20,27 % 17,52 % -26,41 %Average number of shares trade daily 2.227 2.163 1.960 745 608Average number of shares traded monthly 47.319 46.331 42.312 15.822 12.925Yearly volume 567.828 555.968 507.741 189.862 155.099Number of shares 31/12 5. 362.030 5.353.510 5.341.390 5.341.390 5.341.390Capitalization 31/12 206.599.016 172.971.908 138.074.932 110.086.048 90.803.630

INFORMATION FORINVESTORS ANDSHAREHOLDERS

Proper management is an important factor in the success and continuity of Duvel Moortgat. Decision-making and control are under permanent evaluation and are improved where necessary, just as it should be in a ‘learning organisation’.

��INFORMATION FOR INVESTORS AND SHAREHOLDERS

EvolutionStockExchangeDuvelMoortgat EvolutionDuvelMoortgat&BEL20

2. BEL SMALL INDEx

This index was introduced by Euronext with the intention of improving the visibility and liquidity of small companies. The shares that form part of the BEL Small Index are selected based on their liquidity and free tradable market capitalization.

The index is composed of shares whose free float market capitalization is situated between the BEL20 index multiplied by ¤ 5.000 and the BEL20 Index multiplied by ¤ 50.000. The rate of circulation at free float should amount to at least 10% and the weight of the individual shares is limited to 10%. The BEL Small Index is composed of 47 companies with an average market capitalization of ¤ 126 million, with a minimum of approximately ¤ 30 million. The level of the former Belgian Smallcap return index on December 31st 2004 (4.999,83) constitutes the basis of this new price version of the index. In the total index, the Duvel share represents a weight of 1.3%.

The revision takes places per quarter at the end of February, May, August and November, to be applied at the beginning of April, July, October and January, respectively. This index is calculated continuously and is available on the Euronext website.

EvolutionDuvelMoortgat&BelSmallIndex

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Feb31.25

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36.25

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Duvel Moortgat Duvel Moortgat Bel 20


3. PERMANENT LIqUIDITY PROVIDER

In the past, most Belgian small- and midcaps faced a lack of liquidity. That is why, upon the merger of the stock exchanges, Euronext created the statute of ‘liquidity provider’:

• A Liquidity Provider Agreement is a contract concluded between Euronext and a member of the stock exchange, to the benefit of a particular company.• A Permanent Liquidity Provider has the obligation towards Euronext to, concerning the share for which it acts as Permanent Liquidity Provider, to maintain a permanent maximum spread between the purchase and selling price of maximum 4%, for a minimum amount of ¤ 10.000 (on both parts).• A listed company on behalf of which a Liquidity Provider Agreement has been signed, is assured of a quotation on the continue segment (regardless of the number of transactions concluded in the past 12 months).• For control purposes, the stock exchange authorities provide the company with monthly statistics of the performance of the liquidity provider (respect of the spread, the minimum amount and the traded volume).

In July 2002, Duvel Moortgat signed a Liquidity Agreement with the Degroof Bank, who is currently the liquidity rovider for the Duvel share as part of the Liquidity Provider Agreement. This brings the group a significant number of benefits:

• a rise in traded volumes thanks to the permanent presence of buying and selling prices (introduced in the name of and to the account of Degroof Bank), at which investors can trade in Duvel Moortgat shares.• The spread between selling and buying prices narrows.• Imported price fluctuations on small traded volumes are avoided.• A quotation on the continue segment of Euronext is guaranteed (an obligation under the NextPrime Label).

The rate of fluctuation of Duvel shares remained above 11%, and in the case of a correction for the free market capitalization, the rate of fluctuation rose above 40%. Degroof Bank, as a liquidity provider, contributed to this velocity.

The importance of accurate reporting“The success of a brewery does not solely depend on the quality of its beers, but obviously also on its financial situation. A financially healthy company can be recognised amongst others by the accuracy of its reports, budgets and annual accounts. But accurate reporting goes beyond presenting correct figures: it also implies that the stockholders are constantly informed in an honest and open way about the financial well-being of their company.”

Gigi De Borgher, Controller

��INFORMATION FOR INVESTORS AND SHAREHOLDERS

4. FINANCIAL COMMUNICATION

In recent years, the financial communication has consisted mainly of a mixture of information required for legal purposes, plus analysts’ meetings, press releases and interviews. Furthermore, the company actively takes part in financial events, such as the Financial Cocktails by Euronext.

At the moment, the share is being followed by some five analysts.

To meet the investor’s needs for financial transparency, Euronext set up 2 market segments: NextEconomy and NextPrime. The market segment NextPrime concentrates on companies from traditional economic sectors, while the NextEconomy segment is designed for companies from the new economy.

Since January 2002, Duvel Moortgat has been listed on the NextPrime segment of Euronext. NextPrime groups companies who wish to lead the way in financial transparency and who want to make the supply of information to shareholders and investors their top priority: continuous details of the share price, a high amount of financial information, investor relations, etc. This listing will significantly increase the visibility of the share.

With this engagement, Duvel Moortgat has committed itself to further developing the financial communication by adopting the International Financial Reporting Standards (IFRS), using the English language for all publications intended for the financial community, organising a number of analyst’s meetings annually and providing the essential financial information through the internet ( www.duvel.com).

With the liquidity provider contract, the NextPrime label and a proactive participation towards investors, Duvel Moortgat confirms its intention to optimally ensure its quotation on Euronext.

5. FINANCIAL CALENDAR

general meeting 2007 30 April 2007 at 3 pm payment of dividend From 14 May 2007 publication half year results 2007 End of August 2007 interim statement Mid-November 2007 publication annual results 2007 Mid-March 2008 general meeting 2008 28 April 2008 at 3 pm

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" I don’t believe that jazz will ever really die. It’s a nice way to express yourself."Chet Baker

CORPORATE GOVERNANCE


CORpORATE gOvERNANCE CODE

As of December 9th 2004, the Belgian Corporate Governance Code for companies quoted on the stock exchange (Lippens Code) has been into existence. Its main goal is to stimulate the creation of values in the long term. This Code became effective on January 1st 2005. The Code has a large degree of built-in flexibility, so that it can be adapted to the size, activities and culture of each Company. It is based on an “apply or explain” system, which offers the Company the possibility to deviate from the stipulations of the Code. Duvel Moortgat is aware of the great importance of sound management. It will therefore apply the principles and stipulations of the Code as often as possible or else explain why it does not follow the Code.

CORpORATE gOvERNANCE CHARTER

Following the recommendations of the Lippens Code, the Corporance Governace Charter was published on the website.

Since Duvel Moortgat’s introduction on Euronext, the Group has already been applying certain principles. The functions of CEO and Chairman of the Board have been separate since the introduction on the stock exchange. On the other hand, the existing committees were arranged according to the Code’s directives. For instance, the remuneration and appointment committees were split up into a separate appointment committee and a remuneration committee.

BOARD OF DIRECTORS

The Board of Directors is the Company’s most senior administrative body. In addition to its administrative functions, the Board exercises full and material control over the Company. To this purpose, the Board meets no less than four times each year.

The Board of Directors functions in accordance with the framework of the Belgian law. Its most important role is to determine the Company’s strategic goals. In response to management proposals, it decides upon the general policy plan and oversees its implementation. The Board monitors the Group’s financial situation and sets the annual budget. It also has the responsibility to report to the shareholders.

Duvel Moortgat fully supports the Lippens Code, and is trying its utmost to meet the strict strandards in terms of Corporate Governance. Duvel Moortgat is convinced that honest and correct trading should predominate, and is thus trying to find the right balance between the interests of the shareholders and those of the other stakeholders.

CORPORATEGOVERNANCE

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1. Composition

The Board of Directors consists of six members and is composed in the following way:

• Lema nv, represented by Michel Moortgat, managing director, who is also a director of the Belgian Brewers, and a member of the Management Committee of Fortis East Flanders.• LP Invest nv, represented by Philippe Moortgat, director, vice-chairman of the Board of Directors, Managing Director of the Belgian Brewers.• Bemo nv, represented by Bernard Moortgat, director.

The three aforementioned directors represent the dominant shareholder (Fibemi)

• Mrs Veerle Baert - Deheegher, director.• Lessius Corporate Finance nv, represented by Wilfried Vandepoel, its managing director, who is also a director of various other companies, acts as an independent director.• Rubus nv acts as independent director and chairman of the Board of Directors. It is represented by Michel Van Hemele. He is the chairman of Carestel, director and chairman of the Audit Committee of the Delta Lloyd Bank and director of DPA (quoted on Euronext Amsterdam).

As managing director, Lema nv is responsible for the day-to-day management of the Company.

LP Invest nv, Lema nv, Bemo nv, Lessius Corporate Finance nv, Rubus nv and Mrs Veerle Baert - Deheegher were appointed for 6 years, effective as from April 25th 2005 until the General Meeting of 2011.

The Company’s memorandum and articles of association state that “a majority of the directors shall be appointed by the General Meeting from candidates nominated for this office exclusively by Fibemi nv on condition that it or its successors (within the meaning of the Appendix to the Royal Decree of October 6th 1976 on Company annual accounts) hold(s) no less than 35% of the Company’s shares, whether alone or together, at the time of both their nomination of candidates for the office of director and their appointment by the General Meeting. Should Fibemi nv represent less than 35% of the Company’s capital, Fibemi nv or its respective successors shall only be entitled to nominate one candidate for the Board of Directors per tranch of shares representing 5% of the Company’s capital.”

Subject to the aforementioned being satisfied, the General Meeting is obliged to appoint the number of directors concerned from the list of candidates nominated by Fibemi nv.

A list of no less than two candidates must be submitted for each office of director to be conferred. Each candidate may be nominated only once for the offices of director to be conferred at any one time. This list must be deposited at the Company’s registered office no later than the commencement of the General Meeting at which the directors are to be appointed. The General Meeting shall recover its freedom of choice if no valid list is submitted within this period.

The duration of their term of office may not exceed six years. Should the General Meeting fail to fill a vacancy for any reason whatsoever, directors whose term of office has expired shall remain in office until the General Meeting fills the vacancy. Directors reaching the end of their term of office shall be eligible for re-election. No age limit has been set for the performance of an office of director in the Company.



2. Operation

The Board of Directors met on the following dates in 2006: March 15th, April 24th, August 17th and 18th, September 18th and December 7th. Topics on the agenda were Duvel Moortgat’s financial data such as the summery tables, sales figures, monthly reports and budget follow-up, the application of IFRS, the follow-up of subsidiaries, the consolidated results, matters of a strategic nature, new and current investments, the study and analysis of acquisition files, activities of the audit committee, press releases, discussion of reports of the remuneration, nomination and audit committee, preparations for the General Meeting, the coordination of the annual report and the evaluation of the observation of the stipulations of the Corporate Governance Code and Charter.

The Board of Directors can deliberate validly only if at least half of its members are present or represented. Should this quorum not be achieved, a new Board meeting shall be convened with the same agenda, which meeting shall deliberate and pass resolution validly if at least two directors are present or represented. Resolutions of the Board of Directors shall be passed by a majority of the votes cast. The Board may deliberate validly on items not specified on the agenda only with the agreement of all its members and subject to them being present in person.

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3. Procedures

A procedure has been defined which allows directors to take advice from independent experts at the Company’s expense.

An internal information provision procedure has also been defined, under which all directors, and particularly non-executive directors, may exercise their tasks in full knowledge of the circumstances.

Day-to-day management provides the Board of Directors with monthly summary tables, sales statistics, an interim financial report (income statement and balance sheet) and a quarterly financial report (income statement, balance sheet, detailed budget follow-up and ratio analysis). Regular reports must also be submitted on the status/situation of authorised loans, leases and customer follow-up.

The activities of the subsidiary companies are monitored both by regular sales and income reports prepared by the local management and the presence and active participation of the local Boards of Directors.

The global remuneration for the non-executive directors amounts to ¤ 118,711. The remuneration for the executive directores Lema nv, CEO of Duvel Moortgat and Bemo nv, executive director of MIS, amounts to ¤ 437.748.

4. Belgian Governance Institute

Duvel Moortgat is an institutional member of the Belgian Governance Institute (BGI). This institute was founded in 1996 by the partners of Vlerick Leuven Gent Management School and some fifty leading Belgian companies. The creation of the institute should be seen in the light of the increasing importance of the development of Belgium’s own coherent vision of corporate governance. The BGI is a knowledge institute and network for directors and companies, and devotes itself to proper governance in all its dimensions and for each type of company. At the same time, BGI wants to offer a platform for the exchange of experience, knowledge and best practices. At the moment, BGI has some 700 members, both institutional (companies) and individuals, and keeps on growing. The Belgian Governance Institute carries out its own scientific research and offers its members activities and training sessions in this field. At the same time, as a knowledge centre it has been closely involved in the elaboration of both the Belgian Corporate Governance Code for companies quoted on the stock exchange (the Lippens Code) and the Corporate Governance Recommendations for companies not quoted on the stock exchange (Buysse Code), and has been represented in the respective committees.



COMMITTEES FORMED BY THE BOARD OF DIRECTORS

In accordance with the Corporate Governance Code, the existing remuneration and appointments committee was split up into a separate remuneration committee and an appointments committee.

1. Remuneration committee

The remuneration committee met on April 7th 2006. Its members are Rubus nv, Veerle Baert and Lessius Corporate Finance nv.

2. Appointments committee

The members of the appointments committee are: Rubus nv, Lessius Corporate Finance and Bemo nv.

3. Audit committee

The audit committee acts as a supervisory body examining the matters mentioned below in cooperation with the management, evaluates and reports on them to the Board of Directors and proposes actions to the Board of Directors to solve or rectify any problems diagnosed.

Its members are Lessius Corporate Finance nv, Rubus nv and LP Invest nv.

The matters concerned are as follows:

• monitoring and discussion of the interim and annual figures;• discussion with the auditors of their audit plan, interim audit and year-end audit.• the selection, evaluation, appointment and replacement of the auditors of the Group and the various companies which it comprises, and the permanent monitoring of their independence;• the organisation of the Group and the various companies which it comprises.• the organisation of internal and external financial reports;• accounting principles;• conflicts of interest;• procedures and systems;• systems and operation of internal and external audits;• special assignments at the request of the Board of Directors.

The committee met on March 8th and September 11th and discussed the following matters: the 2005 annual results, the annual accounts of the various subsidiary companies, the auditor’s report, the press release for the 2005 annual results, 2005 budget comparison, audit of foreign subsidiaries, interim figures June 30th 2006, discussion of the Achouffe file, discussion and follow-up of the United States file (Ommegang Brewery and Duvel Moortgat USA), discussion and follow-up of the Bar Music Hall file in London and discussion of the applications of the new regulations on insider trading.

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DAY-TO-DAY MANAgEMENT

The managing director is responsible for day-to-day management, assisted by a management committee. Its members are: Krug bvba (Chief Operating Officer), Ajax Consult bvba (Chief Technical Officer), Lugandalf bvba (Human Resources Manager) and Herbert De Loose (Chief Financial Officer).

The total remuneration paid to the management committee was ¤ 658.484 in 2006. The variable costs amounted to ¤ 75.522.

The Extraordinary General Meeting of March 26th 1999 created a warrant plan under the terms of which 250.000 warrants may be allocated, carrying the entitlement to subscribe to the same number of shares. The term of these warrants is a maximum of ten years with effect from their date of issue. The warrants are allocated free of charge and may not be exercised before the expiry of the third calendar year following the year in which the offer was made. The 20.640 warrants already allocated may be exercised at the price of ¤ 21,57 each. They were allocated to members of the management committee.

In 2005, 11.200 warrants were allocated which may be excercised at the price of ¤ 25,54.

By a resolution of the Board of Directors passed on June 2nd 2003, Duvel Moortgat nv offered the beneficiaries of this warrant plan the option of extending the exercise period until March 26th 2009 at the very latest. Warrants remaining unexercised may be exercised between January 1th 2003 and March 26th 2009. All the beneficiaries agreed to the extension of the exercise period.

pROFIT ALLOCATION pOLICY

At the General Meeting, the Board of Directors will propose an increase of the gross dividend from ¤ 0,65 to ¤ 0,72 per share. This is equivalent to a pay out ratio of 36 % of the consolidated profit.

This dividend may rise further in future years on the condition that no exceptional financial needs arise in the light of the Group’s expansion strategy. The Company wishes to retain the necessary flexibility to enable it to take advantage of internal and external expansion opportunities.

RELATIONSHIp WITH THE SHAREHOLDERS

Fibemi nv has concluded a shareholders agreement with the Lessius syndicate, in which a right of pre-emption in favour of Fibemi nv is stipulated with regard to the sale-purchase of shares by the Lessius syndicate, and in which the right to one directorship is stipulated.

Fibemi nv has entered into a shareholders’ convenant with Veerle Baert in which the following agreements are specified: a right of succession in favour of Veerle Baert in the event of the transfer of shares, a preferential right of purchase in favour of Fibemi nv with respect to the sale and purchase of shares by Veerle Baert and the right to one directorship.



pROTOCOL FOR THE pREvENTION OF INSIDER TRADINg

At its meeting held on May 25th 1999, the Board of Directors of Duvel Moortgat nv drew up a protocol to prevent privileged knowledge being used illegally or even the impression of such illegal use being created by directors, shareholders, members of the management and important employees (insiders).

The protocol is composed of a certain number of prohibitory rules. These rules and the supervision of compliance with them are aimed primarily at protecting the market. Insider trading damages the nature of the market. If insiders are allowed the opportunity to make profits using insider knowledge (or even if the impression of this is created), investors will turn their backs on the market. A reduced interest can damage the liquidity of listed shares and prevent the Company from obtaining optimum financing.

The protocol also includes a number of precautionary measures to ensure compliance with legal stipulations and to maintain the Company’s reputation.

The protocol was explained and transmitted to all relevant insiders on June 23rd 1999.

Following the European regulations, the legal framework concerning the fight against market abuse was thoroughly modified. One of the most remarkable modifications is a bigger emphasis on the prevention of insider trading, where an active contribution of companies quoted on the stock exchange, like Duvel Moortgat nv, is expected.

The precautionary measures against insider trading concern amongst others the obligation to compose lists of insiders, the requirements concerning investment recommendations, the obligation to report insider transactions and the obligation for the intermediary to report suspicious transactions. The measures are stipulated in article 25bis of the law of August 2nd 2002 on the supervision of the financial sector and financial services. The stipulations of these obligations were stated by the Royal Decree of March 5th 2006 on insider trading and the Royal Decree of March 5th 2006 on the right representation of investment recommendations and the announcement of conflicts of interest.

In accordance with article 25bis, §1 of the law, Duvel Moortgat nv has drawn up a list of persons in the company who, based on an employment contract, are employed by the company and who have regular or occasional access to inside information directly or indirectly concerning Duvel Moortgat. These lists have to be updated frequently and have to remain at the disposal of the CBFA (Banking, Finance and Insurance Commission) for 5 years.

In accordance with article 25bis, §2 of the law, the members of the Board of Directors and the management were obliged to report Duvel Moortgat’s stock transactions to the CBFA.

In closing, the protocol on the prevention of insider trading, as it was drawn up by the Board of Directors on May 25th 1999, was adjusted as a result of the new regulations, and it was delivered to those concerned.

��CORPORATE GOVERNANCE

ExTERNAL AUDIT

External auditing within the Duvel Moortgat Group is performed by bvba De Roover & C°, Company Auditors, represented by Guy De Roover, Company Auditor. This mission includes the auditing of the statutory annual accounts, the consolidated annual accounts and the interim accounts of Duvel Moortgat nv, its subsidiary companies and its foreign subsidiaries. The auditor’s remuneration was ¤ 115.270.

In accordance with the provisions of article 134 §2, §4 of the Code of Company Law, the Company hereby states that no tasks were performed by any Company with which De Roover & C°, Company Auditors, has any professional cooperation agreements. The tasks performed by De Roover & C°, Company Auditors, with the exception of the audit of the annual accounts mainly included activities and advice relating to internal auditing, the audit committee, non-recurring legal missions and takeovers. The auditor’s remuneration for this was ¤ 7,313.

SHARE OWNERSHIp

The members of the Board of Directors hold a combined total of 534,000 Duvel Moortgat shares (10,13 %). The members of the management committee (excluding the managing director) hold a combined total of 230 Duvel Moortgat shares. 20.640 warrants were allocated to members of the management committee.

On November 24th 2005, four beneficiaries have confirmed their intention to exercise 12,120 warrants. These warrants were converted into 12,120 shares following the capital increase of December 16th 2005.

On May 3rd 2006, three beneficiaries have confirmed their intention to exercise 8,520 warrants. These warrants were converted into 8.520 shares following the capital increase of June 19th 2006.

Doing business with respect to mankind and the environment

“Duvel Moortgat always puts proper management first, which reflects to the day-to-day practice in different ways. A first example is ‘Corporate Governance’. Our Corporate Governance Charter is the key to constant self analysis and improvement, with honesty and transparency being the keywords. This annual report is just one example. Another important factor in our policy is mankind and the environment. That is why each investment is first and foremost judged on its sustainability. Proper management and sustainable management, we at Duvel Moortgat simply consider this ‘management’.”

Herbert De Loose, Chief Financial Officer


FINANCIALSECTION

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1. GENERAL INFORMATION

Name, legal form and registered office.

Duvel Moortgat is a limited liability company under Belgian law. It has the capacity of a company that has called upon and calls upon public savings. The Company’s registered office is situated at Breendonkdorp 58, 2870 Puurs, Belgium. VAT BE 0400.764.903, Register of Legal Persons (“Rechtspersonenregisters”) Mechelen.

Incorporation, amendment to the articles of association and duration.

The company was incorporated on March 12th 1931 by the deed enacted by Jozef De Marré, Notary Public of Mechelen and published in the Appendices to the (Belgian Official Gazette) of March 30th-31st 1931 under reference number 3452. The Company’s Articles of Association have been amended on several occasions since then, the most recent being at the Extraordinary General Shareholders Meeting held on April 28th 2003. This amendment has been filed on May 20th 2003 at the registry of the Commercial Court in Mechelen. The Coordinated Articles of Association were filed simultaneously. On June 19th 2006, the issued capital of the company was increased by certified deed through the exercise of warrants. The amendment to the Articles of Association has been filed at the registry of the Commercial Court in Mechelen on July 4th 2006, simultaneously with the Coordinated Articles of Association. The Company has been incorporated for an unlimited duration.

Financial year - Audit of the accounts

The financial year begins on January 1st and ends on December 31st of each year. The audit of the Company’s annual accounts has been entrusted to the statutory auditor bvba De Roover & Co, auditors, represented by Mr. Guy De Roover, Auditor, Rijmenamsesteenweg 290, B-3150 Haacht.

Consultation of Company documents

The unconsolidated and consolidated annual accounts of the Company and associated reports are filed at the National Bank of Belgium. The Articles of Association and special reports prescribed by the Belgian Company Code are available at the registry of the Commercial Court in Mechelen. These documents can also be examined at the Company’s registered office, where copies can also be obtained. The Company’s annual reports are sent to registered shareholders each year and to any other party having requested a copy. They are available free of charge at the Company’s registered office, as are all other public information documents.

FINANCIAL SECTION

“In 2006 we continued to develop our trademark Bernard beer on the domestic market as well as on the export markets. We also started a new activity: as the only brewery in the Czech Republic we have issued a prestigious lifestyle magazine called „Vlastní cestou“ (“In our own way”). More than 20,000 issues of this magazine are printed every quarter. In a short period of time it managed to gain big popularity and it helps us a lot in creating our premium trade mark.In 2006, the Bernard family brewery proved once again its exclusive position in the official Czech Top 100 competition as we, for the fifth consecutive time, won the position of the most admired firm in the “Vysocina” (Highland) region.”

Stanislav Bernard, CEO Brewery Bernard


Principal activities of the Company (article 3 of the articles of association)

Trade, in the broadest sense of the word (including production and conditioning), in:1. all kind of drinks, whether fermented or not, such as beers, wines, spirits, waters, soft drinks and fruit juices;2. grains and all goods necessary for the production and packaging of the aforementioned drinks, such as malt, barley, hops, etc...The management and trading of liquor stores. Acting as a finance company by granting loans to third parties, possibly accompanied by a pledge on business assets or conditional upon business as well as personal guarantees.The management of a general company dealing in real estate property, investment goods of all types, among other things by trading in and valuing real estate property, including the construction, alteration, finishing or fitting out of real estate property by acting as a general contractor, promoter or coordinator of the building works, by acting as an agent or as a holding company.Provision of services in the broadest sense of the word by, among other things, the delivery of advice and assistance with respect to business management and administrative management. As such, the Company may cooperate with, participate in any manner whatsoever, whether directly or indirectly, take interests in all types of enterprises, enter into all commitments, grant credits and investments, and give guarantees on behalf of third parties, including its own business.In summary, the Company may do anything in relation to the aforementioned activities or of a nature likely to encourage their achievement.

Change in the issued capital (fully paid up)

The General Meeting of Shareholders, deliberating in accordance with the rules applicable for an amendment to the Articles of Association, can increase or reduce the issued capital. Should the General Meeting decide to request for a share premium, this should be paid up in full at the moment of underwriting and recorded in a non-distributable reserve account which may only be decreased or cancelled by a resolution of the General Meeting taken in accordance with the rules applicable for an amendment to the Articles of Association. The share premium shall constitute a guarantee for third parties to the same degree as the issued capital.In the event of a decrease of the issued capital, all shareholders in a similar situation have to be treated equally. The other rules contained in articles 612, 613 and 614 of the Belgian Company Code must also be complied with.

Authorized capital

For a period of 5 years with effect from the publication in the Annexes to the Belgian Official Gazette of the deed of amendment to the Articles of Association dated June 2nd 1999, the Board of Directors is authorized to increase the issued capital on one or more occasions by an amount equal to the amount of the Company’s issued capital after determination of the capital increase within the framework of this Proposal on which the aforementioned General Meeting has resolved. This authorization applies to capital increases in cash and to capital increases in kind. This authorization of the Board of Directors also applies to capital increases by means of conversion of reserves. This authorization of the Board of Directors can be renewed. Within the context of a shares issue within the authorized capital, by virtue of a resolution approved in accordance with the terms and conditions of article 535.560 of the Belgian Company Code, the Board of Directors is hereby authorized by the General Meeting to amend the existing classes of shares or other securities which may or may not represent the capital. In addition to the issuance of shares, convertible bonds and warrants, the capital increase decided upon by the Board of Directors may also be carried out through the issue of non-voting shares, shares with preferential dividend right and liquidation rights and convertible shares which may be converted on specific conditions into a smaller or larger number of ordinary shares.

Within the context of the authorized capital, the Board of Directors is authorized to cancel or limit the preferential right, attributed to the shareholders by law, in the interests of the Company and subject to their compliance with the terms and conditions specified in articles 592 to 599 of the Belgian Company Code. The Board of Directors is authorized to cancel or limit the preferential right in favour of one or more specified parties, even if the party or parties is/are not employed by the Company or its subsidiaries.

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At the time of an increase in the issued capital carried out within the limits of the authorized capital, the Board of Directors is authorized to request for a share premium. Should the Board of Directors make such a request, this premium must be recorded in a non-distributable reserve account which can only be decreased or cancelled by a resolution of the General Meeting taken in accordance with the rules applicable for an amendment to the Articles of Association.

In the absence of an explicit authorization given by the General Meeting to the Board of Directors, the authority of the Board of Directors to increase the issued capital by subscriptions in cash, with the existing shareholders’ preferential right removed or restricted, or by subscriptions in kind, will be suspended from the date of notification to the Company by the Banking, Finance and Insurance Commission (CBFA) of a public takeover bid on the Company’s shares. This authority will come into effect again immediately after the closure of such a takeover bid.

The Board of Directors is authorized to amend the Company’s Articles of Association in accordance with any capital increase resolved upon within the context of its authorization.

Rights related to the shares

All shares are of the same type and have the same rights. The shares may be bearer or registered, as preferred by a shareholder. The Company may issue dematerialised shares either by a capital increase or by exchange with existing dematerialised bearer or registered shares. Any shareholder may request the exchange of shares from one form to another, i.e. from bearer to registered, registered to bearer or material to dematerialised.

Each share entitles the holder to one vote. No single party may cast more than 35 % of the number of votes related to the total number of shares issued by the Company at the General Shareholders’ Meeting. Groups of shareholders, of which the shares are covered by the criteria contained in article 2 of the Law of March 2nd 1989 on the disclosure of significant shareholding in quoted companies and the regulation of public takeover bids, may as well not cast more than 35 % of the number of votes related to the total number of shares issued by the Company at the General Shareholders’ Meeting. These restrictions will however not apply if the vote relates to an amendment to the Company’s Articles of Association or to resolutions for which a special majority is required by virtue of the Belgian Company Code.

Dividends will be paid on the date and at the place determined by the Board of Directors. The Board of Directors may pay interim dividends subject to compliance with the applicable terms and conditions of the Belgian Company Code.

After the settlement of all debts, charges and expenses of the liquidation, the net assets shall be applied first to the repayment in cash or in kind of the fully paid and not yet repaid amount of the shares. Any remaining surplus shall be divided equally among all shares. Profit-sharing certificates do not carry any entitlement to a share of the liquidation balance. Should the net proceeds be insufficient to repay all the shares, the liquidators shall make preferential repayments with respect to the most fully paid up shares until they reach the same level as the less fully paid up shares, or call upon holders of these less fully paid up shares to make an additional capital payment.

Shares subscribable in cash must first be offered to existing shareholders in proportion to the part of the capital represented by their shares, for a period of at least fifteen days starting the day on which the subscription is opened. The General Meeting shall determine the subscription price at which and the period during which the preferential right of subscription can be exercised. Should ownership rights to shares be divided into usufructuary rights and bare property rights, the preferential right shall pass to the owner of the bare property rights.

FINANCIAL SECTION


Acquisition by the Company of its own shares and disposal thereof.

The Extraordinary General Shareholders’ Meeting held on June 2nd 1999 explicitly authorized the Board of Directors to acquire and dispose of own shares or profit-sharing certificates in compliance with the terms and conditions of the Belgian Company Code, without requiring a prior resolution of the General Meeting, directly or through a party acting on his/her own name but for the account of the Company, or via a direct subsidiary within the meaning of articles 627, 628 and 631 of the Belgian Company Code, if their acquisition or disposal is necessary to prevent a threatening serious prejudice to the Company. This authorization is valid for a period of three years with effect from the publication of the aforementioned resolution in the Appendices to the Belgian Offical Gazette, and may be renewed in accordance with articles 620 to 623 of the Belgian Company Code. At the General Shareholders’ Meeting held on April 25th 2005, this authorization was renewed for 3 years until the next General Shareholders’ Meeting of 2008.

The Extraordinary General Shareholders’ Meeting held on June 2nd 1999 also authorized the Board of Directors to acquire the maximum number of shares permitted by virtue of article 620 to 623 of the Belgian Company Code by purchase or exchange, directly or through a party acting on his/her own name but for the account of the Company, or via a direct subsidiary within the meaning of articles 627, 628, §1 of the Belgian Company Code, at a price equal to at least 85 % and at the most 115 % of the last closing price at which these shares were quoted on the primary market of the Brussels Stock Exchange the day prior to this purchase or exchange. This authorization is valid for a period of 18 months with effect from the publication of the aforementioned resolution in the annexes to the Belgian Offical Gazette, and may be renewed in accordance with articles 620 to 623 of the Belgian Company Code. The renewal of the authorisation by the General Shareholders’ Meeting held on April 24th 2006 has been published on May 22nd 2006. This authorization will thus be valid until the General Shareholders’ Meeting of April 30th 2007.

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Notes 2006 2005

All amounts in the financial part are presented in thousands of EUR, unless stated otherwise.

2. CONSOLIDATED INCOME STATEMENT

INCOME STATEMENT

Operating revenue Net revenue Other operating incomePurchasesServices and other goodsPersonnel expensesDepreciations / amortizations and impairments Amortization of intangible assets and depreciation of property, plant and equipment Impairments and provisionsOther operating expenses

Operating profit before financing costs (EBIT)

Financial incomeFinancial expenses

Share of profit of associates

Profit before tax

Income tax expense Current income tax expense Deferred taxes

Profit for the period

Attributable to Minority interest

Attributable to equity holders of the parent

EBITDA

Nominal number of sharesWeighted average number of ordinary sharesDiluted weighted average number of ordinary sharesBasic earnings per shareDiluted earnings per share

4.1

67

10/11

4.2

5.15.2

8

9999

77.02474.597

2.427-12.145

-25.924-13.085-8.068-7.545

-523-1.529

16.273

832-853

0

16.252

-5.560-4.567

-993

10.692

10

10.682

24.340

5.362.0305.318.089

5.409.2802,011,98

68.73066,312

2.418-11,178

-23,183-11.083-7.354-7.203

-151-1.421

14.511

694-520

0

14.685

-4.982-4.733

-249

9.703

0

9.703

21.865

5.308.2445.296.3345.360.828

1,831,81

FINANCIAL SECTION


NON-CURRENT ASSETS

Property, plant and equipmentGoodwillIntangible assetsInvestment propertyInvestments in associatesOther investmentsOther receivablesDeferred tax assetsAmounts receivable after one year

CURRENT ASSETS

Inventories Trade and other receivablesCash and cash equivalents

TOTAL ASSETS

3. CONSOLIDATED BALANCE SHEET

Notes 2006 2005

10

11121314141516

171819

80.165

48.0112.9547.782

19.746375

446547262

42

54.439

4.86525.518

24.056

134.604

63.857

40.4230

2.28119.406

376458566327

20

47.407

4.03820.63022.739

111.264

ASSETS

Notes 2006 2005

EQUITY

Issued capitalShare premiumConsolidated reservesRetained earningsTranslation reservesTreasury shares

MINORITY INTEREST NON-CURRENT LIABILITIES

Interest-bearing loans and borrowingsEmployee benefitsProvisionsDeferred tax liabilitiesOther payables

CURRENT LIABILITIES

Interest-bearing loans and borrowingsTaxes payableTrade and other payables

TOTAL LIABILITIES

20

2122231521

21

24

81.733

12.696396

58.19110.682

610-842

10

34.943

13.151571

4329.76011.029

17.918

2.931960

14.027

134.604

73.719

12.676233

51.5469.984

370-1.090

0

22.860

7.413283505

6.1258.534

14.685

2.9781.027

10.680

111.264

LIABILITIES

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2006 20054. CONSOLIDATED STATEMENT OF CASH FLOWS

OpERATINg ACTIvITIESOperating profit before financing costs (EBIT)Foreign exchange gains / (losses)Depreciations of property, plant and equipment and amortization intangible assetsDeferred taxesProvisions

Gross cash flowCurrent income tax expenseChanges in working capital Netcashflowfromoperatingactivities

INvESTINg ACTIvITIESInvestmentsNet change in debts relating to investmentsNetcashflowfrominvestments

FINANCIAL INvESTMENTSAcquisition Achouffe - net cash paymentsFinancial investmentsIncome from financial fixed assetsImpairment of current assetsInterests received from current assetsNetcashflowfromfinancialinvestments

FINANCINg ACTIvITIESProceeds from the issue of share capitalMinority interestAmounts receivable after one yearLong-term financingCurrent interest-bearing loans and borrowingsInterest paid on financingMinority interestDisposal of own shares Netcashflowfromfinancingactivities

NET CHANGE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIvALENTSAtthestartofthefinancialyearDepositsCash at bank and in handTotalcashandcashequivalentsatthestartofthefinancialyear

AttheendofthefinancialyearDepositsCash at bank and in handTotalcashandcashequivalentsattheendofthefinancialyear

NET CHANGE IN CASH AND CASH EQUIVALENTS

14.51121

7.203249

42

22.026-4.733

76018.053

-9.593-600

-10.193

0-17160

428427

2610

34-2991.220

-371-3.071

52-2.174

6.113

11.4985.128

16.626

15.0727.667

22.739

6.113

16.273-95

7.545993-215

24.501-4.567-3.68316.251

-11.7825.686

-6.096

-8.4893218

121740

-7.578

18310

-222.272

-47-443

-3.461248

-1.260

1.317

15.0727.667

22.739

12.84211.214

24.056

1.317

FINANCIAL SECTION


5. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5.1. SIgNIFICANT ACCOUNTINg pRINCIpLES

Duvel Moortgat NV is a company domiciled in Belgium. The consolidated financial statements of the Company for the year ended December 31 th 2006 comprise the Company and its subsidiaries (together referred to as the “group”) and the Group’s interest in associates and joint ventures. The financial statements were authorised for issue by the Board of Directors on March 9th 2007.

Statement of compliance

The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), as published by the International Accounting Standards Board (IASB) and its interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC), as adopted by the European Union up to December 31st 2006. Standards and interpretations issued before December 31st 2006, but only coming into effect after December 31st 2006 have not been applied by the Duvel Moortgat group.

Basis of preparation

The financial statements are presented in thousands of euros, rounded to the neared thousand except when stated otherwise. They are prepared on the historical cost basis principle except for investment property which is stated at fair value. The financial instruments are stated at fair value.

The accounting policies have been applied consistently to all periods presented in the consolidated financial statements.

The consolidated financial statements describe the financial situation on December 31st 2006.

Principles of consolidation

The full consolidation method has been applied to those subsidiaries in which Duvel Moortgat has, directly or indirectly, more than 50 % of the shares entitled to voting rights or has the power, directly or indirectly, to govern the financial and operating policies of the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The proportionate method of consolidation is applied to those subsidiaries that are jointly controlled by Duvel Moortgat – directly or indirectly – and third party shareholders (joint ventures).

The equity method of accounting is applied to those companies in which Duvel Moortgat directly or indirectly has an interest of 20 to 50 % and thus has significant influence on its management, without effectively controlling them.

All transactions, balances and unrealized gains between Group companies have been eliminated.

The consolidation scope is set out in note 3.

Foreign currencies

Transactions in foreign currencies by Group entities are translated at exchange rates prevailing within the Group at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to euro at the foreign exchange rate ruling at that date. The revenues and expenses resulting from transactions in foreign currencies and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Non-monetary assets and liabilities denominated in foreign currencies are stated at the foreign exchange rate ruling at the date of the transaction.

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The revenues and expenses of foreign operations are translated at average exchange rates per semester, assets and liabilities are translated to euro at the foreign exchange rate ruling at the balance sheet date. The components of shareholders equity are translated at the historical rate. Exchange differences arising from the translation of the shareholders equity to euro, are taken to “Translation Reserves” of the caption “Equity”.

The following foreign exchange rates have been used in preparing the financial statements:

1 euro equals Closing rate Average rate 2006 2005 2006 2005

US dollar (USD) 1,3170 1,1797 1,2566 1,2441Tsjechische Koruna (CZK) 27,4850 29,0000 28,3300 29,7820Pond Sterling (GBP) 0,6715 0,6853 0,6818 0,6838

Financial instruments

The Group can use forward contracts to hedge its exposure to foreign exchange rate risks, mainly with respect to USD, GBP and CZK. The gain or loss resulting from the revaluation of derivative financial instruments, used to hedge the changes in “fair value” of assets and liabilities, are recognized in the income statement, together with the gains and losses resulting from the revaluation at “fair value” of the underlying hedged component. The “fair value” of these hedged components, with respect to the risk for which they are hedged, is their carrying amount at balance sheet date translated to euro, at the foreign exchange rate ruling at that date.

Financial risk management

• Purchases of raw materialsMalt is bought with annual contracts. The closing date is variable, and the price also depends on the circumstances in which the harvest took place. For years now, the malt price has been under pressure to decrease. However, it seems that the bottom point has been reached. It’s almost certain that consolidation movements and reorganizations in the malting sector, will lead to price adjustments in the long term.Derived grain products depend even harder on the harvest circumstances. A close follow up of the market and the timing of purchase are extremely important. The possible variation for these products on an annual basis is significantly more important than for example malt. Annual contracts are also used for these products.Hop, expressed in euro/kg, is certainly the most expensive ingredient. Therefore Duvel Moortgat aims at a durable relationship with its suppliers, but market opportunities at the spot market remain very important. Duvel Moortgat selects hop varieties that are a niche compared to the general offer.

• Foreign currency risksDue to the international character of the Group, we are exposed to different foreign currency risks arising from various exposures primarily with respect to USD, CZK and GBP. In certain cases, forward contracts can be used to hedge this exposure. At the end of 2006, there were no outstanding forward contracts.

• Credit risks regarding customers The credit risk has been limited by applying strict procedures. Furthermore, credit insurance has been taken up since 1/1/2004, which insures against the most important debtor risks.

• Liquidity risksBecause of its considerable cash position, the liquidity risks of the Group are limited. The interest due on the investment credit – concluded in 2002 at variable short-term interest rates – will be covered by an Interest Rate Swap as from 1/1/2006. The interest due on the new investment credit concluded at the end of 2006 is also covered against variable short-term interest rates.

FINANCIAL SECTION


Goodwill

Goodwill amounts on the acquisition of subsidiaries, joint ventures and associates. With respect to acquisitions that have occurred since January 1st 2004, the goodwill represent the difference between the cost of the acquisition and the fair value of the net identifiable assets acquired.

With respect to acquisitions prior to this date, the goodwill is included on the basis of its deemed cost, which represents the amount recorded under previous Belgian GAAP.

The goodwill is stated at cost less any accumulated impairment losses. The consolidation differences are allocated to cash-generating units and the remaining part is no longer amortized but tested for impairment on an annual basis.

To test impairment losses, the goodwill is allocated to any cash-generating units which the Group considers to benefit from the takeover. Those cash-generating units to which goodwill is allocated, are tested annually, or more frequent when there is an indication of impairment. If the recoverable amount of the cash-generating unit is lower than the carrying amount of the unit, impairment is recognised firstly to the carrying amount of the allocated goodwill of the unit, and secondly to the other assets of the unit, pro rata the carrying amount of each asset of the unit. A recognised impairment for goodwill cannot be countered in a future period.

Negative goodwill arising from an acquisition is recognized directly in profit or loss.

Intangible assets

• Research and developmentExpenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge, is recognized in the income statement as an expense as incurred.

Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized if the product or process is technically and commercially feasible and the Group has sufficient resources to complete development, and if it is possible to make a reliable estimate of the intangible asset’s development cost, if it is possible for the intangible asset to generate future economic advantages and moreover has the intention to use and commercialise the product. The expenditure capitalised includes the cost of raw materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognized in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortization and impairment losses.

• Other intangible assetsOther intangible assets that are acquired by the Group are stated at cost less accumulated amortization and impairment losses.

• Brand namesIf part of the amount paid for a company combination refers to brand names, this is classified separately as intangible asset of which fair value is set. Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred.

• Subsequent expenditureSubsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

• AmortizationAmortization is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets. Delivery rights are amortised over the duration of this right. Location and exploitation related business assets are amortized over 10 years. Customer related business assets are not amortized but systematically tested for impairment. Brand names are expected to have an indefinite useful life and are therefore not depreciated.

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Property, plant and equipment

Items of property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. The historical cost includes the purchase price and costs directly attributable to the acquisition (e.g. preparation costs, installation costs, delivery and processing cost and non-deductible taxes which are necessary for bringing the asset to the condition for it to be capable of operating in the manner intended by the management).

The cost of a self-constructed asset includes the cost of materials, direct labour and an appropriate proportion of production overhead.

The Group recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Group. Repairs and maintenance that do not increase the future economic benefits are recognized in the income statement as an expense as incurred.

Property that is being constructed or developed for future use as investment property is classified as property, plant and equipment and stated at cost until construction or development is complete, at which time it is reclassified as investment property.

Where parts of an item of property, plant and equipment have different expected useful lives, they are accounted for as separate items of property, plant and equipment.

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are stated at an amount equal to the lower of the fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses.

Lease payments are apportioned between the outstanding liability and finance charges so as to achieve a constant periodic rate of interest on the remaining balance of the liability. The corresponding lease debts, exclusive of financial charges, are recognized in the section “other non-current payables”. The finance charges are recognized in the income statement during the leasing period as financial expenses. Property, plant and equipment acquired via financial leasing, is depreciated over the expected useful lives of these assets.

Leases of assets under which all the risks and rewards of ownership are substantially retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the term of the lease.

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. During the first year of use, depreciations are calculated pro rata temporis. Following percentages are applied:

Buildings – pubs and housing 2% - 3% - 4%Industrial buildings 3% - 5% - 6%Furniture 10% - 20%Crates and bottles 20%Installations and machines 6,67% - 8,33% - 10% - 12,5% - 14,29% - 20% - 25%Installations on trade outlets 10% - 20%Rolling equipment 20%Pallets 20%Kegs 10%

FINANCIAL SECTION


Investment property

Investment properties are properties which are held either to earn rental income or for capital appreciation or for both.

Investment properties are stated at fair value.

Fair value is the most probable price that reasonably can be expected to be obtained on the market. It is the best price which reasonably can be agreed upon between buyer and seller. This valuation does not take into account exceptional situations or clauses. It is the price that can be obtained under normal competitive circumstances between well-informed parties.

This fair value is evaluated internally every 6 months and tested for impairment with a number of comparison points (for instance recent transactions) and with the return value of the annual rental income.

Any gain or loss arising from a change in fair value is recognized in the income statement.

Rental income is recognized in the income statement on a straight-line basis, over the term of the lease.

Inventories

Inventories are stated at the lower of cost and net realizable value.

The cost of finished products and work in progress comprises raw materials, other production materials, direct labour, other direct costs and an allocation of fixed and variable overhead based on a normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling costs.

Trade receivables

Trade receivables are stated at their nominal value less impairment losses. Impairment losses are accounted for if the recoverable amount at balance sheet date is lower than the nominal value. Impairment losses are determined on a case-by-case basis.

Cash and cash equivalents

Cash and cash equivalents comprises bank balances and term deposits with credit institutions. Bank overdrafts are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Impairment

The carrying amounts of the Group’s assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

Assets that are not amortized (like goodwill) are tested for impairment annually.

For intangible assets that are not yet available for use, goodwill and assets with an indefinite life, the recoverable amount is estimated at each balance sheet date.

An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement.

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The recoverable amount of the Group’s investments and its outstanding receivables is calculated as the present value of estimated future cash flows, discounted at original effective interest rate inherent to these assets. Short-term receivables are not discounted.

The recoverable amount of other assets is determined as the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss with respect to investments and receivables initiated by the Group is only reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognized.

An impairment loss in respect of goodwill is not reversed.

In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Share capital

When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a change in equity. Repurchased shares are classified as treasury shares and presented as a deduction from total equity.

Dividends are considered as a liability in the period in which they are declared.

Provisions

Provisions are recognized in the balance sheet when the Group has a present (legal or constructive) obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. If the effects are considerable, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future normal operating costs are not provided for.

A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower that the unavoidable cost of meeting its obligations under the contract.

A provision for soil sanitation is recognized when soil contamination has been detected and the Group has a legal obligation to decontaminate.

A provision for early retirement has been recognized for people that join the system. No provision has been recognized for those who are expected to join the system.

FINANCIAL SECTION


Employee benefits

• Pension plansThe Group has a number of defined contribution plans in different countries with external insurance companies. The contributions to these plans are funded by payments from employees and the respective Group companies. Contributions to defined contribution plans are recognized as an expense in the income statement as incurred.

• WarrantsThe Extraordinary General Shareholders’ Meeting of March 26th 1999 has created a warrant plan, allowing the granting of 250.000 warrants that entitle their owners to subscribe to the same number of shares. Their term is maximum ten year from the issue date. The warrants are granted for free and cannot be exercised before the end of the third calendar year following the year in which the offer took place. The 20.640 shares that have already been granted in 1999, can be exercised at the price of 21,57 ¤. In 2005, another 11.200 warrants were granted, that can be exercised at the price of ¤ 25,54. In case the warrants are exercised, the amounts received will be added to the issued capital (nominal value) and share premiums after deduction of all costs related to the issuing of the shares.

• BonusesBonuses received by employees and management are based on certain key financial indicators as well as personal targets. The expected amount of the bonuses is included as a cost of the year whereas the actual payment will only take place after balance sheet date.

• Termination benefitsTermination benefits are recognized as a debt and cost when a Group company commits itself to either putting an end to the contract of an employee or group of employees before the normal date of retirement or to provide termination benefits as a direct consequence of an offer encouraging people to retire voluntarily. When termination benefits are due after twelve months following the balance sheet date, they are discoounted.

Interest-bearing loans and borrowings

Interest-bearing loans and borrowings are recognized initially at cost less attributable transaction costs. Subsequent to initial recognition, interest-bearing loans and borrowings are stated at amortized cost with any difference between the initial amount and the redemption value being recognized in the income statement over the expected life of the instrument on an effective interest rate basis.

Trade and other payables

Trade and other payables are stated at nominal value.

Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognized in the income statement except to the extent that it relates to items recognized directly in equity, in which case the tax effect is also recognized directly in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date and any adjustments to tax payable in respect of previous years. Deferred taxes are recognized for all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes, using tax rates enacted at the balance sheet date.No deferred taxes are recognized for following temporary differences: initial recognition of the goodwill, the initial recognition of assets or liabilities that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent they will probably not reverse in the foreseeable future. A deferred tax asset is recognized only to the extent that it is probable that sufficient future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

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Revenue and expenses

• Goods sold and services renderedRevenue from the sale of goods is recognized in the income statement when the significant risks and rewards of ownership have been transferred to the buyer and no significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods exist. Amounts charged on account of third parties can not be considered as economic benefits flowing back to the Company and are therefore not recognized as revenues. Hence, duties that are part of the price charged to the customers are not recognized as revenue in the income statement.

• Rental incomeRental income from investment property is recognized in the income statement on a straight-line basis over the term of the lease.

• Financial incomeFinancial income comprises interest income, dividend income and foreign exchange gains. Interest income is recognized as it accrues, taking into account the effective yield on the asset. Dividend income is recognized in the income statement on the date that the dividend is received.

• Government grantsA government grant is recognized in the balance sheet initially as deferred income when there is reasonable assurance that it will be received and that the Group will comply with the conditions attached to it. Grants that compensate the Group for expenses incurred are recognized in the income statement on a systematic basis in the same periods in which the expenses are incurred. Grants that compensate the Group for the cost of an asset are recognized in the income statement as other operating income on a systematic basis over the useful life of the asset.

• Research and development, advertising and promotional expenses and system development costs Research, advertising and promotional expenses are expensed in the year in which these costs are incurred. Development costs and system development costs are expensed in the year in which these costs are incurred if they do not meet the criteria for capitalisation.

• Operating lease paymentsPayments made under operating leases are recognized in the income statement on a straight-line basis over the term of the lease.

• Finance lease paymentsMinimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.The financial expenses comprise interests on interest-bearing loans and borrowings, foreign exchange losses and transaction charges.

Segment reporting

A business segment is a distinguishable component of the Group that is engaged in providing products or services, and that is subject to risks and rewards that are different from those of other business segments. A geographical segment is a distinguishable component of the Group that is engaged in providing products or services within a particular economic environment, and that is subject to risks and returns that are different from those of other geographical segments.

The Group has chosen the business segment as the primary source of reporting, as it corresponds to the internal financial reporting. The segment “production and sale of drinks” corresponds to more than 90 % of the revenue. A further distinction between the different beers is not made as it wasn’t part of the internal management reporting. The other business segment comprises the real estate activities amongst other things. For the presentation of the geographical segment, turnover is split according to the geographical location of customers. The segmented assets are represented based on their geographical location.

FINANCIAL SECTION


5.2. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT (CONTINUATION):

Index

1. Segment reporting2. Acquisition and disposal of subsidiaries3. Consolidation scope4. Other operating income and expenses5. Financial income and expenses6. Services and other goods7. Personnel expenses8. Income tax expense9. Earnings per share10. Property, plant and equipment11. Intangible assets12. Investment property13. Investments in associates14. Other investments and other receivables15. Deferred tax assets and liabilities16. Amounts receivable after more than one year17. Inventories18. Trade and other receivables19. Cash and cash equivalents20. Capital and reserves21. Interest-bearing loans and borrowings22. Employee benefits23. Provisions24. Trade and other payables25. Renting and letting26. Contingencies27. Capital commitments28. Related parties29. Subsequent events

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1. SEgMENT REpORTINg

1.1. pRIMARY SEgMENT REpORTINg Production and sale of drinks Other Consolidated 2006 2005 2006 2005 2006 2005

Net revenue 73.032 64.759 1.565 1.553 74.597 66.312EBITDA 22.364 20.670 1.976 1.195 24.340 21.865Operating profit before financing costs 14.359 13.380 1.913 1.131 16.272 14.511Financial expenses 818 514 35 6 853 520

Share of profit of associates 0 0 0 0 0 0Income tax expense 4.460 4.687 107 46 4.567 4.733Minority interest 10 0 0 0 10 0Inter-segment eliminations 0 0 0 0 0 0Net profit of the period 9.196 8.992 1.496 711 10.692 9.703

Segment assets 87.129 64.937 23.116 23.240 110.245 88.177Unallocated assets 19.765 20.384 4.595 2.703 24.360 23.087

Investments in associates 0 0 0 0 0 0Inter-segment eliminations 0 0 0 0 0 0Total assets 106.894 85.521 27.711 25.943 134.605 111.264

Segment liabilities 42.615 30.657 497 763 43.112 31.420Unallocated liabilities 64.279 54.664 27.214 25.180 91.493 79.844Inter-segment eliminations 0 0 0 0 0 0Total liabilities 106.894 85.321 27.711 25.943 134.605 111.264

Gross capital expenditure 17.257 8.874 885 1.657 18.142 10.531

Impairment 378 950 0 0 378 950Depreciation of property, plant and equipment 6.768 5.911 0 0 6.768 5.911Amortization of intangible assets 332 276 66 66 398 342Additions to provisions 344 76 0 0 344 76Reversal of provisions 128 118 0 0 128 118

1.2. SECONDARY SEgMENT REpORTINg Belgium The Netherlands France UK 2006 2005 2006 2005 2006 2005 2006 2005

Net revenue 47.007 43.094 5.944 5.340 5.242 4.462 2.889 2.069Total assets 120.163 97.971 0 0 1.505 1.236 -1.801 -413Grosscapitalexpenditure 16.363 7.447 0 0 337 255 83 1.710

US The Czech Republic Other Consolidated 2006 2005 2006 2005 2006 2005 2006 2005

Net revenue 6.371 5.068 4.661 4.240 2.482 2.039 74.597 66.312Total assets 1.156 808 7.431 6.734 6.150 4.929 134.605 111.465Grosscapitalexpenditure 298 310 1.061 809 0 0 18.142 10.531

FINANCIAL SECTION


2. ACQUISITION AND DISpOSALS OF SUBSIDIARIES

On 7 September 2006, 100 % of shares of the Brasserie d’Achouffe were acquired. Brasserie d’Achouffe is a brewery located in Houffalize in the province of Luxemburg. Since October 2006, this subsidiary has been fully consolidated.

Acquisition value Adaptation to fair value Fair value

FIXED ASSETS

Material assets 2.287 1.376 3.663Immaterial assets 26 5.505 5.531

Financial fixed assets 163 0 163Amounts receivable after one year 190 0 190Subtotal 2.666 6.881 9.547

CURRENT ASSETSInventory 222 275 497Amounts receivable within one year 857 0 857Cash and cash equivalents 3.556 0 3.556Subtotal 4.635 275 4.910

AMOUNTS PAYABLE AFTER ONE YEAR

Financial debts -271 0 -271Other long term debts -1.591 0 -1.591Deferred tax liabilities 0 -2.432 -2.432Subtotal -1.862 -2.432 -4.294

AMOUNTS PAYABLE WITHIN ONE YEAR

Trade and other payables -1.071 0 -1.071Subtotal -1.071 0 -1.071

Total 4.368 4.724 9.092

Goodwill 7.677 -4.724 2.953Acquisition price 12.045

Cash and cash equivalents -3.556

Netcashflow 8.489

The acquisition price includes the transaction costs and the discounted earn-out. For the fair value of the material assets the market value of use is applied, which has been determined by an acknowledged expert. In determining the fair value of the brand name, a discount rate of 10 % has been applied.

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3. CONSOLIDATION SCOpE ON 31/12/2006

• List of the fully consolidated subsidiaries:

Duvel Moortgat nv 100%Duvel Moortgat France sarl 100%Moortgat Horeca Services nv 100%Moortgat Financial Services nv 100%Eura Drinks nv 100%Moortgat Immo Services 100%Parallel nv 100%Freya’s Deli Fruit nv 70%Duvel Moortgat USA 82%Brewery Ommegang 100%Belga Bar (UK) Ltd 100%LDV-Immo nv 100%DRC 100%Duvel Moortgat UK Ltd 100%Brasserie d’ Achouffe sa 100%

• List of the proportionally consolidated entities:

Brouwerij Steendonk nv 50%Bernard Brewery as 50%Bernard Malthouse as 50%LFB Développement sa 50%LFB Expansion sas 50%Les Tripiers sarl (LFB Strasbourg) 50%De l’Etoile (LFB Clermont-Ferrand) 50%Le Comtours (LFB Tours) 50%Saint Hugues (LFB Grenoble) 50%Stannancy (LFB Nancy) 50%

• List of the entities accounted for using the equity method:

Force de Vente Service 33.30%

Duvel Moortgat UK Ltd and Stannancy Sarl are newly founded subsidiaries.

An address list with further details on the different entities is included on page 104.

FINANCIAL SECTION


4. OTHER OpERATINg INCOME AND ExpENSES

4.1. OTHER OpERATINg INCOME 2006 2005

Rental income 36 35Gain on disposal of property, plant and equipment 465 341Fair value adjustments of investment property 100 80Other operating income 1.826 1.962Total 2.427 2.418

4.2. OTHER OpERATINg ExpENSES 2006 2005

Impairment loss on trade receivables 28 125

Loss on the disposal of property, plant and equipment 360 110Fair value adjustments of investment property 186 499Sundry operating taxes 735 430Other costs 220 257Total 1.529 1.421

5. FINANCIAL INCOME AND ExpENSES

5.1. FINANCIAL INCOME 2006 2005

Interest income 620 444

Dividend income 0 0Realized foreign exchange gain 52 32Non-realized foreign exchange gain 6 208Gain on disposal of investments 137 0Other 17 10Total 832 694

5.2. FINANCIAL ExpENSES 2006 2005

Interest expense 443 371Realized foreign exchange losses 90 31Non-realized foreign exchange losses 248 65Other 72 53Total 853 520

6. SERvICES AND OTHER gOODS

This caption mainly consists of maintenance expenses, administrative expenses, selling and distribution expenses, marketing, insurance and various overhead expenses.

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7. pERSONNEL ExpENSES 2006 2005

Wages and salaries 10.075 8.536Compulsory social security contributions 2.162 1.875Pension expenses – contribution to pension plans 347 264Other personnel expenses 501 408Total 13.085 11.083

8. INCOME TAx ExpENSE 2006 2005

Current year tax expense 4.607 4.842Adjustments for prior years -40 -109Deferred taxes 992 249Total 5.559 4.982

Profit before tax 16.252 14.685Adjustments to tax basis• Non-deductible expenses 963 345• Non taxable dividends from investments 8 38• Investment allowance -192 -59• Tax shelter -300 -750• Notional intrest deduction -1.864 0• Non-taxable surplus value -368 -249• Unrecognized fiscal losses of the financial year 1.407 810• Accounting of tax losses not previously recognized 0 -259• Recuperation of fiscal losses 416 0• Taxable surplus value previous years 24 296• Non-deductible impairment 0 0Taxable profit 16.346 14.857Income tax expenses calculated at 33,99% 5.556 5.049

Difference 3 -67

Under / (over) provided in prior years -40 -109Effect of tax rates in foreign jurisdictions 43 42

Total 3 -67

Effective tax rate 34,21% 33,93%

9. EARNINgS pER SHARE 2006 2005

Net profit for the period attributable to ordinary shareholders 10.692 9.703Weighted average number of ordinary shares 5.318.089 5.296.334Basic earnings per share in euro 2,01 1,83

Net profit for the period attributable to ordinary shareholders 10.692 9.703Weighted average number of ordinary shares 5.318.089 5.296.334Adjustments for warrants 91.191 64.495Weighted average number of ordinary shares (diluted) 5.409.280 5.360.228Diluted earnings per share in euro 1,98 1,81

FINANCIAL SECTION


10. pROpERTY, pLANT AND EQUIpMENT

COST

Balance at 01/01/2005 18.354 67.203 4.088 29 3.695 772 94.141

• Acquisitions 553 3.737 517 74 2.048 1.786 8.715• Acquisitions through business combinations 0 0 0 0 0 0 0• Transfers and disposals 0 -3.574 -289 0 -363 0 -4.226• Transfers and disposals through business combinations 0 0 0 0 0 0 0• Exchange differences 203 158 34 2 111 4 512• Transfer to other asset categories 673 -370 70 44 1 -393 25Balance at December 31st 2004 19.783 67.154 4.420 149 5.492 2.169 99.167

DEPRECIATION AND IMPAIRMENT LOSSES

Balance at 01/01/2005 6.981 44.841 2.667 0 636 0 55.125• Depreciation charge for the year 691 4.236 523 19 442 0 5.911• Depreciation through business combinations 0 0 0 0 0 0• Impairment losses 0 0 0 0 950 0 950• Transfers and disposals -84 -3.080 -278 0 -16 0 -3.458• Transfers and disposals through business combinationss 0 0 0 0 0 0 0• Exchange differences 29 54 8 2 34 0 127• Transfer to other asset categories 0 45 -3 42 5 0 89Balance at December 31st 2005 7.617 46.096 2.917 63 2.051 0 58.744

CARRYING AMOUNTS

At 01/01/2005 11.373 22.362 1.421 29 3.059 772 39.016At 31/12/2005 12.166 21.058 1.503 86 3.441 2.169 40.423

COST

Balance at 01/01/2006 19.783 67.154 4.420 149 5.492 2.169 99.167

• Acquisitions 2.423 3.680 293 163 636 4.696 11.891• Acquisitions through business combinations 2.561 7.879 327 126 0 0 10.893• Transfers and disposals -551 -1.574 -212 -48 -17 0 -2.402• Transfers and disposals through business combinations 0 0 0 0 0 0 0• Exchange differences -65 -29 -1 12 170 10 97• Transfer to other asset categories 77 1.353 36 255 8 -1.729 0Balance at 31/12/2006 24.228 78.463 4.863 657 6.289 5.146 119.646

Land and buildings

Plant and equipment

Furniture and vehicles

Leasing and similar rights

Other tangible

fixed assets

Fixed assets under

construction and advance

payments

Total

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DEPRECIATION AND IMPAIRMENT LOSSES

Balance at 01/01/2006 7.616 46.098 2.916 62 2.052 0 58.744• Depreciation charge for the year 679 4.914 487 74 615 0 6.769• Depreciation through business combinations 980 5.450 270 104 0 0 6.804• Impairment losses 0 0 0 0 378 0 378• Transfers and disposals -34 -847 -186 -38 -17 0 -1.122• Transfers and disposals through business combinations 0 0 0 0 0 0 0• Exchange differences -14 -8 1 4 89 0 72• Transfer to other asset categories 0 -178 18 148 2 0 -10Balance at 31/12/2006 9.227 55.429 3.506 354 3.119 0 71.635

CARRYING AMOUNTS

At 01/01/2006 12.166 21.058 1.503 86 3.441 2.169 40.423At 31/12/2006 15.001 23.034 1.357 303 3.170 5.146 48.011

Themostimportantinvestmentsrelateto: 2006 2005

Investments in catering businesses 300 1.538Investments in fixture / furniture of catering businesses 876 2.325Water treatment 0 1.128Brewery hall 2.407 0Machinery hall 771 0MHS Building 1.732 0Visitor centre 965 401Bottles, crates and kegs 1.611 2.070Various technical investments 981 2.101Various technical investments Bernard 1.056 0Various technical investments Ommegang 236 0Furniture and vehicles 408 591Total 11.343 10.154

Secured assets

Assets are pledged for an amount of 8.304.000 ¤ (bottling plant) and the commitment was made not to sell or mortgage these assets. The Group has also committed itself not to dispose of nor to mortgage the business assets, partly or as a whole. Those commitments, with the exception of the privilege of the unpaid seller, apply to the new loan of ¤ 3.000.000, contracted in 2006.

Impairments

The fixtures of a bar abroad have been tested for impairment because revenue was lower than initially budgeted. This test resulted in an impairment of 378.000 ¤.

FINANCIAL SECTION


11. INTANgIBLE ASSETS

Research and Consessions Goodwill Advance Total development patents, payments costs licenses, etc.

COST

Balance at January 1st 2005 197 1.423 2.293 0 3.913• Acquisitions 6 171 79 22 278• Transfers and disposals -6 -150 0 0 -156• Transfers to other asset categories 0 0 0 0 0• Exchange differences 0 2 110 0 112• Balance at December 31st 2005 197 1.446 2.482 22 4.147

AMORTIZATION AND IMPAIRMENT LOSSES

Balance at January 1st 2005 33 824 638 1.495• Amortization for the year 39 127 176 342• Transfers and disposals -5 0 0 -5• Exchange differences 0 1 33 34• Balance at December 31st 2005 67 952 847 1.866

CARRYING AMOUNTS

At 01/01/2005 164 599 1.655 2.418At 31/12/2005 130 494 1.635 22 2.281

Research and Consessies Goodwill Advance Total development octrooien, payments costs licenties, enz.

COST

Balance at January 1st 2006 197 1.446 2.482 22 4.147• Acquisitions 0 117 95 125 337• Acquisitions by business combinations 0 5.514 0 0 5.514• Transfers and disposals -20 0 0 0 -20• Transfers to other asset categories 22 0 0 -22 0• Exchange differences 0 3 126 0 129• Balance at December 31st 2006 199 7.080 2.703 125 10.107

AMORTIZATION AND IMPAIRMENT LOSSES

Balance at January 1st 2006 67 952 847 0 1.866• Amortization for the year 40 163 195 0 398• Amortization by business combinations 0 10 0 0 10• Transfers and disposals 0 0 0 0 0• Exchange differences 0 3 46 0 49• Balance at December 31st 2006 107 1.128 1.088 0 2.323

CARRYING AMOUNT

At 01/01/2006 130 494 1.635 22 2.281At 31/12/2006 92 5.952 1.615 125 7.784

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12. INvESTMENT pROpERTY

2006 2005

Balance at January 1st 19.406 18.287Acquisitions 416 1.538Transfer from property, plant and equipment 10 0Fair value adjustments -86 -419Balance at December 31st 19.746 19.406

The investment property relates to properties let to a third party over a renewable period of 9 years.

13. INvESTMENTS IN ASSOCIATES

Ownership Countries 2006 2005

F.V.S France 33,3% 33,3%Espace Belge à Paris France 23,4% 23,4%Groupement des Bières Spéciales France 33,0% 33,0%

Summary of the financial information on associates – 100 %

2005 Assets Liabilities Equity Net Revenue Profit / (loss)

F.V.S 192 184 8 468 0Espace Belge à Paris 1.689 170 1.448 140 71Groupement des Bières Spéciales 4.547 4.547 -2 15.644 -2Total 6.428 4.901 1.454 16.252 69

2006 Assets Liabilities Equity Net Revenue Profit / (loss)

F.V.S 204 196 8 440 0Espace Belge à Paris 1.554 34 1.448 140 72Groupement des Bières Spéciales 6.398 6.398 0 18.463 0Total 8.156 6.628 1.456 19.043 72

FINANCIAL SECTION


14. OTHER INvESTMENTS AND OTHER RECEIvABLES

2006 2005

Various participations (<10%) 446 458Receivables on joint ventures 547 566Total 993 1.024

16. AMOUNTS RECEIvABLE AFTER MORE THAN ONE YEAR

The amounts receivable after more than one year mainly relate to consigned packaging.

15. DEFERRED TAx ASSETS AND LIABILITIES

2006 2005

Balance at 1 January 5.798 5.549• Deferred tax assets 327 3• Deferred tax liabilities 6.125 5.552Deferred tax (income statement) 1.268 249Deferred tax on allocation goodwill Achouffe 2.432 0BalanceatDecember31st 9.498 5.798• Deferred tax assets 262 327• Deferred tax liabilities 9.760 6.125Total 9.498 5.798

Deferred tax assets Deferred tax liabilities 2006 2005 2006 2005

Property, plant and equipment 257 180 4.765 4.407Provisions 0 0 1.644 1.213Inventories 0 0 600 505Allocation goodwill 0 0 2.416 0Deferred charges and accrued income 0 0 335 0Previous tax losses 5 147 0 0Totalmutation 262 327 9.760 6.125

17. INvENTORIES

2006 2005

Raw materials 1.150 1.122Work in progress 811 747Finished goods 2.646 1.920Goods purchased for resale 258 153Advance payments 0 96Total 4.865 4.038

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18. TRADE AND OTHER RECEIvABLES

2006 2005

Trade receivables 19.151 15.609Impairment losses -1.223 -1.098Other receivables 4.474 3.909Deferred charges and accrued income 3.116 2.210Total 25.518 20.630

Duvel Moortgat NV strategically decided to fully take over control of the distribution of Duvel and Maredsous in the US, since Duvel Moortgat is convinced that its recurring margin on the present volumes can increase considerably due to returns to scale. Therefore, a contract has been concluded with the present importer. In the deferred charges and accrued income, an amount of ¤ 984.000 has been booked, to be booked in the results over a period of 4 years (pay-back period).

19. CASH AND CASH EQUIvALENTS

2006 2005

Term deposits over 8 years 1.000 1.000Term deposits (< 1 month) 11.842 14.073Bank balances 11.170 7.653Cash 44 13Total 24.056 22.739

The term deposit over 8 years is a “tak 26” investment that can be called free of charge every three months. It has been entered into at the end of December 2005.

The other deposits are short term deposits. The weighted average interest rate in 2006 amounted to 2,74 %.

FINANCIAL SECTION


20. CApITAL AND RESERvES

20.1. HISTORY OF SHARE CApITAL

Date Nature of transaction Number of shares Share capital in EUR

12/03/31 Incorporation 5.000 123.94729/12/52 Capital increase by incorporation of reserves - 128.90526/03/99 Share split of outstanding shares by 1000 5.000.000 -21/06/99 Capital increase in cash 341.390 12.394.67616/12/05 Capital increase by exercising warrants 12.120 28.69819/06/06 Capital increase by exercising warrants 8.520 20.174 5.362.030 12.696.400

20.2. HISTORY OF THE SHAREHOLDER STRUCTURE

Shareholder structure based on the last published notification (7/04/2004) (Law 2/3/89, article 4§2).

Shareholder Date of notification Number of shares % of total capital % of the total numberincluding 250,000 warrants

Fibemi 07/04/2004 3.415.489 63,94% 61,08%Veerle Baert 07/04/2004 543.000 10,16% 9,71%Other family shareholders 07/04/2004 41.000 0,77% 0,73%Lessius 07/04/2004 0 0% 0%Alpinvest holding 07/04/2004 0 0% 0%Mercator & Noordstar 07/04/2004 23.135 0,43% 0,41%Trustcapital Partners 07/04/2004 0 0% 0%Sinvest 07/04/2004 16.000 0,30% 0,29%

Shareholder structure based on other information:

Shareholder Date of notification Number of shares % of total capital % of the total number including 250,000 warrants

Public - 1.244.763 23,31% 22,26%Registered public - 2.312 0,05% 0,04%Employees - 8.571 0,16% 0,15%Treasury shares - 47.120 0,88% 0,84%Total - 5.341.390 100%

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Mercator Verzekeringen nv has, in accordance with the shareholders agreement concluded in 1999, offered its 23.135 shares for sale to Fibemi nv. Fibemi has exercised its pre-emption right of purchase on October 14th 2004.

At 14/7/2004 the Group has acquired 15.200 of its own shares. The total portfolio of own shares amounted to 47.120 at 31 December 2004..

At 11/1/2005, the Group has sold 1.854 of its own shares. The total portfolio of own shares amounts to 45.266.

At 16/12/2005 a capital increase has been carried out, issuing 12.120 new shares through the exercise of 12.120 warrants. The total number of ordinary shares listed on the regulated market Eurolist by Euronext Brussels has changed from 5.341.390 to 5.353.510 at December 23rd 2005.

At 14/6/2006, the Group has sold 10.300 of its own shares. The total portfolio of own shares amounts to 34.966.

At 19/6/2006 a capital increase has been carried out, issuing 8.520 new shares through the exercise of 8.520 warrants. The total number of ordinary shares listed on the regulated market Eurolist by Euronext Brussels has changed from 5.353.510 to 5.362.030 at June 19th 2006.

After these transactions, the shareholder structure is as follows:

Shareholder structure based on the latest published notification (7/04/2004) (Law dated 2/3/89, article 4§2).

Shareholder Date of notification Number of shares % of total capital % of the total numberincluding 229.360 warrants

Fibemi 3.438.624 64,13% 61,50%Veerle Baert 07/04/2004 543.000 10,13% 9,71%Other family shareholders 07/04/2004 41.000 0,76% 0,73%Sinvest 07/04/2004 16.000 0,30% 0,29%

Shareholder structure based on other information:

Shareholder Date of notification Number of shares % of total capital % of the total numberincluding 229.360 warrants

Public - 1.113.852 20,78% 19,92%Registered public - 1.230 0,02% 0,02%Insinger de Beaufort Asset Management 22/03/2007 167.765 3,13% 3,00%Employees - 5.593 0,10% 0,10%Treasury shares - 34.966 0,65% 0,63%Total 5.362.030 100%

20.3. TREASURY SHARES

The Group has sold 10.300 of its own shares during the past financial year. The realised gain (¤ 121.323) was recognized directly in equity. The total portfolio of own shares amounts to 34.966 shares with a total value of ¤ 842.433. These shares represent 0,65 % of the share capital.

FINANCIAL SECTION


20.4. DIvIDENDS

The following dividend payment has been proposed by the Board of Directors after balance sheet date:

Per share ¤ Total ¤

Net dividend per share 0,54 2.876.615Withholding tax 25/75 0,18 958.871Gross dividend per share 0,72 3.835.486Pay out ratio 35,87%

Shares

Number of shares 5.362.030Number of treasury shares (34.966)Number of shares entitled to dividend payment 5.327.064

Should this proposal be approved, the net dividend of ¤ 0,54 per share will be payable from 14 May 2007 onwards at Fortis Bank, Dexia Bank and Bank Degroof on presentation of coupon no. 8. The coupons of own shares (34.966 shares) have been destroyed.

20.5. EARNINgS pER SHARE

See note 9

20.6. RECONCILIATION OF MOvEMENT IN CApITAL AND RESERvES

Share Share Reserves Reserves for Translation Retained Total Capital premium own shares reserve earning equity

Balance at 1/1/2005 12.648 0 46.444 -1.135 117 8.448 66.522Increase in share capital 28 233 261Transfer from retained earnings to reserves 8.448 -8.448 0Profit for the period 9.984 9.984Dividends -3.071 -3.071Allocation of negative equity of minority interests to the parent company -282 -282Translation reserves 253 253Sale of treasury shares 7 45 52Balance at 31/12/2005 12.676 233 51.546 -1.090 370 9.984 73.719

Balance at 1/1/2006 12.676 233 51.546 -1.090 370 9.984 73.719Increase in share capital 20 163 183Transfer from retained earnings to reserves 9.984 -9.984 0Profit for the period 10.682 10.682Dividends -3.460 -3.460Allocation of negative equity of minority interests to the parent company 0Translation reserves 240 240Sale of treasury shares 121 248 369Balance at 31/12/2006 12.696 396 58.191 -842 610 10.682 81.733

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21. INTEREST BEARINg LOANS AND BORROWINgS

21.1. AMOUNTS pAYABLE AFTER MORE THAN 1 YEAR

2006 2005

Interest bearing

loans with credit institutions 13.151 7.413Total 13.151 7.413

Other debts

Subordinated loan 250 330Trade payables 443 355Consigned packaging 10.336 7.849Total 11.029 8.534

The ‘loans with credit institutions’ of ¤ 13 million consists of the following:

A ¤ 8.3 million loan contracted with regard to the bottling plant investment on 10/12/2002. A reimbursement on this loan amounting to ¤ 1.8 million has taken place. In 2007 a following reimbursement of ¤ 1.2 million will be reimbursed. This loan has been contracted at an interest rate that is revised yearly. This rate amounted to 3.755% in 2006.

A ¤ 12 million loan contracted on 18/12/2006 with regard to the brewery hall investment and the purchase of the Brasserie d’Achouffe. On 31/12/2006, ¤ 4.6 of this loan was taken out. A first reimbursement will take place on 02/01/2008. This loan has been contracted at an interest rate that is revised yearly. This rate amounted to 4.176 % in 2006.

A ¤ 3 million loan on 1/12/2006 also contracted with regard to the brewery hall investment and the purchase of the Brasserie d’Achouffe. On 31/12/2006, this loan was fully withdrawn. A first reimbursement of ¤ 0.5 million will take place in 2007. This loan has been contracted at an interest rate that is revised yearly. This rate amounted to 4.199% in 2006.

The fair value does not considerably differ from the nominal value.

The increase of the ‘consigned packaging’ heading is a result of the takeover of the consignments of Brasserie d’Achouffe, amounting to ¤ 1.7 million.

21.2. AMOUNTS pAYABLE WITHIN ONE YEAR

2006 2005

Interest bearingloans with credit institutions 2.931 2.978

FINANCIAL SECTION


21.3. TERMS AND DEBT REpAYMENT SCHEDULE

Total- 1 year 2-5 year More than 2005 or less 5 years

Subordinated loans 330 0 0 330Interest bearing loans with credit institutions 10.391 3.111 7.047 233Trade payables 355 355 Consigned packaging 7.849 0 0 7.849Total 18.925 3.466 7.047 8.412

Total- 1 years 2-5 years More than 2006 or less 5 years

Subordinated loans 250 0 0 250Interest bearing loans with credit institutions 16.082 2.931 8.875 4.276Trade payables 443 443 0 0Consigned packaging 10.336 0 0 10.336Total 27.111 3.374 8.875 14.862

22. EMpLOYEE BENEFITS

22.1. pROvISION FOR EARLY RETIREMENTS

2006 2005

Balance at January 1st 283 253Provisions made during the year 344 76Provisions reversed during the year -56 -46Balance at December 31st 571 283

A provision for early retirement has been recognized for employees who join the system. In the course of 2006, a provision was recognized for 4 manual employees and 1 administrative employee. No provision has been recognized for those who are expected to join the system.

22.2. DEFINED CONTRIBUTION pLANS

The Group has a number of defined contribution plans in different countries with external insurance companies. The contributions to these plans are funded by payments from employees and the respective Group companies. Contributions to defined contribution plans are recognized as an expense in the income statement as incurred.

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23. pROvISIONS

Contractual obligation Soil sanitation Total 2006 2005 2006 2005 2006 2005

Balance at January 1st 381 453 124 124 505 577Provisions made during the year 0 0 0 0 0 0Provisions used during the year 73 72 0 0 73 72Provisions reversed during the year 0 0 0 0 0 0Balance at December 31st 308 381 124 124 432 505

The Group is not involved in any significant lawsuits other than current disputes relating to normal business activities (e.g. disputes relating to unpaid rent and trade debts, etc.).

24. TRADE AND OTHER pAYABLES

2006 2005

Trade payables 10.567 8.447Social security payables 1.575 1.401Other payables 820 33Accrued charges and deferred income 1.065 799Total 14.027 10.680

In the heading ‘other payables’, a discounted amount of ¤ 765,000 has been booked for the future estimated payments concerning the purchase of Brasserie d’Achouffe.

25. RENTINg AND LETTINg

Rent as tenant

The Group rents buildings, machines and vehicles. The rent is payable as follows: 2006 2005

within one year 1.432 1.524within one to five years 4.567 5.452after five years 1.649 2.019

In the course of the financial year 2006, ¤ 1,942,000 was booked as rent (2005: ¤ 1,524,000).

FINANCIAL SECTION


Rent as letter

The Group lets its investment property (see explanation 12). The future minimum rents to be received are as follows:

2006 2005

within one year 1.543 1.534within one to five years 7.676 6.137after five years 4.610 4.286

In the course of the financial year 2006, ¤ 1,536,000 was booked as rental income (2005: ¤ 1,428,000). With regard to maintenance and renovation of property investments, in the course of the financial year 2006, ¤ was booked as costs. (2005: 287.000 ¤).

26. CONTINgENCIES

There are no contingencies not reflected in the balance sheet.

27. CApITAL COMMITMENTS

At the end of 2006, all investments commitments have been started.

28. RELATED pARTIES

The total amount of salaries paid to the directors relating to activities for the consolidating company, its subsidiaries and associates, including the pensions paid to former directors and executives, amounted to ¤ 556.459. The global remuneration paid to the non-executive directors amounted to ¤ 118,711. The remuneration paid to the executive directors, Lema nv as CEO of Duvel Moortgat and Bemo nv as executive director of MIS, amounted to ¤ 437.748.

The global remuneration paid to the management committee relating to activities for the consolidating company, its subsidiaries and associates amounted to ¤ 658.484 in 2006. The variable part amounted to ¤ 75.522.

The Extraordinary General Meeting of March 26th 1999 created a warrant plan under the terms of which 250,000 warrants may be allocated, carrying the entitlement to subscribe to the same number of shares. The 20.640 warrants already allocated can be exercised at the price of ¤ 21,57 They were allocated to members of the management committee. In 2005, 11,200 warrants were allocated which can be exercised at the price of ¤ 25,54.

All transactions between the different Group companies are at arm’s length.

29. SUBSEQUENT EvENTS

The Group is not aware of any other important events that could influence the financial statements closed on December 31st 2006.

�0�

6. ABBREVIATED STATUTORY ACCOUNTS OF DUVEL MOORTGAT NV

The statutory accounts of the parent company, Duvel Moortgat NV, are presented below in abbreviated version. In compliance with article 98 of the Belgian Company Code, the annual accounts, report of the Board of Directors and the statutory auditor’s report are filed with the Belgian National Bank. These documents are available free of charge upon simple request at the Company’s registered office. They will also be available at the Company’s web site. The statutory auditor’s report on the annual accounts was unqualified.

ASSETS 2006 2005 2004 In thousand ¤ In thousand ¤ In thousand ¤

NON-CURRENT ASSETS 76.237 61.291 59.230

I Start-up expenses 0 0 0II Intangible assets 376 278 359III Property, plant and equipment 33.796 29.804 29.311IV Financial assets 42.065 31.209 29.560

CURRENT ASSETS 31.598 32.690 26.686

VI Inventories 1.505 1.484 1.555VII Amounts receivable within one year 18.732 15.640 14.302VIII Short-term investments 3.998 8.722 6.043IX Cash 6.684 5.855 3.842X Deferred charges and accrued income 679 989 944

TOTALASSETS 107.835 93.981 85.916

LIABILITIES 2006 2005 2004 In thousand ¤ In thousand ¤ In thousand ¤

EQUITY 69.412 64.236 57.603

I Issued capital 12.696 12.676 12.648II Share premium 396 233 0IV Reserves 19.602 19.321 18.056V Retained earnings 36.714 31.996 26.884VI Investment grants 4 10 15

PROVISIONS AND DEFERRED TAXES 848 574 553

VII A Amounts payable after one year 695 407 377VII B Deferred tax liabilities 153 167 176

PAYABLES 37.575 29.171 27.760

VIII Amounts payable after one year 20.952 14.460 14.713IX Amounts payable within one year 16.225 14.418 12.780X Accrued charges and deferred income 398 293 267

TOTALLIABILITIES 107.835 93.981 85.916

FINANCIAL SECTION

ANNUAL REPORT 2006 DUVEL MOORTGAT�0�

INCOMESTATEMENT 2006 2005 2004 In thousand ¤ In thousand ¤ In thousand ¤

I Operating revenue 69.989 64.837 60.752II Operating expenses -56.658 -49.631 -49.410III Operating profit before financing costs 13.331 15.206 11.342IV Financial income 696 1.218 419V Financial expenses -1.274 -1.161 -1.046VI Profit on ordinary activities before tax 12.753 15.263 10.715VII Exceptional income 0 0 1VIII Exceptional expenses 0 -1.000 -30IX Profit for the period before tax 12.753 14.263 10.686IX bis A Transfer from deferred taxes 16 16 13IX bis B Transfer to deferred taxes -2 -7 -54X Income tax expense -3.933 -4.444 -3.788XI Profit of the year 8.834 9.828 6.857XII Transfer from tax-exempt reserves 26 26 21 Transfer to tax-exempt reserves -305 -1.289 -104XIII Profit for the period available for appropriation 8.555 8.565 6.774

APPROPRIATIONOFPROFIT 2006 2005 2004 In thousand ¤ In thousand ¤ In thousand ¤

A Profit available for appropriation 40.551 35.449 29.955 1 Profit for the period available for appropriation 8.555 8.565 6.774 2 Profit brought forward from previous financial year 31.996 26.884 23.181

B Withdrawal from shareholders’ equity 0 0 365 2 To reserves 0 0 365

C Transfers to shareholders’ equity 2 3 365 2 To legal reserves 2 3 0 3 To other reserves 0 0 365

D Retained earnings 36.714 31.996 26.884 1 Retained earnings 36.714 31.996 26.884

E Profit to be distributed 3.835 3.450 3.071 1 Dividends to shareholders 3.835 3.450 3.071

�0�

7. REPORT BY THE STATUTORY AUDITORS

To the shareholders of Duvel Moortgat nv :

We have audited the consolidated balance sheet of DUVEL MOORGAT nv. and its subsidiaries as of December 31st 2006, as well as the consolidated income statement, cash flow statement and notes to the accounts of Duvel Moortgat for the year ended. These consolidated annual accounts were prepared under the responsibility of the Company’s Board of Directors. Total assets on December 31st 2006 amounted to ¤ 134,604 (000) and the profit for the financial year to ¤ 10,692 (000).

Unqualified approval of the financial statements

The preparation of the consolidated accounts is the responsibility of the board of directors. This responsibility implies amongst others: elaborating, implementing and maintaining an internal control with regard to elaborating a true reproduction of the consolidated accounts that do not contain any abnormalities of material interest, as a consequence of fraud or error; choosing and applying the proper basis for financial reporting; making financial estimates reasonable under the circumstances.

It is our responsibility to express our opinion on these consolidated accounts based on our audit. Our examination was carried out in accordance with the “International Standards of Auditing” of the “International Federation of Accountants”. These standards specify that our audit must be planned and conducted in such a way as to produce a reasonable assurance that the consolidated accounts are free of material misstatement.

In accordance with these standards, we have examined the Company’s administrative and accounting systems and its internal audit system. We have examined sample documents to verify the accuracy of the amounts stated in the consolidated accounts. We have also examined the soundness of the accounting policies, consolidation principles, significant accounting estimates and overall presentation of the consolidated accounts. The Company’s management has replied clearly at all times to our requests for explanations and information. We consider that these examinations provide a reasonable basis on which to form our opinion.

Based on these examinations, it is our opinion that the attached consolidated accounts give a true and fair view of the assets and liabilities and the financial situation of Duvel Moortgat nv and its subsidiaries on December 31st 2006, together with the financial achievements of their of their activities and their cash flow for the year ending on this same date, in accordance with the “International Financial Reporting Standards”, as published by the International Accounting Standards Board (IASB).

Additional certifications

The preparation and content of the financial statements is the responsibility of the board of directors.

It is my responsibility to include in this report the following additional certifications which do not modify my audit opinions on the consolidated accounts. I am, however, unable to comment on the description of the principal risks and uncertainties which the group is facing, and of its situation, its foreseeable evolution or the significant influence of certain facts on its future development. I can nevertheless confirm that the matters disclosed do not present any obvious contradictions with the information of which I became aware during our audit.

Without prejudice to formal aspects of secondary importance, the consolidated annual account of the Duvel Moortgat Group is prepared in accordance with the International Financial Reporting Standards, as published by the International Accounting Standards Board (IASB) and its interpretations issued by the International Financial Reporting Interpretation Committee (IFRIC), as adopted by the European Union.

Haacht, March 30th 2007,De Roover & C° Statutory Auditors bvbaStatutory AuditorRepresented by Guy De Roover

FINANCIAL SECTION

ANNUAL REPORT 2006 DUVEL MOORTGAT�0�

1. Duvel Moortgat nv Breendonkdorp 58 2870 Puurs T +32 (0)3 860 94 00 F +32 (0)3 886 46 22 W www.duvel.com E [email protected] 2. Brewery Steendonk nv Breendonkdorp 58 2870 Puurs T +32 (0)3 886 71 21 F +32 (0)3 886 46 22 E [email protected]

Operating Address Steenhuffeldorp 3 1840 Steenhuffel T +32 (0)52 30 02 17 F +32 (0)52 30 41 67 3. Rodinný Pivovar Bernard as 5,kvetna 1, 396 01 Humpolec Czech Republic T +420 (0) 565 532 407 F +420 (0) 565 532 183 W www.bernard.cz E [email protected] 4. Sladovna Bernard as 5,kvetna 1, 396 01 Humpolec Czech Republic T +420 (0) 565 532 407 F +420 (0) 565 532 183 W www.bernard.cz E [email protected]

Operating Address Palackého 135, 664 61 Rajhrad u Brna Czech Republic T 420 (0) 5 472 300 31 F 420 (0) 5 472 291 34 W www.bernard.cz E [email protected] 5. Brewery Belâme ltd (Brewery Ommegang) 656 County Highway 33 Cooperstown NY 13326, USA T +1 (0) 607 544 1800 F +1 (0) 607 544 1801 W www.ommegang.com E [email protected]

6. Freya’s Deli Fruit nv Breendonkdorp 58 2870 Puurs T +32 (0)3 860 94 00 F +32 (0)3 886 46 22 7. Brasserie d’Achouffe Achouffe 32 6666 Wibrin - Houffalize T +32 (0)61 28 81 47 +32 (0)61 28 82 78 F +32 (0)61 28 82 64 W www.achouffe.be E [email protected] 8. Moortgat Horeca Services nv Breendonkdorp 58 2870 Puurs T +32 (0)3 860 94 28 F +32 (0)3 860 94 29

9. Moortgat Financial Services nv Breendonkdorp 58 2870 Puurs T +32 (0)3 860 94 00 F +32 (0)3 886 46 22

10. Eura - Drinks nv Breendonkdorp 58 2870 Puurs T +32 (0)3 886 71 21 F +32 (0)3 886 46 22 11. Brewer’s Special Beers eesv Zalmweg 27 4941 VX Raamsdonksveer The Netherlands T +31 (0)162 581 100 F +31 (0)162 523 385 E [email protected] 12. Duvel Moortgat France sarl 35 Chemin du Mas F 69370 Saint-Didier au Mont d’or, France T +33 (0)437 59 82 30 F +33 (0)478 66 15 65 W www.duvel.com E [email protected]

13. Duvel Moortgat USA, Ltd 21 Railroad Avenue #32 Cooperstown, NY 13326, USA T +1 607 544 1208 F +1 607 544 1801 W www.duvelusa.com E [email protected]

14. Groupement Bières Spéciales Geie 13 rue Pasteur F 62410 Bénifontaine France T +33 (0)3 21 79 39 39 F +33 (0)3 21 79 39 38 E [email protected] 15. Belgabar (UK) Ltd 134 - 146 Curtain Road Shoreditch, London EC2A 3AR UK T +44 (0)20 7729 7216 F +44 (0)20 7729 3893 W www.barmucichall.com E [email protected] 16. Force de Vente Service 13 rue Pasteur F 62410 Bénifontaine France T +33 (0)3 21 79 39 34 F +33 (0)3 21 79 39 38 E [email protected] 17. Duvel Moortgat UK Ltd 62 Wilson Street London EC2A 2BU UK

Operating Address 134 - 146 Curtain Road Shoreditch, London EC2A 3AR UK T +44 (0)20 7729 7216 F +44 (0)20 7729 3893 E nick.short@duvelmoortgat. co.uk 18. DRC sa 2, Rue Nicolas Bové L -1253 Luxembourg Luxembourg T +352 (0)22 73 43 1 F +352 (0) 22 73 47

8. ADRESSES AND FURTHER INFORMATION

�0�FINANCIAL SECTION

19. LFB Développement sa 8 Rue des Jardiniers F 54000 Nancy France T +33 (0)3 83 30 23 20 F +33 (0)3 83 30 23 21 W www.lesfreresberthom.com E developpement@ lesfreresberthom.com

20. LFB Expansion sas 8 Rue des Jardiniers F 54000 Nancy France T +33 (0)3 83 30 23 20 F +33 (0)3 83 30 23 21 21. LFB Strasbourg Sarl Les Tripiers 2 Place des Tripiers F 67000 Strasbourg France T +33 (0)3 88 32 81 18 F +33 (0)3 88 32 27 62 22. LFB Clermont-Ferrand Sarl L’étoile 6-8 Place de l’Etoile F 63000 Clermont-Ferrand France T +33 (0)4 73 31 01 65 F +33 (0)4 73 31 01 65 23. LFB Tours Sarl Comtours 5 Rue du commerce F 37000 Tours France T +33 (0)2 47 20 01 66 F +33 (0)2 47 20 40 04 24. LFB Grenoble Sarl Saint Hugues 1 Rue de Saint Hugues F 38000 Grenoble France T +33 (0)4 76 01 81 17 F +33 (0)4 76 01 96 56

25. LFB Nancy Sarl Stannancy 5 Rue Stanislas F 54000 Nancy France

26. Moortgat Immo Services nv Breendonkdorp 58 2870 Puurs T +32 (0)3 886 71 21 F +32 (0)3 886 46 22 27. Parallel nv Breendonkdorp 58 2870 Puurs T +32 (0)3 886 71 21 F +32 (0)3 886 46 22 28. L.D.V. Immo nv Breendonkdorp 58 2870 Puurs T +32 (0)3 886 71 21 F +32 (0)3 886 46 22 29. Espace Belge à Paris Geie Steenhuffeldorp 3 1840 Steenhuffel T +32 (0)52 30 94 81 F +32 (0)52 30 41 67 30. Duvel Moortgat Nederland Groenweg 21D 3981 CK Bunnik The Netherlands T +31 (0) 30 659 40 20 F +31 (0) 30 659 02 14

Responsible editorMichel Moortgat

Investor relationsMichel Moortgat

Realisation - productionFlink

PicturesJos L.Knaepen / ‘the jazzman’

Nederlandse versie op aanvraag.

annual report 2006 · 2012. 10. 31. · annual report 2006 duvel moortgat dear shareholder, 2006...

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