����

Passionfor

INNOVATION

Omega Pharma NV Venecoweg 26 B-9810 NazarethTel. +32 (9) 381 02 00

Investor Relations: Chris.vanraemdonck@omega-pharma.beE-mail: info@omega-pharma.be

website: www.omega-pharma.be

�������������������������

�����������

��������

�������������

Group profile 1Letter from the Chairman 3Letter from the CEO 5Historical Overview 6

A dynamic company in an attractive sector 9 Key figures 10 The OTC-market 14 Omega Pharma, a unique positioning 18 Strategy: sustainable and profitable growth 21

Information for shareholders 9 Basic information for shareholders 30 Information about the share 31 Corporate governance 37

Financial Statement 2008 57 Consolidated financial statement 2008 58 Stand-alone financial statement 2008 136

Tabel of contents

This document is a translation of the original version in Dutch. In case of doubt, the Dutch version prevails.

2

(1) All figures refer to the continuing operations

(2) Operating cash flow (EBIT+DA) before non-recurring items but after corporate cost

(3) From continuing operations

(4) Net result from continuing operations — non-recurring items (incl. currency exchange differences) and related tax

effects according to the effective tax rate.

(5) Calculated on the basis of the weighted average number of shares, after deduction of treasury shares..

(6) Net financial debt = current and non-current financial liabilities + current and non-current derivative financial

instruments – cash and cash equivalents

(7) Working Capital = trade receivables + inventories – trade payables

(8) Turnover reduced with trade goods and changes in inventories of finished goods and work in progress, as a percentage

of turnover

(9) Net financial debt as a percentage of total equity

Key figures

Consolidated IFRS figures (1) 2008 2007 Evolution in thousand euro 2008/2007

Income statement

Net turnover 811 283 789 302 +3%

Operating cash flow (EBITDA) (2) 130 148 125 554 +4%

Depreciations and amortization (DA) -21 672 -16 427 +32%

Non-recurring items -9 901 -23 133 -57%

Operating result (EBIT) 98 575 85 994 +15%

Financial result excluding non-recurring financial charges -35 827 -34 437 +4%

Non-recurring currency exchange differences -4 040

Result from ordinary activities before taxes 58 708 51 557 +14%

Income tax -7 900 -7 869 0%

Net result from ordinary activities 50 808 43 688 +16%

Net result from associates (24% participation Arseus) 3 569 2 106 +69%

Net result of the group (3) 54 377 45 794 +19%

Recurring net result from continuing operations (4) 66 442 65 396 +2%

Average number of shares (5) 23 673 785 25 799 638 -8%

Market capitalization on 31 December 650 137 1 250 019

Data per share, in euro

Recurring net earnings from continuing operations per share 2.81 2.53 +11%

Net result per share (3) 2.30 1.78 +29%

Gross dividend per share 0.60 0.50 +20%

Net dividend per share 0.45 0.375 +20%

Balance sheet data

Balance sheet total 1 417 253 1 326 699

Total equity before dividend 600 520 612 166

Net financial debt (6) 433 317 355 176

Working capital (7) 124 243 96 916

Key rates

Gross margin (8) 57% 57%

EBITDA (2) margin 16% 16%

Gearing (9) 72% 58%

3

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

1200

1000

800

600

400

200

0

23

IPO

178

star

t in

tern

atio

nali

zati

on

1007

Ars

eus

carv

e-ou

t

789 811

729

Consumer Health (OTC) Professional Health (Arseus)

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

0,6

0,4

0,2

0

0,02 0,025 0,0375

0,8

0,12

0,18

0,24

0,32

0,4

0,5

0,6

� �� �� �� ��� ��� 0 30 60 90 120 150

120,1

125,6

130,1

16%

16%

16%

20 15 10 5

2006

2007

2008

Gross dividend per share, in euro

(*) Operating result (EBIT) increased with depreciations and amortization, before non-recurring items and after corporate costin million euroas a percentage of the

consolidated turnover

Note: The data for 2006, 2007 and 2008 refer to the continuing operations (Consumer Health/OTC), excluding Arseus which was

carved-out in 2007).

From 23 to 811 million euro turnover since IPO

Annual dividend increase

Solid operating cash flow *

The core activities of Omega Pharma are comprised of the development, marketing, and sales of health and personal care products which can be obtained by the end-consumer without a medical prescription (Over-The-Counter, OTC).

From its strong position in Europe, and with a continued strategic focus on selected niche seg-ments, Omega Pharma intends to develop itself further — in a prudent, crafted, and systematic way — as a major player on the world OTC market.

Since its creation in 1987, Omega Pharma has built an impressive track record within that stra-tegic vision. Today, Omega Pharma has over 2,000 employees spread across almost 40 countries. These countries now include a significant presence in Europe, as well as in the Middle East, South-East Asia, and South America. This makes Omega Pharma one of the few companies dealing solely in OTC products that is poised to enter the worldwide Top Ten ranking in the over-the-counter medicines and personal care products market

The realization of this strategic vision will enable Omega Pharma to provide an ever larger group of consumer throughout the world with access to affordable quality products that can significant-ly contribute to a healthy lifestyle and well-being. In pursuing its vision, Omega Pharma presents itself as the preferred partner for the trade — and the pharmacist in particular — for whom the sale of OTC products represents an indispensable complement to the revenues from prescription medicines.

In its daily operations, the group pays attention to all who contributes to its mission: employees, customers, suppliers, shareholders and all other stakeholders. Entrepreneurship, ambition, cre-ativity, innovation, commitment, and mutual respect are highly valued when fulfilling this mission and vision.

Omega Pharma

1

2

Luc Zeebroek (born in Nieuwpoort, Belgium in 1956) has been working for over thirty years under the pseudonym Kamagurka and has gained a widespread reputation for his unique graphic and absurdist, often surrealistic style. His cartoons have been published in renowned media including The New Yorker (USA), The Independent and The Financial Times (United Kingdom), Die Zeit (Ger-many), Charlie Hebdo (France), NRC Handelsblad (the Netherlands), Humo and De Tijd (Belgium). In recent times, Kamagurka has also stepped out as a painter, with the business and commercial support of Marc Coucke, CEO of Omega Pharma. There are striking parallels between Kamagurka and Omega Pharma. Innovation and creativity are combined with both hard work and the convic-tion that one has to live one’s project intensively on a daily basis. The title of the painting above is also refers to Omega Pharma’s core activities: Wellness.

3

2008 in perspective

3

Letter from the Chairman

Dear Shareholder,

In March 2008, the Board of Directors decided to reappoint Marc Coucke CEO of the company. In the preceding months it had become evident that Omega Pharma was not able to fully achieve its objectives without the daily, creative, and inspiring leadership of its founder. Even with the excellent individual qualities of its existing members, the Executive Committee proved to be understaffed. For this reason — and after consultation with the Board of Directors — a number of uniquely competent managers who had left the company were re-included in the Executive Com-mittee.

At the same time, it was decided that this newly re-staffed Executive Committee would hence-forward directly steer the geographic divisions. In addition, the innovation capability was enhanced, thus accelerating the development and market introduction of a larger number of new products. The combination of both measures produced a significant improvement in the striking power of the company. Enhanced cooperation with Marketing and Sales led to a perfect transla-tion into sales successes. Thanks to the efforts and commitment of all staff members throughout every segment of the company, the decreasing turnover of the 2008 first quarter was transformed into growth during the second quarter and beyond.

The Board of Directors also decided to restrict acquisitions to smaller companies, with the es-sential criterion being that they should focus on the Group’s long-term product group perspec-tives and/or geographic markets where it was not operating before. Applying the same principles, small start-up organizations were created in a number of emerging markets.

In the third quarter, the global financial crisis necessitated a re-evaluation of these plans. From a financial point-of-view, it was first decided to slow down the purchase of treasury shares, and to eventually halt the program. On the other hand, the financial crisis offered opportunities to real-ize a number of acquisitions with better conditions than previously available.

By the end of the third and especially the fourth quarter, the global economy had entered a serious recession. Nevertheless, Omega Pharma was able to close out the year with a growth in turnover of 3 per cent and an increase in net profit of 19 per cent despite the fact that currency exchange differences began to weigh heavily on performance as the year was nearing its end. That Omega Pharma has succeeded in growing its turnover with high-value products deserves spe-cial attention. This resulted in a slightly increased gross margin. EBITDA growth was also slightly above the increase in sales. This is a great performance, for which all staff of Omega Pharma deserves praise.

In 2009 — and quite possibly also during several years to follow — it promises to be difficult times for all companies world wide. The chances for success of each company will be determined by a number of factors, including the sector in which they are operating, the competence and the drive of its staff, and its financial resilience. Omega Pharma is operating in a sector with great opportunities for the future. The quality of its staff is excellent. Our financial structure is based on long-term credit facilities, for which all rates are in line with covenants. Nevertheless, the

4

Board of Directors and the Executive Committee consider the strict management of working capi-tal to be an absolutely top priority. Consequently, a vigorous cost savings plan has been initiated under the direct responsibility of the CEO. All managers in the organization — in the geographic divisions as well as in Corporate — should realize that the crisis implies a unique opportunity and challenge to prove their individual worth. They must be constantly aware that they hold the entrepreneurship and competence within them to achieve more at less cost.

Omega Pharma has sufficient assets to successfully get through this crisis. Even in the current economic climate, one can expect the market for health and personal care products to persist in high-welfare countries and to continue growing in emerging markets. Omega Pharma has an exceptional, extended product range with a tremendous price/quality ratio. In several large product categories, the company has the potential to become — or already is — the international market leader. In a considerable number of product categories, it is a strong local player. This mix of global and local strengths enables Omega Pharma to win market share in all of its market segments.

On the buy side, the group should remain alert and ready for strong action towards it suppliers, thus enabling the continuation of the increase in the gross margin. Internally, scrupulous cost containment should lead to a growth in EBITDA. Strict financial management will keep the work-ing capital under control.

Omega Pharma has the advantage that its commercial operations are managed in-house in all countries where it is present. The company sells its enormous assortment of consumer products to a very broad customer base, which implies that debtor risk is very well and evenly spread.

In ten year’s time, Omega Pharma has grown from a small local player into a prominent listed company with international operations, a turnover of over 800 million euro and 600 million euro in equity. This success can be attributed to a creative and daring sense of entrepreneur-ship, sharp business instincts, financial insight, and exceptional passion. Omega Pharma has not

become a cumbersome bureaucratic machine and is still characterized by the versatility, the adaptabil-ity, and the dynamism of an independent entrepre-neur. Also for these reasons, the Board of Directors wants to increase the dividend by 20% to 0.60 euro gross per share, thus expressing its commitment to the shareholder.

We must still — and most certainly can — achieve a great deal in optimizing our efficiency and perform-ance. The Board of Directors, the Executive Com-mittee and all staff are not only fully aware of this, but are also demonstrating the aggressive attitude to turn this potentially negative situation into suc-cessful achievements.

Lucas LaureysChairman of the Board of Directors

5

Letter from the CEO

Dear Shareholder,

Omega Pharma can be reasonably pleased when looking back on 2008. Great performances in the field of innovation, synergy, and geographic expansion were diluted at the end of the year by the weak worldwide macro-economic environment. Ultimately, a satisfactory result was achieved in terms of turnover and profitability.

In 2009, we at Omega Pharma will remain faithful to our fundamental strengths: the relation-ship with our customers and consumers, the innovation within existing and with new brands, the synergetic enhancement of our local structures, and low risk geographic expansion. Considering the limited visibility, continuous attention has to be paid to operational excellence, mainly focus-ing on decreasing the cost basis and improving the working capital. This should enable Omega Pharma to generate major free cash flows in 2009.

I want to express my sincere gratitude to all stakeholders for their performance and their com-mitment in 2008 and I trust they will use their talents to achieve the ambitious objectives for 2009 with equal effort and vigorousness.

Marc Coucke CEO

6

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1999 2001 2003 2004 2005 2006 2007 2008

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2008

Omega Pharma is founded by two pharmacists, including Marc Coucke, the current CEO.

The Company starts selling chemical raw materials for in-pharmacy preparations.

Management buy-outby Marc Coucke.

One-for-ten share split.

Creation of Fagron.

Creation of Omega Medical.

Creation of Arseus as an independent division.

Initial Public Offering (IPO) of Arseus.

Creation of Omega Dental.

Creation of OmegaSoft.

Start of acquisition processes on the Belgian home market.

With the slogan “by pharmacists, for pharmacists” the founders of the company began to build a Consumer health organization in wich the relationshipwith the pharmacists plays a major role.

Initial Public Offering (IPO).

Arseus carve-out and IPO.

Inclusion in the Bel20 index.

Expansion into the CEE and CIS through the acquisition

of Bittner Pharma.

Expansion into Portugal.

Expansion into Greece.

Expansion into France through the acquisition of Pharmygiène.

Start of the internationalization process.

Acquisition of Chefaro, the OTC division of Akzo Nobel, with operations in the UK, Spain, Germany and the Netherlands.

Acquisition of Wartner Europe.

Acquisition of 60 OTC brands

from Pfizer.

Expansion into Italy and Scandinavia via acquisitions.

Inclusion of Silence in the brand portfolio through

the acquisition of Persee Médica.

1987 20001998

2007

2002

Enhanced focus on innovation. Continuation of growth strategy through smaller acquisitions and

start-up initiatives that serve as platforms for future growth

in the emerging markets.

Historical Overview

From five litres containers shampoo in the pioneering years to modern products for personal care with an excellent price/quality ratio in 2009.

7

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1999 2001 2003 2004 2005 2006 2007 2008

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2008

Omega Pharma is founded by two pharmacists, including Marc Coucke, the current CEO.

The Company starts selling chemical raw materials for in-pharmacy preparations.

Management buy-outby Marc Coucke.

One-for-ten share split.

Creation of Fagron.

Creation of Omega Medical.

Creation of Arseus as an independent division.

Initial Public Offering (IPO) of Arseus.

Creation of Omega Dental.

Creation of OmegaSoft.

Start of acquisition processes on the Belgian home market.

With the slogan “by pharmacists, for pharmacists” the founders of the company began to build a Consumer health organization in wich the relationshipwith the pharmacists plays a major role.

Initial Public Offering (IPO).

Arseus carve-out and IPO.

Inclusion in the Bel20 index.

Expansion into the CEE and CIS through the acquisition

of Bittner Pharma.

Expansion into Portugal.

Expansion into Greece.

Expansion into France through the acquisition of Pharmygiène.

Start of the internationalization process.

Acquisition of Chefaro, the OTC division of Akzo Nobel, with operations in the UK, Spain, Germany and the Netherlands.

Acquisition of Wartner Europe.

Acquisition of 60 OTC brands

from Pfizer.

Expansion into Italy and Scandinavia via acquisitions.

Inclusion of Silence in the brand portfolio through

the acquisition of Persee Médica.

1987 20001998

2007

2002

Enhanced focus on innovation. Continuation of growth strategy through smaller acquisitions and

start-up initiatives that serve as platforms for future growth

in the emerging markets.

Historical Overview

8

ANTI-SNORING Spray

9

A dynamic company in an attractive sector

Key figures 10

The OTC-market 14

Omega Pharma, a unique positioning 18

Strategy: sustainable and profitable growth 21

Omega Pharma at a glance

Consolidated figures in EUR million (and %)

Turnover

2008

Contribution to the 2008 consolidated group turnover

10

The Group• Over 2,000 employees• Operating directly in almost 40 countries

Evolution

EBITDA

2008 Evolution2008

margin

Employees (full-time equivalents)

2008 2007

Belgium 25%

Rest Of World 21%

Southern Europe 18%

Northern Europe 13%

France 23%

Western Europe 88%

Emerging markets 12%

Omega Pharma Belgium 205.0 +3% 29.7 14.5% +26% 273 261

Omega Pharma France 187.4 -2% 19.4 10.4% -8% 503 549

Omega Pharma Northern Europe 102.0 +3% 25.2 24.7% -2% 163 160

Omega Pharma Southern Europe 147.6 +3% 22.0 14.9% -21% 333 288

‘Rest Of World’ 169.1 +8% 43.8 25.9% +13% 703 552

OTC operational 811.3 +3% 140.1 17.3% +2% 1 975 1 810

Corporate expense -10.0 +12% 68 71

Omega Pharma (OTC) 811.3 +3% 130.2 16.0% +4% 2 043 1 881

Omega Pharma Belgium• The only organization within the group that is active in both OTC and generic medicines (approximately 1/3 and 2/3 of the turnover respectively)• Number 2 in the Belgian OTC market, with a markets share of approximately 5%• Strategic partnership with Eurogenerics for the distribution of generic drugs. Number 1 in the Belgian generic market, with a market share of approximately 60%

Omega Pharma France• Number 3 in the French OTC market with a market share of approximately 4%• Numerous international brands originate in France including XLS, Para, Silence, T. LeClerc, Innoxa, and Phytosun Arôms, among others• Since the summer of 2006, the organization has a fully integrated structure, with three sales divisions, each specialized in a specific area

Northern Europe• This segment includes the Omega Pharma operations in the four Scandinavian countries (ACO Hud) and Germany (Deutsche Chefaro)• Strong focus on dermocosmetic products, for which the Swedish lab often acts as development centre for the entire group• The German organization also benefits from the expertise that ACO Hud has established in this area

Southern Europe• This segment includes the Omega Pharma operations in Cyprus, Greece, Italy, Portugal, Spain, and Switzerland• There is a strong level of cross-selling of products and brands between the various countries in this region

Rest of World• This reporting segment refers to the operations in Austria, Ireland, the Netherlands, and the United Kingdom, and countries in Central and Eastern Europe (including Russia and Ukraine)

11

5 Reporting segments

12

Geographic expansion

12

9

3431

33

32

1. Belgium 2. Luxemburg 3. France (187.4 m turnover, 183 in Sales)4. Sweden (40.5 m turnover, 7 in Sales)5. Norway (11.7 m turnover, 7 in Sales)6. Denmark (5.4 m turnover, 3 in Sales)7. Finland (6.2 m turnover, 6 in Sales)8. Germany (38.2 m turnover, 46 in Sales)9. Portugal (19.3 m turnover, 12 in Sales)10. Spain (43.3 m turnover, 71 in Sales)11. Italy (52.4 m turnover, 50 in Sales)12. Greece 13. Cyprus 14. Switzerland (8.6 m turnover, 8 in Sales)15. Netherlands (50.3 m turnover, 21 in Sales)16. United Kingdom (25.6 m turnover, outsourced)17. Ireland (3.1 m turnover, 5 in Sales)18. Austria (2.6 m turnover, 2 in Sales)

19. Russia (33.3 m turnover, 103 in Sales)20. Ukraine (24.4 m turnover, 88 in Sales)21. Belarus (0.1 m turnover, export)22. Poland (4.8 m turnover, 20 in Sales)23. Estonia (3.3 m turnover, 11 in Sales)24. Latvia (with Estonia)25. Lithuania (with Estonia)26. Hungary (1.9 m turnover, 4 in Sales)27. Czech Republic (2.9 m turnover, 12 in Sales)28. Slovakia (0.3 m turnover, 4 in Sales)29. Romania (0.5 m turnover, 12 in Sales)30. Turkey (0.2 m turnover, 13 in Sales)31. Australia (3.4 m turnover, 10 in Sales)32. New-Zealand (0.7 m turnover, 2 in Sales)33. India (start in 2009)34. Argentinia (0.5 m turnover, 2 in Sales)

Varia export (11.4 m turnover)

In a period of eight years, Omega Pharma has transformed itself from a local Belgian company into a group with operations in close to forty countries. For each country in the list, the turnover 2008 is indicated (in million euro), followed by the number of staff in the sales teams (represent-atives, merchandisers; key account managers, telesales operators)- in total over 800 employees. On a regular basis they visit about 80,000 pharmacies and other point of sales, which represent the vast majority of the total market value.

(205.0 m turnover, 91 in Sales)]

] (24.0 m turnover, 81 in Sales)

13

active since 1987

first presence between 2000 and 2004

present since 2007

present since 2008 or scheduled for 2009

12

3

4

6

7

8

10

11

13

12

14

15

16

17

18

19

20

21

22

23

24

25

26

5

27

28

29

30

14

The OTC market

14

OTC, a definition

Omega Pharma is active in the market of health and personal care products to which the end-consumer has access without a medical prescription. Often, these products are referred to as ‘Over-The-Counter’ (OTC) because they can be sold to the end-con-sumer without specific restrictions. Some-times these items may also be referred to as ‘Health and Personal Care’ (HPC) products. It concerns products:• That support health and that contribute to the ‘feel-good’ experience of the consumer• That are available without a medical pre-scription• That are mainly sold in pharmacies, but also in natural food shops, drug stores, and health centres• That comply with a number of legal requirements related to efficacy, safety, and/or purity, though not to the same extent as prescription-only medicines• That cover various categories, including nutritional supplements, personal care and hygiene products, and medical devices for minor ailments.

A market with a promising future

A number of factors create favourable per-spectives for this market.

• An ageing population implies increasing medical needs, which can be addressed to a large extent with OTC products.

• The contemporary life style. While the incidence of welfare ailments is increasing, there is also a growing attention to youthful-ness, healthy life style, and enjoyment. We all want to feel good and we also want to look good longer.

• The consumer decides. In general, the consumer is becoming better informed and more vocal. They want to take their health into their own hands, and therefore look more favourably on OTC products.

• A new middle class. In the emerging mar-kets there are a growing number of consum-ers that have joined the middle class and have sufficient income for spending part of it on health care and beauty.

• Supportive regulation. In many countries, government attempt to save on the co-pay-ment of prescription medicines, and there-fore facilitate the access to OTC products. Pharmaceutical products are more easily subject to status switches (Rx-to-OTC), and a centralized authorization system facilitates the market introduction of OTC products in several countries at a time.

• Wider distribution. OTC products are increasingly making their way into various sales outlets beyond the pharmacy chan-nel, even though the latter still remains the reference in continental Europe.

• Increased attention from the pharma-cist. The pharmacist is confronted with decreasing income from prescription-only medicines for which the government-funded social security systems provide co-payment. The pharmacist realizes that this decrease needs to be compensated by the turnover from other products, and therefore pays more attention to OTC health- and personal care products.

1515

A substantial market with continued growth

Since there is no unequivocal definition of OTC products, the value of the world market for OTC products may differ according to the source of the applied methodology. On average, the global OTC market, expressed in consumer prices, is estimated at 50 to 75 billion euro. While the European OTC market represents over one third of the global mar-ket, the regional markets in South-East Asia and Latin America demonstrate the fastest growth. The growth of the European market is occurring primarily in Central and Eastern Europe.

A few main categories and numerous niche segments

The main product categories in the OTC market are: (1) products against coughs and colds, (2) pain relief products, (3) vitamins, minerals, and nutritional supplements, (4) products against gastro-intestinal disorders, (5) skin care products, but also anti-allergy products and smoking cessation therapies. These categories represent over two thirds of the total market. Beside the main catego-ries there are numerous smaller segments for specific disorders and ailments including anti-mosquito products, slimming products, and home diagnostics.

Europe 36%

North America 22%

South-East Asia/China 12%

Japan 10%

Latin America 10%

Others 10%

Global OTC market 50 billion euro Main OTC-segments

Other 26%

Skin care 9%

Digestive 14%

Vitamines Minerals

Food Supplements 15%

Analgesics 17%

Cough/cold 19%

1616

A small top in a frag- mented market that is concentrated on the main categories

The major participants in the global OTC markets are primarily OTC divisions of major pharmaceutical companies, complemented by a number of multinational corporations that approach the OTC market from the Fast Moving Consumer Goods sector (FMCG). These large organizations focus almost exclusively on the larger product segments, in which they enter into mutual competi-tion. In recent years, these companies have begun giving a greater strategic importance to their OTC operations. At the other end of the spectrum, there are numerous smaller national companies which operate almost exclusively in their home markets and con-centrate mainly on dermocosmetic products and smaller market segments.

OTC sales

Group in 2008 %

(OTC-division) (M EUR) of total Major Brands

Johnson & Johnson 12 683 26% Immodium, Neutragena, RoC, Listerine...

Procter & Gamble 11 517 18% Oral-B, Prilosec OTC, Vicks, Actonel

Novartis 4 592 14% Voltaren, Lamisil, Maalox, Nicotinell, Ciba-Vision

GlaxoSmithKline 4 448 18% Alli, Aquafresh, Gaviscon, Nicorette, Zantac

Bayer 4 703 14% Aspirine, Supradyn, Canesten

Wyeth 2 150 12% Advil, Alavert, Caltrate

Reckitt Benckiser 1 884 26% Clearasil, Dettol, Nurofen, Strepsils, Mucinex

Boehring Ingelh. (‘07) 1 100 10% Antistax, Bisolvon, Buscopan, Pharmaton

Taisho 1 221 61% Avalon, Lipovitan D, Livita, Pabron

Pierre Fabre 1 118 68% Klorane, Avène, Galénic, Elancyl, Nicogum

Schering-Plough 1 008 6% Claritine, Coppertone

Bristol-Myers Squibb 914 6% Enfamil, Expecta

Sanofi-Aventis not available Aspégic, Thinatiol, Hexomedine

Omega Pharma 811 100% Wartner, XLS, Paranix, Silence,...

SSL International 535 89% Durex, Scholl Footcare

Chattem 359 100% Icy Hot, Gold Bond

Arkopharma 224 100% 4-3-2-1 Minceur

The turnover figures are based on the data included in the annual reports and /or press releases of the corresponding companies, transformed into euro where relevant at the currency exchange rates of early March 2009.

1717

Distribution on the move

In Europe, OTC products are traditionally sold in the pharmacy — with the traditional exceptions of the Netherlands and United Kingdom, where OTC products are mainly distributed through the drugstore channel.

The growing success of OTC products and the increasing importance that the consumer attaches to self care are but two factors to explain why OTC products benefit from wid-ening distribution and why they can increas-ingly be bought in parapharmacies, health centres, and natural food and alternative health care shops. Although the pharmacist will continue to play a central role in the coming years, the slow trend to a multi-channel distribution has undeniably been initiated.

The pharmacy channel remains highly fragmented, with an estimated 120,000 pharmacy outlets in Western Europe and approximately 100,000 in Eastern Europe. While the emergence of chains is not a new phenomenon, it remains relatively limited. Initially, cooperative organizations played a leading role in forming pharmacy chains, but over the last couple of years, other compa-nies including OPG and Celesio have started to build smaller pharmacy chains within the scope of their vertical integration strate-gies. On average, pharmacy chains represent less than 10% of the total pharmacy outlet universe in a given country. In the drug store channel (in the Netherlands and the UK), integrated chains have gained a strong pres-ence over the years. Because of their size, integrated chains have a strong negotiating power, which leads to some impact on the gross margin for OTC products. On the other hand, integrated chains require a less exten-sive sales organization than for a fragmented pharmacy market, thus levelling out the impact on the net margin.

Regulation and deregula-tion: critical mass is important

The growing importance of the OTC sector has led to increased activity in legislation.

On the one hand, one can distinguish a trend for deregulation, facilitating access for consumers to OTC products. The remaining distribution monopolies in specific countries, including Sweden, will come to an end in the near future. Restrictive ownership and implantation measures for pharmacies, such as those in Germany, will be more and more questioned. The central market authoriza-tion system and the mutual recognition be-tween European member states both enable and accelerate the market introduction of new OTC products. Companies that are or-ganized on a European scale can in particular benefit from these trends.

On the other hand, there is a trend for more regulation at the product level. Even OTC products which do not require offi-cial registration as medicinal products are increasingly subject to specific conditions before the manufacturer can communicate a claim regarding their effectiveness. In the future, one may have to support a com-mitted outcome with the results of clinical studies. Even though these studies cannot be compared to the exhaustive clinical trials for prescription medicines, this trend may become a financial obstacle for smaller na-tional companies of insufficient scale.

1818

Omega Pharma, a unique positioning

• 100% OTC. Since the carve-out of Arseus in October 2007, Omega Pharma can now focus entirely on consumer health products. Omega Pharma is one of the few companies dealing solely in OTC products and is poised to enter the worldwide Top Ten ranking in this promising market. All other companies in the Top 10 refer to divisions of international companies for which their OTC operations represent only 5% to 20% of their consoli-dated group turnover.

• Network to pharmacists and trade. Precisely because the core activities of Omega Pharma are entirely situated in OTC, the company has developed extensive sales organizations to pharmacies and trade. In many countries, Omega Pharma has the largest sales team in the pharmacy channel. This enables Omega Pharma to implement a push/pull marketing strategy, thus combin-ing its strong presence at the point-of-sale with a direct communication aimed at the end-consumer. Companies that do not focus entirely on the OTC market are often less inclined to invest in such a network.

• Big in niche segments. Almost all major companies concentrate their OTC operations in the largest market segments where they stand in mutual competition. Omega Pharma, on the other hand, opts for a strong position in selected niche segments. As competition in those segments consist mainly of local companies — different for each country — Omega Pharma can deploy its multination-al striking power optimally.

• OTC-driven innovation and synergy. Omega Pharma is convinced of the power of permanent innovation. To the company, in-novation means much more than developing an OTC version of a previously prescription-only medicine. At Omega Pharma, innovation refers to genuine OTC innovation. In-home product development is a major source of innovation, and is complemented with licens-ing and cooperative agreements with other organizations and companies. In the past, Omega Pharma has also expanded its product and brand portfolio through acquisitions with major innovative products like Wartner (anti-wart) and Silence (anti-snoring).

Unique in four areas

1919

Horizontal organization and strong entrepreneurial culture

The strength of Omega Pharma is also em-bedded in its entrepreneurship, its speed in decision-making, and its flexibility. These are all factors that enable us to anticipate or benefit from rapidly changing environmental and economic situations. This strength is closely related with the relative horizontal organizational structure of the group.

The daily management is delegated by the Board of Directors to the Executive Com-mittee, which consists of six persons. They direct — as a team — the entire organization with its operations in almost 40 countries. Each Country or Regional Manager reports directly to one of the six members of the Ex-ecutive Committee. This horizontal structure enables a fast decision-making process, and moreover offers far greater sensitivity to the underlying basics, the market, and the end-consumer.

Country Managers traditionally have a high degree of autonomy in the Omega Pharma organization. In close deliberation with their local teams, they can more accurately define the big lines for their business, marketing, and sales policy. Local initiatives are also be-ing complemented by projects and strategies developed by the Corporate organization.

The high degree of local autonomy however also implies a proportionally high degree of responsibility for meeting the budgeted objectives. Sales growth, profitability (ex-pressed as recurring operating cash flow), and working capital management are the three main instruments for evaluating and steering the Country Managers.

This company culture assures that initiatives — at every level: central and local — are being encouraged and that performance is adequately rewarded. The horizontal structure also creates the ideal environment in which successful local initiatives can be transferred very quickly to other countries when appropriate. The success of a project in a lead country is indeed often the best motivator for the Country Managers of the other countries to adapt this project to their markets and then roll it out.

Each Country or Regional Manager reports directly to one of the six members of the Executive Committee.

2020

Focussing on strengths

Omega Pharma focuses on those activities and competency in the OTC value chain where it excels or enjoys special strengths.

• Product development. Innovation is cru-cial in the OTC sector. While new concepts are to a significant degree developed inter-nally, externally originated ideas also receive appropriate attention. Omega Pharma builds strong relationships with various parties that encourage innovation such as university centres and specialized product developers. Innovations are being continuously being integrated through externally developed acquisitions, licensing agreements, and com-mission deals.

• Marketing. Omega Pharma can rely on over twenty years of experience in the marketing of OTC products. Ample marketing talent is available within the organization in each of the various countries.

• Sales. Omega Pharma is one of the rare OTC companies that is capable of imple-menting a powerful push/pull strategy. The strong sales teams for the pharmacy and drugstore channels represent one of the unique pillars of the group.

Omega Pharma has opted for a mixed model in the field of manufacturing and logistics. Approximately three quarters of Omega Pharma’s products are manufactured by third parties. The highly varied product assortment of Omega Pharma requires a thorough specialization in several manu-facturing techniques, and it is not always profitable to invest in each technique. For important product forms, however, Omega Pharma does have its own manufacturing plants, which work almost exclusively for the group. In Belgium, the Omega Pharma plants are located in Zwevegem and Opglabbeek (mainly medicines and anti-insect prod-ucts). In France, the group has four plants: Plélo (aroma therapy products, cosmetics, and related products), Marseille (aerosol products), Largentière (liquid products and compressed tablets), and a smaller site in Breuil sur Couze (medical water). In addi-tion, the group has a manufacturing plant in Rotterdam, the Netherlands (including XLS slimming products in tablet form), in Feld-kirchen, Austria (products based on plants and herbs), while the procurement platform is situated in Finglas, Ireland. The physical distribution of the products to the trade and the pharmacies is also entirely or partially outsourced in each of the various countries. Often, the traditional pharmaceu-tical wholesalers play a major role in this area.

2121

Strategy: sustainable and profitable growth

Three key components

• Build on the unique positioning in OTC. Omega Pharma intends to use its unique posi-tioning in the OTC market for pursuing struc-turally sustainable and profitable growth.

• Grow. The strategy of Omega Pharma is in essence a growth strategy. Sales growth can stem from continuous innovation or can be based on the price/quality ratio of its product. Synergy potential within the group offers additional growth opportunities. Successful products from one country can be rolled out into another. Finally, Omega Pharma also intends to grow by entering new geographic markets and introducing its strongest brands on these new territories.

• Generate free cash flows. The high gross margins of OTC products imply a huge capac-ity to generate free cash flow, which is a pillar in Omega Pharma’s strategy.

Embedded in the product and brand strategy

• Star Brands combined with strong local brands.

• Brand enlargement and brand integration.

• Roll-out and cross-selling.

• A similar approach is valid for other branded products beside the Star Brands.

• Well-considered brand positioning.

• Product mix.

• Passion for innovation.

In 2008, the traditional XLS range of slimming products was complemented with an assortment of low-calorie snacks.

Passion for brands

Star Brands combined with strong local brands. Both brand categories represent an essential component of the brand portfolio in each country. The Star Brands are centrally managed and are generally the innovation leader in a specific niche segment. The inherent economies of scale yield high gross margins. By increasing the relative weight of the Star Brands in the group turnover, we can also further improve the average gross margin. The Star Brands currently represent about a quarter of the consolidated turnover. This implies the availability of strong local brands in each country to assure a balanced mix in turnover. In many respects, the OTC market is still determined by local factors and Omega Pharma has many local brands with a strong reputation built over the years. Often, these brands are either well-situated in niche segments or are well-positioned in other ways.

2424

Star Brands

Wartner. Wartner is the biggest European OTC brand for easy-to-use products to re-move warts from hands and feet by freezing. The brand was acquired in 2004 by Omega Pharma. By 2007, it was introduced on the market in almost every country where the group is operating. In addition, Omega Pharma assures continuous innovation, and has therefore developed a specific version for removing warts on feet (verrucas), as well as a new device that assures a totally pain free treatment. In 2008, Omega Pharma introduced this brand in its initial Central and Eastern Europe markets — a successful process which is set to be continued through-out 2009 and 2010.

Para. Para is the umbrella brand for all anti-insect products of Omega Pharma, with Paranix as the star player in this product category. Paranix is a European top brand for products against head lice. When Paranix was introduced on the market less than a decade ago, it was the first anti-head lice product that did not contain pesticides. Paranix forms a silicon cocoon around the insect which suffocates them. It is effective with just one treatment and safe for children. Omega Pharma followed an identical strategy with Paranix as it did for Wartner: continu-ous innovation, combined with geographic roll-out. Building on the success of Paranix, the suffix Para is now also applied for the anti-mosquito brands of the group (Parazeet) and the recently developed product against dust mite allergy (Paradust).

XLS. The XLS slimming products have their origin in France and today these nutritional supplements are also available in Belgium, Germany, Greece, Italy, Portugal, and Spain. This cross-selling strategy is continuing in 2009, with the scheduled introductions in Austria, Poland, and the Ukraine among oth-ers. In addition, the XLS assortment has been widened step-wise to include low-calorie food (XLS Nutrition) and anti-cellulite prod-ucts (XLS Cellulase).

Silence. This anti-snoring product has been part of the Omega Pharma brand portfolio since April 2007. It was initially only avail-able in France. Since that time, this innova-tive product has been successfully launched in approximately twenty countries, and this number is poised to grow to about thirty by the end of 2009. At the same time, Omega Pharma will widen the Silence range with other health products to encourage healthy sleep.

Predictor. The high brand awareness of Predictor is based on the fact that, in 1971, it was the very first pregnancy test to be used by the consumer without requiring the intervention of a doctor. Continuous innova-tion has characterized Predictor ever since. Beginning in 2006, the Predictor brand was expanded from pregnancy tests to include other auto-diagnostic products (ovulation meters, body temperature meters, and blood pressure meters, among others). Local distribution agreements have already made Predictor one of today’s strongest brands in many Emerging Markets where Omega Pharma has not as yet established full operations.

2525

Continuation of geographic expansion strategy

• Well-considered. From 1987 to 1999, Omega Pharma focussed exclusively on the Belgian home market. From 2000 onwards, the company started its internationalization process. This took the company to almost every Western European country by the end of 2004. Early in 2007, the group unlocked the gate to Central and Eastern Europe and in 2008, a number of low-risk projects were initiated in other international regions.The business model of Omega Pharma ap-pears to be quite unique for the OTC market in other regions as well. In these territories, niche segments often offer attractive per-spectives, and Omega Pharma should also be capable of building a leading position with its top products in selected niche segments there as well. This will obviously create ad-ditional economies of scale.

• Emerging Markets. In the European OTC market, where growth has somewhat slowed over the last few years, Omega Pharma intends to consolidate its position through continuous innovation. In other regions beyond Europe, the OTC market appears to be gaining momentum over the past several years. Omega Pharma is particularly inter-ested in Central and Eastern Europe, the Commonwealth of Independent States (CIS, the former USSR states), South-East Asia and the Pacific region, Southern America, and the Arabian Gulf states. In these regions, a growing middle class is emerging, that is ca-pable of and willing to spend a portion of its disposable income on health and beauty. This offers attractive perspectives for the intro-duction of various Omega Pharma products in these markets.

• Create platforms. In 2007 and 2008, theseEmerging Markets represented respectively 11% and 12% of the consolidated turnover of Omega Pharma. At this stage the contribu-tion as such is not the most important factor, but rather the fact that Omega Pharma is building platforms for future growth in these markets. In September 2008, Omega Pharma announced the acquisition of four rela-tively small companies which will become the platform for their respective markets. In addition to Altermed (Czech Republic, Slovakia), it acquired Interdelta (Switzer-land), Aurora (Australia, New-Zealand), and 0+A (Hungary). The latter three were already local distributors of Wartner and a number of other brands prior to their acquisition. At that time, Omega Pharma notified stakehold-ers that it had initiated the creation of local offices in Singapore. Since that time, further initiatives have been taken to assure a direct presence in Argentina, Romania, and Turkey.

• Explore manufacturing in low-cost coun-tries. The 50/50 joint-venture with Modi Mundipharma in India, announced at the same time, also fits into this strategy. The joint-venture, which has been created in the mean time, will launch eight Omega Pharma products on the Indian market by end 2009 and early 2010. Modi Mundipharma will take care of the local manufacturing of the selected products, ac-cording to European quality standards.

• Low risk, great opportunity. All afore-mentioned initiatives have been taken at a low investment cost and are characterised by their low-risk profile. While the additional turnover may remain relatively limited in the short term, these initiatives may evolve into major growth drivers over time.

2626

Strategic accents for 2009

• Recession. It appears that 2009 will be-come a difficult year for the general econo-my worldwide. This fact has been taken fully into account for the implementation of the above mentioned strategies.

• Organic growth. Despite the challenging economic conditions, Omega Pharma holds the opinion that a slight growth in turnover is a realistic objective for 2009. In 2009, Omega Pharma can introduce its products to markets where it has built new platforms in the course of 2008. While the recession may cause a lower and perhaps slower penetra-tion of these new markets, every singly euro of turnover that is generated here represents a contribution which could not be made in 2008. The cross-selling of products among various countries remains important, while the Star Brands will be further rolled-out to new geographic markets (chart).

In the current context, extra attention will be paid in the product mix to brands with a ‘value-for-money’ positioning. Brands like Bodysol in Belgium and Claire Fisher in Ger-many are the equivalent of the best price/quality ratio for dermocosmetic products in the pharmacy channel. This positioning may prove an important asset in times of weakening consumer confidence. The long-term partnership with Stada for the Belgian distribution of generic drugs of the Euroge-nerics subsidiary is also a major factor in the current recession. Generic products are considerably cheaper per se than branded prescription drugs and therefore have an anti-cyclical nature.

The company will also continue its innova-tion strategy and will maintain its regular level of marketing efforts — expressed in quantity and intensity, though not in cost.

• Extra focus on free cash flow. Each recession offers an opportunity for purifica-tion, enabling the company to prepare itself for harvesting the fruits once the economy resumes its growth. Omega Pharma makes optimal use of the recently occurred defla-tion for various services that are important for the group’s operations. This vigorous cost reduction program should yield at least 30 million euro of savings. Approximately two thirds stems from the deflation of marketing services, including promotion and advertis-ing expenses. For an equal or even slightly higher consumer reach (expressed in Gross Rating Points), prices have dropped con-siderably recently. Furthermore, Omega Pharma intends to save on expenses related to seminars, travel, company cars, mobile phones, et cetera. Personnel charges are always a point of attention, but for 2009, no major restructurings with related heavy social plans are scheduled. Omega Pharma intends to improve its working capital along with its cost reduction program. In the first half of 2008, the company was intentionally more flexible in this area, enabling to swiftly translate the innovation strategy into sales growth. In 2009, the traditional vigour will be reinstalled. As an alternative to support sales, the group intends to reinvest potential savings from the procurement of products into additional promotional actions.

Over the past years, a significant portion of the free cash flow has been appropriated for acquisitions or for share buy-back programs. Although the Board of Directors will analyse all options on a regular basis, debt reduction appears to be the most appropriate option at this time.

2727Russia (a)

Baltics (a)

Poland (a)

Ukraine (b)

Austria (a)

Romania (b)

Czech Republic (a)

Slovakia (a)

Hungary (b)

Turkey (b)

Australia (a)

New-Zealand (a)

Jordan (a)

Iran (b)

Saudi Arabia (b)

Arab. Emirates (b)

Singapore (a)

Malaysia (a)

Czech Republic (a)

Slovakia (a)

Hungary (a)

Poland (a)

Baltics (a)

Romania (b)

Croatia (b)

Austria (a)

Australia (b)

New-Zealand (b)

Turkey (b)

Saudi Arabia (b)

Qatar (b)

Arab. Emirates (b)

Iran (b)

Argentina (b)

Mexico (b)

Brazil (b)

Chile (b)

Ukraine (b)

Poland (c)

Baltics (b)

Czech Republic (a)

Slovakia (a)

Hungary (b)

Russia (c)

Kuwait (a)

Iran (b)

Saudi Arabia (b)

Arab. Emirates (b)

Australia (c)

New-Zealand (c)

Argentina (b)

Chile (b)

Singapore (b)

Korea (b)

Hongkong (b)

South Africa (a)

United Kingdom (b)

Ireland (b)

Australia (b)

New-Zealand (b)

Brazil (b)

Turkey (a)

Qatar (b)

Arab. Emirates (b)

Saudi Arabia (b)

Singapore (a)

Malaysia (b)

Austria (a)

Poland (a)

Hungary (b)

Romania (b)

Croatia (b)

Bulgaria (b)

Serbia (b)

Russia (b)

Iran (b)

Saudi Arabia (b)

Arab. Emirates (b)

Australia (a)

New-Zealand (a)

Mexico (b)

Carribean (b)

Synergies: continue roll-out and cross-selling

(a) Market introduction already in 2008(b) Market introduction scheduled for 2009(c) Market introduction 2010

28

www.xlsdiet.com

Thanks to its dual slimming action, XLS Duo Slim & Shape helps you lose weightand shapes your silhouette. The active ingredients are 100% natural.Food supplement. Exclusively in pharmacy

NEW Discover XLS Duo Slim & Shape

29

Information for shareholders

Basic information for shareholders 30 Consultation of documents 30 Financial services 30 General Shareholder Meeting 30 Dividend 30 Financial Calendar 2009 30 Investor Relations 30 Information about the share 31 Listing 31 Bel20 and other stock indexes 31 Types of shares 31 Number of shares and warrants 31 Purchase of own shares and issue of warrants 32 Evolution of the number of shares 32 Dividend history 34 Evolution of the share price 34 The share in 2008 34 Financial analysts 35 Shareholder structure and notifications of participation 36

Corporate Governance 37 Composition of the main governing bodies 37 Board of Directors 41 Specialised committees of the Board of Directors 48 Remuneration of directors and members of the Executive Committee 49 Charter, policy and rules related to Corporate Governance 50 External supervision 51 Relevant elements in case of a public take-over bid 52 ‘Annual information’ 55

Basic information for shareholders

Consultation of documentsThe company documents which are made public are available on the corporate web site www.omega-pharma.be. These docu-ments can also be obtained free of charge from the registered office of the company. Main documents are the articles of associa-tion of the company, the Corporate Govern-ance Charter and annexes, the statutory and consolidated annual accounts, the annual report and the interim report.

Financial servicesOmega Pharma uses the following financial institutions to provide financial services to its shareholders: Bank Degroof, Dexia Bank, Fortis Bank, ING Bank Belgium, KBC Bank and Petercam.

General Shareholder MeetingThe annual general shareholder meeting is held each year at the registered office of the company on the first Monday of May at 7 PM. If that day is a public holiday, the meeting is held at the same time on the next working day.

The first coming general meeting is sched-uled for May 4, 2009. The convocation, the agenda and the proxy form for each general shareholder meeting are included on the web site www.omega-pharma.be under the section Press releases. The conditions for ad-mission to the general shareholder meetings are included in the articles of association of the company and are also mentioned in the convocations to each general meeting. Both the articles of association and the convoca-tions are made available on the corporate web site.

Shareholders who present, individually or collectively, at least 10 per cent of the capital, are entitled to propose subjects for the agenda of the general meeting, provided that their proposals are submitted at least

30

ninety days in advance to the Board of Direc-tors. (The full information is included in the articles of association, which are made avail-able on the corporate web site).

DividendThe Board of Directors will propose to the Annual Shareholders Meeting of May 4, 2009 to pay out a gross dividend of 0.60 euro per share over the period 2008, corresponding to a net dividend of 0.45 euro per share.The dividend history is briefly presented on page 34.

Financial calendar 2009• 4 May 2009: Annual (7:00 PM) and Extraordinary (08:00 PM) General Shareholder Meeting • 6 May 2009: ex-dividend date• 8 May 2009: ‘record date’• 11 May 2009: dividend payment• 9 June 2009 (11:00 AM): Extraordinary General Shareholder Meeting, in case the required quorum is not reached on 4 May 2009• 16 July 2009 (5:45 PM): Trading update on the second quarter 2009 and the first half year 2009• 27 August 2009 (5:45 PM): Publication of interim report for the first half year 2009• 15 October 2009 (5:45 PM): Trading update on the third quarter 2009• 21 January 2010 (5:45 PM): Trading update on the fourth quarter 2009 and the full year 2009

Investor RelationsOmega Pharma attaches great importance to a good relationship with its shareholders and investors, and therefore fosters a trans-parent communication and a constructive dialogue.

The general shareholder meetings obviously represent an ideal opportunity to enter into contact with shareholders. In addition,

Information about the share

31

the top management of Omega Pharma has welcomed both shareholders and investors at a special Investors Day, which took place on 11 September 2008 in the Stock Exchange building in Brussels (Belgium). On 4 October 2008, Marc Coucke (CEO) addressed a vast audience in Antwerp on the ‘Day of the Tips’ of the Flemish federation of investors and investor clubs VFB. The company also par-

ticipates frequently at investor conferences and road shows, both at home and abroad. In 2008, investors have been visited in Belgium, the Netherlands, London, Paris, New York, Dublin, Frankfurt and Copenhagen.Investors and shareholders can con-tact Chris Van Raemdonck (chris.vanraemdonck@omega-pharma.be) for all questions.

ListingAll shares of Omega Pharma are listed on the regulated market Euronext Brussels.

• ISIN code: BE003785020• Reuters: OMEP.BR• Bloomberg: OME BB

Bel 20 and other stock indexesOn 1 March 2002, the Omega Pharma share was first included in the Bel20 index and has remained part of this Belgian stock index ever since.Hereunder follow the main indexes in which the share is included, together with the weight that Omega Pharma represents in them.

• Bel20 close (0.81%)• Belgian All Share Price (0.30%)• Next150 (0.47%)

Types of sharesThere exists only one category of Omega Pharma shares. Each share corresponds with one vote at the general shareholder meet-ings. The fully paid shares of the company can be nominative shares, bearer shares or dematerialized shares, within the restric-tions put forward by law.There are no VVPR strips that entitle the owner to a reduced tax withholding related to the payment of the dividend.

Number of shares and warrantsOn 31 December 2008 there were 24,227,303 securities conferring voting rights, which represented a total share capital of 16,464,661.41 euro. This number has remained unchanged on the date of this publication (3 April 2009). On 31 December 2008 there were also 335,305 rights to subscribe for securities conferring voting rights, which only refer to warrants. As 16,950 of these rights had expired on the date of this publication, there are 318,355 rights left.Upon exercise of each warrant, one share with one voting right is created.

32

Purchase of own shares and issue of warrantsThe Extraordinary General Meetings of 6 July 2007 and 9 June 2008 granted the company’s Board of Directors the authorisa-tion to purchase own shares for a period of 18 months starting as of the date of these meetings. Since 30 June 2008, the Board of Directors has not made any use of this mandate, but may re-evaluate this in due time. More information on the purchase of own shares can be found in Note 16 to the consolidated annual account. The first com-ing Extraordinary General Meeting (4 May 2009 or 11 June 2009) will decide on the renewal of the mandate for purchasing own shares for a period of five year.From the three warrant plans that the Board of Directors has approved, only war-rant plan 3 (approved on 1 April 2003) still contains warrants that can be exercised. The Board of Directors is of the opinion that the possibility for employees, service

providers and important third parties to participate is an important stimulus in the development and growth of the company. Further details can be found in Note 28 to the consolidated annual statement.

Evolution of the number of shares Main changes since the IPO • IPO on 26 July 1998: listing of 1,678,500 existing and 200,000 newly created shares at an IPO price of 1,250 Belgian francs (30.99 euro). Taking account of the share split at a later stage, this corresponds with an introduction price of 3.10 euro.• Share split on 25 April 2000. Each existing share was transformed into 10 new shares• Public placement of 2,000,000 newly created shares on 11 May 2000.• Private placement of 1,000,000 newly created shares on 30 October 2000.• Private placement of 2,048,643 newly created shares on 12 December 2001.

On 11 September 2008, Omega Pharma welcomed over 200 guests at its Investors Day in the Stock Exchange building in Brussels, Belgium.

Over 5 million own shares bought back in five year’s time, of which over 4 million cancelled

Over the period 2004-2008, a total (net) number of 5,419,558 own shares have been bought back at an average price of 38.13 euro per share.1,596,456 own shares have been bought back in the course of 2008 at an average price of 29.88 euro per share.The changes in the number of shares that have occurred in the course of 2008 are ex-plained by the following notary acts:• 6 February 2008: creation of 2,120 new shares due to the exercise of war-rants, thus bringing the total number of shares to 26,207,968 and corresponding capital increase within the authorized

33

capital bringing the shareholders’ equity to 16,451,521.34 euro and the issue premium to 349,923,659.73 euro.• 9 June 2008: cancellation of 2,000,000 treasury shares without capital reduction, thus bringing the total number of shares to 24.207.968. The share capital remained unchanged.• 3 July 2008: creation of 19,335 new shares due to the exercise of warrants, thus bring-ing the total number of shares to 24,227.303 and corresponding capital increase within the authorized capital bringing the share-holders’ equity to 16,464,661.41 euro and the issue premium to 350,349,465.86 euro.

• Situation on 1 January 2004

• (Net) purchase of own shares in 2004

• Cancellation of treasury shares in 2004

• Situation on 1 January 2005

• (Net) purchase of own shares in 2005

• Cancellation of treasury shares in 2005

• Situation on 1 January 2006

• (Net) purchase of own shares in 2006

• Cancellation of treasury shares in 2006

• Situation on 1 January 2007

• Cancellation of treasury shares in 2007

• Purchase of own shares in 2007

• Situation on 1 January 2008

• Cancellation of treasury shares in 2008

• Purchase of own shares in 2008

• Creation of new shares mainly resulting from the exercise of warrants in the period from 2004 until and including 2008

• Appropriation of treasury shares related to acquisitions

• Situation on 31 December 2008

Number ofshares

Of whichtreasury shares

28,079,946 533,052

+562,672

-0

1,095,724

+1,109,309

-0

2,205,033

+486,377

-1,418,616 -1,418,616

1,272,794

-1,000,000 -1,000,000

+1,065,744

1,338,538

-2,000,000 -2,000,000

+1,596,456

+565,973

-55,000

879,99424,227,303

* translated from Belgian franc into euro** translated from Belgian franc into euro, and

after adjustment for 1-to-10 share split.

Dividend history Ever since the IPO in 1998, Omega Pharma has increased its dividend year after year, but maintained the pay-out ratio at a com-parable level.

34Evolution of the share priceFor the share prices from 26 July 1998 until and including 25 April 2000 the share split of 25 April 2000 has been retroactively taken into account.

1998*

1999**

2000

2001

2002

2003

2004

2005

2006

2007

2008

0,02 euro

0,033 euro

0,05 euro

0,08 euro

0,12 euro

0,18 euro

0,24 euro

0,32 euro

0,40 euro

0,50 euro

0,60 euro

Period Gross dividend

The share in 2008

The share from 1998 untill 2009

02/01/08 1.6

17/07/08 -53.03

jan feb maa apr mei jun jul aug sep okt nov dec 2008

0

-10

-20

-30

-40

-50

750 K

500 K

250 K

Omega Pharma

Bel 20

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

jan feb mar apr may jun jul aug sep oct nov dec

90

80

70

60

50

40

30

20

10

0

Omega Pharma

Share price• Closing rate on the first trading day: 46.750 euro• Highest closing rate: 46.750 euro (2 January 2008)• Highest intraday rate: 47.500 euro (2 January 2008)• Lowest closing rate: 22.100 euro (17 July 2008)• Lowest intraday rate: 21.960 euro (17 July 2008)• Closing rate on the last trading day: 27.000 euro• Average closing rate 2008: 29.626 euro (256 trading days)

Turnover• Total annual turnover: 1,084,350,848.78 euro• Average daily turnover based on the closing rate: 4,235,745.50 euro

Volume• Total traded annual volume: 36.986.775 shares• Average daily traded volume: 144,480 shares• Annual rotation (based on the number of shares on 31 December 2008): 1.53• Average number of shares per transaction in 2008: 174

Market capitalisationBased on the closing rate on 31 December 2008: 654,137,181 euro

35

Financial analystsThe Omega Pharma share is covered by the sell-side analysts for 11 stock brokers, listed alphabetically:

Cheuvreux

Bank Degroof

Exane BNP Paribas

Fortis

ING

KBC Securities

Kempen & Co

Petercam

Rabo Securities

Royal Bank of Scotland

UBS

Frits Went (Amsterdam)

Marc Leemans (Brussels)

Stéphane Sumar (Paris)

Tim Heirwegh (Brussels)

Sjoerd Ummels (Brussels)

Nathalie Sierens (Brussels)

Chris Kaashoek (Amsterdam)

Jan Van den Bossche (Brussels)

Philip Scholte (Amsterdam)

Wim Gille (Amsterdam)

David Kerstens (London)

Stock broker Analyst

At the moment that this annual report is published, Stephan Dubosq of Arkéon Finance (Paris) has started to prepare an initiation report, which is scheduled for publication in the first half of 2009.In addition, analyst Gert De Mesure regularly publishes a summary report on the Omega Pharma share on behalf of the Flemish feder-ation of investors and investors clubs (www.vfb.be). Omega Pharma is also frequently covered in other Belgian investor magazines.

Shareholder structure and notifications of participationBased on the most recent notifications and the transactions that are made public, the sharehold-er structure is as follows:

36

The total ‘free float’ (only excluding) Couck-invest/Marc Coucke and the treasury shares) consequently amounts to 66.13%.In the course of 2008 Omega Pharma also re-ceived the following notifications of partici-pation, which have been replaced by later updates:• Capital Group International Inc. (30 Octo-ber 2008): 5.86%• Omega Pharma NV (2 July 2008): 3.86%• Couckinvest NV/Marc Coucke ( 9 June 2008): 30.82%• Omega Pharma NV (9 June 2008): 1.80%

The articles of association stipulate that participations need to be disclosed when they surpass the thresholds of 3%, 5% and multiples of 5%. Notification forms can be downloaded from http://www.cbfa.be/nl/gv/ah/circ/ah_circ.asp. Shareholders who think they should issue a notification can contact Mr. Chris Van Raem-donck, Investor Relations Officer of Omega Pharma for advice (+32/9/381.0331 - chris.vanraemdonck@omega-pharma.be).

Couckinvest NV/Marc Coucke

Omega Pharma NV (treasury shares)

Capital Group International Inc.

Public

Total

22 September 2008and 29 January 2008 (transactions made public)

22 September 2008

17 October 2008

7,271,746

934,994

1,187,296

14,833,267

24,227,303

30.01%

3.86%

4.90%

61.23%

100.00%

ShareholderDate of most recent notification

Number of shares

Percentage of total

Corporate Governance

37

Composition of the main governance bodies

Picture (from left to right): Lucas Laureys, Jan Cassiman, Jan Boone, Marc Coucke, Jean-Louis Duplat, Benoit Graulich, Sam Sabbe

NameIndependent

DirectorAudit

Committee

Appointment & remuneration

committee

Duration of the current direc-tor’s mandate

Member Chairman

Lucas Laureys NV

Mercuur Consult NV(permanent representative: Jan Boone)

Benoit Graulich

Jean-Louis Duplat

Marc Coucke

Couckinvest NV(permanent representative: Marc Coucke)

(permanent representative: Sam Sabbe)Sam Sabbe BVBA

Jan Cassiman BVBA (3)(permanent representative: Jan Cassiman)

Until 3 may 2010

Until 3 may 2010

Until 3 may 2010

Until 3 may 2010

Until 2 may 2011

Until 2 may 2011

Until 2 may 2011

Until 12 january 2011

(1) In conformity with the law of 17 December 2008 related to the instalment of an audit committee at listed companies, Marc Coucke in his capacity of executive director is no longer member of the audit com-mittee since 1 January 2009, which consists as of that date exclusively of non-executive directors.(2) Untill 31 December 2008(3) Untill the Annual meeting of 4 May 2009. At that day, the General meeting will take knowledge of the resignation as director requested by Jan Cassiman BVBA.

Board of Directors

(permanent representative: Lucas Laureys)

(1) (2)

38

Executive Committee The Board of Directors has established an Ex-ecutive Committee in the sense as included in the Corporate Governance Law of 2 August 2002.The Executive Committee is responsible for the Company’s management and exercises the management powers that the Board of Directors has delegated to it. This is also reflected in the terms of reference of the Executive Committee, wich is annexed to the Corporate Governance Charter and which can be found on www.omega-pharma.be. The members of the Executive Committee

are appointed for an indefinite time by the Board of Directors, based on the recommen-dations by the Appointment and Remunera-tion Committee. In the course of 2008, Jan Cassiman, previously Chief Executive Officer (CEO), was appointed Chief Operating Officer (COO), Marc Coucke was appointed CEO, Sam Sabbe was appointed Chief Strategy Officer (CSO), and Mike Van Ganse BVBA was replaced by Mario Debel as Head of Market-ing and Innovation.The composition of the Executive Committee is now as follows:

Each Country Manager reports directly to a member of the Executive Committee, assuring that this committee remains directly in touch with the daily operations as well as with the market;The Executive Committee meets in principle once a week. The Executive Committee also organ-ized a number of seminars, some in presence of all members of the Board of Directors. The Board of Directors receives the minutes of each meeting of the Executive Committee.

Name Permanent representative Function

Couckinvest NV Marc Coucke Chief Executive Officer

Sam Sabbe BVBA Sam Sabbe Chief Strategy Officer

BDS Management BVBA Barbara De Saedeleer Chief Financial Officer

Jan Cassiman BVBA Jan Cassiman Chief Operating Officer

M.D.S. BVBA Mario Debel Head of Marketing & Innovation

Ton Scheepens Head of Operations

* Note: From this point in the chapter onwards, the mandate holders are indicated with the names of their permanent representatives.

Marc Coucke Sam Sabbe Barbara De Saedeleer Jan Cassiman Mario Debel Ton Scheepens

39

Mr Lucas Laureys. °1945. Graduate in Economic Sciences (Ghent), Postgraduate Business Management (Vlerick Management School), MBA Sales & Marketing (Leuven). From 1971 to 2006 Managing Director (re-sponsible for Sales & Marketing) of Van de Velde NV, listed company, lingerie manufac-turer based in Schellebelle (Belgium). From 1997 to present, also Chairman of the Board of Directors of this publicly listed company. Director of Topform International, listed lin-gerie manufacturing company in Hongkong.

Mr Jan Boone. 1971. Degree in Applied Economic Sciences (KUL, Leuven University) and ‘Licentiat Spéciale en Révisorat’ (UMH, Mons). He started his career in the audit department of PriceWaterhouseCoopers. Between 2000 and 2005 he was member of the Executive Commitee at Omega Pharma. Since 2005, he is active at Lotus Bakeries where he now fulfills the function of manag-ing director. He is also executive director at Lotus Bakeries. In addition, he fulfills a non-executive board mandate at Durabrik.

Mr Benoit Graulich. °1965. Degree in Law, Business Management and Finance (KUL, Leu-ven University) and Fiscal Sciences. Partner of Bencis Capital Partners, and director at Arseus NV (Belgium), Carrières du Hainaut SA (Belgium) and Wereldhave NV (Belgium). Formerly fulfilled various functions at Ernst & Young (Belgium), Artesia Bank (Belgium) and Price Waterhouse (Belgium).

Mr Jean-Louis Duplat. °1937. Degree in Law. Senior Advisor at Ernst & Young Special Business Services (Belgium), Professor at the faculty of Economic Sciences of the Namur University (Belgium), Honorary Chairman of the CBFA/BFIC (Belgium), Chairman of Aedi-

fica NV (Belgium) and independent director at Brantano NV (Belgium).

Mr Marc Coucke. °1965. Pharmacist (Ghent University, RUG) and postgraduate in Management (Vlerick Management School). Founder and driving force of the Company. Until 30 September 2006 also CEO. From 1 October 2006 to 11 March 2008, he was Chairman. Since 11 March 2008, he is again CEO. He is still the inspirer of the Company, determines to a large degree the strategy of the Company and is also actively involved in main acquisition projects. Director of Arseus NV (Belgium). The Country Managers of Bel-gium and France report directly to him in his capacity of CEO.

Mr Sam Sabbe. °1965. Graduate in Law (Ghent University, RUG). Prior to his career at Omega Pharma, he was active as a banker at Artesia Bank (formerly Paribas Bank Bel-gium), where he gained wide experience in the field of Mergers & Acquisitions. Active at Omega Pharma in the capacity of Chief Financial Officer between September 1999 and April 2007, and as Executive Vice President between April 2007 and October 2007. CSO since 11 March 2008. Actively involved in all major acquisitions of Omega Pharma in this period. Director of Ecuphar NV (Belgium). Responsible for strategy, M&A, Business Development, Legal, Investor Rela-tions and a number of operational activities.

Mr Jan Cassiman. °1962. Industry pharma-cist (Ghent University, RUG) and degree in Marketing Management (EHSAL). Started his career with Pfizer and later fulfilled vari-ous management functions with Qualiphar, Novartis and Sanofi. As of 2000 he fulfilled European and international OTC manage-

Brief biographiesHere follow the brief biographies of the members of the main directing and managing bodies or their permanent representatives.

40

ment functions at Sanofi, based in Paris. Since July 2003 active with Omega Pharma. Since February 2005 member of the Execu-tive Committee in the function of Business Development & Marketing Services Director. CEO from 1 October 2006 to 11 March 2008, since then COO. Responsible for the Emerg-ing Markets.

Mrs Barbara De Saedeleer. °1970. Degree in Marketing and in Trade and Financial Sci-ences, specialisation in Quantitative Business Economics (Vlekho). Started her career in 1994 at Paribas Bank Belgium (later Artesia Bank and Dexia Bank Belgium) in the Cor-porate Banking department. Later became Regional Director Corporate Banking for East-Flanders. Joined Omega Pharma in June 2004 as Group Treasury Manager. Later promoted

Head of Finance. Since 16 April 2007 appoint-ed Chief Financial Officer.

Mr Ton Scheepens. °1948. Former Business Unit Manager of Chefaro. Wide experience in managing international OTC organiza-tions. Responsible for Northern and Southern Europe, the United Kingdom and Ireland.

Mr. Mario Debel. °1970. Pharmacist (Ghent University). Was active from 1994 to 2006 at Omega Pharma as Group Marketing Direc-tor and was also member of the Executive Committee in that period. After a short interval for personal reasons, Mario Debel has rejoined the Executive Committee since 7 August 2008 and, in his capacity of Head of Marketing & Innovation, he focuses on prod-uct development and marketing with specific attention for the Star Brands.

Board of Directors

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

Appointment of the members of the Board of DirectorsThe members of the Board of Directors are appointed by the General Meeting. When a director’s position becomes vacant the remaining directors have the possibility of provisionally filling the vacancy. The proce-dure for the appointment of a new director is included in the terms of reference of the Appointment and Remuneration Commit-tee, which is part of the Corporate Govern-ance Charter. The articles of association of the company provide a nomination right to Couckinvest NV for the appointment of the members of the Board of Directors, by which half of the directors plus one must be chosen from among the candidates exclusively nomi-nated by Couckinvest NV. In reality, no use has been made of this nomination right.The terms of office for newly appointed directors and for directors whose mandate is renewed, is set at maximum four years. There is no age limit set for the members of the Board of Directors.

In 2008, the General Meeting of 5 May 2008 took knowledge of the dismissal of Mr. Lucas Laureys and Mr. Gerardus van Jeveren. It appointed Lucas Laureys NV, with Mr. Lucas Laureys as permanent representative, as independent director in the sense of and meeting the criteria put forward in article 524 §4 of the Company Code, for the remain-der of the mandate of Mr. Lucas Laureys. The General Meeting of 5 May 2008 has also reap-pointed Mr. Jean-Louis Duplat as independ-ent director, whose mandate had expired, for a new term of office of two years, until and including the annual meeting to be held in 2010.

41

Functioning of the Board of DirectorsThe role and functioning of the Board of Directors are described in the corresponding terms of reference, which makes up a part of the Corporate Governance Charter.

In 2008, eight board meetings took place and the written decision-making procedure has been applied twice. Marc Coucke and Lucas Laureys participated in all meetings. Jan Boone and Benoit Graulich have each apologized as permanent representatives for one board meeting. Ger van Jeveren has apologized for one of the five board meetings that took place when he was still director of Omega Pharma NV. Sam Sabbe and Jan Cas-siman were apologized for two board meet-ings and Jean-Lois Duplat for three. This results in a participation degree of 85.5%.

The board meetings mainly dealt with discussing the results and performance, the control of the Executive Committee and the implementation of the strategy. In 2008, all decisions of the Board of Directors have been taken by unanimity.

Conflicts of interestThe procedure of article 523 of the Company Code was applied twice in 2008. In conform-ity with the valid specifications, the contents of the minutes of the relevant decisions indi-cating the reason for the conflict of interest are given below, as are the explanation and pecuniary effects of them for the Company.

At the Board of Directors of 11 March 2008“Preceding two directors – i.e. Jan Cassiman BVBA and Sam Sabbe BVBA, state that they have a potential conflict of interest in the sense of article 523 of the Company Code with respect to the discharge of Jan Cassi-man BVBA and Sam Sabbe BVBA respectively in their capacity as members of the Compa-ny’s Executive Company during the account-ing period 2007.For Sam Sabbe BVBA and Jan Cassiman BVBA this conflict of interest arises from the fact that they are Directors of the Company and also members of the Executive Committee or were members of the Executive Committee in the financial year 2007.Jan Cassiman BVBA and Sam Sabbe BVBA will notify the Statutory Auditor of their conflict of interest.Jan Cassiman BVBA and Sam Sabbe BVBA will not further participate at the deliberation, nor at the voting of the discharge for Jan Cassiman BVBA and Sam Sabbe BVBA respec-tively. Jan Cassiman BVBA will leave the meeting when the discharge of Jan Cassiman BVBA as member of the Executive Commit-tee is deliberated and decided upon. Sam Sabbe BVBA will leave the meeting when the discharge of Sam Sabbe BVBA as member of the Executive Committee is deliberated and decided upon.The grounds for justification for granting discharge are as follows:For the duration of the financial year 2007 the Board of Directors regularly acquired complete insight into minutes and decisions of the Executive Committee and, on the ba-sis of this, the Board of Directors was able to satisfactorily establish that each individual member of the Executive Committee prop-erly carried out their duties in the financial year 2007.The pecuniary consequences for granting discharge are as follows:The consequence of discharge is that each member of the Executive Committee cannot

42

be held personally liable by the Board of Directors for errors and omissions made in the exercise of their duties.In separate voting (per member of the Ex-ecutive Committee), the Board of Directors unanimously grants discharge to each of the members of the Executive Committee sepa-rately (Jan Cassiman BVBA, Sam Sabbe BVBA, BDS Management BVBA, Mike Van Ganse BVBA and Mr. Scheepens) for the way that they have exercised their mandate and mission during the financial year 2007.”

At the Board of Directors of 29 April 2008“Preceding two directors – i.e. Couckinvest NV and Mr. Marc Coucke, state that they have a potential conflict of interest in the sense of article 523 of the Company Code with respect to the decision to grant a fixed and a variable remuneration to Couckinvest NV, in its capacity as CEO. The remaining directors confirm that they do not have a conflict of interest in the sense of article 523 of the Company Code when approving the remuneration for the members of the Executive Committee as this decision, in the opinion of the directors, falls under the ex-ception provided for in article 523, §3, item 2 of the Company Code. Moreover, all direc-tors confirm that they do not have a conflict of interest in the sense of article 524, §1, 1° and 2° of the Company Code. For Marc Coucke, this conflict of interest in the sense of article 523, §3, item 2 of the Company Code results from the fact that he is director of the Company on the one hand, and reference shareholder of Coukinvest NV on the other hand.For Couckinvest NV this conflict of interest results from the fact that it is director of the Company on the one hand while it is remu-nerated as CEO on the other hand.The concerned directors will notify the statutory auditor of the Company about their conflicts of interest.Marc Coucke and Couckinvest NV will not

further participate at the deliberation nor at the voting for granting the CEO’s remunera-tion. The concerned directors will leave the meeting when this topic on the agenda is deliberated and decided upon. Marc Coucke and Couckinvest NV consequently leave the meeting.Het grounds for justification are as follows:The Board of Directors holds the opinion that, considering the important role of the CEO in the Executive Committee, an ap-propriate remuneration, which is conform to market practices, is justified for the CEO.The Board of Directors holds the opinion that a fixed remuneration for an amount of 600,000 euro on an annual basis is a fair remuneration for the CEO’s performance.The Board of Directors further holds the opinion that for the financial period 2008 a variable remuneration for the CEO of a maximum amount of 120,000 euro is conform to market practices.The pecuniary consequences are as follows:The mandate of CEO will be remunerated for an amount of 600,000 euro on an annual basis. The Board of Directors unanimously approves the remuneration of 600,000 euro for the CEO over the financial year 2008.The Board of Directors further decides to provide for a variable remuneration to the CEO of maximum 120,000 euro.”

At the Board of Directors of 5 June 2008“Preceding four directors – i.e. Marc Coucke, Couckinvest NV, Sam Sabbe BVBA and Jan Cas-siman BVBA, state that they have a potential conflict of interest in the sense of article 523 of the Company Code with respect to the decision to grant warrants. For Marc Coucke this conflict of interest arises from the fact that he is Director of the Company and reference shareholder of Couckinvest NV.For Couckinvest NV, Sam Sabbe BVBA and Jan Cassiman BVBA this conflict of interest arises from the fact that they are Directors of the

43

Company on the one hand, and that they are beneficiaries of the warrants on the other hand.The concerned directors will notify the statutory auditor of the Company about their conflicts of interest.Marc Coucke, Couckinvest NV, Sam Sabbe BVBA and Jan Cassiman BVBA will not further participate at the deliberation and at the voting for granting warrants that may possible relate to them. The concerned directors leave the meeting respectively.The grounds for justification are as follows:The issue of warrants will take place in the framework of the warrant plan of 1 April 2003 for the benefit of personnel members, service providers and important third parties of the Company (the “Plan”), which continues to be applicable. By means of the Plan, the Company aims to enable the Selected Partici-pants (as specified in the Plan) to participate in the share capital of the Company with the objective to increase the commitment of the Selected Participants with the Company. The Board of Directors holds the opinion that this possibility for the aforementioned person-nel members and/or service providers or important third parties to participate in the Company’s share capital, will form an impor-tant stimulus in the development and growth of the Company. Considering their important role of pioneer, both within the company as towards the external world, each of the mem-bers of the Executive Committee should also be enabled to participate in the Plan.The value of the shares that will form the subject of the Plan, and hence also sched-uled issue of warrants, is determined as fol-lows: the value of the share of the Company equals the average of the share price during thirty stock days preceding the issue date. This exercise price is the minimum price as specified in article 598 of the Company Code and is valid for employees, service providers and important third parties of the Company alike. There is no intention to favor war-

rant holders as such, but rather to motivate them on the one hand by offering them the perspective that they contribute to the growth of the Omega Pharma group of which the represent the drive force, and on the other hand by offering them the possibility to share in plus values that may result from a value increase of the shares to which they will be able to subscribe.The pecuniary consequences are as follows:The pecuniary consequences can only be specified at the moment of the effective creation of the warrants. At that moment, the procedure of article 523 of the Company Code will be complied with.The warrants that are scheduled to be is-sued (including those that will be granted to the members of the Executive Committee), give right to a subscription to a maximum of 240,000 shares.The current number of outstanding shares amounts to 26,206,968. Assuming that all warrants will be subscribed to, and that all will be exercised, a number of 240,000 new shares could be issued, corresponding with 0.9% of the total number of outstanding shares.The Board of Directors approves the principle of the scheduled issue of warrants.”

At the Board of Directors meeting of 5 June 2008, the procedure for conflicts of interest was applied a second time:“Preceding two directors – i.e. Couckin-vest NV and Mr. Marc Coucke, state that they have a potential conflict of interest in the sense of article 523 of the Company Code with respect to the reconfirmation of the decision taken in November 2006 to grant consultancy work and corresponding remuneration to Couckinvest NV and Marc Coucke in 2007. Furthermore, the directors concerned confirm that they do not have a conflict of interest in the sense of article 524 of the Company Code with respect to this reconfirmation since, according to their

44

opinion, the decisions fall under the dem-inis provision as specified in article 524, §1, item 3, 1° and 2° of the Company Code. For Marc Coucke, this conflict of interest in the sense of article 523 of the Company Code results from the fact that he is director of the Company and reference shareholder of Coukinvest NV on the one hand, and that he has been granted remunerated consultancy work on the other hand. For Couckinvest NV this conflict of interest results from the fact that it is director of the Company on the one hand while it has been granted remunerated consultancy work on the other hand. The concerned directors will notify the statutory auditor of the Company about their conflicts of interest.Marc Coucke and Couckinvest NV will not further participate at the deliberation nor at the voting for reconfirming the decision to grant consultancy work and a correspond-ing remuneration. The concerned directors consequently leave the meeting.Het grounds for justification are as follows:The Board of Directors reconfirm that the year-long experience of Marc Coucke and Couckinvest NV is of such nature that the involvement of Marc Coucke and Couckinvest NV as consultants is required for specific mandates beyond their Board mandates, of the Board of Directors. The Board of Direc-tors therefore reconfirms its decision of 7 November 2006 to make an appeal in 2007 on Marc Coucke and Couckinvest NV as consult-ants, for various tasks including the further strategic approach related to Arseus, the or-ganization of seminars at home and abroad, the 20th anniversary of the Company, the counseling for acquisition negotiations, etcetera. The Board of Directors reconfirms the position that a consultancy remunera-tion for an amount of 400,000 euro on annual basis, represents a fair compensation for the consultancy work performed by Couckinvest NV and Marc Coucke.

45

The pecuniary consequences are as follows:The consultancy work performed by Couck-invest NV for the Company, have been remunerated for an amount of 400,000 euro (VAT excluded) on annual basis. The Board of Directors reconfirms the decision taken at the meeting of 7 November 2006, with application of the procedure for conflicts of interests in conformity with article 523 of the Company Code, and consequently reconfirms the consultancy work in 2007 and the corresponding consultancy remuneration of 400,000 euro. The Board of Directors sub-sequently decides to report the decision of 7 November 2006 in its 2008 annual report, as well as to inform the statutory auditor about this reconfirmation. As a last element, the Board of Directors will request the Corporate department of the Company to finalize and implement the administrative completion for the preceding decisions, integrally in conformity with article 523 of the Company Code.

At the Board of Directors meeting of 7 July 2008“Preceding two directors – i.e. Marc Coucke and Couckinvest NV, state that they have a potential conflict of interest in the sense of article 523 of the Company Code with respect to the proposed modification. For Marc Coucke this conflict of interest arises from the fact that he is Director of the Company and reference shareholder of Couckinvest NV.For Couckinvest NV, this conflict of interest arises from the fact that it is a Director of the Company on the one hand, and that it is an indirect beneficiary of the warrants on the other hand.The concerned directors will notify the statutory auditor of the Company about their conflicts of interest.Marc Coucke and Couckinvest NV will not further participate at the deliberation nor at the voting for granting warrants that may

possible relate to them. The grounds for justification are as follows:The proposed modifidation is related to the fiscal treatment of the warrants that will be issued in the framework of the Plan. By means of the Plan, the Company aims to enable the Selected Participants (as speci-fied in the Plan) to participate in the share capital of the Company with the objective to increase the commitment of the Selected Participants with the Company. Considering their important role of pioneer, both within the company as towards the external world, each of the members of the Executive Com-mittee (or their legal representatives) should also be able to participate in the Plan.For the fiscal treatment, it is proposed to make a difference henceforward between employees and service providers on the one hand, and important third parties on the other hand.Employees are being defined as physical persons who are engaged by an employment contract to the Company and/or an affiliated company. Service providers are being defined as the legal representatives of a manage-ment company which fulfills a mandate as director or which renders management services to the Company and/or an affili-ated company. Important third parties are legal persons or physical persons other than employees or service providers, who provide paid or unpaid performances for the Com-pany and/or an affiliated company.For the currently proposed tranche, the war-rants will be granted to service providers, amongst others, as physical persons – i.e; in their capacity of legal representatives of the legal person who render the daily manage-ment services.In this respect, our advisor has asked to the ‘Principle adminstration of the Federal State Department of Finance (“F.O.D. Finance, A.OI.IF., sector directe belastingen, Directie I/5A”, North Galaxy – POB 25, 33 avenue Roi Albert II, 1030 Brussels) amonst other things,

46

if, in case of directly granting warrants to le-gal representatives of companies that render services of daily management of that fulfill a mandate as director, the reduced valuation can be applied – and more specifically if the condition of article 43 §6, 4° of the Law of 26 March 1999 is fulfilled.In its answer, the fiscal authority stated that it can be assumed that the condition of article 43 §6, 4° of the Law of 26 March 1999 is fulfilled, when the warrant is related to shares of the company of which the business relationship with the beneficiary of the war-rant give rise to consider the granting of such warrant as a benefit of all kind by reason of, or as a result of the professional activity.Based on the preceding, the Board of Direc-tors holds the opinion that the direct granting of warrants to natural persons, in their capac-ity as legal representatives of companies that render services of daily management or that fulfill a mandate as director, qualify for the reduced valuation of article 43 §6 of the Law of 26 March 1999. The natural persons exercise their daily professional activities for the Company and/or an affiliated company on behalf of their company.Belgian employees and service providers con-sequently comply with all conditions of article 43 §6 of the Law of 26 March 1999 and qualify for the reduced valuation without recourse of the warrants under the Plan at 9% (7.5% of the value of the underlying share, increased with 0.5% for each year (or each part of it) that ex-ceeds the 5 year term), while important third parties do not exercise a professional activity for the need of the group and the warrants granted to them are consequently valued at 18% (15% of the value of the underlying share, increased with 1% for each year (or any part of it) that exceeds the 5 year term).The pecuniary consequences are as follows:As a consequence of the proposed modifica-tion, the scheduled direct granting of war-rants to natural persons, in their capacity of legal representatives of companies that

render services of daily management or that fulfill a mandate as director, qualify for the reduced valuation of article 43 §6 the Law of 26 March 1999.The board of directors approves the pro-posed modification to the Plan”.

At the Board of Directors meeting of 18 July 2008“Preceding four directors, i.e. Marc Coucke, Couckinvest NV, Sam Sabbe BVBA and Jan Cassiman BVBA, all aforementioned and hereby represented as aforementioned, state that they have a potential conflict of interest in the sense of article 523 of the Company Code with respect to the decision to issue warrants. For Mr. Marc Coucke this conflict of interest arises from the fact that he is Director of the Company and reference shareholder of Couckinvest NV.For Couckinvest NV, Sam Sabbe BVBA and Jan Cassiman BVBA this conflict of interest arises from the fact that they are Directors of the Company on the one hand, and that they are beneficiaries of the warrants on the other hand.The concerned directors will notify the statutory auditor of the Company about their conflicts of interest.Mr. Marc Coucke, Couckinvest NV, Sam Sabbe BVBA and Jan Cassiman BVBA will not further participate at the deliberation nor at the voting for granting warrants that may pos-sible relate to them. The grounds for justification are as follows:The issue of warrants will take place in the framework of the warrant plan of 1 April 2003 for the benefit of personnel members, service providers and important third parties of the Company (the “Plan”), which contin-ues to be applicable, as recently modified on 7 July 2008. By means of the Plan, the Company aims to enable the Selected Partici-pants (as specified in the Plan) to participate in the share capital of the Company with the

47

objective to increase the commitment of the Selected Participants with the Company. The Board of Directors holds the opinion that this possibility for the aforementioned person-nel members and/or service providers or important third parties to participate in the Company’s share capital, will form an impor-tant stimulus in the development and growth of the Company. Considering their important role of pioneer, both within the company as towards the external world, each of the members of the Executive Committee (or their legal represenatives) should also be enabled to participate in the Plan.The value of the shares that will form the subject of the Plan, and hence also sched-uled issue of warrants, is determined as fol-lows: the value of the share of the Company equals the average of the share price during thirty stock days preceding the issue date. This exercise price is the minimum price as specified in article 598 of the Company Code and is valid all Selected Participants. There is no intention to favor warrant holders as such, but rather to motivate them on the one hand by offering them the perspective that they contribute to the growth of the Omega Pharma group of which they repre-sent the drive force, and on the other hand by offering them the possibility to share in plus values that may result from a value increase of the shares to which they will be able to subscribe.The pecuniary consequences are as follows:The warrants that are scheduled to be issued (including those that will be granted to the members of the Executive Committee), give right to a subscription to a maximum of two hundred forty thousand (240,000) shares.The current number of outstanding shares on 18 July 2008 amounts to twenty four million two hundred and twenty-seven thousand three hundred and three (24,227,303). The warrants that are issued under the eigth tranche (including those to be granted to the legal representatives of the members of the

Executive Committee) give right to sub-scribe to a maximum of two hundred forty thousand (240,000) shaes. Assuming that all warrants will be subscribed to, and that all will be exercised, a number of two hundred forty thousand (240,000) new shares could be issued. After exercise of all warrants, these new shares would represent 0,99% of the total number of outstanding shares, based on the current number of outstand-ing shares. Upon exercise of all warrants, the corresponding new shares (based on the current number of outstanding shares) would represent 0.99% of the total. In addition, this may lead to a financial dilution – i.e. the difference between the exercise of the warrants and the stock price of the share at the moment of the exercise of the warrants. Considering the number of warrants to be is-sued under the current tranche in proportion to the total number of outstanding shares – i.e. 0.99% - the Board of Directors holds the opinion that the possibility of financial dilu-tion is minimal.This decision is taken with unanimity of votes.”

48

Specialized committees of the Board of Directors

Within the Board of Directors, an Audit Com-mittee and an Appointment and Remuneration Committee have been created. The terms of reference of both committees form an attach-ment to the Corporate Governance Charter, which can be found on www.omega-pharma.be. These committees have an advisory role. The ultimate decision lies with the Board of Directors. The committees report to the Board of Directors after each meeting.

Audit CommitteeDuring the accounting year 2008, the Au-dit Committee was composed of Jan Boone (Chairman), Benoit Graulich and Marc Coucke. In conformity with the law of 17 December 2008, Marc Coucke is, as executive direc-tor, since 1 January 2009 no longer member of the Audit Committee, which is since this date exclusively composed of non-executive directors. Since early 2009, Lucas Laureys (1 January 2009) and Jean-Louis Duplat (6 March 2009) are also members of the Audit Commit-tee. The composition of the Audit Committee also complies with all specifications of the Belgian Corporate Governance Code.The Audit Committee met three times in 2008. All members attended the meetings.

Appointment and Remuneration CommitteeOn 11 March 2008, the Board of Directors has decided to merge the Appointment Commit-tee and the Remuneration Committee, in order to reduce overcharging of the members’ diaries and to stimulate interaction.In 2008, the Appointment and Remuneration Committee comprised the following members: Benoit Graulich (chairman), Lucas Laureys, Jan Boone, Jean-Louis Duplat and Marc Coucke. With the exception of Marc Coucke, who is on his request no longer member of this committee since 1 January 2009, the composition remains unchanged in 2009. This composition complies with all requirements included in the Belgian Corporate Governance Code.The Appointment and Remuneration Commit-tee has met five times in 2008. All members attended the meetings. In 2008, the Ap-pointment and Remuneration Committee has amongst others provided advice on the termination of the mandate as director of Ger van Jeveren, the replacement of Mr. Lucas Laureys by Lucas Laureys NV in the Board of Directors, the termination of the mandate of Marc Coucke in the Audit Committee, the modified composition of the Executive Com-mittee and the bonus system for members of the Executive Committee.

49

Remuneration of the members of the Board of Directors and the Executive Committee

Executive directors are not entitled to any remuneration for their mandate on the Board. Their remuneration is entirely related to their executive functions. Based on a decision of the Extraordinary General Meeting of 7 July 2004, warrants have been granted to the independent members of the Board of Directors. Today, the Board of Directors does not longer develop proposals to grant addition warrants to independent directors. Conse-quently, the independent directors have not been granted any warrants in the course of 2008. Moreover, on 31 December 2008, no warrants that could be exercised by independent director were left.

Name

Lucas Laureys

Jan Boone

Benoit Graulich

Jean-Louis Duplat

Executive Directors

Total

10,000 euro

10,000 euro

10,000 euro

10,000 euro

-

40,000 euro

-

5,000 euro

5,000 euro

-

-

10,000 euro

10,000 euro

10,000 euro

10,000 euro

10,000 euro

-

40,000 euro

20,000 euro

25,000 euro

25,000 euro

20,000 euro

-

90,000 euro

Board of Directors

Audit Committee

Appointment and RenumerationCommittee Total

Gross remuneration* of the members of the Board of Directors

Gross remuneration* of the CEO and the other members of the Executive Committee

* The total amounts equal the full cost to the Company. No social security expenses or retirement benefit expenses are due by the Company.

Name Base component Variable component Total

Marc Coucke, CEO 600,000 20,000 620,000

The other members of the Executive Committee 1,600,000 120,000 1,720,000

Total 2,200,000 140,000 2,340,000

In the course of 2008, a total of 70,000 warrants have been granted to the members of the Ex-ecutive Committee: 20,000 to Marc Coucke and 10,000 each to Sam Sabbe, Barbara De Saedeleer, Ton Scheepens, Jan Cassiman and Mario Debel.On 31 December 2008, Marc Coucke holds a total of 20,000 warrants that can be exercised in the future. On that same date, the other members of the Executive Committee hold a total of 118,025 warrants that are exercisable in the future. More details about the modalities to exercise warrants can be found in Note 28 to the consolidated financial statement.In the event of any requests for resignation, a settlement will be applied that corresponds in most cases with the fixed remuneration component for one year.

5050

Charter, policy and rules related to Corporate GovernanceCorporate Governance CharterSince 23 December 2005, the Company has a Corporate Governance Charter, based on both the valid legal specifications and the Belgian Corporate Governance Code. This Charter has been modified for a first time on 11 March 2008, at which occasion the Ap-pointment Committee and the Remuneration Committee were merged and the closed pe-riods were extended. The Charter is comple-mented with the terms of reference of the Board of Directors, the Audit Committee, the Appointment and Remuneration Committee and the Executive Committee. The Char-ter also includes the policy established by the Board of Directors for transactions and other contractual relationships between the Company on the one hand and its directors and members of the Executive Committee on the other hand. The Board of Directors has furthermore established rules to prevent market abuse.The entire Corporate Governance Charter, including its annexes, is available at www.omega-pharma.be. Potential future modifica-tions to the Charter will also be announced on this corporate web site.

Policy for transactions and other contractu-al relationships between the Company and its board members or executive managers, which are not covered by the conflict of interest regulationAll members of the Board of Directors and the Executive Committee, or their respective permanent representatives, are expected to avoid actions, positions or interests that are contrary to, or appear to be contrary to the interests of the Company or of one of the companies of the Omega Pharma group.Furthermore, all transactions between the

Company and the above-mentioned persons require the approval of the Board of Direc-tors. When the aforementioned persons identify a possible conflict of interest with respect to a decision or activity of the Company they must also notify the Chairman of the Board of Directors at the earliest pos-sible opportunity.This policy document is a component of the Corporate Governance Charter and can be found on the corporate web site.

Rules for the prevention of insider trading and market manipulationThe Board of Directors has drawn up rules to prevent priviliged information being unlaw-fully used by Insiders.• Insiders. These rules are applicable to the members of the Board of Directors, share-holders, members of management, employ-ees and specified third parties. A nominative list of Insiders is being kept by the Company for the benefit of the supervisory authority. Insiders who wish to acquire or sell securities of the Company must notify the Compliance Officer of this intention prior to the transac-tion.• Compliance Officer. The Board of Direc-tors has appointed a Compliance Officer to supervise compliance with the rules by the Insiders. The Compliance Officer will for-mulate an advice following the notification by an Insider of his intended transaction. A negative recommendation of the Compliance Officer should be considered by the Insider as an explicit rejection of the transaction by the Company.Every request and recommendation of the Compliance Officer is included in a special register.• Closed and blocked periods. Insiders and persons closely related to them may not con-duct transactions with respect to securities of the Company during closed and blocket periods.Closed periods are: (a) the periods between

5151

the closing of the quarter and the publica-tion of the corresponding turnover, and (b) the one-month periods prior to the an-nouncement of the annual an six-monthly results of the Company, or and if shorter, the period starting at the closing of the relevant accounting period until and including the day of the announcement. Blocked periods are the periods that are communicated as such by the Compliance Officer.These rules are a component of the Corpo-rate Governance Charter and can be found on the corporate web site.

Corporate Governance statementThe Company holds the opinion that it complies as of 13 May 2008 with all princi-ples and provisions of the Belgian Corporate Governance Code (version 9 December 2004), with the following two exceptions:

• The Appointment and Remuneration Com-mittee had until 31 December 2008 also an executive director as member – i.e. Marc Coucke. The Board of Directors holds the opinion that his membership was valuable because he can, as founder and driving force of the Company, provide a significant con-trubtion on this area. Moreover, strict agree-ments applied so that Marc Coucke did not participate in deliberations concerning his own person or Couckinvest NV. Since 1 Janu-ary 2009, Marc Coucke, on his own request, is no longer member of this committee.

• The Corporate Governance Charter of the Company entitles shareholders representing at least 10% of the share capital to propose topics for the agenda of the General Meet-ing, while the Belgian Corporate Govern-ance Code refers to 5% in this respect. The Company holds the opinion that its proposal, taking the annual rotation of shares into account, avoids that investors with a short-term view would impact too strong on the strategy of the Company, which is focused on

continuity and sustainable achievements in the mid-term.The Company has taken knowledge of the updated version of the Belgian Corporate Governance Code, which was published on 12 March 2009 and which will form the basis for the Corporate Governance statement in the annual report that will be published in 2010. In the course of 2009, Omega Pharma will align its Corporate Governance Charter to the updated Corporate Governance Code and will inform the public accordingly via the corporate web site.

External supervision

In 2008, external supervision was performed by the Statutory Auditor, PriceWaterhouse-Coopers Bedrijfsrevisoren, represented by MM. Peter Van den Eynde and Peter Opsomer, Auditors, for the period of 1 January 2008 until and including 20 January 2008; and by Mr. Peter Van den Eynde, Bedrijfsrevisor, for the period of 21 January 2008 until and including 31 December 2008.The General Meeting of 5 May 2008 has re-newed the mandate of the Statutory Auditor for a term until the annual meeting that will be held in 2011.Details of the Statutory Auditor’s remunera-tion in 2008 can be found in Note 30 to the financial statement.

5252

Relevant elements in case of a take-over bid

The information that Omega Pharma NV is required to provide, based on article 34 of the Royal Decree of 14 November 2007 on the obligations of issuers of financial instru-ments that are allowed for trading on a regulated market, is listed hereunder.

Share capital structureOn 31 December 2008 there were 24,227,303 securities conferring voting rights, represent-ing a share capital of 16,464,661.41 euro. This number has remained unchanged until the date of this publication (3 April 2009). All shares have equal rights and obligations.

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

Holders of special securities conferring voting rightsThe Company has not granted any special voicing rights to any holder of securities apart from the nomination arrangement provided for in article 14 of the articles of association (cf. hereunder).

Mechanism for the control of share plans for employees, service providers and im-portant third parties of the GroupThe voting rights of the shares to be ac-quired by employees in the framework of the warrant plans, are directly exercised by the related employees

Restrictions related to the exercise of vot-ing rightsEach shareholder of Omega Pharma NV has right to one vote per share.

Each shareholder can exercise his voting rights provided that he has been legally admitted to the General meeting and that his rights have not been suspended. The rules for admission to the General Meeting are included in article 32 of the articles of association as well as in the convocation to the General Meeting.According to articles 7 and 9 of the articles of association, the Company is entitled to suspend the exercise of securities conferred voting rights (i) as long as the requested securities due are not fully paid up and (ii) to which more than one person is entitled,

In 2009, Omega Pharma is present in the profes-sional cycling world with the anti-snoring product Silence and the vitamin products of Davitamon. On the picture: the Belgian coming-man Greg Van Avermaet.

5353

as long as one single representative is ap-pointed to act as owner in respect to the Company.No one can participate in a voting at the General Meeting for voting rights related to securities for which he has failed to submit in due time a legally specified notification of participation.The Board of Directors is not aware of any other legal restriction related to the exercise of voting rights.

Agreements between shareholders, of which the Company is aware, and that may lead to restrictions inthe transfer of secu-ries en/or the exercise of voting rights.The Company is not aware of any such agree-ments at the time that this document is published.

Rules for the appointment and replace-ment of directors and for the modification of the articles of associationThe members of the Board of Directors are appointed by the General Meeting. When a position of director becomes free, the remaining directors have the possibility to preliminary provide for this vacancy. The procedure for appointing a new director is included in the articles of association as well as in the terms of reference of the Appoint-ment and Remuneration Committee, which is a component of the Corporate Governance Charter. The articles of association of the Company also provide a nomination right to Coukcinvest NV for the appointment of the members of the Board of Directors, by which half of the directors plus one must be chosen from among the candidates exclusively nomi-nated by Couckinvest NV. In reality, no use has been made of this nomination right. The articles of association of the Company

can be modified by an Extraordinary General Meeting, in accordance with the provisions and majorities stipulated in the Belgian Company Code.

Authorization to issue or to purchase sharesThe Extroardinary General Meeting of 7 July 2006 has granted authorization to the Board of Directors to increase the share capital in one or more times with a maximum amount of 16,296,833.81 euro, in a manner and under the conditions to be specified by the Board of Directors, for a five year duration starting as of the date of publication of this decision in the Annexes to the Belgian Gazette. On 31 December 2008, the Board of Directors sill had the authorization to increase the capital with a maximum amount of 16,088,384.81 euro.The Extroardinary General Meetings of 6 July 2007 and 9 June 2008 have granted authori-zation to the Board of Directors, for a period of 18 months starting as of the authorization, to acquire own shares, through purchase or exchange, directly or from a person who acts in own name but for the account of the company, at a price which may not be lower than 1 euro and not higher than the average of the closing prices of the 10 working days preceding the day of the purchase or the ex-change, increased with 10% and this in such a manner that the company will not posess at any time treasury shares of which the frac-tional value exceeds 10% of the share capital of the company. The Board of Directors is moreover authorised to alienate these shares without being bound by the aforementioned price and time restrictions. These authorisa-tions may also be used for the possible ac-quisition or alienation of company shares by direct subsidiaries in accordance with article

5454

627 of the Belgian Company Code.A proposal to prolong this authorization for a period of five years starting from the moment of authorization, and to allow the Company to hold treasury shares up to a maximum of 20% of the share capital of the Company, will be submitted to the Extraordi-nary General Meeting of 4 May 2009.

Arrangements in which the Company is a concerned party and which enter into operation, are subject to modifications are terminate in case of a change in control of the Company after a public take-over bidBoth agreements listed hereunder include clauses that enter into operation in case of a change of control over the Company. In accordance with article 5576 of the Belgian Company Code, these clauses have been ap-proved by the General Meeting.

• The EURO 600,000,000 Facility Agree-ment, closed on 1 December 2006 between Omega Pharma NV (as Company and Original Borrower), Omega Pharma Holding (Ned-erland) BV (as Original Borrower), certain subsidiaries of Omega Pharma NV mentioned in the agreement (as Original Guarantors), ING Bank NV (as Arranger and Agent) and the financial institutions mentioned in the agree-ment (as Original Lenders). • The US dollar 285,000,000 Note Pur-chase Agreement concerning 4.84% Series A Guaranteed Senior Notes due July 28, 2009, 5.44% Series B Guaranteed Senior Notes due July 28, 2011, 5.86% Series C Guaranteed Senior Notes due July 28, 2014, 6.19% Series D Guaranteed Senior Notes due July 28, 2016, closed on 27 July 2004 between Omega Pharma NV and some of its subsidiaries men-tioned in the agreement.

Agreements between the Company and its directors or employees, that provide for compensations when, because of a public take-over bid, directors or employ-ees resign or have to resign without valid reasons.There are no such agreements.

Notification of shareholders of the Com-pany in the framework of article 75 of the Law related to public take-over bidsThe Company has received a copy of the notifications of Couckinvest NV and Mr. Marc Coucke to the CBFA (BFIC) in accordance with article 74 of the Law of 1 April 2007 on take-over bids. These notifications demonstrate that Couckinvest NV and Marc Coucke held on 1 September 2007 respectively 7,922,501 and 11,245 securities with voting rights of Omega Pharma NV – i.e. 7,933,746 securities held in mutual agreement. Based on the to-tal number of 26,196,548 outstanding shares with voring right on 1 September 2007, their participations corresponds with 30.29%.

5555

‘Annual information’

In conformity with the Belgian act of 16 June 2006 pertaining to the public offer of investment instruments and the admission of investment instruments to be traded on the regulated market (the ‘Prospectus Law’), a summary of the ‘annual information’ is included hereunder. The full documents referred to in this summary are available on the corporate web site under the chapter In-vestor Center. The Company stipulates that a part of the information included in the docu-ments listed hereunder may have become outdated since their publication.

ProspectussesThe Company has not issued a prospectus in 2008.

Information to the shareholders• Convocations to the General Meetings of 5 May 2008 and 9 June 2008• Proxy forms for the above-mentioned General Meetings• Changes in the denominator resulting from the cancellation of purchased treasury shares on 9 June 2008, and resulting from the creation of new shares from the exercise of warrants on 6 February 2008 and 3 July 2008. Each time, the coordinated articles of association have been updated accordingly.• Disclosure in accordance with the Law of 2 May 2007 (12 September 2008)

Periodical press releases and information• 17 January 2008 (Trading Update fourth quarter and full year 2007)• 13 March 2008 (consolidated results 2007 and abbreviated statutory financial statements 2007)• 17 April 2008 (Trading Update first quarter 2008)• 17 July 2008 (Trading Update second quarter 2008)• 28 August 2008 (Interim financial report 2008)• 16 October 2008 (Trading Update third quarter 2008)• 22 January 2009 (Trading Update fourth quarter and full year 2008)

Occasional press releases and information• Notification in accordance with article 74, §6 of the law of 1 April 2007 on take-over bids (12 February 2008)• Presentation and minutes of the General Meeting (5 May 2008)• Notifications of participation (10 June 2008, 2 July 2008, 26 September 2008 and 4 November 2008)• New strategy announced at Investors Day (11 September 2008)

56

575757

Jaarrekening 2008

�������������������������������� ��Consolidated income statement 58Consolidated balance sheet 59Consolidated statement of changes in equity 60

� �������������������������������� ��Report of the Board of Directors 62General information 68

� ������������������������������������������ ��Risk management 79Segment information 88

� ������ ��� ��������������������������� ���

����������������������������� ���� ��������������������������������������� ���� ������������������������������������ ���� ������������������������ ���

StatementThe undersigned hereby declare that, to the best of their knowledge, the annual accounts that have been �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������included in the consolidation scope.

The undersigned also declare that, to the best of their knowledge, the annual report provides a true and ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������that they are confronted with.

����������������� � �������������������������31 March 2009

Financial statement 2008

(in thousand euro) Note 2008 2007*

Operating income 817 490 792 527

Turnover 1 811283 789303

Other operating income 2 6 207 3224

Operating expenses (718 916) (706 533)

Trade goods (344201) (336301)

Trade goods purchased (341 969) (331 578)

Changes in inventories of raw materials, components, work in progress and finished goods

(2 232) (4 723)

Services and other goods (232526) (223793)

Employeebenefitexpenses 3 (107408) (101775)

Depreciations and amortization 4 (21673) (16427)

Changes in provisions for liabilities 4 3389 688

Otheroperatingexpenses 5 (16497) (28925)

Of which restructuring charges (9 901) (23 133)

Of which other (6 596) (5 792)

Operating result 98 574 85 994

Financial income 1315 406

Financialexpense (41182) (34843)

Financial result 6 (39 867) (34 437)

Net result from continuing operations excluding associates and before income tax 58 707 51 557

Net result of associates (accounted for according to theequitymethod)

3569 2106

Result from ordinary activities before income tax 62 276 53 663

Incometax 7 (7900) (7869)

Result from continuing operations 54 376 45 794

Result from discontinued operations 8 7 999

Net gain from the sale of discontinued operations 100994

Minority interests (117)

RESULT OF THE PERIOD 54 259 154 787

Total number of shares outstanding on December 31 24 227 303 26 205 848

Of which treasury shares 879 994 1 353 128

Weighted average after deduction of treasury shares 23 673 785 25 799 638

Earnings per share (in euro) 9 2.30 6.00

Earnings per share from continuing operations 2.30 1.78

Diluted earnings per share (in euro)** 2.30 5.95

* All figures until and including the ‘Net result from continuing operations excluding associates and before income tax’ refer to the continuing operations in the OTC sector.

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

TheNotesformanintegralpartoftheconsolidatedfinancialstatement.

58

Consolidated income statement

(in thousand euro) Note 2008 2007

Non current assets 1 002 647 968 250

Intangible assets 10 878 967 845318

Property, plant and equipment 11 50074 50199

Financial assets 12 46467 45508

of which: Associates 44 527 42 774

Deferredincometaxassets 26318 26384

Other non current assets 821 841

Current assets 414 606 358 449

Inventories 13 122931 100686

Trade receivables 14 202242 176651

Other current assets 55640 45683

of which income tax assets 28 085 22 681

Cash and cash equivalents 15 33793 35429

TOTAL ASSETS 1 417 253 1 326 699

EQUITY 16 600 520 612 166

Share capital and share premium 366841 366294

Retained earnings 262815 306664

Treasury shares (24144) (63242)

Fair value and other reserves 4641 4212

Cumulative translation adjustments (9850) (1762)

Minority interests 217

LIABILITIES 816 733 714 533

Non current liabilities 439 299 450 774

Provisions 17 3887 6 267

Pension obligations 18 6147 8369

Deferredincometaxliabilities 19 69045 68 059

Borrowings(noncurrentfinancialliabilities) 20 344781 334439

Other non current liabilities 14 64

Derivativefinancialinstruments 20 15425 33576

Current liabilities 377 434 263 759

Borrowings(currentfinancialliabilities) 20 101850 22 526

Trade payables 200930 180421

Incometaxliabilities 27 207 26115

Taxes,remunerationandsocialsecurity 13762 14005

Other current payables 21 28631 20 692

Derivativefinancialinstruments 20 5054

TOTAL EQUITY AND LIABILITIES 1 417 253 1 326 699

TheNotesformanintegralpartoftheconsolidatedfinancialstatement.

59

Consolidated balance sheet

TheNotesformanintegralpartoftheconsolidatedfinancialstatement.

60

(in thousand euro)

Numberof

shares

Sharecapital

& sharepremium

Treasuryshares

Fair value

& otherreserves

Cumulat.transl.adjust-ments

Retainedearnings

Minority inter-

ests

Totalequity

Amount at 31 December 2006 25 711 887 358 274 (58 746) (1 780) 1 241 206 746 505 735

Fairvaluegains/(losses)oncashflowhedges

8 669 8 669

Fairvaluegains/(losses)oncashflowhedges-taxeffect

(2947) (2947)

Currency translation adjustments

(3003) (3003)

Profitfortheperiod 154787 154787

Total recognized income for the period

5 722 (3 003) 154 787 157 506

Capital increases 221167 8 020 8 020

Employee share options scheme and transfers of capital subsidies to discontinued operations

270 (127) 143

Treasury shares cancelled 44044 (44044)

Treasury shares purchased (1065744) (48540) (48540)

Dividend on treasury shares 96 96

Dividend (10794) (10794)

Amount at 31 December 2007 24 867 310 366 294 (63 242) 4 212 (1 762) 306 664 612 166

Fairvaluegains/(losses)oncashflowhedges

543 543

Fairvaluegains/(losses)oncashflowhedges-taxeffect

(184) (184)

Currency translation adjustments

(8088) (8088)

Profitfortheperiod 54259 117 54376

Total recognized income for the period

359 (8 088) 54 259 117 46 647

Capital increases 21455 547 547

Employee share options scheme 70 70

Treasury shares cancelled 85346 (85346) 0

Treasury shares purchased (1541456) (46248) 490 (45758)

Dividend on treasury shares 1217 1217

Dividend (13104) (13104)

Share of movement in reserves of investments accounted for according to the equity method

(1365) (1365)

Other 100 100

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

Consolidated statement of changes in equity

TheNotesformanintegralpartoftheconsolidatedfinancialstatement.

61

(in thousand euro) Note 2008 2007

Net result from continuing operations including associates and beforeincometax

58 707 51557

Taxespaid 7 (9289) (11229)

Amortization of intangible assets 4,10 8 527 8245

Depreciations of tangible assets 4,11 9 658 8764

Amountswrittenoff:inventories-receivables 4 2732 (951)

Amountswrittenoff:financialfixedassets (15)

(Profit)/lossonsaleoffixedassets 104 (2430)

Changes in provisions 4 (5668) 3169

Interestspaidandnon-cashfinancialitems 6 31712 34426

Total adjustments for non-cash items and interests paid 47 066 51 208

(Increase)/decreaseinothernon-currentassets (789) (7)

(Increase)/decreaseininventories 13 (21989) 6554

(Increase)/decreaseintradedebtors 14 (22130) 3825

(Increase)/decreaseinVATreceivables,incometaxreceivablesandotherreceivables(excludingdeferredcharges)

14 (2537) (7315)

(Increase)/decreaseinprepaymentsandaccruedincome (726) 1081

Increase/(decrease)intradecreditors 12185 (3629)

Increase/(decrease)inadvancepaymentsreceived 105

Increase/(decrease)insocialsecurityandtaxationcreditors (807) 4577

Increase/(decrease)inothercreditors (7228) (2999)

Increase/(decrease)inaccrualsanddeferredincome (1431) 4441

Increase/(decrease)inprovisions 219

Total changes in working capital (45 128) 6 528

Total cash flow from operating activities 51 356 98 064

Cashflowfrom/todiscontinuedoperations 272 708

Capitalexpenditure 10,11 (23066) (21632)

Capital disposals 10,11 1845 2 659

Changes in the scope and transfers of opening positions 630 481

Investmentsinexistingshareholdings(postpayments)andinnewholdings

27 (17556) (211949)

Total cash flow from investing activities (38 147) 42 267

Proceeds from the issue of share capital 547 8 020

Purchasesofownshares (47676) (60990)

Dividend distribution 29 (11464) (10343)

Change in debts 20 72845 (33088)

Net interests paid 6 (27548) (34069)

Total cash flow from financing activities (13 296) 130 470

Cash and cash equivalents at the beginning of the year 35429 28 605

Impact of discontinued operations on cash and cash equivalents (2532)

Effectofexchangeratefluctuations (1549) (505)

Cash and cash equivalents at the end of the year 33793 35429

Total net cash flow of the period (87) 9 861

Cash flow from operating activities of discontinued operations (7 078)

Cash flow from investing activities of discontinued operations (15 421)

Cash flow from financing activities of discontinued operations 25 377

Total net cash flow from discontinued operations 2 878

Consolidatedcashflowstatement

62

•Turnover+3percent,netearnings+19percent,dividend+20percent.

•RecurringEBITDAmarginremainslevel(16percent)inrecessionenvironment.

•SolidEBITDAcontributionfromBelgiumandEmergingMarkets.

•2009:Allscenariossuggestaslightgrowthinturnoverfor2009–Costsavingsplantoyieldover30millioneuro.

1.NotestotheconsolidatedincomestatementMajor factors related to the evolution of the turnoverOmegaPharmaachieveda2.8percentincreaseinturnoverversus2007(+3.5percentatconstantcurrencyexchangerates)inspiteofthecurrentmacro-economicconditions.Thisisdueto its focus on the OTC market, the unique positioning of its products, the utilization of group synergies,andtheimplementationofthestrategybasedoninnovationandgeographicexpansionintoEmergingMarkets.

The consumption of over-the-counter health and personal care products continues to be only slightlytomoderatelysensitivetorecession.Changesinconsumerbehaviorweregenerallyregisteredonlytoalimitedextend(e.g.inFrance)andconfinedtomainlysmallerproductsegmentssuchasmake-up.

AstrongincreaseinturnoverhasbeenrealizedinmajorproductcategorieswithOmegaPharmabrandsthathaveauniqueprice/qualityratiopositioning.Inthiscontext,thedynamicapproachwiththeBodysol(Belgium)andClaireFisher(Germany)dermocosmeticbrandsaswellastheBébisolbabyarticles,andtheEG-generics(Belgium)eachledtoastrongdoubledigitincreaseinannualturnover.

Theutilizationofgroupsynergiesandcross-sellingalsocreatedsalesgrowth.Examplesincludetheanti-snoringproductSilence,whichpostedanincreasedturnoverofmorethan50percentthankstoitsintroductioninnumerousadditionalcountries.TheAngstromsunprotectionproducts(Italian-origin)witnessedacomparablegrowthasaresultofcross-sellinginPortugal.

Innovationisalsoanimportantgrowthfactor.Inadditiontonumerouslocalproductinnovations,theintroductionsofXLSNutritionandParadustshowedremarkableresults.XLSNutritionoffersanentirelynewassortmentoflow-calorienutritionalproducts,complementingthewell-knownXLSslimmingproductsrange.Paradustisaninnovativeproductagainsthousemiteallergy,whichwidenedandstrengthenedtheParabrandofanti-insectproducts.

Thanks to its presence in the Emerging Markets, Omega Pharma can anticipate an increasing demandforOTCproductsinthesecountries.TheStarBrandsarebeingintroducedhereonastep-wisebasis.OmegaPharmaextendeditsgeographicexpansionstrategyin2008,enablingthisapproachtocontinuetoremainsuccessfulinthefuture.

Inthosemarketswhereintegratedretailchainsplayamajorrole-i.e.theUnitedKingdomandtheNetherlands-aswellasinSouthernEurope,thefourthquarterwascharacterizedbytheextremelyprudentpurchasingpatternoftradecustomers.Theimpactofthetrade’seffortstoreduceitsstockpositiontoaminimallevelrepresentsanestimated1percentofannualturnover.

Theimpactofunfavorablecurrencyexchangedifferencescausedtheannualturnovertoendapproximately1percentlower.ThisphenomenonwasparticularlyfeltintheUnitedKingdom,Scandinavia,andinspecificEmergingMarkets.

Report of the Board of Directors on the consolidated annual accounts

63

Gross margin and operating cash flow rate respectively amount to 57.6 per cent and 16.0 per cent of turnoverThegrossmarginamountsto57.6percentversus57.4percentin2007andthusincreasesslightlydespitethehigherturnoverfromgenericdrugs(withalowermargin).ThisoccursbecauseoftheeverhigheraddedvalueoftheinternationalOTCbrandsofthegroup(cf.above).

Theincreaseintheoperatingexpenses(+1.8percent)isanentirepercentagepointlowerthanthegrowthinturnover(+2.8percent).

Thecostfortradegoods(+2.3percent)alsoincreaseslessquicklythantheturnover.Amongservicesandothergoods(+3.9percent),thecostsforpromotionandadvertisingarethemaincauseoftheslightincrease,whichisinherentinthehighnumberofintroductionsofnewandrenewedproductsin2008.

Employeebenefitexpensesamountto13percentoftheturnoverandaretoastrongdegreerelatedtotheextendedsalesteams,whichareasignificantelementoftheuniquebusinessmodelofOmegaPharma.Thenumberofpersonnelwas2,139attheendofthereportingperiod(2,043full-timeequivalents).

Theoperatingcashflow(EBIT+DA)beforenon-recurringitemsbutaftercorporateexpense(EBITDA)amountsto130.1millioneuro.Thisisa4percentincreasecomparedto2007andisabovethegrowthinturnover.

Notes to the evolution of turnover and operating cash flow by segmentIn Belgium,OmegaPharma’sturnovergrewstronglyinthethirdandfourthquarters.Asaresult,theannualturnoverincreased3percent.Thisisinspiteofadifficultfirsthalfyear.Therecurringoperatingcashflowincreasedby26percent.Thiscorrespondswitha14.5percentEBITDAmarginwhilethiswasstill11.9percentin2007,thusunderscoringthesuccessoftheimplementedrestructuringsandtheincreasedefficiencyoftheBelgianoperations.Genericdrugsareincreasinglysuccessfulinthecurrenteconomicenvironment.Bothend-consumersandtradecustomersaredrivingthegrowingdemand-eventhoughthemeasuresannouncedbythegovernmentearlierarenotyetimplemented.ThepartnershipforthedistributionofgenericdrugsthusprovesitsstrategicimportancecomplementingtheOTCoperationsinBelgium.AmongOTCproducts,thenumeroussuccessfulnewproductlaunchesofthefourthquarterdemonstratethat Omega Pharma can continue to count on the trust and loyalty of the Belgian pharmacists in thefuture.

In France,asignificantnumberofcustomerscontinuedtofollowanextremelyprudentpurchasingpattern in the second half of 2008, mainly inspired by the generally prevailing perception regardingtheeconomicoutlookandbytheslightlydecreasedconsumerdemand.Theslow-downofturnoveralsoaffectedprofitability.Additionalmarketingexpenses,oftenforrelativelyexpensivecosmeticbrands,didnotresultintheexpectedleveloftheturnoverforthefourthquarter2008,andhenceimpactedtheprofitabilityratio.

In Northern Europe,turnoverincreasedwith3percent.Therecurringoperatingcashflowremainedataboutthesamelevelas2007andthe24.7percentmarginconfirmsthesuccessofthe innovation strategy and the synergies achieved

TheannualgrowthofturnoverinSouthern Europeamountedto3percent,butwasimpactedinthefourthquarterbycomparableconditionsasinFrance,aswellasbytheunrestinGreece.JustasinFrance,theslow-downofturnoverinthefourthquarterstronglyaffectedprofitability.

64

Omega Rest of Worldachieveda8percentgrowthinturnoverforthefullyear.Ontheonehand,theturnoverintheUnitedKingdomandtheNetherlandssufferedfromtheexternalconditionsalreadymentioned.Ontheotherhand,theturnoverinRussia,Ukraine,Poland,andtheothermarketsinCEEandCISwitnessedastrongdoubledigitgrowth.Theoperatingcashflow(+13percent)grewfasterthantheturnover.ThissplendidperformancecomesmainlyontheaccountoftheEmergingMarkets(CentralandEasternEurope,Australasia,andexports).ThehighEBITDAmarginof25.9percentconfirmsthepowerofOmegaPharma’sbusinessmodelintheEmergingMarkets,i.e.stronglocalbrands(forexampleBittner)combinedwithaselectionofinternationalOmegaPharmabrands.

The operating result (EBIT) is 15 per cent higher than in 2007Thereisanincreaseof5millioneurofordepreciationsandamortization,ofwhich1millioneurocanbeattributedtotheincreaseddepreciationrelatedtothenewmanufacturingsiteofBittnerPharmawhichwasputintooperationatthebeginningof2008,andapproximately1.7millioneuroofamortizationoninventoriesrelatedtotherecentintroductionofinnovationswhichreplacethecorrespondingproductversions.

Whilein2007therewerestill23millioneuroforrestructuringsandnon-recurringitems,thisdroppedto9.9millioneurointhelatestreportingperiod,referringtovariousmeasuresinBelgium,France,Ireland,Italy,Scandinavia,Spain,andtheUnitedKingdom,primarilyforfurtherstreamliningtheorganization.Thisindicatesthatthegroupiscontinuouslyoptimizingintegrationandismakingsteadyprogressinthisfield.

After taking account of depreciations, amortization and other operating charges, one arrives at anoperatingresult(EBIT)of98.6millioneuroversus86.0millioneuroin2007(+15percent).

14 per cent increase of profit from OTC operations in spite of impact from currency exchange differencesThefinancialresultconsistsof35.8millioneuroforrecurringitemsand4.0millioneuroforone-offcurrencyexchangedifferences(primarilybetweentheeuroontheonehandandtheBritishpoundandtheScandinaviancurrenciesontheotherhand).

Thisleadstoanetresultfromcontinuingoperationsexcludingassociates(OTC)beforeincometaxof58.7millioneuro(+14percent).

Profit contribution by ArseusOmegaPharmaholds24percentofthesharesofArseusNVandcouldconsequentlyadd24per centofthenetprofitofArseustoits2008result.Afterinclusionof24percentofthenetprofitofArseus,theprofitarrivesat62.3millioneuro.Afterincometax,theresultfromordinaryactivitiesamountsto54.4millioneuro–19percentbetterthanin2007.

WhenaccountistakenoftheentireprofitcontributionbyArseusin2007–includingthe101millioneuroresultingfromtheIPOofArseus–thefinalresultamountedto154.7millioneuro.AstheArseusIPOwasaone-offoperation,anycomparisonwith2008isirrelevant.

65

Less outstanding shares, higher profit per shareThankstothemajorpurchaseofownshares,theaveragenumberofshareshasdecreasedfrom25.8millionin2007to23.7millionin2008,leadingthenetrecurringearningspershareandthenetearningspersharetoincreaseby11percentand29percentrespectively.ThenetrecurringEPSamountsto2.81euro.

Further comments to the various elements in the income statement can be found in the Notes 1-9,whichareincludedfurtherinthisdocumentandwhichformanintegralpartoftheReportoftheBoardofDirectorsontheconsolidatedannualaccounts.

2.NotestotheconsolidatedbalancesheetOntheassetside,theintangibleassetsdemonstratea4percentincrease.Thisisprimarilyrelatedtotheconsolidationgoodwilloftheacquisitionsthathavebeenrealizedinthecourseof2008.R&Dalsoevolvedfrom14millioneuroto18millioneuro,thusillustratingtheenhancedinnovationstrategy.

Theworkingcapital(inventories+tradereceivables–tradepayables)evolvedto124.2millioneuro,i.e.15.3percentoftheconsolidatedturnover.Thisrepresents(aftercorrectionforacquisitions)anincreaseof23.6millioneuroversus2007.Thisneedstobelargelyreducedin2009throughtherecentlylaunchedprogramme.

Ontheliabilitiesside,equitywasmainlyimpactedbythenetprofitontheonehandandthepurchaseoftreasurysharesontheotherhand.

On31December2008,thenetfinancialdebt(NFD)*amountedto433.3millioneuroandcorrespondstoaNFD/EBITDAratio(asappliedforthecovenantcalculation)of2.9.Thenetfinancialdebtwasaffectedin2008bytheincreasedworkingcapital,andthesubstantialpurchaseoftreasurysharesforatotalamountof47.7millioneuro.Thankstothehighprofitabilityandtheworkingcapitalimprovementprogramme,OmegaPharmacangenerateconsiderablefreecashflows,whichmakeitpossibletosignificantlydecreasetheNFD/EBITDAratio.

Thenetcapex(excludingacquisitions)ofthepastperiodrepresents2.6percentoftheturnover.

FurthercommentstothevariouselementsofthebalancesheetcanbefoundintheNotes10-20,whichareincludedfurtherinthisdocumentandwhichformanintegralpartoftheReportoftheBoardofDirectorsontheconsolidatedannualaccounts.

* Net financial debt = current and non-current financial liabilities + derivative financial instruments – cash and cash equivalents)

66

3.NotestotheconsolidatedcashflowstatementTheconsolidatedcashflowstatementstartsfromtheprofitbeforetaxesasincludedintheconsolidatedincomestatement.

Thisamountisreducedbytheoutflowofcashflowsfortaxesintheamountof9.3millioneuro.Thisamountincludesallincometaxesthathavebeeneffectivelypaidoverthecourseof2008,whiletheamountintheincomestatement(7.9millioneuro)referstotheincometaxesthathavebeenaccountedforin2008.

Subsequently,theelementsfromtheoperatingactivitiesthatdonothaveacashfloweffectareaddedback.Non-financialelements(mainlydepreciations,amortizationandchangesinprovision)amounttoatotalof15.4millioneuro.Intheincomestatement,theseelementsalsoincludepartoftheotheroperatingexpenses(restructuringcharges),whichexplainsthedifferencebetweenbothamounts.

Inordertoobtainthecashflowfromoperatingactivities,thefinancialelementsarealsoaddedback.Theamountof31.7millioneurorefersfor27.5millioneurotopaidinterestsonborrowings,andtheremaindertoothernon-cashfinancialitems.Partoftheinterestsduein2008wereeffectivelypaidafterbalancesheetdate,thusexplainingthedifferencewiththeamountintheincomestatement.

Forthecalculationofthenetcashflowfromoperatingactivities,adjustmentsforchangesinworkingcapitalaresubsequentlymade.Thisrelatesbothtochangesinworkingcapitalinthenarrowdefinition,forwhichtradereceivables,inventoriesandtradepayablesaretakenintoaccount,andtootherelements.Theotherelementsoftheworkingcapital(inthebroaddefinition)arereflectedinthetableandrefertodebtsrelatedtoacquisitions,provisions,socialsecurityetc.

Thisleadstoanetcashflowfromoperatingactivitiesof51.4millioneuroin2008.

Thetotalamountforcashflowsfrominvestingactivitiesindicatesanoutflowof38.1millioneuro.In2007,therewasanetinflowof42.3millioneuro,butthiswasrelatedtothesaleof17.5millionsharesofArseusNVattheIPOofthelattercompanyinOctober2007.Thenetcapitalexpenditure(capitalexpenditurereducedwithcapitaldisposals)amountsto21.2millioneuroandcorresponds,asalreadymentioned,with2.6percentoftheturnover.Thepaymentsmadein2008forexistingandnewshareholdings(17.6millioneuro)arealmostexclusivelyrelatedtoacquisitionsmadein2008,whicharealsofurtherdetailedinNote24.Theseacquisitionsimplyanumberofpost-paymentsofthebasepricein2009,andmayalsoleadtoamaximumofapproximately5millioneuroofperformance-relatedcompensations(‘earn-outs’)intheperiod2009-2012.

Thecashflowsfromfinancingactivitiesrepresentanoutflowof13.3millioneuro.Thedifferencewith2007ismainlyrelatedtotheincreaseofdebt.Therewasalsoalimitedcapitalincreaseof0.5millioneuro,resultingfromtheexerciseofwarrants.Thepurchaseoftreasurysharesduringthefirsthalfof2008ledtoanoutflowofcashforanamountof47.7millioneuro.Thedistributionofthedividendovertheprecedingperiod(2007)resultedin2008inanoutflowof11.5millioneuro,while27.5millioneurowaspaidforinterestsonborrowings.

Thetotalcashflowdecreasedwith87thousandeuroin2008.

67

(*) Disclaimer: These forward-looking informations are based on current internal estimates and expectations as well as market expectations. Forward-looking statements contain inherent risks and apply exclusively on the date they are made. The actual results may differ substantially from those included in the forward-looking statements. Considering the reduced visibility which is inherent to the current economic environment, differences between expectations and reality may vary more strongly than before.

4.Prognosis*Considering the group strategy and the unique positioning in the OTC sector, Omega Pharma is convincedthataslightgrowthinturnoverfor2009isarealisticexpectation.

Inthisrespect,OmegaPharmawillcontinuetobearfruitfromthegeographicexpansionalreadyinitiated,enablingitssalesplatformstolaythefoundationsforsustainedgrowthoverthenextseveralyears.Theremarkable2008performancejustifiestheassumptionthatthemarketforthehealthandpersonalcareproductsofOmegaPharmawillcontinuetogrowstructurallyintheEmergingMarkets-eveninlessprosperouseconomictimes.TherestorationofgenericdruggrowthinBelgiumrepresentsanotheropportunity.

In the more mature Western European OTC organizations of Omega Pharma, the combination ofsynergies(geographicroll-outofsuccessfulproducts)andnewinnovativeproducts,shouldimprovethecompetitivepositionofmanylocalorganizations.

Inaddition,OmegaPharmawillcontinuetopaypermanentattentiontotheproductmix,inwhichproductswithanoptimalprice/qualityratiorepresentstrongassets,consideringthecurrenteconomicenvironment.

Basedonallofthesepreparations,OmegaPharmawouldundernormaleconomicconditionslookforwardtoastrong2009.Becausenotallpreparationsmaycometotheirfullexpressionintheactual,changedenvironment-inwhichOmegaPharmastillappearstobealittletomoderatelysensitivetotherecession-thecombinationofthesevariousfactorsisexpectedtoleadmerelytoaslightgrowth.

Fromaprofitabilityperspective,OmegaPharmaisalreadyfullybenefittingfromthedeflationthathasoccurredformanyservicesofhighrelevanceforthegroup(logistics,marketing,etc.)in order to provide an equally strong or even stronger support of its activities at a reduced cost level.Thisvigorouscostsavingsprojectshouldyieldaminimum30millioneuroofsavingsandresultinanimprovementoftheworkingcapitalwithover20millioneuro,withoutlosingmarketshareandwithoutaffectingtheinternaldynamics.Thisplanhasalreadybeenintroducedinallcountriesandisbeingrigorouslyimplemented.

Theexpectedslightgrowthinturnover,combinedwiththecostsavingsprogrammeandlowerfinancialcharges,mayhaveapositiveimpactonthenetearningspersharein2009.Asamatteroffact,theaveragenumberofshareshasdecreasedfrom25.8millionin2007to23.7millionin2008,thankstothemajorpurchaseofownshares.

InformationaboutsignificanteventsafterthebalancesheetdateisincludedinNote26totheconsolidatedannualaccounts.AnoverviewofmainrisksanduncertaintiesisincludedintheNotes,whichareincludedfurtherinthisdocumentandwhichformanintegralpartoftheReportoftheBoardofDirectorsontheconsolidatedannualaccounts.

68

OmegaPharmaNV(the‘Company’)anditssubsidiaries(togetherthe‘Group’)arevendorsofhigh-added-valueproductsandservicestopharmaciesandothermedicalsectors.TheGrouphasactivitiesincloseto40countries.

TheCompanyisalimitedliabilitycompany,makingorhavingmadeapublicappealonsavings.TheCompanyisincorporatedanddomiciledinBelgium,havingitsregisteredofficeatVenecoweg26,9810Nazareth,withcompanynumberBE0431676229.

TheCompany’ssharesarelistedontheregulatedmarketEuronextBrussels.

TheseconsolidatedfinancialstatementshavebeenapprovedforissuebytheBoardofDirectorson31March2009.

SummaryofsignificantaccountingpoliciesTheprincipalaccountingpoliciesappliedinpreparationoftheseconsolidatedfinancialstatementsaresetoutbelow.Thesepolicieshavebeenconsistentlyappliedbyallconsolidatedentities,includingsubsidiaries,toalltheyearspresented,unlessotherwisestated.

Basis of preparationTheconsolidatedfinancialstatementsofOmegaPharmaGrouphavebeenpreparedinaccordancewithInternationalFinancialReportingStandardsasadoptedbytheEU(IFRSsasadoptedbytheEU).Theconsolidatedfinancialstatementshavebeenpreparedunderthehistoricalcostconventionasmodifiedbytherevaluationoffinancialassetsandliabilities(includingderivativeinstruments)atfairvalue.

1) Standards and interpretations to existing standards that are effective in 2008- IFRIC11'IFRS2:GroupandTreasuryShareTransactions'- AmendmentstoIAS39andIFRS7:ReclassificationofFinancialInstruments(anyreclassificationofafinancialassetmadeinperiodsbeginningonorafter1November2008shalltakeeffectonlyfromthedatewhenthereclassificationismade).

2) The following standards and interpretations of existing standards were not yet effective as per the end of 2008:- IAS1revised,'Presentationoffinancialstatements',- IAS23revised,'Borrowingcosts',- IFRS2'Share-basedpayment'amendmentregardingvestingconditionsandcancellations,- IFRIC13,'Customerloyaltyprograms'and- IFRIC14,'IAS19-thelimitonadefinedbenefitasset,minimumfundingrequirementsandtheirinteraction'.

CompaniesreportingunderEU-IFRSshouldapplytheseatthelatestforperiodsbeginningonorafter1January2009,andhencemaychoosetoearlyadoptat31December2008.

*TheEUeffectivedatehasimplicationsforIFRIC14,wheretheeffectivedateintheinter–pretationitselfisayearearlierandforIFRIC13,wheretheeffectivedateintheinterpretationis6monthsearlier.

General information

69

3) Standards and interpretations to existing standards that are not yet effective and have been early adopted by the GroupIFRS8OperatingSegments(mandatoryforaccountingperiodsbeginningonorafter1January2009).

4) Standards, amendments and interpretations effective in 2008 but not relevant- AmendmentstoIAS39andIFRS7:ReclassificationofFinancialInstruments(anyreclassificationofafinancialassetmadeinperiodsbeginningonorafter1November2008shalltakeeffectonlyfromthedatewhenthereclassificationismade).

ConsolidationSubsidiariesSubsidiariesareallentitiesoverwhichtheGrouphasthepowertogovernthefinancialandoperating policies, generally accompanying a shareholding of more than one half of the voting rights.SubsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroup.Theyarede-consolidatedfromthedatethatcontrolceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by theGroup.Thecostofanacquisitionismeasuredasthefairvalueoftheassetsgiven,equityinstrumentsissuedandliabilitiesincurredorassumedatthedateofexchange,pluscostsdirectlyattributabletotheacquisition.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumed in a business combination are measured initially at their fair values at the acquisition date.TheexcessofcostofacquisitionoverthefairvalueoftheGroup’sshareoftheidentifiablenetassetsacquiredisrecordedasgoodwill.

Inter-companytransactions,balancesandunrealizedgainsontransactionsbetweenGroupcompaniesareeliminated.Unrealizedlossesarealsoeliminatedbutareconsideredanimpairmentindicatoroftheassettransferred.

AccountingpoliciesofsubsidiarieshavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbytheGroup.

70

AssociatesAssociatesarecompaniesinwhichtheGrouphas,directlyorindirectly,asignificantinfluencebutnotthecontroltogovernthefinancialandoperatingpolicies.ThisisgenerallyevidencedwhentheGroupholdsbetween20and50percentofthevotingrights.

Investments in associates are accounted for by the equity method of accounting, from the date thatsignificantinfluencecommencesuntilthedatethatsignificantinfluenceceases.Undertheequity method, investments in associates are carried in the consolidated balance sheet at cost as adjusted for post acquisition changes in the Group’s share of the net assets of the associate, less anyimpairmentinthevalueoftheindividualinvestments.

WhentheGroup’sshareoflossesinanassociateexceedsthecarryingamountoftheassociate,thecarryingamountisreducedtonilandrecognitionoffurtherlossesisdiscontinuedexcepttotheextentthattheGrouphasincurredobligationsinrespectoftheassociate.

AnyexcessofthecostofacquisitionovertheGroup’sshareofthenetfairvalueoftheidentifiableassets,liabilitiesoftheassociateidentifiedatthedateofacquisitionisrecognisedasgoodwill.Thegoodwillisincludedwithinthecarryingamountoftheinvestmentandisassessedforimpairmentaspartoftheinvestment.

ProfitsandlossesontransactionsbetweentheGroupanditsassociatesareeliminatedtotheextentoftheGroup’sinterestintheassociates,unlessthelossprovidesevidenceofanimpairmentoftheassettransferred.

Wherenecessary,adjustmentsaremadetothefinancialstatementsofassociatestobringtheaccountingpoliciesusedinlinewiththoseusedbytheGroup.

IncasethefinancialstatementsofanassociatehavebeenpreparedasofadatedifferentfromtheGroup,adjustmentsarebookedforsignificanttransactionsoreventsthatoccurbetweenthatdateandthedateoftheconsolidatedfinancialstatements.

71

Foreign currency translationItemsincludedinthefinancialstatementofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(‘thefunctionalcurrency’).Theconsolidatedfinancialstatementsarepresentedineuros,whichistheCompany’sfunctionalandpresentationcurrency.Toconsolidate,thefinancialstatementsaretranslatedasfollows:•Assetsandliabilitiesattheyear-endrate.• Incomestatementsattheaverageratefortheyear.•Componentsoftheequityathistoricalexchangerate.

Exchangedifferencesarisingfromthetranslationofthenetinvestmentinforeignsubsidiariesattheyear-endexchangeratearerecordedaspartoftheshareholders’equityunder‘currencytranslationdifferences’.

Foreign currency transactionsForeigncurrencytransactionsaretranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthedatesofthetransactions.Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsandfromthetranslationatyear-endexchangeratesofmonetaryassets and liabilities denominated in foreign currencies are recognized in the income statement (inthefinancialresult),exceptwhen,asfrom1January2005,hedgeaccountinginaccordancewithIAS32andIAS39isbeingapplied.Inthatcase,themark-to-marketvalueisrecognizedintheincomestatementwhenrelatedtofairvaluehedges,andinequitywhenrelatedtocashflowhedges.

Property, plant and equipmentProperty, plant and equipment are valued at the acquisition value or production cost, increased withallocatedcostswhereappropriate.Depreciationiscalculatedproratatemporisonthebasisoftheusefullifeoftheasset,inaccordancewiththefollowingdepreciationparameters:

Buildings 3%-4%

Buildingfixturesandfittings 4%-20%

Plant,machineryandequipment 4%-40%

Furniture 20%-40%

Computerequipment,software 20%-33%-40%

Officeequipment 20%-40%

Vehicles 20%

Othertangiblefixedassets 25%-50%

Virtuallyallassetsaredepreciatedonastraight-linebasis.

Totheextentresidualvaluesaretakenintoaccountforcalculatingthedepreciations,thoseresidualvaluesarereviewedannually.

Assetsacquiredunderleasingarrangementsaredepreciatedovertheeconomiclifetime,whichmayexceedtheleasetermifitisreasonablycertainthattheownershipwillbeobtainedattheendoftheleaseterm.

72

Intangible assetsGoodwillGoodwillrepresentstheexcessofthecostofanacquisitionoverthefairvalueoftheGroup’sshareofthenetidentifiableassetsoftheacquiredsubsidiaryatthedateofacquisition.Goodwillonacquisitionsofsubsidiariesisincludedinintangibleassets.Goodwillistestedforimpairmenteachtimethereisatriggeringevent,oratleastannually.Goodwilliscarriedatcostlessaccumulatedimpairmentlosses.Impairmentlossesongoodwillareneverreversed.Gainsandlossesonthedisposalofanentityincludethecarryingamountofgoodwillrelatingtotheentitysold.

Brands, licenses, patents, software and otherIntangibleassetsarecapitalisedatcost.

Severalexternallyacquiredintangibleassetswithanindefiniteusefullifehavebeenidentified.ItspecificallyconcernstheStarBrandsandKeyBrandsforwhich,basedontherelevantfactors,noforeseeablelimittotheperiodoftimeoverwhichthesebrandsareexpectedtogeneratecashflowcanbedetermined.Theseintangiblesaretestedforimpairmentannually.

Thecostsofbrandswithadefiniteusefullifearecapitalizedandgenerallyamortizedonastraightlinebasisoveraperiodof20years.

Research and developmentResearchcostsrelatedtotheprospectofgainingnewscientificortechnologicalknowledgeandunderstandingareexpensedasincurred.

Developmentcostsaredefinedascostsincurredforthedesignofneworsubstantiallyimprovedproductsandfortheprocessespriortocommercialproductionoruse.Theyarecapitalizedif,amongstothers,thefollowingcriteriaaremet:

•Thereisamarketforsellingtheproduct.•TheeconomicbenefitsfortheCompanywillincreasewhensellingthedevelopedasset.•Theexpenditureattributabletotheintangibleassetscanbemeasuredreliably.

Developmentcostsareamortizedusingastraightlinemethodovertheperiodoftheirexpectedbenefit,currentlynotexceedingfiveyears.Amortizationonlystartsasofthemomentthattheseassetsarereadyforuse.

73

Impairmentofnon-financialassetsAssetsthathaveanindefiniteusefullifearenotsubjecttoamortizationandaretestedannuallyforimpairment.Assetsthataresubjecttoamortizationarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognizedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandvalueinuse.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows(cash-generatingunits).

BorrowingsBorrowingsarerecognizedinitiallyatfairvalue,netoftransactioncostsincurred.Borrowingsaresubsequentlystatedatamortizedcost;anydifferencebetweentheproceeds(netoftransactioncosts)andtheredemptionvalueisrecognizedintheincomestatementovertheperiodoftheborrowingsusingtheeffectiveinterestmethod.

BorrowingsareclassifiedascurrentliabilitiesunlesstheGrouphasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthebalancesheetdate.

Financial assetsTheGroupclassifiesitsfinancialassetsinthefollowingcategories:loansandreceivablesandavailableforsalefinancialassets.Managementdeterminestheclassificationofitsinvestmentsatinitialrecognitionandre-evaluatesthisdesignationateveryreportingdate.

Loans and receivablesLoansandreceivablesarenon-derivatefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketandwithnointentionoftrading.Theyareincludedincurrentassets,exceptformaturitiesexceeding12monthsafterthebalancesheetdate.Loansandreceivablesarecarriedatamortizedcostusingtheeffectiveinterestmethod.

74

Available for sale financial assetsAvailableforsalefinancialassetsarenon-derivativesthatareeitherdesignatedinthiscategoryornotclassifiedinanyoftheothercategories.Theyareincludedinnon-currentassetsunlessmanagementintendstodisposeoftheinvestmentwithin12monthsofthebalancesheetdate.

Availableforsalefinancialassetsareatinitialrecognitionmeasuredatfairvalueunlessthefairvaluecannotbereliablydetermined,inwhichcasetheyaremeasuredatcost.Unrealizedgainsandlossesarisingfromchangesinthefairvaluearerecognizedinequity.Whentherelatedassets are sold or impaired, the accumulated fair value adjustments are included in the income statementasgainandlosses.

Currently,theavailableforsalefinancialassetscompriseonlyinvestmentsinsharesthatdonothavequotedmarketsandforwhichthefairvaluecannotbedeterminedreliably.Hence,theyarecarriedatcost.

Any events or changes in circumstances that might indicate a decrease in the recoverable amount areconsideredcarefully.Impairmentlossesarerecognizedintheincomestatementasdeemednecessary.

DerivativefinancialassetsandhedgingactivitiesDerivatives are initially recognized at fair value on the date a derivative contract is entered into andaresubsequentlyremeasuredattheirfairvalue.Themethodofrecognizingtheresultinggainorlossdependsonwhetherthederivativeisdesignatedasahedginginstrument,andifso,thenatureoftheitembeinghedged.TheGroupdesignatescertainderivativesaseither:

(1) hedgesofthefairvalueofrecognizedassetsorliabilitiesorunrecognizedfirmcommitments(fairvaluehedge);

(2)hedgesofparticularriskassociatedwitharecognizedassetorliabilityorahighlyprobableforecasttransaction(cashflowhedge);

(3)hedgesofanetinvestmentinaforeignoperation(netinvestmenthedge).

TheGroupdocumentsattheinceptionofthetransactiontherelationshipbetweenhedginginstrumentsandhedgeditems,aswellasitsriskmanagementobjectivesandstrategyforundertakingvarioushedgetransactions.TheGroupalsodocumentsitsassessment,bothathedgeinceptionandonanongoingbasis,ofwhetherthederivativesthatareusedinhedgingtransactionsarehighlyeffectiveinoffsettingchangesinfairvaluesorcashflowsofhedgeditems.

75

Leases–OperatingleasesLeasesinwhichasignificantportionoftherisksandrewardsofownershipareretainedbythelessorareclassifiedasoperatingleases.Paymentsmadeunderoperatingleasesareexpensedasincurred.

Leases–FinanceleasesLeasesofproperty,plantandequipmentwheretheGrouphassubstantiallyalltherisksandrewardsofownershipareclassifiedasfinancelease.

Financeleasesarecapitalizedattheinceptionoftheleaseatthelowerofthefairvalueoftheleasedpropertyandthepresentvalueoftheminimumleasepayments.Eachleasepaymentisallocatedbetweentheliabilityandfinancechargessoastoachieveaconstantrateonthefinancebalanceoutstanding.

Thecorrespondingrentalobligations,netoffinancecharges,areincludedinthenon-current(payableafter1year)andcurrent(payablewithin1year)borrowings.Theinterestelementofthefinancecostischargedtotheincomestatementovertheleaseperiodsoastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliabilityforeachperiod.

Theproperty,plantandequipmentacquiredunderfinanceleasesisdepreciatedovertheusefullifeoftheasset,whichmayexceedtheleasetermifitisreasonablycertainthattheownershipwillbeobtainedattheendoftheleaseterm.

InventoriesRawmaterials,consumablesandgoodsforresalearevaluedatacquisitionvalueusingtheFIFOmethodornetrealisablevalue(furtherNRV)onthebalance-sheetdate,iflower.Workinprogressandfinishedproductsarevaluedatproductioncost,which,inadditiontothepurchasecostofrawmaterials,consumptiongoodsandconsumables,alsoincludesthoseproductioncoststhataredirectlyattributabletotheindividualproductorproductgroupandrelatedproductionoverhead.

Trade receivablesTradereceivablesarevaluedatfairvalue.AprovisionforimpairmentoftradereceivablesisestablishedwhenthereisobjectiveevidencethattheGroupwillnotbeabletocollectallamountsdue.Significantfinancialdifficultiesofthedebtor,probabilitythatthedebtorwillenterbankruptcyorfinancialreorganization,anddefaultordelinquencyinpaymentsareconsideredindicatorsthatthetradereceivableneedstobeimpaired.

76

Cash and cash equivalentsCashandcashequivalentsincludecashinhand,depositsheldatcallwithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorless,andbankoverdraftsandarevaluedatacquisitionvalue.Adjustmentstothecarryingamountsaremadewhentherealizationvalueonthebalancesheetdateislowerthantheacquisitionvalue.

Share CapitalOrdinarysharesareclassifiedasequity.

Incrementalcostsdirectlyattributabletotheissueofnewsharesoroptionsareshowninequityasadeduction,netoftax,fromtheproceeds.

WhereanyGroupcompanypurchasestheCompany’sequitysharecapital(Treasuryshares),theconsiderationpaid,includinganydirectlyattributableincrementalcosts(netofincometaxesontransactioncosts),isdeductedfromequityattributabletotheCompany’sequityholdersuntilthesharesarecancelled,reissuedordisposedof.Wheresuchsharesaresubsequentlysoldorreissued, any consideration received, net of any directly attributable incremental transaction costsandtherelatedincometaxeffects,isincludedinequityattributabletotheCompany’sequityholders.

ProvisionsProvisionsforrestructuringcosts,legalclaims,theriskoflossesorcostswhichmightarisefrom personal securities or collateral constituted as guarantees of creditors or third party commitments,fromobligationstopurchaseorsellfixedassets,fromthefulfillmentofcompletedorreceivedorders,technicalguaranteesassociatedwithsalesorservicesalreadycompletedbytheCompany,unresolveddisputes,finesandpenaltiesrelatedtotaxes,orcompensationfordismissalarerecognizedwhen:theGrouphasapresentlegalorconstructiveobligationasaresultofpastevents;itismorelikelythannotthatanoutflowofresourceswillberequiredtosettletheobligation;andtheamounthasbeenreliablyestimated.Restructuringprovisionscompriseleaseterminationpenaltiesandemployeeterminationpayments.Provisionsarenotrecognizedforfutureoperatinglosses.

Provisionsaremeasuredatthepresentvalueofmanagement’sbestestimateoftheexpenditurerequiredtosettlethepresentobligationatthebalancesheetdate.

Thediscountrateusedtodeterminethepresentvaluereflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheliability.

77

EmployeebenefitsPension obligationsGroupcompaniesoperatevariouspensionschemes.Theschemesarefundedthroughpaymentstoinsurancecompanies,determinedbyperiodicactuarialcalculations.TheGrouphasbothdefinedbenefitanddefinedcontributionplans.Theliabilityrecognizedinthebalancesheetinrespectofdefinedbenefitpensionplansisthepresentvalueofthedefinedbenefitobligationatthebalancesheetdatelessthefairvalueofplanassets,togetherwithadjustmentsforunrecognizedactuarialgainsorlossesandpastservicecosts.Thedefinedbenefitobligationiscalculatedperiodicallybyindependentactuariesusingtheprojectedunitcreditmethod.Thepresentvalueofthedefinedbenefitobligationisdeterminedbydiscountingtheestimatedfuturecashoutflowsusinginterestratesofhigh-qualitycorporatebondsthataredenominatedinthecurrencyinwhichthebenefitswillbepaid,andthathavetermstomaturityapproximatingtothetermsoftherelatedpensionliability.

Actuarialgainsandlossesarisingfromexperienceadjustmentsandchangesinactuarialassumptionsinexcessofthegreaterof10percentofthevalueofplanassetsor10percentofthedefinedbenefitobligationarespreadtoincomeovertheemployees’expectedaverageremainingworkinglives.

Fordefinedcontributionplans,theGrouppayscontributionstopensioninsuranceplans.The Group has no further payment obligations once the contributions have been paid, as the guaranteedminimumreturnexceedsthelegallyrequiredminimumreturn.

Contributionstodefinedcontributionplansarerecognizedasanexpenseintheincomestatementwhenincurred.

Share based paymentsTheGroupoperatesanequity-settled,share-basedcompensationplan.Thetotalamounttobeexpensedoverthevestingperiodisdeterminedbyreferencetothefairvalueofthewarrantsgranted,excludingtheimpactofanynon-marketvestingconditions(forexample,profitabilityandsalesgrowthtargets).Non-marketvestingconditionsareincludedinassumptionsaboutthenumberofoptionsthatareexpectedtobecomeexercisable.Ateachbalancesheetdate,theentityrevisesitsestimatesofthenumberofoptionsthatareexpectedtobecomeexercisable.Itrecognizes the impact of the revision of original estimates, if any, in the income statement, and a correspondingadjustmenttoequityovertheremainingvestingperiod.

The proceeds received net of any directly attributable transaction costs are credited to share capital(nominalvalue)andsharepremiumwhenthewarrantsareexercised.

78

IncometaxesIncometaxexpenseaspresentedintheincomestatementincludecurrentincometaxanddeferredtaxes.CurrentincometaxesincludetheexpectedtaxliabilitiesontheCompany’staxableincomeforthefinancialyear,basedonthetaxratesapplicableonthebalancesheetdate,andanytaxadjustmentsofpreviousyears.

Deferredincometaxesarerecordedaccordingtothe'liability'methodandarecalculatedontemporarydifferencesbetweenthecarryingamountandthetaxbase.ThismethodisappliedtoalltemporarydifferencesexceptfordifferencesarisingoninvestmentsinsubsidiariesandassociateswherethetimingofthereversalofthetemporarydifferenceiscontrolledbytheGroupandwhereitisprobablethatthetemporarydifferencewillnotreverseintheforeseenfuture.Thecalculationisbasedonthetaxratesthatareenactedorsubstantiallyenactedbythebalancesheetdateandareexpectedtoapplywhentherelateddeferredtaxassetisrealizedorthedeferredtaxliabilityissettled.Accordingtothiscalculationmethod,theGroupisalsorequiredtoaccountfordeferredtaxesrelatingtothedifferencebetweenthefairvalueofthenetacquiredassetsandtheirtaxbaseresultingfromacquisitions,ifany.

Deferredincometaxassetshavebeenaccountedfortotheextentthatitisprobablethatthetaxlossescarriedforwardwillbeutilizedintheforeseeablefuture.Deferredincometaxassetsarewrittendownwhenitisnolongerprobablethatthecorrespondingtaxbenefitwillberealized.

Revenue recognitionSalesofgoodsarerecognizedwhenaGroupentityhasdeliveredproductstothecustomer;thecustomerhasacceptedtheproducts;andcollectibilityoftherelatedreceivablesisprobable.Salesofservicesarerecognizedintheaccountingperiodinwhichtheservicesarerendered.

Segment reportingAn operating segment is a group of assets and operations engaged in providing products or servicesthatarethebasisoftheinternalreportsontheoperatingactivitiestotheExecutiveCommittee.

Dividend distributionDividend distribution to the Company’s shareholders is recognized as a liability in the Group’s financialstatementsintheperiodinwhichthedividendsareapprovedbytheCompany’sshareholders.

79

InconformitywithIFRS7followsadescriptionoftheprincipalrisksanduncertaintiestowhichtheGroup’sactivitiesexposeitto.

It is the Group’s policy to remain continuously focused on identifying all major risks, developing plans to prevent or alleviate risks, to manage them appropriately and reduce their consequences shouldtheystilloccur.DespitethispolicytheCompanyisnotpositionedtoprovideafullguaranteethattheseriskswillnotoccurorthattheywillremainwithoutconsequencesshouldtheyoccur.

AninvestmentinthesharesoftheGroupthereforeinvolvessubstantialrisks,whichpotentialinvestorsshouldcarefullyconsider,andwhichincludebutarenotlimitedtothefollowingrisks(mentionedatrandom):

Cyclical risksAtthemomentofeditingthisdocument,itisnotyetfullyclearhowaweakeconomyand/orarecessionwouldimpactthesaleofOTCproducts.Atthemoment,itisgenerallyacceptedthattheaverageconsumerpostponesthepurchaseofproductswhichheneedsoccasionally,whilethepurchaseofproductsforregularordailyuserelativelykeepsitslevel.Fromthisperspectiveit is plausible to assume that the products of Omega Pharma are generally little to moderately sensitivetotherecession.

In the current phase of the recession, one can notice that certain product categories in the Group’sportfolioarelesssensitivethanothers.Productsfordailyhygiene,thathaveauniqueprice/qualityratio,forexample,appearforexampleatpresentbetterharnessedagainsttherecessionthanhigherpricedluxuryproductslikemake-up.Althoughthelatterproductcategorycontributestheminoritytotheconsolidatedannualturnoverin2008,itcannotbeexcludedthatthecurrentproductmixwouldevolveunfavorablywhenthecurrentrecessionwouldfurtherdeepenorwouldlastlongerthangenerallyexpected.

Therefore,itcannotbeexcludedthatchangesintheeconomy–whethermicroormacro–couldsignificantlyimpacttheGroup’sresults.

UncertaintyofprognosesThe Group makes use of all internally available information for developing forecasts for the sector ingeneralandOmegaPharmainparticular.Basedonallthisinformation,anestimateismade,whichservesasthebasisfordevelopingthebusinessplansfortheGroup.Alllocalmanagersareinvolvedinthisprocess.Noguaranteecanbegiventhattheprognosesincludedintheseplanswilloccurasanticipated.Insuchanevent,thismayhaveamateriallyadverseeffectontheGroup’sbusinessoperations,financialposition,prospectsand/oroperationalresults.

MarketpricefluctuationsThefutureprofitabilityoftheGroupisdeterminedinpartbythepurchasepricesforrawmaterials,components,andforoperatingexpensessuchastransportationcosts.Atthemoment,themarketsforthemajorrawmaterialsandcomponentsappearrelativelystableandsomebusiness-to-businessservicesareevencharacterizedbyadeflationtrend,butitisunclearhowthiswouldfurtherevolveduring2009.Although there are many providers for these products and services on the market, the Group continues to closely monitor the situation in order to be capable of developing the required preventivemeasuresshouldthesemarketsbecomemorevolatile.IncaseofafuellinginflationitcannotbeexcludedthattherawmaterialsforOTCproductsbecomeconsiderablymoreexpensivewhichmaysignificantlyimpacttheGroup’sprofitabilityinanegativeway.

Risk management

80

Inventory related risksGiventhattheGroupstoresandmarketsalargeassortmentofproductshavingaspecificstorage life and a trend-sensitive nature, in a market environment that is characterized by a high innovation pace, the emergence of a disruptive technology or a sudden change in customer preferencesorachangingconsumerconfidencemayleadtotheneedtowritedownpartoftheinventory.AninventoryrelatedriskofthiskindmighthaveanadverseeffectontheGroup’sbusinessoperations,financialpositionand/oroperationalresults.

Innovation risksAlthough Omega Pharma is far less dependent upon the result of Research and Development thantraditionalpharmaceuticalcompanies,aregularinflowofinnovativeproductsandservicesremainsarequirementforthecontinuedfavourabledevelopmentofturnover.OmegaPharmahasinstalledaspecificfunctionforin-licensing.Histaskistotrackinnovationsandestablishthirdpartycontactstoprovidesupportintheeventofasignificantinnovation.Thisreducestheriskofalackofinnovation.TheGroupalsoperformsspecificproductandservicedevelopmentactivitiesin-house.

In the event that Omega Pharma is unable to maintain a high pace of innovation and thereby fails to create the innovative solutions required to meet the needs of the market, its business operations,financialposition,prospectsand/oroperationalresultscouldbe,materiallyadverselyaffected.TheresultsoftheGroupcanbeimpactedmostbychangesinthesegmentswherethelargestturnoverisachieved,e.g.slimming,headlicetreatment,wartremoval,pregnancytests,anti-snoringproducts,vitaminsetcetera.

For the vast majority of the types of products marketed by Omega Pharma, a legal authorization isrequiredpriortointroducingtheseproductsonthemarket.Intheseprocedures,itisverifiedwhetherthenewproductmeetsallvalidrequirementsrelatedtoquality,safetyand/orefficacy.Becausenotallnewproductsaresubjecttosuchprocedures,andbecausesuchprocedurescannotcaptureallrisks,itcannotbeexcludedthatspecific,previouslyunknownproblemsassociatedwithinnovativeproductsoccurwhichmayleadtomarketwithdrawal.Thismayhaveconsequencesfortheoperations,thefinancialsituation,theprognosisand/ortheresultsoftheGroup.

Risks of reduced economies of scaleThe unfavorable economic cycle, increased competition or any other reason may cause a decrease ofthesalesvolumeofspecificproducts.Thismayinvokeacostincreasefortheseproducts(whensourcedexternally)oranegativeprofitabilityoftheGroup’smanufacturingsites(whensourcedinternally).

The unfavorable economic cycle, the cost reduction program or any other reason may cause a decreaseofthesalesvolumeinspecificcountries,whichmaynegativelyaffecttheleverageeffectonprofitabilityinsuchawaythatthefixedcostsoftheorganizationintherelatedcountryisinsufficientlycovered.

81

Risk of inadequate protection of brand and other intellectual property rightsOmegaPharmareliesonacombinationoftrademarks,tradenames,confidentialityandnon-disclosureclausesandagreementsandcopyrightstodefineandprotectitsrightstotheintellectualpropertyrelatedtoitsproducts.ItisofgreatimportancethatOmegaPharmaisable to continue using these brands and trademarks in the future and that it adequately protects all valuable intellectual property by keeping trade secrets or applying legal devices such as trademarkandpatentregistrations.In the event that the above devices fail to fully protect the Group’s intellectual property rights inanyofitskeymarkets,thirdparties(includingcompetitors)maybeabletocommercialiseitsinnovationsorproductsoruseitsknow-how,whichcouldmateriallyadverselyimpactOmegaPharma’sbusinessoperations,financialposition,prospectsand/oroperationalresults.

Theotherwayround,OmegaPharmacannotguaranteethat,unintentionally,itsactivities,orthoseofitslicensors,willnotoccasionallyinfringeonthepatentsownedbyothers.TheGroupmayspendsignificanttimeandeffortandmayincursignificantlitigationcostsifitisrequiredto defend itself against intellectual property rights suits brought against Omega Pharma or its licensors,regardlessofwhethertheclaimshaveanymerit.IfOmegaPharmaisfoundtoinfringeon the patents or other intellectual property rights of others, it may be subject to substantial claimsfordamages,whichcouldmateriallyimpacttheGroup’scashflow,businessoperations,financialposition,prospectsand/oroperationalresults.TheGroupmayalsoberequiredtoceasedevelopment, use or sale of the relevant products or processes or it may be required to obtain a licenseonthedisputedrights,whichmaynotbeavailableoncommerciallyreasonableterms,ifatall.

TheCompanyhasinstalledaspecificfunctiontomanageIntellectualProperty.TheyarechargedwiththetaskofmonitoringandensuringthattheexistingrightsoftheCompanyremainintactandtoassurethatnewbrands,formulas,andtechnologiesareadequatelyprotectedbyallnecessarytrademarkregistrations,patents,etc.

Risk of reduced brand recognition or negative brand imageThe Omega Pharma trademarks and brands are important factors in determining the market positionandcompetitivenessoftheGroup.ThesuccessofOmegaPharmaistoanimportantdegreebasedontherecognitionandthepositiveimageofthecompaniesintheGroup,aswellasthebrandsandproductsofthecompaniesintheGroup.Ifbrandrecognitionwouldconsiderablydecrease,orifanyotherfactorwouldnegativelyaffectthereputationortheimageofthecompaniesandbrandsoftheGroup,itsbusinessoperations,financialposition,prospectsand/oroperationalresultscouldbemateriallyadverselyaffected.

RisksofdependencyonaspecificgeographicalmarketFranceisthecountrywheretheGroupgeneratesthehighestturnoverfromownOTCbrands.NegativemacroeconomicdevelopmentsorweaknessesofthelocalorganizationofOmegaPharmainthiscountrymayhaveasignificantimpactontheresultsoftheGroup.

82

Risks of dependency on customersThe Group generates its consolidated turnover by maintaining a large number of individual customers.Thisconsiderablyreducestheriskofdependencyonafewmajoraccounts.Inspecificindividualcountries,though,includingtheNetherlandsandtheUnitedKingdom,theGroupdoesgenerateanimportantpartofthelocalturnoverwithamorelimitednumberofcustomers,implyingahigherriskofcustomerdependencyinthesecountries.Moreover,themarketsituationmayevolveandleadtoanalteredsituationinothercountries.OmegaPharmasparesnoeffortto detect such alterations in the market at the earliest possible stage in order to develop an appropriateactionplaninsuchanevent,butcannotfullyexcludeanyimpactinsuchanevent.

Risk of an altered competitive landscapeThefuturemarketshareandturnoveroftheGroupcanbeimpactedbycompetition.OmegaPharmalimitsthisriskbyfocusingonthosemarketsegmentswhereithasaconsiderablemarketshareand/orwhereitcanfurtherexpanditspositionandwherenoorlittletransnationalcompetitorsareoperating.Nevertheless,itcannotbeexcludedthatexistingcompetitorsbesetthepositionoftheGrouporthatnewcompetitorsemerge.ThiscouldbringthemarketpositionoftheGroupinperil.OverthepastyearstheglobalOTCsectorhasbeenthesubjectofaconsiderableconsolidation,whichmaycontinueinthefuture,thuspossiblyalteringthecompetitivebalances.

Risk of changes in relevant regulations and of an altered distribution landscapeOmega Pharma is marketing its products to the end-consumer mainly through the pharmacy-channel, although the Group is also operating in large retail distribution and drug store chains incountriessuchastheUnitedKingdomandtheNetherlands.Insomecountries,thetrendtoliberalise the market for OTC medicines has already led to measures authorising the retail sale of theseproductsbeyondthepharmacyundercertainconditions.

Although Omega Pharma is not only marketing OTC medicines, but mainly nutritional supplements, personal care products and medical devices, this trend may still impact the results oftheGroup.Inmanycountriesitisnowauthorisedforonepharmacisttoownandexploitseveralpharmacies.Ifthistrendwouldcontinue,asignificantalterationofthedistributionlandscapecannotbeexcluded,withpossibleimpactonthemarketposition,theturnoverandtheprofitabilityoftheGroup.

Seasonality riskAstheGroup’sproductrangeincludesbothtypicalsummerandwinterproductsaswellasproducts that are consumed throughout the year, Omega Pharma’s annual turnover is relatively evenlyspreadbetweenthevariousquarters.Nevertheless,becauseofseasonalfactors,theturnoverinaspecificquartermayfluctuatesignificantlyincomparisonwithpreviousorcomparablequartersofpreviousaccountingperiods,whichcomplicatesthepredictabilityoftheannualresults.

83

Dependency on distribution and licensing agreementsOver70percentoftheGroup’sturnoverisderivedfromproprietaryproductsandbrands.Nevertheless, terminations or alterations to distribution and licensing agreements may have a significantimpactontheevolutionoftheturnoverandtheprofitabilityoftheGroup,andmay-e.g.inBelgium-causeasubstantialdecreaseoftheactivitylevel.

Dependency on the Belgian government policy related to generic medicinesOmegaPharmaistheBelgiandistributorofthegenericmedicinesofEurogenerics(EG),asubsidiaryofStada.AsopposedtotheproprietaryproductsandbrandsofOmegaPharma,theEGproductsrequireadoctor’sprescriptionforretailsupply.TheturnoveroftheseproductsdependstoalargedegreeonthepolicythattheBelgiangovernmentisapplyingforgenericmedicines.Ontheonehand,thesaleoftheseproductsmaystronglyfluctuateinfunctionofthemeasurestakenbytheBelgiangovernmenttopromotegenericsubscriptionwithphysicians.Ontheotherhand,the Belgian government may determine the consumer price level, the trade compensation level andtheallowanceofthehealthinsurancesysteminthepriceoftheseproducts–allwhichmaysignificantlyimpacttheturnoverandprofitabilityoftheseproducts.

Risks inherent to acquisitionsSinceitsIPOin1998,OmegaPharmahasacquiredmultiplecompanies.AcquisitionshavebeenandarelikelytoremainanimportantpartoftheGroup’scurrentgrowthstrategy,evenwhennomajoracquisitionsareexpectedin2009.Butalsoforminoracquisitionsthereisariskthatcorporateculturesdonotmatch,expectedsynergiesarenotfullyrealised,restructuringsprovetobemorecostlythaninitiallyanticipatedoracquiredcompaniesprovetobemoredifficulttointegratethanforeseen.Furthermore,asOmegaPharmafurthergrowsthroughacquisitions,itmayhavetorecruitadditionalpersonnelandimproveitsmanagerial,operationalandfinancialsystems.IftheGroupfailstoaddressthesechallenges,thiscouldadverselyimpactitsbusinessoperations,financialposition,prospectsand/oroperationalresults.

RiskrelatedtofiscaldisputesCf.Note22relatedtoContingencies.

Dependency on key staff The performance of the Company is largely dependent on its ability to identify, attract, recruit, train,retainandmotivatehighlyskilledstaff.IftheCompanydoesnotsucceedinthismission,itcanhaveamajornegativeimpactonitsoperations,itsresults,anditsfinancialsituation.

84

Product liability risksTheproductsofOmegaPharmaaresubjecttopotentialproductliabilityrisks–bothofageneralnature,asinherenttopharmaceuticalproducts,medicaldevicesandnutrients.Despiteexistingpre-marketing registration and control procedures, the use of these products may lead to complaints and/or claims related to safety, quality, labeling,… ItcannotbeguaranteedthattheGroupwillnotbesubjecttoanysuchclaimsinthefuture.IftheGroup’sproductliabilityinsurancecoverageisinsufficienttocoveranysuccessfulsuchproductliabilityclaims,itsbusinessoperations,financialposition,prospectsand/oroperationalresultscouldbemateriallyadverselyaffected.

IT risksInformation systems are a central part of Omega Pharma’s business operations and the distributionandlogisticsservicesitoffers.ThefailureoftheGroup’sinformationsystemsthroughbreakdown,maliciousattacks,virusesorotherfactors,couldseverelyimpairseveralaspectsofoperationsincluding,butnotlimitedto,logistics,sales,customerserviceandadministration.Anysuch failure related to the operation of information systems, may have a material adverse effect onOmegaPharma’sbusinessoperations,financialposition,prospectsand/oroperationalresults.

Environmental and safety risksTheGroup’soperationsaresubjecttoenvironmentalandsafetylawsandregulations,whichcancontinuouslyevolve.Thecostofcompliancewiththeseandsimilarfutureregulationscouldbesubstantial.

Share price riskJustlikeanyshare,theOmegaPharmashareissubjecttofluctuationsthatarecausedbyinternalandoftenalsoexternalfactors.AlthoughOmegaPharmaaimsforabalancebetweenlong-termviewshareholdersandinvestorswithashortertermperspective,itremainspossiblethatatagiventimeanunbalancedsituationoccursthatincreasestheshare’svolatility.

Financial riskOmegaPharmahasoutstandingfinancialdebtsandmustthereforebecapableofrepayingthem.OvertheyearsOmegaPharmahasalwaysgeneratedasufficientlyhighnetfreecashflowtorepayorserviceitsdebts,thusmeetingallcovenantswithitscreditproviders.TheGroupholdstheopinionthatithasappliedasolidfinancialstructurewithanappropriateleverageoverthepastyears.Fromtheperspectiveofthecurrenteconomicrecession,theinherentsharperprofileofvariousriskfactorsaswellastheinherentreductionofthevisibility/predictabilityforthefurtherevolutionoftheoperationsandtheirprofitability,itispossiblethatthecurrentfinancialleveragemayprovelessidealthanunderpreviousconditions.Intheeventofabreachofcovenantsatthemomentofrefinancing(end2011),anewfinancingfacilitymayprovetobemoredifficulttoobtain,ormayinvokehigherfinancialcharges.

85

CurrencyexchangeriskTheGroupincursforeigncurrencyriskonborrowingsandintereststhataredenominatedinUSdollar(ontheUSPrivatePlacement)andonitsoperatingactivitiesdenominatedinothercurrencies.Foreigncurrencyriskfromexchangingassets,equityandliabilitiesofforeignsubsidiariesfromforeigncurrenciesintoeuroarenothedged.

ThecurrencyexchangeriskontheUSPrivatePlacement,denominatedinUSdollar,isentirelyhedgedbycrosscurrencyswaps.

TheGroup’sriskmanagementpolicyistohedgebetween75percentand100percentofanticipatedtransactions. Iftheeurohadstrengthened(weakened)10percentagainsttheUSdollarat31December2008,thehedgingreserveinshareholdersequitywouldhavebeen1.719millioneurolower(2.694millioneurohigher)–2007:0.437millioneurolower(1.949millioneurohigher). ThefluctuationintheUSdollarhasaninsignificantinfluenceonprofitorloss,sincethehedgesthatqualifyasfairvaluehedge,areanexactmirrorofthehedgeditem.MoredetailsaboutthesehedgescanbefoundinNote20.

SomeoftheGroup’sactivitiesaredenominatedinothercurrenciesthantheeuro–i.e.intheScandinaviancountriesandtheUnitedKingdom.Thehypotheticaleffectofa10percentstrengthening(weakening)oftheeuroagainsttheBritishpound,wouldhavehadaneffectonprofitorlossof1.051millioneuro(-1.051millioneuro),whileshareholders’equitywouldbeimpactedby-0.919millioneuro(0.919millioneuro).Iftheeurohasgained(lost)10percentagainsttheSwedishcrown,thiswouldhaveimpactedprofitorlossby-0.289millioneuro(0.289millioneuro),whileshareholders’equitywouldbeimpactedby-0.053millioneuro(0.053millioneuro).

AlsoincountrieslikeRussiaandUkraine,wheretheoperatingincomeoftheGroupislargelyrealizedineuro,thereisanindirectcurrencyexchangeriskaseachdevaluationwouldmaketheproductsoftheGrouprelativelymoreexpensiveforthelocalconsumers.

Interest rate riskTheGroupreviewsatleasttwiceayearthetargetmixbetweenfixedandfloatingratedebt.Thepurposeofthispolicyistoachieveanoptimalbalancebetweencostoffundingandvolatilityoffinancialresults.TheGroup’sinterestrateriskarisesmainlyfromlong-termborrowings.Atbothyear-end2007and2008,approximately60percentoftheborrowingswereatfloatingrates.TheGroupenteredintoseveralinterestrateswapsinrespectoftheUSPrivatePlacement.TheGroupmanagesitscashflowinterestrateriskbyusingfloating-to-fixinginterestrateswaps.Suchinterestrateswapshavetheeconomiceffectofconvertingborrowingsfromfloatingratestofixedrates.

Ifthemarketinterestrateswouldhavebeenonaverage100basepointhigher(lower)during2008,profitorlosswouldhavebeen3.371millioneurolower(higher).In2007,thischangewouldhavehadanimpactof4.173millioneuro.

Anincreaseof100basepointsoninterestrateswouldhaveledtoanincreaseinthehedgingreserveinshareholders’equityby6.95millioneuro.

Achangeof100basepointsoninterestrateswouldhaveimpactedthehedgingreserveinshareholders’equityby10.321millioneuro.

86

(in thousand euro) 31.12.2008 31.12.2007

Totalborrowings 446645 357029

Derivativefinancialinstrumentsrelatedtoborrowings 20479 33576

Less:cashandcashequivalentsandcurrentfinancialassets (33793) (35429)

Net financial debt 433 331 355 176

Total equity 600 520 612 166

Gearing ratio 72% 58%

USPrivatePlacementhedgesCf.Note20.

Fair value riskCf.Note20.

Customer credit riskAstheGrouphasastrictcreditpolicyinplace,exposuretocreditriskismonitoredandcanbeminimised.

TheGrouphasnoindividualcustomerswhorepresentasignificantpartoftheconsolidatedturnover,noroftheTradeReceivables.

Capital riskTheGroup’sobjectiveswhenmanagingcapitalaretosafeguardtheGroup’sabilitytocontinueasagoingconcerninordertoprovidereturnsforshareholdersandbenefitstootherstakeholdersandtomaintainanoptimalcapitalstructuretoreducethecostofcapital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, acquire and cancel treasury shares,issuenewsharesorsellassetstoreducedebt.

Consistentwithothersintheindustry,theGroupmonitorscapitalonthebasisofthegearingratio.Thisratioiscalculatedasnetdebtdividedbytheequity.Netdebtiscalculatedastotalborrowings(includingcurrentborrowings,non-currentborrowingsandthevalueoftherelatedfinancialderivatives)lesscashandcashequivalents.

Thegearingratiosat31December2008and2007wereasfollows:

87

31.12.2008 Earliest contractual maturity (undiscounted)

(in thousand euro) < 1 year 1 to 5 years > 5 years

Finance lease liabilities 812 2916 2247

Bankborrowings 55361 369883 61706

Bank overdrafts 61805

Trade and other payables 270530

Total liabilities 388508 372799 63953

Liquidity riskThetablebelowanalysestheGroup'sfinancialliabilitiesintorelevantmaturitygroupingsbasedontheremainingperiodatthebalancesheettothecontractualmaturitydate.Theamountsdisclosedarethecontractualundiscountedcashflows.Astheamountsincludedinthetablearethecontractualundiscountedcashflows,theseamountswillnotreconciletotheamountsdisclosedonthebalancesheetforborrowings,andtradeandotherpayables.

31.12.2007 Earliest contractual maturity (undiscounted)

(in thousand euro) < 1 year 1 to 5 years > 5 years

Finance lease liabilities 958 2891 3614

Bankborrowings 10717 322419 64744

Bank overdrafts 21567

Trade and other payables 241234

Total liabilities 269 826 325310 68358

88

AllactivitiesoftheGrouparesituatedintheOTCbusiness(OverTheCounter–i.e.non-prescriptionhealthcareproducts).

Thesegmentsoftheseactivitiesareidentifiedfollowingtheirgeographicallocation.Thesegmentreportingonlyconsistsofthegeographicalsegments.Nosecondaryreportinghasbeenidentified.Theidentificationoftheoperatingsegmentsisdoneonthebasisofthecomponentsthat the Management uses to assess the performance and to make decisions about the operating activities.

At31December2008,theGroupisorganizedintofivebusinesssegments:1.OmegaPharmaBelgium:theactivitiesinBelgium2.OmegaPharmaFrance:theactivitiesinFrance3.OmegaPharmaNorthernEurope:activitiesinScandinaviaandGermany4.OmegaPharmaSouthernEurope:activitiesinSpain,Italy,Portugal,Greece,CyprusandSwitzerland.

5.OmegaPharmaRestofWorld:activitiesintheNetherlands,theUnitedKingdomandIrelandaswellasCentralandEasternEurope(includingRussia,Ukraine,CzeckRepublic,Slovakia,Hungary,RomaniaandTurkey),andalsoAustralia,NewZealandandArgentina.

Thesegmentresultsfortheyearended31December2007areasfollows:

Segment information

(inthousandeuro) Belgium France North.Europe

South.Europe

Rest ofWorld

Unallo-cated

TOTAL

Total turnover 205 070 200640 101923 143091 182139 832863

Inter segment turnover (5963) (10285) (2391) (24922) (43561)

Turnover 199 107 190 355 99 532 143 091 157 217 789 302

Operating profit/segment result 18 336 10 067 23 855 24 915 30 992 (22 171) 85 994

Financial result (34437)

Profit/Lossfortheyearofassociates

2106

Result from continuing operations before income tax

53 663

Incometax (7869)

Net income from continuing operations

45 794

Result from discontinued operations 108993

Net result of the period 154 787

89

(inthousandeuro) Belgium France North.Europe

South.Europe

Rest ofWorld

Unallo-cated

TOTAL

Total turnover 212822 190139 102648 147650 198244 851503

Inter segment turnover (7804) (2697) (584) (20) (29114) (40219)

Turnover 205 018 187 442 102 064 147 630 169 130 811 284

Operating profit/segment result 21 440 15 313 24 100 18 963 39 713 (20 955) 98 574

Financial result (39867)

Profit/Lossfortheyearofcompanies at equity

3569

Result from continuing operations before income tax

62 276

Incometax (7900)

Net income from continuing operations

54 376

Share of minority interests (117)

Net result of the period - Share of the Group 54 259

31.12.2007(in thousand euro)

Belgium France North.Europe

South.Europe

Rest ofWorld

Unallo-cated

TOTAL

Depreciations and amortization 3368 6084 2737 925 2333 1562 17009

Write-downoninventories 512 (295) (146) (986) (172) (1087)

Write-downonreceivables 15 642 (33) 218 (337) 505

Increase/decrease in provisions (20) (106) 149 224 (935) (688)

31.12.2008(in thousand euro)

Belgium France North.Europe

South.Europe

Rest ofWorld

Unallo-cated

TOTAL

Depreciations and amortization 3081 6382 2894 1144 2 696 1665 17862

Write-downoninventories 754 157 358 477 (18) 1728

Write-downonreceivables 89 1602 51 (124) 464 2 082

Increase/decrease in provisions (85) (401) (1479) (785) (639) (3389)

Thesegmentresultsfortheyearended31December2008areasfollows:

Othersegmentitemsincludedintheincomestatementareasfollows:

90(in thousand euro) Belgium France North.

EuropeSouth.Europe

Rest ofWorld

Unallo-cated

TOTAL

Total assets 106465 273693 136408 112870 549535 147728 1326699

Total liabilities 64553 130489 23622 31027 88 078 376764 714533

Capitalexpenditure 2 682 8462 3483 1582 8030 2 029 26 268

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivablesandoperationcash.TheyexcludedeferredtaxationrelatedtotheIFRSrevaluationoftheswapsandinvestments.

Segmentliabilitiescompriseoperatingliabilities.Theyexcludeitemssuchascorporateborrowings.

Segmentationofthe2008turnoveraccordingtotheoriginoftheproductsrevealsthat571.156millioneuro(71.4percent)turnoverisgeneratedbyproprietarybrandedproducts,whiledistributionsrepresentaturnoverof232.127millioneuro(28.6percent).Distributionsreferforapproximately3/5togenericmedicinesandfor2/5toOTCproductsinothercategories.

Thesegmentassetsandliabilitiesat31December2007andcapitalexpenditurefortheyearthenendedareasfollows:

Thesegmentassetsandliabilitiesat31December2008andcapitalexpenditurefortheyearthenendedareasfollows:

(in thousand euro) Belgium France North.Europe

South.Europe

Rest ofWorld

Unallo-cated

TOTAL

Total assets 114739 267341 152015 144325 598 025 140808 1417253

Total liabilities 82135 123215 34327 33818 99649 443589 816733

Capitalexpenditure 3549 6 586 4940 1820 4565 3305 24765

91

Notes

1. Turnover 92

2. Otheroperatingincome 92

3. Employeebenefitexpenses 92

4. Depreciations,amortizationandchangesinprovisions 94

5. Otheroperatingexpenses 94

6. Financialresult 95

7. Incometax 96

8. Discontinuedoperations 97

9.Earningspershare 98

10. Intangibleassets 99

11. Property,plantandequipment 103

12. Financialassetsandothernon-currentassets 105

13. Inventories 106

14. Tradeandotherreceivables 107

15. Cashandcashequivalents 108

16. Equity 108

17. Provisions 109

18. Retirementbenefitobligations 110

19. Taxes,remunerationandsocialsecurity 112

20. Financialdebtsandderivativefinancialinstruments 114

21. Othercurrentpayables 122

22. Contingencies 123

23. Offbalancesheetrightsandobligations 123

24. Businesscombinations 124

25. Listofconsolidatedcompanies 125

26. Significanteventsafterbalancesheetdate 128

27. Relatedparties 129

28. Warrants-share-basedpayments 130

29. Dividend-share-basedpayments 133

30. InformationontheAuditor'sremunerationandrelatedservices 133

92

1. Turnover

(in thousand euro) 2008 2007

Sale of goods 770434 757545

Rendering services 40849 31758

Turnover 811 283 789 303

2. Otheroperatingincome

(in thousand euro) 2008 2007

Gainondisposaloffixedassets 71 176

Other operating income 6136 3048

Other operating income 6 207 3 224

3. Employeebenefitexpenses

(in thousand euro) 2008 2007

Wages and salaries 66 627 64877

Social security costs 19024 19232

Pensioncosts–definedbenefitplans* 4816 1378

Pensioncosts-definedcontributionplans 1151 907

Otheremploymentcosts(commissions,premiums,travel,…) 15790 15381

Employee benefit expenses 107 408 101 775

* See also Note 18.

Other operating income include, amongst others, received indemnities and royalties, and relates toseveralcountries.

Employeebenefitexpenseshaveincreasedto107.4millioneuro.Theimpactofacquisitionsontheseexpensesis2.0millioneuroin2008.

93

Full-time equivalents rounded at one unit

31.12.2008 31.12.2007

Belgium, including corporate services 341 332

France 503 549

Northern

Europe

Denmark 7 7

Finland 11 11

Germany 72 75

Norway 11 9

Sweden 62 58

Southern

Europe

Cyprus 5 5

Greece 92 88

Italy 48 46

Portugal 50 49

Spain 110 100

Switzerland 28 -

Rest

of the

World

Argentina 7 -

Australia 21 -

Austria 272 261

Czech Republic 50 -

Hungary 9 -

Ireland 32 36

Latvia 11 9

Luxembourg 22 21

the Netherlands 152 180

NewZealand 2 -

Poland 28 4

Romania 60 -

Singapore 1 -

Slovakia 6 -

Turkey 20 -

UnitedKingdom 10 41

Total 2 043 1 881

94

4. Depreciations,amortizationandchangesinprovisions

(in thousand euro) 2008 2007

Depreciations and amortization 17862 17009

Write-downoninventories 1729 (1087)

Write-downonreceivables 2 082 506

Increase/decrease in provisions for current liabilities (1323) (124)

Increase/decrease in provisions for pension liabilities (2066) (565)

Depreciation, amortization and changes in provisions 18 284 15 739

(in thousand euro) 2008 2007

Otheroperatingexpenses 6 596 5 792

Restructuring charges 12180 18991

Restructuring provisions (2279) 4142

Other operating expenses 16 497 28 925

5. Otheroperatingexpenses

Amortizationofintangibleassetsamountedto8.2millioneuroandremainedthesamelevelasin2007.Depreciationsofproperty,plantandequipmentevolvedfrom8.8millioneuroin2007to9.7millioneuroin2008.ThishigherlevelstemsfromthedepreciationsofthenewmanufacturingplantofBittnerPharmawhichwasputintooperationatthebeginningof2008.

Write-downoninventoriesresultsfromtherecentintroductionsofinnovationswhichreplacethecorrespondingproductversions.Write-downonreceivablesreferstovariouscountries,withnoindividualcountryrepresentingthemajority.Asimilarsituationappliestothechangesinprovisions.

Theamountforrestructuringchargesandrelatedprovisionsarrivesat9.9millioneurofor2008comparedto23.1millioneuroin2007.

In2007,thesechargesweremainlyrelatedtorestructurings(e.g.inBelgiumandGermany),outsourcingintheUnitedKingdomandIreland(manufacturing),andtoinventoriesandtradereceivables,asaconsequenceofthenewpositioningasapureOTCcompany(followingthecarve-outofArseus,whichbecameapubliclylisted,independentcompanyinOctober2007).

95

6. Financialresult

(in thousand euro) 2008 2007

Financial income 1315 406

Financialexpenses (6856) (8557)

Interestexpenses (29897) (26024)

Foreignexchangedifferences (4429) (262)

Financial result (39 867) (34 437)

In 2008, the amount mainly refers to various measures in Belgium, Germany, Ireland and the UnitedKingdom(cf.theprovisionsbuiltupin2007)aswellasFrance,Italy,ScandinaviaandSpain.Thesemeasuresareprimarilyforfurtherstreamliningtheorganizationandreferforaminorpartalsotostock.TheconsiderablylowertotalamountindicatesthattheGroupismakingsteadyprogressinthecontinuousintegrationprocessofitsoperations.

TheapplicationoftheprovisionforrestructuringsreferstothesituationintheUnitedKingdomwherethesalesteamhasbeenoutsourced,asmentionedinthe2007report.

Themostimportantchangesincomparisonwith2007canbeattributedtotheinterestexpensesandcurrencyexchangedifferences.Theincreaseoftheinterestexpensesresultsfromhigherbasicinterestrates,combinedwiththeevolutionofthenetfinancialdebt.Themajorimpact,however,comesfromcurrencyexchangedifferences.Unfavorablecurrencyexchangedifferencesareexceptionally4.0millionabovetheaverageleveloftherecentyears.Inthefallof2008,variouscurrenciesbegantofluctuateexponentiallyfromtheeuro.ThefluctuationoftheBritishpoundversustheeurorepresentsapproximatelyhalfofthecurrencyexchangedifferences,whilethecurrencyratedeviationoftheSwedish,DanishandNorwegiancrownscauseanotherquarter.TheseunfavorablecurrencyexchangedifferencesstemmainlyfromeffectivelyrealizedcurrencyexchangedifferencesontransactionsbysubsidiariesincountriesbeyondtheEurozone,whicharealsoexpressedatconsolidatedlevel.OmegaPharmalooksintothepossibilitytohedgethesecurrencyexchangedifferences,buthasnotyetcometoaconclusionatthemomentthatthisdocumentispublished.

96

7. Incometax

ThetaxontheGroup’sprofitbeforetaxdiffersfromthetheoreticalamountthatwouldariseusingtheweightedaveragetaxrateapplicabletoprofitsoftheconsolidatedcompaniesasfollows:

Theweightedaverageeffectivetaxratewas13.46percent(2007:15.26percent).

(in thousand euro) 2008 2007

Currenttaxexpenses 5470 7 870

Deferredtax 2430 (1)

Total tax charge 7 900 7 869

(in thousand euro) 2008 2007

Profitbeforetax 58 708 51557

Tax calculated at weighted average statutory tax rate 14 889 14 583

Incomenotsubjecttotax (12686) (12051)

Expensesnotdeductablefortaxpurposes 1732 1516

Other 3965 3821

Tax charge 7 900 7 869

97

8. DiscontinuedoperationsIn2007,OmegaPharmasold17,500,000or70percent,oftheexistingsharesinArseusatanofferingpriceof10.25europershare.Inaddition,Arseusissued6,000,000newsharesagainstcontributionincashand195,121newsharesagainstcontributioninkindofanoutstandingliabilityof2millioneuro–bothattheofferingpriceof10.25europershare.AftertheIPO,OmegaPharmaholds24percentinthetotalsharecapitalofArseus.TheparticipationinArseusisvaluedonthebalancesheetatequitymethod.AsaresultoftheIPOofArseus,OmegaPharmarealizedin2007anetprofit,aftertransactioncosts,of100.994millioneuro.

Until30September2007,ArseuswasfullyincludedintheconsolidationscopeoftheOmegaPharmaGroup.Inthefirstninemonthsoftheyear,Arseuscontributed7.999millioneurotothenetprofit.Thisresultcanbedetailedasfollows:

(in thousand euro) January-September

2007

Revenue 214618

Expenses (206084)

Profit from discontinued operations - before tax 8 534

Taxes (535)

Profit from discontinued operations - after tax 7 999

Consideringthefactthat,in2008,theparticipationofOmegaPharmainArseusisforthefirsttimerecognizedaccordingtotheequitymethodfortheentireaccountingperiodoftwelvemonths,Arseusislogicallynotrecognizedforanypartunder‘discontinuedoperations’from2008onward.

98

9. Earningspershare

(in thousand euro unless stated otherwise) 2008 2007

Basic earnings per share

ProfitattributabletoequityholdersoftheCompany 54259 154787

Weightedaveragenumberofordinaryshares(inthousands) 23674 25 800

Basic earnings per share (in euro) 2.30 6.00

Profitfromdiscontinuedoperations 108993

Basic earnings per share (in euro) of discontinued operations 4.22

Basic earnings from continuing operations (in euro) 2.30 1.78

Diluted earnings per share

ProfitattributabletoequityholdersoftheCompany 54259 154787

Weightedaveragenumberofordinaryshares(inthousands) 23674 25 800

Effectofwarrants** 222

Weightedaveragenumberofordinaryshares(diluted)(inthousands) 26021

Diluted earnings per share (in euro) 2.30 5.95

Profitfromdiscontinuedoperations 108993

Diluted earnings per share (in euro) of discontinued operations 4.19

Earnings per share before non-recurring items

ProfitattributabletoequityholdersoftheCompany 54259 154787

Non-recurringitems,aftertax* 12065 (89392)

Profitbeforenon-recurringitemsattributabletoequityholdersoftheCompany

66324 65395

Weightedaveragenumberofordinaryshares(inthousands) 23674 25 800

Basic earnings per share before non-recurring items (in euro) 2.80 2.53

Diluted earnings per share before non-recuring items

ProfitattributabletoequityholdersoftheCompany 54259 154787

Non-recurringitems,aftertax* 12065 (89392)

Profitbeforenon-recurringitemsattributabletoequityholdersoftheCompany

66324 65395

Weightedaveragenumberofordinaryshares(inthousands) 23674 25 800

Effectofwarrants** 222

Diluted earnings per share (in euro) ** 2.80 2.51

In the calculation of the ratios based on the number of shares, the number of treasury shares is deductedfromthetotalnumberofshares.

* For 2008, the amount refers to the restructuring charges, included in the other operating expenses (cf. Note 5) and the non-recurring currency exchange differences (cf. Note 6), but after application of the effective tax rate, while the amount for 2007 refers to the balance of other operating expense after faxes and the net income from the sale of Arseus shares at the IPO of the latter company in that year.

** Since all exercise prices of the valid warrants are situated below the closing rate of the share Omega Pharma on 31 December 2008, there is no dilutive effect from warrants at that date.

99

(in thousand euro) Goodwill R&D Conces-sions &patents

Brands Soft-ware

Other TOTAL

Year ended 31 December 2007

Opening net book value 478586 19956 2954 255664 5523 133 762816

Exchangedifferencescost (1854) (283) (7) (2144)

Additions

Internal development 3937 625 4562

Purchased from third parties 3208 99 199 894 138 4538

Through business combinations 105041 184 100 124290 225 1 229841

Disposals and investments put out of use

(125) (851) (719) (428) (913) (34) (3070)

Adjustments of local accounting practicesinconformitywithconsolidation policies

690 (839) 1076 (606) 158 (72) 407

Costs related to discontinued operations

(136409) (7936) (2577) (168) (6642) (22) (153754)

Currencyexchangedifferencesdepreciations

103 3 106

Amortization of the year (6300) (485) (52) (1756) (6) (8599)

Amortization of disposals and investments put out of use

517 591 356 816 2 280

Application of consolidation policy for depreciation for local accounting practices

139 (266) 148 217 238

Accumulated depreciations related to discontinued operations

2403 1200 117 4370 7 8 097

Net book value at end of the period 445929 14238 1972 379521 3512 146 845318

Balance at 31 December 2007

Purchase value 445929 26511 5377 389152 9963 151 877083

Accumulated depreciations (12273) (3404) (9632) (6451) (5) (31765)

Net book value 445 929 14 238 1 973 379 520 3 512 146 845 318

10. Intangibleassets

100

(in thousand euro) Goodwill R&D Conces-sions &patents

Brands Soft-ware

Other TOTAL

Year ended 31 December 2008

Opening net book value 445929 14238 1973 379521 3512 146 845318

Exchangedifferencescost (5094) (983) (9) (158) (21) (6265)

Additions

Internal development 4918 555 5473

Purchased from third parties 5113 710 594 1004 105 7 526

Through business combinations 33435 106 1371 30 34942

Disposals and investments put out of use

(37) (946) (132) (45) (2215) (3375)

Adjustments of local accounting practicesinconformitywithconsolidation policies

72 1143 73 (61) 1227

Currencyexchangedifferencesdepreciations

626 8 14 15 663

Amortization charge

Amortization of the year (5991) (302) (350) (1864) (20) (8527)

Through business combinations (91) (284) (11) (386)

Amortization of disposals and investments put out of use

1001 109 2214 3324

Application of consolidation policy for depreciation for local accounting practices

(880) (73) (953)

Net book value at end of the period 474232 17976 1564 381805 3219 170 878 967

Balance at 31 December 2008

Purchase value 474232 34613 6124 392057 9389 195 916611

Accumulated depreciations (16637) (4560) (10252) (6170) (25) (37644)

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

GoodwillGoodwillistestedannuallyforimpairmentandcarriedatcostlessaccumulatedimpairmentlosses.

Impairment tests for goodwillGoodwillisallocatedtotheGroup’scash-generatingunits(CGUs)identifiedasthefivebusinessunitsoftheGroup,beingBelgium,France,NorthernEurope,SouthernEuropeandRestofWorld.

101

TherecoverableamountofaCGUisdeterminedbasedonvalue-in-usecalculations.Thesecalculationsusecashflowprojectionswithafive-yearforecasthorizonbasedondetailedfinancialbudgetsapprovedbymanagementforyearone.Foryeartwotillfivethebudgetfiguresofyearoneareextrapolatedtakingintoaccountaninternalgrowthrateandabudgetedgrossmargin.Besides these rates, the model includes a number of assumptions, such as the rate of perpetual growthandapre-taxdiscountrate.

Anoverviewofthekeyassumptionsforthevalue-in-usecalculationsisstatedbelow.Managementdeterminedgrossmarginandgrowthratesbasedonpastperformanceanditsexpectationsforthemarketdevelopment.

Forthereviewoftheparametersinthecharthereunder,thelowerautonomousgrowththathas been achieved in 2008 both on group level as per cash-generating unit, has been taken into account,alongwiththeassumptionthatthecurrentrecessionwillnotbeentirelyoverinthenextperiod.Asaconsequence,the5yearaveragepercentageshavebeendecreased.Ontheother hand, the impact of the increasing economies of scale and group synergies has also been takenintoaccount.

Thevaluepercash-generatingunitwhichiscalculatedinthismanner,iscomparedwiththenetbookvalueofthecorrespondingfixedassets.Despitethedownwardadjustmentsofthegrowthparametersin2008,therecoverableamountsofthecash-generatingunitscontinuetoexceedtheirnetbookvalue.Asaresult,noimpairmentofgoodwillisrequiredfor2008.Forthecash-generatingunitwiththesmallestdifferenceatthislevel,thecalculatedrecoverableamountstillexceedsthenetbookvaluewith44percent.

Asummaryofthegoodwillallocationperbusinessunitispresentedbelow(inmillioneuro).

Business unit 2008 2007

Belgium 24.54 30.64

France 122.75 121.67

Northern Europe 53.21 90.92

Southern Europe 50.18 42.38

Rest of World 211.80 155.05

Corporate 11.75 5.28

Total 474.23 445.93

102

Autonomous5 year-growth(%)

Perpetual growthrate (%)

Gross margin(%)

Discount rate(%)

2008 2007 2008 2007 2008 2007 2008 2007

Belgium 3 4 2 2 28.36 28.53 10.65 10.63

France 2 4 2 2 65.60 63.02 9.58 9.35

Northern Europe 4 5 2 2 75.54 54.30 10.64 10.21

Southern Europe 5 6 2 2 71.75 68.56 12.06 10.90

Rest of World 7 8 2.5 2.5 61.06 51.16 11.34 10.90

Total 4 6 2.10 2.14 57.34 51.73 10.87 10.49

BrandsThenetbookvalueofallbrands,includingthosewithindefiniteusefullives,areannuallytestedforimpairmentattheleveloftheCGUasdefinedaboveandusingthemethodologysetoutabove.

ForStarBrandsandKeyBrands,basedonananalysisofallrelevantfactors,thereisnoforeseeablelimittotheperiodoftimeoverwhichthesebrandsareexpectedtogeneratecashflowsfortheCompany.Thesebrandshavebeenassignedindefiniteusefullives.Experiencelearnsthatthosebrandscancontinuouslyappealtonewconsumers,providedthatacertainlevelofmarketingsupportismaintained.Thelistofbrandsincludes,forexample,PoudresT.LeClerc,whichisalreadymarketedsince1881andwhichhasoverthepastyearsbeenintroducedinnewgeographicmarkets.

ThetotalbookvalueofStarBrandsandKeyBrandstotalled381.805millioneuroaspertheendof2008(2007:379.521millioneuro).AllStarBrandsandKeyBrandsareallocatedtothebusinessunitOTC,whichisthelevelatwhichtheyaretestedforimpairment(seeabove).

Inadditiontotheimpairmenttesting,theindefinitelifenatureoftheStarandKeyBrandsisreviewedannually.Notonlystrategicconsiderationsaretakenintoaccountbutalsotheevolutionofthenetrecoverableamounts.Thenetbookvalueforeachoftheaforementionedbrandsseparatelyiscomparedtoits’recoverableamount.Therecoverableamountisdeterminedasthehigherofthevalueobtainedbasedon:•Adiscountedcashflowmodel,similartothecalculationofthegoodwillimpairment.•Amultiplemethod.

Asfarasthemultiplemethodisconcerned,thefollowingmultiplesareapplied,wherebythebrandvalueequalsthemultipletimestheannualsalesoftherelatedbrand:

Brand Multiple

Star 3

Key 2.5

Other 0.5

Reviewrevealedthatthesemultiplesstillcorrespondwiththeratiosthathavebeenusedforacquisitionsofcomparablebrandsoverthepastyear.

ForallStarandKeyBrands,therecoverableamountexceedsthenetbookvalue,whichcorroboratestheindefiniteusefullifenatureofthebrands.

(in thousand euro) Landand

buildings

Plant,machinery

andequipment

Furnitureand

vehicles

Leasing& othersimilarrights

Othertangible

assets

Assetsunder

construc-tion

TOTAL

Year ended 31 December 2007

Opening net book value 20496 8713 6425 11625 5764 700 53723

Currencyexchangedifferencesonthe purchase cost

1 (30) (113) 2 (140)

Investments

Purchased from third parties 1616 3428 2171 5824 4128 17167

Through business combinations 1749 117 461 (85) 114 5049 7405

Disposals (2924) (1804) (1983) (55) (205) (36) (7007)

Adjustments of local accounting practicesinconformitywithconsolidation policies

9 1674 (1126) (154) 141 (790) (246)

Costs related to discontinued operations

(10355) (8559) (13964) (5268) (3386) (531) (42063)

Currencyexchangedifferences on depreciations

(1) 2 66 (2) 65

Depreciations

Depreciations of the year (801) (1984) (1847) (444) (3708) (8784)

Depreciations of disposals 617 1851 1848 96 174 4586

Application of consolidation policy for depreciation for local accounting practices

(21) (1288) 1300 31 (141) (1) (120)

Accumulated depreciations related to discontinued operations

2816 6612 10736 2 566 2883 25613

Net book value at end of the period 13200 8732 3974 8312 7461 8 520 50199

Balance at 31 December 2007

Purchase value 20142 26477 11064 12694 18440 8548 97365

Accumulated depreciations (6942) (17745) (7090) (4381) (10979) (29) (47166)

Net book value 13 200 8 732 3 974 8 313 7 461 8 519 50 199

11. Property,plantandequipment

103

(in thousand euro) Landand

buildings

Plant,machinery

andequipment

Furnitureand

vehicles

Leasing& othersimilarrights

Othertangible

assets

Assetsunder

construc-tion

TOTAL

Balance at 31 December 2007

Purchase value 20142 26477 11064 12694 18440 8548 97365

Accumulated depreciations (6942) (17745) (7090) (4381) (10979) (29) (47166)

Net book value 13 200 8 732 3 974 8 313 7 461 8 519 50 199

Year ended 31 December 2008

Opening net book value 13200 8732 3974 8313 7461 8519 50199

Currencyexchangedifferencesonthe purchase cost

(2) (112) (439) (15) (12) (580)

Investments

Purchased from third parties 423 4156 1847 42 1535 3763 11766

Through business combinations 293 122 78 38 22 553

Disposals and investments put out of use

(233) (5725) (6006) (19) (777) (137) (9897)

Adjustments of local accounting practicesinconformitywithconsolidation policies

2140 4424 27 (17) 3222 (11859) (2063)

Currencyexchangedifferences on depreciations

1 21 285 8 9 324

Depreciations

Depreciations of the year (745) (2468) (1739) (440) (4266) (9658)

Depreciations of disposals and investments put out of use

228 5 267 3027 18 889 9429

Application of consolidation policy for depreciation for local accounting practices

(116) 109 9 (1) 1

Net book value at end of the period 15012 14472 4207 7 977 8 098 308 50074

Balance at 31 December 2008

Purchase value 22470 29513 9615 12763 22446 337 97144

Accumulated depreciations (7458) (15041) (5408) (4786) (14348) (29) (47070)

Net book value 15 012 14 472 4 207 7 977 8 098 308 50 074

Therearenoliabilitiessecuredonlandandbuildings.

104

105

12. Financialassetsandothernoncurrentassets

(in thousand euro) 31.12.2008 31.12.2007

Cash guaranties 821 841

Financial assets available for sale 1940 2734

Investments included according to the equity method 44527 42774

47 288 46 349

(in euro) 31.12.2008 31.12.2007

Number 7 500 000 7 500 000

Closingrateat31December(ineuro) 6.25 9.25

Total 46875000 69375000

(in thousand euro) 31.12.2008 31.12.2007

Turnover 354506 304368

Operating result 30033 26440

Net result 14900 16260

Total assets 417733 347467

Equity 185530 178225

Total liabilities 232203 169242

Noneofthecashguarantiesrequireimpairmentadjustments.

Theinvestmentsincludedaccordingtotheequitymethodrefertothe24percentparticipationthattheGroupholdsinArseusNV.Since5October2007,ArseusNVispubliclylistedasaseparatecompany.

Arseus is operating as an autonomous company and implements its proper strategy on a market whichdiffersfromthemarketwheretheOmegaPharmaGroupisoperating.AlthoughOmegaPharmaisthroughoneofitsdirectorsalsorepresentedintheboardofdirectorsofArseusNV,ithasnodecisiveorsteeringpositionatthislevel.ConsequentlyonecanconcludethatOmegaPharmaNVdoesnotexercisecontroloverArseusNV,andthereforethelattercompanyisnotincludedintheconsolidationcircleoftheGroup.

Theamountof44.527millioneurointhetableaboverepresents24percentoftheequityoftheArseusGroupasat31December2008.Thispercentagehasremainedunchangedsince31December2007.

Thisparticipationvaluedattheclosingrateofthesharepriceasper31December2008,is:

ArseusNVhaspublishedthefollowingconsolidatedfiguresfortheaccountingperiodending31December2008:

13. Inventories

(in thousand euro) 31.12.2008 31.12.2007

Rawmaterials 8 578 8946

Production supplies 10758 11377

Work in progress 1070 592

Finished goods 16373 12309

Trade goods 86152 67462

Inventories 122 931 100 686

Theincreaseininventoriesrefersmainlytotradegoods.Thisincreaseisforabout6millioneurorelatedtotheacquisitionsthathavebeenrealizedinthecourseof2008.TheremainderoftheincreaseisassociatedwiththeinnovationstrategyofOmegaPharma,whichhasbeenenhancedin2008,resultinginseveralnewproductlaunchessincethesecondquarteroftheperiodandcontinuedinthefourthquarterof2008,mainlyinFranceandSouthernEurope.Inaddition,severalexistingOmegaPharmaproductshavebeenintroducedonnewmarketsinCentralandEasternEurope.Ineachofthesecases,theorganizationhasbuiltupstocksfortheseproducts,whichlogicallyalsoserveforsupplyingthemarketin2009.

106

14. Tradeandotherreceivables

(in thousand euro) 31.12.2008 31.12.2007

Trade receivables 210103 182457

Provision for impairment of receivables (7861) (5806)

Trade receivables - net 202 242 176 651

Other receivables

VATreceivables 3617 3144

Incometaxreceivables 28 085 22681

Other receivables 6 976 6047

Deferred charges 16962 13811

Total 257 883 222 334

(in thousand euro) Carryingamount

Of which nei-ther impaired

Of which not impaired on the reporting date andpast due in the following periods

nor past due on 31.12.2008

less than30 days

between 30and 90 days

between 90and 180 days

more than180 days

Tradereceivablesasof31.12.2008 202242 170482 18363 4220 4762 4414

Otherreceivablesasof31.12.2008 6 976 6 976

Tradereceivablesasof31.12.2007 176651 136489 14116 8467 5450 12129

Otherreceivablesasof31.12.2007 6047 6047

Tradereceivablesincreasedwithapproximately4millioneuroresultingfromtheacquisitionsin2008.

Theotherreceivables(7.0millioneuro)aremainlyrelatedtoindemnitiestobereceivedfromsuppliersandothers.

107

108

The mutations of this balance sheet item are shown in the statement of changes in equity.

Here are some comments on the recognition of treasury shares in equity. During the accounting period 2008, 1,596,456 shares were purchased at an average price of 29.88 euro per share and 55,000 of them were appropriated for an acquisition. In comparison: in the accounting period 2007, 1,065,744 shares were purchased at an average price per share of 45.52 euro and no shares were sold.

After cancellation of 2,000,000 treasury shares by the Extraordinary General Meeting of 9 June 2008, Omega Pharma held 879,994 treasury shares on 31 December 2008 compared to 1,353,128 on 31 December 2007.

These shares are held as ‘treasury shares’ and in conformity with IFRS, they are deducted from the shareholders’ equity, but do no have any impact on the income statement. They represented a total amount of 24.144 million euro on 31 December 2008 and 63.242 million euro on 31 December 2007.

More information about share-based payments (warrants, dividend) is included in the Notes 28 and 29.

15. Cash and cash equivalents

16. Equity

(in thousand euro) 31.12.2008 31.12.2007

Short term investments 5 2 182

Cash at bank and in hand 33 788 33 248

Cash and cash equivalents 33 793 35 430

The vast majority of cash and cash equivalents is cash at bank and in hand – i.e. current bank accounts of the companies in the Group.

109

17. Provisions

(in thousand euro) Taxes Disputes Others TOTAL

Balance at 31 December 2006 49 462 3 069 3 580

Additions

Through business combinations 7 124 130

Other* 1572 4021 5593

Amountsused(appropriations) (7) (863) (705) (1574)

Currencyexchangedifferences (222) (222)

Transfers 1011 (954) 57

Related to discontinued operations (49) (264) (984) (1297)

Balance at 31 December 2007 0 1 918 4 349 6 267

Additions

Through business combinations 893 96 989

Other* 2 225 721 2946

Amountsused(appropriations) (1733) (4439) (6172)

Currencyexchangedifferences (143) (143)

Balance at 31 December 2008 3 303 584 3 887

* Mainly related to commercial and social disputes. See also Note 5.

110

18. RetirementbenefitobligationsTheamountsrecognizedinthebalancesheetaredeterminedasfollows:

(in thousand euro) 31.12.2008 31.12.2007

Present value of funded obligations 27 287 27303

Fair value of plan assets (20688) (17603)

Presentvalueofunfundedobligations* 6 599 9 700

Unrecognizedactuarialgains/(losses) (452) (1331)

Liability in the balance sheet 6 147 8 369

(in thousand euro) 2008 2007

Current service cost 1477 1717

Interest cost on obligation 1327 1162

Expectedreturnonplanassets (992) (919)

Netactuarial(gains)/lossesrecognisedduringtheyear 938 (1147)

ofwhichincludedinchangesinprovisionsforretirementbenefitobligations

(2066) (565)

ofwhichincludedinotheremploymentcosts 4816 1378

* Difference between the financed liabilities (payments by Omega Pharma) and the fair value of the assets included in the pension scheme.

Alldefinedbenefitplansarefinalsalarypensionplans.Theamountspertainingtopostemploymentmedicalplansareincludedintheliabilitybutarenotsignificant.Therearenoinformalconstructiveobligations.

TheassetscomprisereservesofqualifyinginsurancepoliciesandarenotpartoftheGroup’sownfinancialinstruments.

Theamountsrecognizedintheincomestatementareasfollows:

111

Movementsinnetliability:

TheGrouphasvariousdefinedbenefitpensionplans.ThemostimportantplansareintheNetherlands,Germany,IrelandandFrance.

Theprincipalactuarialassumptionsusedwereasfollows:

Theweightedaveragediscountratefor2007amountedto5.46percentandfor2008to5.94percent.

Theweightedexpectedreturnonplanassetswas5.02percentfor2007and5.08percentfor2008.

Theweightedexpectedgeneralsalaryincreasewas2.83percentfor2007and2.96percentfor2008.

Thecontributionstobepaidin2009areexpectedtobeinferiortothosein2008.

Theplanassetsaremainlyinvestedinshares(60percent)andbonds,forwhichtheeffectivereturnwas-15percentin2008.

(in thousand euro) 31.12.2008 31.12.2007

Net liability in the balance sheet at 1 January 8 369 11 424

Expense 2 750 813

Pensions paid directly from pension reserve (59) (21)

Contributions(benefits-effectivepaymentsrelatedtoretirementbenefitobligations)

(3277) (1613)

Transfer caused by the carve-out of Arseus in 2007 (2234)

Actuary movements (1447)

Net liability in the balance sheet at 31 December 6 336 8 369

(in thousand euro)Nether-lands

Germany Ireland France TOTAL % oftotal

liabilities

Net liability in the balance sheet at

31.12.2007 3049 1395 757 1858 7 059 84.34

31.12.2008 1629 14 1391 1919 4953 78.17

112

19. Taxes,remunerationandsocialsecurity

(in thousand euro) 31.12.2008 31.12.2007

Currentincometaxliabilities 19814 18293

OthercurrenttaxandVATpayables 7393 7 822

Remuneration and social security payables 13762 14005

Taxes, remuneration and social security 40 969 40 120

(in thousand euro)Discrepancy

with taxdepre-ciation

Undistri-buted

earnings

Financialinstru-ments

Other Reclass TOTALdiferred

taxliabilities

Balance at 31 December 2006 39 595 1 416 413 (7 127) 34 297

Result (394) 1376 1591 (38) 2535

Acquisition of subsidiary 33323 33323

Discontinued operations (2052) (371) (2423)

Reclass 389 389

Exchangeratedifferences (58) (4) (62)

Balance at 31 December 2007 70 414 2 792 1 591 0 (6 738) 68 059

Result 1778 754 3116 5648

Charged to equity

Acquisition of subsidiary

Transfers (4373) (4373)

Exchangeratedifferences (283) (6) (289)

Balance at 31 December 2008 71 909 2 792 2 345 3 110 (11 111) 69 045

Deferredtaxliabilities

TheReclasscolumninthechartsforDeferredtaxliabilitiesandDeferredtaxassetsfeaturesidenticalamountsastheyreferto‘netting’ofassetsandliabilitiesincludedbylocalentities.

Thisreclassificationsreferto'offsets'asmeantinIAS12§71.

113

(in thousand euro)

Differencein depre-

ciation rates

Employeebenefits

Provi-sions

Taxlosses

Financialinstru-ments

Other Reclass TOTALdeferred

taxassets

Balance at 31 December 2006 3 648 2 581 4 877 19 870 1 449 (9) (7 127) 25 289

Result (1269) 48 2 206 9571 (1449) 9107

Acquisition of subsidiary 1098 1098

Discontinued operations (445) (573) (775) (7705) (9498)

Reclass 389 389

Exchangeratedifferences (1) (1)

Balance at 31 December 2007 1 934 2 056 7 406 21 736 (10) (6 738) 26 384

Result (275) (1206) (6014) 10199 29 2733

Charged to equity

Acquisition of subsidiary 1716 36 1752

Reclass (4373) (4373)

Exchangeratedifferences 37 (215) (178)

Balance at 31 December 2008 1 696 850 2 893 31 971 19 (11 111) 26 318

Deferredtaxassets

114

20. Financialdebtsandderivativefinancialinstruments

(in thousand euro) 31.12.2008 31.12.2007

Non-current 360 220 368 079

Financial lease liabilities 5210 5 807

of which with a maturity later than 1 year and no later than 5 years 2 461 2 395

of which with a maturity later than 5 years 2 749 3 412

Bankborrowings 339585 328696

of which with a maturity later than 1 year and no later than 5 years 289 265 263 733

of which with a maturity later than 5 years 50 320 64 963

Derivativefinancialinstruments 15425 33576

Current 106 904 22 527

Financial lease liabilities 575 779

Bankborrowings 39470 181

Bank overdrafts 61805 21567

Derivativefinancialinstruments 5054

Total 467 124 390 606

Composition according to duration

115

31.12.2008 31.12.2007

Carrying amount(in thousand euro)

Amount Effective interest

rate

Amount Effective interest

rate

Non-current bank borrowings

Syndicated loan, in euro 148502 5,45% 97 779 4,76%

French loan, in euro 26 000 5,34% 38000 4,99%

USPrivatePlacement,inUSdollar 186385 5,21% 230890 5,15%

FairvalueofthehedgedpartoftheUSPrivatePlacement (22006) (37973)

Other 704

Total non-current bank borrowings 339 585 328 696

of which euro denominated 175 206 135 779

of which US dollar denominated 164 379 192 917

Current bank borrowings

USPrivatePlacement,inUSdollar 44679 5,56%

FairvalueofthehedgedpartoftheUSPrivatePlacement (5375)

Other 166 181

Total current bank borrowings 39 470 181

of which euro denominated 166 181

of which US dollar denominated 39 304

Total non-current and current bank borrowings 379 055 328 877

Note:bankoverdraftsarenotincludedinthechartabove.

Asdemonstratedinthechartabove,thedebtfinancingoftheGroupconsistsoftwomajorbankborrowings:(1)asyndicatedloanand(2)aprivateplacementintheUS.

(1)Thesyndicatedloanwasclosedend-2006.Thisrevolvingcreditfacilityinitiallyprovidedforatotalof600millioneurocreditlines.Becauseoftherelativelylimiteduseoftheavailablecreditlines,thistotalhasbeenreduceduponrequestofOmegaPharmato450millioneurointhecourseof2007.Thechartaboveindicatesthatlessthan150millioneurowasusedfromtheselineson31December2008.

(2)TheUSPrivatePlacementwasclosedin2004,whentheGroupraised285millionUSdollar.ThisplacementishedgedforcurrencyexchangedifferencesandinterestfluctuationsbetweentheUSdollarandtheeuro.Onthemomentthattheseagreementswerecommitted,thenominalprincipalamountwas231.519millioneuro.Thisamountremainsunchanged.

AsafirstbullettrancheofthisUSPrivatePlacementmaturesin2009,thecorrespondingamountof44.7millioneuroistransferredfromnon-currenttocurrentbankborrowings.

BecauseofthehedgesrelatedtotheUSPrivatePlacement,thecorrespondingderivativefinancialinstrumentsarealsoincludedinthechartabove.Furthercommentscanbefoundhereunder.

Bankborrowings

116

Recognition of the hedges related to the US Private Placement in the accountsTheUSPrivatePlacementconsistsoffour‘Notes’whichcorrespondwithanequalnumberofinstallments(bullettranches):55millionUSdollarin2009,160millionUSdollarin2011,50millionUSdollarin2014and20millionUSdollarin2016.

CurrencyandinterestraterisksarecoveredperindividualtranchebycrosscurrencyswapsfromUSdollarfixedinterestratestoeurofixedinterestrates:•100%hedgeofthecurrencyriskinrespectofallcapitalinstallmentsandinterestpayments•75%hedgeoftheinterestrisk.

TheGroupenteredalsointotwocrosscurrencyswapsfromUSdollarfixedinterestratetoeurofloatinginterestrate.

Asalreadymentioned,thenominalprincipalamountwas231.519millioneuroonthecontractdate,andremainsunchanged.

Thesehedgesarereflectedinthefollowingoverview:

US Private Placement Notes

Maturity date

Amount covered by swaps from US dollar fixed interest rate to

euro fixed interest rate

Amount covered by swaps from US dollar fixed interest rate to

euro floating interest rate

55millionUSD 28July2009 55millionUSD

160millionUSD 28July2011 135millionUSD 28millionUSD

50millionUSD 28July2014 50millionUSD

20millionUSD 28July2016 20millionUSD

285 million USD 205 million USD 80 million USD

TheswapsfromUSdollarfixedinterestratetoeurofixedinterestrate(thirdcolumn)arequalifiedascashflowhedges,whiletheswapsfromUSdollarfixedinterestratetoeurofloatinginterestratesarequalifiedasfairvaluehedges.

Forcashflowhedges,theeffectivepartofthechangesinfairvalueofthederivativefinancialinstrumentisrecognizedinequityonthebalancesheet.

Forfairvaluehedges,boththefairvalueoftheswapasthechangesinfairvalueofthehedgedamounts resulting from changes in currency rates and risk free interest rate is recognized in the incomestatement.

Thisisalsoreflectedinthefollowingoverview:

117

Hedges TypeRecognition in the accounts

Related to At the level of

HedgesbyswapsfromUSdollarfixed interest rate to euro fixed interest rate

Cashflowhedge

a) b)

Thefairvalueoftheswap The effective part of the changes in fair value of the derivativefinancialinstrument

a) b)

Derivativefinancialinstruments on the balance sheet Equity on the balance sheet

HedgesbyswapsfromUSdollarfixed interest rate to euro floating interest rate

Fair value hedge

a) b)

Thefairvalueoftheswap The change in fair value of the hedged amounts

a) b)

Derivativefinancialinstruments on the balance sheet Financialexpenseintheincome statement

Theswapsthemselvesarerecognizedasderivativefinancialinstrumentsonthebalancesheets.Initially,theyarerecognizedatthefairvalueatthedatewhenthederivativecontractwascommitted.

Oneachclosingdate,theyarerevaluedatthefairvalueofthatmoment.

Thefairvalueoftheinterestswapsiscalculatedasthepresentvalueofestimatedfuturecashflows.Thefairvalueofthecurrencyswapsisdeterminedusingforwardexchangemarketratesatthebalancesheetdates.

ThefairvalueoftheseinstrumentsreflectstheestimatedamountsthattheGroupwouldreceiveonmaturitydate–whensettlingfavorablecontracts–orthattheGroupwouldhavetopay–whenterminatingunfavorablecontracts.

Thebalancesheetitem‘Non-currentderivativefinancialinstruments’,withanamountof15.425millioneuroandthebalancesheetitem‘Currentderivativefinancialinstruments’,withanamountof5.054millioneurothusrefertothefairvalueoftheswaps.

Thefairvalueisnotonlydeterminedfortheswaps,though,butalsoforthehedgedamounts–i.e.theNotesoftheUSPrivatePlacement.ThefairvalueoftheseNotesis,alongwiththenon-hedgedbankborrowings,includedinthebalancesheetitem‘Non-currentinterestbearingfinancialliabilities’whichamountto334.504millioneuro.Withinthistotalamount,theUSPrivatePlacementNotesrepresent186.385millioneurointhenon-currentbankborrowingsand44.679millioneurointhecurrentbankborrowings.Theeffectofthemark-to-marketvaluationoftheseNotesamountsto-22.006millioneuroforthenon-currentborrowingsand-5,375millioneuroforthecurrentborrowings.

ThefairvalueeffectofbothswapsandNotescombinedamountsto6.901millioneuro(ofwhich6.580millioneuronon-currentand0.321millioneurocurrent).Theeffectofdeferredtaxesisnottakenintoaccountfortheseamounts.

Theeffectoftherevaluationofboththeunderlyingborrowingandtheoutstandingswaps,andtakingtheeffectofdeferredtaxesintoaccount,amountsto-4.555millioneuro.Thisamountcanbesplitintoagrossamountof-6.901millioneuroand+2.346millioneuroforthedeferredtaximpact.

Thisisspecifiedinthefollowingchart.

118

(in thousand euro) Assets Liabilities

Balance at 31 December 2006 1 449 4 264

Fair value hedges (31) (215)

of which: gross amount (277)

of which: deferred tax effect (31) 63

Cashflowhedges (1418) (7140)

of which: gross amount (8 669)

of which: deferred tax effect (1 418) 1 529

Balance at 31 December 2007 0 (3 090)

Fair value hedges (1106)

of which: gross amount, non-current (1 355)

of which: gross amount, current (321)

of which: deferred tax effect 570

Cashflowhedges (359)

of which: gross amount (543)

of which: deferred tax effect 184

Balance at 31 December 2008 0 (4 555)

119

Additional disclosures on financial instruments

Amounts recognised in the balance sheetaccording to IAS 39

Amountsrecogn.

(in thousand euro)

Categoryin accord.

withIAS 39

Carryingamount

31.122007

Amor-tizedcost

Cost Fair valuerecog-

nized inequity

Fair valuerecogn. in

profit orloss

in balancesheet

accordingto IAS 17

Fairvalue31.122007

Available-for-salefinancialassets AfS 2734 2734 n.a.

Other non-current assets LaR 841 841 841

Trade receivables LaR 176651 176651 176651

Other receivables LaR 6047 6047 6047

Cash and cash equivalents LaR 35429 35429 35429

Finance lease liabilities n.a. 6 586 6 586 5546

Bankborrowings FLAC 388701 388701 350480

Derivativefinancialliabilities(hedgeaccounting)

n.a. (4682) (4496) (186) (4682)

Trade payables FLAC 180422 180422 180422

Other non interest bearing liabilities FLAC 8212 8212 8212

ofwhich:aggregatedbycategoryinaccordancewithIAS39

Available for sale AfS 2734 2734 n.a.

Heldtomaturity HtM

Loans and receivables LaR 218968 218968 218968

Financial liabilities at amortized cost

FLAC 577335 577335 539114

120

Amounts recognised in the balance sheetaccording to IAS 39

Amountsrecogn.

(in thousand euro)

Categoryin accord.

withIAS 39

Carryingamount

31.122008

Amor-tizedcost

Cost Fair valuerecog-

nized inequity

Fair valuerecogn. in

profit orloss

in balancesheet

accordingto IAS 17

Fairvalue31.122008

Available-for-salefinancialassets AfS 1940 1940 n.a.

Other non-current assets LaR 820 820 820

Trade receivables LaR 202242 202242 202242

Other receivables LaR 6 976 6 976 6 976

Cash and cash equivalents LaR 33793 33793 33793

Finance lease liabilities n.a. 5 785 5 785 4865

Bankborrowings FLAC 468814 468814 438945

Derivativefinancialliabilities(hedgeaccounting)

n.a. (6902) (5039) (1863) (6902)

Trade payables FLAC 200930 200930 200930

Other non interest bearing liabilities FLAC 16102 16102 16102

ofwhich:aggregatedbycategoryinaccordancewithIAS39

Available for sale AfS 1940 1940 n.a.

Heldtomaturity HtM

Loans and receivables LaR 243831 243831 243831

Financial liabilities at amortized cost

FLAC 685846 685846 655 977

Finance leases

AssetsTheproperty,plantandequipmentincludethefollowingamountswheretheGroupisalesseeunderafinancelease:

(in thousand euro) 31.12.2008 31.12.2007

Cost-capitalisedfinanceleases 12990 12845

Accumulated depreciation (5013) (4533)

Net amount of assets in leasing 7 977 8 312

121

Thenetamountofthefinanceleasesconcernfollowinginvestments:

(in thousand euro) 31.12.2008 31.12.2007

Land 528 528

Buildings 7346 7 777

Installations, machinery and equipment 10 7

Furniture and vehicles 93

Net amount of assets in leasing 7 977 8 312

LiabilitiesFinanceleaseliabilities–minimumleasepayments:

(in thousand euro) 31.12.2008 31.12.2007

Notlaterthan1year 575 779

Laterthan1yearandnotlaterthan5years 2461 2395

Later than 5 years 2749 3412

Present value of finance lease liabilities 5 785 6 586

(in thousand euro) 31.12.2008 31.12.2007

Notlaterthan1year 723 958

Laterthan1yearandnotlaterthan5years 2 890 2891

Later than 5 years 2 872 3614

Total minimum lease payments 6 485 7 463

Futurefinancechargesonfinanceleases (700) (877)

Present value of finance lease liabilities 5 785 6 586

Thepresentvalueoffinanceleaseliabilitiesisasfollows:

122

Operating leasesTheoperatingleasesconcernmainlybuildings,warehousesandcompanycars.

Thenon-cancelableoperatingleasesarepayableasfollows:

(in thousand euro) 31.12.2008 31.12.2007

Notlaterthan1year 9863 12253

Laterthan1yearandnotlaterthan5years 22398 22 790

Later than 5 years 6 580 5251

Operating leases – minimum lease payments 38 841 40 294

(in thousand euro) 31.12.2008 31.12.2007

Other payables 16110 8 220

Accruedexpenses 12521 12472

Other current payables 28 631 20 692

21. Othercurrentpayables

The 8 million euro increase of this balance sheet item refers mainly to due payments related to acquisitions.

123

22. Contingencies

23. Offbalancesheetrightsandobligations

OmegaPharmahasanumberofdisputeswiththeBelgiantaxauthorities.

Afirstdisputeconcernsthetaxabilityofthe1998warrantsplan,whichrelatestotheperiod2000to2006.ThetaxauthoritiestakethepositionthatthewarrantsaretaxablewhentheyareexercisedandhastaxedtheCompanywithrespecttoallegedgifts.Thetaxauthoritiesdemandpaymentof9.9(million)euro.TheCompany’smanagementdoesnotacceptthetaxauthorities’argumentsandhasappealed.Themostrecentdevelopmentsinjudge-madelawsupporttheCompany’sarguments.Thelastexercisesunderthewarrantplanof1998tookplacein2008.

TheseconddisputerelatestothedeductibilityofinterestpaidtotheGroup’sLuxembourgfinancingvehicleinthefinancialyears2002to2005.Thetaxauthoritieshaverejectedthisdeductioninfullanddemandpaymentof10.1(million)euro.Theargumentsofthetaxauthoritiesarenotbasedonjudge-madelawandwererejectedinanappeal.Sincemid-2006,nofurtherinterestpaymentshavebeenmadetotheLuxembourgfinancingvehicle.

CollateralTheamountof2.119millioneuromaybeanalysedasfollows:

Omega Pharma France SAS Mortgageregistration 366 Registeredpledgeonworkingcapital 1753

2119

Sinceallconcernedbankborrowingsarereimbursed,releaseofcovenantwillbeaskedin2009.

2.ThebankloansofOmegaPharmaSAS(France)arebackedupbyaLetterofIntenttothevalueof60(million)eurobyOmegaPharmaNV.

3.OmegaPharmaNVhassignedaliabilitystatementonbehalfofanumberofsubsidiariesintheNetherlands,Ireland,ItalyandGermany,i.e.:

BionalInternationalBV BionalNederlandBV ChefaroNederlandBV DamianusBV OmegaPharmaHoldingNederlandBV SamenwerkendeApothekersNederlandBV WartnerEuropeBV Chefaro Ireland Ltd Omega Teknika Ireland Ltd Chefaro Pharma Italia SrL DeutscheChefaroGmbH ParacelsiaPharmaGmbH

124

24. Business combinationsIn the course of the accounting period 2008, Omega Pharma has acquired a number of relatively small companies in various countries. No parts of the acquired companies have been sold. These acquisitions are recognized as business combinations. The companies concerned and their respective date of inclusion in the consolidation circle can be found in Note 25.

Book value Fair value adjustments

Fair value

Non current assets 1 958 350 2 308

Intangible assets 1 319 (199) 1 120

Property, plant and equipment 550 (19) 531

Other non current assets 47 47

Deferred tax assets 42 568 610

Current assets 13 852 (1 089) 12 763

Cash and cash equivalents 1 045 1 045

Other current assets 12 807 (1 089) 11 718

Non current liabilities 496 496

Deferred tax liabilities

Other non current liabilities 496 496

Current liabilities 13 932 1 241 15 173

Minority interests 196 (88) 108

Net assets acquired 1 186 (1 892) (706)

Goodwill 30 663

Total consideration 29 957

The purchase price allocation and the goodwill calculation were done, in conformity with IFRS 3, on a preliminary basis and may still be modified within twelve months following the acquisition date.

The goodwill of the acquisitions represents the value of their respective sales organization and sales structure, which allow the Group to quickly penetrate the corresponding markets through the distribution of its existing brands.

The acquired companies increased the consolidated turnover with approximately 6 million euro. The combined turnover amounted to 18.525 million euro. It should be noted that a number of these companies acted as importers/distributers for specific products of Omega Pharma. This turnover was then recognized in the segment Rest of World. Their contribution to the operating result (EBIT) was 1.896 million euro.

125

Followingcompaniesareconsolidatedaccordingtotheglobalconsolidationmethod:

ACOHudAB 100% Box622-19426UpplandsVäsby(Sweden)ACOHudNordicAB 100% Box622-19426UpplandsVäsby(Sweden)ACOHudNorgeAS 100% OkernBus95-NO-0509Oslo(Norway)ACOPharmaOY 100% Gardsbrinken1A-FI02240Esbo(Finland)AktifKozmetikTicaretLtd.STI(1) 100% FerahevlerMah.VatanCad.KaymakSok18Tarabya,Sariyer-34457Istanbul(Turkey)AltermedCorporationd.o.o.(2) 100% PutM.Makovina3-Zagreb(Croatia)Altermed Corporation SA (2) 100% Hnevotínská56-77900Olomouc(CzechRepublic)AltermedSlovakias.r.o.(2) 100% Kysucka3-Zilina01001(Slovakia)Auragen Pty Ltd (3) 100% Level1,16ByfieldStreet-NorthRide2113(Australia)Aurios Pty Ltd (3) 100% Level1,16ByfieldStreet-NorthRide2113(Australia)AuropharmEuropeBV(3) 100% PrinsBernhardplein200-1097JBAmsterdam(theNetherlands)Aurora Pharmaceuticals Pty Ltd (3) 100% Level1,16ByfieldStreet-NorthRide2113(Australia)Aurora Pharmaceuticals Ltd (3) 100% 183GrenadaStreet-AratakiTauranga3116(NewZealand)BelgianCyclingCompanyNV 100% Venecoweg26-9810Nazareth(Belgium)BionalFranceSARL 100% AvenuedeLossburg470-69480Anse(France)BionalInternationalBV 100% Tolhusleane11-15-8401GAGorredijk(theNetherlands)BionalNederlandBV 100% Tolhusleane11-15-8401GAGorredijk(theNetherlands)BioverNV 100% Monnikenwerve109-8000Brugge(Belgium)Carecom International SA (1) 100% AkaraBuilding-24DeCastroStreetWickhamsCayI RoadTownTortola(BritishVirginIslands)ChefaroIrelandLtd 100% FarnhamDrive-FinglasRoad-Dublin11(Ireland)ChefaroNederlandBV 100% Keileweg8-3029BSRotterdam(theNetherlands)ChefaroPharmaItaliaSRL 100% VialeCastellodellaMagliana18–00148Roma(Italy)ChefaroPortuguesaLda 100% EdificioNeopark-Av.TomásRibeiro43-PT-2795-574Carnaxide(Portugal)

25. Listofconsolidatedcompanies

Included in the consolidation scope:(1) as of 01.10.08(2) as of 01.07.08(3) as of 01.04.08(4) as of 01.01.08

126

ChefaroUKLtd 100% PercyRoad3-Huntingdon-CambsPE296SZ(UnitedKingdom)Cinetic Laboratories Argentina SA (1) 100% Av.Triunvirato2736-CityofBuenosAires(Argentina)CosmeaACOAS 100% Slotsmarken18-DK-2980Hörsholm(Denmark)Cosmediet-BiotechnieSAS 100% AvenuedeLossburg470-69480Anse(France)CTCMedicalAB 100% Box622-S-19426UpplandsVäsby(Sweden)DamianusBV 100% Keileweg8-3029BSRotterdam(theNetherlands)DeutscheChefaroGmbH 100% ImWirrigen25-45731Waltrop(Germany)EMASARL 100% RueAndréGide20,BP80-92321Châtillon(France)FischemKozmetikUrunleriVeSanayiTicaretLtd(1) 100% FerahevlerMah.VatanCad.KaymakSok18Tarabya,Sariyer-34457Istanbul(Turkey)HerbsTradingGmbH 100% Hauptplatz9-9300St.VeitanderGlan(Austria)HidraICVEDisTicaretLtd.STI(1) 100% FerahevlerMah.VatanCad.KaymakSok18Tarabya,Sariyer-34457Istanbul(Turkey)Hipocrate2000SRLSC(1) 100% 6APrahovaStreet,sector1-Bucharest(Romania)HipocrateDistributionGrupSRLSC(1) 100% 14ATarguNeamt,sector6-Bucharest(Romania)HomeopatischLaboratoriumSimiliaNV 100% Deuzeldlaan34-36-2900Schoten(Belgium)HudSA 100% RueGuillaumeKroll5-1882Luxembourg(Luxembourg)Interdelta SA (4) 71,13% RouteAndréPiller21-1762Givisiez(Switzerland)JLRPharmaSA(4) 100% AuVillage107-1745Lentigny(Switzerland)LaBeautéInternationalSARL 100% RueAndréGide20,BP80-92321Châtillon(France)LaboratoiresOmegaPharmaFranceSAS 100% RueAndréGide20,BP80-92321Châtillon(France)MedgenixBeneluxNV 100% Vliegveld21-8560Wevelgem(Belgium)O+APharmaLtd(2) 90,00% Bégu.3-5-1022Budapest(Hungary)OmegaAlpharmCyprusLtd 100% KennedyAvenue-1stfloor-Office10812-14-1087Lefkosia(Nicosia)(Cyprus)OmegaPharmaGmbH 100% Reisnerstrasse55-57-1030Vienna(Austria)OmegaPharmaSAS 100% RueAndréGide20,BP80-92321Châtillon(France)Omega Pharma Australia Pty Ltd (3) 100% Level1,16ByfieldStreet-NorthRide2113(Australia)OmegaPharmaBalticsSIA 100% Bauskasiela58a-902LV-1004Riga(Latvia)

127

OmegaPharmaBelgiumNV 100% Venecoweg26-9810Nazareth(Belgium)OmegaPharmaCapitalNV 100% Venecoweg26-9810Nazareth(Belgium)OmegaPharmaEspañaSA 100% PlazaJavierCugat,2-EdificioD-Plantaprimera 08174SantCugatdelVallés(Spain)OmegaPharmaHellasSA 100% 19kmofAthens–LamiaNat.Road–14671NeaErythraia(Greece)OmegaPharmaHoldingNederlandBV 100% Keileweg8-3029BSRotterdam(theNetherlands)OmegaPharmaInternationalsNV 100% Venecoweg26-9810Nazareth(Belgium)OmegaPharmaLuxembourgSARL 100% ZareOuest-4384Ehlerange(Luxembourg)OmegaPharmaPolandSp.z.o.o. 100% Dabrowskiego2477-249–93232Lodz(Poland)Omega Pharma Singapore Pte Ltd (3) 100% 100JalanSultan-#09-06SultanPlaza-Singapore199001(Singapore)OmegaPharmaUKLtd 100% PercyRoad3-Huntingdon-CambsPE296SZ(UnitedKingdom)OmegaTeknikaLtd 100% FarnhamDrive-FinglasRoad-Dublin11(Ireland)ParacelciaPharmaGmbH 100% ImWirrigen25-45731Waltrop(Germany)Pharmasales Pty Ltd (3) 100% Level1,16ByfieldStreet-NorthRide2113(Australia)PharmavitEuropeNV 100% Deuzeldlaan34-2900Schoten(Belgium)PrisfarProdutosFarmaceuticosSA 100% RuaAnterodeQuental629-4200-068Porto(Portugal)PromedentSARL 100% ZareOuest-4384Ehlerange(Luxembourg)RichardBittnerAG 100% Reisnerstrasse55-57-103Vienna(Austria)RubiconHealthcareHoldingsPtyLtd(3) 100% Level1,16ByfieldStreet-NorthRide2113(Australia)SamenwerkendeApothekersNederlandBV 100% Tinbergenlaan1-3401MTIJsselstein(theNetherlands)ViaNaturaNV 100% Ondernemersstraat4-2500Lier(Belgium)VivoxBV 100% Zwaanhoefstraat4a-4702LCRoosendaal(theNetherlands)WartnerEuropeBV 100% Keileweg8-3029BSRotterdam(theNetherlands)

TheArseusGroupisconsolidatedaccordingtotheequitymethod:

ArseusNV 24% Textielstraat24-8790Waregem(Belgium)

128

Followingcompanieshavebeenremovedfromtheconsolidationcircleinthecourseof2008:

ArunValleyTradingCompanyLtd-UnitedKingdom(dissolvedin2008)DAYOUConsultingGmbH-Austria(mergedwithOmegaPharmaGmbHfrom1January2008)GalencoNV-Belgium(mergedwithOmegaPharmaCapitalNVfrom1January2008)JJLDistribucióndePerfumeríayCosméticaSL-Spain(mergedwithOmegaPharmaEspaña from1January2008)JungleFormulaCompanyLtd-UnitedKingdom(dissolvedin2008)OmegaPharmaSchweizAG-Switzerland(dissolvedin2008)

FurthertothememorandumofintentwhichwasannouncedontheInvestorsDayof11September2008,OmegaPharmaandModiMundipharmawillfinalizeinthecourseofthesecondquarter2009 all formalities related to the creation of the 50/50 joint venture in India, named Modi OmegaPharma(India)PrivateLimited.PlansincludethateightproductsofOmegaPharmawillbemanufacturedinIndiaforcommercializationbythisjointventureonthelocal,Indianmarket.Thefirstturnoverbythejointventureisexpectedforend-2009,early-2010.

26. Significanteventsafterbalancesheetdate

129

27. RelatedpartiesRelatedpartiesrefertothemembersoftheExecutiveCommittee,thenon-executivemembersoftheBoardofDirectorsandtoArseusNV,inwhichtheCompanyholdsa24percentparticipation.

Members of the Executive Committee and non-executive members of the Board of Directors

2008 2007

Sale of goods and services 223 8 239

Sale of goods to Arseus companies 145 440

Sale of services to Arseus companies 78 7 799

Purchase of goods and services 205 2 776

Purchase of goods from Arseus companies 189 524

Purchase of services from Arseus companies 16 2 252

Grossremuneration* (inthousandeuro)

Basecomponent

Variablecomponent

Total

ExecutiveCommitteemembers,includingtheCEO 2 200 000 140000 2340000

Non-executivemembersoftheBoardofDirectors 90 000 90 000

Total 2 290 000 140000 2430000

* The total amount equals the full cost to the Company. No social security expenses nor retirement benefit expenses are due by the Company.

Inthecourseof2008,atotalof70,000warrantshavebeengrantedtothemembersoftheExecutiveCommitteeandnowarrantshavebeengrantedtothenon-executivemembersoftheBoardofDirectors.

IntheeventofanyrequestsforresignationofamemberoftheExecutiveCommittee,asettlementwillbeappliedthatcorrespondsinmostcaseswiththefixedremunerationcomponentforoneyear.Noothersettlementsareinplace.

Moredetailedinformationisincludedinthispublicationinthechapter'InformationfortheShareholder'underthesub-heading'CorporateGovernance'.

Arseus NVThetablebelowincludestherelatedpartytransactionsbetweentheCompanyandArseusin2008:

130

28.Warrants–share-basedpaymentsOmegaPharmahasfourwarrantplans,ofwhichwarrantplan3istheonlyonewhichstillincludesexercisablewarrants.Foreachwarrantthatisexercisedonenewsharewithonevotingrightisbeingissued.

Overview of the warrant plans of Omega Pharma NV

Nr. Approved on Approved by For the benefit of

Status

1. 20April1998 Board of Directors Employees, service providers and important third parties of Omega Pharma and/or its subsidiaries

LastwarrantsforfeitedinNovember2008.

2. 13December2000 Board of Directors Nonewwarrantsgrantedin2008.16,950exercisableon31.12.2008butallexpiredinJanuari2009.

3. 1April2003 Board of Directors 196,750newwarrantsgrantedin2008.318,355warrantsarestillexercisable.

4. 7July2004 ExtraordinaryGeneral Share-holders Meeting

The independent directors of the Company

LastwarrantsexpiredinAugust2008.

Note:Warrantplan4deviatedfromtheBelgianCorporateGovernanceCodeasitprovidedinshare-basedpaymentsforindependentdirectors.TheBoardofDirectorsholdstheopinionthatthissystemresultsinanoptimumcommitmentbetweentheindependentdirectorsandtheCompany.ThisprincipledatesfrombeforetheimplementationoftheBelgianCorporateGovernanceCodeandreferstoatimeinwhichnon-executivedirectorswerenotremuneratedfortheirtermsofoffice.Inthemeantime,allwarrantsfromthisplanareexpiredandtheBoardofDirectorshasdecidednottodevelopnewproposalsforgrantingadditionalwarrantstoindependentdirectors.

Vesting of warrants

Target Exercisable as from In annual instalments of

Employees Twotofouryearsaftergrantdate 20%to25%

Important third parties and service providers Twoyearsaftergrantdate 20%

Independent directors One year after grant date 20%

Theaveragevestingperiodisaboutfivetonineyears.Theconditionforvesting/exercisingthewarrantsis,foremployees,thattheyarestillinservice,andforimportantthirdpartiesandserviceproviders,thattherelationshipwiththeCompanyisnotterminated.

131

2008 2007 Number Average

exercise price in euro

Number Average exercise price

in euro

Outstanding on 1 January 228 004 38.76 418 070 35.59

Granted 196750 25.66 57 500 49.74

Expired(a) and forfeited(b) (67994) 39.49 (26399) 39.79

Exercised(c) (21455) 24.12 (221167) 35.50

Outstanding on 31 December 335 305 31.88 228 004 38.76

Granting, exercising and potential future exercising of warrants

Exercise scheme for 2007 and 2008

(a) As a consequence of not being exercised with the scheduled annual instalments.(b) As a consequence of leaving service (employees) or termination of the relationship with the Company (other warrant holders).(c) By issuing an equal number of new shares Omega Pharma: cf. the effectively exercised warrants in the scheme hereunder.

2008 2007

Expiry date of the warrants

Exercise price per

warrant

Number of warrants per

instalment

Exercise price per

warrant

Number of warrants per

instalment

Effectively exercised warrants

January2008 39.12 38595 2120

June2008 28.20 42956 19335

August 2008 41.49 2 500 0

November 2008 39.59 26450 0

January2009 39.19 16950 40.05 8 290 0

June2009 34.84 40824 34.64 22431

June2010 34.71 21930 34.64 22431

June2011 46.07 19863 46.38 21363

June2012 30.56 64419 46.72 16738

June2013 30.27 61060 49.74 13125

June2014 30.27 61067 49.74 13125

June2015 25.66 49192

31.88 335 305 38.76 228 004 21 455

On31December2008,atotalof335,305warrantswereexercisableatanaverageexercisepriceof31.88europershare,whilethatdaytheclosingpriceoftheshareOmegaPharmaamountedto27.00euro.

132

Asinthecourseof2009already16,950warrantswereexpiredorforfeited,thetotalnumberofrightstosubscribeforsecuritiesconferringvotingrightsthathaveyettobeissuedis318,355andonlyreferstowarrants.Theaverageexerciserightis31.49eurowhiletheclosingpriceoftheshareOmegaPharmawas19.76euroon12March2009.Thisimpliesthatnowarrantsareexercisable(‘inthemoney’).

If,hypothetically,allwarrantswouldbeexercised,thetotalnumberofvotingrightswouldamountto24,545,658(24,227,303+318,355).

Themostrecentsituationregardingthenumberofsharesandthenumberofwarrantsismadeavailableonwww.omega-pharma.be,intheInvestorCenter,undertheheaderInfoforshareholders.

Warrant holders in the Board of Directors and the Executive CommitteeSeepages48and49.

Recognition of the warrant cost in the balance sheetThefairvalueofthewarrantsisrecognizedinthebalancesheetunderEquity,spreadoverthevestingperiod(cf.theconsolidatedstatementofchangesinequity).

Thefairvalueofthewarrantsisdeterminedasfollows:

•Asthewarrantplans1and2weregrantedpriorto7November2002,IFRS2doesnotrequireaspecificcalculationofthefairvalue.

•Thefairvalueofthewarrantsofwarrantplan3aredeterminedusingtheBlack-Scholesvaluationmodel.Accordingtothismethod,thefairvalueofthesewarrantsamountedto1.315millioneuroin2008,versus1.247millioneuroin2007.Themaincomponentsusedinthemodel,arethesharepriceatgrantdate,theexercisepriceshownabove,thestandarddeviationoftheexpectedsharepricereturns(withvolitalitysetat40percentandtheexpecteddividendyieldat0.50percent),theoptionlifedisclosedabove,andtheannualrisk-freeinterestrate(5percent).IntheBlack-Scholesvaluationmodel,thesecomponentsformthebasisforcalculatingthepresentvalueoftheshareex-dividendandtheexerciseprice.Inthismanner,whichisalsousedoftenforthevaluationoftradablecalloptions,thefairvalueofthewarrantsisbeingdetermined.

•Sincenowarrantsfromwarrantplan4areexercisableanymore,nofairvalueisrecognizedinthebalancesheet.

Recognition of the warrant cost in the income statementThewarrantcostisrecognizedintheincomestatementunderOtheremployeebenefitexpenses.

Forthecalculationofthiscost,thefairvalueofthewarrantsatgrantdateisspreadovertheperioduntilthefinalvestingofthewarrants.

For2008,thiscostamountedto68,057eurocomparedto148,167euroin2007.

133

Thedividendfortheperiod2007(0.50eurogrosspershare)waspaidin2008andamountedtoatotalof13.103millioneuro.Thedividendfortheperiod2006(0.40eurogrosspershare)waspaidin2007andamountedtoatotalof10.794millioneuro.For2008,adividendof0.60eurogrosspersharewillbeproposedtotheAnnualMeetingon4May2009.Thisrepresentsatotaldividendof14.536millioneuro,payablein2009andnotreflectedinthisfinancialstatement.

ThedividendsontreasurysharesarenotsuspendedandpaidouttoOmegaPharmaNV.

TheStatutoryAuditorisPricewaterhouseCoopersBedrijfsrevisorenBCVBA,representedbyPeterVandenEynde.

TheAuditCommitteeofOmegaPharmaNVconfirmedinitsmeetingsof15December2008and25 August 2008 that the above-listed additional services do not impair the independence of the StatutoryAuditor.

29. Dividend–share-basedpayments

30. InformationontheAuditor'sremunerationand related services

(in thousand euro)

Audit fee for the Group audit 2008

Omega Pharma Group 628

AuditfeeforPricewaterhouseCoopersBedrijfsrevisoren 196

AuditfeeforpartiesrelatedtoPricewaterhouseCoopersBedrijfsrevisoren 432

Additional services rendered by the Auditor to the Group

OtherengagementslinkedtotheAuditor'smandate 77

Taxadvisoryservices 0

Other services 0

Additional services rendered by parties related to the Auditor to the Group

OtherengagementslinkedtotheAuditor'smandate 0

Taxadvisoryservices 121

Other services 30

134

Statutory Auditor’s report to the General Shareholders’ Meeting on the consolidated accounts ofthecompanyOmegaPharmaNVasofandfortheyearended31December2008

Asrequiredbylawandthecompany’sarticlesofassociation,wereporttoyouinthecontextofourappointmentasthecompany’sstatutoryauditor.Thisreportincludesouropinionontheconsolidatedaccountsandtherequiredadditionalinformation.

Unqualified opinion on the consolidated accountsWehaveauditedtheconsolidatedaccountsofOmegaPharmaNVanditssubsidiaries(the“Group”)asofandfortheyearended31December2008,preparedinaccordancewithInternationalFinancialReportingStandards,asadoptedbytheEuropeanUnion,andwiththelegalandregulatoryrequirementsapplicableinBelgium.Theseconsolidatedaccounts,aspresentedonpages58to133,comprisetheconsolidatedbalancesheetasof31December2008,the consolidated income statement, consolidated statement of changes in equity and consolidated cashflowstatementfortheyearthenended,aswellasthesummaryofsignificantaccountingpoliciesandotherexplanatorynotes.ThetotaloftheconsolidatedbalancesheetamountstoEUR(000)1.417.253andtheconsolidatedstatementofincomeshowsaprofitfortheyear,groupshare,ofEUR(000)54.259.

Thecompany'sboardofdirectorsisresponsibleforthepreparationoftheconsolidatedaccounts.Thisresponsibilityincludes:designing,implementingandmaintaininginternalcontrolrelevantto the preparation and fair presentation of consolidated accounts that are free from material misstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.

Ourresponsibilityistoexpressanopinionontheseconsolidatedaccountsbasedonouraudit.WeconductedourauditinaccordancewiththelegalrequirementsapplicableinBelgiumandwithBelgianauditingstandards,asissuedbythe"InstitutdesReviseursd'Entreprises/InstituutderBedrijfsrevisoren".Thoseauditingstandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhethertheconsolidatedaccountsarefreeofmaterialmisstatement.

Inaccordancewiththeauditingstandardsreferredtoabove,wehavecarriedoutprocedurestoobtainauditevidenceabouttheamountsanddisclosuresintheconsolidatedaccounts.

The selection of these procedures is a matter for our judgment, as is the assessment of the risk thattheconsolidatedaccountscontainmaterialmisstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,wehaveconsideredtheGroup’sinternalcontrolrelatingtothe preparation and fair presentation of the consolidated accounts, in order to design audit proceduresthatwereappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’sinternalcontrol.Wehavealsoevaluatedtheappropriateness of the accounting policies used and the reasonableness of accounting estimates madebymanagement,aswellasthepresentationoftheconsolidatedaccountstakenasawhole.Finally,wehaveobtainedfromtheboardofdirectorsandGroupofficialstheexplanationsandinformationnecessaryforouraudit.Webelievethattheauditevidencewehaveobtainedprovidesareasonablebasisforouropinion.

135

Inouropinion,theconsolidatedaccountsgiveatrueandfairviewoftheGroup’snetworthandfinancialpositionasof31December2008andofitsresultsandcashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards,asadoptedbytheEuropeanUnion,andwiththelegalandregulatoryrequirementsapplicableinBelgium.

Additional informationThe company’s board of directors is responsible for the preparation and content of the managementreportontheconsolidatedaccounts.

Ourresponsibilityistoincludeinourreportthefollowingadditionalinformation,whichdoesnothaveanyeffectonouropinionontheconsolidatedaccounts:

•Themanagementreportontheconsolidatedaccountsdealswiththeinformationrequiredbythelawandisconsistentwiththeconsolidatedaccounts.However,wearenotinapositiontoexpressanopiniononthedescriptionoftheprincipalrisksanduncertaintiesfacingthecompanies included in the consolidation, the state of their affairs, their forecast development orthesignificantinfluenceofcertaineventsontheirfuturedevelopment.Nevertheless,wecanconfirmthattheinformationprovidedisnotinobviouscontradictionwiththeinformationwehaveacquiredinthecontextofourappointment.

Gent, 2 April 2009

The statutory auditorPricewaterhouseCoopersReviseursBedrijfsrevisorenbcvbarepresented by

PeterVandenEyndeBedrijfsrevisor

136

OmegaPharmaNVstand-alonecondensedincome statement

(in thousand euro) 2008 2007

OPERATING INCOME 16 828 24 577

Turnover 16815 12539

Other operating income 13 12038

OPERATING CHARGES 15 338 25 790

Goodsforresale,rawmaterialsandconsumables 135 9 870

Services and other goods 11058 11517

Remuneration, social security and pensions 3175 2933

Amountswrittenoff 831 1309

Other operating charges 138 161

OPERATING PROFIT 1 490 (1 213)

FINANCIAL RESULT 743 237 354

PROFIT FROM ORDINARY ACTIVITIES BEFORE TAXES 2 233 236 141

EXCEPTIONAL RESULT (853) (11 084)

PROFIT FOR THE FINANCIAL YEAR BEFORE TAXES 1 380 225 057

RESULT TAXES (31) (76)

NET PROFIT FOR THE FINANCIAL YEAR 1 349 224 981

137

OmegaPharmaNVstand-alonecondensedbalance sheet

(in thousand euro) 2008 2007

FIXED ASSETS 1 144 348 1 136 393

Formationexpenses 1954 2 858

Intangiblefixedassets 2 506 2794

Tangiblefixedassets 1121 1141

Investments 1138767 1129600

CURRENT ASSETS 145 482 118 163

Debtorsduewithinoneyear 117075 45238

Investments 24095 63218

Cash at bank and in hand 1943 7833

Deferred charges and accrued income 2369 1879

TOTAL ASSETS 1 289 830 1 254 556

CAPITAL AND RESERVES 694 310 792 297

Capital 16465 16450

Share premiums 350376 349844

Legal reserve 1646 1645

Not available reserve 24095 63213

Profitcarriedforward 301728 361145

CREDITORS 595 520 462 259

Creditors due after one year 336840 231519

Creditorsduewithinoneyear 251277 224685

Accrued charges and deferred income 7403 6 055

TOTAL LIABILITIES 1 289 830 1 254 556

138

AppropriationofprofitsOmegaPharmaNV

(in thousand euro) 2008 2007

Profits to be appropriated 362 494 422 772

Profitsfortheyeartobeappropriated 1349 224981

Profitcarriedforwardfromthepreviousfinancialyear 361145 197791

Transfers to capital and reserves (46 230) (48 524)

To statutory reserves 1 14

To other reserves 46229 48510

Result to be carried forward (301 728) (361 145)

Profittobecarriedforward 301728 361145

Profit to be distributed as dividends (14 536) (13 103)

Dividend 14536 13103

Accounting policiesTheaccountingpoliciesusedforthestatutoryfinancialstatementsofOmegaPharmaNVarethesameaspreviousyear.TheseaccountingpoliciesareinlinewiththeRoyalDecreeof30January2001oftheimplementationoftheBelgianCompanyCode.

StatutoryannualaccountsofOmegaPharmaNVInaccordancewithArticle105oftheBelgianCompanyCode,thisannualreportincludesanabbreviatedversionofthestatutoryannualaccountsofOmegaPharmaNV.TheannualreportandtheAuditor’sreporthavebeenfiledandarealsoavailableforconsultationattheregisteredoffice.

TheAuditorhasissuedanunqualifiedopiniononthestatutoryannualaccountsofOmegaPharmaNVforthefinancialyear2008aswellasforthepreviousyear.

4

Alphabetic terminology list

In addition to the terms that are defined in IFRS, this annual brochure also includes other financial terminology. These ‘alternative performance indicators’ are defined below. The IFRS terminology is set in italics.

EBIT: “Earnings Before Interests and Taxes” - Results of operating activities

EBITDA: “Earnings Before Interests, Taxes, Depreciations and Amortizations” Results of operating activities increased with depreciations and amortizations before non-recurring items and after corporate cost

EBT: “Earnings Before Taxes” - Results of operating activities after net finance cost

Financial result: Net finance cost - result of financial income and financial charges

Gearing ratio: Net financial debt as a percentage of total Equity

Gross margin: Revenue reduced with Trade goods, raw materials and consumables and also adjusted for Changes in inventories, expressed as a percentage of Revenue

Net capex: Net capital expenditures - Investments and produced assets reduced with sales of investment goods and investment goods that are taken out of service

Net financial debt: The sum of current and non-current Borrowings and Derivative financial instruments reduced with Cash and cash equivalents

Net profit: Profit or loss - consolidated result

Non-recurring items: Exceptional charges that are not-related to the ordinary operations

Net turnover: Revenue

Operating cash flow: EBITDA - “Earnings Before Interests, Taxes, Depreciations and Amortizations” Results of operating activities increased with depreciations and amortizations before non-recurring items and after corporate cost

Operating result: Results of operating activities - EBIT (“Earnings Before Interests and Taxes”)

Recurring net profit: Profit or loss corrected for all non-recurring items

Working capital: Inventories + Trade receivables – Trade payables

����

Passionfor

INNOVATION

Omega Pharma NV Venecoweg 26 B-9810 NazarethTel. +32 (9) 381 02 00

Investor Relations: Chris.vanraemdonck@omega-pharma.beE-mail: info@omega-pharma.be

website: www.omega-pharma.be

�������������������������

�����������

��������

�������������