activity report - groupe avril · introduction p.2 - profile p.4 - a group with a sectoral...

ACTIVITYREPORT

2017

INTRODUCTIONP.2 - Profile

P.4 - A group with a sectoral structure P. 6 - Interview with Jean-Philippe Puig P. 9 - Interview with Arnaud Rousseau

P. 10 - Governance P. 14 - Deciphering the year

2017 – THE CORE

P. 18 - Stakes, challenges and opportunities P. 20 - Staying on course and reaffirming

our ambitions P. 22 - A strong and competitive group in its markets that listens to customers P. 26 - A resolutely international group

set to conquer new markets P. 30 - Innovation to drive the creation

of sustainable value P. 34 - People committed to serving

a federative company project

A REVIEW OF ACTIVITIESInvestments

P. 40 - SofiprotéolIndustrial activities

P. 46 - Oilseeds Processing P. 52 - Oils & Condiments

P. 60 - Avril Specialties P. 66 - Animal Nutrition & Processing

P. 74 - Avril Development

P. 78 – Financial information

CONTENTS

Industrial sites Commercial offices

AVRIL, A GROUP WITH

A SECTORAL STRUCTURE,

FROM GRAIN TO THE PROCESSED

PRODUCT

Avril was built and operates according to an original model: a sectoral organization

where each activity creates value for all links in the chain. Starting from grain

and its two inseparable co-products – oil and protein – Avril has developed an entire sector of activities in plants

and animals which complement each other and work in synergy, from upstream

to downstream. 89 sites in the world of which:

30 sites in oilseed sectors

59 sites in animal sectors

ONE THIRD OF TURNOVER ACHIEVED INTERNATIONALLY IN 2017

STRONG TERRITORIAL ROOTS IN FRANCE

15 sites in oilseed sectors

47sites in animal sectors

RéunionIsland€ 6.2 Bn

turnover in 2017

21 countries

7,600employees

AVRIL, A COLLECTIVE

DYNAMIC

Avril, a collective dynamicSet up in 1983 at the initiative of farmers in order to assure long-term markets for the production in France of plants rich in oils (rapeseed, sunflower, olive, soybean, etc.) and proteins (pea, field bean, lupin, etc.), in 35 years Avril has become a major industrial and finance group. It is now present in France and internationally in sectors as diverse as human foods, animal nutrition and expertise, renewable energies and chemistry, and has built its growth on a portfolio of strong brands such as Sanders, Lesieur, Puget, Matines, Diester®, Bunica, Taous, etc.To fulfil its mission, the Group draws strength from its two complementary activities: industrial – organized in five business lines – and investment, which it exercises through Sofiprotéol, its finance and development company. Avril is a unique group characterized by well-established collective share ownership, strong farming and regional roots and the systematic reinvestment of all profits in the growth of national sectors wherever it operates.

OUR MISSION

Creating sustainable value in the oils and proteins sectors, thus contributing to better food for humans and preservation of the planet.

62 sites in France of which:

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AVRIL — Activ ity repor t 2017

2. 3.

Crushing

Food

Collection of oilseed and protein grains

Genetics and animal health, other inputs and services

Renewable energies

Involvement of Sofiprotéol, finance and development company

Oleochemicals

Milk, meat

Poultry

Food

Livestock farmers

Eggs, pork

Proteochem®

Seeds, biotechnology, other inputs and services

100,000 agricultural producers

Biosecurity

Animal nutrition

Lesieur France, margins were squeezed between pressure from major distributors and a marked rise in raw material prices. In parallel, Matines pursued changes to some of its production towards the alternative egg market and should see a return to growth in 2019.It was our biodiesel sector that was the most severely impacted last year, and this is continuing in 2018. The culprit was the removal of antidumping duties on Argentine biodiesel made using soybean oil, which arrives on the European market at the same price as raw rapeseed oil. We issued alerts as to the disastrous consequences for the sector, but 2018 is starting with an alignment of the European decision on palm oil-based biodiesel from Indonesia. We have been heard, but responses in the face of this unfair competition have still not materialized. This situation has severely damaged our ratios and had a negative impact on our net results, but the Group’s solidity has not been called into question.

What is the impact of this situation on your strategic decisions? J.-P. Puig: This episode has confi rmed the vital necessity to pursue changes to the structure of our activities and business model. Some activities are starting to rise to the top. Oleochemicals over-performed in 2017. Its results were linked to the good health of the global economy, to the gains in productivity achieved and to the pertinence of a strategy focused on customers and specialties. The pig branch is another example of success, with the AVF joint enterprise having had benefi cial eff ects throughout the sector.There were many other reasons for satisfaction that demonstrated the sustainability and pertinence of the Avril model. For example, Sofi protéol’s €100 million increase in capital was an excellent vote of confi dence and provided us with new investment capacities in diff erent agri-food and agribusiness sectors.

I would also like to mention the acquisition of Indusalim in Morocco by Lesieur Cristal, thanks to which Avril is taking a stake in a new international business, that of margarine.

How is consolidation of the Group progressing?J.-P. Puig: It is almost complete. Following a complicated but successful process, Lesieur has now switched to our integrated computer system so that a single system is now operational throughout the Group. Nearly 200 people work in our shared service centers. And we are also transforming our working methods. Digitization is developing and has made a noteworthy diff erence to the services we can propose to our customers via the FeedMarket.fr platform for the online sale of oilseed meals, and the Canopée tool is able to exploit data from livestock farms.We have made important progress, up to and including our Executive Committee, which is now renewed, tighter knit, younger and feminized.

PURSUING OUR TRANSFORMATION TO

SUCCESSFULLY FULFIL OUR MISSION

The early part of 2018 was marked by the tragic accident that occurred at the Saipol site in Dieppe. What lessons have you drawn from this?Jean-Philippe Puig: An explosion followed by a fi re caused the death of two people working for one of our subcontractors. This tragedy took place after a year (2017) that had been relatively positive in terms of safety results, because our teams achieved their goal of reducing the accident rate by 20% and at some sites even surpassed 2,000 days without any accidents. The tragedy reminded us that safety can never be taken for granted in an industrial setting, and reinforced our commitment to continue improving our results and striving towards a zero accident rate.

What is your assessment of 2017?J.-P. Puig: At an economic level, the year was one of contrasts. Excellent results were achieved in some activities such as oleochemicals, the pig branch, Sofi protéol, Sopral and Terrial (which tripled its profi ts), but there were some more diffi cult situations: at

In a year that was severely impacted by diffi culties in its biodiesel sector, Avril accelerated the transformation of its business model to in order to restore an ability to achieve

its aims and pursue its plan to serve the agricultural, agri-food and agribusiness sectors. An analysis by

Jean-Philippe Puig, Avril’s CEO

JEAN-PHILIPPE PUIGCEO of Avril

The year was one of contrasts. Excellent results were achieved in some activities such as oleochemicals, the pig branch, Sofi protéol, Sopral and Terrial. ”

AVRIL — Activ ity repor t 2017AVRIL — Activ ity repor t 2017

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And Avril’s raison d'être? J.-P. Puig: Our mission has remained unchanged. We are there to offer long-term and sustainable markets for different agricultural sectors and will continue to support our initial activity, that of grain crushing and esterification. In 2018, we shall be seeing the results of European arbitration regarding the regulations on renewable energies for 2020 to 2030 – including biofuels – and these will have important effects – one way or another – on our activities. Particular efforts were made in 2017 to promote Diester®, a biodiesel Made in France using French raw materials; this campaign was well received and won a major advertising award. We are now working on major initiatives to drive the business model for first-stage processing towards a strategy of specialty biofuels such as B100, a product made with 100% French rapeseed for use by captive fleets.

What are your priorities for 2018?J.-P. Puig: We must move more rapidly, simplify our decision-making processes and develop closer ties with our customers. The three key words for 2018 are safety, customers and cash.Safety because it is our absolute priority and a measure of managerial performance. Customers because improvements are still necessary to ensure that they are central to all our activities. In all areas, we must think in terms of pull rather than push. This is a cultural revolution for a Group such as Avril.Cash and performance will restore our ability to achieve our ambitions, hampered at present by the harsh reality of Group profitability.I would like our customers to see an immediate difference – a Group connected to the farming world that thinks for the medium and long term and is socially responsible – so that they will immediately attach “quality – service – product” to our name.

How is Avril positioned in the talent market? J.-P. Puig: Thanks to our model, we attract some very good candidates because of the originality and consistency of its plan. People today are looking for a purpose and we can give it to them. It is up to us to cultivate this common culture, which is essential to the Group’s growth and transformation. That is what we are trying to do through our in-house university, Avril Academy, and our intranet which is now accessible to 80% of our employees.

The French National Food Conference was one of the highlights of 2017. Will it change the parameters? J.-P. Puig: We welcome a certain number of advances and hope that they will be transformed into law. We salute the strategy, but the important thing will be to convert the goal. How might these results be reflected by facts and in the law? We shall be paying particular attention to the details. Our negotiations with major distributors at the end of last year were harder than ever, despite the Good Conduct Charter signed during the Conference. Next year, it is the new law that will apply.

We are there to offer long-term and sustainable markets for different agricultural sectors. ”

AVRIL’S MODEL IS EXTREMELY MODERN

Arnaud Rousseau, Chairman of Avril Gestion, shares 2017 highlights

What is your analysis of 2017?Arnaud Rousseau: It was a difficult year for us. After the tragic loss of Xavier Beulin and the departure of two FOP directors, we had to almost entirely rebuild the agricultural governance of Avril Gestion in an economic context dominated by the biodiesel issue. But continuity is now assured. In 2017, biofuels were a major concern to us. They were the original link between the Group and the farming world, and together we shall be working to find solutions to deal with this crisis, not for the first time.

What challenges does Avril face today? A. R.: Faced with structural difficulties in agriculture, it is vital to redefine a strong collective project based on our regional roots but also including an export and competitive vision. In this respect, the French President elected in 2017 is driving innovative plans for

agriculture, and the National Food Conference highlighted the expectations of the French: higher quality, traceability and regional sourcing. From this standpoint, Avril’s model is extremely modern and wholly in phase with this vision. It restores ambition and dynamics to a farming sector that is looking for French champions.

What makes this model so original for oilseed producers? A. R.: Avril can guarantee that their grain will be processed locally, that they will be less exposed to the global market and able to plan for the long term. I would also like to emphasize the ambitious innovative approach adopted by the Group, notably regarding proteins, which offers real market opportunities for farmers. I am convinced that proteins will be a driver for the future of our sector.

What are the prospects for 2018?A. R.: This will be a pivotal year, with important deadlines that will impact our environment: the issues of international trade and customs duties, the use of palm oil for biofuels, European decisions on the future of biodiesel and the French law we are expecting as a result of the National Food Conference that will redistribute the balance between producers, processors and distributors, etc. In this period of uncertainty, we must more than ever reaffirm our collective beliefs and the vocation of our sectoral model regarding the sustainable development of our regions.

ARNAUD ROUSSEAU Chairman of Avril Gestion


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BUSINESS LINES

OILSEEDSPROCESSING

AVRIL SPECIALTIES

ANIMAL NUTRITION & PROCESSING

AVRIL DEVELOPMENT

TERRES UNIVIA FIDOP

EMPLOYEES

FOP

OILS& CONDIMENTS

COLLEGIAL GOVERNANCE WITH STRONG

AGRICULTURAL ROOTS

Xavier Beulin, an important leader in agriculture Xavier Beulin died suddenly on 19 February 2017, at the age of just 58 years. He had been Chairman of the Avril Group since 2000. Involved from an early age in agricultural unionism, he steadily climbed the ladder to become Chairman of the FOP in 1999, and then of the FNSEA. We remember a profoundly committed man, a lover of the land and a visionary, who worked unceasingly to develop French farming. He was a central driving force behind the Avril Group, giving it the stature of a national leader.

THE BOARD

Governance forged for the future In 2015, Avril equipped itself with a new governance structure and the status of a limited partnership with share capital (Société en Commandite par Actions, SCA). This structure can separate the power of shareholders (the limited partners or associés commanditaires which include the FIDOP2, FOP3 and the Fondation Avril, recognized as a public utility) from that of the manager (Avril Gestion, the general partner or associé commandité). This helps to ensure that the founder shareholders in the Group remain central to its growth strategy. The partners work through a Supervisory Board with eight members, who include two staff representatives from the Avril Group, elected by their peers. This Board is chaired by Antoine

Henrion, who is also Chairman of Terres Univia4. The Board of Avril Gestion appoints the manager of the SCA and decides upon the major strategic and fi nancial orientations of the Avril Group. This Board comprises nine members: four from the FOP, three qualifi ed personalities and two former CEOs or corporate offi cers of the Group. In February 2017, the Offi cers of Avril Gestion elected Arnaud Rousseau to serve as the Chairman of its Board.

1. Terres Inovia: Technical Institute for Oilseed Crops, Grain Legumes and Industrial Hemp.

2. FIDOP: Interprofessional Development Fund for the Oilseeds and Proteins Sector.

3. FOP: French Federation of Oilseed and Protein Crop Producers.

4. Terres Univia: Interprofessional organization for oilseeds and protein crops.

BENJAMIN LAMMERTFarmer,

Member of the Board of the FOP

ARNAUD ROUSSEAUFarmer, Chairman of Avril Gestion,

Chairman of the FOP

JEAN-PIERRE DENISChairman of Crédit Mutuel Arkea and Crédit Mutuel de Bretagne

S É BA ST I E N W I N D S O RFarmer, Vice-Chairman of the FOP,

Chairman of Terres Inovia 1

ALAIN RENOUXFarmer,

Vice-Chairman of the FOP

ANNE LAUVERGEONCEO of ALP Services and Chair of Sigfox

PIERRE PRINGUETVice-Chairman

of Pernod Ricard

SYLVIE RUCARConsultant

ALAIN MIROTFormer CFO

of Sofi protéol


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THE EXECUTIVE COMMITTEE

1. MOUSSA NACIRI General Manager of the Avril Specialties

Business Line

2. OLIVIER DELAMÉA General Manager of the Oils & Condiments

Business Line

3. MARIE DE LA ROCHE KERANDRAON

Vice President for Human Resources and Communications

4. MICHEL BOUCLY Deputy CEO

5. JEAN-BAPTISTE BACHELERIE General Manager of the Oilseeds

Processing Business Line

6. JEAN-PHILIPPE PUIG Chairman and Executive Officer (CEO)

7. PAUL-JOËL DERIAN Vice President for Innovation,

Research & Sustainable Development

8. MARIE GRIMALDI General Manager of the Animal Nutrition

& Processing Business Line

9. AYMERIC MONGEAUD Chief Financial Officer (CFO)

10. STÉPHANE YRLÈS Secretary-General

11. GABRIEL KRAPF Vice President for Industrial

& International Development

2 81 74 103 95 116

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functions such as accounting, salaries, IS management and General Services in France, so that Business Lines can focus on their core activities. Three years after Avril was born, this dynamic focused on improving our performance is on the right track. Furthermore, the increase in capital of Sofi protéol – €100 million – and additional external commitments in its new private debt fund refl ected the trust of investors in our areas of activity and also in our investment management skills.

How did the Group’s activities change?A.M.: Biodiesel production suff ered severe damage to its margins because of a concomitance of unfavorable factors, notably linked to opening of the European market to imports of soybean biodiesel from Argentina and palm biodiesel from Indonesia. In the Oils & Condiments Business Line, Lesieur also experienced a diffi cult year. This was fi rstly due to a marked rise in raw material costs (+60% in two years for olive oil in particular) that the company was not able to pass on during commercial negotiations with major retailers. The second reason was the unfavorable trade situation regarding imports into Algeria, which damaged Lesieur’s sauces and condiments lines. However, the latter issue will soon be resolved by opening a factory in Algeria during the summer of 2018.The performance of our oleochemicals activities refl ected the upturn of the global and European economies which favorably impacted the needs of industry and validated Oleon’s positioning on specialty products with high added value. The egg branch pursued changes to its model in response to increasing consumer demand for alternative eggs. However, our purchase prices were severely aff ected by the abrupt rise in shell egg prices triggered by the Fipronil crisis, although this did not concern Avril’s supply sectors. For this reason, we were forced in 2017 to launch plans to adapt Matines’ production tools. In parallel, the Group worked with its partner breeders to support changes in our production modes towards free range and organic eggs.

Our pig branch confi rmed the pertinence of the strategy adopted in recent years to enable the valorization of French products in terms of quality. As for animal nutrition activities, they recorded an excellent recovery after a year (2016) that had been marked by the French livestock crisis. Finally, our incubator for rapidly growing companies, Avril Development, confi rmed the value of its model through the good performance of Sopral in developing its international activities, and Terrial’s confi rmation as an increasingly important actor in organic fertilizers.

What were the eff ects on the Group’s results?A.M.: In a market environment that remained unfavorable to some of our activities, the Group’s good performance illustrated its strength and fully validated the pertinence of actions implemented under the Avril 2020 strategic plan. Turnover progressed to €6.2 billion (+6%), driven by the rise in raw materials prices and our international growth; the EBITDA fell to €122 million. The net result continued to be impacted by the problems encountered by our crushing, refi ning and esterifi cation activities, and also by shell eggs. The level of debt rose but remained under control and limited when compared to our equity capital, which reached €1.75 billion.

What are your priorities and prospects in 2018?A.M.: In an environment that remains diffi cult, the Group will – as in 2017 – remain watchful regarding the need to control expenditure and prefer investments that off er prospects for rapid profi tability and can consolidate resilient foundations for an EBITDA that is less sensitive to market volatility, under the logic of developing the share of specialties with high added value and pursuing actions that enhance its operational excellence. In its historic activity of biofuels, Avril will be opening a new market in 2018 with the launch for captive fl eets of a 100% plant-based, 100% renewable and 100% Made in France fuel that can completely replace fossil diesel. This new specialty biofuel will generate additional value for the sector.

DECIPHERING THE YEAR

What is your analysis of 2017?Aymeric Mongeaud: the year stood out for the marked diff erence in its dynamic by comparison with 2016, when all our activities suff ered from an unfavorable economic context. Some activities performed extremely well in 2017 and accelerated their eff orts to create value, such as oleochemicals, animal nutrition, animal specialties, the pig branch, international oils and condiments, Avril Development and our fi nance company, Sofi protéol. But others had to deal with diffi cult environments, such as the egg branch, biodiesel manufacture and oils and condiments in France. Despite these trends, which refl ected heterogeneous sectoral contexts, 2017 fully validated the transformation strategy initiated two years ago. Firstly, through the opening of new growth opportunities in high potential markets thanks to innovation and internationalization, and secondly the increase in the Group’s competitiveness and fl exibility, thanks to consolidation of our operational excellence in an unstable economic setting. Our international sales were responsible for driving increases in activity and value creation. As for our operational excellence approach, it passed some important milestones. We exceeded our objective of achieving overall

Despite the growth of our businesses and increased profi tability, the unfavorable market for French biodiesel penalized our results. Nevertheless, Avril kept on course

in 2017 in terms of cost control and operational excellence, and continued to support the creation of value

in all its activities.

savings of €100 million, thanks to the Operational and Strategic Excellence Program (EOS) launched in 2013. We also accelerated the deployment of projects that would consolidate the Group for the future. These notably included the fi rst structuring steps towards a renovated Information System and Computer Infrastructure, implementation of our future Group ERP in the fi rst operational entity – Lesieur – and a year after its launch, the full deployment of Avril Services that centralizes

AYMERIC MONGEAUD, CFO of the Avril Group and Deputy CEO of Sofi protéol


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To pursue its transformation and ensure the success of its founding principles, Avril is maintaining its strategic course focused on four

main areas: operational excellence, international growth, innovation and a collective commitment. An

overview of progress in 2017.

2017 – THE CORE

STAKES, CHALLENGES AND OPPORTUNITIES

IN FRANCE

Restoring value for agriculture and food in the futureAs part of Avril’s mission, this challenge was at the heart of the États Généraux de l'Alimentation (French Food Conference) that took place during the second half of 2017 and combined public consultation with workshops focused on three issues: improving the distribution of product value, accelerating the transformation of French agriculture and responding to demands from society with respect to food. Among its conclusions, the Conference underlined the essential need for well-structured agricultural sectors. For Avril, which has always promoted this vision and largely participated in the discussions, thinking on foods for tomorrow and models for their production needs to go far beyond short distribution channels and organic sectors and also integrate conventional sectors (such as vegetable oils and proteins) which are committed to supplying consumers with regional products of impeccable quality that are accessible to all. It is also fundamental to attack the structural problem of value distribution between major retailers and upstream agriculture.

Favoring national self-suffi ciency in vegetable proteinsIn early 2018, The French President stated that he was in favor of an ambitious protein plan for the coming fi ve years, with the aim of achieving national self-suffi ciency. As a spearhead in this ambition, Avril pointed out that it was the development of rapeseed cultivation that had enabled a reduction in France’s protein dependence in terms of livestock feeds thanks to the co-valorization of its two indissoluble resources: oil and protein. Faced with this challenge of national importance, the Group is involved in several

areas: the defense of biofuels Made in France (co-producers of vegetable proteins), new opportunities for innovation that will valorize vegetable proteins in nutrition and renewable chemistry, and practical contributions to the structuring of a French non-GM soybean sector, which has met with considerable success.

IN EUROPE

Contributing to energy transition through regionally-produced biofuelsTo comply with the undertakings of the Paris Climate Agreement, Europe needs to adopt an ambitious stance regarding the obligatory share of renewable energy to be used in transport between now and 2030. It must also determine its position on the renewable energy mix, and notably the incorporation rate and nature of fi rst generation biofuels. These decisions are the subject of debate at the European level, focused on the Renewable Energies Directorate (RED II). It is Avril’s opinion that biofuels made using locally cultivated biomass such as rapeseed should constitute a preponderant proportion of the renewable energy mix for the long term, as the alternatives are not suffi cient at present to meet the declared aims, and do not supply pertinent responses to vegetable protein needs. In 2017, the Group asserted the

environmental, economic and social contributions made by Diester®, a biodiesel made from renewable and local raw materials. Avril continues to work on improving the environmental component of biodiesel production from the fi eld to the pump, and has for several years been investing in research on second generation biofuels to supplement their predecessor.

WORLDWIDE

Producing more and increasingly sustainablyWhether the aim is to respond to the strong growth in demand for proteins from developing countries or to propose new technological solutions for the chemicals industry, Avril works to address a key challenge of sustainable performance. In animal sectors, the Group aligns its eff orts with several important trends: reducing the use of antibiotics in livestock units and paying more attention to animal welfare. Drawing strength from its expertise in the husbandry, health and nutrition of animals, Avril has committed to a Sustainable Health Management approach in livestock units and is developing the international use of its innovative specialties in diff erent animal sectors. In the area of renewable chemistry, the Group has progressed in the fi eld of biosourced solutions that off er both environmental and health benefi ts.

ONE GRAIN, TWO CO-PRODUCTSRapeseed oil and protein, and their markets, are inseparable

The future of our sectors will be based on a global vision of plants and a balanced valorization of its co-products: oil and protein. We need to continue developing markets for these two resources, which are inseparable from each other, to the benefit of our regions.”

Michel BouclyDeputy CEO

44%of the weight of a rapeseed grain is

made up of vegetable oil

used to produce table oils, renewable energies and

for plant chemistry

56% of the weight of a rapeseed grain is

made up of oilseed meal rich in vegetable

proteinused for livestock feeds

Avril positions itself in areas that are in phase with its mission and responds to key societal challenges in France,

Europe and around the world. The range of its activities represents markets for the oils and proteins sectors and

opportunities for the Group’s growth.


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STAYING ON COURSE AND REAFFIRMING OUR AMBITIONS

A paradoxical situationYear on year, Avril’s model has confi rmed its usefulness and modernity when faced with major challenges. In 2017, the French National Food Conference traced the roadmap for good agricultural practices and emphasized the need for well-structured sectors in order to recreate relationships and trust. Several signs indicated that the importance of the oils and proteins sector to France’s food self-suffi ciency was clearly understood. But paradoxically, and mainly for regulatory reasons, the situation had never been as bad in one of its major markets, biodiesel, with rapeseed suff ering from unfair competition from imported soybean and palm oils. A situation that made the Group’s strategic choices, as set out in the Avril 2020 plan, even more relevant.

Accelerating the transition towards new activities and marketsAvril continued to adapt the structure of its activities towards those with higher added value and a global dimension. External growth played a key role in this transition. Thus Avril Animal Specialties doubled its biosecurity activities thanks to the acquisition of Ewabo in Germany, and the Avril Oil & Ingredient Solutions platform enhanced its skills by developing close ties with the specialist fi rm Novastell. Through the acquisition of Indusalim in Morocco, the Group took a position in the margarine market. For these reasons, the majority of the Group’s EBITDA in 2017 was achieved in international markets.

A second lever concerned the transformation of innovation, a strong component within Avril, into markets. Advances were thus achieved, such as the fi rst industrial trials by Evertree in Proteochem® or the fi rst production of sunfl ower lecithin by Saipol. Finally, by developing digital tools such as Canopée and FeedMarket.fr, Avril opened a new chapter in the services it can off er its customers.

Intensifying our regional projects As well as its economic objectives, Avril is pursuing its overall goal, which is its fi ght for local and regional strength. Through its activities as an investor with Sofi protéol, the Group further increased its fi nancial commitments to serve this mission of national importance. Two major events – an increase in capital at the end of the year and the success of the fi rst fundraising round by Sofi protéol Dette Privée – reinforced Avril’s ability to support all parts of the French agricultural economy through the partnerships developed by Sofi protéol. In its core business, biodiesel, the Group reaffi rmed its desire to continue defending this essential market for farmers by valorizing regional biofuels such as B100, made of 100% French rapeseed.Defending local interests also means adding value to French livestock sectors in line with the successful model of our pig branch with Abera, which is structured to drive products towards higher value and respond to demands for proven origin and quality from consumers.

Our atypical model allows us to apply a long-term strategy supported by our industrial performance. The aim is to reinforce our sustainable development commitments and to better publicize our advantages in response to the demands of all our customers: quality, traceability, a French origin and sectors of excellence.”

In an external context that was damaged by a crisis impacting its biodiesel activities, Avril nevertheless stayed

on course in 2017 and accelerated its transformation towards new growth opportunities. This was crucial to the

success of its founding objective: to add value to the oils and proteins sectors while serving diff erent regions.

Michel Boucly Deputy CEO


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During a year of poorer profi tability, the Group nevertheless continued to drive the ambitions of its Operational and Strategic Excellence program (EOS)

focused on six priorities: health and safety, operational performance, optimization of purchasing and the supply chain, the adaptation of production facilities and reducing working capital requirements. In 2017, Avril surpassed its goal of achieving savings worth €100 million since 2013.

Continuing progress with safetyThe tragic accident that occurred at the Saipol site in Dieppe on 17 February 2018 reinforced Avril’s commitment to achieving a zero accident rate. In 2017, the frequency of accidents (TF2) fell by 20% (and by more than 60% since 2013), thanks notably to the development of site safety visits (VST), the ongoing training plan and the personal commitment of managers. In France, a specifi c approach adopted with a major temporary employment group resulted in a signifi cant drop of 48% in the TF2 involving its workers.

Optimizing expenditureTo further improve its industrial performance, Avril accelerated its EOS training program for employees responsible for deploying plans to improve the yields, quality and timelines of production. Thus 850 additional operatives were trained at sites throughout the world, and more than 600 performance projects generated value worth nearly €27 million for the Group. In the supply chain, the adoption of S&OP (Sales & Operations Planning) methods will confi rm Avril’s ability to reconcile its sales plans (demand) with its production capacities (supply) while meeting the Group’s objectives in terms of service. Following the fl ow analysis performed in 2017, improvements to logistics and transport strategies should improve costs in this area. For its supplies in raw materials, Saipol has launched a two-year project designed to develop water or rail transport options instead of, or alongside, shipment by truck, with the dual objective of ensuring environmental performance and cost optimization. In terms of purchasing, Avril pursed its eff orts towards mutualizing and professionalizing this function, which in 2017 generated savings worth more than €24 million and in 2018 will be broadened to include multiservice providers and logistics. The Group also widened the scope of competition for certain international calls for tender, notably regarding services that concern investment expenditure, and formalized its requirements relative to environmentally-friendly practices in a Responsible Purchasing Charter.

Strategic Area 1

A STRONG AND COMPETITIVE

GROUP IN ITS MARKETS THAT LISTENS

TO CUSTOMERS Improving Avril’s operational

excellence at all levels.

Safety remains our number one priority. Following a successful pilot project in Morocco, we are focusing in 2018 on raising the awareness of all employees to the improvement in our results by working on individual behaviors.”

Gabriel Krapf Vice President for Industr ia l & International Development

Savings worth more than

€ 100 Machieved since the EOS program was launched in 2013

Nearly

70% of employees implemented safety-related actions during the second “Avril Safety Day”

Nearly 5,000site safety visits took place in 2017


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All mobilized for road safety

In 2017, particular attention was paid to the road safety of all traveling staff (delivery drivers, technical sales staff) and employees using their vehicles to come to work. During the

second “Avril Safety Day" in June, 662 vehicles were checked at the Group’s ten French sites. This was achieved with the support of Arval, the long-term vehicle rental firm used by Avril, which called on the assistance of Euromaster, a specialist in the diagnosis of vehicle safety.

A second operation was organized in January 2018 to anticipate winter conditions. At the same time, some sixty employees from the Bruz site in Brittany benefited from training in safer driving. The aim was to identify risky situations (fatigue, using a phone while driving, etc.) and thus prevent them. The SOLO game – usually used in factories – was adapted to the needs of traveling sales staff and delivery drivers at Sanders Bretagne and Sanders Euralis. Its principle is to think about the risks before starting a task in order to adopt the correct behavior. Finally the Purchasing Department – working with Human Resources – introduced new criteria for the equipment of the company’s fleet; e.g. an audible warning sounds when a white lane marking is being crossed.

Adapting industrial facilities to market changes

Nearly €150 million were committed in 2017 to projects to develop or transform industrial assets: for

example, at Lesieur, with the installation of a new packaging machine on the Grande-Synthe site, modernization of industrial and research activities in Coudekerque or the construction of a mayonnaise factory in Algeria, which will be completed in 2018. In parallel, Oleon opened a new R&D center in Malaysia to meet the growing Asian demand for oleochemical specialties, and completed an increase in its dimer production capacity in Ertvelde, Belgium. In plant processing, Avril initiated the production of sunflower lecithins with two units; one in France (Saipol) and the other in Romania (Expur). In animal nutrition, Sanders converted two plants to produce organic feeds, and improved the performance of four other sites in Brittany. And in the context of revitalizing a non-GM soybean sector in France, Sofiprotéol, the Group’s finance and development arm, contributed to funding the opening in 2017 of a crushing unit – Sojalim – in the Hautes-Pyrénées region.

Biomass at the service of energy performance

In 2017, the Saipol site in Sète completed the installation of its electricity generating turbine

alongside the biomass boiler which uses a by-product – sunflower hulls – from the Bassens plant in Gironde. Seven of Avril’s eight largest production sites (in France, Romania, Malaysia and Morocco) are now equipped with biomass boilers that supply 95% of their thermal energy requirements. By replacing gas, they prevent emissions of 130,000 tonnes CO2/year.

A UNIQUE MANAGEMENT SYSTEMThe Group is preparing the launch in 2019 of the Avril Integrated Management System (AIMS). Designed to replace numerous existing certifications, this system favors continuing improvement in the fields of safety, the environment and quality, and is based on a new and specific informatics tool. Saipol is currently testing this management system in a pilot study.

A new serviceFor the first time, Avril provided technical support to another company that was constructing a soybean crushing plant in Algeria. The provision of expert support is an activity that the Group could well develop in the future.

HIGHLIGHTS


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at Sanders Ouest, Bretteville site, France

1/3of turnover and XX% of EBITDA achieved internationally in 2017

For the past two years, two management teams, one for the American continent and the other for Africa-the Middle East-Asia, have been providing operational support for the international growth of both Business Lines and Business Units. A wide variety of interventions were made in the fi eld, always with the aim of optimizing Avril’s performance in these regions, either through export or by setting up commercial or industrial sites. This organization also aims to foster Group synergies.

Avril’s international dynamism illustrates the potential of this strategic area for growth. When searching for new markets to serve its sectors,

the Group exploits three levers: internationalization of its sectoral model, its specialty activities and increasing exports of its brands. Considerable progress was achieved in all three in 2017.

Structuring and growing national sectorsAvril pursued its strategy focused on international sectoral development, notably in Maghreb countries. The rapeseed sector that the Group has been organizing during the past three years in Tunisia produced its fi rst 100% Tunisian rapeseed oil in 2017. In Algeria, Lesieur started construction of a mayonnaise factory in a joint venture with its retail partner, the Djadi Group, which constituted a particularly strategic advance in the local context of import restrictions. In Morocco, Lesieur Cristal acquired Indusalim in the margarine market. This new activity will reinforce its local leadership and enable it to pursue the development of its value chain in the fats segment. In the animal sectors, international activities also off ered a growth opportunity for Sanders which progressed in Algeria where Sim Sanders already holds more than 50% of market share, and in Tunisia where the company signed an agreement with the Hachicha Group to develop its activities. Overall, Sanders recorded excellent growth of 67% in its international tonnage in 2017, and is predicting 35% growth in 2018 for its three subsidiaries in Algeria, Tunisia and Serbia.

Accelerating the conquest of new regionsGlobalization was the driver for growth in specialty areas. Major progress was achieved by Avril Animal Specialties in 2017, notably thanks to its strategic acquisitions – Salus in Brazil, Ewabo in Germany – and to the synergies operated between its diff erent subsidiaries. Oleon also pursued its conquest of the American and Asiatic markets by launching tailor-made solutions. More recently, the Avril Oil & Ingredient Solutions platform (AOIS) has been focusing on the international network of sites in the Oilseeds Processing Business Line to sell its specialty oils and ingredients and respond to global calls for tender. Finally, the Lesieur and Lesieur Cristal brands increased their export eff orts and crossed new frontiers: that of the USA for Moroccan oils and that of China for French sauces and condiments.

Strategic Area 2

A RESOLUTELY INTERNATIONAL GROUP SET TO CONQUER NEW

MARKETSAccelerating international

development to capture new growth opportunities


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Asia: considerable potential for Avril’s growth

Saipol in Singapore, MiXscience in Vietnam, Oleon in Malaysia, Lesieur in China, etc. Within a few years, Asia has become a target market for Avril and most Business Lines are pursuing

ambitious objectives in this region with immense potential for consumption, where French products can off er the guarantees of quality and traceability sought by the growing middle classes. In all its activities, Avril is capitalizing on a premium positioning and products adapted to the requirements of local customers.

Lesieur’s sauces and condiments have thus started to conquer the Chinese market by attracting attention in the blogosphere through cooking demonstrations given by well-known French chefs, and by developing a sweet mayonnaise adapted to local tastes. In this, Lesieur is following Oleon Health & Beauty which launched its Jolee® product range at the in-cosmetics event in Bangkok by highlighting formulations adapted to the local climate.

Avril Animal Specialties has also reinforced its presence in this strategic region: enlargement of the Oleon research center in Malaysia and the creation of a MiXasia subsidiary in Vietnam to develop its know-how in animal specialties in China and South-East Asia.

In order to foster all possible synergies between these initiatives, and create more value together, Avril has set up a tight network and shared tools for all the employees concerned.

How Lesieur is growing in the Middle East

The Middle East is one of the regions targeted by Avril, notably for its table oils. The aim is to gain a

position in the premium segment and then develop this market as part of the French sector. Thus Lesieur is planning to produce in Abu Dhabi in partnership with a local actor. The oil will come from France but be bottled in the country. This will allow Lesieur to gain in competitiveness and adapt to the regional standard of bottles with an integrated handle. Starting from these foundations, Lesieur oils could then fi nd markets throughout the region: Saudi Arabia, Qatar, Bahrein, etc.

THE FIRST 100% TUNISIAN RAPESEED OILIn early 2017, the Tunisian government, Avril, and its subsidiary Lesieur Cristal, inaugurated a local rapeseed sector structured from upstream to downstream around local partners. At that time, Cristal Tunisia launched the fi rst 100% Tunisian rapeseed oil, sold under the Lesieur brand, placing particular emphasis on its high omega 3 content and associated health benefi ts. The venture was a success and the entire production was sold. Avril thus created a rapeseed market in Tunisia that had not previously existed.

Best World's Olive Oil 2017This is the title earned by olive oil from Domaine de Kalea (Morocco) at the "New York international Olive Oil competition"!

Avril Animal Specialties conquering South American markets

In 2016, MiXscience became a majority shareholder in the Brazilian company Salus, a major actor in the world’s third

largest market for livestock feed. A year later, Salus recorded excellent results that enabled Avril Animal Specialties to increase its market share in Brazil. The company, which specializes in premix for farmed livestock, thus broadened its customer base and diversifi ed and added value to its products. The two partners combined their know-how in nutritional specialties to accelerate their growth and now aim to conquer markets in neighboring countries.

Arabia, Qatar, Bahrein, etc.

World's

HIGHLIGHTS


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250

research scientists and experts

5

main RID centers in France, Morocco and Malaysia

13 sustainable development indicators integrated in the Group’s strategic plan

For Avril, innovation and sustainable development are the two inseparable pillars required to create value.

Protein on the route to industrializationA priority for the future of the sector, projects concerning new opportunities to valorize vegetable proteins saw considerable progress in 2017. The aim is to use the protein fraction of grain to create specialty projects for sale in diversifi ed markets. In the area of protéochimie® (protein chemistry), Evertree opened its own innovation center to respond to the needs of the wood-based composite panels industry. In terms of human foods, RID chose the partnership route and successfully produced its fi rst protein isolates. Finally, the advances achieved regarding processes to concentrate rapeseed and sunfl ower fl ours now make it possible to envisage their industrialization in 2018 for applications in animal nutrition.

From innovation to businessIn specialty activities, innovation is an important lever for development and 2017 was a year of practical results. In oleochemicals, the industrialization of an original process for dimer production enabled an off er of new services in a growth market. Oleon also started to sell its bio-surface active agents, opening the way towards numerous 100% natural applications. On its side, Avril Animal Specialties marketed its fi rst additives benefi ting from a new encapsulation technology, and the fi rst barrier fl ora resulting from biotechnology research.

Demands from society as a source of innovationIn all Avril’s activities, RID is trying to place increasing emphasis on responding to societal challenges. This may mean biosourced and environmentally-friendly products for the chemicals industry, support for livestock farmers in their eff orts to demedicalize their units by using preventive and natural solutions, or participating in the circular economy through companies such as Terrial and Adonial, whose vocation is to recycle livestock waste, organic industrial residues, agri-food by-products and production rejects into resources.

Strategic Area 3

INNOVATION TO DRIVE

THE CREATION OF SUSTAINABLE VALUE

A lever for profi table and responsible growth

Most of our innovation projects are driven by our principal commitments: to valorize French sectors, provide better foods for humans and preserve the planet”

Paul-Joël Derian Vice President for Innovation, Research & Sustainable Development .


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Sustainable developmentDemanding and engaging programs

As a responsible industrial group, Avril also aims to be a driver for transformation throughout the sector. In 2017, the Group formalized its ambitious policies with respect to sustainable

palm oil and animal welfare, so that they could be shared with its ecosystem.

The Sustainable Palm Policy can be defi ned by a single ambition – supplies of only “zero deforestation” palm oil – and a demanding program that impacts all palm oil purchases. In the fi rst instance, Avril listed all its direct suppliers and worked with them to map the supply chain and introduce a monitoring system. The same approach was also initiated relative to sustainable soybean.

In terms of the welfare of farmed livestock, Avril is committed to total transparency in two main areas: identifying and eliminating unacceptable situations and advancing practices within the scope of its responsibility. In practice, its approach is based on three founding principles – to provide solutions that will guarantee animal health, ensure good living conditions for animals, and develop a culture of consideration for animals – and their implementation, species by species through targeted actions as from 2018.

Furthermore, Avril has now adhered to the United Nations Global Compact and thus to the ten social and environmental principles derived from important international documents. Its membership requires the annual publication of a report that monitors its actions and is fi led on the UN Global Compact website.

The growth of Evertree

In 2017, Evertree opened its fi rst Innovation Center in Venette (Oise). Its mission is to develop biosourced

solutions using rapeseed protein as alternatives to petroleum-based products, and to drive a new activity for Avril: Proteochem® (protein chemistry). Numerous innovation projects are now under way, including fi nalization of a fi rst family of additives for the wood-based panels industry. This innovation will enable the reduction or even elimination of chemical glues and adhesives (such as PMDI or formaldehyde) in these panels, and thus procure major environmental benefi ts with identical or even better technical and economic performance. Various industrial qualifi cation trials with leaders in this industry are ongoing.

A 100% LOCAL SUNFLOWER OILLaunched by Saipol and Lesieur, Cœur de Tournesol 100 % Sud-Ouest is sunfl ower oil that is harvested, produced, packaged and sold in south-western France. Tested in partnership with a major retailer, this innovation illustrates the modernity of Avril’s sectoral model that can respond to growing demands from consumers for products from short distribution channels, and valorize the quality of French products. This innovation is fully in line with the Group’s mission and sustainable development policy.

For more information,consult our Sustainable Development Report

The potential for digital innovation

With Canopée at Sanders and FeedMarket.fr at Saipol, digital innovation was in the spotlight in

2017. Taking the form of a digital app for use by livestock farmers, Canopée is a unique service innovation that collects and analyses all livestock data on a farm and then transforms them into a predictive management tool. FeedMarket.fr is the digital market-place for the sale of oilseed meals and vegetable oils to livestock farmers, traders and feed manufacturers. These are two innovations that illustrate the emergence in the Group of new services and business models to create value.

HIGHLIGHTS


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Strategic Area 4

The men and women of Avril contribute every day, and everywhere the Group operates, to the development of sectors of excellence. What mobilizes them is a

collective company project and values that the new Human Resources Division aims to cultivate so as to better prepare for the future, while deploying pragmatic initiatives that will drive structural change.

A new HR organization to support Avril’s transformationIn 2017, the Human Resources Division initiated its reorganization. Centered around the added value of the function at the service of the Group’s transformation and growth, its organization is based on the founding principles of Avril – its history, culture and values. It thus focuses on four commitments: 1. reinforcement of its attractiveness as an employer and the development of all talents;2. fair and competitive rewards for the contributions of all employees;3. reinforcement of the role of managers and the empowerment of all colleagues as actors in transformation; 4. attentiveness, an ability to listen and close relations with all stakeholders, both internal and external.To serve these commitments, managers working alongside Human Resources are central to the Group’s transformation. For this purpose, deployment of the “Manager@Avril” program, launched in 2015 in order to federate 950 “team leaders” around a common managerial culture, is continuing. An initial cycle of Weedoo training (see insert on p. 37) was thus completed in 2017 and brought together 450 local

PEOPLE COMMITTED TO SERVING

A FEDERATIVE COMPANY PROJECT

Cultivating our values to prepare for the future

It is by knowing where we have come from that we shall understand where we are going. In a rapidly changing Group that benefi ts from a broad diversity of skills and working environments, the strength and modernity of our company project and business model are the fi rst levers for collective commitment. It is by cultivating them that we shall provide effi cient support for the Group’s growth.”

Marie de la Roche Kerandraon, Vice President for Human Resources and Communicat ion

ATTENTIVE TO ALL STAFF AND

BUSINESS PARTNERS. EFFICIENT.

DEVELOPMENT OF ALL TALENTS

CENTRAL TO TRANSFORMATION

FAIRE AND COMPETITIVE

REWARDS

A RH TEAM

The future for our business model also requires the implementation of a Human Resources policy that is attractive and homogenous. The achievements of recent years have enabled some important advances in consolidating a real Group culture. The actions undertaken by our new management constitute a major step forwards and Avril now benefi ts from the best possible standards.”

Phil ippe Lamblin , ex-Vice President for Human Resources and Communicat ions

HR FOUR COMMITMENTS


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managers around a shared foundation of skills to serve the Group’s priorities: health and safety, a culture of excellence, the career development of staff , initiative and creativity.

Drawing from our rootsAvril operates according to an original and resolutely modern model: a sectoral organization from grain to the processed product that combines a variety of activities under the same banner and a collective project to serve the both general interest and local agriculture. These links with the farming world nourish a sense of belonging that each Group employee can consolidate; a good example of such community projects is in Morocco where in 2017 Lesieur Cristal employees renovated a primary school attended by the children of its olive grove farmers. Other examples are the upcoming launch of a voluntary program in the context of actions by the Fondation Avril, and eff orts to highlight the value of jobs in the agricultural and agri-food sectors: as from 2018, Avril’s French employees will be encouraged to meet with farmers and participate in hikes organized by the association Au Cœur des Paysans, supported by the Fondation Avril.Another vector for these community eff orts is the Yellow intranet platform that was launched in 2016 and continues to grow; it is now accessible to 80% of the Group’s employees. Avril also opened some new horizons. In 2017, the Group Executive Committee welcomed four new managers, including two women. The Executive Committee for Young People, which comprises managers who are younger than 35, notably focused on teleworking (starting in 2017) and intrapreneurship.

Welfare at work and proud of our activities

Health and welfare at work are priorities for Avril and new initiatives are launched each year. In 2018, Lesieur

will be one of the fi rst French companies to adopt a program on quality of life at work following a survey on the expectations of its employees. In addition, Lesieur organized cooking workshops for Saipol in order to train employees at the Montoir-de-Bretagne site in the basics of a healthy and balanced diet. On its side, Abera called on a specialist in knife skills to help with preventing the musculoskeletal disorders linked to butchery and to give new life to the age-old profession of the butcher.

FONDATION C. GÉNIAL: 80 TEACHERS VISITING AVRIL SITESDuring the past two years, Avril has been a partner in the Professeurs en entreprise (teachers in companies) initiative led by the Fondation C. Génial, designed to create links between the worlds of education and industry. Nine Group sites thus opened their doors to nearly 80 teachers, most working in technical and vocational sectors. The aim was to improve their knowledge of jobs in the agri-food and agribusiness sectors so that their teaching and career advice would be based on their practical experience. In 2017, Ovoteam, Oleon and Sanders joined Saipol and Lesieur in this great adventure. In 2018, Avril will be testing another operation proposed by the Fondation C. Génial: Ingénieurs et Techniciens dans les Classes (engineers and technicians in the classroom). This time, it will be our staff members who will be presenting their activities directly to the students.

With Avril Academy, consolidation of the Group culture continues

Since January 2016, Avril Academy has been the Group’s internal “university” which fosters and develops all strategic and transversal training projects. Completed in 2017, its fi rst 70-hour training course for

local managers – Weedoo – was acknowledged externally for its originality, pertinence and qualifi cations – by École Polytechnique. A new course was launched at the end of 2017: Weelead. It is intended for 250 managers of managers, and training is based notably on a fi ctional series in four seasons written to cinema standards which drives the development of leadership skills. In 2018, Avril also initiated courses focused on particular activities, starting with Weesupply for those working in logistics in order to develop a common identity and language and thus facilitate synergies within the Group. Since January, new recruits also benefi t from a 100% digital introductory course -Weestart- which enables them to discover Avril, its values, its history, its strategy and its activities in an interactive and dynamic manner.

HIGHLIGHTS


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Avril’s activities are organized around two complementary activities: that of an

investor with Sofiprotéol, and industrial activities structured in five business lines.

An overview and highlights.

A REVIEW OF ACTIVITIES

€

SOFIPROTÉOLAccelerating

our investment in French sectors

€230 M invested in 5 years

€25 Minvested in 2017

The fi nance and development arm of the Avril Group, Sofi protéol supports companies in the French and European agricultural and agri-food sectors by

means of minority stakes and loans. Its aim is to support their growth and competitiveness for the long term and assure the future of national sectors. In 2017, increases in its capital base and private debt fund off ered more resources to implement this mission and thus pursue its role as a bridge between entrepreneurship in diff erent sectors and fi nance.

A €100 million increase in capital, proof of the trust of our stakeholders and an opportunity to broaden our shareholder base At the end of 2017, Sofi protéol successfully completed a €100 million increase in capital thanks to contributions from its historical minority shareholders¹ who for this operation were joined by Arkéa (Crédit Mutuel) and Groupama, through Gan Vie and fi ve of its regional branches. At the same time, Avril’s stake in Sofi protéol fell from 84% to 71%. This operation, which increased Sofi protéol’s capital base to €450 million, was designed to improve its ability to invest in, and support the development of, agribusiness and agri-food companies active in France. Sofi protéol also supported innovation in these sectors by funding R&D projects initiated by the FASO² and investing in venture capital funds such as Capagro). The value of each investment can now reach €60 million – versus €40 million previously – and Sofi protéol aims to allocate €400 million to its funding activities between now and 2022. This improved fl exibility will fi rst of all benefi t stakes taken in order to reinforce existing partnerships or create new ones. In January 2018, Sofi protéol thus participated in an increase in the capital of the LDC Group, specializing in the processing and sale of poultry (Loué, Le Gaulois, Maître Coq, Marie brands), to a value of €29.9 million.

Capagro Innovation takes off In 2014 Sofi protéol contributed €10 million to setting up the fi rst French venture capital fund dedicated to fi nancing innovative startups in the agriculture, food, bioenergies and green chemistry sectors. In October 2017, Capagro Innovation completed a new funding round which means it now benefi ts from an investment capacity of €124 million, making it one of the leaders in its sector in Europe. These increased resources will benefi t new stakeholdings (some twenty in the long term) but also the international growth of young French AgTech startups that are already receiving support. For more details, go to: www.capagro.fr

Support for more than

100companies, representing 105,000 jobs

. The historical shareholders of Sofi protéol who participated in this increase in capital were: Crédit Agricole -via Idia Capital Investissement-, Natixis, Unigrains, Terres Univia (interprofessional organization for oilseed and protein crops), ANAMSO (French Association for Oilseed Seed Producers), FNAMS (National Seed Growers Association), FNA (Federation of Agricultural Traders), GTOM (French Group for Oilseed Processors), SNIA (National Union of Animal Nutrition Industries). 2. FASO (Strategic Oilseeds and Pulses Action Fund).


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A dual purpose as investor and expert in an attractive sectorThe success of this increase in capital validated the strength of Sofi protéol’s model designed to serve agriculture and its unique positioning in the French investment landscape. Indeed, most of the ten or so members of its team originally trained in agronomy or agriculture and fi nance. Much more than an investor, Sofi protéol thus capitalizes on a global vision of the sectors in which it operates and on its detailed knowledge of their actors so as to create a partnership dynamic between companies in its portfolio, as well as supporting them in their strategic projects. As an active shareholder, Sofi protéol thus has a seat on the Board, Supervisory Board or Strategic Committee of each company.

Sofi protéol Dette Privée doubles in size A year ago, Sofi protéol invested €25 million in setting up a private debt fund so that it could respond to requests for long-term loans in the form of bonds. With an initial endowment of €120 million thanks to contributions from Tikehau Capital (which manages this fund) and institutional investors, Sofi protéol Dette Privée then launched a new funding round in 2017 which means it can now cover commitments worth €206 million. Since it started in the summer of 2016, the fund has invested in 13 companies through interest-only loans or the leverage funding of acquisitions.

Pursuit of the diversifi cation of investmentsSofi protéol made investments worth €25 million in 2017. In upstream agriculture, the company continued to support solutions that would enable farmers to produce more effi ciently and more competitively while respecting the environment. Five years after it took its fi rst stake in De Sangosse, Sofi protéol reinvested in the French group which is the leader in developing plant adjuvants, preparations which optimize the eff ectiveness of plant health products and thus enable a reduction in their use. Its adjuvants also reduce run-off and the risks of spray drift. De Sangosse is also present in the biocontrol market, where its methods for crop protection are based on the use of living organisms or natural substances.

The dynamic growth of Sofi protéol and the infl uence of its activities are more than ever responding to our core mission which is to create value that will serve our national and regional sectors.”

Collection and processing of agricultural products

Upstream plant production Upstream animal production Investment funds Food products and consumer goods

Sofi protéol Dette Privée (debt fund)

Sustainable innovation, other

38%10%

9%

21% 15%

6%

Total

€234.2 M

Breakdown of commitments in 2017

Agro Invest, partner in the capital of SMESet up in 2007 at the initiative of Sofi protéol, Agro Invest provides fi nancial and strategic support for entrepreneurs in French SME working in the agri-food and agribusiness sectors regarding their consolidation and development projects in France and internationally. A long-term investor, the company intervenes in the form of minority stakes. At present, Agro Invest is supporting seven companies in a variety of sectors – the distribution of delicatessen products to retailers, wine production and trading, cheese production, institutional mass catering, the operation of market gardening greenhouses with a high energy performance or the manufacture of equipment. For more details, go to: www.agroinvest.fr

1%

Michel Boucly Deputy Manager of Sof iprotéol


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Sojalim, a 100% French soybean projectBased in south-west France in Vic-en-Bigorre (Hautes-Pyrénées), the new Sojalim³ crushing unit is supplied by farmers in the region who send it 25,000 tonnes of soybean a year, 20% of which is grown organically. Its processing – into oilseed meal, oils and soybean hulls – is assured on site by the Sanders-Euralis facility. Destined to supply livestock farmers in south-western France, its customers include the Fipso cooperative, which supplies pork for the Carrefour Quality range, as well as breeders of yellow chickens in the Landes region. All these actors can now confi rm to consumers that their livestock are reared using locally-produced, non-GM soybean.

In the fi eld of animal nutrition, the fi nance and development arm of the Avril Group confi rmed its commitment to revitalizing the French non-GM soybean sector in July by opening Sojalim³, a grain crushing unit in which Sofi protéol holds a 45% capital stake. It is situated in the Hautes-Pyrénées region, on the same site as the Sanders-Euralis cattle feed manufacturing facility which was born of a partnership concluded in 2013 between Sofi protéol and the Euralis Group, a leading actor in French agriculture and agri-food sectors. Sojalim thus increased processing capacity for the French soybean sector after an initial crushing unit had been set up in Eastern France in 2014, in which Sofi protéol also invested. The aim is to secure supplies for French livestock farmers (cattle, pigs, poultry) of high-quality and sustainable French vegetable proteins. Increasing the share of vegetable proteins in the human diet is another investment priority for Sofi protéol. In 2017, the company reinvested in Inveja, which ranks second in Europe for lupin-based food ingredients Rich in proteins, lupin off ers considerable potential for its incorporation in bread and pastries, notably those which are gluten-free.

The renewed trust of our shareholders in 2017 was recognition of our complementary expertise. It validated the pertinence of our investment choices and the quality of our portfolio, as well as our ability to support the strategy and projects of our partner companies.”37

stakeholdings

7intervention sectors

. Sojalim received grants from the Occitanie Regional Council and from the European FEDER program.

Claire MaingonDirector of Commitments , Sof iprotéol


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ties

Confronted by contextual problems that aff ected its principal activity, biodiesel, the Oilseeds Processing Business Line has taken numerous

initiatives to diversity its activities, drive eff orts towards added value and increase its customer and market potential.

An adverse economic climateUpstream in the sector, the Oilseeds Processing Line groups the processing of rapeseed and sunfl ower grain (crushing, esterifi cation, refi ning) and sale of the resulting products (biodiesel, oils, oilseed meals and proteins). In the biodiesel market, the sector was forced to deal with a paradoxical situation in 2017. In a generally favorable context, with abundant rapeseed and sunfl ower harvests and sustained demand for biofuels throughout Europe, the massive arrival of soybean biodiesel from Argentina markedly destabilized the second half of the year. This resulted from the European Union lifting the customs barriers on Argentine biodiesel, combined with the introduction of taxes on the import of this biodiesel into the USA. The sector was unable to deal with unfair competition from Argentine biodiesel arriving at an equivalent (or even lower) price when compared to that of the raw rapeseed oil used to produce biodiesel in France. The result was an extreme drop in demand and pressure on margins in a market that represents 70% of the oil produced by the Group.

Managerial resilience and robustnessFaced with this situation, Saipol adapted its activities to limit losses and improve its resilience: since March 2018, temporary use has been made of part-time working at several of its French sites in order to preserve the competitiveness of its assets, the future of the sector and its associated jobs; the grain purchasing process was adjusted to gain in fl exibility at all levels (scheduling, volumes and prices); the operational excellence program was pursued and helped to achieve savings worth €11 million in 2017, more than half of them related to optimized purchasing and logistical resources, and fi nally, the reorganization of trading activities was completed in order to ensure better risk control. This resilience was epitomized by the excellent results achieved in terms of safety in 2017, although even the focused commitment of all employees was not able to prevent the fatal accident that occurred in early 2018 at the Saipol site in Dieppe.

FeedMarket.fr, the leading marketplace for animal feeds This was one of the Line’s major innovations in 2017: the launch of FeedMarket.fr, an online marketing platform for oilseed meals and raw oils for animal feeds. Designed for use by livestock breeders, feed manufacturers and actors in agricultural distribution, it off ers all purchasers real-time access to the prices of raw materials so they can opt for the most competitive opportunities. It markets products certifi ed as being of French origin, alongside some imported items. Saipol’s objective is to use this platform to improve the market penetration of rapeseed meal in France and to propose associated services in synergy with MiXscience.

Thanks to FeedMarket.fr, Saipol meets the expectations of its customers wanting to access local vegetable proteins while increasing the penetration rate of rapeseed meal. The platform also off ers new connected services and leverages MiXscience's animal nutrition expertise, Sanders' commercial networks as well as its distribution partners.

€3.1 Bn Turnover

11sites,

7 of them in France

Driving the international growth of high added value products

OILSEEDS PROCESSING


47.46.

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Valorizing the biodiesel marketIn this diffi cult context, the Business Line continued to invest in order to protect the future of “Biodiesel Made in France” and raise the awareness of all actors by means of an information campaign focused on Diester® that was launched in June 2017 and acknowledged by a Top/Com Gold Award in March 2018. So as to further highlight the environmental benefi ts of biodiesel and to conquer new markets, Saipol launched a biodiesel in 2017 that generates markedly lower greenhouse gas emissions through the esterifi cation of sunfl ower grain, a product notably adapted to the demands of the German market. Another major innovation concerned B100, made using 100% French rapeseed. A new energy “Made in France” and targeting captive fl eets that will be on the market as from 2018.

Driving new springboards for growthIn parallel, this activity pursued its development towards new sources of added value in diversifi ed and profi table markets. Born at the start of 2017, the Avril Oil & Ingredient Solutions platform (Avril OIS) was reinforced through the acquisition of Novastell, a French specialist in phospholipids and essential ingredients, and marketed its fi rst sunfl ower lecithins produced at sites in Bassens in France and Slobozia in Romania. These lecithins are highly sought after by the agri-food industry. The Avril OIS platform is now structured around three activities: refi ned oils (such as oleic sunfl ower oil where Avril hopes to become the European leader); ingredients with Novastell, and specialty oils with Kerfoot, a British operator which joined the Group in 2016. The platform builds on synergies between its diff erent actors and other Group entities – such as Oleon – to target global markets and customers.

Novastell joins the Avril OIS platformThe Normandy-based fi rm Novastell, French specialist in lethicins and phospholipids, has supplemented the products and know-how available via the Avril Oil & Ingredient Solutions platform designed for global customers from the agri-food, cosmetics and nutraceutics industries. Via this platform, Avril is already off ering a portfolio of refi ned oils, specialty oils and functional ingredients produced by Saipol, Lesieur, Kerfoot and Expur. The merger with Novastell, which has considerable expertise in nutrition, will favor numerous other synergies and complementarities.

The Mériot 4.0 plant A fi rst for the Group: the Saipol plant in Mériot is becoming digitized to improve its performance. This is a pilot scheme for Avril, which will be deploying this project at its Bassens and Grand-Couronne sites in 2018. The idea is to reduce the variability of processes at source, thanks to a system of sensors combined with artifi cial intelligence. The result is more stable processes, improved yields, and ultimately better product quality. These advances also provide an opportunity for operators to enhance their skills, broaden their roles and improve their employability.

Our strategy is to valorize our activities and accelerate the transformation of our business model by placing greater emphasis on customer orientation, the diversifi cation and internationalization of our products and synergies within the Group.”

Jean- Baptiste BachelerieGeneral Manager of the Oilseeds Processing Business Line


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From left to right: Olivier Tillous-Borde (Director of Avril Oil & Ingredient Solutions) and Pierre Lebourd (Chairman and Founder of Novastell).

50. 51.

However, 2017 saw a further deterioration in the regulatory and market conditions that govern this activity. In particular, the fall in anti-dumping duties introduced in 2013 by the EU on Argentine soybean and Indonesian palm biodiesels removed all obstacles to their massive import into France. The harmful eff ects of this situation, aggravated by the concomitant initiation by the USA of dissuasive duties (of around 70%), were immediate, and forced the Avril Group to introduce part-time working measures. Between September 2017 and March 2018, the EU thus imported 1 million tonnes of Argentine soybean biodiesel, raising fears of a similar scenario concerning Indonesian palm biodiesel. This unfair competition also accelerated the development in European markets of hydrotreated vegetable oils (HVO) for the production of biodiesel, favored by less expensive imports of palm oil. In this context, 2018 is a pivotal year and major decisions will now determine the future of this sector, and notably the new European Directive on Renewable Energies (RED-II) or the measures that the authorities will be introducing to protect local sectors from unfair competition. Despite this unstable situation, Avril is nevertheless determined to preserve a key market for French oilseed farmers that is crucial to the circular economy and the lessons of the National Food Conference. Rapeseed grown in the French countryside, a pioneer of sectoral working, has, thanks to oilseed biodiesel – a French invention – enabled the combined production of a renewable energy source and vegetable proteins for livestock feeds. These eff orts serve the food provision vocation of agriculture and its practical, pragmatic and natural participation in energy transition.

FOCUS

For 35 years, the agricultural and industrial rapeseed biodiesel sector has been contributing unceasingly to the development of

French agriculture, to the food sovereignty of France, the protein and energy sovereignty of its regions and to economic dynamism

and employment in our countryside.

CULTIVATING THE ADVANTAGES OF THE

FRENCH RAPESEED BIODIESEL SECTOR

20,000jobs that cannot be relocated.1

1 L = 2 KGFor 1 liter of French rapeseed biodiesel manufactured, 2 kg of non-GM, protein-rich oilseed meal is produced for livestock feeds.

75,000farmers.

55%France’s independence in vegetable protein for livestock feeds. This has risen from 23% in the early 1980s to 55% today thanks to the development of rapeseed cultivation. The EU overall records a defi cit of 70%.

€2 BnContribution of the sector to France’s GDP1.

60%Rapeseed biodiesel reduces CO2 emissions by 60%2 when compared to the fossil fuels it replaces, as well as signifi cantly reducing particulate emissions3.

€1.5 BnSaved each year on the import of fossil fuels and oilseed meals for livestock feeds1.

1. PwC 2. ADEME 3. IFPEN

The strategy of the vegetable oils and proteins sector to serve renewable energies is fundamental. B100, a biosourced, plant-based alternative that can fully replace diesel, off ers a new frontier for Avril, that of a renewable energy for the future that is local and traceable and also favors the national production of proteins that will serve the food vocation of agriculture.”

Stéphane Yrles , Secretar y General

B100: a biosourced and renewable alternative to diesel


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OILS & CONDIMENTSAccelerating the growth

of our brands

In 2017, Oils & Condiments adopted a new brand-focused strategy in support of Avril’s repositioning in markets with high added value.

Interview with Olivier Delaméa, General Manager of the Oils & Condiments Business Line.

Counted from 2017, the Oils & Condiments Line has declared a single priority: to accelerate the growth of its brands. Why?O. Delaméa: Profi tability in our business line is currently driven by our brands: ISIO 4 and Puget in France, Lesieur and Taous in Morocco, Bunica in Romania, Cristal in Tunisia, etc. This has been possible because of their ability to diff erentiate themselves from their market competitors. But if we are to give our brands suffi cient resources to innovate and be increasingly appreciated by consumers, we need to fi nd a higher level of profi tability in all activities of the Oils & Condiments Line. That is the overall challenge of our new strategy, which is to create value where our brands will be both the levers and benefi ciaries.

Your strategy is clear: to increase profi tability in order to fund the growth of your brands. What is the roadmap?O. D.: We have fi xed ourselves four goals. The fi rst is clearly to restore the profi tability of Lesieur after a diffi cult year in France. The second is to consolidate our leadership in Morocco where our activities recorded two-digit growth in 2017. Indeed, Oils & Condiments achieved generally excellent results in our international markets. We then need to grow our “nuggets” so that they will continue to contribute more to creating value for the business line. I am referring to the Compagnie des Saveurs and our subsidiary SPHB in Reunion Island, as well as our activities in Algeria, Tunisia and Senegal, and Expur’s bottling plants in Romania. Finally, we need to deploy our eff orts more rapidly beyond our current frontiers; by accelerating our growth in olive oil markets worldwide and targeting new regions for our other products.

And what about the future for non-branded activities?O. D.: They have a real role to play in the equilibrium of our model once they become profi table. We manage them on a case by case basis, depending on their ability to support our strategy. In Morocco, an excellent example is that of lower range products which off er good protection against our competitors. These products can limit any levelling down of the market and thus preserve the value of our brands.

4 LEVERS TO SUPPORT OUR STRATEGYThe Oils & Condiments Business Line is based on several levers: the commitment of its teams to a common vision; the optimization of costs to further reinforce its ability to invest for the future;consolidation of the foundations of our brands (starting with quality);and fi nally accelerating our digital transformation, both internally to gain in fl exibility and externally to improve our marketing and commercial operations.

13 sites,

of which 7 in France

€1.1 Bnturnover

1.2 Mtonnes

of table oils sold

142,000tonnes

of soap sold

36,000tonnes

of sauces sold


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No. 1 and No. 3 respectively in the French oils and condiments markets, Lesieur is also present in 65 other countries with products that are adapted

to the habits of local consumers. In 2017, the excellent performance of its international activities was overshadowed by a diffi cult year in France because of two concomitant factors: a marked rise in the price of olive oil that could not be passed on to the market and, as from July, the suspension of exports to Algeria, which checked the excellent dynamic of mayonnaise products.

Brands that remain unique thanks to innovationBy listening to the demands and also the habits of consumers, Lesieur innovates through its recipes and packaging, or even by creating new markets. The single goal is to make a diff erence everywhere. In Tunisia, the introduction of ketchup – previously unknown in this country – was well received by the market. And Lesieur rapeseed oil made from the fi rst harvest of a new 100% Tunisian rapeseed sector was also welcomed by the public, notably thanks to its high omega-3 content. Mindful of the need to respond to increasing demand for local products, the brand also launched in France a sunfl ower oil produced

ISIO 4: A REJUVENATED BRAND IN 2018A new formulation containing linseed, a new bottle design and new labeling… in 2018, the leader in combined oils in France will be giving new impetus to its activities based on major communication campaigns. At the same time, ISIO 4 is becoming a 100% French product and an organic version will soon be on the market.

2017 AS SEEN BY ROMAIN NOUFFERTGeneral Manager of Lesieur (until 31 January 2018), now General Manager of International Development for Oils & Condiments

entirely in the southwest (Cœur de Tournesol 100% Sud-Ouest) as an exclusive product with Système U supermarkets. In the same region, Lesieur is preparing a series of innovations for 2018, which will notably include a new range of four sauces to satisfy the tastes of the whole family, as well as the fi rst egg-free mayonnaise – made using vegetable proteins – for the vegan market. For professionals in the out-of-home dining sector (+5% volume in oils) where Lesieur faces competition like elsewhere, it is continuing to innovate with better performing frying oils and new sauce varieties. Lesieur gained some new French customers in 2017, such as Buff alo Grill and O’Tacos, and succeeded in maintaining its good commercial relations with Quick, which is now part of Burger King.

Focus on organic productsPuget’s organic range expanded (+18% in volume terms in 2017), with the launch of ISIO 4 and Cœur de Tournesol: Lesieur prepared to accelerate its positioning in the organic market for 2018 with a major innovation, because the company has now succeeded in solving the problem of the odor of its organic grain oils (rapeseed, sunfl ower) which previously hampered their use as table oils.

China and Algeria: our new frontiersDespite the dampener placed on this segment in 2017 due to restrictions on imports into Algeria, condiments recorded structural international growth. In Algeria, where Lesieur is the market leader in mayonnaise, a dedicated factory in partnership with the Djadi Group is scheduled to open in the summer of 2018.In 2017, Lesieur also laid the fi rst foundations for developing condiments in China, a country which loves the French origin of its products, and its off er will be completely new, including a sweetened mayonnaise.

The new ERP¹, a competitive advantage for the futureAs from 2018, the SAP tool will be improving the operational fl exibility of teams both at head offi ce and in factories thanks to this integrated management system. The benefi ts anticipated include enhanced performance throughout the supply chain, optimized commercial and marketing actions and new functionalities for customers.

Lesieur is changing in order to give itself opportunities to make major reinvestments in innovation, its brands and conquering new frontiers. We have a single objective: to develop our entire potential for growth.”

NOUVEAU

Une gamme huiles 100% relookéeMAD clients à partir de mi juin 2018

(Sans changement des codes EAN)

PMC* 18 2,99 € 1,99 €2,69 € 4,09 € 2,29 €2,29 €0,5 L1L ISIO 4 Olive ISIO 4 NoixSqueeze 0,675 L Squeeze BIO 0,675 LISIO 4 Basilic

3,79 €

* Seul le distributeur reste libre de la fixation des prix

Marie Saglio General Manager of Lesieur

. ERP is a computerized integrated management system that can link all functions in a company within the same information system.

NOUVEAU




3,79 €


NOUVEAU




3,79 €


NOUVEAU




3,79 €


NOUVEAU




3,79 €


NOUVEAU




NOUVEAU

3,79 €



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In Morocco, Lesieur Cristal produces and sells table oils (rapeseed, sunfl ower and olive), margarine, hygiene and beauty products and oilseed meals that the

company exports to nearly 40 countries. In a market that was aff ected by volatile raw material prices and aggressive competition, growth in these activities nevertheless accelerated (+12 %). In 2018, Lesieur Cristal is pursuing its strategy focused on reinforcing the reputation of its brands (Lesieur, Al Horra, Huilor, El Kef, Taous).

Reinforcement of leadership in MoroccoIn July 2017, Lesieur Cristal acquired Indusalim, a Moroccan company that owns strong brands that off er it a position in the margarine segment (see insert opposite). In the hygiene and beauty market, the Taous brand innovated to consolidate its specialization. After soaps and shower gels, it invested in the area of hair care with a plant-based formulation that contains no silicone, paraben or colorant, focusing on wheat protein as its lead ingredient. With this new range of natural shampoos that respond to the demands of Moroccan consumers, Lesieur Cristal is pursuing a major ambition in this highly competitive market and has invested in a new manufacturing and packaging line. In parallel, to support the growth of table oils on both the local market and at export, Lesieur Cristal developed a new line of 5-liter PET containers for oil, which optimize export freight costs by more than 20%. In the olive oil market, which experienced a poor harvest in 2016/2017 and rising prices, the company also equipped itself with a new crushing facility with a capacity of 200 tonnes per day.

Pursuing growth of the Moroccan olive sectorIn the context of the Green Morocco Plan, Lesieur Cristal was involved in developing the Moroccan olive oil sector through upstream integration and protection. The company launched an olive grove planting program in the Marrakech and Meknès regions that are reputed for the quality of their olives. In order to favor integration with upstream agriculture and development of its grouping program, Lesieur Cristal draws strength from its specialized subsidiaries: the Société d'Exploitation de l'Olive (630 ha), Domaines Jawhara (540 ha) and Olivco (225 ha). In 2017, the latter benefi ted from major investments which notably enabled the construction of an irrigation plant and basin.

A NEW MARKET: MARGARINEThrough the acquisition of Indusalim, which counts 65 employees, Lesieur Cristal has reinforced its position in the fats segment. This comes with excellent prospects for growth in Morocco and internationally. Since 1987, when the fi rst table margarine was put on the Moroccan market, Indusalim has become the reference brand in the segment, characterized by high quality and innovative products. Indusalim now benefi ts from a strong reputation. Its lead products include: the Magdor brand, aimed at consumers with a love of fl avor, and the Ledda range of pastry-making margarines for use by professionals, characterized by sustained innovation and an excellent price-quality ratio.

2017 AS SEEN BY SAMIR OUDGHIRI IDRISSI General Manager of Lesieur Cristal

Consolidating a culture of excellenceIn September, Lesieur Cristal gave new impetus to its safety dynamic by focusing on individual behaviors. Following an external audit to identify levers for improvement, 300 employees adapted the new Safety Charter to the specifi cities of their activities. In parallel, in the context of the Operational and Strategic Excellence program (EOS) implemented at Group level, the optimization of expenditure and gains in productivity produced more than €2.5 million, thus exceeding the initial goal of €2 million.

Supporting the Group’s international growthLesieur Cristal’s Moroccan olive oils are now sold in the USA via professional channels (cafés, hotels and restaurants). This was made possible by the creation in 2017 of a new subsidiary, Lesieur Inc., based in Boston, whose mission is to adapt Moroccan products to the consumption habits of American households which are becoming increasingly attracted to olive oil. The company draws strength from its local management and the local partners who package and distribute its products. Domaine de Kalea, the new brand created especially for this market, received a Gold Award as one of the World’s Best Olive Oils for 2017 at the prestigious New York International Olive Oil Competition.


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In an edible oils market that has been shrinking in recent years, the Untdelemn de la Bunica brand confi rmed its leading position. With its own crushing

unit for rapeseed and sunfl ower grains, Expur also sells oilseed meals for animal nutrition and biodiesel. In 2017, the subsidiary continued to reorganize its activities to gain in profi tability and balance its market positions with a commercial goal: to stand out by creating more value for customers.

Responding to an increasingly premium marketIn recent years, Romanian consumers have been purchasing less but better quality table oils, for three reasons: a slight demographic downturn, an improvement in living standards and greater consumer awareness to the benefi ts of a healthy diet. In this context, the leading brand in the country – Untdelemn de la Bunica – achieved excellent growth (+15% in volume) thanks to a range of technical products that enabled it to win over new consumers. Although the market has until now mainly consumed sunfl ower oil, it has gradually opened towards olive oil. For this reason, and in partnership with Lesieur Cristal, in 2017 Expur launched an extra virgin olive oil called Zagora. Currently in its test phase among major retailers in Bucarest, the off er is gradually being deployed throughout

DIVERSIFICATION BUILT ON SYNERGIES WITHIN AVRILIn order to open new markets, Expur further developed synergies with other entities within the Group. The subsidiary notably collaborates with Lesieur on the marketing of oil in the Middle East, and with Saipol on the export of oilseed meals to Asia. Since the opening in September of a sunfl ower lecithin production unit on its site, Expur has also been positioned in the ingredients market for industrial customers in the context of the Group’s creation in early 2017 of the Avril Oil & Ingredient Solutions marketing platform. Sold by the company Novastell – acquired by Avril in 2017 – lecithin is a natural food emulsifi er that is highly sought after by the agri-food industry. It is notably found in chocolate. When compared with lecithins obtained from other raw materials, sunfl ower has the advantage of being non-GM and non-allergenic.

2017 AS SEEN BY PASCAL PINSONGeneral Manager of Expur

the country. The attractive Mediterranean design of its bottle, and its price positioning, have underpinned the success of its sales.

Development at export The reallocation of oil production volumes hitherto sold by distributor brands enabled Expur to continue growing its B-to-B activity at export, with oils supplied in industrial packaging. As well as Greece and Bulgaria, commercialization is now extending to Saudi Arabia, Lebanon and Israel, driven by innovation in favor of oils for professional use, and notably high performance frying oils.

Seeking performance in biodiesel and oilseed meals Mainly positioned on the Romanian market, Expur’s biodiesel activities maintained their advance and recorded a good year, even though reopening of the European market to Argentine soybean and Indonesian palm is reason for caution in 2018. In terms of rapeseed and sunfl ower meals for livestock feeds, Expur pursued the development of its local market through diff erentiation in terms of quality, and notably protein content. Its production now supports 50% of the needs of Romanian livestock farmers for vegetable proteins. In parallel, fi nalization of the storage hubs enabled further gains in performance.


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AVRIL SPECIALTIES

Innovation, international activities and customer orientation: the winning trio

The development of specialty skills is a strategic challenge for the transformation of Avril. Whether in Oleochemicals or Animal Specialties, the aim is to

identify profi table international growth markets and propose a range of products and services that will create value. This gamble paid off in 2017.

OLEOCHEMICALS

Encouraging resultsA major actor in renewable chemistry, Oleon specializes in transforming vegetable oils and fats into a broad range of substances such as glycerin, fatty acids, esters, technical oils and other specialties. These products and solutions combine excellent performance and biodegradability. Oleon’s ambition is to be a leading supplier of oleochemical solutions for its customers throughout the world, placing particular emphasis on proximity, innovation and sustainable development. Oleon focuses its strategy on developing specialty molecules with high added value. Whether it is to supply lubricants for oil drilling, solvents for the formulation of inks and paints or emulsifi ers for use as food additives or in cosmetic formulations, its products are developed in partnership with its customers in order to solve their specifi c technical problems.

In 2017, supported by recovery of the global economy and a favorable environment for raw materials, Oleon achieved encouraging results, with growth in almost all fi elds. The company pursued its investment program designed to improve and modernize its industrial facilities and logistic tools. These improvements increased its ability to respond to the most stringent demands and develop tailor-made services for its customers, particularly with respect to glycerin. The supply chain was the focus of an operational excellence program in 2017, and included the introduction of a centralized organization capable of delivering the right product to the right place at the right time. These advances have thus improved both its competitiveness and customer service.

WELL.O®, lubricants for the American oil industry With a rise in the oil price per barrel, activities recovered well in 2017. Oleon was already present in this market with its high added value lubricant products used in drilling. In order to diversify its portfolio and better adjust to the specifi cities of the North American market, Oleon launched Well.o®, a new range of specialties targeting both oil drilling and petroleum and gas production.

Get to know Well.O and call our Oleon Oilfield team at + 32 (0)9 341 10 11 or send us an e-mail at [email protected] for more info.

Tailor-made Drilling, Completion and

Production chemicals

A new Oleon brand

www.oleon.com

Oleon_WellO_Advertentie_170x240.indd 1 1/03/18 15:34

OLEOCHEMICALS

6 sites in Europe and Asia

AVRIL ANIMAL SPECIALTIES

10 sites in 6 countries, commercial

presence in more than 50 countries

€875 Mturnover


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In a highly competitive environment, we are continuing to invest in skills and research & innovation so as to anticipate the needs of our customers. It is only through a detailed knowledge of their activities that we can off er them advice and tailor-made solutions.”

Moussa Naciri General Manager of the Avri l Specialt ies Business Line (Oleochemicals and Avri l Animal Specialt ies)

Karima Zitouni: an international chemistAvril’s Human Resources are supporting the growth of Oleon, notably by encouraging the international mobility of staff , as refl ected by the career of Karima Zitouni. After jobs in Belgium and France, this chemist participated in setting up the new research center in Malaysia as head of its R&D Department, responsible for developing products for the lubricant, industry and oil markets. Now back in France, Karima also assures the remote management of research teams based in Malaysia and Belgium and soon in the USA.

International specialties:levers for long-term growthFor several years now, Oleon has chosen to develop technical solutions in highly diversifi ed markets such as cosmetics, lubricants or foods. A fruitful strategy that has enabled it to be less dependent on market fl uctuations and to create more value. Innovation is the byword. For example, within its Jolee® product range, Oleon has developed biodegradable alternatives to the silicone oils used in cosmetic formulations. More generally, the growth of biotechnologies has opened the way towards 100% natural solutions that correspond to demands from the market. In North America and Asia, where Oleon is already well established, the challenge is to adapt as closely as possible to specifi c market needs, as shown by the launch of the Well.o® brand which targets the American oil industry (see Focus) and Jolee® designed for the Asiatic cosmetics market. This new brand from Oleon Heath & Beauty was born in 2016 in order to conquer the Asian market, placing particular emphasis on products and formulations adapted to the demands of local consumers. To better understand and respond to these specifi c needs, Oleon’s R&D was reinforced in Asia where the laboratory in Malaysia was enlarged and modernized, so that it can evaluate the performance of products with local customers and develop innovations for the foods, cosmetics and lubricants markets. This research center works in close collaboration with nearby universities. One collaborative agreement was signed in 2017 with the University of Malaya to develop a new generation of additives for environmentally-friendly lubricants.

More than

€10 Mspent on R&D in Oleochemicals

Jolee ,

Oleon Health and Beauty’snew top brand. Meet her at:

www.oleonhealthandbeauty.com

®

Natural emollients & emulsifiers with multifunctional and sustainable benefits.


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AVRIL ANIMAL SPECIALTIES

A growth dynamicIn 2017, Avril Animal Specialties (ASA) pursued its development with the aim of becoming a global leader in its fi eld: managing and optimizing the effi ciency of livestock units through the use of innovative nutritional and hygiene solutions. ASA focuses on four main activities organized in business units: nutrition (premixes, nutritional specialties), additives for specialties, liquid feeds for ruminants, and biosecurity (i.e. a range of preventive hygiene methods for buildings and livestock). All these activities form part of a Sustainable Health Management approach for livestock units that will respond to a key global challenge: to produce greater quantities and more sustainably in the context of reducing the use of antibiotics. ASA is developing in growth areas such as supporting the natural defenses of animals, alternatives to medication or increasing the application of preventive hygiene in livestock units. In two years, ASA’s activities have increased by 50%, driven by two-digit organic growth and strategic acquisitions. In France, nutrition activities grew despite a declining market, a performance linked to a rise in the market share of

Sanders – the main customer for ASA – and improved valorization of the products and services proposed.

A successful international gambleAs a crucial plank in its plans for the development of ASA, international activities will account for more than 50% of gross margin in 2018, thus attaining a key goal of the business model. Its two recent acquisitions – Salus in 2016, Ewabo in 2017 – thus achieved the desired leverage. In Brazil, the third largest global market for animal nutrition, Salus recorded excellent results with marked growth and a larger market share, resulting from an ambitious marketing plan and a strategy focused on specialty products. Salus will now be able to extend its expertise to other South American countries. On its side, ASA biosecurity activities doubled in size in 2017 through the acquisition of Ewabo in Germany. And to reinforce its presence in the high potential region of south-east Asia, ASA created a subsidiary in Vietnam, thus completing its global network of sites.

Innovations in the market-placeAs a vector for diff erentiation in the face of strong competition, innovation is central to the success of ASA. 2017 marked an important advance for feed additives, with the market introduction of around ten specialty products whose active ingredients are potentiated by sophisticated galenics. These included beTane® which is the fi rst vector-borne and encapsulated betaine on the market, a formulation that ensures its improved stability over time and maximum effi cacy.After two years of research, Dielna, specialist in liquid feeds for dairy cows, introduced two innovative specialties: Stabiliq® and Energiliq®, resulting from MiXscience research and designed to supplement forage rations for ruminants and ensure digestive well-being and energy input. Furthermore, Dielna purchased the liquid feed activities of Provimi (Cargill Group), thus reinforcing its position as market leader in France. Finally, innovation also concerned digitization, with the creation of Datalab at MiXscience. Its mission is to develop a “smartfeed” program for livestock farmers, and its fi rst tool, Canopée (developed with Sanders) aims to structure, analyze and valorize breeding data on dairy farms, and will soon be extended to poultry.

Avril Animal Specialties draws strength from its wide-ranging expertise in livestock husbandry, nutrition, health and biosecurity so that it can drive the Sustainable Health Management approach on farms at an international level and become a global leader in a fast growing sector.”

Jean- Pierre Pail lot General Manager of Avri l Animal Specialt ies

Nolivade, a promising start-upAcquired in 2014, Nolivade specializes in animal biocontrol. This start-up develops benefi cial bacterial fl ora – or barrier fl ora – as alternative solutions that will contribute to reducing antibiotic use. In 2017, Nolivade achieved signifi cant progress in industrializing its processes, notably regarding the development of dry formulations for the international market. The start-up has already fi led six patents and launched Certifl ore, a spray designed to limit the proliferation of pathogens on the feet of ruminants.

The Salus team in Brazil


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ANIMAL NUTRITION

& PROCESSINGConsolidating and valorizing

French sectors

The ambition of the Animal Nutrition & Processing Business Line complies with the fi rst undertaking of Avril’s sustainable development policy: to develop

local sectors. In all activities of the Business Line, from upstream to downstream, the aim is to develop sectors of excellence that will drive French animal products towards success.

The challenges of the meat and egg branchesThe Animal Nutrition & Processing Business Line groups all activities regarding the nutrition of farmed livestock and the processing and sale of pork and eggs. It is therefore a strategic business line in terms of adding value to the French Farm. These activities are growing in a context of changing markets aff ected by several trends. Upstream, livestock farmers are adapting their methods to feed livestock: an increase in the production of feeds on-farm (FOF) in pig units and forage independence in ruminant farms. Downstream, consumers are tending to reduce their meat consumption, and their choices of eggs are increasingly moving towards free-range or organic products, to the detriment of standard eggs. It is therefore a strategic necessity to adapt activities in the Line by capitalizing on their advantages: technical know-how and a national presence close to livestock farmers for Sanders; the strong brand image of Matines, French leader in shell eggs; unique R&D expertise in egg products, and industrial skills combined with a global vision of the sector for meat processing.

A customer- and sector-oriented strategyResponding to new demands from multiple customers – whether they are livestock farmers for Sanders, industrial fi rms, retailers or consumers in the meat and egg branches – is crucial to the sustainable and profi table growth of the Business Line.But it is also its ability to attract and grow downstream activities by building strategic alliances that the Line will be able to construct high-quality sectors and ensure markets for all links in the chain. The success of the partnerships concluded with major food brands and retailers in the pork market is a good demonstration of this approach. Underpinning this sectoral approach is Avril’s commitment in all its activities to animal products that can guarantee compliance with criteria that have become prerequisites for consumers and society: quality, health safety and animal welfare.

A review

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3.4 Mtonnes of feed produced using Sanders techniques

Local soybean to supply livestock farms in south-western FranceFor several years now, Avril has been contributing to the structuring of a 100% French soybean sector. In July 2017, Sojalim, a new production facility based on the Sanders-Euralis site in Vic-en-Bigorre (Hautes-Pyrénées) started to crush locally-produced soybean grain. In the six remaining months of the year, Sojalim managed to process 25,000 tonnes of soybean, including 5,000 tonnes grown organically. This off ers a local alternative to imported soybean that is GM-free and destined above all for animal sectors in south-western France that wish to exploit this commercial advantage with their consumers, such as the Basque pork sector Kintoa, or Carrefour’s South-West France Quality Pork products.

28sites specialized in animal nutrition, 25 of them

in France, OQUALIM certifi ed

8 sites specialized in egg packaging and the

manufacture of egg products

€1.6 Bnturnover

3 sites specialized in the slaughter, butchery and

processing of pork

P 675 C P 280 C C 21 / M 100 / J 0 / N 0 C 100 / M 100 / J 0 / N 22 R 195 / V 0 / B 123 R 0 / V 54 / B 124


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ANIMAL NUTRITION

Consolidating the market and gaining in competitivenessDespite a relatively strong economic recovery of French livestock production following the historic crisis in 2016, the animal nutrition market continued to shrink in 2017, but to a lesser extent (-1% in volume terms). In this context, Sanders, the market leader, nevertheless grew by 2.4% to reach a volume in France of nearly 3 million tonnes. This growth was driven by good performance of the table poultry segment, the development of processing activities and the takeover of Richard Nutrition in Hennebont (Morbihan, Brittany), a site producing 60,000 tonnes of feed per year. To consolidate the market to the benefi t of French animal sectors, Sanders has continued to improve its industrial facilities. In 2017, out of the €10 million invested, €8 million were used to re-equip four factories in Brittany, thus improving their ability to comply with the most stringent specifi cations.In continuity of its strategy in recent years, Sanders pursued its policy of industrial agreements with local partners. After Euralis and Agrial, the company concluded an alliance with Nealia in north-eastern France. Together, Nealia (Vivescia Group) and Sanders set up Aliane to improve their support for breeders in the region, always according to the same principle of pooling production tools to optimize costs.

In the Meat and Egg Branches, we are seeing changes in a market attracted by the idea of ‘eating less but better’ and consumers who are increasingly aware of animal welfare. In this context, we need to create a diff erence through our proximity with our customers - livestock farmers, cooperatives, industrial fi rms, major retailers and consumers – and commit ourselves to sustained progress with respect to animal welfare.”

Marie Grimaldi General Manager of the Animal Nutr it ion & Processing Business Line

Thanks to our know-how and close ties with our partner livestock farmers, our vocation is to develop sustainable French sectors and drive their adaptation so that they can respond to new consumer demands. 2017 was a year of clear practical outcomes in this respect.”

Bernard MahéGeneral Manager of Sanders

26,000 partner livestock farmers


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Defending a sustainable production modelBoosted by its “Nourrir nous engage” (Food is our Commitment) signature, Sanders’ aim, through its activities in animal nutrition and consulting, is to off er products that are guaranteed in terms of animal welfare and nutritional quality and will also provide a source of income for its partner livestock farmers. Avril was one of the fi rst signatories of the Duralim Charter, which promotes sustainable feeds for farmed livestock, thus committing itself to a certain number of good practices and areas for progress. Of these, Sanders has paid particular attention to the issue of animal welfare which formed part of the policies and action plans formalized by the Group in 2017. Finally, the company has built on its presence throughout France, its proximity with its partner livestock farmers and its know-how to develop a global approach in all animal sectors based on Sustainable Health Management, the priority of which is to reduce the consumption of antibiotics on livestock farms.

Adding value to French animal productsIn this area, Sanders’ aim is to help livestock farmers to respond to the diversity of production models because of changing consumer expectations. This is the vocation of the “Engagés dans l'élevage” (Committed to Livestock) sectors of excellence. These include the sector created in partnership with Fleury-Michon for the “J’aime” (I Like) range of charcuterie products: pork from pigs receiving non-GM feeds and reared without antibiotics after weaning. A real commercial success, this sector now involves more than fi fty partner livestock farmers committed to these principles.A major initiative in raw materials was the creation of Sojalim, a crushing unit for French soybean grain that can off er breeders in south-western France competitively priced soybean meals of 100% French origin. Sanders is also involved in organic livestock farming, and made a further industrial investment in Rethel (Ardennes) to develop its Alinat range of organic feeds and become leader in this strongly growing market. With three dedicated facilities, the Sanders brand produced 30,000 tonnes of organic feeds for diff erent species in 2017. The aim is to reach 100,000 tonnes in 2018.

ANIMAL PROCESSING

PORK BRANCH

Alliances that boost the sectorIn pork processing and sales, 2017 clearly refl ected a winning strategy: the capture of downstream markets to gain access to consumers and draw benefi ts for the entire sector. In 2016, the creation in partnership with the German Group Tönnies of an ultra-modern fresh pork butchery and processing facility called AVF (Alliance des Viandes de France) had responded to strong demand from major retailers who wanted to off er French consumers processed pork products “Made in France”. In 2017, AVF doubled its capacity to meet increased demand and thus generated additional volumes upstream for Abera, the supplier of 5F pigs (born, reared, slaughtered, butchered and processed in France).In charcuterie, the plans for sectors of excellence initiated by several Avril subsidiaries with Fleury Michon and other agri-food fi rms such as Herta or Aoste enabled Abera to diversify its industrial know-how by exploiting certain cuts of meat, and Sanders to off er new markets for its partner livestock farmers.

In the ‘Engagés dans l’élevage/J’aime’ (Committed to livestock/I like) sector of excellence, relationships with breeders, and the know-how they can contribute, are crucial. We have long been committed to an approach free of antibiotics and GMO feeds, because quality is essential if we are to add value to our products. In the context of our partnership with Avril and Fleury Michon, we know to whom we are entrusting our animals. We know what will happen to them and we are also sure that our work on quality is respected throughout the value chain. That makes us very proud.”

Roland LefeuvrePig breeder in the Côtes-d ’Armor region

A service strategy with CanopéeLivestock farmers can now generate increasing amounts of data on their animals, but they are not always successfully exploited. Based on this observation, Sanders is now proposing Canopée, a unique service that collects, analyzes and predicts all livestock data. Intended in the fi rst instance for dairy farmers, the Canopée app off ers an overall view of crucial herd data and constitutes an effi cient decision-support tool for breeders. For Sanders, it provides an opportunity to develop an independent service and optimize the relevance of its advice. The aim is to have connected 200 livestock farmers by the end of 2018.

Un service unique grâce à une application web qui collecte, analyse et prédit vos données d’élevage

pour plus de sérénité, de performance et de rentabilité.

Un service unique grâce à une application web qui collecte, analyse et prédit vos données d’élevage

pour plus de sérénité, de performance et de rentabilité.

[email protected]

facebook.com/sanders.fr facebook.com/sanders.et.les.eleveurs.laitiers

collecter,

analyser, prédire


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An optimized product-customer mixIn a French pork market still under threat from very strong competition, Abera has for several years been developing a fl exible and resistant business model by diversifying its activities, know-how, customers and markets. Recent developments in the sector highlighted one of its strong points: the effi cient management of a balance between diff erent meats and customers, between butchers, out-of-home dining, exports to Asia and processed products working with AVF. Access to downstream markets enabled it to adapt rapidly to new market data and comply with all specifi cations.

EGG BRANCH

A necessary reorganization for MatinesUnder the banner of Matines, shell egg packaging and sales activities pursued their transformation in 2017 to adapt market changes involving a loss of impetus for standard eggs (-8%) and the strong growth of alternative eggs (free range and organic).In this context, the company presented plans to adapt the industrial organization of its packaging centers for implementation in 2018, and reviewed its business model so as to reinforce is competitiveness.To address the challenges of all these changes, in July 2017 Avril implemented a €44 million increase in the capital of Matines, conditional upon modernization of its industrial

A new visual identity for PorcgrosSpecialist in the butchery of pork in Rungis, Porcgros celebrated its 70th anniversary and continued to grow in a niche market. The key to its success? A strategy that combines tailor-made products and added value for its customers: artisans, butchers-charcutiers or wholesalers, to whom the company can off er high-quality meat from diff erent sectors adapted to all their requirements. In preparation for its move to a new dedicated workshop for its pork activities at the Rungis market, Porcgros has adapted its visual identity and created a consumer brand (“Le cochon des Halles”) so that its products will be correctly identifi ed in retail outlets.

facilities and the provision of support for the conversion of farms to alternative production methods. Matines is investing in its 140 partner breeders under a fi ve-year plan, the long-term aim being to achieve 70% of eggs produced under free range or organic conditions. The overall objective is to achieve restored growth in 2019, based also on the reputation of a brand that is much appreciated by the French.

Egg products: the importance of know-how on layingOvoteam designs and produces egg products – egg-based solutions – for the agri-food industry and the out-of-home dining and bakery-viennoiserie-pâtisserie (BVP) sectors. This market remains fl ourishing, notably internationally, and is also moving towards alternative products – free range and organic. Driven by considerable R&D know-how, the success of its innovations and its export growth, Ovoteam nevertheless suff ered during the second half of 2017 from very high egg prices linked to the Fipronil crisis, which involved the use of a counterfeit antiparasitic agent that contaminated eggs from Belgium and the Netherlands. Having caused production defi cits in Europe and a rise in demand for French eggs, it also drove up their prices. To continue modernizing its industrial facilities, Ovoteam invested in its unit in Plaintel (Côtes-d'Armor), with the aim of reducing losses of egg white during shelling operations and ensuring fewer visual defects on shelled eggs.

Irreproachable traceabilityThe French sector was spared during the Fipronil crisis that impacted the market late in the year, thus demonstrating the importance of extremely rigorous traceability: each egg laid in France and then sold by retailers is marked with a code that identifi es its farm of origin. The professional body for the egg industry (CNPO) also created a new label: “Œuf de France” (French Eggs) which replaces the “Pondus en France” (Laid in France) logo to facilitate consumer choices.

Time'œuf, a new concept for out-of-home diningBoosted by the success of its “œufs chauds” (cooked boiled and scrambled eggs), Ovoteam created Time'œuf, an innovative process that can reheat or keep eggs warm while preserving their gustatory quality, so is ideal for breakfasts off ered by the catering trade. Ovoteam is thus combining products and services in order to improve customer satisfaction.

concept for Time'œuf, a new concept for


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AVRIL DEVELOPMENT

A dynamic incubator

For Avril Development, 2017 was a very positive year, the Group’s “incubator” which hosts a wide variety of companies. Their common trait is a rapid development

mode, a start-up spirit and an ambition to become champions in their sectors. Focus on some atypical activities and promising solutions that are developing in growth markets.

Sopral: Innovation and proximity to its customersSopral draws its strength and sustained growth from its highly specifi c marketing positioning. As an expert in nutrition for dogs, cats and horses, the company depends for its diff erentiation on its premium and super premium products and network of professional customers: wholesalers, veterinarians, specialized retailers and garden centers.In the pet food market, Sopral has benefi ted from the success – both in France and internationally – of its gluten-free and cereal-free range of well-being products, Pure Life, which was launched in 2016. In 2017, Pro-Nutrition super premium health foods for dogs and cats were relaunched, with enhanced benefi ts and with a new visual identity. In a horse market which was seeing slight growth (+2%), Sopral achieved an excellent performance of +12% with its Dynavena, Laboratoire LPC and Sanders brands, the result of a tailor-made approach to its customers. To develop its presence in the racing and sports segments, Dynavena launched two specifi c products as responses to important issues that aff ect working horses: myositis (muscle disorders linked to excessive physical activity) and ulcers.

Feed Alliance: An expert in raw materialsFeed Alliance was born of an original idea to federate eff orts so as to optimize the purchasing of raw materials on behalf of their industrial customers in human foods and animal feeds, including the leader in the latter fi eld, Sanders.Today, 85% of these raw materials (cereals, protein meals, by-products of starch manufacturing or milling, and oils etc.) are linked to the futures market, which encourages companies to delegate this highly technical service; as well as mass purchasing they can benefi t from a broad range of skills, such as market analysis, strategy development, negotiation, contractual arrangements, and risk optimization and management. As well as mastering the fi nancial markets, all purchaser-traders have detailed knowledge of their product families.Furthermore, Feed Alliance is committed to contributing to the sustainable development of supplies in raw materials such as soybean, for which it is the leading purchaser in France.

The Pléchâtel unit is doubling its capacityAs from 2019, the site in Pléchâtel (Ille-et-Vilaine) will be able to produce nearly 40,000 tonnes of top grade, dry extruded foods for dogs and cats, focused notably on the use of natural ingredients, animal well-being and nutritional balance. For this purpose, Sopral has invested €14 million in modernizing and developing its pet food factory in order to gain in quality and fl exibility and thus better respond to the demands of its customers.

€79 Mturnover

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Avril Development illustrates the entrepreneurial spirit that pervades the Avril Group. Our flotilla of SME, whose growth rates exceed 10% per year, enable us to explore new markets, experiment with new skills and drive the acceleration of activities with high potential.”

TWO COMPANIES AT THE HEART OF THE CIRCULAR ECONOMY

Adonial Adonial processes by-products (mustard bran, apple pulp, etc.) and production rejects (biscuits, milk powder, etc.) from the agri-food industry, transforming them into raw materials that can be used for animal feeds which are then sold directly to livestock farmers or feed manufacturers. Its activity responds to a trend in markets demanding strong health guarantees from both suppliers and customers. In 2017, Adonial centralized its activities at a single industrial and warehouse site in Château-Gontier (Mayenne). This site now houses workshops specialized in diff erent materials and processes, thus enabling the rationalization of both facilities and fl ows of goods and improving productivity. It also optimizes the quality of service off ered to suppliers and customers: from the collection of products upstream – facilitated by the new storage capacities in Château-Gontier – to the optimized packaging of fi nished products downstream, while enabling the development of new formulations and product ranges that can meet all the needs of Adonial’s customers.

Terrial Terrial’s vocation is to transform waste into resources. A specialist in fertilization and the valorization of organic by-products, the company recycles livestock and organic wastes generated by industrial activities – notably by the Avril Group – into compost or methane to produce fertilizers and renewable energy. In the area of fertilizers, Terrial is supporting the strong development of organic farming, which now accounts for 45% of its sales. Its solutions allow farmers producing both arable and specialized crops (vines, arboriculture, market-gardening) to limit their use of chemical fertilizers and pesticides, seeing particular success with nutritional solutions such as biofertilizers and biostimulants based on plant extracts and microorganisms. A new and innovative product range called Dynamix will be on the market in 2018.In terms of industrial by-products, Terrial recycles organic matter into locally produced renewable energy, principally by means of methanization. Under the logic of a circular economy, the company is also working on identifying new opportunities to recycle biogas plant digestates into organic fertilizers or soil conditioners.

€30 Mturnover in 2017

100,000tonnes of industrial waste recycled into biogas

280,000tonnes of organic fertilizers produced using waste from French livestock farms

Terrial

60,000tonnes of by-products, production rejects and food surpluses valorized

Adonial

Paul-Joël Derian Vice President for Research, Innovation & Sustainable Development


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2016 2017

OILSEEDS SECTORSEdible oils (packaged + bulk) 1,188 1,226

Soap

Sauces

Oilseed meals (not incl. specialized crushing) 2,151 2,143Crushed grain (not incl. specialized crushing) , ,

Biodiesel 1,727 1,823

of which production in France , ,

of which international production

Oleochemical products 532 685

ANIMAL SECTORSFeeds produced (not incl. premixes) , ,

Tonnage of pigs slaughtered

Number of eggs (upstream eggs, shell eggs and egg products (in millions)) , ,

Turnover EBITDA

Sofi protéol and its subsidiaries . .

Oilseeds Processing ,. (.)

Oils & Condiments ,. .

Avril Specialties . .

Animal Nutrition and Processing ,. .

Avril Development . .

Other . (.)

Eliminations (.)

Total Group 6,230.5 121.9

Group 2016 Group 2017

Group net consolidated pro forma income (1.) (56)

Equity 1,71 1,749

Investments 207 136

of which industrial investments in animal sectors

of which industrial investments in oilseeds sectors

of which fi nance and development company ()

of which Group information systems

2016 2017

Upstream oilseeds production . .

Upstream livestock production . .

Agricultural and agri-food processing and by-products . .

Consumer food products .

Sustainable innovations, investment funds, other . .

Debt fund .

Total commitments 240.1 234.1

FINANCIAL INFORMATION

Industrial production(DATA IN THOUSANDS OF TONNES)

Commitments of the fi nance and development company

(DATA IN € MILL ION)

Selected fi nancial data(DATA IN € MILL ION)


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We would like to thank all Avril’s employees and partners – agricultural producers, livestock farmers, research scientists, fund-providers – who supported the Group and its achievements in 2017.Published by the Avril Group Communication Division – Publication Director: Tom Doron – Design and production | – Photo credits: Edouard Bernaux, Hadrien Brunner, Bruno Clergue, Evertree, Expur, Emmanuel Fradin, Arnaud Février, FOP, Yann Foreix, Happy Days, Cédric Helsly, Urich Lebeuf, Lesieur, Lesieur Cristal, Matines, Philippe Montigny, Oleon, Ovoteam, Cédric Pasquini, Porcgros, Puget, Olivier Robinet, Gwenaël Saliou, Sanders, Sojalim, Sojaxa, Thibaut Voisin, © Groupe Avril – All rights reserved (June 2018) – Illustration credits: 6&5 Studio/La Manufacture Paris, Jonathan Bréchignac.

This document was printed in France with vegetable inks by a ‘Imprim’vert’ certi� ed printer on ‘FSC® Recycled’ certi� ed recycled paper in an ISO 14001 & EMAS certi� ed factory.

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www.groupeavril.comjune 2018

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