dedicated to glass

CII

message from the president

For more than a century, the people of Verallia have worked hard to make our company the world’s second-largest supplier of glass packaging for foods and beverages. With approximately 25 billion bottles and jars manufactured every year, we have achieved leadership positions in each of our market segments, most notably in still and sparkling wines, spirits and foods, in which we are the leading global supplier.

Our mission is to provide our 10,000 customers around the globe with glass packaging solutions and the innovative services they need to deploy those solutions sustainably into the markets of tomorrow.

Our success in this mission hinges on the talents of the men and women who work for Verallia, and the shared values we have inherited from Saint-Gobain, as expressed in our Principles of Conduct and Action.

With more than 100 years of glassmaking experience, Verallia is proud to work with a material of unparalleled virtues. Glass is made from natural raw materials, and is pure, inert

25 billion bottles and jars each year and more passionate than ever

strength and proximity: a winning strategyand completely and endlessly recyclable, making it the ideal packaging choice for protecting the well-being of consumers and caring for the environment.

Our business model is built upon a unique combination of strength and proximity—the strength of an international network of 46 glass production facilities, and the proximity of 15,500 employees working closely with our customers at the local level. Our teams apply the highest standards in the industry to provide customers with personalized and innovative solutions and services that add the maximum value to their products.

Working closely with our customers, bringing them the benefits of world-class industrial expertise and proudly upholding a set of shared values, Verallia aims to become the benchmark for glass packaging and, more generally, for rigid packaging—a company contributing to the sustainable development of its communities, value for its customers and the well-being of its end-consumers.

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IntroduCtIon

our key figures ........................................................................................................................ 4

our primary markets ....................................................................................................... 6

strength and proximity: a winning strategy .................................. 8

strength of a global leader

four ways to accelerate performance ................................................ 12 manufacturing, investments, purchasing, innovation

a constant commitment to quality ........................................................... 16

our business tailored to your needs ..................................................... 18

proxImIty of a responsIble partner

art in a bottle ........................................................................................................................ 24 Selective Line: the Collection, Creativ’Lab, Speed-to-Market

long-standing customer relationships .............................................. 26

customized services .................................................................................................... 27

contents

Western Europe

56%

South America

9% Eastern Europe

4%

United States

31%

4 5

our key figures

Verallia is the world’s second-largest manufacturer of glass containers for foods and beverages.

Verallia delivers innovative, personalized and environmentally-friendly solutions to more than 10,000 customers worldwide.

A global leader in glass packaging for wine, spirits and food, Verallia manufactured approximately 25 billion bottles and jars in 2011.

Approximately 15,500 employees in 14 countries

Portfolio of more than 10,000 customers

Approximately 25 billion bottles and jars produced in 2011

Sales presence in 47 countries

13 awards for innovation in 2011

95 glass furnaces and 6 centers for research & development and innovation

2011 Facts and Figures

Verallia’s business model is built upon the strength of its international network—an industrial presence in 14 countries, a sales presence in 47 countries, and six research & development centers—and the proximity its 15,500 employees maintain with customers on a local basis.

In 2011, Verallia generated sales of €3.6 billion.

by region

by market

sales: €3.6 billion

operating income: €448 million

EBITDA: €685 million

investments: €272 million

Sparkling wines

9%

Food

19%

Spirits

10%

Still wines

29%

Other bottles

8%

Beer

19%

6%

Other (including tableware

and decoration)

our SALES

6 7

sPirits• 10% of 2011 sales

• Approximately 1.5 billion bottles manufactured in 31 plants

• Wide array of colors (including extra flint and black) and decorations

• Volumes from 30 ml to 4.5 L

• Selection of customized bottles for added value

Beers• 19% of 2011 sales

• More than 7.5 billion bottles manufactured in 24 plants

• Specialized and customized series to support major global brands (blue bottles)

• Dedicated ranges and services for microbreweries and regional breweries (Ecova and ECO Series™, BOB (“Buy Our Bottles”) service)

Food• 19% of 2011 sales

• Approximately 7 billion jars manufactured each year in 24 plants

• Markets: baby food, preserves, sauces, spreads, jams, instant coffee, etc.

• Volumes ranging from 30 ml to 3 L

wines• 29% of 2011 sales in still wines and 9% in sparkling wines

• Approximately 6 billion bottles manufactured in 31 plants

• Facilities centrally located in wine-producing regions

• More than 20 bottle colors available, from traditional (greens) to innovative (blues, blacks, etc.)

• More than 900 models in our catalog

• Volumes ranging from 187.5 ml (airline bottle) to 15 L (Nebuchadnezzar)

our primary markets

8 9

strength and proximity: a winning strategy

Countries in dark grey:The Group has an industrial presence (14 countries)

Countries with drops:The Group has a sales presence (47 countries)

• Solid and long-standing business relationships

• Capacity to serve major international customers

• Optimized purchasing

Value-added services to provide customers of all sizes with the same level of attention

• Dedicated local sales teams (more than 400 people focused on the requirements of 10,000 customers)• Local logistics platforms• Tailor-made services • Bottle decoration (2 integrated partners: SAGA Décor in France and Euroverlux in Poland)• Design and co-development• 13 bottle and jar design centers around the world, including Creativ’Lab, which is dedicated to our Selective

Line premium brand• Collaborative development of new designs with customers• Focus on innovation and optimization of time to market

PROXIMITY OF A RESPONSIVE PARTNER The widest range of products on the market

• All sizes and volumes, all colors, all segments• Responsive and flexible approach

STRENGTH OF A GLOBAL LEADER• Sharing of best practices

• Structured innovation programs

• Ambitious sustainable development strategy

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strength of a global leader

BUILDING ON estaBLIsheD eXPeRtIseWith a global network of 46 glass production facilities and a commitment to continuous improvement, Verallia provides customers around the world with best-in-class technological expertise.

Our know-how is based on a long tradition of excellence in glassmaking skills. In terms of glass chemistry and glass melting techniques, Verallia draws on more than three centuries of glassmaking tradition with Saint-Gobain. Regarding surface treatment, decoration and design of containers (processes and products), Verallia builds upon more than 100 years of experience.

Underpinning this expertise is a sustained commitment to research and development. Its main areas of focus are industrial processes, primarily glass melting and forming, and product development,

particularly eco-conceived products and the optimization of their physical, environmental and aesthetic characteristics.

One of the factors that set our company apart is the extensive resources we devote to the development of glass containers. Our efforts to further enhance the performance and functionality of glass as a material are spearheaded by our six research & development centers around the world. Verallia draws extensively on the expertise of dedicated research teams and on partnerships with universities and research institutes.

In many cases, particularly in the area of glass melting, research and development work is conducted with Saint-Gobain. Our company currently holds more than 300 patents, relating primarily to our processes and the properties of our products.

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strength of a global leaderoperational excellence

To accelerate our efforts to improve our industrial efficiency and environmental performance, we have put in place a number of strategic, company-wide programs over the last three years that are aimed at achieving operational excellence. These programs focus on four key areas:

2. investmentsVerallia continues to invest heavily in its world-class industrial facilities in order to maintain them at the very highest levels of excellence. Its investments in 2011 amounted to €272 million. Verallia has its own expertise in industrial infrastructure, and designs and manufactures part of the machinery it uses for the forming of glass containers. Acting as a machinery manufacturer gives us complete control over our glass production facilities and also enables us to place our industrial expertise in direct competition with the market by acquiring part of our equipment from third parties while maintaining machine sales to other companies.

Whenever we invest, we seek first and foremost to optimize and standardize equipment design as far as possible in order to benefit from economies of scale and to achieve greater operational flexibility and interoperability. By further standardizing its facilities, Verallia is able to optimize capacity by shifting production from one plant, furnace or machine to another, thereby improving our ability to respond to changing market conditions and ultimately deliver higher levels of service to our customers.

At the same time, we are constantly seeking to identify best practices as part of our investment program and implement them at all our sites.

1. ManufacturingSince 2008, we have rolled out a world-class manufacturing program called Enterprise Excellence (E²) at all our facilities around the world in order to improve Verallia’s industrial and environmental performance. Based primarily on continuous process improvement, the E² program focuses on workplace organization, improvement of tools and elimination of waste to achieve higher levels of efficiency.

E² is also designed to foster a culture of excellence across our teams by maximizing performance and competitiveness. It incorporates seven continuous improvement indicators: quality, flexibility, team commitment, availability, workplace safety, environment and innovation. Progress in each of these key areas is monitored using a unified industrial reporting system, which allows us to exchange best practices and compare performance across all our facilities worldwide.

MANUFACTURING

INVESTMENTS

PURCHASING

INNoVATIoN

Verallia has more than 100 years of experience in the field of glass melting, and this expertise is backed by a multi-year cooperation agreement with Saint-Gobain. This agreement draws on our combined infrastructure of approximately 200 glass furnaces, our respective histories and our experience in the 12 countries where we have glass manufacturing plants.

Verallia designs its own glass furnaces at the research & development center in Chalon-sur-Saône, France.

Through our ambitious research and development programs, we aim to constantly improve the performance of our furnaces and achieve significant reductions in energy consumption and greenhouse gas emissions by optimizing the flame.

WORLD-CLASS EXPERTISE IN GLASS MELTING four ways to accelerate

performance

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OPeRatIONaL eXceLLeNce

3. PurchasingThe scale of our industrial network allows us to benefit from significant synergies in the purchasing of capital goods and assets (international invitations to tender, pooling, standardization, sourcing in low-cost countries, etc.) and in information systems (global rollout of our ERP system).

To optimize our purchases of capital goods and services, our technical and purchasing teams work together using a

closely coordinated approach. We have put in place 10 global work groups, organized by purchase category, to implement all possible cost reductions, particularly globalization and standardization of purchases, sourcing in countries where prices are lowest, such as India, China, Brazil and Colombia, and supplier quality control.

In 2009, in line with this strategy, we acquired a company based in Pune, India, which specializes in the purchase of replacement metal parts for our machines. Similarly, we have signed a partnership agreement with a Chinese company to supply glass forming moulds for all our subsidiaries.

4. InnovationOur expertise, based upon more than a century of experience and tradition, is constantly being expanded with new innovations. As part of Verallia’s continuing efforts to improve industrial processes, particularly in the area of glass melting and forming, a range of ambitious research and development projects are currently in progress.

Verallia’s innovation policy operates at two main levels: innovation in products and services, and enhanced functionality of glass as a material.

In terms of product innovation, our company meets the demands and expectations of each market as a result of our ability to develop, manufacture and support new creative concepts. Attentive as we are to emerging market trends, and with our expertise in innovation, Verallia brings exquisitely shaped bottles to life and develops specific decoration processes, such as Saticoat® (an exclusive eco-friendly enameling process that provides

a frosted finish), transfer by immersion (which involves immersing the bottle in a liquid bath containing suspended decorative inks, giving the bottle a marble, wood, denim or other effect) and masking (which involves creating a clear “window” on a frosted bottle through which a design on the opposite side of the bottle is reflected).

To develop material functionality, we are working to further enhance the properties of glass and the visual aspect of our products, including more effective scratch-resistant surface treatments, impact resistance, and reduced weight by optimizing the distribution of material.

Our innovation policy is an integral part of our commitment to sustainable development and includes a constant effort to improve industrial processes to reduce our fossil fuel consumption and greenhouse gas emissions, as well as the incorporation of an eco-conception approach to new product development in order to add more value to the content.

In Germany, India and the United States, Verallia designs and manufactures part of the machinery it uses for the forming of glass containers, known as IS machines. This enables us to incorporate the latest developments into our industrial facilities.

The research and development programs conducted by our teams are aimed primarily at improving the operation of certain types of machines, particularly by optimizing heat exchange during the glass forming process.

For example, we own the patent for a process called “Vertical Finish Mould Cooling”. This patent is designed to protect an original air propulsion system that cools the entire mould while limiting installation costs and energy losses.

CONTINUOUS OPTIMIZATION OF GLASS FORMING PROCEDURES

We have developed specific surface treatments to enable

our customers to heat seal glass containers. This innovation in closures meets the dual

requirement of air-tight sealing and easy opening of products, primarily for food containers.

CoNTAINER CLoSURES

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strength of a global leaderqUaLIty

Packaging controlsIn glass containers for food, our expertise in manufacturing and risk management, acquired over many decades, enables us to meet the specific requirements of the food industry. Our machines benefit from the latest technological advances to conduct rigorous controls and guarantee air-tight sealing of containers (verification of dimensions, elimination of surface defects, etc.). Turning systems eliminate any residual marks. The heat stresses to which we subject our containers during manufacture allow our customers to utilize cold- or hot-fill processes as well as the full range of sterilization and pasteurization techniques. Surface treatments improve resistance and ensure the smooth flow of products on our customers’ production lines. Lastly, the transfer of knowledge and skills from one facility to anotherensures reliability and security of supply, and encourages the development of new products around the world.

a constant commitment to quality

ISO 9001: This standard specifies the organizational requirements for a quality management system to ensure the consistent provision of products in line with customer expectations and applicable regulations. It also includes processes to support continuous improvement of the system.

ISO 22 000: This standard guarantees the ability to control food safety hazards for the consumer throughout all production processes. Specifically, it sets out the requirements for a food safety management system, based on a cohesive set of processes, to allow management to ensure the effective and efficient application of its food risk policy and the continual improvement of its objectives in order to offer products that are safe for the consumer and that comply with customer expectations and applicable regulations.

HACCP (Hazard Analysis Critical Control Point): This system identifies, evaluates and controls significant food safety hazards. There is no HACCP certification as such, since the applicable principles are included in the ISO 22000 standard.

RIGOROUS COMPLIANCE WITH STANDARDS

In sparkling wines and the champagne segment in particular, where specific production techniques require high standards of excellence in glass packaging, we place great importance on the quality controls applied to our bottles to ensure they meet the demands of each customer. Our quality control system includes stringent pressure tests on the production line, with a guarantee that each bottle is able to withstand pressures more than six times higher than the pressure typically measured in a champagne bottle (approximately 6 bars). This standard is just one of a series of checks and measures covering such parameters as slip rates (related to bottle stacking) and dimensional specifications. We thus apply our standards of excellence in industrial procedures to this luxury market, whose prestigious estates and major brands are appreciated by consumers around the world and where attention to detail is paramount.

extra quality Our Selective Line premium range of spirits bottles are manufactured in extra-flint glass in furnaces specially dedicated to this quality of finished product. They can then be tinted in a wide array of colors, including extra black, which offers unparalleled density for a perfect blend of elegance and refinement. Using techniques such as lacquering and etching, these bottles are finished as unique designs, perfectly tailored to the quality and differentiation requirements of our customers.

STANDARDSVerallia’s facilities are certified to the latest applicable standards, primarily ISO 9001 and ISO 22000.

COMMITMENT Since the beginning, Verallia has been engaged in a process of continuous improvement, shared by all teams across the company. Our commitment to quality is based upon a common set of written procedures, designed to be easily shared and implemented.

TRANSPARENCYAudits are conducted annually to verify that these procedures are duly applied and that our products comply with the highest standards of quality.

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Our company is equipped to meet the full spectrum of market requirements, from long production runs for international standard products to more limited series and specialties for high value-added products.

To meet the needs and expectations of each customer, Verallia continues to work hard to make its industrial facilities as flexible as possible, allowing us to adjust the length of production runs in line with changing patterns of demand.

In the spirits market, we are equipped to manufacture bottles for all segments, with capacities ranging from the very largest to the very smallest. In a market dominated by

our business tailored to your needs

specialty products, we anticipate and respond to market trends with the manufacture of premium, high-end designs.

For wines, Verallia launches several production runs each year of bottles in different colors. As well as the classic colors developed for standard and specialty wine bottles, some of our plants in France, Germany and the United States utilize an exclusive glass coloring technique to manufacture short and medium series of bottles in a wide array of colors on a single production line.

Combining our unique expertise with continuous innovation, we are able to offer our customers a vast range of very high-

INFINITE POSSIBILITIES

The size of our operations and the expertise of our teams have enabled us to successfully integrate new companies, particularly in the fast-growing economies such as Eastern Europe, South America and the South Mediterranean Basin, where we have focused our development strategy in recent years. The companies acquired in these regions benefit from the technical know-how that Verallia has accumulated over the decades. With their industrial facilities optimized and upgraded to the highest standards, these companies are better able to meet the requirements of local markets as well as support our major customers as they expand internationally.

INTERCULTURAL OPENNESS AND INTEGRATION OF NEW COMPANIES

strength of a global leaderfLeXIBILIty

quality products and unparalleled levels of flexibility. The synergies made possible by our size and international footprint also enable us to be extremely competitive. Our constantly increasing flexibility is matched by gains in productivity and efficiency.

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Our presence in key geographic regions gives us a more precise understanding of local markets and helps us foster close relationships with customers of all sizes. This gives us the ability to respond quickly and efficiently to the requirements of each customer and each market. As local players in each market, we can also collaborate closely with customers on the design and co-development of specific products.

good neighbors, good business

proximity of a responsive partner

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proximity of a responsive partner

Verallia operates 13 creative design centers around the world, where our experts work directly with customers on bottle and jar projects, seeing them through to the simulation of their products on store shelves.

Equipped with computer-aided design tools and high-performance videoconferencing systems, which can also be connected to customers’ own development departments and networks, these facilities rely largely on the same technologies and interact with each other so that they can transfer design drawings and share best practices.

These 13 laboratories are places where innovative ideas are transformed into glass products ready for manufacture and sale at competitive prices. They are located in France (Albi, Chalon-sur-Saône and our decoration facility in Pont-Sainte-Maxence, near Paris-Charles de Gaulle Airport, where Verallia inaugurated its Creativ’Lab center in 2012, dedicated to our Selective Line premium brand), Germany (Bad Wurzach), Russia (Kamyshin), Spain (Madrid), Portugal (Figueira da Foz), Ukraine (Zorya), the United States (Muncie), Brazil (São Paulo), Argentina (Mendoza) and Italy (Gazzo Veronese and Dego, inaugurated in November 2011).

COLLABORATIVE DEVELOPMENT: MORE THAN AN IDEA FACTORY

In addition to its traditional beer business, Heineken, one of Verallia Deutschland’s key customers, is also positioning itself in new niche markets, such as cider.

To further this objective, Heineken turned to Verallia Deutschland to create a new 300 ml cider bottle to be sold in Italy and the United Kingdom under the Strongbow Gold brand.

THE NEW SHAPE OF CIDER IN GERMANY

“This new cider bottle is characterized by its resolutely modern design and its strong visual identity,” said Jürgen Grasel, Beer Sales Director for Verallia Deutschland. “It features an original engraving on the neck. It is also the first bottle in white glass that Verallia Deutschland has produced for Heineken.”

EXQUISITE SHAPES AND NOVEL DECORATION FOR PRODUCTS WITH PERSONALITY

Our teams know how to work with glass, experimenting with product ranges, colors and shapes to create something genuinely beautiful. With bottles and jars in ever more unusual shapes and with novel decoration, Verallia provides its 10,000 customers around the world with the solutions they need and supports their development and growth in new markets. In 2011, 13 innovation awards were presented to products manufactured by our company.

manufacturing techniques. From the simplest to the most complex shapes and decorations for wines, spirits, beers, mineral waters and other products, Selective Line creative concepts are varied. By placing innovation, speed to market and customer support at the heart of its strategy, Selective Line anticipates market expectations and aims to become a key player in the premium segment.

Selective Line, our new global premium brand, is a perfect illustration of our innovation strategy, with a collection of infinitely customizable bottles in all shapes and colors; Creativ’Lab, a state-of-the art creation and innovation center; and the Speed To Market service for new design and decoration projects.

Selective Line benefits from Verallia’s industrial expertise and brings together our best experts in glass design and

innovation

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THE COLLECTIONcatalogue of standard bottles

CREATIV’LABinnovation and creation center

SPEED TO MARKET customer support service

the CoLLeCtion includes a series of standard bottles, available for order or directly from stock, depending upon the model. Infinitely customizable, the COLLECTION was designed for the wine, spirits and non-alcoholic beverage markets. Using the extra-flint quality glass, the COLLECTION is also available in a variety of colors and shades, including extra black.

art in a bottle Creativ’ Lab is a state-of-the-art innovation and creation center where experts in glassmaking and premium decoration techniques come together with customers to develop new design and decoration concepts. Equipped with the latest collaborative tools, CREATIV’ LAB supports the creative process and shortens design-to-production time. The center is located at the site of SAGA Décor (one of Verallia’s integrated partners) in Pont-Sainte-Maxence, just 30 minutes from Paris-Charles de Gaulle airport, providing easy access for our international customers.

New logo, new image, new offering—our Selective Line brand reaffirms its place in the premium market and is structured around

sPeed-to-MarKet is a fast-track product development service with dedicated project managers who work alongside our customers throughout the process. The SPEED-TO-MARKET teams coordinate the various areas of expertise involved in the creation of new products, significantly reducing the time needed to finalize and validate designs.

3components:

proximity of a responsive partnerseLeCtive Line

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proximity of a responsive partnerserviCes

Working with its customers, Verallia builds upon world-class glassmaking expertise and a proven potential for innovation to develop products that stay abreast of market trends while respecting the principles of sustainability.

In the United States, for example, as a trusted partner of Boulevard Brewing, the largest specialty brewer in the Midwest, we have scaled down their beer bottles—without changing their shape—from the family-size 750 ml bottle to a 350 ml format better suited for individual consumption. Retaining the shape of the container has minimized the customer’s investments needed to retool its bottling lines.

In terms of sustainability, our eco-conceived product lines, launched in almost all countries since 2009, have been highly successful. Lighter than regular bottles, the Ecova and ECO Series™ bottles add value to the contents while respecting the environment. These ranges continue to attract customers around the world,

particularly major wine producers and exporters in South America. In Chile, for example, Ecova bottles now represent the majority of our sales volumes.

With a sales network of more than 400 people, Verallia has the capacity to offer tailored services that meet the specific requirements of individual customers, large and small.

In Southwest France, for example, we have established a mobile bottling business with a fleet of specially-equipped trucks that our winemaking customers use to bottle their wine at their own vineyards, meeting their appellations’ onsite bottling rules without needing to invest in expensive equipment.

CUSTOMIzED SERVICES

In the United States, Verallia has set up two automated units that package empty wine bottles on demand for shipment in cardboard boxes for our wine customers. The automated lines, located at our Seattle plant and at a dedicated center in Fairfield, California, offer a flexible response to demand from wineries and have reduced delivery times from three months to just three weeks.

LONG-STANDING CUSTOMER RELATIONSHIPS

Publisher: Claire MosesEditor in Chief: Gina BehrmanEditorial: Kristel LiarçouTranslation: eFilesPhotos: Saint-Gobain Emballage, Bernard Gouédard, Saint-Gobain Vetri, DCM Associati, Burwell Photography, Glass Packaging Institute Illustrations: Pascale TestanièreDesign & layout: www.ad-nova.com©Paris 2012, Saint-Gobain EmballageAll rights reservedNo part of this publication may be reproduced

Verallia 18, avenue d’Alsace

Les Miroirs - 92096 La Défense CedexTel. +33(0)1 47 62 38 00Fax +33(0)1 47 62 39 55

www.verallia.com