Confident growth for LAÏTA

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1 Press kit 17 April 2012 Confident growth for LAÏTA Increased turnover: + 12 % Increased investments: 100 million euros over 24 months

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3 Summary press release LAÏTA ended 2011 on a very positive note, with strong growth: growth in turnover: billion euros (+ 12 % pro forma) growth in staff numbers: 2,230 employees (+ 4.6 %) with, in particular, the creation of 60 permanent contracts growth in the volume of milk collected: 1,350 million litres (+ 150 million litres in 2 years) from 3,470 dairy farms (within an identical geographical area) growth in milk prices paid to farmers: 338.2/1000, including quality bonuses (+ 8 %). In 2011, LAÏTA fulfilled its three primary missions: promoting its farmers milk, creating jobs and satisfying its customers. Through the vitality of all its activities, LAÏTA was able to make the most of a strong dairy demand. This vitality was particularly apparent with: Paysan Breton (+ 38 % for Madame Loïk s whipped cheeses; new buttermilk and crêpe ranges) cheeses: continued development of private label brands in France and Europe (+ 8.5 %) health nutrition (+ 15 %) solid performance of dry ingredients in Europe and worldwide through an upmarket shift of LAÏTA products. LAÏTA is confidently preparing for the coming years and continues to pursue its strategy based on a business model that is increasingly resistant to market volatility. Given this goal, a high increase in investments is anticipated in strategic sectors: brands, cheeses, formulated dry ingredients and health nutrition. In 2012 and 2013, these investments are due to reach over 100 million euros. Supporting our cooperative partners development goals "In 2 years, LAÏTA has collected and processed an additional 150 million litres of milk. To sustainably support the development goals of the cooperative partners who supply their milk, LAÏTA has entered a strong growth phase. With the end of milk quotas in sight, this solid and steady growth phase aims to attain a balance between value and volume to reduce the exposure of LAÏTA and its cooperative partners to the scissors effect caused by volatility. Dominique Chargé, President of LAÏTA A proactive investment policy "In its second year of operation, LAÏTA has proven the efficiency of its organisation through solid, profitable growth (+ 12 % within an identical geographical area). Confident in its future, LAÏTA is shifting from a sustained investment policy (29 million euros in 2011) to a proactive investment policy, with 100 million euros planned for the coming 24 months. Christian Couilleau, CEO of LAÏTA 3

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5 Contents 2011, a high growth year 7 Paysan Breton gains market shares Specific responses to the needs of steadily growing industry Growth in added value of specialised nutrition International demand boosts activity New vitality supports dairy farmers and employment 10 Milk collection on the rise A high investment rate 60 permanent jobs created in 2011 Facts & figures 12 Press contact: Anne Laure Visseiche Tel.: +33.(0) alvisseiche@laita.fr 5

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7 2011, a high growth year LAÏTA is withstanding the economic downturn. In fact, the cooperative dairy company is in excellent health. Its 2011 turnover is up 12 % from the previous year. This growth is due to: the development of consumer products the expansion of ingredients and specialised nutrition activities an increasing international presence. While the global economic crisis is challenging States and disrupting all sectors of the economy, LAÏTA is confidently striding on marked a new stage in the cooperative dairy company s growth. With billion euros turnover, its results show a 12 % increase within an identical geographical area. Breakdown of 2011 turnover: (1.159 billion euros) Consumer products: 56.5 % Dry ingredients: 17.5 % Specialised nutrition: 10.0 % Other*: 16.0 % *: milk sales, custom processing Paysan Breton gains market shares Revenue from consumer products (ultra fresh, butters, cheeses...) is up 11 %. It is boosted by LAÏTA brand products: Paysan Breton, Mamie Nova, Régilait and by the steady performance of private label product sales. Paysan Breton s visibility has been reinforced both in the written press and on television. The fresh advertising campaigns and new flavours of Madame Loïk s whipped cheese have enticed consumers. In 2011, sales rose 38 % in a very competitive market marked by the arrival of a major US competitor (Philadelphia). Paysan Breton, already a nationally renowned brand on the dairy shelves, is expanding its range of buttermilk and traditional crêpes. These two product ranges now enjoy national exposure. Régilait has maintained its volumes sold on the French and European consumer product and automatic distributor markets. 7

8 Mamie Nova continues to develop in the luxury yoghurt segment with a whole host of new features. New flavours and new desserts enhance its 2011 range: luxury strawberry, mango, apricot, mint and liquorice, Speculoos, lemon cheesecake and caramel cheesecake. Private label products are no exception. In 2011, LAÏTA confirmed its leading position for private label butters and gained market shares in cheese flavoured products targeted towards European retailers. Specific responses to the needs of steadily growing industry In the intermediate food product market, LAÏTA, through its subsidiary EPI Ingrédients, is fine tuning its responses to the demands of the European and international agri food industry. In 2011, the Research & Development teams developed new technical and functional dairy ingredients (fermented yoghurt powders ) designed for the preparation of sauces, ready meals, pastries and chocolates, but also for infant nutrition. These dry ingredients for human nutrition are gradually taking over from powders for animal nutrition. The shift in 2011 towards these more value added products was significant. Sales of Animal Consumption powders decreased by 9.5 %. EPI Ingrédients is, for instance, able to offer product differentiations, such as halal, with very precise specifications (MUI certificate for Indonesia). Our Créhen and Yffiniac sites are certified for the production of these new ranges. 8

9 Growth in added value of specialised nutrition Even Santé Industrie continues to develop its offer geared towards major clinical, dietary and infant nutrition firms. The launch, in 2011, of a new range of products packaged in prefilled mini baby bottles enabled this LAÏTA subsidiary to accelerate its development with new infant nutrition concepts. This quest for value added solutions is also a priority of Ouest Elevage. This bovine colostrum specialist (Oriane brand) founded the European Colostrum Industry, a joint venture with a Belgian research centre, to diversify its veterinary activities towards the human pharmacy sector, in particular the expanding market of immuno nutrition. International demand boosts activity Over one third of LAÏTA s turnover originates from the international market. This proportion developed further in 2011 due to the rising world population and high demand for dairy products from developing countries. This trend benefits LAÏTA s activities. EPI Ingrédients, for which developing countries already represent 15 % of its turnover, is making its debut on the Chinese market, where expectations and demand for dairy ingredients are already very high. Similarly, Régilait is experiencing strong international development, on the growing market of infant milk. LAÏTA consumer products are today distributed in over 120 countries. In 2011, the turnover of LAÏTA s 3 subsidiaries (Eurilait in the UK, Fromka in Germany and LAÏTA Italia in Italy) rose 20 %. 9

10 New vitality supports dairy farmers and employment The growth recorded in 2011 benefits the 3,470 LAÏTA milk suppliers and boosts the vitality of rural areas, in line with the company s responsible economy cooperative initiative. Milk collection on the rise In 2011, LAÏTA collected billion litres of milk, 6.4 % more than the previous year. In two years, the volume of milk collected by LAÏTA increased by 150 million litres. The processing capacities supported by a major investment plan and the firm s quest for new openings give milk suppliers the possibility to grasp market opportunities and to prepare for the end of milk quotas. LAÏTA s tendency towards consumer and specific nutrition products, both high value sectors, boosts dairy farmers income. The introduction of a differentiated price system (Volume A/Volume B) gives each farmer the freedom to choose whether to develop their production, by reducing the impact of price volatility on part of the volume produced. A high investment rate In 2011, LAÏTA implemented its 29 million euro investment plan as announced. This plan focused on material scheduling, production organisation and industrial equipment modernisation, for: consumer products (45 %) dry ingredients (25 %) specialised nutrition (+ 15 %) and other investments (15 %). These dynamics are gaining momentum with a 100 million euro investment plan for 2012 and These investments will be devoted to: butter segmentation with major work on the organoleptic qualities of Paysan Breton brand products dry ingredient development for human nutrition with precise specifications processing capacities and cheese differentiation (hard cooked cheeses, soft cheeses and fromages frais) a new packaging range of tubs, increasing the production capacity and packaging range offered by Even Santé Industrie. 10

11 These material investments go hand in hand with the just as significant intangible investments. Between 2011 and 2012, LAÏTA s Quality and Research & Development teams have been strengthened. Today they comprise around a hundred specialised engineers and technicians. Alongside the Marketing Department, these teams promote innovation, LAÏTA s strategic focus. Breakdown of investments: (100 million euros) Consumer products: 52 % Dry ingredients: 12 % Specialised nutrition: 21 % Other investments*: 15 % *: collection, IS, new headquarters 60 permanent jobs created in 2011 At the end of 2011, LAÏTA had a total of 2,230 employees, of which 90 were based at its European subsidiaries (UK, Germany and Italy). Through recruitment efforts, made possible by the company s good performance, LAÏTA is now positioned as one of northwest France s key economic players. In particular, 30 new recruits are under apprenticeship contracts and work study programmes, as part of a youth training effort. The first months of 2012 and the strategic development plans are also promising for this new year. LAÏTA continues to recruit in order to replace retiring staff and to meet its growth targets. Today, LAÏTA is notably recruiting line operators, maintenance technicians and drivers. 11

12 Facts & figures In 2011: billion euros turnover 3,470 dairy producers billion litres of milk collected 2,230 employees 6 industrial sites Breakdown of share capital: Even: % Terrena: % Triskalia: % 3 subsidiaries in Europe: Eurilait, Fromka and LAÏTA Italia And one representative in Spain: Iber Conseil N 1 for traditional moulded butter N 2 for plain spreading cheese with Madame Loïk s whipped cheese by Paysan Breton N 1 for Régilait milk powder N 1 for luxury yoghurts European reference for the production of private label consumer dairy products European reference for formulated powders designed for the agri food industry European reference for clinical nutrition 12