Letter to the shareholders n 15 NOVEMBER 2006 1.196bn in turnover 67.8 M in operating income 39.2 M in net income, group share Dear shareholders, In terms of turnover growth, nothing was gained in 2005/2006; in terms of operational profitability, it was a mediocre year; and in terms of net income, it was a good year So it was a year full of paradoxes, which of course need explaining, but above all it was a year rich in initiatives, which need to be set out, as markers for the future. Growth Behind the stability of consolidated sales excluding exchange rate and scope variations (-0.2%) there hides a considerable disparity between the geographic zones: > + 13 % outside the euro zone, despite an unfavourable /$ exchange rate, > a negative development (-2.1%) in the euro zone in an unfavourable consumer environment, with strong pressure on prices; we also voluntarily decided to stop unprofitable activities, or those which did not comply with our vegetable pure player strategy. Profitability Slightly down ( 68m, i.e. -2.2%), operational profitability was subject to heavy non-recurring restructuring and re-organisation charges ( 4m). In effect, the agri-industrial area registered developments in Germany (closure of Wanzleben and transfer of its activity to Straelen and Reutlingen) and France (Flaucourt manufacturing transferred to Estrées and Gniewkowo). In addition, the huge re-organisation, decided and announced during the course of the previous year, has started. The new scope of the subsidiaries, operational since January, and the establishment of administrative departments centralised by geographic zones have led to a reduction in the permanent workforce (-219 at the end of June), carried out with as much preparation as possible. This has been made possible by the implementation of the new integrated information system, common to the whole group. Up by over 8% to 40m, the net income is the consequence of a stability of the financial results and a marked improvement in the tax burden. Developments The group is therefore in good health and the measures taken over the last two years are expected to benefit subsequent years, in terms of profitability as well as internal growth. This health has also allowed us to resume external growth at the end of the period. We thus acquired the residual frozen activities of Unilever in Spain, subcontracted by the group since 2001, and also, and most importantly the 25% shareholding in Aliments Carrière, the Canadian leader in the canned and frozen vegetables segment with sales of 230m, allowing us into the North American market on a solid and profitable foundation. This shareholding will probably be transformed into a controlling stake in the summer of 2007. This is clearly an essential stage towards the globalisation of the group, the consolidation of its leadership and the best distribution of its risk with a view to guaranteeing its future. Christophe Bonduelle Chairman and general manager Pierre Deloffre Deputy general manager 1
R E S U L T S Results Consolidated profit and loss account Message from Chairman of Supervisory Board Dear shareholders, During the 2005/2006 financial year, the Supervisory Board carried out the work that you confided to it. It was regularly informed by management of developments in activity and had at its disposal all of the documents needed for the verification and audit of the financial statements and consolidated accounts. During the next AGM of 7th December you will have the opportunity to vote on the renewal of the mandates of 4 members of the Supervisory Board: Daniel Bracquart, Stanislas Dalle, Jean Gueguen and myself. You will be asked to vote on the motion to appoint Isabelle Danjou as new member of the Supervisory Board, as a replacement for Francis Danjou who, for personal reasons, has not requested the renewal of his mandate. We thank him wholeheartedly for his contribution to the work of the Board over the last 9 years. As was the case last year, you will find in the specific report to be presented to the AGM of 7th December 2006 the detailed account of the work of the Board and of the accounts committee during the period. André Crespel Chairman Consolidated balance sheet 2 At 30/06/05* At 30/06/06 (in thousands of euros) 12 months 12 months Turnover 1 200 880 1 196 046 Purchases and external charges (838 099) (835 550) Payroll (241 958) (241 391) Depreciation (53 023) (48 954) Other operating income 41 338 33 202 Other operating charges (40 185) (32 731) Income from disposal of consolidated shareholdings (73) Operating income before exceptionals 68 953 70 549 Non-recurring items 370 (2 792) Operating profit 69 323 67 757 Financial income 11 469 46 813 Financial charges (21 513) (56 439) Investment income (10 044) (9 626) Results of equity-accounted companies 11 Pre-tax profit 59 290 58 131 Income taxes (22 224) (17 770) Net profit 37 066 40 361 Group share 38 046 39 228 Minority share (980) 1 133 BASIC EARNINGS PER SHARE 4,84 4,98 DILUTED EARNINGS PER SHARE 4,84 4,98 * Excluding IAS 32-39 Assets (in thousands of euros) At 30/06/05* At 30/06/06 Non-current assets 410 877 430 509 Other intangible fixed assets 30 799 34 243 Goodwill 75 553 75 312 Tangible fixed assets 278 765 291 551 Equity accounted shares 73 73 Other non-current financial assets 7 782 17 236 Deferred taxes 15 392 10 496 Other non-current assets 2 513 1 598 Current assets 671 618 678 331 Stocks and work in progress 296 322 279 526 Clients and other debtors 307 327 339 436 Tax receivables 658 1 146 Other current assets 4 752 4 561 Other current financial assets 4 140 9 290 Cash and cash equivalents 58 419 44 372 TOTAL ASSETS 1 082 495 1 108 840 Liabilities (in thousands of euros) At 30/06/05* At 30/06/06 Shareholders' equity (Group share) 289 442 312 324 Share capital 56 000 56 000 Share premiums 22 545 22 545 Consolidated reserves 210 897 233 779 Minority interests 14 095 20 750 Shareholders equity 303 537 333 074 Non-current liabilities 309 614 293 572 Financial debts 280 940 269 959 Staff commitments 4 271 4 617 Other non-current provisions 7 031 7 632 Deferred taxes 4 655 1 931 Other non-current liabilities 12 717 9 433 Current liabilities 469 344 482 194 Current financial debts 61 967 66 131 Current provisions 6 282 3 921 Suppliers and other creditors 397 821 408 265 Tax debts 2 055 2 355 Other current liabilities 1 219 1 522 TOTAL LIABILITIES 1 082 495 1 108 840 * After impact of IAS 32-39
News Bonduelle sets up in North America Aliments Carrière, Bonduelle's entry into North America, is a company with a similar culture and scale to those of the group. As Canadian leader in the processed vegetable sector, this company produces canned and frozen food for the US and Canadian markets. With over 800 employees, Aliments Carrière operates 7 vegetable processing factories: 4 in Quebec, 3 in Ontario. This alliance will allow the Canadian group access to Bonduelle's knowledge of products with high added value, and will also provide an opportunity for new growth in what is still a very basic American market (single vegetables, simple mixes). Market in North America * in 2005, by technology where processed vegetables are very well represented. Categories of vegetables Value Market share (billions of euros) (%) Fresh vegetables 42,0 46,6 Canned 20,4 22,6 Frozen 23,7 26,3 Processed fresh 4,0 4,5 * Canada, USA, Mexico, source: Food for thought 2006 study Note on seasons A cold and damp spring, high temperatures in July and a rainy month of August have affected farming production in Europe. Germany, Poland, the UK, France and Italy were particularly affected by these difficult meteorological conditions. However, the vagaries of the weather which have profound effects on yields and harvesting periods are factors which are managed by the group thanks to the distribution of places of cultivation. With a presence all over Europe, from east to west and from Spain to Russia, Bonduelle has diversified its geographic production zones, a veritable trump card which, along with its solid agricultural expertise, has helped the group to an overall successful production campaign in 2006. Chicago CANADA Toronto Strathroy Ingersoll Tecumseh Detroit Pittsburgh ÉTATS-UNIS NEW PRODUCTS Poland, Czech Republic Bonduelle is innovating and in Poland has launched canned vegetables which are specially adapted to children: Bonduelki. In order to boost these new products, the group has created a website where children can discover all the benefits of vegetables whilst having fun! Vegetables on top form St-Denis Montréal St-Cesaire Bedford Ste-Martine Washington Québec Albany Boston New York Philadelphie Fredericton Aliments Carrière Villes majeures Grands axes In the Czech Republic, two new products in jars are appearing on the A real feast for the eyes as well as the taste buds! www.bonduelle.pl www.bonduelki.pl www.bonduelle.cz Halifax Advertising Italy This year, Bonduelle carried out advertising campaigns in several European countries. In Germany notably, two films have been made on the technology used for preserving food, and on the ready to eat fresh range (salads in sachets). Based on comical characters and puns, these films raise the brand's profile and contribute to optimising its image with German consumers. Whilst the traditional Italian range for minestrone is in the frozen format, Bonduelle has developed a recipe in the fresh ready to cook segment. This product, typically Italian, has allowed Bonduelle to make a successful entry into the fresh and ready to cook www.bonduelle.it 3
News Bonduelle sets up in North America Aliments Carrière, Bonduelle's entry into North America, is a company with a similar culture and scale to those of the group. As Canadian leader in the processed vegetable sector, this company produces canned and frozen food for the US and Canadian markets. With over 800 employees, Aliments Carrière operates 7 vegetable processing factories: 4 in Quebec, 3 in Ontario. This alliance will allow the Canadian group access to Bonduelle's knowledge of products with high added value, and will also provide an opportunity for new growth in what is still a very basic American market (single vegetables, simple mixes). Market in North America * in 2005, by technology where processed vegetables are very well represented. Categories of vegetables Value Market share (billions of euros) (%) Fresh vegetables 42,0 46,6 Canned 20,4 22,6 Frozen 23,7 26,3 Processed fresh 4,0 4,5 * Canada, USA, Mexico, source: Food for thought 2006 study Note on seasons A cold and damp spring, high temperatures in July and a rainy month of August have affected farming production in Europe. Germany, Poland, the UK, France and Italy were particularly affected by these difficult meteorological conditions. However, the vagaries of the weather which have profound effects on yields and harvesting periods are factors which are managed by the group thanks to the distribution of places of cultivation. With a presence all over Europe, from east to west and from Spain to Russia, Bonduelle has diversified its geographic production zones, a veritable trump card which, along with its solid agricultural expertise, has helped the group to an overall successful production campaign in 2006. Chicago CANADA Toronto Strathroy Ingersoll Tecumseh Detroit Pittsburgh ÉTATS-UNIS NEW PRODUCTS Poland, Czech Republic Bonduelle is innovating and in Poland has launched canned vegetables which are specially adapted to children: Bonduelki. In order to boost these new products, the group has created a website where children can discover all the benefits of vegetables whilst having fun! Vegetables on top form St-Denis Montréal St-Cesaire Bedford Ste-Martine Washington Québec Albany Boston New York Philadelphie Fredericton Aliments Carrière Villes majeures Grands axes In the Czech Republic, two new products in jars are appearing on the A real feast for the eyes as well as the taste buds! www.bonduelle.pl www.bonduelki.pl www.bonduelle.cz Halifax Advertising Italy This year, Bonduelle carried out advertising campaigns in several European countries. In Germany notably, two films have been made on the technology used for preserving food, and on the ready to eat fresh range (salads in sachets). Based on comical characters and puns, these films raise the brand's profile and contribute to optimising its image with German consumers. Whilst the traditional Italian range for minestrone is in the frozen format, Bonduelle has developed a recipe in the fresh ready to cook segment. This product, typically Italian, has allowed Bonduelle to make a successful entry into the fresh and ready to cook www.bonduelle.it 3
News Vegetables on top form Nutrition, a major concern for Bonduelle Interview Laurence Depezay Head of nutrition at the group N E W S What is at stake with regard to nutrition? The current public health environment is not good, with a rise in pathologies linked to bad eating habits, such as obesity, diabetes and cardiovascular problems. In this environment we have undertaken, for several years now, a major nutrition programme. What does this involve? It starts with Groupe Bonduelle employees, with several training initiatives organised around the theme of nutrition. This training helps them acquire the expertise which can be directly applied to their responsibilities. We also have a solid innovation policy, for both industrial procedures and products. We thus guarantee consumers of processed vegetables optimal nutritional value. What about sponsorship? Bonduelle's commitment in nutrition has also led to the creation and development of the Louis Bonduelle Company Foundation. The Foundation, whose objective is a lasting positive development in food habits, has now been working on the ground for two years, with fun, efficient and measurable operations. The latest development in this area is the creation and extension of the Tuesday concept, vegetable day. This major concept, involving several partners from the catering and retail sectors, approaches the subject of vegetables in a festive way, putting them at the heart of our meals and thus helping towards a positive development in eating habits. Visit www.fondation-louisbonduelle.org www.lejourdulegume.fr Focus on... FOUNDATION ACTION The Foundation's main operation currently involves over 500 restaurants in the service food sector, with partners such as the Fondation Cœur et Artères and other names from the retail and consumer industries. Vegetables 2000 : following the success of the first operation in 2005, the Foundation has re-used the best parts of the first edition of Vegetables 2000, this year carrying the campaign to the internet. Novelties have been added to the existing strong points of the campaign. For example, there is the launch of audio recipes in down-loadable MP3 format, an innovation which aims to reach young people. Visit www.legumes2000.fr La Fondazione in Naples: after students in France, it was Italian children who were the subject of an awareness campaign in March, via an operation combining lessons and school outings with, in Naples, several performances of a specially created theatre play. Les Robins du Potager (Vegetable Garden Robins) In France the Foundation is also trying to get children to take that first step towards eating enough vegetables. This has involved classroom talks, vegetable picking on allotments, and cooking lessons, allowing the little ones to discover vegetables, from the garden fork to the knife and fork. FOUNDATION REWARDED FOR EFFECTIVE CAMPAIGNS Prix Nutridor On 13 June at the Journées Pratiques de Nutrition event the Louis Bonduelle Foundation was awarded the prize for the best nutrition advertising campaign of the year. This prize, presented by Dietecom and Le Quotidien du médecin, was awarded by health professionals during the event, with almost 60% of voters choosing the Louis Bonduelle Foundation. A recognition by consultants which follows work on the ground aimed at changing eating habits. Evaluating the impact of operations is key! Parallel with the Robins du Potager and Vegetables 2000 campaigns, the LH2 polling group carried out a survey for the Foundation to evaluate the effectiveness of the operations. Surprising results, which can be viewed on its internet site, demonstrate the impact of these campaigns on individuals' eating habits. 5
N E W S NEW PRODUCTS France Bonduelle has launched several product innovations in France, under various technologies. In the Catering sector, the start of 2006 was marked by the development of three grated vegetable recipes. Presented in 250g earthenware dishes, the three products are heated up in the microwave in just 2 minutes and 30 seconds. In the canned segment, for its 150th birthday Cassegrain is re-visiting provençale cuisine with a brand new pea recipe: la Gourmandise de Pois à la Provençale. Finally, in the frozen segment, Bonduelle is innovating by introducing complete meals which are rich in vegetables. With 4 recipes, this new range offers consumers balanced dishes with over 70% vegetables! Tasty products which take 5 minutes to prepare in the microwave. Flavour preservation is guaranteed by the steam cooking process. Want to know more about the products? Visit www.bonduelle.fr Belgium, Netherlands On the back of the success of technological innovation, Bonduelle is continuing its development with its Tetra Recart range, notably in Belgium and the Netherlands. The new packaging used helps preserve all the flavour of the cooked vegetables and makes the product even easier to use. www.bonduelle.be Shareholders' area Bonduelle on the stock market Development of Bonduelle share price in comparison with SBF 120 index (based to 100 November 2005) 140 120 100 Bonduelle SBF 120 8 million shares Listing on the Euronext Paris ISIN code: FR0000063935 80 nov. 05 dec. 05 jan. 06 feb. 06 march 06 april 06 may 06 june 06 july 06 aug. 06 sep. 06 oct. 06 Shareholders' diary 07/12/2006 Combined General Meeting 29/01/2007 Turnover for first half of 2006/2007 financial year 22/02/2007 Interim results for 2006/2007 14/05/2007 Turnover for 3rd quarter of 2006/2007 08/08/2007 Turnover for 2006/2007 financial year 09/10/2007 Annual results for 2006/2007 During the 2005/2006 financial year, the Bonduelle share registered strong progression (+30% since January 2006), in slightly lower transaction volumes. Find all the financial information in the finance area of the group's website: www.bonduelle.com 6 Bonduelle Rue Nicolas Appert BP 30173 59 653 Villenneuve-d Adcq Cedex France Tél. +33 (0)3.20.43.60.60 Fax +33 (0)3.20.43.60.00 Design/Production: Franklin Partners/DAG Photo credits: Bonduelle photo library, Barbara Grossmann