The unstable environment of 2016 has been marked by several economic crises such as that from which Latin America, in particular Brazil and Argentina, is still suffering. The global dairy crisis has continued as a result of con- traction of demand, aggravated by the Russian embargo. Excess milk production has resulted in a steep fall in world prices which has hit our ingredients businesses hard. The collapse in the price of commodity cheeses such as Gouda or cheddar has equally toughened the competitive environment for our own cheese businesses.

The crisis has not spared France and French milk producers. Within this difficult context, the Group has remained supportive of its producer partners. Over and above compliance with our contracts, we have provided our suppliers with support to help them through this par- ticularly difficult period. In 2016, milk collected in France has thus become the most expensive for the major dairy countries of Europe and the French market s profitability is currently way below the Group s average. It is thanks to our results in foreign markets that we have been able to help our French milk producers, via the higher price for their milk, to traverse the crisis we have been expe- riencing over the past two years.

The strength of our brands, our international dynamism and our specialty product innovation are the engines of our growth.

MESSAGE FROM MANAGEMENT

MESSAGE FROM MANAGEMENT

2 2016 ANNUAL REPORT