JEAN-PAUL TORRIS Chief Executive Officer

France must not forget that the country exports almost half its national milk production. For our part, the Group exports 58% of the milk it collects in France, whether in the form of retail products or ingre- dients. Confronted with very active European and global competition, the French dairy industry will not be able to avoid the structural reform necessary to provide the last- ing competitiveness which is indispensable if it is to cope in the future with the inherent volatility of the markets.

Within this volatile and demanding environment, our strategy of value creation based on the diffe- rentiation provided by our brands and our quality, innovation and competitiveness has generated profitable growth in particular internationally. Our results are a tribute to the daily commitment of all our employees worldwide.

Our net sales for 2016 amount to 4.4 billion including organic growth of 2.2%. Current operating profit has risen by 23% sustained by our international activities, the development of brand volumes and our industrial performance. Our net income amounts to 104.5 mil- lion or 2.4% of net sales. Solid profitability is vital to our

long-term development, in particular internationally. The sustainability of milk production and processing is indispensable for us to meet the expectations of the thousands of milk producers who place their trust in us.

2017 will be a new year of challenges. We will have to cope with the volatility of the dairy industry in the main producing countries, with the uncertain evolution of numerous currencies and with slowing consumption in the emerging countries. We will also have to manage with renewed large increases in the world prices for dairy raw materials.

Sharing our taste for entrepreneuring, the teams of Savencia Fromage & Dairy will remain commit- ted to profitable growth which more than ever will be conditioned by our strategic orientations: the product differentiation provided by our specialties, strong brands and the reinforcement of our competitiveness and of our international positions.

MESSAGE FROM MANAGEMENT

2016 ANNUAL REPORT 3