ROBERT BRZUSCZAK

Executive Vice-President Deputy Managing Director

Managing Director of Compagnie Laitière Européenne.

JEAN-PAUL TORRIS

Executive Vice-President Deputy Managing Director

Managing Director of cheese operations.

Within that difficult environment, our results for 2014 demonstrate the Group s capacity for resistance inasmuch as we reinforced our market shares and stayed on course in terms of our strategy and long-term investment. Our Cheese Products business registered organic growth of +4.2%. Our main brands improved their market positions through continuous investment in quality, communication and innovation. The strength of our brands, and our commercial dynamism, helped us maintain or improve our market shares in most of the countries in which we are present and in particular, in our two foremost markets, France where Caprice des Dieux, St Moret, Tartare, St Agur, Le Rustique and RichesMonts are the market leaders for their respective categories, and Germany where in 2014 Géramont became the No. 1 cheese brand across all categories. Our Other Dairy Products business registered organic growth of +6.4% thereby confirming the relevancy of our strategy of product differentiation and added value. The scissor effect produced by the gap between the rising purchase price for milk and the brutal fall in world prices for ingredients was attenuated in the second half of 2014 with the development of new high value added ingredients. Our Elle & Vire brand improved its leadership in France and continued its growth outside Europe.

The economic and geopolitical environment for milk and dairy products has been particularly unstable in 2014 for the dairy industry as a whole and for our Group in particular. The price of milk reached a record high with an increase of +7% in France, our main collection zone, and as much as +25% in the USA. World demand then began to fall and China, subject to high levels of inventory, started reducing its milk powder imports during the third quarter of the year. As a result, the Russian embargo implemented in August indirectly triggered a brutal fall in prices of 20 to 35% for powder and butter and 15% for whey. Finally, in the consumer markets, the economic crisis continued to deplete purchasing power and consumer demand, particularly in Central and Southern Europe, whilst our major retail distributors continued to exert strong pressure on pricing.

MESSAGE FROM MANAGEMENT

2014 Annual Report2