First-half 2016 results06/09/2016

First-half 2016 results06/09/2016

Grégoire Gonnord, Chairman

Régis Lebrun, Chief Executive Officer

Jean-Louis Roy, Senior Vice President

Administration and Finance

Summary02

Situation and New Strategic Priorities 4

Financial Results 11

Operations and Action Plans 22

Business Segments: French Supermarkets, International, New Food Services

Development Paths

Appendices 54

3

Page

Situation and New Strategic Priorities

Financial Results

Operations and Action Plans

4

Our business environment

DEMANDING... ...BUT FAVORABLE IN THE LONG-TERM

01

• Pressure on margins

• Price war in French Supermarkets

• Pig farming crisis

• Media pressure

• Consumer focus:

"eat better", act responsibly

• Transparency a must

• Numerous opportunities for

innovation/differentiation

• Growth potential

in France and abroad

5

What are Fleury Michon's

strategic priorities

for the future?

New strategic challenges require

new priorities for action!

6

Fleury Michon’s past challenges and

priorities

SITUATION OUR PAST PRIORITIES

02

• A major brand, but not top-of-mind(2008: Herta no. 1, FM ranked 9th)

• Looming battle among brands

(2008 law on modernisation of the

French economy)

• Food scandals and consumer

distrust - brands asked to

respond; Fleury Michon and agro-

industry put in same basket

• Digital revolution

• Win the race to achieve leadership

and critical size

• Make FM the leading brand with a

project that was truly responsible and

focused on society

• Strengthen our historic core

segments: hams, prepared meals and

surimi

• Explore our potential in services and

international markets

7

2015 results03

• Revenue multiplied by two in ten years

• Brand gains new status

• Gap widens with competitors

• International Operations:

from €10m to €120m in ten years **

* Source: Kantar year-to-date 30 June 2016 ** 2015 revenue based on FM's interest 8

Fleury Michon’s future challenges and

priorities

A NEW SITUATION NEW PRIORITIES

04

• Pressure on margins

• Customers looking to reinvent

themselves

• Emergence of new

technologies

• Historic opportunity for

innovation: "Help People Eat

Better!"

• Focus on profitable, lasting growth

• Be recognised as the most

innovative food company

• Put an emphasis on high-impact

innovations (usefulness for

consumers, high growth,

profitability, image)

• Unleash our potential in services

and international operations

9

Keys to success05

• Continue to shift to an even more consumer-focused culture

• Determine our priority projects for the future

• Focus our resources

for even greater success

• Adapt our organisation to be

increasingly nimble and efficient

10

Situation and New Strategic Priorities

Financial Results

Operations and Action Plans

11

Revenue01

Total International

€63.2m +11.4%

*Joint venture revenue based on Fleury Michon's interest and at constant exchange rates

12

in €m H1 2015 H1 2016 % change

French 314.9Super-

markets

+28%

International 27.9+33.9% at constant

exchange rates

Services 29.2

and Other

TOTAL 374.5 372.0 -0.70%

27.1 +7.7%

325.6 -3.30%

21.8

Fleury Michon brand revenue02

Revenue

in €m

Average year-on-year revenue growth (Q3 to Q2)

+5.1%

13

102,7

110,3113,1

115,4119,6

125 124,3 123,5

130,8136 134,2 136

139,7 138,6 139,5

133,2135,9

143,8 142,2145,3

149154,1

156,9151,7 150,4

147

0

20

40

60

80

100

120

140

160

180

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

Operating Profit and Margin03

14

Other Businesses

Operating Profit

Operating Margin

French Supermarkets Operating

Profit

(€0.54m) €0.18m

€13.12m€15.91mFrench

SupermarketsOp Margin

4.7%

H1 2015 H1 2016

€15.4m €13.3m

4.1% 3.6%

French Supermarkets

Op Margin4.0%

Net Profit and Margin04

15

in €m H1 2015 H1 2016Recurring operating profit

15.4 13.3Operating profit

Finance costs, other financial income and

expense, net (0.7) 0

Income tax expense (5.9) (3.7)Share in profits (losses)

(0.6) (0.7)of associates

Net profit 8.2 8.9

Net margin 2.2% 2.4%

Cash Flow05

Presented in accordance with French GAAP 16

* Securitisation programme launched in February 2016

H1 2016 in €m Uses Sources

Cash flow 24.3

Change in operating

working capital(2.6)

Net cash provided by 21.7

operating activities

Capital spending 11.7

Borrowings 15.1

Dividends 5

Securitisation programme* 46.2

Other 0.3

TOTAL 32.1 67.9

Change in cash and

cash equivalents35.8

Cash and cash

equivalents at beginning of

period94.6

Cash and cash

equivalents at end of period130.4

Capital Spending06

in €m H1 2016

TOTAL 11.6

17

*Capital spending as a % of revenue

standard level

4% < > 5% of revenue

€m

6.0%*

7.8%

5.9%

3.9%

3.6%

4.7%

07 Key Ratios

18

H1 2015 H1 2016After-tax ROCE

6.7% 6.20%(Return on capital employed)

Recurring operating margin2.3% 2.30%

after income tax

Asset turnover 2.9 2.70%

ROE 4.1% 4.20%

(Return on equity)

EPS 1.88 2.02

(Earnings per share)

PER (at closing share price on 30 June 201415.2 14.4

= €60.39; 2015 = €57.05)

GEARING

(Net debt/Equity)

08 Debt

Net financial debt in €m 55.1

27.5%

Net debt/EBITDA

Free cash flow in €m

0.89

10.7

H1

2015

H1

2016

53.3

25.3%

0.93

10.2

19

09 Statement of Financial Position

20

+5.2%

-3.3%

21

Conclusion10

First half ended with a year-on-year decrease in operating profit as

revenue held virtually stable.

This reflects lower revenue and a narrower operating margin in French

Supermarkets.

The International and New Food Services segments enjoyed

continued growth and wider operating margins.

Net margin improved and finance costs (net) came in at zero.

Fleury Michon continued to strengthen its financial position and saw

an improvement in gearing.

Situation and New Strategic Priorities

Financial Results

Operations and Action Plans Business Segments

Development Paths

22

Situation and New Strategic Priorities

Financial Results

Operations and Action Plans

Business Segments Development Paths

23

Operations and Action Plans

Business Segments

French Supermarkets

International

New Food Services 24

French Supermarkets impacted by higher raw

material costs and lower consumer prices01

25*Source IRI , July 2016, FMCG, HMSM

Fleury Michon has made a conscious choice to raise its

prices in a situation of dwindling value

Consumer selling prices: Inflation over 1 yr*

All products: -1.20%

National brands: -1.73%

Ham, flank removed consensus – Price at Rungis+6.3%Norwegian salmon market price trends in NOK

+43.0%

Promotional discounts

granted

Increasingly costly promotional campaigns*02

26* Source Nielsen 2015

FMCG

revenue+8%+1.5%

YEAR AFTER YEAR, PROMOTIONS ARE WEIGHING MORE ON PRODUCERS

+ 5 points in 5 years for producer brands, and the trend is continuing in 2016

Proportion of revenue from “heavy” promotions (in %)

Hypermarket/Supermarket – Producer Brands

General trend: Promotions pushed down

FMCG brands' revenue in Q1 2016 03

Source: Nielsen Q1 2016 27

PROMOTION TRENDS FOR FAST-MOVING CONSUMER GOODS

Change in Fresh Self-Service FMCG revenue in hypermarkets and supermarkets

Year-to-date P3 2016Full year 2015

Excluding store promotions Total store promotions Of which flyers Of which displays

28

•Our goal is to achieve profitable, lasting growth and maintain our connection with consumers

Enhanced presence for Fleury Michon in flyers(products in flyers up 5.3%): greater visibility among consumers

But reasonable promotional discounts

• Result: Fleury Michon products sold via promotionsdown by 1,100 metric tons in H1 2016 vs H1 2015

• But we have strengths in this environment

Fleury Michon: Carefully considered

promotions04

An effective brand identity05

29

Around €1bn in consumer sales

Only majority family-owned company

Fleury Michon is one of the few players to maintain its market share

Mkt share in value (and change in bp vs. Y-1) Change in mkt share value (%) Purchase frequency

Fresh Self-Service FMCG – All channels – Q2 2016 MAT vs Q2 2015 MAT

Fleury Michon stabilises: No. 3 in Top 10 for market share in

value, but No. 1 single brand

An increasingly trusted brand06

30

2009: the 9th most purchased brand

2014: the 4th most purchased brand

2016: the 2nd most purchased brand!

Source: Kantar 2016 Brand Footprint – expressed in CRP: Number of consumers x Frequency of purchase, in millions

107

107

121

121

135

148

182

192

212

224

+3

-5

Two indicators of

attractiveness: How many

households buy a brand and

how often (Consumer Reach

Points - CRP)

Fleury Michon brand attractiveness07

31

For Fleury Michon: +138,000 consumer households, for a10 bp

increase in purchases over the past 12 months

The only brand among the Top 5 FMCG brands to see an increase in

these two indicators

And still plenty of room

for growth

Purchase frequency

105.1 in all for Fresh Self-Service FMCG

Fresh Self-Service FMCG – All channels – Q2 2016 MAT vs Q2 2015 MAT

Customer base

Fleury Michon: Steady growth in

consumer reach points08

32

Increasing CRPs is the key growth driver for Fleury Michon

A strategic challenge for the product offering's value added

Source: Kantar 2016 Brand Footprint – expressed in CRP: Number of consumers x Frequency of purchase

176180

190 190

207 210

0,89

0,92

0,95

0,93

1,01 1,01

0,86

0,88

0,90

0,92

0,94

0,96

0,98

1,00

1,02

130

140

150

160

170

180

190

200

210

220

CAM 2T11 CAM 2T12 CAM 2T13 CAM 2T14 CAM 2T15 CAM 2T16

CRP Part de marché valeur 100% PGC-FLSMarket share in value 100% Fresh Self-Service FMCG

MAT QT11 MAT Q212 MAT Q213 MAT Q214 MAT Q215 MAT Q216

Operations and Action Plans

Business Segments

French Supermarkets

International

New Food Services33

Continued growth in International

Operations01

34

CANADAEXPORT(1)

-2.9%

Revenue ofconsolidated subsidiaries

€27.9m +28.0%

SLOVENIA

SPAIN(3)

CANADA

SLOVENIA

ITALY(2)

EXPORT(1)

-2.9%

Revenuebased on Fleury Michon's interest

€63.2m +11.4%

NORWAY(4)

-56.5%

35.9%

20%

33.4%

6.9%3.8%

75.6%

8.8%

15.6%

(1) Export + Fleury Michon Switzerland

(2) Piatti Freschi Italia 50% interest

(3) Platos Tradicionales 47.5% interest

(4) Fleury Michon Norge now 100% interest

Delta Dailyfood02

35

Good growth in revenue (up 40.9%), lifted by

airline catering and brand sales

Wider margins thanks to revenue growth and improved

production costs

Piatti Freschi Italia03

36

Revenue down 1.1%, good full-year trend

Platos Tradicionales04

37

First-half 2016 revenue down 2.9% but good full-year

trend

Profitability outlook still positive

Proconi05

38

Revenue up 6.7%

Operations and Action Plans

Business Segments

French Supermarkets

International

New Food Services39

New Food Services

Good performance across the portfolio

Favourable growth in meal solutions for

healthcare facilities

Firm results from

airline catering

01

40

€29.2m +7.5%

Excluding non-strategic businesses

CATERING

+9.8%

ROOM SAVEURS

+7.5%

EAT-OUT

+6.8%

46.8%14.3%

38.9%

Room Saveurs

Robust revenue growth, margins

still at a good level

02

41

Situation and New Strategic Priorities

Financial Results

Operations and Action Plans Business Segments

Development Paths

42

Priority actions01

Create sustainable,

differentiating

competitive

advantage that gives

Fleury Michon an

exclusive product

offering

OUR PRIORITIES

• Focus on profitable, lasting growth

• Be recognised as the most

innovative food company

• Put an emphasis on high-impact

innovations (usefulness for

consumers, high growth,

profitability, image)

• Unleash our potential in services

and international operations

(43)

Development paths - method02

44

Become the benchmark player in high demand, high

value-added food segments (product offering)

Be as close to consumers as possible (distribution

channels)

Work actively with French Supermarkets to reinvent the

model together

Shift from communicating towards consumers to

creating a relationship with them

Adopt a flexible method and

organisation, adapted to

these objectives

45

Changing consumer patterns03 Multiple behaviours depending on:

The time

The place

High expectations for well-being, a clearly-signalled desire to

consume better and responsibly

Consumers are attentive to corporate responsibility and develop special ties

with companies; they voice their opinions to make brands change

Consumers want to make enlightened choices on the product

experience offered to them

The focus of the offering needs to shift from

the product to the "brand experience"

Priority in product innovation: Develop

value added04

46

Healthy snacking

Healthy delivered meals and

buffets

An offering that is

available at the right time

Health

Well-being

An offering that makes me

feel good

Organic

Quality channels

A responsible offierng

Health and nutrition05Healthy products

- Carefully controlled

additives• Kept to a strict minimum

• In the smallest possible

proportions

(e.g., nitrates, palm oil,

sodium glutamate,

phosphates, etc.)

- Clear consumer

information (what people need to know, not pedantic)

- Involvement in sourcing

channels47

Seek out consumers where they are06

48

Convenience stores

E-commerce

43% of growth in FMCG -

purchasing outlets where I live

Eat-out

Heathcare institutions

Airline catering

Wherever consumers

are

Supermarkets

Work together to invent

tomorrow's categories

and aisles

Organise aisles with the consumer in mind

(rather than professionals)07

49

• Store aisles are still organised on the basis of industrial or supply chain

considerations

• Store aisles and product categories have not changed much since the 1990s

• Think of ways to display products that are aligned with consumers' perceptions and

various expectations

• Consumers organise their

shopping based on their own

buying criteria

How we will organise differently in the future08

50

Strategic direction

Ensure that all our projects are aligned with our Company Project

-> go from an organisation by market to an organisation by projects

Objectives

Less hierarchy

Greater autonomy, broader areas of

responsibility

Faster implementation at the operating level

Same amount of resources, but allocated

more effectively

To sum up

A period of transformation

Reflecting our constantly changing lifestyles

Rooted in Fleury Michon's corporate culture

Strengths to implement this change

And a strategy focused on product quality, customer intimacy

and consumer satisfaction

51

09

In conclusion

(52)

2016: Pivoting to new priorities

• Priorities that are an obvious fit

• An ideal position for achieving our objectives

02

Our past priorities

• Win the race to achieve leadership and critical

size

• Make FM the leading brand with a project that

was truly responsible and focused on society

• Strengthen our historic core segments: hams,

prepared meals and surimi

• Explore our potential in services and

international markets

Our new priorities

• Focus on profitable, lasting growth

• Be recognised as the most innovative food

company

• Put an emphasis on high-impact

innovations (usefulness for consumers, high

growth, profitability, image)

• Unleash our potential in services and

international operations

53

First-half 2016 results05/09/2016

APPENDICES

54

Pork Hams02

55

Market

€1,537m -0.9%

Fleury MichonHertaPrivate LabelsMADRANGELowest PriceOther

18.3%(+0.0%)

21.6%(-2.2%)2.4%

(+12.0%)

48.20%(-1.4%)

5.0%(-11.40%)

Moving annual total Supermarkets +

Hard Discount - Source: IRI 12 June 2016

4.6%(+17.3%)

Fleury Michon

Herta

Private Labels

Lowest Price

Other

Poultry Cuts02

56

Market

€356m +2.4%

5.2%(+23.8%)

43.4%(+3.6%)

4.6%(-3.2%)

37.9%(-2.5%)

8.9%(+16.3%)

Moving annual total Supermarkets +

Hard Discount - Source: IRI 12 June 2016

Market

€389m +0.2%

Fleury Michon

Petigas

Private Label

Lowest Price

Other

5.3%(+5.3%)

42.3%(+3.6%)

3.7%(-8.1%)

36.1%(-3.8%)

9.0%(+1.6%)

Ready-to-Eat Charcuterie

57

Moving annual total Supermarkets +

Hard Discount - Source: IRI 12 June 2016

Fleury Michon

Marie

WW

Private Labels

Other

16.2%(+10.6%)

31.1%(-0.7%)

28.6%(-3.1%)

8.7%(+17.0%)

15.4%(+13.5%)

Individual Prepared Meals02

58

Market

€474m +3.7%

Moving annual total Supermarkets +

Hard Discount - Source: IRI 12 June 2016

Fleury Michon

Coraya

Private Labels

Lowest Price

Other

Surimi02

59

20.7%(+6.0%)

27.5%(-3.2%)

5.9%(-9.7%)

42.1%(-5.2%)

Market

€280m -2.9%

Moving annual total Supermarkets +

Hard Discount - Source: IRI 12 June 2016

3.9%(-7.5%)

First-half 2016 results06/09/2016