PORTRAITS & FIGURES · 2018. 2. 21. · viability of pig husbandry in The Netherlands and Germany thanks to our leadership in productivity, Foreword 2015: A USEFUL YEAR FOR VION FOOD

ANNUAL REPORT

& F I G U R E S

P O R T R A I T S

2015

ANTOON SPOORENBERG

MEMBER OF FARMING STAFFFUNCTION

LOCATION

TODAY

Vion Farming, Boxtel (NL)

> 18 telephone calls: longest lasted 33 minutes, shortest 3 minutes 30 seconds> 5 visits to farmers> 223 km driven to visit suppliers

SHIFT

8:00 - 17:00

> 14 years of service with the company> 2 children> 73 km cycled with 7 friends

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Table of contents

Profile 4Foreword: 2015, a useful year for Vion Food 7Mission and strategy 9Our brands 10Management review 13Corporate Social Responsibility 27Corporate governance 33Risk management, compliance and internal control 39Report of the Supervisory Board 45

> 25 Formula 1 races watched, from start to finish> 2 daughters aged 13 and 15> Eats Dutch food 3 times a week and Antillean food 4 times a week

COVER: SHARLON PEDRO

SLAUGHTERHOUSE DEPARTMENT MANAGER

FUNCTION

LOCATION

TODAY

Vion Food, Boxtel (NL)

> 10,400 cuts of meat processed using the F-line> 9,788 pigs slaughtered> 100,000 kg of meat processed

SHIFT

6:00 - 14:15

V I O N A N N U A L R E P O R T 2 0 1 5 | 3

Vion Food is an international meat producer with production locations in The Netherlands and Germany and sales support offices in sixteen countries worldwide.

Through its three divisions - Pork, Beef and Food Service - the Company provides fresh pork and beef, and derived products for retail, foodservice and the processed meat industries.

Vion Food supplies customers in its home markets of The Netherlands and Germany, other countries in Europe and the rest of the world. Vion Food’s headquarters are located in Boxtel (The Netherlands).

Vion Holding N.V. is a public limited liability company under Dutch law. Starting in 2016 Vion Food will comply with the Dutch Corporate Governance Code.

Vion Food’s sole shareholder, Stichting Administratiekantoor SBT, is a trust office that has issued depositary receipts for its shares to NCB-Ontwikkeling, which acts as the investment fund of ZLTO. ZLTO is an association for entrepreneurs working in agricultural sectors and has approximately 15.000 members in Noord Brabant, Zeeland and the southern part of Gelderland.

Profile

303,000PROCESSED PER WEEK

P IGS

17,400PROCESSED PER WEEK

CATTLE

€ 4.6BILL ION

TURNOVER 2015NET

IN 201511,021INCLUDING FLEX WORKERS

EMPLOYEESNO OFAVERAGE


KEY F IGURES

2015 2014 2013

RESULTS

Net turnover 4,571 4,992 7,033

> Net turnover from ongoing operations 4,571 4,833 5,031

> Net turnover from discontinued operations - 159 2,002

Normalised EBITDA 1 46 60 196

Including:

> EBITDA normalised from ongoing operations 45 58 22

Operating result 31 20 728

Net result 22 -21 516

CASH FLOW

Cash flow from operating activities 34 80 -41

Net cash flow from operations (available for financing activities) 2 -18 1,563 -113

Sale and acquisitions of group companies 2 1 1,519 -

BALANCE SHEET

Group equity 416 397 425

Balance sheet total 945 980 2,706

Net debt 3 -52 -87 1,459

RATIOS

Added value as % of net turnover 4 21.2% 21.0% 27.5%

Staff costs as % of net turnover 10.2% 9.7% 10.6%

EBITDA normalised 1 as % of added value 4.7% 5.7% 10.2%

EBITDA normalised 1 as % of net turnover 1.0% 1.2% 2.8%

Solvency 44.1% 40.5% 15.7%

Return (ordinary operations) on average capital employed (ROCE) 5 3.7% 5.9% 11.9%

EMPLOYEES

Number of employees at year-end 4,233 4,311 6,669

Number of employees including flex workers at year-end 11,542 11,492 14,274

Average number of employees 4,228 5,243 12,491

Average number of employees including flex workers 11,021 12,897 18,099

(amounts in millions of euros)

1 Excluding impairments, restructuring and book earnings from divestments of group companies.

2 Change is primarily due to the divestment of Vion Ingredients.

3 Long-term liabilities and current interest-bearing liabilities payable to credit institutions less cash and cash equivalents.

4 Net turnover and changes in inventory of finished goods and goods being processed less cost of raw materials and consumables as a percentage of net

turnover.

5 Normalised operating result1 divided by average capital employed (fixed assets, excluding financial fixed assets, plus net working capital, excluding all

interest-bearing liabilities payable to credit institutions and receivables related to divestments of group companies).


> 23 years of marriage, 2 daughters aged 21 and 16> 22:00 bedtime> 40-minute motor scooter ride to work > 3 hours of indoor football per week: 1 hour of matches, 2 hours of fitness training> 5 to 10 km walking the dog at the weekend

LOUIS AUERBACH

CATTLE SLAUGHTERHOUSE FOREMAN FUNCTION

LOCATION

TODAY

Vion Food, Tilburg (NL)

> 500-600 cattle slaughtered> 2-knife system used for maximum hygiene> 35 slaughterhouse staff members managed> 5% of staff given training on the job> 6 emergency response officers within a team of 80

SHIFT

6:00 - 15:00


We continued our important efforts to optimise

our footprint; over two years, this has resulted in a

reduction from 35 to 25 production sites, without

losing volume. At the same time, key investments

upgraded various sites to best-in-class level. For

example, Waldkraiburg in southern Germany will be

one of the largest and most modern beef processing

sites in Europe. A new management board (CEO

and CFO) as well as a new COO for our Pork division

and a Group HR Director came on board. The pro-

duct-driven management structure was maintained

and strengthened. To manage the Company and

implement our strategy and plans, we have set up an

Executive Committee consisting of the division COOs

and the CEO and CFO plus the Group HR Director.

In 2015, Vion Food was definitely impacted by

the difficult situation in pig husbandry in The

Netherlands, Germany and Europe in general. First

and foremost, Vion Food has deep empathy for

farmers who do their work with passion and make

(often unnoticed) continuous improvements without

proper reward. At Vion Food, we see it as our res-

ponsibility to contribute to improving this situation,

whether by making ourselves even more efficient,

by creating and managing supply chains that give

better access to the market or by using our scale to

optimize valorisation.

This year we made further progress on optimising

the economic value of the animals processed by

accurately aligning our product selection with global

market demand. Access to markets around the world

is a key success factor for our Company. If we can

sustain this approach, we believe in the long-term

viability of pig husbandry in The Netherlands and

Germany thanks to our leadership in productivity,

Foreword

2015: A USEFUL YEAR FOR VION FOOD

In 2015, we continued to build on the progress made in the previous year. We faced tough market circumstances in the pork industry which had an impact on our operational result (EBITDA) in the Pork division. However, thanks to the solid performance of our Beef and Food Service divisions and lower restructuring costs, we returned to a positive net income and thus solidified our equity and solvency.

food safety, animal welfare and sustainability.

As further highlighted in this Annual Report, in

2015 we signed commercial contracts which will set

examples for the industry. They are based on better

satisfying customer needs through management

of the complete supply chain, which we see as the

strategy going forward.

Indeed, the key message about the mid- and long-

term prospects of Vion Food are related to our

unique position to promote trust in the industry. We

are fully aware that, over the past few years, meat

has been the subject of important social debates,

such as on animal welfare, food safety and

traceability and the role of meat in healthy diets, to

name just a few. Our position as a ‘funnel’ between

the fragmented animal husbandry sector on the

one hand and the meat processing industry on the

other makes Vion Food the natural – and much

needed – chain coordinator in our markets. The

chain coordinator guarantees the origin of the meat,

encourages and rewards animal-friendly husbandry

and safeguards food safety, quality and consumer

satisfaction.

At Vion Food, we are ready to take on this

responsibility. Our focus over the coming years

will be on putting this into practice and thus

maximising the Company’s full potential, backed

by our loyal and dedicated employees. Their daily

efforts to improve our performance are remarkable

and wholeheartedly appreciated. Hence, you find in

the Annual Report some of their Portraits together

with Vion’s Figures.

Francis Kint

Chief Executive Officer


> 4,700 m walked with the dog> 15 kg dog food bought> 4 years spent renovating his home

PIETER VAN GOOL

CATTLE SHED EMPLOYEEFUNCTION

LOCATION

TODAY

Vion Food, Tilburg (NL)

> 457 cows received> 43 livestock vehicles unloaded> 6 different nationalities talked to

SHIFT

6:00 - 14:15


MISSION

Vion Food wants to be the leading reliable partner

within the food supply chain that provides people

around the world with safe meat products.

OUR VALUES

> Pride

> Transparency

> Ambition

> Sustainability

> Quality

Mission and strategy

STRATEGY

This mission statement translates into the

following strategic and future-proof principles:

> The consolidation and strengthening of existing

worldwide market positions and the

development of new markets.

> The continuous monitoring of product quality,

food safety and its full traceability.

> The alignment of products with customer needs,

including the introduction of innovative and

new products.

> The creation and management of an integrated

supply chain by assisting farmers and actively

collaborating with retail and industry.

> The controlling of costs and and raising

efficiency in the production systems.

> The active contribution to societal debates

about public health, animal health, animal

welfare, sustainable food production and its

environmental impact.


De Groene Weg has been the market leader in The Netherlands

since 1981. The De Groene Weg brand contributes to the integral

sustainability of organic meat in the supply chain. Vion Food acts

as a one-stop supplier with respect to purchasing, production and

supply chain management, thus adding value to organic beef

and pork. This brand is sold to butchers shops throughout The

Netherlands.

SALOMON FoodWorld offers a wide range of innovative burgers,

centre-of-plate and finger food products for the out-of-home

market. SALOMON Foodworld’s three successful concepts are

Finger Food Hits, Handheld Snacks and Centre-of-Plate.

FVZ Convenience – The modern traditionalist. This brand is built on

five pillars: Schnitzel, Poultry, Minced Meat, Haxer and Vital.

Vion Food supplies fresh pork and beef of the highest quality

under the Food Family brand. Food Family stands for strict controls

on raw materials, high processing standards and consistent quality.

Our brands

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Goldbeef is high-quality beef that is distinguished by its deep-red

meat colour and the fat marbling that indicates its quality. The beef

maturation process is very important; it gives the meat its tenderness

and releases aromas, which guarantee a unique taste experience.

The clearly defined production process ensures

consistent quality.

Schweinegold represents fresh pork that is destined for the meat

industries in Japan and Korea.

Products sold under the Hackplus brand consist of meat combined

with protein from vegetables or wheat. This means Hackplus

products contain less fat and salt while tasting just as good as

traditional meat products. Hackplus is available in various

supermarkets in Germany.

Weylander beef is a premium line of beef that is available in various

supermarkets in The Netherlands. Weylander beef is specially

selected and prepared and the products mature in the packaging,

which creates a characteristic flavour and guarantees tenderness.

Good Farming Star is premium pork which is sold in The Netherlands

and is characterised by the extra attention paid to animal welfare.

Furthermore, the concept complies with sustainability requirements

in the value chain. Good Farming Star offers known-origin meat and

is produced in a controlled and transparent chain.

V I O N A N N U A L R E P O R T 2 0 1 5 | 1 1

> 12 years of marriage> 1 son> 200 hours traffic-jam per year> 324 ballpoint pens collected

SILVIA SPRIEGEL

QUALITY MANAGEMENT REPRESENTATIVE

FUNCTION

LOCATION

TODAY

Vion Food, Hilden (DE)

> 2 checks on production> 7 specification sheets drawn up> 4 document revisions made> 1 complaint processed> 18 samples sent to the laboratory

SHIFT

7:00 - 17:00


RESTRUCTURING AND OPTIMISATION OF THE FOOTPRINT

During 2015 Vion Food further optimised its

network of production locations. This process

started in 2014 and was further executed in 2015

by the closing of two pork sites (Bad Neustadt

and Straubing) and two beef sites (Anklam and

Frankfurt).

Parallel to the closures, significant investments

were made to expand and/or modernise several

sites in line with the strategic intent of the foot-

print optimisation.

Investments in modernisation and expansion

of capacity took place in Groenlo and are

expected to be finalised in 2016. This will

concentrate activities from slaughter up to

and including the consumer packing for Good

Farming Star and organic pork meat in Groenlo.

Investments in expansion of capacity took place

at the pork sites Landshut and Vilshofen. In 2015

the co-shareholders Erzeugergemeinschaften-

Beteiligungs GmbH (EGB) and Erzeuger-

gemeinschaften Südostbayern eG (EGS) increased

their shareholdings to 49% in Landshut and

Vilshofen respectively. Both EGS and EGB

participate in the investments in Landshut and

Vilshofen in accordance with their new share in

the companies.

Investments have been made for transformation of

the current mixed (beef, pork) site Waldkraiburg

to a dedicated beef site. Vion Food ended pork

slaughtering at this site in the first quarter of 2016.

In addition, capacity is being expanded to absorb

the volume of Pfarrkirchen after the closing of

this site in January 2016. After the expected

finalisation of the investment in Waldkraiburg

in the first half year of 2016, it will be one of

Europe’s most modern and high-performance beef

slaughtering and deboning facilities.

In 2015 Vion Food took over the minority interests

of 25% in Salomon Hitburger GmbH, a sound

business with good margins that is complementary

to the fresh meat business. In addition to this Vion

Food acquired the minority interests of 30% of

Vion SA held by local management. Accordingly,

these shareholdings of Vion Food increased to

100%.

Management review

2015 Was an important year for Vion Food: one in which further major steps have been taken in strengthening our management, optimising the organisational structure and carrying out the strategic plans which were initiated in 2014. All of this was done against the backdrop of a difficult market. In 2015 the market conditions were tough putting pressure on the entire sector, in particular the pork meat industry. Despite this setback Vion Food held on to further development and implementation of the strategic plans focused on the main pillars: footprint, valorisation, supply chain, quality and innovation.


In 2015 the further integration of

FVZ Convenience GmbH into Food Service

continued. End of the year a major investment

in its production site in Holzwickede started.

OPERATIONAL IMPROVEMENTS BY VALORISATION AND SUPPLY CHAIN

Vion Food took further steps on valorisation.

Valorisation enables further optimisation of the

economic value of the animals processed by Vion

Food and a better alignment of product offerings

with global demand in markets open for Vion

Food, such as China, North America, Japan, Korea

and Australia. The positive impact of optimising

valorisation is already visible in The Netherlands.

In 2014 a centralised supply chain organisation

has been created in order to achieve economies

of scale and efficiencies across the divisions. It has

focused on all procurement, apart from livestock

and fresh meat, and on optimisation of the logis-

tics and distribution networks. Since its inception,

major savings and efficiency improvements have

been realised in many areas. As Vion Food mo-

ves forward into the next phase of entrenching

the divisional organisation, and in order to give

the divisions even more ways of improving their

performance and results, Vion Food has decided to

bring these activities back to the divisions. This is

currently being implemented.

GOVERNANCE AND ORGANISATIONAL OPTIMISATION

Internally, 2015 was the first full year of managing

Vion Food based on a divisional structure with

three divisions – Pork, Beef and Food Service –

managed by dedicated management teams. This

structure has contributed to further focus on the

direction of Vion Food, improving collaboration

and utilisation of synergies.

Vion Food introduced an Executive Committee to

support the Management Board in achieving the

objectives of the Company and implementing the

strategic objectives set out in the strategy and

business plan. The Executive Committee

currently consists of the members of the

Management Board (CEO and CFO), the Chief

Operating Officers (COOs) of the three divisions

and the Group HR Director.

In the second half of 2015, Vion Food’s corporate

governance has been reviewed and various items

have been updated (e.g. rules of procedure for the

Management Board and the Supervisory Board).

Starting in 2016 the Company will comply with the

Dutch Corporate Governance Code.

QUALITY AND INNOVATION

Vion Food operates according to demanding

quality requirements for all of its production

locations. Food safety, animal welfare, product

integrity, worker safety and transparency are very

important elements of these requirements. Vion

Food takes full responsibility concerning these

issues. Next to this independent government

veterinarians continuously monitor slaughter-

houses, and random samples are taken for testing

in third-party laboratories for food-safety hazards,

antibiotics and other unwanted substances.

As of October 2014, Vion Food has started to

publish inspection results and audit reports online

on the website www.vionfood.nl. The quality

reports provide a clear picture of the quantity and

quality of the meat processed by Vion Food, the

results of government inspections and third-party

audits, and the conditions under which the meat is

processed.

For Vion Food, innovation is an important part of

the business. In addition to the continuous

monitoring of quality, a lot of attention is paid to

innovation. The R&D activities focus on

optimisation and innovation throughout the

supply chain, ranging from genetics to the

selection of technical parts for the various markets

and food and meat quality, as well as other specific

product properties and reduction of the use of


antibiotics in the animal supply chains. An

international project on the control of boar taint

was finalised and resulted in several scientific

publications that show the high effectiveness of

Vion Food’s control measures to prevent boar taint

in pork.

NEW CREDIT FACILITY

In June 2015 Vion Food successfully signed new

facility agreements of € 100 million with ABN

AMRO Commercial Finance and NIBC, specially

for financing of working capital. In July 2015 this

syndicate has been expanded to include Bank of

America Merrill Lynch, expressing its confidence

in Vion Food’s future, and increasing the facility

amount to € 125 million. The new facility has a

two year term expiring 24 June 2017.

FINANCIAL REVIEW

Over 2015, both net turnover and total operating

costs decreased, resulting in an operating result of

€ 31 million, an increase of € 11 million compared

to last year. Net sales and margins were negatively

impacted by difficult market conditions, putting

pressure on the entire business, in particular the

pork meat sector. Factors that positively impacted

the operating result were the further optimised

M A N A G E M E N T R E V I E W

Results for 2015

(in millions of euros)

PROFIT AND LOSS ACCOUNT 2015 2014

Sales volume (in tons of kg) 2,104,665 2,125,076

Net turnover 4,571 4,992

Total income 4,613 5,010

Total operating costs 4,582 4,991

Operating result 31 20

Normalised EBITDA from ongoing operations 45 58

Financial income and expenses -6 -22

Taxes -0 -13

Share of third parties in result -2 -5

Net result 22 -21

network of production locations and efficiency

improvements in the logistics, distribution network

and lower (non) product related spend categories

leading to lower operating costs.

Normalised earnings before interest, taxes,

depreciation and amortization (EBITDA) from

ongoing operations decreased to € 45 million

(2014: € 58 million). However, the operating result

increased mainly due to € 18 million lower restruc-

turing expenses and € 6 million lower impairment

expenses.

In 2015 Vion Food’s net result was positive again

(€ 22 million, 2014: € 21 million negative), mainly

caused by improved operating result, lower net

financial expenses and lower tax charges.

The net financial expenses are lower due to an

exceptionally high interest charge related to pen-

sions in 2014, a lower amount of financing needed

in 2015 and a lower interest margin under the new

financing agreement (2015: € 6 million, 2014: € 22

million). The tax charges decreased by € 13 million

mainly due to non-taxable income and incidental

tax charges in 2014.

In addition, the share of third parties in the result

decreased by € 3 million (2015: € 2 million, 2014:

€ 5 million) due to Vion Food’s acquisition of 25%

minority shares in Salomon Hitburger GmbH and

of 30% in Vion SA in 2015.


> 4 children aged 20, 18, 16 and 14> 18-year-old son helps out 8 hours a week> 3 hours out cycling with 10 cycling buddies> 5,200 km of bicycle racing per year> Drunk 2 bottles of dark

beer after cycling

ROB COOPMANS

GOOD FARMING STARSUPPLIER

FUNCTION

LOCATION

TODAY

Ysselsteyn (NL)

> 400 sows and 3,100 slaughter pigs tended to> 260 piglets born> 205 Good Farming Star pigs delivered> 23 years as a farmer on this site

SHIFT

6:00 - 19:30


Next to these, provisions for reorganisation and

restructuring costs (2015: € 19 million, 2014:

€ 38 million) are part of the total provisions.

These provisions decreased amongst others by

€ 17 million caused by releases of divestments

provisions formed in previous years.

At the end of 2015, an amount of € 46 million

(2014: € 100 million) was drawn under the € 125

million (2014: € 100 million) facility. With gross

debt of € 71 million and cash and cash equivalents

of € 123 million, net debt was negative € 52 million

(2014: € 87 million negative). This means that Vion

Food is de-facto debt free. The solvency remained

strong in 2015 (44.1%, 2014: 40.5%).

The cash flow from operating activities

amounted to € 34 million (2014: € 80 million).

The main reasons for the decrease are the lower

EBITDA performance (2015: € 46 million, 2014:


The intangible fixed assets increased to

€ 32 million (2014: € 9 million). This increase is due

to the capitalisation of goodwill relating to the

acquisitions of the minority shares of Salomon

Hitburger GmbH and of Vion SA in 2015. For both

acquisitions a payment schedule has been agreed,

which resulted in an increase of the long-term

liabilities by € 11 million. The tangible fixed assets

increased by 24 million to € 230 million mainly by

investments to expand and/or modernise several

sites for footprint optimisation.

The provisions consists mainly of provisions for

post-employment benefits (pension plans, pre-

pension and early retirements schemes) as well as

long-term benefits (jubilee and leave agreements)

(2015: € 120 million, 2014 € 123 million). The

pension plan liabilities apply fully to the defined

benefit pension schemes for employees and former

employees of the German group companies.

Cash flows


CASH FLOW STATEMENT 2015 2014

Net cash flow from operating activities 34 80

Net cash flow from investment activities -52 1,483

Net cash flow from financing activities -56 -1,508

Increase / (decrease) in cash and cash equivalents -75 54

Cash and cash equivalents at year-end 123 198

Financial position


BALANCE SHEET 2015 2014

Fixed assets 296 247

Current assets 649 733

Group equity 416 397

Provisions 141 165

Long term liabilities 24 11

Current liabilities 364 407

Balance sheet total 945 980

Net debt -52 -87

Solvency 44.1% 40.5%


€ 60 million) and the decrease in working capital

(2015: € 12 million, 2014: € 43 million).

In 2015, the main use of the cash flow from

operating activities included investments in

fixed assets mainly to further optimise the produc-

tion locations (€ 64 million) and a smaller amount

drawn under the current financing facility (€ 53

million). The cash and cash equivalents conse-

quently decreased by € 75 million to € 123 million.

In 2014 the cash flow from investment activities

(€ 1,483 million) and cash flow from financing

activities (€ 1,508 million negative) were highly

impacted by the sale of group companies and

consequently, the repayment of debts to financial

institutions.

DIVISIONS

PORK

Success of Good Farming Star

After five years of investment and development,

the more animal-friendly and more sustainable

production of pork achieved a breakthrough in the

past year. Vion Food succeeded in signing

contracts with The Netherlands’ most important

food retailers. The duration and nature of the

contracts provide a strong foundation for the

Good Farming Star market concept.

In addition to developing concepts, the Pork

division is striving to take its meat marketing

activities to the next level in various other ways

supported by optimised valorisation.

The Pork division consists of 16 production loca-

tions. Three slaughterhouses in The Netherlands

(Apeldoorn, Boxtel and Groenlo) and nine in Ger-

many (Altenburg, Crailsheim, Emstek, Landshut,

Perleberg, Riedlingen, Vilshofen, Waldkraiburg

and Zeven). In Boxtel and Groenlo, Pork operates

processing plants as well (Encebe Vleeswaren Box-

tel and Retail Groenlo). Besides these, the division

operates four separate deboning and processing

plants: two in The Netherlands (Scherpenzeel and

Valkenswaard) and two in Germany (Ahlen and

Holdorf). The Pork division head office is located

in Boxtel, The Netherlands. At the end of 2015 the

division had approximately 7,800 FTEs (including

flex workers). The Pork division processes approxi-

mately 303,000 pigs per week. The resulting meat

is supplied to national and international retailers,

food service clients and food processing compa-

nies.

Vion Farming

Vion Food works closely with its suppliers, which

include almost 50% of all pig farmers in The

Netherlands and 16% in Germany. Vion Farming is

the department of the Pork division which handles

pig procurement in The Netherlands. This

department also keeps the pig farmers informed

and regulates the quantity and quality of the

animals. Vion Farming’s employees in the field

form an important link between breeders

(producers of piglets) on the one hand and pig

farmers on the other, and they know exactly which

piglets meet the requirements of pig farmers at

home and abroad. Vion Farming helps pig farmers

to optimise the health of their animals. In addition,

Vion Farming controls the livestock flows and plans

transportation of the animals.

Market

At the division’s production sites, pork is processed

into products for domestic clients as well as export

customers in a.o. Europe, Asia and North

America. Basic raw materials are delivered to

industrial customers who process the pork into a

2015 2014

# Production 17 19

locations

# Slaugthered 15,744,000 15,752,000

heads

Sales volume 1,685,000 1,708,000

(in tons of kg)



# FTE 7,728 7,373

(flex workers included)


wide range of meat products, such as cold cuts,

meat snacks, smoked sausages, pizza toppings and

dried hams. Fresh pork is processed by Vion Food

into semi-finished and finished products for the

domestic and export retail markets.

Vion Food works with the following market

concepts: Good Farming Star, Good Farming

Organic, Good Farming Welfare and Good Farming

Global. These concepts allow Vion Food to address

different needs in different countries.

Good Farming Star, launched in 2010 and aimed at

Dutch retailers, is characterised by its extra

attention for animal welfare and has received a

one-star rating from the Dutch Society for the

Protection of Animals (‘Dierenbescherming’).

Furthermore, the concept complies with

sustainability requirements. One important step in

2015 was the agreement Vion Food reached with

the main retailers in The Netherlands at the end of

the year to continue supplying Good Farming Star

meat. For the largest supermarket organisation,

this is a multi-year cooperation agreement

concerning the purchase of fresh pork and

pork-based ingredients for the production of meat

products. The Good Farming Organic brand ’De

Groene Weg’ has held a strong position in both the

Dutch and the European markets for organic beef

and pork for some years. The organic meat market

is growing year on year and De Groene Weg is well

positioned to benefit from this growth. Good

Farming Organic is working closely with its

suppliers to further expand the supply chain.

Continuing price pressure

Sustained overproduction of pigs meant that 2015

was characterised by continuing price pressure and

challenging conditions for the sector. This even

led to demonstrations by pig farmers in countries

including France, Belgium and The Netherlands.

The year started with the relatively low price of

€ 1.27 per kg. The price began to rise in February,

reaching the level of € 1.46 per kg in April.

However, it subsequently declined due to closure

of the borders in Russia and Ukraine and falling

consumption in the EU. Global exports were also

under pressure due to the strong dollar.

Nevertheless, the price peaked at € 1.48 per kg in

June. It remained at this level for a week before

dropping back to € 1.33 per kg later in the

summer. Apart from a brief respite in September,

the price went into a steady decline in the second

half of 2015 resulting in a low of € 1.19 in

November. In addition to a weak European

market, the exporting slaughterhouses were also

confronted with high levels of supply globally and

tough competition on the Asian market. The

average price level in 2015 was € 1.34 which is

11.4% lower than in 2014.

Restructuring

Over the course of 2015, two production locations

(Bad Neustadt, February 2015 and Straubing,

October 2015 ) were closed in southern

Germany. Nearly all production from those entities

was moved to other locations to retain market

share. At the same time, investments have been

made at many sites in both The Netherlands and

Germany. For instance, the slaughtering and

processing activities at Landshut have been greatly

expanded and equipment at Vilshofen has been

modernised to keep its production process at a high

level. Capacity at Groenlo will be increased in 2016.

End of 2015 the Pork division consists of seven-

teen production sites: five in The Netherlands

(Apeldoorn, Boxtel, Groenlo, Scherpenzeel and

Valkenswaard) and twelve in Germany (Ahlen,

Altenburg, Bamberg, Crailsheim, Emstek, Holdorf,

Landshut, Perleberg, Riedlingen, Vilshofen, Wald-

kraiburg and Zeven).

Operational improvement

In 2015 Vion introduced valorisation, a process that

optimises the pig farming chain up to and inclu-

ding the customers. The aim of valorisation is to

achieve meat processing efficiency and profitability

by gaining maximum benefit from all aspects of

the animals supplied while simultaneously meeting

the needs of the customers in the various

countries. The concept of valorisation was

developed and applied in 2015 and will be

combined with state-of-the-art systems for quality

control, full transparency and traceability.



> 2 children (18 and 15 years old)> 40 years of membership of the VFJ Lippborg Table Tennis Club> 3 km jogged every other day> 5000 one-cent coins collected> 1 meal cooked for family and friends each week

FELIX ZUBROWSKI

ENGINEERING MANAGER AND ENERGY OFFICER

FUNCTION

LOCATION

TODAY

Vion Food, Hilden (DE)

> 200 machines under his responsibility> 400 m of conveyor belts to maintain> 20 breakdowns repaired> 15 parts replaced

SHIFT

7:30 - 17:00


All production locations are certified in accordance

with one of the leading food safety standards (IFS

or BRC). In addition, thanks to the use of

innovative and patented QR-code technology, full

transparency is provided. Consumers have the

possibility to trace meat back to individual farms by

scanning a QR code on the packaging using their

mobile phone which links directly to a relevant

website for more information.

Reliable partners

Vion Food has a strong and a long-term partnership

with most of its suppliers. Vion Food collaborates

intensively with farmers, industry associations and

traders. Food safety is ensured through close

cooperation with professional and reliable partners,

whether for breeding, housing or transportation.

Vion Food as a trendsetter

In 2015 Vion Food maintained its leading market

position in its home markets. Regionality and

quality are major drivers for the beef sector,

especially in Germany. Vion Food fulfils its role as a

trendsetter with the launch of high-quality regional

products under the umbrella brand of Goldbeef.

One ongoing trend is dry-aged beef, which is now

even sold in supermarkets. Dry-aged beef is beef

that has been left to dry in a temperature-

controlled environment. This aging process enables

the meat to develop an intense flavour. Vion Food’s

investment in temperature-controlled storage

rooms opens up new market possibilities for

dry-aged beef.

Prices: seasonal pattern

Cattle prices follow a seasonal pattern with higher

prices in the spring and summer (due to the

reduced supply) and lower prices in the autumn

and winter (due to the increased supply).

The milk quotas were abolished at the end of the

first quarter of 2015. In response, dairy farmers

increased their milk production and hence retained

more cattle for themselves. This had a downward

effect on the number of dairy cows supplied to

slaughterhouses and led to significantly higher cow

prices in The Netherlands and Germany, especially


BEEF

Numerous developments

In 2015, Vion Food’s Beef division was confronted

with numerous developments, both internally and

externally. One major change was the ending of the

European Union milk quotas on 31 March. Further-

more, the Beef division is involved in a

restructuring programme to strengthen and mo-

dernise its manufacturing activities. A total of three

plants are to close as part of this programme, and

two of those closures were completed in 2015. In

2015, work also started on the construction of one

of Europe’s most modern and high-

performance beef slaughtering and deboning

facilities in Waldkraiburg.

Market leader in The Netherlands and Germany

Vion Food is a trendsetter and market leader for

beef in Germany and The Netherlands and holds a

leading position in Europe. Vion Food’s beef pro-

ducts are mainly marketed in the home markets of

The Netherlands and Germany as well as Southern

Europe (France, Greece, Italy and Spain). Thanks to

its skill and expertise combined with large-scale,

state-of-the-art production technology, Vion Food

is able to supply an extensive customer base with

large quantities of consistently high-quality beef.

Clients can choose from a wide portfolio of fresh

and frozen beef and beef-based products. Vion

Food offers excellent customer service and is a

reliable partner for the retail, food service and

processed meat industries.

2015 2014

# Production 12 14

locations

# Slaugthered 905,000 917,000

heads

Sales volume 431.000 470.000

(in tons of kg)



# FTE 3,222 3,571



in the first half of the year. The effects on the

individual Vion Food plants varied. The

slaughterhouse in Tilburg suffered the greatest

impact because dairy cows account for

approximately 90% of its volumes. At other plants

dairy cows account for between 35 and 65% of

volumes. There were 5% fewer milking cows

slaughtered than in 2014. Total number of

slaughterings decreased by 1%, so Vion Food

increased the numbers of the other categories by

3%.

Slaughterhouse restructuring

In order to further strengthen its market position,

Vion Food’s Beef division is in the midst of a

large-scale, multi-year restructuring programme.

The Company continued with its strategy of

creating an effective, efficient and future-proof

organisation in 2015. As a consequence, the plants

in Anklam (July 2015) and Frankfurt (August 2015)

were closed, and the plant in Pfarrkirchen is closed

in the first quarter of 2016. The remaining plants

are being modernised. Vion Food is investing

heavily in Waldkraiburg to create one of the most

high-tech and high-performance beef centres in

Europe.

The Beef division consists of nine slaughter-

houses: one in The Netherlands (Tilburg) and eight

in Germany (Altenburg, Bad Bramstedt, Bamberg,

Buchloe, Crailsheim, Furth im Wald, Pfarrkirchen

and Waldkraiburg). The slaughterhouses are all

strategically located to minimise the transit time

for the animals. In addition to its slaughterhouses,

Vion Food operates three deboning and processing

plants: one in The Netherlands (Enschede) and two

in Germany (Hilden and Großostheim).

FOOD SERVICE

Consistent market strategy

The approach of the Food Service division is

characterised by the pursuit of a consistent,

multi-year market strategy. The core of this

strategy is to achieve annual revenue growth and

to continually raise awareness of the two brands

Salomon FoodWorld and FVZ Convenience. In

2015, Food Service once again succeeded in

achieving revenue growth, notably at above the

rate of market growth which resulted in a larger

market share. Brand awareness has been increased

yet again thanks to a systematic focus on

positioning.

Gastronomy and impulse channels

Food Service serves two segments of the food

market: gastronomy and impulse channels. The

gastronomy segment comprises catering firms,

canteens, restaurants and hotels. These make

up the more traditional part of the food sector

which is largely mature and affected by the state

of the economy. The other segment, impulse

buys (snacks), comprises the ad hoc convenience,

travel, transport and leisure/entertainment outlets.

The impulse channel is young and offers a lot of

potential. A growing number of people are eating

outside of the home and buying food from

establishments such as petrol stations and

takeaway outlets.

Two brands: Salomon FoodWorld and

FVZ Convenience

Vion Food offers two food service brands: Salomon

FoodWorld and FVZ Convenience.

Salomon FoodWorld is positioned as an innovative

convenience company, focused on customer

impulses, successes and emotions. This is a large

brand in Germany and Austria, and was also

launched in The Netherlands in 2015, replacing

Food Service Nederland. Salomon FoodWorld

supplies products in three groups:

> Finger Food Hits (snacks from various countries)

> Hand Held Snacks (especially burgers)

> Centre-of-Plate (meat-based convenience

products)

FOOD SERVICE 2015 2014

# Production 2 2

locations

Sales volume 57,000 57,000

(in tons of kg)

Net turnover 226 228


# FTE 432 430



2015 was a dynamic year for FVZ Convenience.

At the end of 2014 Vion Food gained the majority

interest in FVZ Convenience by acquiring all the

shares from Westfleisch. This led to modernisation

of the strategy and development of new concepts.

FVZ Convenience is specialised in the manufacture

of convenience products. FVZ Convenience is

positioned as the modern traditionalist with the

promise “Simply do it…”. Customers can choose

from a range of lines comprising dozens of

products that are quick and easy to prepare.

Market share growth

The Food Service activities have demonstrated

continuous growth and outperformed the concer-

ning German market growth, that was estimated

at 1.5% in 2015. Key drivers behind this significant-

ly above-average growth are the success factors of

‘producer competence’, ‘marketing

competence’ and ‘purchasing power’ as a

fully-fledged member of the Vion Food Group.

‘Producer competence’ means that, since the

Company has full control over the formulations

and manufacturing process, it can tell customers

exactly what goes into the products and how they

are made. ‘Marketing competence’ expresses the

fact that Vion Food does not merely sell products

but also helps customers to prepare and sell them.

‘Purchasing power’ means that the division has

excellent suppliers and hence, as part of Vion

Food, has access to outstanding meat products.

In Germany Vion Food is market leader in the

division’s three segments with Salomon Food-

World’s Center-of-Plate (schnitzel and mince-

based products) with more than 35%, Finger

Food Hits (e.g. buffalo chicken wings and

appetisers) with more than 35% and Hand Held

Snacks (mainly hamburgers) with more than 60%

of the food service market (value). In addition,

with the brands FVZ Convenience and Salomon

FoodWorld, the Food Service division holds a

market-leading position in the Top 100 key

accounts with a share of more than 80%.

Salomon FoodWorld and FVZ Convenience are also

expanding internationally. In addition to Germany

and The Netherlands, both brands also sell their

products to customers in Austria, France and

Scandinavia.

Production locations

The Food Service division operates two production

plants: one in Großostheim for hamburger patties

and one in Holzwickede for schnitzel, Haxer and

minced beef and poultry products. In addition, the

division has long-term strategic alliances in Europe

as well as in Asia with external production

partners. In 2015, Vion Food invested an

appropriate amount in optimising its production

technology in a drive towards leaner, more

efficient and more effective manufacturing.

OUTLOOK FOR 2016

The Dutch and German pork industry is expected

to remain under pressure. These pork markets are

still in imbalance with respect to (over-) supply

and demand, and will continue to rely strongly on

exports. European consumption is predicted to be

slightly decreasing going forward.

Volatile cattle prices and slowly decreasing beef

consumption in The Netherlands and Germany are

expected.

The meat-based frozen food segment of the

out-of-home market in Germany is growing

steadily and, with its strong position in this

segment, Vion Food will benefit from this and

further improve its market share.

Despite the anticipated ongoing difficult market

conditions, Vion Food strives to maintain or

improve its results and market share next year.

This is based upon the results of previously

implemented footprint initiatives, realised cost

savings and the experience of the new

professionalised divisional structure. In addition,

Vion Food will continue to invest in restructuring

and improvements of its footprint, optimising

the margin through valorisation and further cost

reductions in the supply chain.



F.J.L.J. (Francis) Kint

1962, Belgian Nationality

Chairman of Management Board

and Executive Committee

Function

CEO since 1 September 2015

Former functions

CEO at UNIVEG, President Europe

at Fiskars Brands, Vice-President

North & Eastern Europe at

Chiquita Brands, Manager

Financial Planning at Sara Lee,

Consultant at Accenture

J.L.M. (Joost) Sliepenbeek

1963, Dutch Nationality

Member of Management Board

and Executive Committee

Function

CFO since 1 May 2015

Former functions

CFO of Van Gansewinkel, C1000/

Schuitema and HEMA. Previously

he also worked at Royal Ahold,

Gilde Investment Management,

KPMG Management Consulting

and De Vleeschmeesters.

F.H.A. (Frans) Stortelder


Member of Executive Committee

Function

COO Pork (COO) since 8 March 2015

Former functions

Business economist with lifetime

career in the international

meatbusiness, Sales and Marketing

Director at SturkoMeat, Managing

Director SturkoMeat Group, CEO of

Vion’s predecessor Dumeco,

Managing Director at Jutland Meat,

several consulting programs at

EMAPlus for a.o. Sara Lee Foods,

Groupe Smithfield.

COMPOSITION OF THE MANAGEMENT BOARD AND EXECUTIVE COMMITTEE

The Vion Food Management Board is comprised of Francis Kint (CEO)

and Joost Sliepenbeek (CFO). The Executive Committee further

includes Frans Stortelder (COO Pork), Bernd Stange (COO Beef), Bernd

Stark (COO Food Service) and Henk van den Bogaart (Group HR

Director).

BOXTEL, 7 APRIL 2016

Management Board

F.J.L.J. Kint, CEO

J.L.M. Sliepenbeek, CFO

PERSONAL DETAILS OF THE MEMBERS OF THE EXECUTIVE COMMITTEE

From left to right:

Frans Stortelder

Bernd Stange

Henk van den Bogaart

Francis Kint

Joost Sliepenbeek

Bernd Stark



B. (Bernd) Stange

1960, German Nationality


Function

COO Beef since 1 April 2014

Former functions

Joined Vion Food in 2000 and

worked in various roles:

Managing Director of the

Business Unit (BU) Fresh Meat

Germany and the BU Pork and

Beef (2013), BU Fresh Meat North

and BU Fresh Meat South (2006)

and A. Moksel (2000). Former

General Manager of Gausepohl

GmbH and Stange KG.

B. (Bernd) Stark

1958, German Nationality


Function

COO Food Service since

1 April 2014

Former functions

Joined Vion Food in 2005 and

worked in various roles:

Managing Director Salomon

FoodWorld (2011) and Salomon

Hitburger (2005). Former

Marketing Director Nestlé

Schöller and responsible for food

service Europe ice-cream and

frozen food and additionally for

the brand Mövenpick.

H.G.M. (Henk) van den Bogaart



Function

Group HR Director since

1 October 2015

Former functions

CHRO at Royal Wessanen,

Vice-President HR at Philips

Domestic Appliances & Personal

Care, Corporate HR Director at

Gist-brocades, HR Director at

Baxter Healthcare Inc., HR Officer

at Organon International.


> 112 recipe books collected> 158 km driven from home to work> 11 km run

BOY VERMAAS

BY-PRODUCT MANAGERFUNCTION

LOCATION

TODAY

Vion Food, Boxtel (NL)

> 88 different by-products sold> 74 telephone calls / e-mails to country offices> 60 containers of by-products sent to China this week

SHIFT

8:00 - 17:00


Corporate Social Responsibility (CSR) is embedded

throughout the organisation and is an important

part of Vion Food’s daily operations. There are five

core themes: agriculture, communities, environ-

ment, nutrition & health, and people. Vion Food

uses these themes to classify its CSR-related

activities. In line with these themes, Vion Food

actively contributes to social issues with respect to

public health, animal health, animal welfare and

the environment.

Corporate Social Responsibility

Vion Food steers developments by introducing continuous improvements and collaboration throughout the entire agri-food supply chain, and constantly seeks the right balance between people, planet and profit. The focus is on creating a better quality of life for people and animals. This means that Vion Food’s production processes are organised as efficiently as possible and that optimal use is made of all resources. These measures all help to create the smallest possible ecological footprint.

“We are an excellent partner in the sustainable development of agricultural supply chains.”

“We provide a large selection of safe, healthy and nutritious meat products that fit into a healthy lifestyle.”

“Our approach makes a substantial contributi-on to reducing the total ecological footprint of our organisation.”

“We strive to be a commendable, attractive and stimulating employer.”

“We contribute to the welfare of the communi-ties in which we operate.”


Collaboration with StarFarmers

2015 was the fifth consecutive year in which Vion

Food worked with the Good Farming Star concept

in the Dutch market. At the heart of this concept

is a ‘farm to fork’ chain featuring pig farmers who

take a more animal-friendly and sustainable

approach to farming. Good Farming Star is a

demand-driven and dynamic concept. It complies

with the one-star Beter Leven quality mark and

with the criteria of the “Varken van Morgen”

scheme. Over the past five years, Good Farming

Star has developed into a stable chain with 150

pig farmers. These pig farmers all supply to Vion

Food individually and since March 2015 have been

members of the StarFarmers suppliers’ association.

StarFarmers is aimed at strengthening the market

concept for all links in the chain, and hence also

for the pig farmers. The suppliers’ association was

established in 2015 and the Vion Food organisation

regularly consults with the association as a

discussion partner.

Sustainable Beef Production

Vion Food is an active member in the Platform Beef

Working Group’s sustainable agriculture initiative.

The European Beef Farm Sustainability Assessment

(FSA) was developed by the Platform Beef Working

Group in 2015. This FSA module is based on the

Sustainable Agricultural Initiative (SAI) Platform’s

Principles of Sustainable Beef Production launched

in 2013. The SAI Platform is the global food and

drink industry’s primary platform for driving

sustainable agriculture, and one of its key goals

is continuous improvement within sustainable

agriculture. It views sustainable beef production

as a journey and a pre-competitive process. It sees

benchmarking of beef assurance schemes against

the SAI European Beef Farm Sustainability

Assessment criteria as the first step to a

sustainability performance. Vion Food is a

member of the SAI Platform.

Vion Food is active throughout the entire supply chain, working closely with all links in the

production process. Vion Food firmly believes that an optimal connection between these links can

only be achieved based on professional collaboration with, and between, the various stakeholders.

There are solid, long-term relationships with all stakeholders within Vion Food’s divisions: Pork, Beef

and Food Service. These relationships are both on the supply side, with pig and cattle farmers, and

on the demand side, namely with processors and retailers. Vion Food wants to reduce the distance

between farmers and citizens and increase social acceptance.

AGRICULTURE


Sustainable Deployability:

new aspect of the HR policy in The Netherlands

It is Vion Food’s aim to employ high-quality people

with a healthy degree of diversity in the employee

pool. To attain this goal, Vion Food introduced the

concept of ‘Sustainable Deployability’ which was

launched as part of a sector project. It has been an

integral part of the HR policy since 2015.

Sustainable Deployability is aimed at improving

employee mobility and stimulating movement and

progression within the organisation. Vion Food

employees have the opportunity to develop within

the Company and advance to other roles. At the

same time, the Sustainable Deployability policy also

encourages them to consider roles outside of Vion

Food as a way of increasing employee turnover as

well as stimulating employees in their own personal

development.

This topic is discussed during appraisals, and em-

ployees also receive a budget for training courses

of their choice which they can use for their own

career development.

Setting employment standards for the German

meat industry

Vion Food has a strong and motivated workforce.

Part of this are also the employees of our third

party labor providers. Vion Food feels responsible

for the well-being of these employees and aims at

setting high industry standards for the

employment conditions of third party labor

workers.

Vion Food was one of the main drivers forming the

implementation of a minimum wage in the German

meat industry and also initialized the introduction

of a code of conduct for the meat industry

with regard to the working conditions and

accommodation for third party labor workers from

eastern European countries. This industry code

is meanwhile signed by all major players in the

industry.

In September 2015 Vion Food took part in the

discussions with the German Ministry of Economics

to introduce a Commitment of the Meat industry

for attractive employment conditions and was

among the first to sign this commitment.

Employees are paramount at Vion Food, because they are the Company’s most important asset. The

development of knowledge, skills and teamwork are key focus areas for Vion Food and employees

receive opportunities for personal development. Vion Food strives to create a pleasant, hygienic,

healthy and safe environment for its employees.

C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y

PEOPLE


Sustainable transport

Transport is an important activity for Vion Food

because the supply of animals and the delivery of

meat products around the world involves a lot of

transportation. The Supply Chain Department that

handles the procurement of all logistics services

and network optimisation activities took significant

measures in 2015 to improve the sustainability and

reduce the costs of transport.

The trailers that are used for the temperature-

controlled transportation of meat are being fitted

with electrical refrigeration systems rather than

systems based on an internal combustion engine.

The energy used for refrigeration comes from the

energy grid, meaning that it does not produce

additional greenhouse gases or CO2 emissions.

Another advantage of electrical refrigeration is a

reduction in noise disturbance.

Since July 2015 Vion Food has been transporting

products to Italy by rail, which enables the trailers to

carry 20% more meat. This has considerably reduced

the greenhouse gas emissions, firstly because rail

transport consumes less energy and secondly

because larger loads result in fewer transport

kilometres.

Packaging is another important aspect of

logistics at Vion Food, because the meat is shipped

in special reusable crates. The Logistics & Planning

Department arranges for the crates to be collected

from the customers and returned to the Vion Food

facilities. In 2015 a project was initiated, resulting

in the formation of a central department that will

handle the planning for all locations from April

2016 onwards in order to plan the crate transport

more efficiently. This will minimise the unnecessary

transportation of packaging materials and hence

significantly reduce transport activities and green-

house gas emissions.

Water purification

In addition to meat, a slaughterhouse also produces

wastewater, which is why the Vion Food

slaughterhouse in Boxtel had a purification system

that partly purified the wastewater. The effluent

from that system was then further purified in

a regular wastewater treatment plant. In 2015,

however, in collaboration with the water Company

Brabant Water, Vion Food built an advanced

purification system. This system purifies the water

to such an extent that the resulting water is suitable

for reuse in the slaughterhouse.

A by-product of water purification is sludge. The

system in Boxtel includes a fermenter which

converts the sludge into biogas. Vion Food uses the

resulting gas for the heating processes in the

slaughterhouse, which generates a substantial

energy saving. The system also reduces Vion Food’s

greenhouse gases emissions or CO2 footprint by

producing cleaner water and decreasing energy

consumption.

Vion Food strives to minimise its environmental impact. To this end, various aspects affecting the

environment are regularly identified and evaluated based on continuous improvement processes.

This includes use of water and energy, emission of greenhouse gases and also the production of

energy in the form of biofuels. The water treatment approach used by Vion Food produces purified,

reclaimed and recycled water that has the same quality as nonpotable water.

ENVIRONMENT


Reduction of salt in meat

Vion Food continuously strives to further increase

the nutritional value and health aspect of its meat

products. Meat contributes to a healthy diet and

is naturally rich in proteins, minerals and vitamins.

The main focus is on the reduction of salt (sodium)

and fat in fresh and processed meat products. In

2015 salt reduction was achieved in minced meat in

combination with a clean label strategy. In response

to customer wishes, the salt and fat content in a

number of cooked-meat products was reduced.

Based on a large research project carried out in

cooperation with Top Institute Food and Nutrition,

Vion Food is able to reduce fat by 20 to 25% in

various meat products (i.e. smoked sausage,

Berliner sausage or dry-cured sausage) without

negatively affecting the sensory quality of the

products.

Soup for the homeless

The HR Department of Vion Food’s Pork division

works with the ‘Samen voor Eindhoven’ (Together

for Eindhoven) organisation, which is a local

platform for bringing companies into contact with

charities in order to strengthen community ties.

Companies that are keen to follow a policy of

Corporate Community Involvement (CCI) roll up

their sleeves and do their bit for good causes. This is

one way in which companies can give shape to their

CCI objectives and make a practical contribution to

society as a whole.

‘Samen voor Eindhoven’ forms ‘matches’ between

companies and charities so that they can work

together on concrete projects. In 2015, the HR

Department of the Pork division was matched with

The Salvation Army to support a project for the

homeless. Twice a week, The Salvation Army drives

around Eindhoven with a so-called ‘soup van’ to

offer food and drink to the city’s homeless

population. Vion Food provides the fillings for the

sandwiches and also personnel for the soup van.

This is organised by the HR Department employees,

who form part of the team along with people from

The Salvation Army and other volunteer

organisations, such as hotels that provide the soup.

This helps to ease the burden on the homeless

community in Eindhoven and is a meaningful way

for the volunteers to give something back to the

community.

C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y

Every day, millions of people worldwide eat

meat that has been processed by Vion Food.

The Company is committed to providing all

those people with safe meat products and it

continuously invests to maintain – and, if ne-

cessary, expand – its knowledge with respect

to quality and food safety. Vion Food collects

information throughout the supply chain to

safeguard food safety. Vion Food also com-

plies with various internationally recognised

quality systems such as BRC Global Food Stan-

dard, IKB, QS, ISO 9001: 2000, HACCP, USDA

approved, TESCO approved and GlobalGAP.

Vion Food’s activities contribute to the

economic and social development of local

communities where the Company is based or

operates. Employees are actively encouraged

to become involved in the local community.

In the case of Vion Food’s operations causing

any inconvenience to local communities, the

Company looks for appropriate solutions in

close consultation with those concerned.

NUTRITION & HEALTH COMMUNITIES


> 60 minutes worked in the garden per week > 14 years in a serious relationship > 1 holiday booked (to the Netherlands for the 4th time)

HEIKE NOWOTSCH

PRODUCT DEVELOPERFUNCTION

LOCATION

TODAY

Salomon Hitburger, Großostheim (DE)

> 2 new schnitzel coatings tested > 3 vegetarian finger food concepts developed

SHIFT

8:00 - 17:00


MANAGEMENT BOARD

Tasks and responsibility

The Management Board is responsible for Vion

Food’s strategy, its portfolio policy, the deployment

of people and resources, the risk management

system and the operating results. The

Management Board is accountable to the General

Meeting of Shareholders. The Management Board

makes decisions based on an absolute majority.

The Supervisory Board oversees Management

Board policy. To this end, the Management Board

provides all information to the Supervisory Board

that it needs for the proper performance of its

duties. Important Management Board decisions are

subject to the approval of the Supervisory Board.

The Management Board has laid down rules

regarding its composition and performance in rules

of procedure that can be found on the Company’s

website.

Appointment and conflict of interests

The Management Board members are appointed

by the General Meeting of Shareholders after the

prior binding opinion of the Supervisory Board has

been reached. The General Meeting of Share-

holders may only ignore the binding opinion of

the Supervisory Board with the consent of at least

two-thirds of the votes cast, which in turn

represents at least half of the issued capital. The

Management Board members are appointed for an

indefinite period.

Vion Food strives to achieve a reasonable gender

balance on the Management Board, with neither

the proportion of women nor that of men falling

below a minimum of 30%. While this goal is taken

into account, Vion Food’s principle is that the most

suitable candidate for the vacancy will be

appointed. After careful consideration of all

relevant selection criteria, a woman has not yet

been appointed to the Management Board. The

next time a vacancy arises the search criteria will

emphasise that the candidates should preferably

be female.

In the event of a conflict of interests with regard

to a particular topic, the Management Board

member in question may not participate in

discussions or decision-making on that topic.

Corporate governance

Vion Holding N.V. is a public limited liability company under Dutch law with its registered office in Best, The Netherlands. Vion Food is exempted from applying the Dutch regime for large companies, the so-called large company regime (structuurregime), because Vion Food is an international holding company. Vion Food has a two-tier board. The Management Board is responsible for managing the Company, while the Supervisory Board oversees the policy set by the Management Board and the general affairs of the Company. The Management Board is supported by the Executive Committee. Vion Food’s corporate governance consists of rules based on Dutch legislation, its articles of association, the Dutch Corporate Governance Code (the ‘Code’), and Vion Food’s own Code of Conduct.


Remuneration

The Supervisory Board determines the

remuneration of the Management Board and the

other employment terms for the Management

Board members within the general remuneration

policy adopted by the General Meeting of Share-

holders.

EXECUTIVE COMMITTEE

The Management Board is supported by the

Executive Committee in achieving the objectives of

the Company and implementing the strategic

objectives set out in the strategy and business plan.

In addition to the Management Board members,

the other members of the Executive Committee

include the Chief Operating Officers (COOs) of

the Pork, Beef, and Food Service divisions and any

other by the Management Board appointed key

officers. The Management Board is ultimately

responsible for the actions and decisions taken

within the Executive Committee and the overall

management of Vion Food.

SUPERVISORY BOARD

Tasks

The Supervisory Board oversees the policies set by

the Management Board and the general affairs

of the Company, and provides the Management

Board with advice and assistance. In the

performance of its duties, the Supervisory Board

focuses on the interests of the Company and its

business. Important Management Board decisions

are subject to the prior approval of the Supervisory

Board. Important decisions are those that relate to

how Vion Food is structured and the nature and

scale of business operations and decisions affecting

the capital structure of the Company.

The Supervisory Board makes decisions based on

an absolute majority. The Supervisory Board may

only take valid decisions when at least the majority

of the Supervisory Board members in office are

present or represented. The Supervisory Board may

only take decisions outside its meetings, provided

that all Supervisory Board members have expressed

themselves in favour of the proposal concerned.

The Supervisory Board has laid down rules

regarding its composition and performance in rules


website.

Independence

The Supervisory Board strives to achieve that the

majority of its members are independent in the

sense of best practice provision III.2.2 of the Code.

The section on the Corporate Governance Code

on page 36 includes information on the

independence of members of the Supervisory

Board.

Appointment

The Supervisory Board members are appointed for

a period of four years by the General Meeting of

Shareholders after the prior binding opinion of the

Supervisory Board has been reached.

Reappointment is possible for a maximum of two

terms of four years each. The General Meeting of

Shareholders may only disregard the binding

opinion of the Supervisory Board with the consent

of at least two-thirds of the votes cast, which in

turn represents at least half of the issued capital.

The General Meeting of Shareholders may grant a

fixed remuneration to Supervisory Board members.

Expenses will be reimbursed.

The Company strives to achieve a reasonable

gender balance on the Supervisory Board, with

neither the proportion of women nor that of men

falling below a minimum of 30%. The composition

of the Supervisory Board is established using

carefully defined profiles and competencies. Vion

Food is in this respect pleased that as of 1 October

2015 Marieke Bax has been appointed as

member of the Supervisory Board. As a result of

this appointment one out of seven members is at

this moment a woman. The next time a vacancy

arises the search criteria will emphasise that the

candidates should preferably be female.

The Supervisory Board has appointed an Audit

Committee and a Remuneration, Selection and


Appointment Committee from among its

members. The purpose of both committees is solely

to advise the Supervisory Board and thus these

committees will not take on the responsibilities of

the Supervisory Board.

Audit Committee

The Audit Committee supports the Supervisory

Board with respect to oversight. In this context, it

assesses in particular the financial reporting

process, the system of internal control and

management of (financial) risks, the audit process,

and the process that Vion Food uses to comply

with laws and regulations and with its own Code

of Conduct. The Audit Committee has laid down

rules on its composition and performance in rules


website.

Remuneration, Selection and

Appointment Committee

The Remuneration, Selection and Appointment

Committee advises the Supervisory Board on the

selection, appointment and remuneration of

the Company’s Management Board members.

The Remuneration, Selection and Appointment

Committee has laid down rules on its composition

and performance in rules of procedure that can be

found on the Company’s website.

GENERAL MEETING OF SHAREHOLDERS

General

The General Meeting of Shareholders is held at

least once a year with the objective of adopting

the annual accounts. The General Meeting of

Shareholders is also held as often as the

Management Board or the Supervisory Board

deems necessary. Shareholders are entitled to ask

the Management Board or the Supervisory Board

to convene a General Meeting of Shareholders

provided they represent at least 10% of the issued

capital. In convening a General Meeting of

Shareholders, the topics to be discussed will be

reported.

Each shareholder is entitled to attend the

General Meeting of Shareholders and to speak

and to exercise voting rights. The Chairman of the

General Meeting of Shareholders is appointed by

the Supervisory Board.

The General Meeting of Shareholders shall take

decisions by an absolute majority, except when

stipulated in the law or articles of association that

a larger majority of votes is required for the

specific decision. The articles of association

stipulate that an amendment to the articles of

association or the dissolution of the Company

requires a two-thirds majority which in turn

represents at least two-third of the issued capital

in the event the initiative to do so was taken by

the General Meeting of Shareholders and is not

supported by the Management Board or the

Supervisory Board.

Important Management Board decisions are

subject to the prior approval of the General

Meeting of Shareholders. Important decisions are

those that relate to how Vion Food is structured

and the nature and scale of business operations,

and decisions affecting the capital structure of the

Company.

Stichting Administratiekantoor SBT

Stichting Administratiekantoor SBT (‘SBT’) is the

sole shareholder of the Company. SBT has issued

depositary receipts in bearer form for its shares in

the Company. The depositary receipts have been

issued without cooperation of the Company. All

depositary receipts are held by Noordbrabantse

Christelijke Boerenbond, Rooms-Katholieke

Vereniging van Boeren en Tuinders –

Ontwikkeling (‘NCB-Ontwikkeling’). The Board of

SBT consists of five members. According to the

articles of association of SBT three out of five

board members are appointed by

NCB-Ontwikkeling. The other two board

members are also appointed by NCB-Ontwikkeling

as holder of all depositary receipts. At this moment

one board member of SBT is also member of the

board of NCB-Ontwikkeling. NCB-Ontwikkeling is

C O R P O R A T E G O V E R N A N C E


related to Zuidelijke Land- en Tuinbouworganisatie

(‘ZLTO’), mainly because the board of

NCB-Ontwikkeling consists of the same members as

the board of ZLTO and the members of

NCB-Ontwikkeling are also member of ZLTO.

Furthermore, the daily management of both

NCB-Ontwikkeling and ZLTO is in the hands of the

same director, who is also a board member of SBT.

ZLTO is an association for entrepreneurs working

in agricultural sectors and has approximately

15,000 members in Noord Brabant, Zeeland and

the southern part of Gelderland. NCB-Ontwikke-

ling acts as the investment fund of ZLTO.

AUDIT OF THE ANNUAL ACCOUNTS

Every year the Management Board draws up

annual accounts and an annual report. The annual

accounts are approved by signature of both the

Management Board and the Supervisory Board and

are presented to the General Meeting of

Shareholders for adoption. Vion Food engages

an auditor for the annual accounts. The General

Meeting of Shareholders is primarily responsible

for awarding this engagement.

The General Meeting of Shareholders may

completely or partially release the Management

Board from all liability for its management and the

Supervisory Board from liability for its oversight.

REGISTERED OFFICE AND HEADQUARTERS

The Company has its registered office in Best. Vion

Food’s headquarters are located in Boxtel.

CORPORATE GOVERNANCE CODE

Because Vion Food is not listed on a stock

exchange, the Code does not apply to Vion Food.

Nevertheless, Vion Food voluntarily applies the

Code as of 1 January 2016, while deviating from

the Code’s provisions in a number of instances.

Generally speaking, this is the case where the

provisions are not compatible with its legal

structure and the nature of its business or are

specifically written for listed companies with a

widespread ownership. Vion Food strives to report

on the application of the Code for the first time in

its 2016 Annual Report. Vion Food will in any event

not (fully) comply with best practice provisions

II.1.1 and III.2.1 as well as principle IV.2 of the Code

for the reasons set out below.

Provision II.1.1

(appointment of the Management Board)

Best practice provision II.1.1 of the Code states that

a member of the Management Board is

appointed for a period of a maximum of four

years. The Management Board members of Vion

Food are appointed for an indefinite period given

the importance of a long-term commitment of the

Management Board members to the Company.

Provision III.2.1

(independence of the Supervisory Board)

Best practice provision III.2.1 of the Code states

that all Supervisory Board members, with the

exception of one person, must be independent in

the sense of best practice provision III.2.2 of the

Code. More than one member of the Company’s

Supervisory Board at present can be considered not

independent in this sense.

Best practice provision III.2.2 specifies that a

member of the Supervisory Board shall not be

deemed independent if he or she is a member of

the board of a legal entity which holds at least

10% of the shares in the Company. Currently, two

members of the Supervisory Board (Hans Huijbers

and Toon van Hoof) are members of the board

of NCB-Ontwikkeling, which holds all depositary

receipts for the shares in Vion Food. As a

consequence Hans Huijbers and Toon van Hoof

may not be deemed independent in the sense of

the Code. This reflects the difference between

a listed company with a widespread ownership

versus the situation at Vion Food with only one

shareholder.



deemed independent if he or she has been a


member of the Management Board in the five

years prior to the appointment. Tom Heidman

acted as interim CEO of the Company in the period

from 26 January up to and including August 2015

and therefore could be viewed as a non-indepen-

dent. Nevertheless he has been reappointed as

member of the Supervisory Board given the

interim nature of his term as member of the

Management Board and his important

contribution to the Supervisory Board.



deemed independent if he or she has had an

important business relationship with the company

in the year prior to the appointment. This includes

the case where the Supervisory Board member is

a Management Board member of any bank with

which the company has a lasting and significant

relationship. In the year prior to his appointment

Sipko Schat has been a member of the

Management Board of Rabobank with which Vion

Food had a significant relationship at the moment

of his appointment. Sipko Schat could therefore

be viewed as not independent. Vion Food believes,

however, that Sipko Schat is a highly valuable

supervisory director, who offers considerable

added value in terms of his knowledge and

experience. In addition, Sipko Schat is no longer

a Management Board member (or employee) of

Rabobank and the banking relationship of the

Company with Rabobank ended in 2015.

Principle IV.2 (depositary receipts for shares)

Principle IV.2 and the related best practice

provisions cover depositary receipts for shares.

This principle is specifically written for listed

companies with a widespread ownership and

depositary receipts that have been issued with

cooperation of the company. In the case of Vion

Food the depositary receipts have been issued

without cooperation of the Company and are held

by one owner. As a consequence, the Company

deems the principle and the related best practice

provisions not applicable casu quo leaves it to

shareholders and holders of depositary receipts to

decide whether they will apply this provision.

C O R P O R A T E G O V E R N A N C E


> 1 year married> 6,368 km travelled for a holiday in Australia> 45 minutes of sport> 35 Gundam models and action figures collected

ANDY LAU

SALES SUPPORT MANAGERFUNCTION

LOCATION

TODAY

Vion Food, Singapore (SG)

> 3 different products delivered> 25 calls made> 375 tons sent to Thailand> 162 tons sent to the Philippines

SHIFT

8:00 - 17:00


RISK APPETITE

Vion Food wants to take a prudent approach to

risk. Product quality and safety, worker safety and

compliance with laws and regulations are the

highest priorities. This means that reducing risks

related to food and worker safety to reasonably

practicable levels and meeting the legal

obligations will take priority over all other business

objectives.

Strategic: Vion Food will pursue strategies in order

to:

(i) lower the costs;

(ii) improve the valorisation of animals; and

(iii) gradually shift the product portfolio towards

higher added-value products.

The Company accepts the risk inherent in these

strategies.

Operational: the highest priority is managing

product quality and safety as well as worker safety.

Procedures are in place which are monitored and

audited by internal and external parties.

Financial and reporting: within respect to financial

risks, Vion Food has a prudent financing strategy,

including a balanced combination of self-insurance

and commercial insurance coverage.

Compliance: the objective is to comply with

applicable laws and regulations everywhere the

Company does business.

RISK MANAGEMENT

In order to facilitate and coordinate risk

management and to oversee compliance with

relevant laws, regulations and policies, Vion Food

has a risk and compliance committee in place.

This committee is chaired by the CFO, who is

assisted by specialists in different risk areas. The

Risk and Compliance Committee has the following

responsibilities:

1. To help the Executive Committee to set the

tone, develop a risk-conscious culture and

promote open discussion regarding risks such

that people at all levels manage key risks in

accordance with the Company’s risk appetite

and strategy.

2. To provide input to the Executive Committee

regarding risk appetite and strategy and to

assist the Executive Committee in determining

and communicating the Company’s risk appetite

and strategy.

3. To monitor the Company’s risk profile: its

ongoing and potential exposure to risks of

various types.

4. To oversee and facilitate the Company’s en-

terprise risk assessment and risk management

activities to provide a consistent approach to

identifying, mitigating and monitoring key

business risks throughout Vion Food.

5. To ensure that adequate internal control over

financial reporting is established and

Risk management, compliance and internal control

Risk management is an important part of Vion Food’s strategy. The undesirable consequences of risks must be restricted. At the same time, Vion Food wants to take advantage of opportunities in the markets in which it is active. Vion Food’s system of risk management and internal control is based on the COSO 2013 model.


maintained. For this purpose Vion Food has

redesigned the Vion Food Financial Control

Framework. Based on this control

framework self-assessments are organised,

monitored and reported upon on a quarterly

basis.

6. To oversee the Company’s compliance efforts

with respect to relevant laws, regulations and

policies including, but not limited to, a quarterly

internal certification process.

Although Vion Food considers the management

of risks to be an important responsibility, it knows

that there are limitations for each form of risk

management and internal control. This means

that the management systems and procedures

cannot prevent specific inaccuracies, errors, fraud

or non-compliance with regulations in all cases.

KEY RISK CATEGORIES

Strategic

1. Market volatility risk

Vion Food operates in markets that are

characterised by fierce competition and price

volatility. The prices of raw materials and

agricultural products fluctuate and the purchase

costs for pigs and cattle are volatile as are sales

prices. This can lead to significant and unwanted

fluctuation in Vion Food’s financial results.

Managing market volatility risks

By distributing activities across different

geographical markets and channels, Vion Food

mitigates the specific market threats to some

extent. This distribution allows Vion Food to

exploit opportunities in various markets and

channels. Furthermore the Company aims to

reduce the impact of the market volatility by

agreeing into fixed-term purchasing and sales

contracts for a part of its business.

Operational

2. Food safety and quality risk

Wholesome and safe food is one of Vion Food’s

top priorities. In view of the nature of the

products, it goes without saying that Vion Food

stipulates high standards for food quality and food

safety. A quality problem, or even a change in the

quality perception of consumers or governments,

could have enormous consequences for the

Company’s reputation and market position. Clients

and governments are making increasingly

stringent quality demands of food manufacturers.

Managing food safety and quality risks

Food safety and quality are part of the Codes of

Practice at all production sites. In order to manage

its own processes such that customer satisfaction

and operational excellence are achieved, all Vion

Food production sites are ISO 9001 certified.

Besides the application of its own quality standards

within its operations, all the Vion Food facilities

operate according to at least one of the quality

schemes as recognised by the Global Food Safety

Initiative (GFSI), such as IFS, BRC and EFSIS.

3. Animal welfare and health risk

Wholesome and safe animal products can only be

derived from healthy livestock. There is a strong

RISK CATEGORY RISK

Strategic 1. Market volatility

Operational 2. Food safety and quality

3. Animal welfare and health

4. Health, safety and environment

5. Information management

6. Human capital

Financial 7. Financing

Compliance 8. Non-compliance


correlation between the welfare and health of

livestock, and in addition Vion Food also values

the integrity of animals. A large-scale outbreak

of animal disease could have significant

consequences for the continuity of supply to

the Company’s customers.

Managing animal welfare and health risks

Handling of livestock within the food supply chain

is integrated in the quality schemes. This implies

that humane handling of animals is

demonstrated at farm level, during transport and

within the slaughterhouses. Intermediaries and

hauliers in the supply chain also have to adopt

these standards. At all Vion Food’s slaughter

facilities, several animal welfare officers are

present who monitor the handling of animals

to ensure welfare standards are met.

4. Health, safety and environment risk

Risks in production processes can adversely affect

the results. These risks arise from areas such as

personal health and safety, process safety and

product safety. Unlikely scenarios can involve

major incidents with a high impact on the

Company’s internal organisation, causing business

continuity risks and reputational damage. Vion

Food has an active commitment to Health, Safety

and the Environment (HSE) for all its employees.

Managing health, safety and environment risks

In order to achieve these goals, Vion Food applies

a systematic approach to HSE management which

is designed to:

> Provide a framework for the setting of HSE

goals and performance objectives, and the use

of an effective management system;

> Monitor, evaluate and continually improve

the Company’s HSE performance through the

definition of operational standards, training,

assessments and audits;

> Educate employees, customers, contractors

and business partners on the safe and

environmentally responsible use of the

Company’s products, and how their actions

can influence HSE performance.

5. Information management risk

Vion Food’s longer-term information technology

strategy is aimed at converging its IT landscape

into fewer ERP systems and other critical

applications. The amount of digital exchanges of

business transactions with customers, suppliers

and other stakeholders is increasing. Non-

availability of critical IT systems or unauthorised

access, whether through cybercrime or other

events, can have a direct effect on the

production processes, the competitive position and

the reputation of the Company. The availability of

information at Vion Food is particularly

significant for the financial processes and for

production control. Some of the Manufacturing

Execution Systems (‘MES systems’) that are

currently used by Vion Food are outdated. This

poses a production continuity risk.

Managing information management risks

Two years ago, Vion Food initiated a programme

to replace outdated systems and to increase the

overall level of information management services.

Good progress has been made in 2015.

Additionally, an IT control framework has been

designed which will form the basis for

implementing and monitoring additional

measures in 2016.

6. Human capital risk

Having the right people, with the right capabili-

ties, experience and mindset can, to a large extent,

determine the success of the organisation.

Managing human capital risks

“Inspiring people to be best performers” is Vion

Food’s mission as an employer, in order to keep

people motivated so that they make a meaning-

ful contribution to the Company’s success. In this

respect it is important to have the right, suitably

qualified people in the right job at the right time.

It is Vion Food’s ambition to achieve this, both

qualitatively and quantitatively.

From an individual angle Vion Food’s aim is to

accommodate people in their careers – to offer the

R I S K M A N A G E M E N T , C O M P L I A N C E A N D C O N T R O L


kinds of roles that employees of today would like

to work in. Important elements in this are: own

sense of responsibility, freedom to act, fun and

learning.

In order to inspire and support best performers

who have ambitions to work in leadership

positions in Vion Food’s market, the Company has

several HR systems and programmes in place or in

development.

Financial

7. Financing risk

To carry out its operations, Vion Food is partly

dependent on external financing. The potential

for further inability to pass on the effects of

fluctuation in important markets for Vion Food

could have an impact on the businesses’ ability to

generate free cash flow.

Managing the capital markets risks

Vion Food targets a strong liquidity position by

means of committed credit facilities. In the current

financial markets, obtaining credit from financial

institutions and investors is very much dependent

on a company’s financial position, its outlook and

its reputation. In 2015 Vion Food was able to

refinance, obtaining better interest conditions and

an extension of the maturity. Vion Food’s credit

facilities are contracted by Group Treasury. The

interest rates for interest-bearing borrowings are

variable. Vion Food has a negative net debt

position of € 52 million.

Managing financing risks

Vion Food monitors compliance with the

agreements with the financing banks. Periodically,

a revised forecast is drawn up that indicates the

extent to which the budget will be realised. The

revised forecast includes a detailed prediction

of the profit and loss statement, balance sheet,

working capital, cash flow and cash position. This

allows the outcome of the various ratios and

liquidity position to be forecasted so that timely

action can be taken, should this be deemed

necessary. This risk is monitored on an ongoing

basis by the Management Board.

Managing foreign currency risk

Vion Food uses derivative financial instruments to

hedge its exposure to foreign exchange risk arising

from operational, financing and investment

activities. Vion Food’s policy is not to hold

derivative financial instruments for speculative

purposes.

Compliance

8. Non-compliance risk

The risk that Vion Food is non-compliant with

applicable laws and regulations may adversely

affect Vion Food’s reputation and expose it to

financial losses.

Managing non-compliance risk

Vion Food is committed to comply with laws and

regulations in the various countries in which it

operates, as it can be held liable for the

consequences of non-compliance. In addition, cost

of compliance with, or changes in, any of these

laws and regulations could impact the operations

and thus could affect Vion Food’s financial

condition or reduce its profitability. Vion Food has

established policies and procedures aimed at

compliance with applicable legislation and

regulations. An example is the Vion

Competition Compliance Policy, which on a

detailed level instructs the Vion Food companies

on the do’s and don’ts in relation to the

competition.

Besides this, Vion Food has a Code of Conduct that

goes beyond the compliance within the legal and

regulatory framework by providing guidance on

behaviour. The Vion Food Whistleblower Policy

aims to support compliance with applicable laws,

integrity in financial management, a healthier and

safer work environment and effective corporate

governance. Vion Food conducts its business based

on the principles of fairness, honesty, integrity and

respect and, accordingly, wants to ensure that any

employee of Vion Food can make a report under

this Policy without the risk of retaliation and with

the assurance that all reports are treated

confidentially and are promptly investigated.


In addition to reporting directly to management,

Human Resources or the Management Board,

employees can contact the Whistleblower line

which is operated by an external service provider.

This allows employees to report issues

anonymously. During 2015, six complaints were

received through this line (2014: nine). These

complaints related to labour relations, health &

safety and conflicts of interest.

ASSESSMENT OF INTERNAL RISK MANAGEMENT AND CONTROL

The Management Board has evaluated the design

and the effectiveness of the internal risk manage-

ment and control systems, based upon continuous

monitoring and interaction with business and

corporate staff and by evaluating – amongst other

things – the following information:

> Letters of Representation signed by

management of operating companies and

divisions.

> Reports of the Internal Audit Department and

QA auditors on reviews and audits performed

throughout the year. Findings and measures to

address issues were discussed with local

management, the Division management

and/or the Audit Committee.

> Management Letter from the external auditor

with findings and remarks regarding internal

control. This letter has been discussed with the

Audit Committee and the Supervisory Board.

The Management Board concluded that risk ma-

nagement and internal controls require further

formalisation and standardisation.

For this purpose a project to redesign and

implement the Vion Food Financial Control

Framework was executed during 2015. Going

forward, the Management Board will monitor

the continuous improvement of this framework.

R I S K M A N A G E M E N T , C O M P L I A N C E A N D C O N T R O L


> 87 minutes of sport> 30 pages read> 34 different 2 euro coins collected> 2 episodes of CSI watched

ANJA RAMLOW

COMPANY MANAGEMENT’S SECRETARIAL OFFICE

FUNCTION

LOCATION

TODAY

Vion Food, Bad Bramstedt (DE)

> 10 invoices sent> 43 calls received> 3 payment reminders sent> 2 languages spoken: German and English

SHIFT

8:00 - 17:00


Composition of the Supervisory Board

Tom Heidman temporarily stepped down on

26 January 2015 as member of the Supervisory

Board to act as interim CEO of Vion Food. As of

1 September 2015 he was reappointed as member

of the Supervisory Board. We thank Tom Heidman

for his contribution and great commitment to

the Company. On 19 May 2015 Cees van Rijn

stepped down from the Supervisory Board for

personal reasons. We thank Cees van Rijn for his

contribution. As of 1 October 2015 Marieke Bax

has been appointed as member of the Supervisory

Board. The Supervisory Board currently has seven

members. Next to Tom Heidman and Marieke Bax

the members are Sipko Schat (chairman), Hans

Huijbers (vice chairman), Toon van Hoof, Ton van

der Laan and Ronald Lotgerink.

Corporate governance

The section on the Corporate Governance Code on

page 36 includes information on the

independence of members of the Supervisory

Board. The members of the Supervisory Board do

not receive any remuneration that is dependent

on the financial performance of the Company. In

the event of a conflict of interests with regard to a

particular topic, the Supervisory Board member in

question may not participate in discussions or

decision-making on that topic. The Supervisory

Board has drawn up rules of procedure with

respect to the performance of its duties and to its

assigned tasks. Vion Food strives for a

composition of its Supervisory Board that is

balanced and in which the combination of the

member’s experience, expertise and independence

ensures the Supervisory Board can fulfil its various

duties on behalf of Vion Food and its stakeholders

in the best possible way.

Supervisory Board meetings

The Supervisory Board met 20 times in 2015. None

of its members were frequently absent. The

Supervisory Board received all information needed

to perform its tasks from the Management Board

and the Company’s external auditors. The agendas

for the Supervisory Board meetings were drawn

up by its chairman, in consultation with the

Management Board and the Corporate Secretary.

Remuneration, Selection and

Appointment Committee

The members of the Remuneration, Selection and

Appointment Committee are Sipko Schat, Tom

Heidman, Hans Huijbers and Ton van der Laan.

As of 1 September 2015, Tom Heidman joined the

Remuneration, Selection and Appointment

Committee. Tom Heidman succeeded Sipko Schat

as chairman as of 1 January 2016.

In 2015 the Remuneration, Selection and

Appointment Committee met two times and a

number of times in a full Supervisory Board

meeting. In addition to the remuneration policy

of the Management Board, the Remuneration,

Selection and Appointment Committee also

advised the Supervisory Board on various human

resources-related issues, among other things.

Report of the Supervisory Board

The Supervisory Board is pleased with the positive developments at Vion Food in 2015. With the appointment of Francis Kint as the Company’s CEO per 1 September 2015 and Joost Sliepenbeek as the Company’s CFO per 1 May 2015, we now have a new Management Board that can further improve and build Vion Food.


Audit Committee

The members of the Audit Committee are Marieke

Bax (chairman), Toon van Hoof and Ronald

Lotgerink. Cees van Rijn stepped down as

chairman on 19 May 2015. Ronald Lotgerink

succeeded Cees van Rijn as chairman until 1

October 2015. As of that date Marieke Bax has

been appointed as chairman of the Audit

Committee.

The Audit Committee met eight times in 2015.

The Audit Committee advised the Supervisory

Board on Vion Food’s annual accounts for 2015

and the consultations with the external auditor

related to these annual accounts. The annual

accounts are drawn up by the Management Board

and approved by signature by the members of

both the Management Board and the Supervisory

Board. The annual accounts are adopted by the

General Meeting of Shareholders.

In the Audit Committee meetings the financial

restructuring process was discussed. In addition, a

lot of attention was focused on operational and

financial performance and the liquidity position

of the group. Compliance and internal

governance are topics that receive ongoing

attention by the Audit Committee and are fixed

agenda items. Both the external auditor and the

internal auditor attend the Audit Committee

meetings. In addition, the Audit Committee also

met with the external auditor without the

presence of members of the Management Board.

Annual accounts

The 2015 annual accounts were initially discussed

by the Audit Committee and then by the plenary

Supervisory Board together with the Management

Board and EY, the external auditor.

The Supervisory Board then approved the

Annual Report and Accounts. The Supervisory

Board proposes to the General Meeting of

Shareholders that the annual accounts 2015 be

adopted accordingly.

The Supervisory Board would sincerely like to

thank the management and all employees of Vion

Food for their great efforts over the past year.

BOXTEL, 7 APRIL 2016

On behalf of the Supervisory Board,

S.N. Schat, Chairman

PERSONAL DETAILS OF THE SUPERVISORY BOARD

S.N. (Sipko) Schat

Chairman

1960, Dutch nationality

Former functions

Member Executive Board Rabobank Nederland

and Director Stichting Administratiekantoor SBT

(shareholder of Vion Food)

Main other positions

Member Supervisory Board OCI N.V., Rothschild &

Co and Trafigura Group Pte Ltd

J.A.M. (Hans) Huijbers

Vice Chairman


Function

Agricultural entrepreneur


Chairman Zuidelijke, Land- en Tuinbouw-

organisatie (ZLTO), Member Board LTO

Nederland, Chairman Steering Committee

Agricultural Innovation Noord-Brabant,

Member Governing Board Food, Farming and

Agriculture, Chairman Advisory Board HAS Den

Bosch and Member Board Agriplace


M. (Marieke) Bax


Former functions

Various functions Sara Lee Corporation (among

which Head Strategy and M&A Europe for meat,

foodservice and textile division), CFO e-commerce

company, Managing Partner governance and

communication firm Gooseberry and Initiator

Talent to the Top


Member Supervisory Board VastNed Retail (Chair-

man Remuneration and Appointment Committee),

Member Board CLSA BV, Member Advisory Board

Fonds Podiumkunsten and Frans Hals Museum/De

Hallen, Member Supervisory Board Corbion and

Boardroom advisory KPMG

T. (Tom) Heidman


Former functions

CEO C1000 and Retail Network, Operational and

Commercial Director Albert Heijn, Director

Gall&Gall and interim-CEO Vion Food (26 January

2015 until 1 September 2015)


Member Supervisory Board Rituals B.V., Vermaat

Groep and The European Candy Group

A.J.M. (Toon) van Hoof


Function

Agricultural and recreation entrepreneur


Vice Chairman Zuidelijke, Land- en Tuinbouw-

organisatie (ZLTO), Member Board Council Animal

Affairs (Ministry of Agriculture and Innovation),

Chairman Board GD Animal Health Service

foundation, Portfolio holder Animal Welfare LTO

and Board member zuivel.nl

A.T.C. (Ton) van der Laan


Function

CEO Nidera Capital B.V.


Member Supervisory Board of Royal Douwe

Egberts B.V. and Chairman Supervisory Board UTZ

Certification

R.E.M. (Ronald) Lotgerink


Function

CEO Zwanenberg Food Group


Member Board ‘Ik Kies Bewust’ Foundation and

Member Advisory Board RAPS GmbH

ROTATION PLAN OF THE SUPERVISORY BOARD

Commencement date Current term Commencement Reappointment

first appointment expires date of latest term possible

Toon van Hoof 21 May 2003 2017 24 April 2014 No

Hans Huijbers 11 September 2009 2017 24 April 2014 Yes

Ton van der Laan 24 April 2014 2017 - Yes

Ronald Lotgerink 1 July 2014 2018 - Yes

Sipko Schat 1 October 2014 2018 - Yes

Tom Heidman 20 May 2014 2019 1 September 2015 Yes

Marieke Bax 1 October 2015 2019 Yes

R E P O R T O F T H E S U P E R V I S O R Y B O A R D


> 1 dog taken for a walk> 4.7 km run> 5 courses eaten at dinner> 124 km driven from home to work and back

MARIEKE TEUNISSEN

HR ASSISTANTFUNCTION

LOCATION

TODAY

Vion Food, Scherpenzeel (NL)

> 1 job interview conducted> 3 recommendations regarding safety improvements given> 2 return-to-work discussions held> 2 training courses arranged for staff members

SHIFT

8:00 - 16:30


Annual accounts


CONSOLIDATED BALANCE SHEET

as at 31 December 2015

(before result appropriation)

(in thousands of euros)

note 2015 2014

ASSETS

Fixed assets

Intangible fixed asset 1 32,324 9,347

Tangible fixed assets 2 229,911 206,376

Financial fixed assets 3 33,991 30,955

296,226 246,678

Current assets

Inventories 4 127,994 121,857

Receivables 5 398,308 413,588

Cash and cash equivalents 6 122,737 198,043

649,039 733,488

Total assets 945,265 980,166

LIABILITIES

Group equity

Equity 7 399,683 377,833

Minority share 8 16,777 19,552

416,460 397,385

Provisions 9 140,574 165,310

Long-term liabilities 10 23,844 10,702

Current liabilities 11 364,387 406,769

Total liabilities 945,265 980,166



note 2015 2014

INCOME

Net turnover 15 4,570,562 4,991,726

Changes in inventories of finished 6,231 -7,445

goods and goods being processed

Other operating income 16 35,778 28,243

Result related to the sale of group companies - -2,414

Total income 4,612,571 5,010,110

OPERATING COSTS

Cost of raw materials and consumables 3,607,247 3,936,988

Costs of subcontracted work and external costs 491,830 520,348

Wages and salaries 17 436,980 465,131

Social security contributions 18 33,134 37,839

Amortisation and depreciation of fixed assets 19 28,493 31,386

Impairment losses on fixed assets 1, 2, 20 - 5,883

Other operating costs 21 -16,074 -6,987

Total operating costs 4,581,610 4,990,588

Operating result 30,961 19,522

FINANCIAL INCOME AND EXPENSES

Interest income and similar income 1,313 2,475

Interest charges and similar expenses 22 -7,566 -24,611

Total financial income and expenses -6,253 -22,136

Result before tax 24,708 -2,614

Taxes 23 -407 -13,202

Share in the results of participating interests 174 -42

Result after tax 24,475 -15,858

Minority share -2,076 -4,893

Net result 22,399 -20,751

CONSOLIDATED PROFIT AND LOSS STATEMENT



2015 2014

CASH FLOW FROM OPERATING ACTIVITIES

Operating result 30,961 19,522

Amortisation and depreciation 28,493 31,386

Impairment losses on fixed assets - 5,883

Result related to sales of assets and group companies -2,255 6,497

Increase / (decrease) in provisions -31,830 -14,923

(Increase) / decrease in current assets

> trade receivables 19,601 21,074

> inventories -6,137 14,668

> prepaid costs and other current assets -452 15,867

Increase / (decrease) in current liabilities

> trade liabilities 5,576 -10,119

> taxes and social security charges -2,521 -4,213

> other debts and accruals and deferred income -4,251 5,815

Net cash flow from business operations 37,185 91,457

Financial income received 4,182 1,310

Financial charges paid -8,092 -6,836

Tax received / (paid) on profit 583 -5,695

Net cash flow from operating activities 33,858 80,236

CASH FLOW FROM INVESTMENT ACTIVITIES

Investments in intangible fixed assets -5,413 -1,671

Divestments of intangible fixed assets 5 -

Investments in tangible fixed assets -58,765 -44,210

Divestments of tangible fixed assets 11,311 11,044

Investments in financial fixed assets -87 -1,250

Divestments of financial fixed assets 15 279

Acquisition of group companies -4,661 -8,000

Sale of group companies 5,393 1,527,004

Net cash flow from investment activities -52,202 1,483,196

CASH FLOW FROM FINANCING ACTIVITIES

Drawdown / (repayment) of debts to financial institutions (long-term portion) -450 -1,198,212

Drawdown / (repayment) of loans and credits (current portion) -53,607 -119,799

Dividends paid to minority shareholders -4,628 -5,524

Drawdown / (repayment) of non-bank debts 2,276 -3,530

Drawdown / (repayment) under the terms of Receivables Purchase Facility - -180,522

Net cash flow from financing activities -56,409 -1,507,587

Effect of differences in exchange rates -553 -1,814

Increase/ (decrease) in cash and cash equivalents -75,306 54,031

Cash and cash equivalents at the start of the year 198,043 144,012

Cash and cash equivalents at year-end 122,737 198,043

CONSOLIDATED CASH FLOW STATEMENT


GENERAL PRINCIPLES

The annual accounts of Vion Food have been

prepared in accordance with Title 9, Book 2 of the

Dutch Civil Code. The annual accounts have been

prepared by the Management Board on 7 April

2016.

The annual accounts are drafted on the basis of

going concern.

The general principle for the valuation of assets

and liabilities, as well as the determination of

result, is the historical cost. Unless stated other-

wise, assets and liabilities are recorded at cost.

An asset is included on the balance sheet when

it is likely that any future economic benefits will

accrue to the Company and the asset’s value can be

reliably determined. A liability is included on the

balance sheet when it is likely that its settlement

will involve an outflow of economically-valuable

resources, the value of which can be reliably

determined.

Income is included in the profit and loss statement

when there is an increase in economic benefits

related to an increase in an asset’s value or a

decrease in a liability, the amount of which can be

reliably determined. Expenses are included when

there is a decrease in future economic benefits

related to a decrease in an asset’s value or an

increase in a liability, the amount of which can be

reliably determined.

If a transaction results in all, or almost all, future

economic benefits and all, or almost all, risks with

respect to an asset or liability being transferred

to a third party, the asset or liability is no longer

included on the balance sheet. Furthermore, assets

and liabilities are no longer included on the

balance sheet from the date that the conditions

relating to likely future economic benefits or

reliability of the determination of the value are no

longer satisfied.

Income and costs are allocated to the period to

which they relate. Income is recognised when all

significant risks relating to the goods are trans-

ferred to the buyer.

All amounts specified in the annual accounts are in

euros. The euro is the functional currency and the

reporting currency of Vion Food and this has not

changed since the previous year.

Accounting policies

Vion Holding N.V. (‘Vion Food’ or the ‘Company’) is a public limited liability company under Dutch law with its registered office in Best, The Netherlands. Vion Food has one shareholder: Stichting Administratiekantoor SBT.

The Company is a holding company. Vion Food’s product portfolio consists of fresh pork and beef and derived convenience food products.


Mergers and acquisitions

From the date control is obtained, the financial

data of the acquired companies are included in the

consolidated annual accounts as of the acquisition

date.

An acquisition is entered into the accounts in

accordance with the purchase accounting method.

Identifiable assets and liabilities as at the date of

acquisition are accounted for at fair value. The

difference between the purchase price and the

companies’ share in the fair value of the identifiable

assets and liabilities as at acquisition date is

accounted for as goodwill.

In the case of merging interests, the pooling of

interests method is used.

On 1 January 2015, the remaining 25% of the shares

in Salomon Hitburger GmbH were acquired. The

purchase price is based on an appraisal report from

an independent officer, which was appointed by

both parties. The seller did not agree on the resulting

purchase price. Management does not expect any

material adjustment of the purchase price.

On 25 May 2015, the remaining 30% of the shares

in Vion SA were acquired. The best estimate for

the transaction price is accounted for. The final

transaction price depends on an earn-out agreement

based on the future performance of Vion SA.

Any future adjustments to set the final transaction

price will affect the goodwill amount.

Divestments and increase of minority shares

The financial data for the companies divested in 2015

are no longer included in the consolidated annual

accounts from the moment that control is no longer

exercised over the companies concerned.

On 23 February 2015, the co-shareholder EGS

Erzeugergemeinschaften Südostbayern eG increased

its shareholding in Vion EGN Südostbayern GmbH

from 41.67% to 49%. Accordingly, the shareholding

of Vion Food decreased from 58.33% to 51%.

No significant dilution results have occurred.

On 24 September 2015, the co-shareholder EGB

Erzeugergemeinschaften-Beteiligungs GmbH

increased its shareholding in Vion SBL Landshut

GmbH from 42.86% to 49%. Accordingly, the

shareholding of Vion Food decreased from 57.14%

to 51%. No significant dilution results have

occurred.

Principles for the consolidation

The consolidated annual accounts record the

financial data of Vion Holding N.V. and its group

companies according to the full consolidation

method.

Where joint ventures are involved, the

proportional method is used for the consolidation.

The consolidated annual accounts of Vion Food

include the financial data of its group companies

and other legal entities where Vion Food exercises

control or which are subject to its central

management. Group companies are no longer

included in the consolidation as of the date that

decisive control ceases. The items in the

consolidated annual accounts are determined in

accordance with uniform accounting policies.

The financial data of the group companies and

other legal entities and companies pertaining to

the consolidation are fully included in the

consolidation after elimination of intercompany

balances and transactions. Third-party interests

in the capital and result of group companies are

disclosed separately in the consolidated annual

accounts.

Results of newly acquired group companies and

other legal entities and companies included in

the consolidation are consolidated from the date

of acquisition. On this date, the assets, provisions

and liabilities are recognised at the fair value. Any

goodwill paid is included as an asset, and

amortised over the economic lifetime. The results

of divested group companies are recognised in the

consolidation until the date that control ceased.


Foreign currency conversion

The consolidated financial statements are

denominated in euros as the functional and

reporting currency of Vion Food. The functional

and presentation currency of Vion Food and the

foreign activities have not changed compared

with the previous financial year. Individual group

companies set their own functional currency and

financial statement items are valued on the basis

of this functional currency. Transactions in foreign

currencies are at initial recognition valued against

spot rates of the functional currency.

Receivables, payables and liabilities are conver-

ted at the exchange rate as of the balance sheet

date. Transactions in foreign currencies during

the reporting period are included in the annual

accounts at the average exchange rate per month.

The exchange rate differences arising from the

currency conversion are included in the profit and

loss statement.

Foreign group companies and non-consolidated

foreign participating interests qualify as foreign

business operations. The exchange rate at the

balance sheet date is used for the currency

conversion for these business operations for

balance sheet items. The average rate per month is

used for the items in the profit and loss statement

The currency conversion differences that arise are

directly credited or charged to the group equity as

part of the legal reserve.

When a gain is realised on the sale of a foreign

group company, the accumulated exchange rate

differences are transferred within equity from the

exchange rate differences reserve to other

reserves.

Estimates

The preparation of annual accounts requires

management to make estimates and

assumptions that affect the application of

principles and reported values of assets, liabilities,

income and expenses. Actual results may differ

from these estimates. The estimates and

underlying assumptions are continually assessed.

Revisions to estimates are recorded in the period in

which the estimate was revised and in any future

periods affected by the revision. In the opinion of

the Management Board, the following

accounting policies are the most critical for

representing the financial position, and require

estimates and assumptions:

> valuation of assets related to impairments;

> provisions;

> valuation of deferred tax assets.

Impairments of assets

Each year, an impairment test is carried out for

the cash-generating units or groups of assets

when there are objective reasons to presume an

impairment, for example when results do not

meet the expectations. In this test, the book value

of the cash-generating units or groups of assets

is compared with the recoverable amount. The

recoverable amount is the higher of the value in

use and the direct net realisable value. The value

in use is assessed at the best estimate of future

cash flows discounted against the effective interest

rate of the applicable fixed asset. An impairment

loss accounted for in previous periods is reversed

only when this reversal results from objective and

sustainable circumstances occurring after the date

of initial impairment. The reversal will be limited

to the amount necessary to measure the fixed asset

at its book value if no impairment would have

occurred. The reversal is recorded through profit

and loss. If this test shows that the book value is

higher than the recoverable amount, then an

impairment is charged to the profit and loss

statement.

Offsetting

Assets and items for debt are offset in the annual

accounts only if and insofar as:

> a sound legal instrument exists to balance and

simultaneously settle an asset and liability;

> there is a firm intention to simultaneously settle

the balance or both items.

A C C O U N T I N G P O L I C I E S


ACCOUNTING POLICIES FOR THE BALANCE SHEET

Intangible fixed assets

Intangible fixed assets acquired from third parties

are valued at acquisition cost less accumulated

amortisation and, if applicable, impairments.

Intangible fixed assets are amortised on a

straight-line basis over the estimated period of use,

with a maximum period of 20 years.

The estimated useful lives are as follows:

goodwill 10 to 20 years

software 3 to 5 years

other intangible fixed assets 3 to 5 years

Goodwill is determined as the acquisition cost of

the acquired company less the fair value at the

time of acquisition of the assets and liabilities of

the company based on Vion Food’s accounting

policies. Goodwill paid on the acquisition of

foreign group companies is converted using the

exchange rate on the transaction date.

The period of use of the goodwill for acquired

companies is determined per acquisition, using as a

basis the specific market, clients, products, facilities

and organisation. This predominantly concerns

acquired strategic market positions.

Disposals are recorded in the movement schedules

at net value.

Tangible fixed assets

Tangible fixed assets are valued at acquisition cost

less accumulated depreciation and, if applicable,

impairments. The depreciation is based on the

estimated period of use, and is calculated based on

a fixed percentage of the acquisition cost and any

residual value.

The estimated useful lives are as follows:

business premises 25 to 30 years

plant and equipment 10 to 15 years

other tangible fixed assets 3 to 15 years

Tangible assets are depreciated from the moment

that they become operational. Land is not

depreciated. Assets no longer in use are valued

at book value or the lower market value.

Impairments in the financial year are directly

deducted from the book value.

Any investment grants received are deducted from

the relevant tangible fixed asset.

Costs for scheduled major maintenance are

charged against net result at the time the

maintenance is carried out.

Disposals are recorded in the movement schedules

at net value.

Financial fixed assets

Participating interests in which Vion Food exercises

significant influence over business and financial

policy are valued using the equity accounting

method based on the net asset value. This is

calculated by valuing the assets, provisions and

liabilities, and calculating the result in accordance

with Vion Food’s accounting principles.

Participating interests in which Vion Food does not

exercise significant control over the business and

financial policy are valued at acquisition cost and,

if applicable, less impairments.

Deferred tax assets are recognised to the extent

that it is probable that these can be realised within

a planning period that is in line with the sectors

in which Vion Food operates. These deferred tax

assets are valued at face value, and are

predominantly of a long-term nature.

The receivables from and loans to participating

interests as well as other receivables are included

at fair value when first recognised, and

subsequently valued at the amortised cost using


the effective interest method less any allowances

deemed necessary. Dividends are recognised in the

period in which these are made payable.

Leasing

The assessment of whether an agreement includes

a lease is based on the economic reality at the time

that the contract was entered into. The contract is

deemed to be a lease agreement when fulfilment

of the agreement requires the use of a specific

asset or the right to use a specific asset.

In the case of financial leasing (where the

advantages and disadvantages of owning the lease

object are fully or almost fully borne by the lessee),

the lease object and the associated debt upon

entering into the agreement are included on the

balance sheet at the fair value of the lease object

at the time of entering into the lease agreement,

or at the cash value of the minimal lease payments

when this is lower than the fair value. The initial

direct costs for the lessee are included when the

asset is first recognised. The lease payments are

split into interest charges and repayments for the

outstanding liability in order to achieve a constant

interest rate for the remaining net liability.

In the case of operational leasing, the lease

payments are charged to the profit and loss

statement on a straight-line basis over the

duration of the lease period.

Financial instruments

Financial instruments include both primary

financial instruments, such as receivables and

payables, and financial derivatives. Please refer

to the notes on the separate balance sheet item

for the accounting principles used for the primary

financial instruments.

Derivatives

Vion Food uses derivatives to hedge exchange rate

risks on foreign currencies and interest rate risk.

For the exchange rate risk on the currency

conversion for the foreign operating activities,

Vion Food uses net investment hedge

accounting, whereby changes in the fair value of

the derivative, to the extent that these cover an

item included on the balance sheet, are included in

the exchange rate differences reserve. Vion Food

does not hedge the currency conversion risk on the

net result of foreign entities. Vion Food uses cost

price hedge accounting for the exchange rate risk

on foreign currency conversion transactions. Vion

Food hedges its currency positions with forward

contracts and currency swaps. Changes in the fair

value of derivatives that are designated and

qualify for hedge accounting are included in the

profit and loss statement together with changes

in the fair value of balance sheet items that are

allocated to the hedged risk. The foreign currency

component of forward exchange contracts that

functions as an instrument for hedging

future transactions is valued at cost, as long as the

hedged position has not yet been included on the

balance sheet.

Vion Food hedges its interest rate risk on

long-term debt financing with interest rate swaps.

Cost price hedge accounting is used for these

derivatives. The effective portion of the derivatives

allocated to cost price hedge accounting is valued

at cost. The ineffective portion is valued at fair

value. The value differences of the fair value of the

ineffective portion is directly included in the profit

and loss statement.

To the extent that derivatives are used to hedge

future rights and obligations (for which the

company has entered into commitments with fixed

terms and conditions), profits or losses on these

derivatives are not recognised until the moment of

settlement.

Hedge accounting

Derivatives are used to hedge currency and interest

rate risks. For derivatives that are part of an

effective hedging relationship, cost price hedge

accounting is used. Vion Food uses hedge

accounting based on generic documentation in

accordance with Dutch accounting standard RJ290.

All derivatives for which no hedge accounting is

used are valued at cost or the lower market value.



Measurement of the effectiveness of hedge

accounting is done by the assessment of the critical

characteristics (specifically duration and amount)

of the derivatives in comparison with the hedged

items concerned mainly sales orders. These are

both current items.

Inventories

The inventories consist of goods with a limited

shelf life.

Inventories are valued at the lower of cost of

acquisition or production and the recoverable

amount.

Inventories of finished goods are valued at

purchase price plus a premium allocated for

production costs. For products being processed,

the costs of raw materials and consumables, direct

production costs and a proportional share of

general production costs are recognised, taking

into account the stage of the production process.

If necessary, an amount is deducted from the

valuation for obsolescence.

Receivables

Receivables are initially included at fair value when

first recognised, and subsequently valued at the

amortised cost using the effective interest method,

which is equal to the face value less the necessary

allowances for doubtful debts. These allowances

are determined according to individual assessment

of the receivables.

Cash and cash equivalents

Cash and cash equivalents are stated at face value

and, unless stated otherwise, are at Vion Food’s

disposal.

Provision for deferred tax liabilities

The provision for deferred tax liabilities relates to

future tax liabilities resulting from the differences

between the economic valuation of assets and

liabilities in the annual accounts and their

valuation for tax purposes. The provision is stated

at face value based on the applicable tax rate.

Pension provisions

Separate pension plans are applicable in the

various countries where Vion Food operates.

Pensions are calculated according to RJ 271

guidelines.

The Netherlands

Vion Food has several pension schemes for its

Dutch employees which are all under the super-

vision of an independent pension

administrator. Premiums owed in the financial year

to the pension administrators are recognised as

costs. A liability is included for premiums not paid

as of the balance sheet date. These liabilities are of

a current nature and measured at their face value.

In case of prepayments of pension premiums, these

are recorded under current assets. Liabilities

besides the premiums owed to the pension

administrators are provided for on the basis that

a legally binding or constructive obligation is

present, that an outflow of cash is likely to settle

these obligations and that a reliable estimate of

the size of the obligation can be made. The

provision for any such additional liability is

measured at the best estimate of the amounts

needed to settle the obligation as at balance sheet

date. In case material, the provision is discounted.

Germany

Vion Food holds a separate pension scheme for its

foreign (German) operations. The elements of the

scheme itself are comparable to the Dutch pension

schemes. However, as the governance of the

German pension scheme differs Vion Food

accounts for the resulting liability following

RJ 271.321 letter a.

Pension liabilities arising from Vion Food’s foreign

(German) pension schemes are therefore included

at the best estimate of actual and legally

enforceable obligations on the balance sheet date.

This relates to obligations towards pension

administrators, employees and former employees.

For the calculation of the pension provisions a

full discount rate curve of high-quality corporate

bonds is used to determine the defined benefit


obligation. The curves are based on Towers

Watson’s Rate:Link which uses data of corporate

bonds rated AA or equivalent.

Other provisions

The provisions for reorganisations and other

obligations were created for the legally

enforceable or actual obligations that exist at the

balance sheet date, where the magnitude of the

amounts is uncertain, but which can be reasonably

estimated. These obligations are due to events

in the past, where settlement will occur after the

balance sheet date. Staff costs and other expenses

directly related to reorganisations are only

included if the following conditions are satisfied as

of the balance sheet date:

> During the financial year, a detailed plan was

drawn up for the reorganisation. The plan

included the relevant activities, locations,

expected number of employees with associated

job grades, related expenditures and the time

when the plan was to be implemented.

> A legitimate expectation was created among

those who would have been affected by the

reorganisation that the reorganisation would

take place because a start was made or its main

points were communicated to those who would

have been affected.

In addition, the staff costs associated with the

reorganisations are recognised in the financial year

that the reorganisation took place.

Furthermore, this item includes the costs directly

related to the reorganisations, including closing

costs, consultancy fees and other costs, such as

onerous contracts.

The other provisions are included at face value,

and are of a predominantly long-term nature.

Long-term liabilities

Long-term liabilities are payables with a residual

maturity greater than one year. The payables are

included at fair value when first recognised, and

subsequently valued at the amortised cost using

the effective interest method.

Current liabilities

Current liabilities are payables with an expected

maturity of up to one year.

ACCOUNTING POLICIES FOR THE PROFIT AND LOSS STATEMENT

General

The results are defined as the difference between

net turnover and all related costs allocated to

the reporting year. The costs are determined in

accordance with the aforementioned valuation

principles.

Profits are recognised in the year in which they are

realised. Losses are recognised in the year in which

they are foreseeable.

Other income and expenses are allocated to the

period to which these relate.

Net turnover

The net turnover included in the profit and loss

statement is the income from the supply of goods

and services to third parties, less permitted

customer discounts (excluding payment discounts),

and excluding turnover tax.

Income arising from the sale of goods is recognised

at the moment when all significant rights to

economic benefits and all significant risks have

been transferred to the buyer.

Other operating income

Other operating income includes, amongst others,

realised profits on the sale of fixed assets,

commissions, bonuses, governmental grants and

rental income.

Costs

Costs are included at the acquisition cost.

Costs of raw materials and consumables

These are the costs of raw materials and

consumables associated with the use of raw

materials and consumables, as well as changes in the

inventories of raw materials, and are valued at the

acquisition cost.



> 42 years old> 4 children> 10 km route driven daily

DIETGER KRATZ

SHOP FLOOR MANAGERFUNCTION

LOCATION

TODAY

FVZ Convenience GmbH, Holzwickede (DE)

> 10,000 litres of thermal oil used > 7,000 m² of production

space inspected> 6 production departments overseen, processing 85 tons of meat products each day

SHIFT

8:00 - 16:30


Costs of outsourced work and external costs

This item includes the direct and indirect selling

expenses, costs of energy and water and costs of

manufacturing and maintenance, among others.

This item is valued at acquisition cost.

Wages and salaries

This item includes wages and salaries of employees

who were employed within Vion Food, and

employees working on a temporary contract basis.

In addition, this item includes pension costs.

Social security contributions

This item includes the costs for social security

contributions for the employees who were

employed within Vion Food.

Amortisation and depreciation of fixed assets

The profit and loss statement includes

depreciation of tangible fixed assets and

amortisation of intangible fixed assets, which are

calculated on the basis of a fixed percentage of the

acquisition cost, taking into account the residual

value and the economic lifetime.

Impairment of assets

This item includes impairments of fixed assets that

occurred during the financial year.

If there are indications for an impairment of a

cash-generating unit or (group of) assets, the

recoverable amount for this is determined as the

higher of the directly net realisable value and the

value in use. If the recoverable amount is below

the book value, the associated cash-generating

unit or (group of) assets is adjusted to this lower

recoverable value.

Other operating costs

Other operating costs include changes in

provisions, rental costs for central headquarters

and local headquarters, lease costs for company

cars, travel and entertainment expenses.

Financial income and expenses

The financial income and expenses include interest

received and paid and exchange rate results, as

well as results from forward exchange contracts

and interest rate swaps on financial positions.

Tax on result

Corporate income tax on earnings is calculated

according to the profit and loss statement at the

applicable rate allowing for tax relief facilities and

limits that have a permanent influence on the tax

rate. The calculation allows for the change in

receivables and the provision for deferred

corporate income tax and applicable local tax

rates.

Share in the results of participating interests

The share in the result of non-consolidated

participating interests includes the share of the

group in the earnings of these participating

interests.

Minority share

This item consists of the share in the result to be

allocated to other shareholders of the Company in

which they participate.

ACCOUNTING POLICIES FOR THE CASH FLOW STATEMENT

The cash flow statement was prepared using the

indirect method. Issued dividends are included in

the cash flow from financing activities.

For payments arising from long-term loans, the

part relating to the interest rate is included in

the cash flow from operating activities. The part

relating to repayment is included in the cash flow

from financing activities. Cash flows in foreign

currencies are converted at an estimated average

exchange rate. Receipts and expenditures relating

to interest and profit taxes are included in the cash

flow from operating activities.

The impact of acquisitions and divestments of

group companies, including changes in assets and

liabilities, are included in the cash flow from

investing activities.



Notes on the consolidated balance sheet

Balance as at 1 January 2015 Goodwill Software In progress Other Total

Acquisition cost 6,401 36,313 937 13,210 56,861

Accumulated amortisation 203 34,317 - 12,994 47,514

Book value 6,198 1,996 937 216 9,347

Movements in the book value

Acquisition of group companies 20,936 - - - 20,936

Additions - 658 4,722 33 5,413

Divestments - - - -5 -5

Reclassification - 1,860 -1,686 -131 43

Amortisation -1,882 -1,528 - - -3,410

Balance 19,054 990 3,036 -103 22,977

Balance as at 31 December 2015

Acquisition cost 27,336 41,649 3,973 245 73,203

Accumulated amortisation 2,084 38,663 - 132 40,879

Book value 25,252 2,986 3,973 113 32,324

The acquisition of group companies amounting to € 20.9 million relates to the goodwill that arose due to

the acquisition of the remaining 25% of Salomon Hitburger GmbH and the remaining 30% of Vion SA.

The total purchase price amounted € 21.7 million.

The intangible fixed assets in progress relate to internally developed as well as external sofware

capitalised.

As at 31 December 2015

(In thousands of euros)

ASSETS

Note 1 - Intangible fixed assets

The movements in intangible fixed assets are as follows:

2015


Balance as at 1 January 2014 Goodwill Software In progress Other Total

Acquisition cost - 35,897 611 17,827 54,335

Accumulated amortisation - 30,081 95 17,582 47,758

Book value - 5,816 516 245 6,577


Acquisition of group companies 6.401 - - - 6,401

Divestment of group companies - -1,211 - -9 -1,220

Additions - 1,161 421 89 1,671

Reclassification - -2,445 - - -2,445

Amortisation -203 -1,325 - -109 -1,637

Balance 6,198 -3,820 421 -29 2,770


Acquisition cost 6,401 36,313 937 13,210 56,861

Accumulated amortisation 203 34,317 - 12,994 47,514

Book value 6,198 1,996 937 216 9,347

2014


Fixed

Business Other assets Non-

premises Plant and operating under productive

Balance as at 1 January 2015 and land equipment assets construction assets Total

Acquisition cost 641,672 629,313 17,903 17,351 799 1,307,038

Accumulated depreciation 528,718 554,112 17,033 - 799 1,100,662

Book value 112,954 75,201 870 17,351 - 206,376


Additions 3,435 13,251 285 41,794 - 58,765

Disposals -7,890 -2,393 -1 -50 - -10,334

Reclassification 7,609 8,538 804 -16,994 - -43

Depreciation -5,459 -19,109 -515 - - -25,083

Exchange rate differences 200 27 3 - - 230

Balance -2,105 314 576 24,750 - 23,535




Book value 110,849 75,515 1,446 42,101 - 229,911

The reclassification of fixed assets includes a water treatment installation amounting € 7 million which is financed

by means of a financial lease.

The investment grants received are allocated to sustainable investments and investments that promote

employment opportunities. These investments are deducted from the relevant tangible fixed asset. As of 31

December 2015 the total book value for allocated investment grants amounted to € 0.4 million (2014: € 0.4 million).

Fixed assets under construction mainly relate to investment programs for the Landshut, Emstek and Boxtel

production sites.

The legal ownership is limited for fixed assets financed under financial lease (€ 6.8 million, 2014: € 7.0 million).

Note 2 - Tangible fixed assets

The movements in tangible fixed assets are as follows:

2015


Fixed

Business Other assets Non-

premises Plant and operating under productive

Balance as at 1 January 2014 and land equipment assets construction assets Total

Acquisition cost 851,076 804,210 23,502 8,032 1,443 1,688,263

Accumulated depreciation 730,897 726,082 23,502 589 - 1,481,070

Book value 120,179 78,128 - 7,443 1,443 207,193


Divestment of group companies -183 -650 -528 -2,323 - -3,684

Additions 7,604 15,140 142 28,324 - 51,210

Disposals -11,267 -2,873 -72 -477 -206 -14,895

Reclassification 7,236 8,898 1,924 -15,613 - 2,445

Impairments -4,572 -409 -29 - -873 -5,883

Depreciation -6,149 -23,029 -570 - - -29,748

Exchange rate differences 106 -4 3 -3 -364 -262

Balance -7,225 -2,927 870 9,908 -1,443 -817




Book value 112,954 75,201 870 17,351 - 206,376

2014

N O T E S O N T H E C O N S O L I D A T E D B A L A N C E S H E E T


2015 2014

Participating interests 7,949 7,889

Receivables from non-consolidated participating interests 479 479

Deferred tax assets 15,689 17,448

Other receivables 9,874 5,139

Balance as at 31 December 33,991 30,955

Participating interests

Movements during the financial year were as follows:

2015 2014

Balance as at 1 January 7,889 6,726

Divestment and deconsolidation of group companies and participating interests - -60

Movements in the share capital in participating interests -11 1,265

Share in the result 174 -42

Dividend distribution -103 -


This relates to the following participating interests with a share of 20% or higher:

Participating interest

Pigture Group B.V., Helvoirt (The Netherlands) 22.50%

Fleischversorgungszentrum Rhein-Main GmbH & Co. Vermietungs KG, Frankfurt (Germany) 24.41%

Zweckverband ‘Fleischzentrum Emsland’, Lingen (Germany) 33.34%

Premium Fleisch-Servicegesellschaft GmbH, Zeven (Germany) 42.86%

Fleischmarkt Nürnberg GmbH, Nürnberg (Germany) 23.80%

LQB Landwirtschaftliche Qualitätssich. Bayern GmbH (Germany) 28.00%

Best Hides GmbH, Eching-Weixerau (Germany) 40.00%

Receivables from non-consolidated participating interests

The movements are as follows:

2015 2014

Balance as at 1 January 479 744

Repaid during financial year - -265

Balance as at 31 December 479 479

The loan issued to the non-consolidated participating interest expires on 1 December 2019. An interest

rate is charged for the current facility amounting to the 3-month Euribor plus a mark-up of 4.0%.

Note 3 - Financial fixed assets


Deferred tax assets

The movements are as follows:

2015 2014


Reclassification of tax assets and tax liabilities 4,603 1,200

Divestment of group companies - -204

Withdrawal from / addition to result -6,523 -3,094

Exchange rate differences 161 -


For group companies, at year-end 2015 there were losses of approximately € 926 million available for

limited or unlimited offset (2014: € 915 million). Of these available losses, € 50 million was recognised at

year-end 2015 (2014: € 65 million) with a tax value of € 15 million (2014: € 19 million).

It is not expected that the available losses amounting to € 876 million (2014: € 850 million) will provide

actual compensation in a reasonable period of time. Accordingly, the related deferred tax assets are not

recognised.

The other deferred tax positions refer to timing differences.

Other receivables

2015 2014

Balance as at 1 January 5,139 131

Divestment of group companies - -4

Issued 2 5,026

Repaid -15 -14

Other 4,748 -


The € 5 million issued loan in 2014 was for deferred payment of the sales price for the divestment of the

Oerlemans group. This deferred payment expires on 28 May 2017. An interest rate of 4.0% is charged for

this loan. No security has been provided for this loan.

Other concerns an escrow account relating to deferred income of the sale of group companies in previous

years. Initially, the escrow amount was fully provided for. The current estimation is that the total amount

of claims to be received from the buyer is lower than the amount of the escrow. The remaining balance of

the escrow will become available to Vion Food in January 2017.



Note 4 - Inventories

Note 5 - Receivables

2015 2014

Raw materials and consumables 14,093 14,762

Goods in progress 866 398

Spare parts and other 10,266 9,268

Finished products 102,769 97,429


The allowance for obsolete inventories amounted to € 0.9 million (2014: € 0 million).

Among others, spare parts consist of packaging material.

2015 2014

Trade receivables 344,354 363,874

Taxes 32,136 27,712

Receivables from associated companies 4,494 6,179

Other receivables and accruals 17,324 15,823


A bad debt allowance of € 7.8 million has been included in trade receivables (2014: € 8.2 million).

The cash and cash equivalents include € 20 million (2014: € 55 million) that is only available to Vion Food

under certain conditions, as agreed with credit insurers.

LIABILITIES

For a breakdown of the movements in equity, please refer to the notes on the company balance sheet.

Consolidated statement of comprehensive income 2015 2014

Consolidated net result after taxes attributable to the legal entity 22,399 -20,751

Conversion differences related to foreign group companies -549 -2,459

Total direct movements in equity of the legal entity -549 -2,459

Comprehensive income of the legal entity 21,850 -23,210

Note 6 - Cash and cash equivalents

Note 7 - Equity


2015 2014


Divestments of group companies 2,393 -1,327

Movements in third-party interests -2,600 -2,479

Share of result 2,076 4,893

Dividend distribution -4,628 -5,524

Exchange rate differences -16 -234


2015 2014

Deferred tax liabilities 2,118 4,121

Pension liabilities 119,720 123,461

Other provisions 18,736 37,728


Deferred tax liabilities

2015 2014


Reclassification of tax assets and tax liabilities 4,603 1,200

Divestments of group companies - -11,204

Released to result -6,644 -683

Exchange rate differences 38 -


Note 8 - Minority share

Note 9 - Provisions

Pension liabilities

These are provisions for pension plans, pre-pension

and early retirement schemes, as well as jubilee and

leave arrangements. These provisions are typically

long-term.

The Netherlands

Vion Food has pension schemes for its employees

in The Netherlands, where the pension benefits are

based on a moderate career-average scheme. The

pension schemes are administered by the General

Pension Fund for the Meat, Meat Products, and

Convenience Foods and Poultry Sector (“Stichting

Bedrijfstakpensioenfonds voor Vlees, Vleeswaren,

Gemaksvoeding en Pluimvee”, abbreviated as VLEP),

the Pension Fund for the Butcher’s Trade, the

Pension Fund for the Transport Sector and a

premium pension institution.

The most important elements of the Dutch pension

schemes in place are:

> VLEP runs a defined benefit scheme for

pensionable salaries up to € 63,540 topped with

a defined contribution scheme for pensionable

salaries exceeding this, tax driven maximised at

€ 100,000.

> The Pension Fund for the Butcher’s Trade runs a

defined benefit scheme for pensionable salaries

up to the fiscal maximum of € 100,000.

> The Pension Fund for the Transport Sector runs a

defined benefit scheme for pensionable salaries

up to € 51,414 topped with a defined

contribution scheme for pensionable salaries

exceeding this, tax driven maximised at € 100,000.

> For Vion N.V. and ICT personnel a defined

contribution pension scheme up to the fiscal

maximum of € 100,000 is applicable.

If there are shortfalls in pension funds, Vion Food

is not obliged to make additional contributions

other than in the form of higher future premiums.



The movements in the pension liabilities of Vion Food can be summarised as follows:

2015 2014


Divestment of group companies - -17,210

Added from the result 3,617 23,049

Released to the earnings 232 -1,035

Used for the intended purpose -7,590 -8,875


The balance as per year-end includes an amount of € 2.6 million (2014: € 2.3 million) for jubilee arrange-

ments. The remainder fully relates to German pension plan liabilities.

An amount of € 7.7 million (2014: € 7.5 million) of the employee benefits liabilities has a term of less than

one year. The anticipated yearly pension payments for the coming 5 years varies between € 7.3 million and

€ 7.7 million.

Other provisions

2015 2014


Divestments of group companies -3 -1,980

Added from the result 8,946 42,795

Released to the earnings -13,988 -8,610

Used for the intended purpose -13,994 -36,499

Exchange rate differences 47 60


The other provisions are for reorganisation and restructuring costs amounting to € 13 million (2014:

€ 25 million). These are predominantly current in nature. In addition, there are provisions for various

claims and other obligations.

At year end, there was only a shortfall in the VLEP

contribution.

At year end, the coverage ratio was 96.1% (2014:

103.8%) for the VLEP pension fund, 108,4% (2014:

110.0%) for the Pension Fund for the Butcher’s

Trade, and 100,5% (2014: 111.5%) for the Pension

Fund for the Transport Sector.

Risks of future wage increases, price indexations,

adjustments to mortality tables and to investment

yields of fund assets may lead to future

adjustments in the annual contributions to the

pension funds. These risks are not provided for.

Other than the premiums due no further liabilities

from the Dutch pension schemes occur which need

to be provided for.

The actuarial method ‘projected unit credit

method’ is used to determine the provision.

Germany

The pension plan liabilities in the balance sheet fully

apply to the defined benefit pension schemes for

employees and former employees of the German

group companies. These schemes are moderate

career-average schemes with conditional indexation.

The schemes are not open to new participants.

A part of the schedules will be funded using a

so-called ‘Unterstützungsfonds’, while liabilities

are direct. The obligations are measured on the

basis of actuarial calculations using the Projected

Unit Credit method as at year-end and applying a

full discount rate curve of high-quality corporate

bonds. The curve is based on Towers Watson’s Rate:

Link which is comprised of data from corporate

bonds rated AA or equivalent. The discount rate for

2015 is 1.667% (2014: 1.4%). Local mortality tables

including the probability of marital status at death

are applied (“Richttafeln 2005G”). Average

remaining service amounts to 11 years.


2015 2014

Payable to financial institutions 690 1,050

Financial lease obligations 6,833 7,000

Other payables 16,321 2,652


Other payables relate for an amount of € 11.2 million to the acquisition of Salomon Hitburger GmbH and

Vion SA, consisting of future payments and earn out agreements related to the purchase price.

2015 2014

Financial institutions and other interest-bearing liabilities 46,473 100,080

Repayment obligations 360 450

Suppliers and trade payables 188,265 182,678

Taxes and social security contributions 12,679 9,495

Other payables, accruals and deferred income 116,610 114,066


Included within the current payable to financial institutions is an amount of € 46 million (2014: € 100 milli-

on) under the facilities as disclosed in note 12.

The negative net debt position as at 31 December

2015 amounted to € 52 million (2014: negative

€ 87 million).

CREDIT FACILITIES

In June 2015 Vion Food agreed a new financing

facility agreement of € 100 million. In July 2015 it

was increased to € 125 million. The facility includes

a German receivables purchase facility and a Dutch

borrowing base facility refinancing the existing

receivables purchase facility. The term for the

facility is two years, starting 24 June 2015. The

facility is provided by a group of international

banks.

The interest rate is based on Euribor plus a

margin. As a result of the refinancing the margin

has improved compared to the former facility.

The facility contains customary covenants including

a minimum liquidity cover, an EBITDA floor and

maximum capital expenditure. Liquidity is defined

as the freely transferable, convertible and

accessible cash including the evidenced

available facility headroom. EBITDA is calculated

on a 12-month rolling basis. During 2015, Vion

Food was in compliance with these covenants.

In the beginning of 2016, certain amendments

in the terms and conditions of the facility were

agreed with the lenders.

Vion Food has provided full securities for both

facilities with pledges on its trade receivables.

At 31 December 2015, an amount of € 46 million

(2014: € 100 million) was drawn under the credit

facilities.

Note 10 - Long-term liabilities

Note 11 - Current liabilities

Note 12 - Payable to credit institutions



FINANCIAL RISK MANAGEMENT

Vion Food is exposed to a variety of financial risks,

such as credit risk, foreign currency risk, interest

rate risk and liquidity risk. These risks are

inherent to the way Vion Food operates as a

multinational with several local operating compa-

nies. Vion Food’s overall risk management policy is

to identify, assess and, if necessary, mitigate these

financial risks in order to minimise potential adver-

se effects on its financial performance.

The Treasury policies include the use of derivative

financial instruments to hedge certain exposures.

The Management Board is ultimately responsible

for risk management. Financial risk management

is, except for credit risk of non-financial

counterparties, carried out by Group Treasury in

line with clearly formalised treasury policies.

Group Treasury identifies, evaluates and hedges

financial risks at corporate level and monitors

compliance with its policies within Vion Food. Vion

Food has a Risk Management and Compliance

Committee that advises the Management Board on

risk management.

The capitalisation and funding of operating

companies is a responsibility of Group Treasury,

but managed in close cooperation with Group

Tax as the combination of equity and short term

intercompany loans is mostly used as a financing

structure. Decisions regarding the debt-to-equity

ratio are based on various aspects including

minimum regulatory requirements and the

flexibility to change the structure. Vion Food has

no restrictions in paying intercompany cash

dividends or in repaying intercompany loans.

The divisions and operating companies are

primarily responsible for identifying and managing

financial risks, especially in relation to transactions

in foreign currencies.

Within the boundaries set in the Treasury policies,

the operating companies execute appropriate

foreign currency risk management activities. Vion

Food does not purchase or hold any financial

derivatives for trading purposes, and primarily

uses derivative financial instruments to manage its

foreign currency risk. These financial transactions

are all executed through Group Treasury and

qualify for hedge accounting. Therefore, gains or

losses arising from changes in the fair value of

derivatives are included in the profit and loss

statement (under cost price hedge accounting)

when these changes are compensated by an

equivalent change in the fair value of the hedged

items.

Group Treasury is responsible for reporting to the

Management Board on Vion Food’s exposure to

a number of financial risks, including liquidity,

foreign exchange and interest exposure.

CREDIT RISK

Credit risk represents the accounting loss that has

to be recognised on the reporting date if

counterparties fail to perform as contracted.

Credit risk is carried out by Corporate Credit Risk

Management (CCRM).

In line with clearly formalised policies, CCRM is

operating as a credit insurer. All guidelines and

procedures are audited and checked by banks and

insurance companies.

The group only trades with creditworthy

parties and has adopted procedures to monitor the

creditworthiness of these parties. Vion Food has

established guidelines to limit the magnitude of

the credit risk for each party. In addition, Vion Food

continually monitors its receivables and uses a strict

collection procedure. These measures minimise the

credit risk for Vion Food. There are no significant

concentrations of credit risk within Vion Food.

FOREIGN CURRENCY RISK

Vion Food is exposed to currency risks in the

following areas:

> transaction risk on anticipated sales, and on the

balance sheet receivables or payables arising

from such transactions;

> currency conversion risk arising from currency

conversion differences on intercompany and

external payables and deposits in foreign

currency;

> currency conversion risk on net investments in

consolidated foreign entities;

> currency conversion risk on the net result of

foreign entities.

Note 13 - Objectives and policy for managing financial risks


Vion Food makes use of a financial policy to deal

with currency risks. This policy states that

committed transactional positions should be

hedged using forward contracts. In general, the

average duration of these contracts is three to four

months. Vion Food generally strives to fund local

entities in their functional currency. The currency of

the external funding and deposits of Vion Food is

based on the financial policy coupled with the re-

quired funding of companies within Vion Food. This

can be either directly by external foreign currency

loans and deposits or through currency swaps.

The currency conversion risk on the capital invested

in consolidated foreign entities financed with their

own resources is partially hedged based on the

policy approved by the Management Board. If

these types of hedging transactions are entered

into, these are recognised as a hedge of a net

investment in a foreign entity. Vion Food does not

hedge the currency conversion risk on the net result

of foreign entities.

The notional value of the forward exchange

contracts to hedge the described currency risks,

particularly the US dollar and British pound,

amounted to a total of € 128 million net at year-

end 2015 (2014: € 120 million). The fair value of

these contracts at the balance sheet date was a

Some of the group companies have long-term

liabilities arising from the rental and operational

leasing of assets. The composition of these

obligations is as follows:

• < 1 year € 14 million (2014: € 10 million)

• 1 to 5 years € 20 million (2014: € 13 million)

• > 5 years € 8 million (2014: € 2 million)

For group companies, an amount of € 20 million

was issued in bank guarantees (2014: € 55 million).

Vion Food entered into long-term sales contracts

with minimum delivery requirements with different

customers. The relevant sales prices depend on the

market prices of the relevant products at the time

of sale.

negative amount totalling € 0.7 million (2014

positive € 0.8 million). Of this, a negative amount

of € 0.7 million (2014: positive € 0.8 million) is

disclosed off-balance sheet based on cost price

hedge accounting.

The fair values of all financial instruments

approximate the book values.

INTEREST RATE RISK

Vion Food is partly financed with interest-bearing

borrowings but overall has a negative net debt

position. Vion Food’s exposure to interest rate

risk (especially due to limited long-term debt) is

limited. Vion Food considers the financial policy to

deal with interest rate risk. This policy allows for

the use of derivatives. However, no interest rate

swaps were held in 2015.

LIQUIDITY RISK

The primary objective of liquidity management is

to provide sufficient cash and cash equivalents at

all times to enable Vion Food to meet its payment

obligations. Management monitors forecasts

of Vion Food’s liquidity reserves on the basis of

expected cash flows. Vion Food aims for sufficient

committed credit facilities and a strong liquidity

position.

Claims have been made against Vion Food and/

or its group companies that are contested by Vion

Food. Although the outcome of these disputes

cannot be predicted with certainty, legal advice and

the information available leads to the assumption

that this will not have a significant adverse effect

on the consolidated financial position.

With regard to the BSE inspections which were

incorrectly performed in the past, Vion Food has

an outstanding claim against the local authority

concerned. Although management and external

advisors believe that these claims will lead to

positive future cash flows, the amount and timing

of such revenue is impossible to predict at the time

of preparation of these annual accounts, and they

are therefore not included on the balance sheet.

Note 14 - Assets and liabilities not included on the balance sheet



The geographical composition of the net turnover is as follows: 2015 2014

Europe:

- Germany 2,061,079 2,302,008

- The Netherlands 554,529 610,948

- Italy 424,456 483,544

- United Kingdom 199,324 224,353

- Belgium 22,021 34,772

- Other EU countries 860,013 939,934

- Non-EU countries 65,706 71,488

Subtotal 4,187,128 4,667,047

Asia 310,280 277,983

United States of America 22,378 20,517

Canada 9,453 6,873

Other countries 41,323 19,306

Total 4,570,562 4,991,726

Vion Food is mainly active in the food industry; less than 10% of sales is generated by other lines of business.

This item accounts for different categories of other operating income. This concerns, among others,

commissions, bonuses and governmental grants amounting to € 21 million (2014: € 25 million), rental

income amounting to € 0.8 million (2014: € 1.1 million) and transport income amounting to € 1.1 million

(2014: € 0.8 million). In addition, this item also includes a profit from sales of fixed assets amounting to

€ 1.0 million (2014: loss of € 0.5 million).

The composition of the personnel costs is as follows: 2015 2014

Wages and salaries 190,836 213,691

Other personnel costs 2,157 7,626

Wages and salaries associated with reorganisations 4,955 17,982

Pension charges 9,680 11,827

Subtotal 207,628 251,126

Wage costs for employees on a contract basis 229,352 214,005

Total 436,980 465,131

At the end of 2015, Vion Food employed 4,233 FTEs (2014: 4,311). The average number of employees for

Vion Food was 4,228 in 2015 (2014: 5,243). Moreover, an average of 6,793 employees (2014: 7,396) were

employed within Vion Food via temporary employment agencies.

Notes on the consolidated profit and loss statement


Note 15 - Net turnover

Note 16 - Other operating income

Note 17 - Wages and salaries


The number of employees broken down by country are as follows: 2015 2014

The Netherlands 1,605 1,554

Germany 2,431 2,662

Other countries 197 95

Total 4,233 4,311

This item includes an amount of € 0.4 million (2014: € 1.5 million) in respect of social security contributions

relating to reorganisations.

2015 2014

Intangible fixed assets 3,410 1,637

Tangible fixed assets 25,083 29,749

Total 28,493 31,386

The impairment charge amounts € 0 million (2014: € 5.9 million). In 2014, the impairment charge was fully

attributable to tangible fixed assets.

This item includes € 4.3 million for rental costs for buildings and non production related equipment (2014:

€ 4.4 million), € 5.5 million for lease costs for company vehicles (2014: € 5.8 million), € 1.4 million (2014:

€ 5.5 million) for costs relating to reorganisations, and the effect of movements in provisions. For 2015,

€ 20.6 million (2014: € 24.4 million) is included that was released from divestment provisions formed in

previous years. It mainly relates to the sale of Moon entities and Vion Ingredients. For 2014, € 24.4 million

is included that was released from divestment provisions formed in previous years.

The decrease in interest charges and similar expenses as compared to 2014 is mainly due to lower amount

of financing needed in 2015 and a lower interest margin due under the new financing agreement as from

24 June 2015.

Note 18 - Social security contributions

Note 19 - Amortisation and depreciation of fixed assets

Note 20 - Impairment losses on fixed assets

Note 21 - Other operating costs

Note 22 - Interest charges and similar expenses


The effective tax rate for ordinary operating results in 2015 amounted to 1.6% (2014: 497.1% negative).

The level of the effective tax rate depends on, amongst other things, the nominal tax rate and the tax

relief facilities and restrictions in the countries where the activities occur, as well as the extent to which

use can be made of existing off-set of losses available for offset.

Taking into account the nominal Dutch tax rate, the effective tax rate is determined as follows:

2015 2014

Result before taxes 24,882 -2,656

Nominal Dutch tax rate (25.0%) 6,221 -664

Differences due to foreign tax rate -1,692 -4,067

Weighted average 4,529 -4,731

Taxes on result in previous years -947 9,239

Change in valuation of available losses and timing differences 3,483 -64,316

Non-deductible expenses 2,378 180

Non-taxable/deductible income from participating interest -8,762 63,063

Withholding tax - 89

Other tax effects -274 9,678

Total tax charges 407 13,202

The tax impact on valuation adjustments to available losses and timing differences is caused by the

utilisation of tax losses and movements in deductible timing differences for which no deferred tax assets

were recognised. This is because it was unlikely that there would be sufficient future profits to offset. This

has a positive impact on the effective tax rate.

Note 23 - Taxes

N O T E S O N T H E C O N S O L I D A T E D P R O F I T A N D L O S S S T A T E M E N T


2015 2014

EY EY EY EY

The Netherlands International Total The Netherlands International Total

Annual accounts audit 721 899 1,620 1,246 817 2,063

Other audit related services 32 314 346 44 130 174

Tax related activities 130 - 130 346 - 346

Other 16 - 16 - - -

Total 899 1,213 2,112 1,636 947 2,583

The composition of this item is as follows: 2015 2014

Fixed remuneration 1,297 68% 1,382 31%

Variable remuneration 352 18% 1,330 30%

Pension charges 158 8% 66 1%

Termination payments 63 3% 1,679 37%

Other 50 3% 34 1%

Total 1,920 100% 4,491 100%

Remuneration paid to the Supervisory Board members amounted to € 380 thousand in 2015 (2014: € 328

thousand).

Stichting Administratiekantoor SBT (`SBT’) is the sole shareholder of the Company. SBT has issued depo-

sitary receipts in bearer form for its shares in the Company without cooperation of the Company. All depo-

sitary receipts are held by Noordbrabantse Christelijke Boerenbond, Rooms-Katholieke Vereniging van

Boeren en Tuinders - Ontwikkeling (`NCB-Ontwikkeling’). NCB-Ontwikkeling is related to Zuidelijke Land-

en Tuinbouworganisatie (`ZLTO’). ZLTO is an association for entrepreneurs working in agricultural sectors

and has approximately 15,000 members in Noord Brabant, Zeeland and the southern part of Gelderland.

Certain members of ZLTO are suppliers to the Company. This is on an individual basis and is not related to

their ZLTO membership. In addition, ZLTO supplies consultancy services to Vion Food. During 2015, ZLTO

carried out a number of projects for, and made facilities available to Vion Food, for which in total € 975

thousand was paid (2014: € 1 million).

Best Hides GmbH (`Best Hides’) is a joint venture with Darling International in which Vion Food owns 40%.

During 2015, Vion Food has sold hides to Best Hides for an amount of € 58.9 million (2014: € 65.8 million).

All transaction with related parties are at arm’s length.

Other information


Note 24 - Auditor’s fee

Note 25 - Director’s renumeration

Note 26 - Supervisory Board members’ renumeration

Note 27 - Related parties


note 2015 2014

ASSETS

Fixed assets

Financial fixed assets a 407,649 385,816

407,649 385,816

Current assets

Receivables from group companies 54,714 83,880

Other receivables 15 -

Cash and cash equivalents 55 28

54,784 83,908

Total assets 462,433 469,724

LIABILITIES

Issued capital 2,285 2,285

Share premium reserve 372,716 372,716

Legal reserve 3,815 169

Exchange rate differences reserve -981 -432

Other reserves 3,095 23,846

Retained earnings 18,753 -20,751

Equity b 399,683 377,833

Current liabilities payable to group companies 62,749 91,848

Other current liabilities 1 43

Total liabilities 462,433 469,724

Company balance sheet

As at 31 December 2015

before result appropriation



Company profit and loss statement


Company accounting policies

2015 2014

Income from participating interests 17,634 -20,387

Other results 4,765 -364

Net result 22,399 -20,751

General principles

The Company annual accounts have been prepared

in accordance with the provisions of Title 9, Book

2 of the Dutch Civil Code. Unless stated otherwise

below, please refer to the notes on the

consolidated annual accounts for the general

principles used to prepare the annual accounts, the

accounting policies for the balance sheet and the

profit and loss statement, and the notes on of the

separate assets and liabilities and results.

Vion Food’s financial data is included in the

consolidated annual accounts. Therefore, the

Company profit and loss statement for Vion Hol-

ding N.V. only reports the share of the net result of

companies in which Vion Food has a participating

interest, and other net earnings, in accordance

with Article 402, Title 9 of the Dutch Civil Code.

Accounting policies for

the profit and loss statement

Income from and valuation of participating interests

The income from participating interests relates to

the share of Vion Food in the result of the

participating interests stated at net asset value.

Income from participating interests where

significant influence is exerted on the business and

financial policy is the share in the result from these

participating interests that accrues to the company.

This income is determined based on Vion Food’s

accounting policies for the balance sheet and

profit and loss statement.

For participating interests in which Vion Food does

not exert any significant influence on the business

and financial policy and that are valued at cost, the

dividends are regarded as income. This is included

in financial income and expenses.

Participating interests with a negative net asset

value are valued at nil. If the company fully or

partially guarantees the debts of the relevant

participating interest, an allowance is formed

primarily against the receivables from this

participating interest, and the remainder is

covered by the provisions, to the sum of the share

in the losses incurred by the participating interest,

or the expected payments by the Company for

these participating interests.


ASSETS

Note A - Financial fixed assets

These assets include the investments in group companies. These investments are stated at net asset value.

The movements in Vion Food’s share are as follows: 2015 2014

Balance on 1 January 385,816 408,663

Results 17,634 -20,387

Exchange rate differences -549 -2,460

Release provision 4,748 -


Notes on the company balance sheet



LIABILITIES

Note B - Equity

The share capital of Vion Holding N.V. amounts to € 4.5 million divided into 100,000 shares with a

nominal value of € 45. Vion Holding N.V. holds 3,566 shares (2014: 3,566). On 31 December 2015, there

were 50,784 fully paid- up shares issued to third parties (2014: 50,784). The share premium reserve consists

of the income from share issues insofar as this income is higher than the nominal amount of the shares.

The legal reserve for exchange rate differences recognises exchange rate differences which result from the

conversion of the functional currencies of foreign business operations to the presentation currency. When

a group company is divested, the accumulated exchange rate differences for this group company are

included in the other reserves.

The movements in the individual components of equity capital are as follows:

Exchange

Share rate

Issued premium Legal differences Other Retained

capital reserve reserves reserve reserves earnings Total

Balance as at 1 January 2015 2,285 372,716 169 -432 23,846 -20,751 377,833

Result appropriation previous year - - - - -20,751 20,751 -

Exchange rate differences - - - -549 - - -549

Reclassification - - 3,646 - - -3,646 -

Result - - - - - 22,399 22,399

Balance as at 31 December 2015 2,285 372,716 3,815 -981 3,095 18,753 399,683

The € 3,646 million change in legal reserve mainly relates to hours included in total capitalised internally

developed software.

See note 1 of the consolidated financial statements.

Note C - Personnel

At the end of 2015, Vion Holding N.V. had 0 employees as converted into FTEs (2014: 0).

Note D - Off-balance sheet rights and obligations

Vion Holding N.V. heads the Dutch fiscal unity for corporate income tax. As a result, Vion Holding N.V. is

jointly and severally liable for the corporate income tax for the entire Dutch fiscal unity.

Through issuing a 403 declaration, Vion Holding N.V. has declared itself liable for the subsidiaries in The

Netherlands where it owns a majority interest.


Registered Country Share in % (if not 100%)*Name office (if not NL) 2015 2014 A. Moksel GmbH Buchloe D Ahlener Fleischhandel GmbH Ahlen D 75.0% 75.0%Atlas Handelsgesellschaft mbH Munich D Bain 3 Ltd Sittingbourne UK BFU Beteiligungsgesellschaft für Food Unternehmen Buchloe D BV Destructor Zeeland Best CEMO GmbH Buchloe D Cymru Country Feeds Ltd Llay, Nr Wrexham UK Cymru Country Produce Ltd Livingston UK De Groene Weg BV Groenlo Distrifresh BV Boxtel Encebe Vleeswaren BV Boxtel Favor Parker Ltd Kings Lynn UKFVZ Convenience GmbH Holzwickede D G.u.P. Salomon GmbH Buchloe D Hy-Co Hybridschweine Cooperationsgesellschaft mbH Bad Bramstedt D 50.0%*** 50.0%Kühlhaus Hilden GmbH Hilden D Marox GmbH Buchloe D NFZ Convenience Produkte GmbH Buchloe D OFW Fleisch- und Wurstwaren GmbH Buchloe D PB Fleisch GmbH Duisburg D Peelse Barrier Holding BV & Co KG Buchloe D 94.3% 94.3%Peelse Barrier Holding BV & Co Zweite KG Buchloe D 94.3% 94.3%Prignitzer Fleischzentrum GmbH Perleberg D 89.0% 89.0%Salomon Food World GmbH Grossostheim D Salomon Hitburger GmbH Grossostheim D 75.0%Schlachtzentrum Gelsenkirchen Verwaltungs GmbH Gelsenkirchen D SFB Fleisch- und Kühlcentrale GmbH Holdorf D 50.0%*** 50.0%SFB Fleisch- und Kühlcentrale GmbH & Co. KG Holdorf D 62.5% 62.5%Sobel Best NV Best Südfleisch Bamberg GmbH Bamberg D Südfleisch GmbH Munich D Südfleisch Holding GmbH Munich D Südfleisch Italia GmbH Bruneck I Südfleisch Waldkraiburg GmbH Waldkraiburg D Südfrost Kühlhausgesellschaft mbH Buchloe D Südost-Fleisch GmbH Altenburg D Thorne Poultry Ltd Thorne UK Trägergesellschaft Schlachthof Minden GbR Minden D 95.0% 95.0%Unterstützungsfonds der Südvieh-Südfleisch GmbH Munich D VION Anhalt GmbH Rodleben D VION Anklam GmbH Anklam D VION Apeldoorn BV Apeldoorn VION Bad Bramstedt GmbH Bad Bramstedt D VION Boxtel BV Boxtel VION Buchloe GmbH Buchloe D VION Bulgaria EOOD Sofia BG VION Convenience GmbH Grossostheim D VION Crailsheim GmbH Crailsheim D VION Denmark ApS Holstebro DK VION EGN Südostbayern GmbH Vilshofen D 51.0% 58.3%VION Emstek GmbH Emstek D VION Enschede BV Enschede VION Farming België NV Wommelgem B VION Farming BV Boxtel VION Finance SARL Hunsdorf L VION Financial Services BV Son VION FKM Furth im Wald GmbH Furth im Wald D 70.0% 70.0%VION Fleischzentrum GmbH Buchloe D VION Food (NL Division) Ltd Sittingbourne UK VION Food Group Ltd** Livingston UK VION Food Hellas EPE Athens GR VION Food International (Holding) BV Son VION Food International BV Boxtel VION Food International Pacific Ltd Hong Kong HK VION Food International Singapore Pte Ltd Singapore SG VION Food Nederland BV Boxtel VION Food Nederland Overhead BV Boxtel

Note E - List of participating interests

Vion Holding N.V. consolidates the following participating interests:


Registered Country Share in % (if not 100%)*Name office (if not NL) 2015 2014

VION Food North GmbH Bad Bramstedt D VION Food Scotland Ltd** Broxburn UK VION France Eurl. Fourqueux F VION Frankfurt GmbH Frankfurt a. M. D VION Fresh Meat North GmbH Bad Bramstedt D VION Fresh Meat South GmbH Buchloe D VION GmbH Buchloe D VION Groenlo BV Groenlo VION Hilden GmbH Hilden D VION Holdorf TK GmbH Holdorf D VION Hungary KFT Érd HU VION ICT Services BV Best VION Ile de France EURL Fourqueux F VION Import Export S.L. Barcelona ES VION International BV Boxtel VION International GmbH Hamburg D VION International Ljubljana d.o.o. Ljubljana Slo VION IT Services GmbH Wunstorf D VION Lausitz GmbH Kasel-Golzig D VION Livestock BV ‘s-Hertogenbosch VION Luxembourg SARL Hunsdorf L VION Move GmbH Buchloe D VION NV Best VION Perleberg GmbH Perleberg D VION Pfarrkirchen GmbH Pfarrkirchen D 51.0% 58.3%VION Poland Sp.z.o.o. Warsaw PL VION Praha s.r.o. Prague CZ VION Property Emstek GmbH Emstek D VION Ramfood LLC Moscow RU 51.0% 51.0%VION Retail Groenlo BV Groenlo VION Retail Nederland BV Best VION Romania SRL Bacau RO VION Rundvee BV Boxtel VION Rusland BV Best VION SA Chiasso CH 70.0%VION SBL Landshut GmbH Landshut D 51.0% 57.1%VION Scherpenzeel BV Scherpenzeel VION Spain SL Barcelona ES VION Straubing GmbH Straubing D 51.0% 58.3%VION Subco GCF Ltd Livingston UK VION Subco GCFI Ltd Livingston UK VION Subco GCPB Ltd Livingston UK VION Subco JJT Ltd** Sittingbourne UK VION Subco MD Ltd Livingston UK VION Subco MFG Ltd Doncaster UK VION Subco TOC Ltd Sittingbourne UK VION Sweden AB Arsta SE VION Tilburg BV Tilburg VION Trading Company SRL Bacau RO VION Trading GmbH Hamburg D VION Trading Poland SP.z.o.o. Warsaw PL VION Veredelungs- und Vermarktungsgesellschaft mbH & Co. KG Buchloe D VION Vilshofen GmbH Vilshofen D 51.0% 58.3%VION Zeven AG Zeven D 60.9% 60.0%VION Zucht- und Nutzvieh GmbH Bad Bramstedt D VION FOOD Portugal, Lda Lisbon PT 50.0%*** 50.0%Vleesindustrie Valkenswaard BV Valkenswaard WBA Wasserwerkbetriebs GmbH Altenburg D ZVK Zuchtviehkontor GmbH Munich D 67.2% 67.2%

* The percentages reflect the actual shareholdings. ** The marked UK registered participating interests are exempt from the Companies Act 2006 requirements relating to the audit of

their individual financial statements by virtue of Section 479A of the Act as Vion Food has guaranteed the subsidiary companies under Section 479C of the Act.

*** These joint ventures are proportionally included in the consolidation.

The non-consolidated participating interests are disclosed in note 3 on financial fixed assets.


BEST, 7 APRIL 2016

Management Board Supervisory Board

F.J.L.J. Kint, CEO S.N. Schat, Chairman

J.L.M. Sliepenbeek, CFO J.A.M. Huijbers, Vice Chairman

A.J.M. van Hoof

A.T.C. van der Laan

R.E.M. Lotgerink

T. Heidman

M. Bax

Profit appropriation according to the Articles of Association

Article 23 of the Articles of Association reads as follows:

PARAGRAPH 1

The Management Board, subject to approval by the Supervisory Board, will reserve amounts from the

result as specified in the annual accounts adopted by the General Meeting of Shareholders. The remaining

result is at the disposal of the General Meeting of Shareholders.

PARAGRAPH 2

The Company may only make distributions to the shareholders and other parties entitled to the result

available for distribution insofar as the equity exceeds the amount of the issued capital plus the reserves

that must be maintained by law.

Proposed profit appropriation

The proposal for the profit appropriation is to add the net result for 2015 to the other reserves.

Net result 2015 22,399

Other information(in thousands of euros)

Events after balance sheet date No subsequent events occurred that are significant to Vion Food.


Independent auditor’s report

To: Management Board of VION Holding N.V.

REPORT OF THE FINANCIAL STATEMENTS

We have audited the accompanying financial

statements 2015 of VION Holding N.V., Best which

comprise the consolidated and company balance

sheet as at December 31, 2015, the consolidated

and company profit and loss account for the year

then ended, the consolidated cash flows and the

notes, comprising a summary of the accounting

policies and other explanatory information.

Management’s responsibility

Management is responsible for the preparation and

fair presentation of these financial statements and

for the preparation of the annual report, both in

accordance with Part 9 of Book 2 of the Dutch Civil

Code. Furthermore management is responsible for

such internal control as it determines is necessary to

enable the preparation of the financial statements

that are free from material misstatement, whether

due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on

these financial statements based on our audit. We

conducted our audit in accordance with Dutch law,

including the Dutch Standards on Auditing. This

requires that we comply with ethical requirements

and plan and perform the audit to obtain reasona-

ble assurance about whether the financial state-

ments are free from material misstatement.

An audit involves performing procedures to obtain

audit evidence about the amounts and disclosures

in the financial statements. The procedures selec-

ted depend on the auditor’s judgment, including

the assessment of the risks of material misstate-

ment of the financial statements, whether due to

fraud or error.

In making those risk assessments, the auditor

considers internal control relevant to the entity’s

preparation and fair presentation of the financial

statements in order to design audit procedures

that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. An

audit also includes evaluating the appropriateness

of accounting policies used and the reasonableness

of accounting estimates made by management, as

well as evaluating the overall presentation of the

financial statements.

We believe that the audit evidence we have ob-

tained is sufficient and appropriate to provide a

basis for our audit opinion.

Opinion with respect to the financial statements

In our opinion, the financial statements give a true

and fair view of the financial position of VION Hol-

ding N.V. as at December 31, 2015 and of its result

for the year then ended in accordance with Part 9

of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements

Pursuant to the legal requirement under Section

2:393 sub 5 at e and f of the Dutch Civil Code, we

have no deficiencies to report as a result of our

examination whether the annual report, to the ex-

tent we can assess, has been prepared in accordan-

ce with Part 9 of Book 2 of this Code, and whether

the information as required under Section 2:392

sub 1 at b-h has been annexed. Further we report

that the annual report, to the extent we can assess,

is consistent with the financial statements as requi-

red by Section 2:391 sub 4 of the Dutch Civil Code.

EINDHOVEN, 7 APRIL 2016

For and on behalf of Ernst & Young Accountants

LLP

sgd. R.E.J. Pluymakers RA



www.vionfood.com

PORTRAITS & FIGURES · 2018. 2. 21. · viability of pig husbandry in The Netherlands and Germany thanks to our leadership in productivity, Foreword 2015: A USEFUL YEAR FOR VION FOOD

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