Annual Report 2015 Antoon Spoorenberg
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PORTRAITS & FIGURES ANNUAL REPORT 2015 ANTOON SPOORENBERG FUNCTION MEMBER OF FARMING STAFF SHIFT LOCATION Vion Farming, Boxtel (NL) TODAY > 18 telephone calls: longest lasted 33 minutes, shortest 3 minutes 30 seconds 8:00 - 17:00 > 5 visits to farmers > 223 km driven to visit suppliers > 14 years of service with the company > 2 children > 73 km cycled with 7 friends 2 | VION ANNUAL REPORT 2015 Table of contents Profile 4 Foreword: 2015, a useful year for Vion Food 7 Mission and strategy 9 Our brands 10 Management review 13 Corporate Social Responsibility 27 Corporate governance 33 Risk management, compliance and internal control 39 Report of the Supervisory Board 45 COVER: SHARLON PEDRO FUNCTION SLAUGHTERHOUSE DEPARTMENT SHIFT MANAGER LOCATION Vion Food, Boxtel (NL) TODAY > 10,400 cuts of meat processed using the F-line > 9,788 pigs slaughtered 6:00 - 14:15 > 100,000 kg of meat processed > 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 VION ANNUAL REPORT 2015 | 3 Profile Vion Food is an international meat producer with production locations in The Netherlands and Germany and NET sales support offices in sixteen countries TURNOVER 2015 worldwide. Through its three divisions - Pork, Beef and € 4.6 Food Service - the Company provides fresh pork and beef, and derived products for BILLION retail, foodservice and the processed meat industries. AVERAGE Vion Food supplies customers in its home O markets of The Netherlands and Germany, N OF other countries in Europe and the rest of EMPLOYEES the world. Vion Food’s headquarters are located in Boxtel (The Netherlands). IN 2015 INCLUDING FLEX WORKERS Vion Holding N.V. is a public limited liability company under Dutch law. Starting 11,021 in 2016 Vion Food will comply with the Dutch Corporate Governance Code. Vion Food’s sole shareholder, Stichting PIGS Administratiekantoor SBT, is a trust office PROCESSED PER WEEK that has issued depositary receipts for its shares to NCB-Ontwikkeling, which acts 303,000 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 CATTLE and the southern part of Gelderland. PROCESSED PER WEEK 17,400 4 | VION ANNUAL REPORT 2015 KEY FIGURES (amounts in millions of euros) 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 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). VION ANNUAL REPORT 2015 | 5 LOUIS AUERBACH FUNCTION CATTLE SLAUGHTERHOUSE FOREMAN SHIFT LOCATION Vion Food, Tilburg (NL) TODAY > 500-600 cattle slaughtered > 2-knife system used for maximum hygiene 6:00 - 15:00 > 35 slaughterhouse staff members managed > 5% of staff given training on the job > 6 emergency response officers within a team of 80 > 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 6 | VION ANNUAL REPORT 2015 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. We continued our important efforts to optimise food safety, animal welfare and sustainability. our footprint; over two years, this has resulted in a As further highlighted in this Annual Report, in reduction from 35 to 25 production sites, without 2015 we signed commercial contracts which will set losing volume. At the same time, key investments examples for the industry. They are based on better upgraded various sites to best-in-class level. For satisfying customer needs through management example, Waldkraiburg in southern Germany will be of the complete supply chain, which we see as the one of the largest and most modern beef processing strategy going forward. sites in Europe. A new management board (CEO and CFO) as well as a new COO for our Pork division Indeed, the key message about the mid- and long- and a Group HR Director came on board. The pro- term prospects of Vion Food are related to our duct-driven management structure was maintained unique position to promote trust in the industry. We and strengthened. To manage the Company and are fully aware that, over the past few years, meat implement our strategy and plans, we have set up an has been the subject of important social debates, Executive Committee consisting of the division COOs such as on animal welfare, food safety and and the CEO and CFO plus the Group HR Director. traceability and the role of meat in healthy diets, to name just a few. Our position as a ‘funnel’ between In 2015, Vion Food was definitely impacted by the fragmented animal husbandry sector on the the difficult situation in pig husbandry in The one hand and the meat processing industry on the Netherlands, Germany and Europe in general. First other makes Vion Food the natural – and much and foremost, Vion Food has deep empathy for needed – chain coordinator in our markets. The farmers who do their work with passion and make chain coordinator guarantees the origin of the meat, (often unnoticed) continuous improvements without encourages and rewards animal-friendly husbandry proper reward. At Vion Food, we see it as our res- and safeguards food safety, quality and consumer ponsibility to contribute to improving this situation, satisfaction. whether by making ourselves even more efficient, by creating and managing supply chains that give At Vion Food, we are ready to take on this better access to the market or by using our scale to responsibility. Our focus over the coming years optimize valorisation. will be on putting this into practice and thus maximising the Company’s full potential, backed This year we made further progress on optimising by our loyal and dedicated employees. Their daily the economic value of the animals processed by efforts to improve our performance are remarkable accurately aligning our product selection with global and wholeheartedly appreciated. Hence, you find in market demand. Access to markets around the world the Annual Report some of their Portraits together is a key success factor for our Company. If we can with Vion’s Figures. sustain this approach, we believe in the long-term viability of pig husbandry in The Netherlands and Francis Kint Germany thanks to our leadership in productivity, Chief Executive Officer VION ANNUAL REPORT 2015 | 7 PIETER VAN GOOL FUNCTION CATTLE SHED EMPLOYEE SHIFT LOCATION Vion Food, Tilburg (NL) TODAY > 457 cows received > 43 livestock vehicles unloaded > 6 different nationalities 6:00 - 14:15 talked to > 4,700 m walked with the dog > 15 kg dog food bought > 4 years spent renovating his home 8 | VION ANNUAL REPORT 2015 Mission and strategy MISSION STRATEGY Vion Food wants to be the leading reliable partner This mission statement translates into the within the food supply chain that provides people following strategic and future-proof principles: around the world with safe meat products. > The consolidation and strengthening of existing worldwide market positions and the development of new markets. OUR VALUES > The continuous monitoring of product quality, food safety and its full traceability. > Pride > The alignment of products with customer needs, > Transparency including the introduction of innovative and > Ambition new products. > Sustainability > The creation and management of an integrated > Quality supply chain by assisting farmers and actively collaborating with retail and industry.