Annual Report & Audited Consolidated Financial Statements 2017 Realizing our Potential. Contents This is LDC 02 Global Presence 04 Our Value Chain 06 Perspectives 10 Louis Dreyfus Company is a leading Message from our Chairperson 12 merchant and processor of agricultural Message from our CEO 14 goods, leveraging its global reach and Corporate Governance 16 extensive asset network to deliver Strategic Approach 20 for our customers around the world – Our Strategy 22 safely, responsibly and reliably. Our Capabilities 26 2017 Review 34 2017 from A-Z 36 Financial Highlights 40 Platform Performance 42 Regional Overview 50 Audited Consolidated Financial Statements 56 Management Discussion & Analysis 58 Financial Highlights 58 Income Statement Analysis 59 Balance Sheet Analysis 61 Independent Auditor’s Report 64 Consolidated Income Statement 67 Consolidated Balance Sheet 68 Consolidated Statement of Comprehensive Income 70 Consolidated Statement of Cash Flows 71 Unless otherwise indicated, “Louis Dreyfus Company”, “LDC”, “Group”, Consolidated Statement of Changes in Equity 72 “Louis Dreyfus Company Group” and related terms such as “our”,“we”, etc. used in this Annual Report refer to the Louis Dreyfus Company B.V. Group. Notes to Consolidated Financial Statements 73 Louis Dreyfus Company Annual Report & Audited Consolidated Financial Statements 2017 1 Our vision Our mission 11 Platforms To work towards a safe To use our know-how Our diversified activities span the entire value chain from farm to fork, and sustainable future, and global reach to bring across a broad range of business lines (platforms). contributing to the the right product to the global effort of providing right location, at the The Value Chain Segment sustenance for a growing right time. The Merchandizing Segment includes platforms that have a fully includes platforms that have a more population. integrated asset network ranging merchant-oriented business model. from origination to distribution. Net Sales1 This is LDC. Oilseeds Grains Coffee Cotton US$43.0b Soybeans, canola, Wheat, white corn, Arabica and robusta Sourced from all major US$40.6 billion in 2016 rapeseeds, cottonseeds, yellow corn, DDGS, producers sunseeds, peanuts, sorghum, barley, palm, meals and oils rye, oats, chickpeas, (crude & refined, bulk & fertilizers, inputs & bottled), lecithin, glycerin seeds (crude & refined), 1 biodiesel, fertilizers, Volumes inputs & seeds up 5% Sugar Rice Dairy Finance year-on-year more than 90% Raw and white sugar Paddy, brown, milled Milk powders, whey Provision of foreign and parboiled (bulk & powders, fat-filled exchange risk Owned by packed) powders, fats and mitigation Louis Dreyfus Holding B.V. cheese Segment Operating Results1 US$1,057m US$1,037 million in 2016 * Juice Freight Metals2 ca. less than 19,000 10% 6 Orange, grapefruit, Global footprint Base and precious 1 Capital Expenditure lime, lemon, apple thanks to an extended metals in raw and Employees worldwide Employee-owned Regions and citrus by-products network and refined form (citrus pulp pellets involvement in *as of January 1st, 2018 & oils) major trade flows US$271m US$350 million in 2016 Net Income, Group Share Milestones 1851 1930s 1992 2006 2017 US$317m US$305 million in 2016 The company is founded Grain is traded all over the The Oilseeds port complex Taking charge of his Reorganization with the by Léopold Louis-Dreyfus world, through coded telex of General Lagos opens in family’s company, sale of LDC’s Fertilizers in Alsace, France. messages exchanged by Argentina. LDC has been Robert Louis-Dreyfus operations in Africa and commercial correspondents. present in the country since creates autonomous Australia, the ring-fencing Léopold’s company code, the 19th century. subsidiaries for each of of Juice activities and the Sesostris, becomes a symbol the Group’s activities. creation of a new Region of reliability among suppliers He consolidates the with China (effective and customers. company’s structure January 1st, 2018). 1. These figures do not include discontinued and creates LDC. operations (Metals Platform). 2. Discontinued operations. 2 Louis Dreyfus Company Annual Report & Audited Consolidated Financial Statements 2017 3 Perspectives Europe, Middle East & Africa Calgary Moscow Wittenberg Rotterdam Warsaw Ghent Kiev Portland Paris Grand Junction Geneva Ürümqi North Norfolk Milan Chicago Lyon America Krasnodar Shymkent Beijing Claypool Kansas City Wilton Sofia Fresno Lisbon Madrid Istanbul Cordova North Asia Lubbock Shanghai Port Wentworth Sugar Haryana Land Winter Garden Alexandria Dubai Karachi Kunming Gujarat Taïwan Mexico D.F. South & Villanueva Dakar Andhra Pradesh Pleiku Southeast Karnataka Asia Ho Chi Minh Lagos Abidjan Global Presence. Bogotá Medan Kuala Lumpur Kampala Tema Singapore Balikpapan North Nairobi Latin America Mombasa Jakarta Our network of strategically placed Lampung Lima assets enables us to stay ahead Santa Cruz of changing supply and demand. São Paulo Johannesburg South & West Asunción Santos Latin America Brisbane Rosario North Fremantle Santiago de Chile Montevideo Buenos Aires Melbourne Key South & West South & North America Latin America Europe, Middle East & Africa North Asia* Southeast Asia* Grains & Oilseeds Farming Offices Rice Processing asset Canada Argentina Belgium Kazakhstan Switzerland China Australia Coffee Logistic asset – storage United States Bolivia Bulgaria Kenya The Netherlands India Cotton Logistic asset – transport Chile Ivory Coast Nigeria Turkey Indonesia Colombia Egypt Poland UAE Malaysia Sugar Mining Honduras France Portugal Uganda Pakistan Juice Under construction Mexico Germany Russia Ukraine Singapore North Latin Dairy Tolling agreement, off-take Paraguay Ghana Senegal Vietnam America Peru Italy South Africa Fertilizers & Inputs contract, minority stake, land lease, facility lease Uruguay Spain Metals Brazil NB: For readability purposes, the above map displays only some of LDC’s farming assets in North Latin America *Since January 1st, 2018 *Since January 1st, 2018 4 Louis Dreyfus Company Annual Report & Audited Consolidated Financial Statements 2017 5 Perspectives Our Value Chain. Our activities span the whole value chain. We 1. Originate & leverage our assets at various stages to support Produce customers by getting the right product to the We share our expertise with farmers right location, at the right time. and producers worldwide, be it through partnerships or our origination network. Our commitments include investing to secure long-term origination and guarantee service to customers. 2. Process & 3. Store & Refine Transport Once harvested, we process and refine We efficiently manage movements the finest quality raw materials, in a across the value chain. sustainable manner. Our network of silos, warehouses, We control quality thoroughly and supply transloading facilities and ports allows products to our value chain network. us to control costs and mitigate risks Our strategically located asset base throughout the process. maximizes our capability to respond to changing demand. 4. Research & 5. Customize & Merchandize Distribute All platforms and regions rely on We supply products to a range of our market knowledge to ensure customers, from multinationals to responsive supply. local manufacturers. Our teams research every aspect of Packaged frozen orange juice, dairy the products in our value chain: from products, rice, vegetable oil and sugar environmental conditions and weather are part of our diversified portfolio. to economic developments and consumption trends. 6 Louis Dreyfus Company Annual Report & Audited Consolidated Financial Statements 2017 7 Perspectives To illustrate better how LDC works across the value chain, here are some examples of the journey of cotton and soybeans from the raw material to the final products. Across our Value Chain. Soybeans 2. The quality of a crop is determined by Soybeans are one of the most 4 main parameters: important oilseeds that can be impurities, moisture, used for human consumption, protein and oil content. animal feed and industrial applications. LDC originates, handles, stores, transforms and merchandizes soybeans. This is The soybean crop in Brazil Beans are around 73% 3. Within about three the soybean journey from Brazil, 1. 3. Cotton is harvested from February meal and 19% oil – but weeks, blossoms open one of the largest producers, all to May, about 6 months and their petals change the higher the protein Over 30 years ago, LDC after planting. from creamy white to the way to its main destination and oil content, the entered the global cotton greater the premium. dark red before falling – China. business. Today, we are off, leaving green pods among world leaders in called cotton bolls. Water moisture content can also have cotton merchandizing and an effect, as drier we manage the journey of soybeans are easier to cotton – all the way from store – if there is too the fields to the fabric 5. Trains, trucks and 4. Farmers deliver the much moisture, the that makes up clothes. barges take them to a soybeans to a grain beans have to be coastal or river port, to elevator by truck, dried before storage. 1. Cotton is grown in tropical 2. After two months, be loaded onto large where they are and subtropical regions. It flower buds, called transport ships for checked for quality can be planted by hand, but squares, appear on export, such as a 50- and weight, dried and mechanical planters are the cotton plants. 60,000 ton ‘Panamax’. cleaned before being mostly used. transported further. 6. It