Co-operative Entrepreneurship 2012

Jan Willem Straatsma Manager projects and

sustainable dairy farming

27-02-2012

We provide people around the world with all the good things milk has to offer

PAUZE

By nature, milk is one of the richest sources of food. We process the milk, supplied by our member dairy farmers, into a wide range of dairy products.

Our milk

Our farmers

We are a multinational dairy company wholly owned by Zuivelcoöperatie FrieslandCampina

• 14,800 member farmers form one of the oldest

dairy co-operatives in the world, the owners of

FrieslandCampina.

• Sustainable value creation for the members consists

of milk price, capital payment and addition of

members’ reserves on name.

Our co-operative base

14,800 member dairy farms

A young company in name,

but we have a long history

Governance structure

“I am expecting as a representative of our 20,000 member farmers – also shareholders – our company FrieslandCampina to deliver tangible results in three different areas:”

Return on Investment

1. Continuity (we have a 140 yrs heritage)

2. Successfully embedding FrieslandCampina in the societies where we operate….

(stay aligned with stakeholders’ expectations)

Piet Boer Chairman of FrieslandCampina

The role of our co-operative

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Collective valorisation

Guarantee

collective licence to produce

Opportunities for competitive dairy

entrepreneurs

Farmers are fully

guided by their co-operative

Classic co-operative

Stay strong together

Entrepreneurial differentiation

Fully integrated

Company

Royal FrieslandCampina

N.V.

Organisation

What we do

Consumers around the world

Retail chains, wholesalers,

local shops

Professionals in the hotel,

restaurant, café and

bakery segments

Food producers and

pharmaceutical companies

Our customers and consumers

Branches in:

Belgium Germany France Greece Great Britain Hungary Italy The Netherlands Austria Romania Russia Spain

Saudi Arabia United Arab Emirates

Ghana Nigeria

China Philippines Hong Kong Indonesia Malaysia

Singapore Thailand Vietnam United States of America Worldwide Ingredients

Our world of brands

Key figures

in millions of euros

movement 2009 2010 Results

Net revenue 8,972 8,160 +10%

Operating profit 434 258 +68%

Profit 285 182 +57%

Balance sheet

Total assets 5,299 4,770

Group equity 2,071 1,749

Ratios

Interest coverage ratio 10.0 6.2

Net debt / EBITDA 0.9 1.4

Solvency 39.1% 36.7%

Key figures

movement 2009 2010 Employees

Average number of FTEs 19,484 20,034 -2.7%

Member farmers

Member dairy farms 14,829 15,329 -3.3%

Members 20,375 21,062 -3.3%

Milk

Milk supplied by members 8,821 8,685 +1.6%

Total payment milk member farmers 10,266 10,755 +4.5%

21,2

12,3

9,1

9,1

8,8

8,3

7,4

6,9

5,3

5,1

4,3

4,1

4,0

4,0

3,9

Our position 2010 dairy revenue, in billion Euro’s

1. Nestlé -Switzerland

2. Danone - France

3. Fonterra - New Zealand

4. Lactatis - France

5. FrieslandCampina - Netherlands

6. Dean Foods - USA

7. Dairy Farmers of America - USA

8. Arla Foods - Denmark

9. Kraft Foods - USA

10. Unilever - Netherlands/UK

11. Saputo - Canada

12. Meiji Dairies - Japan

13. DMK - Germany

14. Sodiaal – France

15. Parmalat - Italy

Company Dairy revenue

Strategy

route2020

Help people move forward in life with natural dairy nutrition

To be the most attractive dairy company for member farmers

Aspiration

Value drivers

Benefit platforms

Capabilities

Foundation

Growth & development

Daily nutrition

Health & wellness

Functionality

Talent management

Milk valorisation

Innovation

Business model & cost focus

Goodness of dairy

Chain advantages Sustainability The way we work

Our strategy

Growth and value-creation

Dairy-based beverages

IFT (B2B, B2C)

Branded Cheese

Foodservice in Europe

Basic products

Strongholds & geographic expansion

Profitability

Member milk usage

The objective of a business with no member milk is to generate profits above our EBIT hurdle

The objective of our member milk intense businesses is to valorise milk at positive EBIT margins

We need to generate profit and valorise member milk

•Fundamental global need for healthy food

•Milk is one of the most nutrient-rich foods

•As a leading multinational dairy business, we aim to contribute to sustainable production

•We want to show leadership in the field of Corporate Social Responsibility by means of:

Development of dairy farming

Asia, Africa

Sustainable value chains

More efficient use

of natural resources

Sustainable dairy farming

Sets the standard

Health & nutritional value

Tackling nutrient

deficiency & obesity

Sustainability

Global challenges ahead for dairy

farming and processing sector

Growing world

population

Food security & food

inflation

Scarcity in natural

resources

Global warming

Volatile energy

markets

Need for sustainable

energy

Obesity & malnutrition

Nature and biodiversity at

risk

Sustainability

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Key sustainability issues at the farm

The most pressing sustainability issue on the dairy farm are: 1) green house gas emissions 2) animal welfare 3) sustainable

soy, 4) mineral balance (manure) 5) ammonia

25% udder problems

25% claw problems

20% of cows never outside

Sustainable feed (soy usage)

CO2

Methane

Ammonia

Energy and climate

Cow is key

Biodiversity

Renewable energy

Phosphate and Nitrogen

Methane

Impact on water quality

Responsible Dairy Farming 5 modules

Cows in the meadow

Energy

& Climate

Nature conservation, landscape (protect

biodiversity) Health & Welfare dairy cows

Phosphate (Minerals)

-140 meetings with 6,000 farmers -Pilot projects started mid 2011

-Action plan ready & agreed by member farmers end of 2011

Open farm days: a pleasant way to

show our transparency

• Hundreds of thousands of Dutch consumers are having a day out at our dairy farms annually

• Picknick, guided farm tours, cuddle corner with calves, dairy product taste sessions, children festivities and events, education about farm life and nature conservation

• Supported by our Campina dairy brand

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This is what sustainable dairy

farming brings

Larger access in the international dairy

market

Improved sustainability

Maintaining appreciation of the dairy farms

Economically powerful dairy farms

Royal

FrieslandCampina