ANNUAL REPORT 31 MARCH 2016

ANNUAL REPORT31 MARCH 2016

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2 FM Logistic – Annual report – 31 March 2016

CONTENTSANNUAL REPORT31 MARCH 2016

FM LOGISTIC

6 FM Logistic: an international logistics organiser

6 Key figures at 31 March 2016

8 On course for a well-planned and successful future

Jean-Claude Michel, Chairman of the Board, FM Logistic

10 Board of directors

12 Executive committee

14 Inventing the logistics chain of the future: our key to success for Ambition 2022

Interview with Jean-Christophe Machet, CEO of FM Logistic

AMBITION

18 2015-2016: driving growth in all of the Group’s countries

20 Ambition 2016: our objectives and results per strategic project

21 India: a powerful growth lever for the future


3FM Logistic – Annual report – 31 March 2016

INNOVATION

26 Technological innovation: inventing the supply chain of the future

• Organisation designed to innovate across the board

• Increasingly recognised for our capacity to innovate

• Robotisation, augmented reality, connected objects : a revolution on the way

• The future of the supply chain starts here

32 Human resources: inventing the logistics company of the future

• Organisation & Management: a new HR innovation dynamics

• A collaborative approach to continuous improvement and simplification

• Encouraging a participatory approach in order to move forward together

• Pro-innovation collaborative management

• Blue Mind: a think tank to accompany Group transformation

• Blue Ocean Strategy: an innovation and agility lever

38 Information and communication management

• Sharing as a new trademark

40 FM Logistic’s social commitment: innovating to facilitate the access to jobs for all

SUSTAINABLE DEVELOPMENT

44 FM Logistic: exemplary commitment in all of its countries

• FM Poland: collaborators sensitised to health

• Eco-performance: FM Logistic’s commitment rewarded by the “ROIS de la Supply Chain Grand Prix”

• Goods transport: an impact now measured

• Green logistics: FM Logistic’s expertise sought by ORTAL

47 Three directions for 2016-2019

• Brazil: exceptional solidarity following the tropical storm

• FM Logistic Russia: sustained commitment in 2015

• FM Ukraine: support for the injured and orphans

• Vltava Run 2015: a team sponsored by FM Logistic Czech Republic

• Longueil-Sainte-Marie: specialists in eco-mowing at work

FINANCIAL INFORMATION

52 Consolidated balance sheet

53 Consolidated income statement

54 Consolidated cash flow statement





FM LOGISTIC



FM LOGISTIC

FM LOGISTIC:AN INTERNATIONAL LOGISTICS ORGANISER

SINCE ITS CREATION IN 1967, FM LOGISTIC HAS BECOME ONE OF THE INTERNATIONAL LEADERSIN THE DIFFERENT FIELDS OF SUPPLY CHAIN MANAGEMENT. AS AN INDEPENDENT GROUP, IT ISRECOGNISED AS BEING EXPERT IN THE CONSUMER GOODS, RETAIL, PERFUME/COSMETICS,INDUSTRIAL AND HEALTH MARKETS. WITH 21 815 MEMBERS OF STAFF NOW BASED IN 13COUNTRIES, FM LOGISTIC HAS INCREASED ITS TURNOVER BY 2.9% AT CONSTANT RATES THISFINANCIAL YEAR, REACHING 1.034 BILLION EUROS BY 31 MARCH 2016, AND AN OPERATINGPROFIT OF 30.6 MILLION EUROS.

KEY FIGURES AT 31 MARCH 2016

2 500vehicles managed

1 700 000deliveries per year

13operating countries

500 millionparcels prepared

320 millionconsumer units produced packed per year



1billion €

Transport 33 %

Co-packing 10 %

Warehousing 57 %

Retail 29 %

Industry 16 %

Perfume & cosmetics 16%

Health 4 %

Consumer goods 35 %

Central Europe 27 %

Eastern Europe 22 %

Western Europe 8 %

Brazil 3 %

China 3 %

France 37 %

Distribution of turnover

by zone

in turnover


by business sector


by activity

21 815

Distribution of

employees

by zone

employees (including India employees)

France 23 %

Central Europe 21 %

India 14 %

Brazil 4 %

Western Europe 3 %

China 1 %

Eastern Europe 34 %

Central Europe 21 %

Eastern Europe 20 %

Western Europe 10 %

India 8 %

Brazil 6 %

China 2 %

France 33 %

3 313 000 sqm

Distribution of

operating surfaces

by zone

of warehousing space

Development in number of employees(temporary workers included)

18 730 19 571 21 815

Development in operating result(in M€)

36

2014

39

2015

31

20162014 2015 2016 2014 2015 2016

Development in turnover (in M€)

1 043 1 066 1 034

Growth in turnover (in M€)

Growth at constant rate 31.1

Foreign exchange effects -64.0

Total variation -32.9

Variance in operating profit (in M€)

Growth at constant rate -6.9



Variance in net profit (in M€)

Growth at constant rate -0.6





FM LOGISTIC

We continued to boost intelligence on theground by constantly giving more autonomyand operational responsibility to our countries.Decision-making capacity close fromcustomers is essential for their satisfaction.

“

”JEAN-CLAUDE MICHEL, CHAIRMAN OF THE BOARD, FM LOGISTIC



ON COURSE FOR A WELL-PLANNED AND SUCCESSFUL FUTURE

JEAN-CLAUDE MICHEL, CHAIRMAN OF THE BOARD, FM LOGISTIC

I n 2015-2016, the financial year has contrasts. Currency

fluctuations contributed to masking the efforts made by our 21 800

members of staff during the year in our 13 countries. Firstly, in Russia

the situation continued to deteriorate with a 25% devaluation of

the rouble and a drop in buying power which caused lower

domestic consumption. Brazil had the same difficulties due to the

economic crisis and the weakening of the real. In most countries,

the global crisis led to an unprecedented surplus of available storage

space: storage space had been in demand but it is now more

difficult to fill on account of lower customer volumes.

These different elements explain why our results, in euros, are

considerably lower than last year despite working harder and

better. In spite of this negative trend, signs of robustness are

present and point to extremely high development potential for our

Group when the international situation gets back on track. This

year again, we actively prepared ourselves : we continued to boost

intelligence on the ground by constantly giving more autonomy

and operational responsibility to our countries. Decision-making

capacity close from customers is essential for their satisfaction. We

also reinforced our continuous improvement and operational

excellence approaches everywhere. A new management culture is

taking shape which will adjust our practices to fit our objectives in

terms of economic performance.

Our Group is ready to implement the 2016/2019 strategic plan

defined last November. Under the banner of continuity, it retains

the same ambitions in terms of growth and profitability. Our

recent external growth operation in India demonstrates our will

to anticipate the future by ensuring our development in a country

that is to become the 3rd largest market in the world by 2030.

Over the next 3 years we will also focus on the transport business,

the only sector where our results do not yet live up to our

ambitions. In view of our position as reference player in a market

where FM Logistic’s capacity to invent the supply chain of the

future is increasingly recognised, I am totally confident that our

Ambition 2019 plan will be a success.

Our recent externalgrowth operation in India demonstrates our will to anticipate the future by ensuringour development in a country that is tobecome the 3rd largestmarket in the world by 2030.

“

”



FM LOGISTIC

BOARD OF DIRECTORS

From left to right:

Claude Faure – co-founder of FM Logistic

Régis Bello – independent director

Monique Zomeno – independent director

Jean-Claude Michel – president

Gilles Faure – family director

Marie-Laure Schreiber – family director

Vincent Mercier – independent director



Jean-Claude Michel

Former managing director then chairman of the management board of the Norbert Dentressangle group.

Founder and director of ’Management et Participation’.

Regis Bello

Former CEO of De Dietrich.

Administrator (or supervisory committee member) : NSC Group, Socomec, De Dietrich,

Ponycom, EM Strasbourg, Alsace Innovation, University of Strasbourg Foundation.

Monique Zomeno

Former HR vice president of the Cephalon Europe group.

HR consultant for the TEVA group.

Vincent Mercier

Managing partner then vice president of the supervisory board of Roland Berger Strategy.

On the board of directors at Neopost and Adie.


FM LOGISTIC


EXECUTIVE COMMITTEE

From left to right:

Daniel CIZ – financial director

Hervé DUJARDIN – commercial director

Cécile CLOAREC – human resources & communication director

Pablo GOMEZ – innovation director and managing director, Iberia

Yannick BUISSON – managing director, France

Stéphane DESCARPENTRIES – strategic projects director



Jean-Christophe MACHET – CEO

Michèle COHONNER – managing director, Brazil

Christophe MENIVARD – managing director, Russia and Central Europe

Vittorio BATTAGLIA – transport director and managing director, Italy

Olivier FAURE – support functions director

Hervé HOCHSTRASSER – legal director



FM LOGISTIC

INVENTING THE LOGISTICS CHAIN OF THE FUTURE: OUR KEY TO SUCCESS FOR AMBITION 2022

INTERVIEW WITH JEAN-CHRISTOPHE MACHET, CEO OF FM LOGISTIC

How would you assess 2015/2016?

J.-C. M.: Firstly I would like all of our staff to know that I sincerely

support them in this unpredictable and aggressive context. Crises

in Ukraine, economical difficulties in Russia, terrorist attacks in

Europe, political crises and severe weather damage in Latin America:

in 2015/2016, many of us were confronted with unprecedented

human and natural violence. I would like to pay tribute to all of our

staff members who have actively remained on course despite the

problems.

What are the financial results in these difficult

times?

J.-C. M.: Business dynamics and performance are supported by

numerous commercial successes and the general improvement of

our business activities. The result for the financial year however, is

unsatisfactory. Our turnover and EBIT are lower in current euros.

Following 10 consecutive quarters of improved performance, the

last two quarters of the financial year declined. While our volumes

increased by 6%, our turnover in current Euro decreased by 3%

to 1.034 billion as a result of the foreign exchange market. Our

operating result amounted to 30.6 million which is 3% of our

turnover.

Did the Group anticipate the situation?

J.-C. M.: Yes for the main part of it, and this helped to limit the

damage when the devaluation of the rouble greatly reduced our

profitability in Russia. With sales objectives surpassed at 128%

(165 million euros of new contracts), we made up for our losses

here : France, Poland, Romania and China for example, performed

well in 2015/2016. And despite intensified competition in all of

our countries, FM Logistic also continued to gain market shares.

What are the main directions

of the new 3-year strategic plan?

J.-C. M.: We met the key objectives of our previous strategic plan

of providing our retail customers with fresh-product services,

moving into South America and implementing a sound continuous-

improvement approach. The only false note is that we got behind

schedule with the implementation of a solid international transport

solution and a comprehensive range of transport services in all of

our countries. In our new 3-year plan, we want to succeed in this

area and double our efforts to set up our omni-channel offer in the

market, for which Yves Rocher, Nespresso and Natura already

constitute fine references. Important work is still underway to line

our mission, our vision, our values and our company project up

with our long-term ambitions. In this regard, innovation is at the

heart of our 3-year plan: it ensures our position as opinion leader

in our market and for our customers. We are also continuing to

strengthen our geographical bases and our business activities as

well as maintaining our entrepreneurial culture in order to seize the

growing number of external growth opportunities as we have just

done in India, at the very end of the exercise.

With this acquisition, is FM Logistic

anticipating the logistic developments in one of the

biggest Asian markets?

J.-C. M.: Our majority shareholder status in Spear Logistics

constitutes an amazing development opportunity on this continent

and a long-term growth lever in India. India is forecast to become

the third biggest economy in the world within 15 years and the

biggest consumer market for the middle class. The logistics sector

there is going through a phase of reorganisation and consolidation.

In addition to its expertise in the diversity and complexity of the

Indian market, Spear Logistics has national standing and a customer

portfolio of large national and international companies. With the

same culture of operational excellence, our teams will come

together to implement our customers’ future logistics plans, via

new multi-client sites near the country’s major consumer centres.

Forecasting is the key to the future then?

J.-C. M.: The reason that we are doing well today in an adverse

international climate is that we have always been a step ahead of

events by making winning decisions for the long-term. Just as we

continue to do by focusing on innovation in order to the boost

performance, whether it be our service range, our technologies

or our internal organisation. The Executive Committee has been

preparing our new 3-year along these lines since September 2015.

Objectives for growth and profitability remain the same but a culture

for innovation is being introduced at all levels within the company:



the collective intelligence of employees will be called upon by a

collaborative management team, cutting-edge digital technologies

will redefine our services, organisational transformations will put an

end to our silo-management approach preferring a communities-of-

interest-management policy, and of course robotics will be integrated

into our business activities.

So inventing the logistics chain of the future is FM

Logistic’s new motto?

J.-C. M.: Absolutely. An innovation direction has been set up and

is already working on numerous future projects. This corporate

dynamic is progressively spreading to all of our countries. We want

to be at the forefront of the digitisation movement which

prefigures the new collaborative economy : with new digital

technologies (ultra-broadband, mobile internet, geo-tracking,

smartphones, etc.), we are able to promote innovating services

that will give FM Logistic and its customers the competitive edge.

Our Group is one of the best placed to reinvent the supply chain : we receive ever more demands for our expertise on the subject.

“”JEAN-CHRISTOPHE MACHET, PRÉSIDENT DE FM LOGISTIC

Our Group is one of the best placed to reinvent the supply chain:

we receive ever more demands for our expertise on the subject.

Past efforts are paying off now: in 2015 for example, the city of

Rome chose our CityLogin urban logistics service and three other

european capitals are very interested in it.

Is FM Logistic also innovating its

financing policy to prepare for 2022?

J.-C. M.: Indeed, our continuous improvement policy also

concerns our financing strategy. We have been working on

restructuring and reorganising our financing policy since January

2016. Although it is perfectly adapted today, it has to evolve in

order to support the growth forecast for 2022. Together with our

organisation’s managerial transformation and potential for

innovation, this new configuration provides the means to prepare

for the future and succeed.




AMBITION




AMBITION

2013-2016 : DRIVING GROWTH IN ALL OF THE GROUP’S COUNTRIESTHE POLITICAL AND ECONOMIC CRISES IN THE COUNTRIES AND BUSINESS ACTIVITIES WHERE FM LOGISTIC STARTED OPERATING DURING THE LAST 3-YEAR PLAN, HAVE OF COURSE DAMPENEDTHE GROUP’S AMBITIONS. DESPITE CHALLENGES, FM LOGISTIC HAS CONTINUED TO DEVELOP INRUSSIA WHERE IT IS NOW AMONG THE LOGISTIC LEADERS OF THE FUTURE. THIS IS IN LARGE PARTDUE TO ITS POWERFUL PLATFORMS NEAR MAJOR RUSSIAN CITIES.

F ollowing the satisfactory integration of staff from the Mclane

acquisition in Brazil, the slump in the Brazilian economy had an

adverse effect on business volumes. We are now getting ready, with

our teams, to assist our customers as soon as growth picks up.

In Western Europe, the Group has developed according to its

strategical plans. In France, the favourable climate has allowed FM

Logistic France to gain at least fifteen new contracts worth 58

million euros which is about 15 % of its turnover. Continuous

improvement in production has involved introducing innovations

: over 25 projects in France since 2014 implementing 110 vehicles

with on-board weighing system, 81 embedded scanners and 50

picking arches with light display. These innovations have made a

considerable contribution to results in continuous improvement.

In Spain, FM Logistic has become more efficient and more

profitable. It has also consolidated its base in the Canary Islands

where distribution costs can reach 15% of total logistics costs for

consumer goods companies while representing only 5% of their

total turnover. In Italy, the Group has now a high-performance

tool, a strong distribution network and reference customers like

Mondelez, Humana, Lactalis, Galbusera, Elah Dufour, Nestlé or

Pernigotti.

FM Logistic is strengthening its position in Central Europe by

boosting inter-country cooperation in this large zone. The Group

achieved excellent results in Poland and continues to gain market

shares in Ukraine. Convinced that Central Europe has high

development potential, FM Logistic is consolidating its positions in

Poland, Ukraine, the Czech Republic, Slovakia, Hungary and

Romania in order to be ready and in the right place when growth

accelerates.

Lastly, after a slow start in China 10 years ago, business is now

developing steadily and making a profit: the teams are currently

working to meet the new demands of consumers and customers

from the biggest domestic market in the world.

58M€of new contracts in France, about 15 % of its turnover



Thanks to FM Logistic we have continued to growthrough logistics optimisation and the implementationof continuous improvement process.

“”JOÃO LUIZ OLIVEIRA SOUZA, MANAGING DIRECTOR OF MAPED DO BRASIL



AMBITION

AMBITION 2016:OUR OBJECTIVES AND RESULTS PER STRATEGIC PROJECT

Transport A comprehensive service in all of our countries

Development dynamic below expectationsbut still a strategic standard

Commercial performance 100 % 128 %

Solutions, innovations, new sectors

To stay a step ahead The development of our omni-channel business, the optimisation of our innovation potential and keydeployment projects on the ground

Human resources Simplification and empowerment An organisation closer to the ground, moreautonomy for managers and culture thatadapts to the development of the company

BUSINESSES OBJECTIVE RESULT

New countries and external growth

To gain a solid foothold in high-potential countries

A leading position in Russia

External communication Developing a brand image Revamped, modernised and international communication

Marketing To make our services more attractive The optimisation of commercial materialand formalisation of our service range

Sustainable development To establish ourselves as a responsible and exemplary company

The deployment of a sustainable development policy managed by allcountries in all sectors

DEVELOPMENT OBJECTIVE RESULT

Continuous improvement To do better, cheaper and outpace competitors

The same approach implemented in all of our countries, customer service/costratio in constant progression andstrengthened operational performance

PROFITABILITY OBJECTIVE RESULT



INDIA: A POWERFUL GROWTH LEVER FOR THE FUTURE

I t’s a strategic development opportunity for FM Logistic : with

more than 7% growth in 2015 and a population of 1.3 billion,

India is likely to become the third biggest economy in the world

by 2030 and the biggest consumer market on the planet. On top

of that, the logistics sector in India is at the dawn of an

unprecedented reorganisation and consolidation movement led

by the new tax harmonisation law for products and services (GST)

and by the very fast development of e-commerce. Logistic

warehouses are currently split up in all States in order to avoid

taxes. The tax reform is planned for 2016/2017 and will lead to a

movement of consolidation and the setting up of bigger regional

warehouses: service providers will have to make investments and

restructure. This development will be accompanied by a very high

growth in e-commerce estimated at 35% per year by 2022.

E-commerce players will have considerable storage requirements

that will accentuate the shortage of large warehouses.

Strategic complementarity of skills

As well as its in-depth knowledge of the diversity and complexity of

the Indian market, Spear Logistics brings nationwide coverage to

the Group and a customer base comprised of major national and

multinational companies. In accordance with FM Logistic’s strategy

of autonomous countries and local proximity, Spear Logistics’

current executive team will continue to run the company under the

general management of one of the founders, Gautam Dembla.

In 2016/2017, FM Logistic and Spear Logistics will prepare the

ground together in order to implement a logistics plan in line with

tax unification. This project will lead to the creation of regional

distribution centres managed from multi-client platforms to be set

up near the main Indian cities. This acquisition allows FM Logistic

and Spear Logistics to put their common culture of customer

proximity and operational excellence together. FM Logistic will

operate in the strategic sectors of e-commerce, telecommunications,

retail, consumer goods, industry and automotive.

1.3MdPopulation in India in 2015

FOLLOWING CHINA IN 2004 AND BRAZIL IN 2013, FM LOGISTIC CONTINUES ITS GROWTH STRATEGYIN EMERGING COUNTRIES WITH THE ACQUISITION OF SPEAR LOGISTICS IN INDIA IN MARCH 2016.THE GROUP BECAME MAJORITY SHAREHOLDER OF ONE OF THE TOP FIVE INDIAN LOGISTICSPROVIDERS AFTER PURCHASING SHARES FROM A PRIVATE INVESTMENT FUND.



AMBITION

By combining our skills we will be in a positionto offer our customers a comprehensive and reliablerange of services in warehousing, distribution andtransport, in any sector or distribution circuit,whether it be e-commerce or the retail trade.

“

”GAUTAM DEMBLA, MANAGING DIRECTOR OF SPEAR LOGISTICS


PuneMumbai

BangaloreChennai

New Delhi


LOGISTICS EXPERTS

S pear Logistics was created in 2001 by a private investment

fund. Today it is one of the top five logistics providers in India

with almost 3 000 employees and a turnover of 18 millions euros

(financial year end at end of March 2016) of which 80% is

from warehousing and handling, and 20% from transport and

distribution. It outsources to around a hundred partner transporters

and uses 75 warehouses (270 000 sqm) in 23 cities in 12 States:

Mumbai, New Delhi, Pune, Hyderabad, Ahmedabad, Bangalore,

Chennai, Nagpur, Calcutta, etc.

Its customer portfolio includes major Indian and international

market leaders such as Atlas Copco, Siemens, Cummins,

Honeywell, Indus Towers, Crompton Greaves, Federal Mogul,

Castrol, Dr Reddy’s Laboratories and Owens Corning. 11% of

Spear Logistics’ turnover comes from e-commerce with customers

like Snapdeal, number 3 in the Indian market. It also provides high

value-added services in sectors like co-packing.

Thanks to its expert and skilled teams, Spear Logistics is a key

player that has received distinctions for operational excellence:

three prizes in 2015 including the company of the year award

attributed by the Indian Institute of Materials Management.

Engineering 29 %

Automotive 25 %

Consumer goods 16 %

E-commerce 11 %

Telecom 9 %

Others 10 %

18M€of turnover




INNOVATION




INNOVATION

TECHNOLOGICAL INNOVATION:INVENTING THE SUPPLY CHAIN OF THE FUTURE

FM Logistic set up an innovation team in September 2015

made up of 13 general or domain-specific (robotisation,

automation, etc.) members of staff. Their most important role is

to show the way and drive innovation: it’s the role of the

innovation manager in each country to ensure its development. It

is also their job to take care of communicating on the technology

in order to share and export it. After the launch of CityLogin in

Rome in 2015, the innovation team set about introducing the

initiative to other European capitals. Today the Group’s innovation

team is working in three ways: open innovation, supply chain

technologies in 2030 and supply chain digitalisation.

ORGANISATION DESIGNED TO INNOVATE ACROSS THE BOARD

Open innovation

This innovation methods is based on sharing ideas and issues

and cooperating with any player that can make a contribution

(companies, institutions, universities, etc.). Objective: to prioritise

collaborative work and change the traditional way of doing things

by observing what goes on elsewhere.

This progression in the Group’s culture affects innovation process

management and its surrounding ecosystem. R&D externalisation

for example, is a first step to capitalising on complementary

resources that contributes to lower research costs. That’s why

FM Logistic has established a bridge between its own teams and

the world of academic research by signing an Industrial Training

Convention through Research (CIFRE) in 2015: a partnership with

the University of Le Havre (France) will contribute to reinforcing

research in robotisation. The Group is currently looking into setting

up other partnerships for innovation creation and patents.

Supply chain technologies in 2030

A dedicated team is responsible for identifying new technologies

that will impact the sector in the short, medium and long-term.

It designs and adapts innovation strategy in order to develop

technologies that will benefit supply chain services in 5, 10 and

15 years.

Supply chain digitalisation

Large companies’ business models are challenged today by more

agile and innovative start-ups who capitalise on new communication

technologies. FM Logistic is getting ready for the digitalisation of

the logistics chain by becoming a start-up incubator. This will ensure

a front seat in the emerging digital economy to gain new markets

and customers.

PABLO GOMEZ, INNOVATION DIRECTOR

FM Logistic is placing co-creation at the heart of its international innovation approach in order to invent the logistics chain of the future.

“”



FM Logistic has reached real technological maturity with

innovative processes reputed for their efficiency. In order to

accelerate innovation the Group prioritises co-development: being

now part of an international and collaborative network of partners

from different sectors. This eco-system highlights FM Logistic’s

standard of excellence in innovation. It not only allows the company

to identify future technologies but also to reduce the time required

between the design phase of the innovation and its implementation.

In this way, Inventory Viewer, a real-time inventory system (see

box), was designed and studied in 2015 before making its first

public appearance in April 2016 at the International Transport and

Logistics Fair (SITL). FM Logistic was also awarded first place from

“ROIs de la supply chain” for its participation in the CRC project.

For the past 10 years the company has been an active member of

the Demeter club whose objective is to develop sustainable

logistics practices through experimentation and collaboration.

FM Logistic France developed the CRC® project in partnership with

4S Network, the innovative and sustainable supply chain specialist.

CRC® or Collaborative Routing Centre, is an innovative service for

coordinating and routing multi-manufacturer and multi-distributor

transport operations. The objective is to develop an open network

of regional collaborative routing centres in order to optimise truck

loads (> 90%) and reduce their carbon footprint while

guaranteeing visibility, transparency and standards to distributors.

INCREASINGLY RECOGNISED FOR OUR CAPACITY TO INNOVATE

INVENTORY VIEWER: AN EFFECTIVE CO-INNOVATION

FM Logistics and Hub One, the information and communication technology service provider

for professionals, have co-developed Inventory Viewer, an innovative inventory solution. With

this bold new solution, no more need for cherry pickers or a lot of personnel for inventories:

reach trucks and on-board cameras collect code bar information and transmit it to the WMS

(Warehouse Management System) with a reliability rate of 99%. Two Inventory Viewer pilot

programmes have been launched in France and Italy, after which this innovating system will be

deployed at 15 to 20 of the Group’s sites.

MANUEL SERVIO, EUGÈNE PERMA’S LOGISTICS DIRECTOR

FM Logistic is a true creatorof added value in the logisticschain. I have been workingwith them for 25 years and they are one of the mostclient-focused actors in themarket, providing innovativesolutions for improvedperformance.

“

“



INNOVATION

SUPPLY CHAIN MANAGEMENT GALA: RECOGNISED AND RESPECTED EXPERTISE

On the 25 June 2016, FM Logistic was the Gold partner at

the AGORA flagship event that brings together 160 logistics

directors from large private and public companies.

Jean-Christophe Machet was called upon for his vision of

the supply chain of the future, and with him Nicolas Bouvet,

Managing Director of Accenture Strategy, Laurent Sabatucci,

Associate Director of EOL and Luc Ferry, philosopher and

former Minister for Education in France, contributed to the

evening debate on “Man’s future in the Supply Chain”. They

all agreed that the coming 30 years will have a more

significant impact in terms of innovation than the last three

centuries put together.

SUMMER FORUM: GREEN SUPPLY CHAIN OR NO SUPPLY CHAIN

On the 9 July 2015 around a hundred participants took part in the summer forum dedicated

to green logistics. The event was organised by Supply Chain magazine in partnership with

ESCP-Europe business school. FM France’s managing director Yannick Buisson and NG

Concept’s managing director Pierre Orsatti represented the Group. Their main goal was to

present the procedures necessary to get HQE certifications for FM Logistic’s new platforms

such as at the Entraigues-sur-la-Sorgue (Vaucluse, France) platform.

FM LOGISTIC, PARTNER TO “TROPHÉES DES INDUSTRIES NUMÉRIQUES”(DIGITAL INDUSTRY TROPHIES)

Organised by the “Usine Nouvelle” and “Usine Digitale”

magazines, this event is aimed at awarding projects, start-ups

and managers who innovate using digital technology. As

ambassador of FM Logistic, Jean-Christophe Machet presented

the Digital Supply Chain award to CMA-GCM, the French ship-

owner that equips its temperature-controlled containers with

terminals connected to an information processing platform.



R

ROBOTISATION, AUGMENTED REALITY, CONNECTED OBJECTS: A REVOLUTION ON THE WAY

obotisation is developing rapidly and is a key innovation focus

for FM Logistic. The convergence of industrial robotics and service

robotics is giving rise to collaborative robots which are capitalising

more and more on the development of mobile platforms

(telepresence, security, communication, etc.). Robotisation is

indispensable in order to turn a warehouse into a flow production

site rather than just a storage site. However, robots must be able

to see and stock must be visible : artificial vision, geo-tracking and

automated guided vehicles (AGVs) constitute the lines of

supplementary research for the future of the supply chain and

physical internet, a world where everything is connected and

managing information flows will make all the difference.

SITL 2016: FM LOGISTIC WINS THE « BEST TRANSPORT & LOGISTICS INNOVATION SERVICE » AWARD

At the 16th logistics innovation award ceremony on the

25 March 2016, the Group was awarded the prize for the

best transport and logistics innovation, for the creation

of its box-cutting module. Box-cutting takes place in co-

packing activities. The repetitive movement can be the

cause of muscular problems and cuts. That’s why FM Logistic

developed a tool in partnership with Axys Robotique that is

capable of cutting boxes with different formats and no risk

of content damage: it makes manual product handling

easier and provides a simple, user-friendly Man-Machine

interface. Being ergonomic, safe and compact, the module

is to be deployed at the Group’s sites shortly.

HUNGARY: PICK-TO-LIGHT IN THE SERVICE OF E-COMMERCE

In 2015 an innovative e-commerce activity was launched by FM Logistic in Hungary to meet the changing requirements of

Nespresso. Orders are placed on Internet then the pick-to-light process ensures operation reliability and productivity. This

order-picking support solution tells the operator which products and quantities are needed for the order. Since the solution

became operational in 2014 it has increased the Group’s productivity by over 30 % by eliminating picking errors.



INNOVATION

H ere are some of the solutions designed and/or deployed by

FM Logistic over the past three years which highlight our capacity

for innovation and co-development.

THE FUTURE OF THE SUPPLY CHAINSTARTS HERE

SHIPPEO: REAL-TIME ROAD TRANSPORTAND TRACEABILITY

Transport has numerous constraints including road traffic

congestion and consequently delivery delays, stock shortages

and legal disputes. Information flows have become as crucial

as physical flows now to ensure FM Logistic’s operational

excellence. The Group has begun working with a start-up

created by former Science Po Paris (top French business

school) students to develop and test Shippeo, a mobile web

platform for road transport management. This collaborative

tool can be accessed via the web and smartphones. It

provides optimal information diffusion and real-time visibility

of flows.

PUT-TO-LIGHT TROLLEY: EXCELLENCE WITH FLEXIBILITY

In order to overcome the constraints and mistakes involved

in multi-order-picking, FM Logistic went into partnership

with Balea (industrial control systems specialist) to develop

the Put-to-Light trolley. It is a Plug & Play-type solution that

can be installed on any type of trolley. Being adaptable and

flexible it optimises internal logistic flows as well as goods

traceability. This innovation was particularly appreciated by

order-pickers during its 2-month trial period in 2015 at one

of the Polish FM Logistic sites. They found it reliable (error-

free picking), functional (compatible with different ma-

chines) and ergonomic (reduced tiredness at the end of the

day) while providing equivalent or better operating quality

than a classic solution.

CITYLOGIN: A MAJOR ACHIEVEMENT“SUSTAINABLE CITIES”

In partnership with the Italian transporter Mag-Di in Rome,

FM Logistic designed and implemented an ecological and

innovative solution for the last mile of delivery: CityLogin.

Clean vehicles make the deliveries to the historic city centre

from a platform on the outskirts. Result: approximately 20%

energy savings as well as reduced CO² emissions and noise

pollution. The success of this service has not gone unnoticed

by the city of Paris and FM Logistic has become one of the

founding members of the municipal incubation programme:

"Sustainable Urban Logistics and Mobility" which was

launched in December 2015. So far in 2016, 3 European

capitals have also shown an interest in CityLogin.



FORKLIFT TRUCKS WITH HYDROGEN CELLS: EVERYTHING IT TAKES TO SUCCEED

Since 2013, FM Logistic has gone into several major partnerships in order to introduce forklifts

with hydrogen cells into the world of logistics : Air Liquide (world leader in gases, technologies

and services for industry and the health sector), HyPulsion (hydrogen-cell specialist), Toyota and

Crown (forklift manufacturers) and Diagma (Supply Chain Management consultancy). In 2015,

the 85 000 sqm Neuville-aux-Bois site (Loiret, France) was chosen as the pilot platform. As well

as providing a constant performance rate, the operating autonomy of these forklifts is

unprecedented (up to 10 hours) and hydrogen refuelling only takes 3 minutes as opposed to

the 10 to 15 minutes required to change a classic battery, which is also a much higher safety risk.

HORIZON: A VALUE-ADDED CO-PACKING ALTERNATIVE

In partnership with PDC Europe (sleeving specialist), FM

Logistic presented “Horizon” at the 22nd Packinnove Europe

trade fair in Troyes (France) in June. Horizon is a patented,

state-of-the-art, economical, ecological and pleasing-to-the-

eye alternative to cardboard and blister packaging. It

replaces classic packaging solutions by a recyclable, stretchy

and strong polythene sleeve. Horizon is already being used

at several FM Logistic’s sites.

QUICK PICK REMOTE: OPTIMISED ORDER-PICKING

As part of its “Difficult conditions and well-being at work”

project, FM Logistic France decided to test Quick Pick Remote

at its Ressons-sur-Matz (Oise, France) platform. Developed in

2013 by Crown, the world leader in handling equipment, the

system reduces the risk of accidents in the workplace and

optimises order-picking. Picking vehicles are controlled via a

simple button on a wireless remote control. Result: Up to

50% time savings on trips back and forth to the vehicle and

up to 70% less getting on and off the truck. After using Quick

Pick® Remote for several months in Ressons-sur-Matz, staff

found it particularly convenient when picking from low

storage spaces and for closely spaced operations.



INNOVATION

HUMAN RESOURCES:INVENTING THE LOGISTICSCOMPANY OF THE FUTURE

D igital technologies will shake logistic flows in the not so distant

future. Processes will change and this will obviously have a significant

impact on staff who will have to adapt their know-how. For this rea-

son FM Logistic has broadened the scope of innovation to all areas in

the company. A human resources management team is driving all

countries to come up with, experiment with and share organisational,

management and working methods in order to invent the logistics

company of the future.

ORGANISATION & MANAGEMENT: A NEW HR INNOVATION DYNAMICS FM LOGISTIC SEMINAR:

FOCUS ON WHAT IT MEANS TO BE A MANAGER

From the 22 to 24 October last year, 12 FM Logistic

Italy managers took part in a training session on to-

morrow’s management and in particular the role of

managers in relation to different responsibilities wi-

thin the company : managerial of course, but also

economic, organisational, institutional, etc.

We are exploring different possibilities today with creativity and pragmatismin order to identify the HR practices that will prepare us for the supply chainof the future: collaborative management, e-learning, etc. By testing andapproving these innovative approaches on the ground, we are transformingand modernising FM Logistic little by little.

“

”CÉCILE CLOAREC, HUMAN RESOURCES AND COMMUNICATION DIRECTOR



Continuous improvement and innovation are two sides of the

same coin as far as the Group is concerned. That’s why FM Logistic

now asks its customer account managers for example, to take

charge of continuous improvement projects (theoretical skills and

practical experience) in order to become business activity directors.

This approach has been transforming the company over the past

three years and the new HR innovation dynamic is an extension of

it, enabling the release of energies and ideas and the project

management in a participative way. Among the projects run by FM

Logistic’s HR community are: modernising Human Resources

Information Systems, harmonising talent management procedures

and providing inter-country training programmes. Since April 2015,

the Group’s human resources management team has also been very

involved in getting to know the company’s managers (more than

200 interviews have taken place) and the different sites’ needs.

Two seminars were organised in April and December for country

human resources directors and Group human resources experts in

order to share experiences and co-create the HR strategy and tools

necessary for the future. Each subject is headed by a Group expert

and a country human resources manager, and dealt with in a

collaborative way. This new method is part of the simplification

programme launched by FM Logistic in 2013 and it meets the

demands of countries who want to be able to count on central

functions for their day-to-day tasks. Different actions organised by

the human resources and communication management team have

led to a stronger team spirit between Corporate and the countries.

They have also encouraged managers and staff to look outwards

and to be creative in order to invent FM Logistic’s future human

relations.

A COLLABORATIVE APPROACH TO CONTINUOUSIMPROVEMENT AND SIMPLIFICATION

POLAND: CONTINUOUS IMPROVEMENT BUILT ON CONSTANT COLLABORATION

After implementing a Lean Management system in 2014, FM Logistic Poland continues its

efforts to transmit a culture of continuous improvement: over 1 000 Polish members of staff

from all different domains took part in specific workshops during the year together with

customers. Objective: to perceive continuous improvement as a work ethic and the result of a

working partnership with customer teams. In March 2016 FM Logistic Poland also launched

Lean Leader, a training programme specifically designed for team leaders. 120 employees will

take part in the programme this year.

Operational excellence is a promise that FM Logistichas kept perfectly. Our indicators show continualprogress in performance. The Group is working withus to optimise the entire logistics chain, includingthe components part, in the aim of reducing priceswithout lowering quality.

“

”THIERRY LESCUYER-CHAVASSE, TECHNICOLOR’S INTERNATIONAL LOGISTICS DIRECTOR



INNOVATION

As part of the simplification and country-autonomy approach,

FM Logistic encourages staff participation in projects that concern

everyone. In 2015 for example, all staff were asked to answer three

questions with a view to adapt the values defined in 2007 to the

Group’s new multi-cultural dimension: "What are your personal

values? What values do you live in the company? What values do

you think are necessary for FM Logistic to be even more successful

in the future?".

The operation was a hit with 74% participation, and highlights

the commitment of FM Logistic staff in all countries. With 11,000

responses, the project team was able to hold 35 quality discussion

groups involving 250 people from operators to executive

committee members. The objective was to finalise the values that

would support FM Logistic’s strategy and enable continued

growth.

Here too, it was necessary to innovate and think outside the box:

customer satisfaction is no longer seen as a value for example, but

the effect of a value that must be identified. In the spring of 2016,

the Group Management Board approved these new values and

their definitions which are now being sent out to all countries. This

will lead to collaborative, multi-cultural work which will allow the

tangible skills and necessary behaviour to be adopted. The

objective is to bring the values to life within the Group so that they

become a differentiating, high-performance tool.

ENCOURAGING A PARTICIPATORY APPROACH IN ORDER TO MOVE FORWARD TOGETHER

MARIE-LAURE SCHREIBER, GROUP VALUES AND SHAREHOLDER RELATIONS DIRECTOR

FM Logistic has greatly evolved and grown since we defined our values in 2007. In order to reflect the reality of our company as well as its new strategic, organisational andmanagerial challenges, they have to progressand attain a consensus through a participatoryproject involving all of our staff.

“

”

The freedom to discuss and participate in the running of FM Logistic is what really counts. “

”FLAVIA, INVENTORY ANALYSIS, FM LOGISTIC BRAZIL



A long the same development and participatory lines, FM Logistic

France launched its first Blue Mind programme in 2015. This training

programme uses collaborative management to boost innovation.

As part of the company transformation process 10 participants were

chosen by their managers to explore the future, to energise and

accelerate talent and skill development . Each member of the

training programme is also benefitting from a course at the ESSEC

business school, as well as individual coaching until their « ESSEC

Executive Education » certification examination in September 2016.

PRO-INNOVATION COLLABORATIVE MANAGEMENT

FM Logistic? A company where people are at the heart of corporate management! “

”ANGE, TEAM LEADER, FM LOGISTIC FRANCE

BRAZIL: A YEAR DEFINED BY HUMAN RELATIONS

In Brazil in 2015, FM Logistic focused on good human relations as a way to prepare for the future

of the supply chain. There were three main projects during the year: modernising the

remuneration system, developing leadership through tools and Group practices (continuous

improvement, team work, etc.) and bringing Brazilian HR policies up to date in terms of

recruitment, training and personnel administration. FM Logistic Brazil’s organisation is now in

line with the rest of the Group’s and salaries are conform with the market.

ROMANIA: INTERPERSONAL SKILLSTRAINING FOR FUTURE MANAGERS

For the third year running FM Logistic has supported the JUMP

programme in Romania to help higher education students in the

Timisoara region capitalise on their potential. The programme

focuses on self-control, perseverance, taking initiatives, responsibility,

co-operation, etc. Around 50 teenagers are currently on the diploma

course which is held at FM Logistic’s local training centre.


T he world logistics market, leadership and management

methods, governance and decision making, performance and

productivity driving, marketing and value-creation in customer

relations as well as innovation and the new digitisation

technologies, these were among the themes covered. At the end

BLUE MIND: A THINK TANK TO ACCOMPANY GROUP TRANSFORMATION

YANNICK BUISSON, MANAGING DIRECTOR OF FM LOGISTIC FRANCE


INNOVATION

of this year-long training programme, the first Blue Mind class

will have to put forward pertinent solutions to company issues,

it will have to test and master new concepts, promote a creative

working environment and develop skills and open mindedness

within the Group.

Blue Mind is part of the company project Ambition 2022: itdevelops a win-win relationship between the participants, whichallows them to gain skills while adressing the company’s issues.Sharing, exploring, benchmarking, innovating, developing andperforming are the company transformation leitmotifs.

“

”



S imilarly to the Blue Mind programme, the Blue Ocean

Strategy aims to develop new services and is based on 3 principles:

firstly, don’t do it better than competitors, do it differently,

secondly, take an interest in non-clients and thirdly, get inspiration

from other industries. By combining collaborative management

and innovation, this approach encourages innovation community

staff to work together. It comprises three phases : market exploration

and the identification of new needs, innovation conception and

design, and development and deployment at constant costs. In

2015, 50 customers and 50 non-customers were interviewed on :

“What can FM Logistic provide you with to achieve your strategic

plan?”. After this initial phase, many staff members came up with

ideas. Out of the 200 ideas initially kept and studied, 9 were

selected. The Executive Committee then chose 3 of them in June

and launched them in September. This operation was a great

success among staff and reinforced the Group’s desire to take it

further. Since March 2016 the programme has entered its

industrialisation phase: the three idea providers are now in charge

of their start-ups in Paris and Strasbourg incubators. FM Logistic

intends to be ready for the digitalisation of the economy by

immediately integrating the qualities that characterise digital

companies, namely agility and the capacity to create.

BLUE OCEAN STRATEGY: AN INNOVATION AND AGILITY LEVER

DESTINATION PLANT MANAGER: A SECOND CLASS TO PREPARE FOR THE FUTURE

FM University is responsible for designing and providing training schemes.

In 2015 FM University started the Destination Plant Manager programme

for future platform directors for the second time. 8 participants from

7 countries took a around ten modules of 2.5 days each over a period of

a year in preparation for their new jobs: operations, warehousing,

co-packing, management, strategy, negotiating, creating an international

contact network, openness to other business contexts and solutions,

developing the capacity to cooperate within an intercultural group, etc.

The success of this multicultural programme illustrates the international

open-mindedness that the Group is developing in its managers in order to

support growth and prepare for the future.

The path to success isn’t easy but at FM Logisticwe always get there.

“”ZSOLT, COMMERCIAL DIRECTOR, FM LOGISTIC HUNGARY



INFORMATION & COMMUNICATION MANAGEMENT

I n 2015/2016, focus was put on FM Logistic’s internal/external

information and communication management. Suitable tools must

be used to develop a collaborative management policy. For this

reason domain-specific committees were set up during the year.

Their objective: to think about future IT tools for the supply chain

on the one hand, and organisation in order to assist managers and

countries transform the company on the other.

Designing and sharing future-oriented training

schemes

For several years now FM University has had an on-line training

system for staff who want to update their skills. In 2015 a digital

learning course was added to enrich the programmes and

accelerate their deployment in all countries. FM Logistic has now

an on-line training course creation tool which was used to launch

a first anti-fraud training module at the beginning of 2016. The

Group is also driving its first world knowledge sharing programme

which started in October 2015 and will continue until June 2016.

Objective: to list all available training programmes in the Group’s

13 countries and post them on a collaborative platform for

everyone to access.

Student Innovation Challenge:

sharing talent

In February 2016, the Group launched a student challenge on

a key subject: “Imagine the supply chain of the future”. The

challenge is open to all types of higher education establishments

(engineering, business, architecture, design schools, etc.) and

allows students to participate in an innovative, creative process.

It also contributes to promoting FM Logistic as an innovative

company, getting us known at graduate schools and opening

doors to new partnerships. The challenge is being carried out on

a collaborative platform. After analysis of FM Logistic’s innovation

issues, specifications were sent to all students on the platform. The

teams had two months to present their ideas on just a few pages.

25 of them were selected to make a more in-depth study and

provide a twenty page report. In June 2016, 5 teams will be

chosen to present their projects to the jury, composed of company

managers and customers, at which time the winners will be

named. This competition also allows us to spot future talents for

FM Logistic. The best students will win prizes and be given the

opportunity to work in the Group (job, internship, VIE: French

International Business Volunteer Programme).

SHARING IS PART OF THE COMPANY’S NEW IDENTITY

INNOVATION



FM Logistic: a developing employer brand

Various actions were launched in 2015-2016 to boost the Group’s

employer brand with the same objective of promoting FM Logistic

to students and universities. In addition to taking on interns and

participating in student forums, the company also set up a talent

acquisition department to accompany young graduates at the

beginning of their career with an international perspective. The

FM Logistic employer brand is greatly developing due to this

initiative: the Group took part in for the first time and obtained

the Top French Employer certification in February 2016.

In the spring of 2016, FM Logistic also launched an original

communication campaign for young professionals. It was designed

by the human resources and communication teams and boasts novel

audacity in the sector: rather than sticking to a classic institutional

approach, the campaign uses young advertising codes (smartphones,

texting, etc.) to promote FM Logistic as an audacious and modern

employer who is inventing the supply chain of the future.

NEW ROISSY SITE: AN FM LOGISTIC INNOVATION SHOW-ROOM

In February 2016, the Group inaugu-

rated its new Corporate headquarters

in Roissy (France). These vast start-up-

type buildings prioritise collaborative

management, openness and sharing

just like the new FM Logistic head-

quarters in Phalsbourg with its rest

area, table football, concierge service

and massage service. The site will

soon include a show-room too for FM

Logistic’s technological innovations.



INNOVATION

FM LOGISTIC’S SOCIAL COMMITMENT: INNOVATING TO FACILITATE ACCESS TO JOBS FOR ALL

FMEA: an innovating network that values

the 9% of our employees in France who suffer

from a disability.

FM Logistic France is a model among French companies with 9 %

of employees in its teams and on its platforms being disabled.

However, the legal status of these employees makes it impossible

to add value to their work. With an innovative approach the Group

created FMEA (FM Entreprises Adaptées), a subsidiary of FM Logistic

France. The aim of this network is to set up adapted companies next

to existing structures in order to:

• Facilitate permanent jobs for people with

disabilities in stable sectors with optimum

working conditions;

• Develop new activities in order to adapt

the work to the individual;

• Allow everyone to get a qualification, skills

recognition, and in the long-term (depending on individual

goals) a job in an ordinary Company.

An adapted company works in exactly the same way as any other

company: the difference is that a minimum of 80% of personnel

have a handicap. It also includes at least 20 employees with a socio-

professional role: training, adaptation to the work station, assistance

with administrative tasks, developing a career project, initiating skills

recognition procedures, etc. It allows disabled workers to have a

paid job in conditions adapted to their possibilities, for FM Logistic

France as well as for other companies.

A first creation in partnership with SEB

The first FMEA Adapted Company was created in Saint-Cyr-en-Val

(Val de Loire, France) in July 2015. The SEB Group, world leader in

small electrical appliances and customer of the FM Logistic Orléans

platform, wanted such a structure to be set up in the region:

FOR FM LOGISTIC, CONTINUOUS IMPROVEMENT GOES BEYOND TECHNOLOGIES, PROCESSES ANDORGANISATION: IT ALSO MEANS COMMITTING TO SUSTAINABLE DEVELOPMENT. DURING THE2015-2016 FINANCIAL YEAR, THE GROUP IMPROVED THE EFFECTIVENESS OF ITS (AND ITS CUSTOMERS’)SOCIETAL INVOLVEMENT ONCE AGAIN, PARTICULARLY IN FAVOUR OF DISABLED WORKERS.

SANDRINE BUECHELER - FMEA DIRECTOR

FMEA is the beginning ofa new chapter in the valuesthat the company has held dearsince its creation in 1967.

“”



to support this new adapted company, it entrusted it with its co-

packing activities, officially becoming its first customer and

strengthening its social commitment. Just like any other company,

FMEA Centre-Val de Loire carries out business activities to meet

the demands and requirements of its customers:

• logistic services: copacking, kit assembly,

labelling, bagging, etc.

• related services: returns handling, warehouse cleaning services,

waste sorting, etc.

• administrative services : dispute handling,

document digitalisation, mailings,

post handling, etc.

This first creation is part of a global and long-term approach.

FM Logistic intends to create 3 FMEA subsidiaries over the next

three years and to eventually have one in each of its home

regions. A project in the Picardie region is already underway.

Co-construction of a new business

sector with the ’Apprentis d’Auteuil’ foundation

Another innovation for FM Logistic in 2015-2016: building a

project with a partner committed to child protection. The

’Apprentis d’Auteuil’ foundation is a recognised public-interest

organisation, in France and internationally. It provides shelter,

education, training and integration programmes that give young

people and families in difficulty what they are most lacking:

confidence. The objective of FM Logistic France and Apprentis

d’Auteuil was to come up with a programme for young people in

difficulty, from 16 to 25, to help them get a job. The two partners

created a new "Logistics - Transport" training branch to add to

the 19 existing ones and the Group committed to taking on

around twenty "apprentis" per year in France. A communiqué of

the partnership was released at the SITL fair in March 2016.

Open to new forms of disability

Modern disabilities include mental illness. FM Logistic advocates

more recognition of these new disabilities which are unfortunately

on the rise in our hyper-connected societies where economic

pressures can cause nervous breakdowns, bipolar disorders, burn-

outs, schizophrenia, etc. People suffering from mental illness are in

need of assistance for social and professional integration. Sufferers

desire a normal life, including a professional one. Reintegration is

often the best therapy but it is seriously inadequate in France.

That’s why FM Logistic contacted Clubhouse, an association with

a proven track record over the past 60 years in more than 30

countries. The first French Clubhouse was created in 2011. It is the

missing link between medical care and working life for people who

suffer from mental illness. In 2015-2016 FM Logistic France and

Clubhouse launched a common initiative to inform the Group’s

managers and heighten their awareness of mental illnesses. The

objective is to contribute to the integration of sufferers and to

detect and support members of staff who may be concerned.

UKRAINE: TAKING UP A CHALLENGE FOR THE WFP AND THE RED CROSS

From November 2015 to February 2016 at the Dudarkiv platform

in Ukraine, FM Logistic took up a co-packing challenge set by

Metro, with the profits going to the world food programme (WFP)

and the Red Cross. In order to meet the challenge, teams organised

three automatic production lines and recruited 130 temporary

workers. The challenge was a success: FM Logistic managed to

produce 21 600 boxes per day thereby meeting the requirements

of the charity operation in a country plagued by war.

YVES POULIQUEN, SUPPLIER QUALITY MANAGER FOR THE SEB GROUP

This shared FM Logistic and SEB Group vision gave rise to the creation of the firstadapted FMEA company, where disabled workers are employed for contract packingoperations. We hope the initiative will be a success and an example to follow!

“”









FM LOGISTIC: EXEMPLARY COMMITMENT IN ALL OF ITS COUNTRIES

Safety First Attitude: a shared safety culture

In 2015-2016, many projects were initiated or reinitiated in all

domains and in all FM Logistic countries, especially through the

international Safety First Attitude programme. The programme has

given rise to a new deployment phase of the safety at work culture

shared by all Group employees today.

Being a matter that concerns everyone, all countries were asked

to consider and establish some common safety rules that could be

adapted to local requirements and formalised in the Safety Law.

FM Logistic’s commitment is ongoing with the deployment of the

Safety First Attitude.

The next phase takes the human factor to another level, it concerns

changes in attitudes and behaviours. Observation and warning

signs at all levels and in all sectors show that health (ergonomics,

nutrition, sport, fight against smoking) and well-being in the

workplace are becoming of utmost importance. As well as

evaluating professional hazards, our countries monitor and analyse

the frequency and causes of accidents at work. Quality of work life

is also given special attention. Monitoring indicators that were

implemented in 2013 show that the efforts made led to positive

results in 2015 in all countries where the Group is based. Between

2014 and 2015 the LTIFR (Lost Time Injury Frequency Rate)

decreased by 15% from 0.55 to 0.47 thanks to actions carried out.

QHSE managers assisted by human resources teams encourage the

efforts made every day in order to reach the target set by the Group

for 2022: an LTIFR of 0.22.

F

FM POLAND: COLLABORATORS SENSITISED TO HEALTH

In 2015, as part of the "Taking care of our health, together"

programme in Poland, 15 000 kg of fruit was given out to

employees at platforms to heighten awareness of the importance

of a balanced diet. The company also organised a cancer screening

campaign for its staff as cancer screening is not covered by the

local social security system.

M Logistic has been deploying its sustainable development

strategy since 2013 everywhere it operates. All countries are aware

and dedicated to transforming the Group’s commitments into

concrete actions:

• Social: training employees while remaining focused on safety

and quality of work life.

• Environmental: reducing our carbon footprint and being

environmentally friendly in everything we do.

• Societal: developing partnerships to support local causes.

• Economic: promoting employment and developing the local

economy by leveraging innovation which is at the heart of

the Group’s strategy.



Promoting sustainable transport

As well as initiating eco-management at its new logistics platforms

(HQE certification in France and LEED internationally), FM Logistic

continued to promote eco-management in the transport sector

following the signing of the voluntary charter in 2009 to reduce

CO² emissions in France. In 2015-2016 FM Logistic continued its

membership with the Green Freight Europe initiative that started

in 2013. The initiative aims to improve collaboration between

dispatchers, logistics providers and public authorities in order to

reduce the environmental impact of road freight.

In the aim of improving transport sub-contractors relations,

FM Logistic has created an international think tank for 3 areas:

• « Training » with eco-driving and delivery-quality

awareness modules.

• « Green solutions » to increase CO² emissions monitoring.

• « Partnership & loyalty », dedicated to main

sub-contractors with central purchasing assistance.

ECO-PERFORMANCE: FM LOGISTIC’SCOMMITMENT REWARDED BY THE "ROIS DE LA SUPPLY CHAIN GRAND PRIX"

In 2015, FM Logistic continued its partnership with CRC

Services: a complementary initiative to pooling that the Group

pioneered. It aims at guaranteeing 100 % pooled distribution

and fits perfectly into the Group’s sustainable transport

strategy by disassociating upstream and downstream

distribution and developing a network of "open" regional

collaborative routing centres. It optimises truck loads (> 90 %)

while guaranteeing visibility, transparency and compliance to

distributor standards. CRC also reduces the carbon footprint

through optimised truck sharing. As partner and player in

the multi-industrial, multi-distributor pooling pilot project,

FM Logistic won the "ROIS de la Supply Chain Grand Prix" just

two years after winning it for the Pool SPHINX project.

Improve collaboration betweendispatchers, logistics providersand public authorities in orderto reduce the environmentalimpact of road freight.

“

”



GREEN LOGISTICS: FM LOGISTIC’S EXPERTISE SOUGHT BY ORTAL

The regional transport and logistics observatory in Alsace (ORTAL)

invited FM Logistic to take part in the "Green Logistics" conference in

Strasbourg on 2 October 2015. Four logistic themes were covered during

the conference:

• How to approach energy transition and climate change in logistics?

• How to initiate eco-logistics?

• Green logistics in the national logistics conference

• Is it necessary to chose between being competitive and being green

in logistics?

During the conference, FM Logistic’s director of operational support

services, Olivier Faure, explained how sustainable development could

be compatible with economic performance by presenting some of the

Group’s initiatives such as CityLogin, cooperation with Green Freight

Europe, pooling and CRC Services.


GOODS TRANSPORT: AN IMPACT NOW MEASURED

In 2015, FM France chose to have its eco-responsible supply

chain performance rated by TK’Blue. From its collaborative

platform, this non-financial independent rating agency

measures, grades and evaluates the global environmentalimpact of transport operations in terms of CO², greenhouse

gases, particles, accidents, congestion and noise. TK’Blue’s

tools are available to FM Logistic France for measuring and

controlling, as well as for simulating material, equipment,

energy, loading rates, etc. It also provides access to technicaland regulatory information, notably concerning CO² and

greenhouse gases, but also CSR (Corporate Social Responsibi-

lity). FM France will now be able to measure and compare its

own performances over time, and position itself within its bu-

siness sector. Objectively measuring the global impact of its

goods transport activities will also contribute to strengthening

FM Logistic’s customer-partners’ CSR commitment. It could

be also deploy in the different countries where FM Logistic

operates.



3or the coming 3 years, FM Logistic has set 3 priority courses to make its

sustainable development approach even more effective:

• Bringing its own and its customers’ initiatives closer by targeting common

environmental and societal concerns,

• Driving all countries every year during the Sustainable Development Week

in May/June and communicating on initiatives,

• Progressively setting up an initiative reporting system.

THREE DIRECTIONSFOR 2016-2019

F



BRAZIL: EXCEPTIONAL SOLIDARITYFOLLOWING THE TROPICAL STORM

In Brazil, FM Logistic upheld its partnership with the APAE

association created in 1954 for Down’s syndrome sufferers as

well as its involvement in the Light in the dark programme for

handicapped or blind children. A special class was created for

blind children and FM Logistic provided the funds to buy a bus

for them. During the year a violent storm also ravaged the

south of the country affecting many FM Logistic employees.

The Group provided them with financial assistance and all

Brazilian staff got together to help their colleagues.

FM LOGISTIC RUSSIA: SUSTAINED COMMITMENT IN 2015

FM Logistic Russia continued developing FM Care projects in

2015-2016 by helping children in need and people with

disabilities. One of the initiatives was an outing organised

in April for students at the Bauman Moscow State Technical

University to go to the FM Logistic Dolgoprudny site near

Moscow. Students accompanied blind and deaf people on a

warehouse visit to discover FM Logistic and the career

opportunities it provides for people with disabilities. During

the visit, two members of staff with serious hearing

problems, Elena Pyankova and Mikhail Shushpannikov,

spoke of their experience working at FM Logistic. In May the

Group also organised a trip for children suffering with

cerebral palsy: around 70 families with their children in

wheelchairs went to the Pokrovskiy convent to admire the

relics of Saint Matrona.

FM UKRAINE: SUPPORT FOR THE INJUREDAND ORPHANS

In the face of war and crisis that has affected the entire

population including children, FM Ukraine organised various

actions to help victims in 2015. For example, staff decided to

use the money intended for the New Year celebrations and

gifts to help soldiers injured. The Group also continued to

assist the Nizhyn orphanage that is home to 106 children.




LONGUEIL-SAINTE-MARIE (FRANCE): SPECIALISTS IN ECO-MOWING AT WORK

Since October 2015 five Ouessant sheep (a hardy breed from the Ouessant island) have replaced

mechanical lawn mowers at the Longueil-Sainte-Marie (Oise, France) FM Logistic site. The living mowers

have taken over the green spaces thereby eliminating the environmental impact of fuel-driven machines

and contributing to a favourable environment for the fauna and flora.

VLTAVA RUN 2015: A TEAMSPONSORED BY FM LOGISTIC CZECH REPUBLIC

In the Czech Republic FM Logistic has suppor-

ted the Leontinka foundation for a number of

years now and last year was no exception. The

foundation helps the visually impaired, parti-

cularly children and students, to integrate so-

ciety, education, working life, sport and leisure

activities. The Group essentially supplied two

chauffer driven vehicles and material for a

team of 12 visually impaired people from the

foundation so they could participate in the

Vltava Run 2015. The Vltava Run is a 350 km

relay race along the river Vltava. The race

brought 176 teams of visually impaired compe-

titors together. With its 12 guides and a dog,

the team supported by FM Logistic finished in

35 hours 29 minutes and 50 seconds.




FINANCIALINFORMATION





CONSOLIDATED BALANCE SHEET

ASSETS (in k€) 31.03.2016 31.03.2015

Goodwill 46 249 40 587

Intangible assets 10 890 9 922

Property, plant and equipment 151 906 143 308

Financial assets: 23 531 28 481

- Non-consolidated shares 483 158

- Other financial assets 23 048 28 323

FIXED ASSETS 232 575 222 298

Inventories 7 708 7 089

Trade receivables and related accounts 159 430 165 031

Prepayments for current assets 5 685 10 052

Tax and social receivables 18 022 14 027

Current accounts (debit) 13 771 5 227

Other receivables 5 784 1 906

Deferred tax assets 3 832 4 420

Prepaid expenses 4 363 4 443

Cash and cash equivalents 96 190 104 089

CURRENT ASSETS 314 785 316 284

TOTAL ASSETS 547 359 538 582

EQUITY AND LIABILITIES (in k€) 31.03.2016 31.03.2015

Share capital 42 927 42 880

Premiums and reserves 96 486 85 943

Profit for the period 7 292 10 260

Foreign currency translation adjustment -42 742 -32 187

SHAREHOLDERS’ EQUITY - GROUP SHARE 103 962 106 897

Minority interests 1 985 0

TOTAL EQUITY 105 947 106 897

PROVISIONS FOR RISKS AND CHARGES 24 391 25 110

DEFERRED TAX LIABILITIES 3 911 4 772

Borrowings and other financial liabilities 150 953 160 278

Bank overdraft 23 725 3 242

FINANCIAL LIABILITIES 174 678 163 520

Trade payables and related accounts 128 739 126 753

Advance payments from third parties 1 651 1 898

Tax and social liabilities 87 589 93 757

Current accounts (credit) 142 134

Other liabilities 16 160 12 736

Deferred income 4 150 3 005

CURRENT LIABILITIES 238 431 238 283

TOTAL LIABILITIES 547 359 538 582



CONSOLIDATED INCOME STATEMENT

(in k€) 31.03.2016 31.03.2015

TURNOVER 1 033 504 1 066 436

Write-back of provisions and depreciations 3 644 1 407Other operating income 6 918 5 278

TOTAL OPERATING INCOME 1 044 066 1 073 121

Purchases 61 773 70 008External services 475 632 474 067Other external services 118 982 118 109Taxes, levies and similar payments 13 092 13 503Staff costs 299 801 316 915Allowances for depreciation and provisions 35 090 34 906Other operating expenses 9 111 6 179

TOTAL OPERATING EXPENSES 1 013 479 1 033 688

OPERATING PROFIT 30 586 39 432

Financial profit / (loss) -5 276 -11 261Exceptional profit / (loss) -6 612 -3 146

PROFIT BEFORE INCOME TAX 18 698 25 025

Employee profit-sharing -1 152 -1 536Income tax -7 840 -11 673Deferred tax 350 1 351Goodwill amortisation allowance -2 765 -2 908

PROFIT/LOSS FOR THE PERIOD 7 292 10 260

Attributable to:

- Minority interests 0 0- Group share 7 292 10 260



CONSOLIDATED CASH FLOW STATEMENT


(in k€) 31.03.2016 31.03.2015

OPERATING ACTIVITIES

NET PROFIT/LOSS 7 292 10 260

Adjustment for:

- Depreciation, amortisation and provisions 35 026 40 705

- Gains and losses on disposal of fixed assets 847 -2 252

- Deferred taxes -350 -1 351

- Unrealized foreign exchange gains / losses -1 182 2 334

CASH FLOW GENERATED BY THE ACTIVITY 41 632 49 695

Change in trade current assets and liabilities 5 066 18 782

- Change in inventories -783 -81

- Change in trade receivables 1 921 -11 207

- Change in trade payables 3 928 30 070

Change in non-trade current assets and liabilities -10 354 -2 835

CHANGE IN WORKING CAPITAL REQUIREMENT -5 288 15 947

NET CASH FROM OPERATING ACTIVITIES 36 344 65 642

INVESTMENT ACTIVITIES

Payment / acquisition of intangible assets -3 851 -4 671

Payment / acquisition of PPE -32 136 -35 101

Receipts / disposal of PPE and intangible assets 6 480 6 277

Payment / acquisition of financial assets -1 460 -2 487

Receipts / disposal of financial assets 7 203 8 433

Net cash / acquisition and disposal of subsidiaries -10 310 29 005

NET CASH FROM INVESTMENT ACTIVITIES -34 074 1 455

FINANCING ACTIVITIES

Increase in capital 330 0

Dividends paid to parent company shareholders 0 -4 558

Cash from borrowings 28 140 34 861

Repayments of borrowings -53 706 -46 494

NET CASH FROM FINANCING ACTIVITIES -25 236 -16 191

VARIATION IN CASH AND CASH EQUIVALENTS BEFORE EXCHANGE RATE FLUCTUATIONS -22 965 50 906

Net effect of exchange rate fluctuations -5 416 -7 917

CASH AND CASH EQUIVALENTS AT THE OPENING 100 846 57 858

CASH AND CASH EQUIVALENTS AT THE CLOSING 72 465 100 846

Comments:

In conformance with the Regl. 99-02, restatements at the time of contract signature of financial leases are not presented in consolidated cashflow statement in so far as they do not generate any cash flow. For information, the value of financial leases signed during the financial yearin the various consolidated companies of the FM Logistic Group is of €19 572k (impact on the increase of gross values and of borrowings fromcredit institutions).

Therefore, these contracts should be accounted for during the comparison of the consolidated cash flow statement and the different statementsof movements in the notes to the consolidated financial statements.


© FM Logistic CorporateEdition: 06/2016 - R542/DPhotos: FM Logistic, Fotolia



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Documents

ANNUAL REPORT 31 MARCH 2016