Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
ANNUAL REPORT
& F I G U R E S
P O R T R A I T S
2015
ANTOON SPOORENBERG
MEMBER OF FARMING STAFFFUNCTION
LOCATION
TODAY
Vion Farming, Boxtel (NL)
> 18 telephone calls: longest lasted 33 minutes, shortest 3 minutes 30 seconds> 5 visits to farmers> 223 km driven to visit suppliers
SHIFT
8:00 - 17:00
> 14 years of service with the company> 2 children> 73 km cycled with 7 friends
2 | V I O N A N N U A L R E P O R T 2 0 1 5
Table of contents
Profile 4Foreword: 2015, a useful year for Vion Food 7Mission and strategy 9Our brands 10Management review 13Corporate Social Responsibility 27Corporate governance 33Risk management, compliance and internal control 39Report of the Supervisory Board 45
> 25 Formula 1 races watched, from start to finish> 2 daughters aged 13 and 15> Eats Dutch food 3 times a week and Antillean food 4 times a week
COVER: SHARLON PEDRO
SLAUGHTERHOUSE DEPARTMENT MANAGER
FUNCTION
LOCATION
TODAY
Vion Food, Boxtel (NL)
> 10,400 cuts of meat processed using the F-line> 9,788 pigs slaughtered> 100,000 kg of meat processed
SHIFT
6:00 - 14:15
V I O N A N N U A L R E P O R T 2 0 1 5 | 3
Vion Food is an international meat producer with production locations in The Netherlands and Germany and sales support offices in sixteen countries worldwide.
Through its three divisions - Pork, Beef and Food Service - the Company provides fresh pork and beef, and derived products for retail, foodservice and the processed meat industries.
Vion Food supplies customers in its home markets of The Netherlands and Germany, other countries in Europe and the rest of the world. Vion Food’s headquarters are located in Boxtel (The Netherlands).
Vion Holding N.V. is a public limited liability company under Dutch law. Starting in 2016 Vion Food will comply with the Dutch Corporate Governance Code.
Vion Food’s sole shareholder, Stichting Administratiekantoor SBT, is a trust office that has issued depositary receipts for its shares to NCB-Ontwikkeling, which acts as the investment fund of ZLTO. ZLTO is an association for entrepreneurs working in agricultural sectors and has approximately 15.000 members in Noord Brabant, Zeeland and the southern part of Gelderland.
Profile
303,000PROCESSED PER WEEK
P IGS
17,400PROCESSED PER WEEK
CATTLE
€ 4.6BILL ION
TURNOVER 2015NET
IN 201511,021INCLUDING FLEX WORKERS
EMPLOYEESNO OFAVERAGE
4 | V I O N A N N U A L R E P O R T 2 0 1 5
KEY F IGURES
2015 2014 2013
RESULTS
Net turnover 4,571 4,992 7,033
> Net turnover from ongoing operations 4,571 4,833 5,031
> Net turnover from discontinued operations - 159 2,002
Normalised EBITDA 1 46 60 196
Including:
> EBITDA normalised from ongoing operations 45 58 22
Operating result 31 20 728
Net result 22 -21 516
CASH FLOW
Cash flow from operating activities 34 80 -41
Net cash flow from operations (available for financing activities) 2 -18 1,563 -113
Sale and acquisitions of group companies 2 1 1,519 -
BALANCE SHEET
Group equity 416 397 425
Balance sheet total 945 980 2,706
Net debt 3 -52 -87 1,459
RATIOS
Added value as % of net turnover 4 21.2% 21.0% 27.5%
Staff costs as % of net turnover 10.2% 9.7% 10.6%
EBITDA normalised 1 as % of added value 4.7% 5.7% 10.2%
EBITDA normalised 1 as % of net turnover 1.0% 1.2% 2.8%
Solvency 44.1% 40.5% 15.7%
Return (ordinary operations) on average capital employed (ROCE) 5 3.7% 5.9% 11.9%
EMPLOYEES
Number of employees at year-end 4,233 4,311 6,669
Number of employees including flex workers at year-end 11,542 11,492 14,274
Average number of employees 4,228 5,243 12,491
Average number of employees including flex workers 11,021 12,897 18,099
(amounts in millions of euros)
1 Excluding impairments, restructuring and book earnings from divestments of group companies.
2 Change is primarily due to the divestment of Vion Ingredients.
3 Long-term liabilities and current interest-bearing liabilities payable to credit institutions less cash and cash equivalents.
4 Net turnover and changes in inventory of finished goods and goods being processed less cost of raw materials and consumables as a percentage of net
turnover.
5 Normalised operating result1 divided by average capital employed (fixed assets, excluding financial fixed assets, plus net working capital, excluding all
interest-bearing liabilities payable to credit institutions and receivables related to divestments of group companies).
V I O N A N N U A L R E P O R T 2 0 1 5 | 5
> 23 years of marriage, 2 daughters aged 21 and 16> 22:00 bedtime> 40-minute motor scooter ride to work > 3 hours of indoor football per week: 1 hour of matches, 2 hours of fitness training> 5 to 10 km walking the dog at the weekend
LOUIS AUERBACH
CATTLE SLAUGHTERHOUSE FOREMAN FUNCTION
LOCATION
TODAY
Vion Food, Tilburg (NL)
> 500-600 cattle slaughtered> 2-knife system used for maximum hygiene> 35 slaughterhouse staff members managed> 5% of staff given training on the job> 6 emergency response officers within a team of 80
SHIFT
6:00 - 15:00
6 | V I O N A N N U A L R E P O R T 2 0 1 5
We continued our important efforts to optimise
our footprint; over two years, this has resulted in a
reduction from 35 to 25 production sites, without
losing volume. At the same time, key investments
upgraded various sites to best-in-class level. For
example, Waldkraiburg in southern Germany will be
one of the largest and most modern beef processing
sites in Europe. A new management board (CEO
and CFO) as well as a new COO for our Pork division
and a Group HR Director came on board. The pro-
duct-driven management structure was maintained
and strengthened. To manage the Company and
implement our strategy and plans, we have set up an
Executive Committee consisting of the division COOs
and the CEO and CFO plus the Group HR Director.
In 2015, Vion Food was definitely impacted by
the difficult situation in pig husbandry in The
Netherlands, Germany and Europe in general. First
and foremost, Vion Food has deep empathy for
farmers who do their work with passion and make
(often unnoticed) continuous improvements without
proper reward. At Vion Food, we see it as our res-
ponsibility to contribute to improving this situation,
whether by making ourselves even more efficient,
by creating and managing supply chains that give
better access to the market or by using our scale to
optimize valorisation.
This year we made further progress on optimising
the economic value of the animals processed by
accurately aligning our product selection with global
market demand. Access to markets around the world
is a key success factor for our Company. If we can
sustain this approach, we believe in the long-term
viability of pig husbandry in The Netherlands and
Germany thanks to our leadership in productivity,
Foreword
2015: A USEFUL YEAR FOR VION FOOD
In 2015, we continued to build on the progress made in the previous year. We faced tough market circumstances in the pork industry which had an impact on our operational result (EBITDA) in the Pork division. However, thanks to the solid performance of our Beef and Food Service divisions and lower restructuring costs, we returned to a positive net income and thus solidified our equity and solvency.
food safety, animal welfare and sustainability.
As further highlighted in this Annual Report, in
2015 we signed commercial contracts which will set
examples for the industry. They are based on better
satisfying customer needs through management
of the complete supply chain, which we see as the
strategy going forward.
Indeed, the key message about the mid- and long-
term prospects of Vion Food are related to our
unique position to promote trust in the industry. We
are fully aware that, over the past few years, meat
has been the subject of important social debates,
such as on animal welfare, food safety and
traceability and the role of meat in healthy diets, to
name just a few. Our position as a ‘funnel’ between
the fragmented animal husbandry sector on the
one hand and the meat processing industry on the
other makes Vion Food the natural – and much
needed – chain coordinator in our markets. The
chain coordinator guarantees the origin of the meat,
encourages and rewards animal-friendly husbandry
and safeguards food safety, quality and consumer
satisfaction.
At Vion Food, we are ready to take on this
responsibility. Our focus over the coming years
will be on putting this into practice and thus
maximising the Company’s full potential, backed
by our loyal and dedicated employees. Their daily
efforts to improve our performance are remarkable
and wholeheartedly appreciated. Hence, you find in
the Annual Report some of their Portraits together
with Vion’s Figures.
Francis Kint
Chief Executive Officer
V I O N A N N U A L R E P O R T 2 0 1 5 | 7
> 4,700 m walked with the dog> 15 kg dog food bought> 4 years spent renovating his home
PIETER VAN GOOL
CATTLE SHED EMPLOYEEFUNCTION
LOCATION
TODAY
Vion Food, Tilburg (NL)
> 457 cows received> 43 livestock vehicles unloaded> 6 different nationalities talked to
SHIFT
6:00 - 14:15
8 | V I O N A N N U A L R E P O R T 2 0 1 5
MISSION
Vion Food wants to be the leading reliable partner
within the food supply chain that provides people
around the world with safe meat products.
OUR VALUES
> Pride
> Transparency
> Ambition
> Sustainability
> Quality
Mission and strategy
STRATEGY
This mission statement translates into the
following strategic and future-proof principles:
> The consolidation and strengthening of existing
worldwide market positions and the
development of new markets.
> The continuous monitoring of product quality,
food safety and its full traceability.
> The alignment of products with customer needs,
including the introduction of innovative and
new products.
> The creation and management of an integrated
supply chain by assisting farmers and actively
collaborating with retail and industry.
> The controlling of costs and and raising
efficiency in the production systems.
> The active contribution to societal debates
about public health, animal health, animal
welfare, sustainable food production and its
environmental impact.
V I O N A N N U A L R E P O R T 2 0 1 5 | 9
De Groene Weg has been the market leader in The Netherlands
since 1981. The De Groene Weg brand contributes to the integral
sustainability of organic meat in the supply chain. Vion Food acts
as a one-stop supplier with respect to purchasing, production and
supply chain management, thus adding value to organic beef
and pork. This brand is sold to butchers shops throughout The
Netherlands.
SALOMON FoodWorld offers a wide range of innovative burgers,
centre-of-plate and finger food products for the out-of-home
market. SALOMON Foodworld’s three successful concepts are
Finger Food Hits, Handheld Snacks and Centre-of-Plate.
FVZ Convenience – The modern traditionalist. This brand is built on
five pillars: Schnitzel, Poultry, Minced Meat, Haxer and Vital.
Vion Food supplies fresh pork and beef of the highest quality
under the Food Family brand. Food Family stands for strict controls
on raw materials, high processing standards and consistent quality.
Our brands
1 0 | V I O N A N N U A L R E P O R T 2 0 1 5
Goldbeef is high-quality beef that is distinguished by its deep-red
meat colour and the fat marbling that indicates its quality. The beef
maturation process is very important; it gives the meat its tenderness
and releases aromas, which guarantee a unique taste experience.
The clearly defined production process ensures
consistent quality.
Schweinegold represents fresh pork that is destined for the meat
industries in Japan and Korea.
Products sold under the Hackplus brand consist of meat combined
with protein from vegetables or wheat. This means Hackplus
products contain less fat and salt while tasting just as good as
traditional meat products. Hackplus is available in various
supermarkets in Germany.
Weylander beef is a premium line of beef that is available in various
supermarkets in The Netherlands. Weylander beef is specially
selected and prepared and the products mature in the packaging,
which creates a characteristic flavour and guarantees tenderness.
Good Farming Star is premium pork which is sold in The Netherlands
and is characterised by the extra attention paid to animal welfare.
Furthermore, the concept complies with sustainability requirements
in the value chain. Good Farming Star offers known-origin meat and
is produced in a controlled and transparent chain.
V I O N A N N U A L R E P O R T 2 0 1 5 | 1 1
> 12 years of marriage> 1 son> 200 hours traffic-jam per year> 324 ballpoint pens collected
SILVIA SPRIEGEL
QUALITY MANAGEMENT REPRESENTATIVE
FUNCTION
LOCATION
TODAY
Vion Food, Hilden (DE)
> 2 checks on production> 7 specification sheets drawn up> 4 document revisions made> 1 complaint processed> 18 samples sent to the laboratory
SHIFT
7:00 - 17:00
1 2 | V I O N A N N U A L R E P O R T 2 0 1 5
RESTRUCTURING AND OPTIMISATION OF THE FOOTPRINT
During 2015 Vion Food further optimised its
network of production locations. This process
started in 2014 and was further executed in 2015
by the closing of two pork sites (Bad Neustadt
and Straubing) and two beef sites (Anklam and
Frankfurt).
Parallel to the closures, significant investments
were made to expand and/or modernise several
sites in line with the strategic intent of the foot-
print optimisation.
Investments in modernisation and expansion
of capacity took place in Groenlo and are
expected to be finalised in 2016. This will
concentrate activities from slaughter up to
and including the consumer packing for Good
Farming Star and organic pork meat in Groenlo.
Investments in expansion of capacity took place
at the pork sites Landshut and Vilshofen. In 2015
the co-shareholders Erzeugergemeinschaften-
Beteiligungs GmbH (EGB) and Erzeuger-
gemeinschaften Südostbayern eG (EGS) increased
their shareholdings to 49% in Landshut and
Vilshofen respectively. Both EGS and EGB
participate in the investments in Landshut and
Vilshofen in accordance with their new share in
the companies.
Investments have been made for transformation of
the current mixed (beef, pork) site Waldkraiburg
to a dedicated beef site. Vion Food ended pork
slaughtering at this site in the first quarter of 2016.
In addition, capacity is being expanded to absorb
the volume of Pfarrkirchen after the closing of
this site in January 2016. After the expected
finalisation of the investment in Waldkraiburg
in the first half year of 2016, it will be one of
Europe’s most modern and high-performance beef
slaughtering and deboning facilities.
In 2015 Vion Food took over the minority interests
of 25% in Salomon Hitburger GmbH, a sound
business with good margins that is complementary
to the fresh meat business. In addition to this Vion
Food acquired the minority interests of 30% of
Vion SA held by local management. Accordingly,
these shareholdings of Vion Food increased to
100%.
Management review
2015 Was an important year for Vion Food: one in which further major steps have been taken in strengthening our management, optimising the organisational structure and carrying out the strategic plans which were initiated in 2014. All of this was done against the backdrop of a difficult market. In 2015 the market conditions were tough putting pressure on the entire sector, in particular the pork meat industry. Despite this setback Vion Food held on to further development and implementation of the strategic plans focused on the main pillars: footprint, valorisation, supply chain, quality and innovation.
V I O N A N N U A L R E P O R T 2 0 1 5 | 1 3
In 2015 the further integration of
FVZ Convenience GmbH into Food Service
continued. End of the year a major investment
in its production site in Holzwickede started.
OPERATIONAL IMPROVEMENTS BY VALORISATION AND SUPPLY CHAIN
Vion Food took further steps on valorisation.
Valorisation enables further optimisation of the
economic value of the animals processed by Vion
Food and a better alignment of product offerings
with global demand in markets open for Vion
Food, such as China, North America, Japan, Korea
and Australia. The positive impact of optimising
valorisation is already visible in The Netherlands.
In 2014 a centralised supply chain organisation
has been created in order to achieve economies
of scale and efficiencies across the divisions. It has
focused on all procurement, apart from livestock
and fresh meat, and on optimisation of the logis-
tics and distribution networks. Since its inception,
major savings and efficiency improvements have
been realised in many areas. As Vion Food mo-
ves forward into the next phase of entrenching
the divisional organisation, and in order to give
the divisions even more ways of improving their
performance and results, Vion Food has decided to
bring these activities back to the divisions. This is
currently being implemented.
GOVERNANCE AND ORGANISATIONAL OPTIMISATION
Internally, 2015 was the first full year of managing
Vion Food based on a divisional structure with
three divisions – Pork, Beef and Food Service –
managed by dedicated management teams. This
structure has contributed to further focus on the
direction of Vion Food, improving collaboration
and utilisation of synergies.
Vion Food introduced an Executive Committee to
support the Management Board in achieving the
objectives of the Company and implementing the
strategic objectives set out in the strategy and
business plan. The Executive Committee
currently consists of the members of the
Management Board (CEO and CFO), the Chief
Operating Officers (COOs) of the three divisions
and the Group HR Director.
In the second half of 2015, Vion Food’s corporate
governance has been reviewed and various items
have been updated (e.g. rules of procedure for the
Management Board and the Supervisory Board).
Starting in 2016 the Company will comply with the
Dutch Corporate Governance Code.
QUALITY AND INNOVATION
Vion Food operates according to demanding
quality requirements for all of its production
locations. Food safety, animal welfare, product
integrity, worker safety and transparency are very
important elements of these requirements. Vion
Food takes full responsibility concerning these
issues. Next to this independent government
veterinarians continuously monitor slaughter-
houses, and random samples are taken for testing
in third-party laboratories for food-safety hazards,
antibiotics and other unwanted substances.
As of October 2014, Vion Food has started to
publish inspection results and audit reports online
on the website www.vionfood.nl. The quality
reports provide a clear picture of the quantity and
quality of the meat processed by Vion Food, the
results of government inspections and third-party
audits, and the conditions under which the meat is
processed.
For Vion Food, innovation is an important part of
the business. In addition to the continuous
monitoring of quality, a lot of attention is paid to
innovation. The R&D activities focus on
optimisation and innovation throughout the
supply chain, ranging from genetics to the
selection of technical parts for the various markets
and food and meat quality, as well as other specific
product properties and reduction of the use of
1 4 | V I O N A N N U A L R E P O R T 2 0 1 5
antibiotics in the animal supply chains. An
international project on the control of boar taint
was finalised and resulted in several scientific
publications that show the high effectiveness of
Vion Food’s control measures to prevent boar taint
in pork.
NEW CREDIT FACILITY
In June 2015 Vion Food successfully signed new
facility agreements of € 100 million with ABN
AMRO Commercial Finance and NIBC, specially
for financing of working capital. In July 2015 this
syndicate has been expanded to include Bank of
America Merrill Lynch, expressing its confidence
in Vion Food’s future, and increasing the facility
amount to € 125 million. The new facility has a
two year term expiring 24 June 2017.
FINANCIAL REVIEW
Over 2015, both net turnover and total operating
costs decreased, resulting in an operating result of
€ 31 million, an increase of € 11 million compared
to last year. Net sales and margins were negatively
impacted by difficult market conditions, putting
pressure on the entire business, in particular the
pork meat sector. Factors that positively impacted
the operating result were the further optimised
M A N A G E M E N T R E V I E W
Results for 2015
(in millions of euros)
PROFIT AND LOSS ACCOUNT 2015 2014
Sales volume (in tons of kg) 2,104,665 2,125,076
Net turnover 4,571 4,992
Total income 4,613 5,010
Total operating costs 4,582 4,991
Operating result 31 20
Normalised EBITDA from ongoing operations 45 58
Financial income and expenses -6 -22
Taxes -0 -13
Share of third parties in result -2 -5
Net result 22 -21
network of production locations and efficiency
improvements in the logistics, distribution network
and lower (non) product related spend categories
leading to lower operating costs.
Normalised earnings before interest, taxes,
depreciation and amortization (EBITDA) from
ongoing operations decreased to € 45 million
(2014: € 58 million). However, the operating result
increased mainly due to € 18 million lower restruc-
turing expenses and € 6 million lower impairment
expenses.
In 2015 Vion Food’s net result was positive again
(€ 22 million, 2014: € 21 million negative), mainly
caused by improved operating result, lower net
financial expenses and lower tax charges.
The net financial expenses are lower due to an
exceptionally high interest charge related to pen-
sions in 2014, a lower amount of financing needed
in 2015 and a lower interest margin under the new
financing agreement (2015: € 6 million, 2014: € 22
million). The tax charges decreased by € 13 million
mainly due to non-taxable income and incidental
tax charges in 2014.
In addition, the share of third parties in the result
decreased by € 3 million (2015: € 2 million, 2014:
€ 5 million) due to Vion Food’s acquisition of 25%
minority shares in Salomon Hitburger GmbH and
of 30% in Vion SA in 2015.
V I O N A N N U A L R E P O R T 2 0 1 5 | 1 5
> 4 children aged 20, 18, 16 and 14> 18-year-old son helps out 8 hours a week> 3 hours out cycling with 10 cycling buddies> 5,200 km of bicycle racing per year> Drunk 2 bottles of dark
beer after cycling
ROB COOPMANS
GOOD FARMING STARSUPPLIER
FUNCTION
LOCATION
TODAY
Ysselsteyn (NL)
> 400 sows and 3,100 slaughter pigs tended to> 260 piglets born> 205 Good Farming Star pigs delivered> 23 years as a farmer on this site
SHIFT
6:00 - 19:30
1 6 | V I O N A N N U A L R E P O R T 2 0 1 5
Next to these, provisions for reorganisation and
restructuring costs (2015: € 19 million, 2014:
€ 38 million) are part of the total provisions.
These provisions decreased amongst others by
€ 17 million caused by releases of divestments
provisions formed in previous years.
At the end of 2015, an amount of € 46 million
(2014: € 100 million) was drawn under the € 125
million (2014: € 100 million) facility. With gross
debt of € 71 million and cash and cash equivalents
of € 123 million, net debt was negative € 52 million
(2014: € 87 million negative). This means that Vion
Food is de-facto debt free. The solvency remained
strong in 2015 (44.1%, 2014: 40.5%).
The cash flow from operating activities
amounted to € 34 million (2014: € 80 million).
The main reasons for the decrease are the lower
EBITDA performance (2015: € 46 million, 2014:
M A N A G E M E N T R E V I E W
The intangible fixed assets increased to
€ 32 million (2014: € 9 million). This increase is due
to the capitalisation of goodwill relating to the
acquisitions of the minority shares of Salomon
Hitburger GmbH and of Vion SA in 2015. For both
acquisitions a payment schedule has been agreed,
which resulted in an increase of the long-term
liabilities by € 11 million. The tangible fixed assets
increased by 24 million to € 230 million mainly by
investments to expand and/or modernise several
sites for footprint optimisation.
The provisions consists mainly of provisions for
post-employment benefits (pension plans, pre-
pension and early retirements schemes) as well as
long-term benefits (jubilee and leave agreements)
(2015: € 120 million, 2014 € 123 million). The
pension plan liabilities apply fully to the defined
benefit pension schemes for employees and former
employees of the German group companies.
Cash flows
(in millions of euros)
CASH FLOW STATEMENT 2015 2014
Net cash flow from operating activities 34 80
Net cash flow from investment activities -52 1,483
Net cash flow from financing activities -56 -1,508
Increase / (decrease) in cash and cash equivalents -75 54
Cash and cash equivalents at year-end 123 198
Financial position
(in millions of euros)
BALANCE SHEET 2015 2014
Fixed assets 296 247
Current assets 649 733
Group equity 416 397
Provisions 141 165
Long term liabilities 24 11
Current liabilities 364 407
Balance sheet total 945 980
Net debt -52 -87
Solvency 44.1% 40.5%
V I O N A N N U A L R E P O R T 2 0 1 5 | 1 7
€ 60 million) and the decrease in working capital
(2015: € 12 million, 2014: € 43 million).
In 2015, the main use of the cash flow from
operating activities included investments in
fixed assets mainly to further optimise the produc-
tion locations (€ 64 million) and a smaller amount
drawn under the current financing facility (€ 53
million). The cash and cash equivalents conse-
quently decreased by € 75 million to € 123 million.
In 2014 the cash flow from investment activities
(€ 1,483 million) and cash flow from financing
activities (€ 1,508 million negative) were highly
impacted by the sale of group companies and
consequently, the repayment of debts to financial
institutions.
DIVISIONS
PORK
Success of Good Farming Star
After five years of investment and development,
the more animal-friendly and more sustainable
production of pork achieved a breakthrough in the
past year. Vion Food succeeded in signing
contracts with The Netherlands’ most important
food retailers. The duration and nature of the
contracts provide a strong foundation for the
Good Farming Star market concept.
In addition to developing concepts, the Pork
division is striving to take its meat marketing
activities to the next level in various other ways
supported by optimised valorisation.
The Pork division consists of 16 production loca-
tions. Three slaughterhouses in The Netherlands
(Apeldoorn, Boxtel and Groenlo) and nine in Ger-
many (Altenburg, Crailsheim, Emstek, Landshut,
Perleberg, Riedlingen, Vilshofen, Waldkraiburg
and Zeven). In Boxtel and Groenlo, Pork operates
processing plants as well (Encebe Vleeswaren Box-
tel and Retail Groenlo). Besides these, the division
operates four separate deboning and processing
plants: two in The Netherlands (Scherpenzeel and
Valkenswaard) and two in Germany (Ahlen and
Holdorf). The Pork division head office is located
in Boxtel, The Netherlands. At the end of 2015 the
division had approximately 7,800 FTEs (including
flex workers). The Pork division processes approxi-
mately 303,000 pigs per week. The resulting meat
is supplied to national and international retailers,
food service clients and food processing compa-
nies.
Vion Farming
Vion Food works closely with its suppliers, which
include almost 50% of all pig farmers in The
Netherlands and 16% in Germany. Vion Farming is
the department of the Pork division which handles
pig procurement in The Netherlands. This
department also keeps the pig farmers informed
and regulates the quantity and quality of the
animals. Vion Farming’s employees in the field
form an important link between breeders
(producers of piglets) on the one hand and pig
farmers on the other, and they know exactly which
piglets meet the requirements of pig farmers at
home and abroad. Vion Farming helps pig farmers
to optimise the health of their animals. In addition,
Vion Farming controls the livestock flows and plans
transportation of the animals.
Market
At the division’s production sites, pork is processed
into products for domestic clients as well as export
customers in a.o. Europe, Asia and North
America. Basic raw materials are delivered to
industrial customers who process the pork into a
2015 2014
# Production 17 19
locations
# Slaugthered 15,744,000 15,752,000
heads
Sales volume 1,685,000 1,708,000
(in tons of kg)
Net turnover 2,944 3,246
(in millions of euros)
# FTE 7,728 7,373
(flex workers included)
1 8 | V I O N A N N U A L R E P O R T 2 0 1 5
wide range of meat products, such as cold cuts,
meat snacks, smoked sausages, pizza toppings and
dried hams. Fresh pork is processed by Vion Food
into semi-finished and finished products for the
domestic and export retail markets.
Vion Food works with the following market
concepts: Good Farming Star, Good Farming
Organic, Good Farming Welfare and Good Farming
Global. These concepts allow Vion Food to address
different needs in different countries.
Good Farming Star, launched in 2010 and aimed at
Dutch retailers, is characterised by its extra
attention for animal welfare and has received a
one-star rating from the Dutch Society for the
Protection of Animals (‘Dierenbescherming’).
Furthermore, the concept complies with
sustainability requirements. One important step in
2015 was the agreement Vion Food reached with
the main retailers in The Netherlands at the end of
the year to continue supplying Good Farming Star
meat. For the largest supermarket organisation,
this is a multi-year cooperation agreement
concerning the purchase of fresh pork and
pork-based ingredients for the production of meat
products. The Good Farming Organic brand ’De
Groene Weg’ has held a strong position in both the
Dutch and the European markets for organic beef
and pork for some years. The organic meat market
is growing year on year and De Groene Weg is well
positioned to benefit from this growth. Good
Farming Organic is working closely with its
suppliers to further expand the supply chain.
Continuing price pressure
Sustained overproduction of pigs meant that 2015
was characterised by continuing price pressure and
challenging conditions for the sector. This even
led to demonstrations by pig farmers in countries
including France, Belgium and The Netherlands.
The year started with the relatively low price of
€ 1.27 per kg. The price began to rise in February,
reaching the level of € 1.46 per kg in April.
However, it subsequently declined due to closure
of the borders in Russia and Ukraine and falling
consumption in the EU. Global exports were also
under pressure due to the strong dollar.
Nevertheless, the price peaked at € 1.48 per kg in
June. It remained at this level for a week before
dropping back to € 1.33 per kg later in the
summer. Apart from a brief respite in September,
the price went into a steady decline in the second
half of 2015 resulting in a low of € 1.19 in
November. In addition to a weak European
market, the exporting slaughterhouses were also
confronted with high levels of supply globally and
tough competition on the Asian market. The
average price level in 2015 was € 1.34 which is
11.4% lower than in 2014.
Restructuring
Over the course of 2015, two production locations
(Bad Neustadt, February 2015 and Straubing,
October 2015 ) were closed in southern
Germany. Nearly all production from those entities
was moved to other locations to retain market
share. At the same time, investments have been
made at many sites in both The Netherlands and
Germany. For instance, the slaughtering and
processing activities at Landshut have been greatly
expanded and equipment at Vilshofen has been
modernised to keep its production process at a high
level. Capacity at Groenlo will be increased in 2016.
End of 2015 the Pork division consists of seven-
teen production sites: five in The Netherlands
(Apeldoorn, Boxtel, Groenlo, Scherpenzeel and
Valkenswaard) and twelve in Germany (Ahlen,
Altenburg, Bamberg, Crailsheim, Emstek, Holdorf,
Landshut, Perleberg, Riedlingen, Vilshofen, Wald-
kraiburg and Zeven).
Operational improvement
In 2015 Vion introduced valorisation, a process that
optimises the pig farming chain up to and inclu-
ding the customers. The aim of valorisation is to
achieve meat processing efficiency and profitability
by gaining maximum benefit from all aspects of
the animals supplied while simultaneously meeting
the needs of the customers in the various
countries. The concept of valorisation was
developed and applied in 2015 and will be
combined with state-of-the-art systems for quality
control, full transparency and traceability.
M A N A G E M E N T R E V I E W
V I O N A N N U A L R E P O R T 2 0 1 5 | 1 9
> 2 children (18 and 15 years old)> 40 years of membership of the VFJ Lippborg Table Tennis Club> 3 km jogged every other day> 5000 one-cent coins collected> 1 meal cooked for family and friends each week
FELIX ZUBROWSKI
ENGINEERING MANAGER AND ENERGY OFFICER
FUNCTION
LOCATION
TODAY
Vion Food, Hilden (DE)
> 200 machines under his responsibility> 400 m of conveyor belts to maintain> 20 breakdowns repaired> 15 parts replaced
SHIFT
7:30 - 17:00
2 0 | V I O N A N N U A L R E P O R T 2 0 1 5
All production locations are certified in accordance
with one of the leading food safety standards (IFS
or BRC). In addition, thanks to the use of
innovative and patented QR-code technology, full
transparency is provided. Consumers have the
possibility to trace meat back to individual farms by
scanning a QR code on the packaging using their
mobile phone which links directly to a relevant
website for more information.
Reliable partners
Vion Food has a strong and a long-term partnership
with most of its suppliers. Vion Food collaborates
intensively with farmers, industry associations and
traders. Food safety is ensured through close
cooperation with professional and reliable partners,
whether for breeding, housing or transportation.
Vion Food as a trendsetter
In 2015 Vion Food maintained its leading market
position in its home markets. Regionality and
quality are major drivers for the beef sector,
especially in Germany. Vion Food fulfils its role as a
trendsetter with the launch of high-quality regional
products under the umbrella brand of Goldbeef.
One ongoing trend is dry-aged beef, which is now
even sold in supermarkets. Dry-aged beef is beef
that has been left to dry in a temperature-
controlled environment. This aging process enables
the meat to develop an intense flavour. Vion Food’s
investment in temperature-controlled storage
rooms opens up new market possibilities for
dry-aged beef.
Prices: seasonal pattern
Cattle prices follow a seasonal pattern with higher
prices in the spring and summer (due to the
reduced supply) and lower prices in the autumn
and winter (due to the increased supply).
The milk quotas were abolished at the end of the
first quarter of 2015. In response, dairy farmers
increased their milk production and hence retained
more cattle for themselves. This had a downward
effect on the number of dairy cows supplied to
slaughterhouses and led to significantly higher cow
prices in The Netherlands and Germany, especially
M A N A G E M E N T R E V I E W
BEEF
Numerous developments
In 2015, Vion Food’s Beef division was confronted
with numerous developments, both internally and
externally. One major change was the ending of the
European Union milk quotas on 31 March. Further-
more, the Beef division is involved in a
restructuring programme to strengthen and mo-
dernise its manufacturing activities. A total of three
plants are to close as part of this programme, and
two of those closures were completed in 2015. In
2015, work also started on the construction of one
of Europe’s most modern and high-
performance beef slaughtering and deboning
facilities in Waldkraiburg.
Market leader in The Netherlands and Germany
Vion Food is a trendsetter and market leader for
beef in Germany and The Netherlands and holds a
leading position in Europe. Vion Food’s beef pro-
ducts are mainly marketed in the home markets of
The Netherlands and Germany as well as Southern
Europe (France, Greece, Italy and Spain). Thanks to
its skill and expertise combined with large-scale,
state-of-the-art production technology, Vion Food
is able to supply an extensive customer base with
large quantities of consistently high-quality beef.
Clients can choose from a wide portfolio of fresh
and frozen beef and beef-based products. Vion
Food offers excellent customer service and is a
reliable partner for the retail, food service and
processed meat industries.
2015 2014
# Production 12 14
locations
# Slaugthered 905,000 917,000
heads
Sales volume 431.000 470.000
(in tons of kg)
Net turnover 1,669 1,759
(in millions of euros)
# FTE 3,222 3,571
(flex workers included)
V I O N A N N U A L R E P O R T 2 0 1 5 | 2 1
in the first half of the year. The effects on the
individual Vion Food plants varied. The
slaughterhouse in Tilburg suffered the greatest
impact because dairy cows account for
approximately 90% of its volumes. At other plants
dairy cows account for between 35 and 65% of
volumes. There were 5% fewer milking cows
slaughtered than in 2014. Total number of
slaughterings decreased by 1%, so Vion Food
increased the numbers of the other categories by
3%.
Slaughterhouse restructuring
In order to further strengthen its market position,
Vion Food’s Beef division is in the midst of a
large-scale, multi-year restructuring programme.
The Company continued with its strategy of
creating an effective, efficient and future-proof
organisation in 2015. As a consequence, the plants
in Anklam (July 2015) and Frankfurt (August 2015)
were closed, and the plant in Pfarrkirchen is closed
in the first quarter of 2016. The remaining plants
are being modernised. Vion Food is investing
heavily in Waldkraiburg to create one of the most
high-tech and high-performance beef centres in
Europe.
The Beef division consists of nine slaughter-
houses: one in The Netherlands (Tilburg) and eight
in Germany (Altenburg, Bad Bramstedt, Bamberg,
Buchloe, Crailsheim, Furth im Wald, Pfarrkirchen
and Waldkraiburg). The slaughterhouses are all
strategically located to minimise the transit time
for the animals. In addition to its slaughterhouses,
Vion Food operates three deboning and processing
plants: one in The Netherlands (Enschede) and two
in Germany (Hilden and Großostheim).
FOOD SERVICE
Consistent market strategy
The approach of the Food Service division is
characterised by the pursuit of a consistent,
multi-year market strategy. The core of this
strategy is to achieve annual revenue growth and
to continually raise awareness of the two brands
Salomon FoodWorld and FVZ Convenience. In
2015, Food Service once again succeeded in
achieving revenue growth, notably at above the
rate of market growth which resulted in a larger
market share. Brand awareness has been increased
yet again thanks to a systematic focus on
positioning.
Gastronomy and impulse channels
Food Service serves two segments of the food
market: gastronomy and impulse channels. The
gastronomy segment comprises catering firms,
canteens, restaurants and hotels. These make
up the more traditional part of the food sector
which is largely mature and affected by the state
of the economy. The other segment, impulse
buys (snacks), comprises the ad hoc convenience,
travel, transport and leisure/entertainment outlets.
The impulse channel is young and offers a lot of
potential. A growing number of people are eating
outside of the home and buying food from
establishments such as petrol stations and
takeaway outlets.
Two brands: Salomon FoodWorld and
FVZ Convenience
Vion Food offers two food service brands: Salomon
FoodWorld and FVZ Convenience.
Salomon FoodWorld is positioned as an innovative
convenience company, focused on customer
impulses, successes and emotions. This is a large
brand in Germany and Austria, and was also
launched in The Netherlands in 2015, replacing
Food Service Nederland. Salomon FoodWorld
supplies products in three groups:
> Finger Food Hits (snacks from various countries)
> Hand Held Snacks (especially burgers)
> Centre-of-Plate (meat-based convenience
products)
FOOD SERVICE 2015 2014
# Production 2 2
locations
Sales volume 57,000 57,000
(in tons of kg)
Net turnover 226 228
(in millions of euros)
# FTE 432 430
(flex workers included)
2 2 | V I O N A N N U A L R E P O R T 2 0 1 5
2015 was a dynamic year for FVZ Convenience.
At the end of 2014 Vion Food gained the majority
interest in FVZ Convenience by acquiring all the
shares from Westfleisch. This led to modernisation
of the strategy and development of new concepts.
FVZ Convenience is specialised in the manufacture
of convenience products. FVZ Convenience is
positioned as the modern traditionalist with the
promise “Simply do it…”. Customers can choose
from a range of lines comprising dozens of
products that are quick and easy to prepare.
Market share growth
The Food Service activities have demonstrated
continuous growth and outperformed the concer-
ning German market growth, that was estimated
at 1.5% in 2015. Key drivers behind this significant-
ly above-average growth are the success factors of
‘producer competence’, ‘marketing
competence’ and ‘purchasing power’ as a
fully-fledged member of the Vion Food Group.
‘Producer competence’ means that, since the
Company has full control over the formulations
and manufacturing process, it can tell customers
exactly what goes into the products and how they
are made. ‘Marketing competence’ expresses the
fact that Vion Food does not merely sell products
but also helps customers to prepare and sell them.
‘Purchasing power’ means that the division has
excellent suppliers and hence, as part of Vion
Food, has access to outstanding meat products.
In Germany Vion Food is market leader in the
division’s three segments with Salomon Food-
World’s Center-of-Plate (schnitzel and mince-
based products) with more than 35%, Finger
Food Hits (e.g. buffalo chicken wings and
appetisers) with more than 35% and Hand Held
Snacks (mainly hamburgers) with more than 60%
of the food service market (value). In addition,
with the brands FVZ Convenience and Salomon
FoodWorld, the Food Service division holds a
market-leading position in the Top 100 key
accounts with a share of more than 80%.
Salomon FoodWorld and FVZ Convenience are also
expanding internationally. In addition to Germany
and The Netherlands, both brands also sell their
products to customers in Austria, France and
Scandinavia.
Production locations
The Food Service division operates two production
plants: one in Großostheim for hamburger patties
and one in Holzwickede for schnitzel, Haxer and
minced beef and poultry products. In addition, the
division has long-term strategic alliances in Europe
as well as in Asia with external production
partners. In 2015, Vion Food invested an
appropriate amount in optimising its production
technology in a drive towards leaner, more
efficient and more effective manufacturing.
OUTLOOK FOR 2016
The Dutch and German pork industry is expected
to remain under pressure. These pork markets are
still in imbalance with respect to (over-) supply
and demand, and will continue to rely strongly on
exports. European consumption is predicted to be
slightly decreasing going forward.
Volatile cattle prices and slowly decreasing beef
consumption in The Netherlands and Germany are
expected.
The meat-based frozen food segment of the
out-of-home market in Germany is growing
steadily and, with its strong position in this
segment, Vion Food will benefit from this and
further improve its market share.
Despite the anticipated ongoing difficult market
conditions, Vion Food strives to maintain or
improve its results and market share next year.
This is based upon the results of previously
implemented footprint initiatives, realised cost
savings and the experience of the new
professionalised divisional structure. In addition,
Vion Food will continue to invest in restructuring
and improvements of its footprint, optimising
the margin through valorisation and further cost
reductions in the supply chain.
M A N A G E M E N T R E V I E W
V I O N A N N U A L R E P O R T 2 0 1 5 | 2 3
F.J.L.J. (Francis) Kint
1962, Belgian Nationality
Chairman of Management Board
and Executive Committee
Function
CEO since 1 September 2015
Former functions
CEO at UNIVEG, President Europe
at Fiskars Brands, Vice-President
North & Eastern Europe at
Chiquita Brands, Manager
Financial Planning at Sara Lee,
Consultant at Accenture
J.L.M. (Joost) Sliepenbeek
1963, Dutch Nationality
Member of Management Board
and Executive Committee
Function
CFO since 1 May 2015
Former functions
CFO of Van Gansewinkel, C1000/
Schuitema and HEMA. Previously
he also worked at Royal Ahold,
Gilde Investment Management,
KPMG Management Consulting
and De Vleeschmeesters.
F.H.A. (Frans) Stortelder
1959, Dutch Nationality
Member of Executive Committee
Function
COO Pork (COO) since 8 March 2015
Former functions
Business economist with lifetime
career in the international
meatbusiness, Sales and Marketing
Director at SturkoMeat, Managing
Director SturkoMeat Group, CEO of
Vion’s predecessor Dumeco,
Managing Director at Jutland Meat,
several consulting programs at
EMAPlus for a.o. Sara Lee Foods,
Groupe Smithfield.
COMPOSITION OF THE MANAGEMENT BOARD AND EXECUTIVE COMMITTEE
The Vion Food Management Board is comprised of Francis Kint (CEO)
and Joost Sliepenbeek (CFO). The Executive Committee further
includes Frans Stortelder (COO Pork), Bernd Stange (COO Beef), Bernd
Stark (COO Food Service) and Henk van den Bogaart (Group HR
Director).
BOXTEL, 7 APRIL 2016
Management Board
F.J.L.J. Kint, CEO
J.L.M. Sliepenbeek, CFO
PERSONAL DETAILS OF THE MEMBERS OF THE EXECUTIVE COMMITTEE
From left to right:
Frans Stortelder
Bernd Stange
Henk van den Bogaart
Francis Kint
Joost Sliepenbeek
Bernd Stark
2 4 | V I O N A N N U A L R E P O R T 2 0 1 5
M A N A G E M E N T R E V I E W
B. (Bernd) Stange
1960, German Nationality
Member of Executive Committee
Function
COO Beef since 1 April 2014
Former functions
Joined Vion Food in 2000 and
worked in various roles:
Managing Director of the
Business Unit (BU) Fresh Meat
Germany and the BU Pork and
Beef (2013), BU Fresh Meat North
and BU Fresh Meat South (2006)
and A. Moksel (2000). Former
General Manager of Gausepohl
GmbH and Stange KG.
B. (Bernd) Stark
1958, German Nationality
Member of Executive Committee
Function
COO Food Service since
1 April 2014
Former functions
Joined Vion Food in 2005 and
worked in various roles:
Managing Director Salomon
FoodWorld (2011) and Salomon
Hitburger (2005). Former
Marketing Director Nestlé
Schöller and responsible for food
service Europe ice-cream and
frozen food and additionally for
the brand Mövenpick.
H.G.M. (Henk) van den Bogaart
1958, Dutch Nationality
Member of Executive Committee
Function
Group HR Director since
1 October 2015
Former functions
CHRO at Royal Wessanen,
Vice-President HR at Philips
Domestic Appliances & Personal
Care, Corporate HR Director at
Gist-brocades, HR Director at
Baxter Healthcare Inc., HR Officer
at Organon International.
V I O N A N N U A L R E P O R T 2 0 1 5 | 2 5
> 112 recipe books collected> 158 km driven from home to work> 11 km run
BOY VERMAAS
BY-PRODUCT MANAGERFUNCTION
LOCATION
TODAY
Vion Food, Boxtel (NL)
> 88 different by-products sold> 74 telephone calls / e-mails to country offices> 60 containers of by-products sent to China this week
SHIFT
8:00 - 17:00
2 6 | V I O N A N N U A L R E P O R T 2 0 1 5
Corporate Social Responsibility (CSR) is embedded
throughout the organisation and is an important
part of Vion Food’s daily operations. There are five
core themes: agriculture, communities, environ-
ment, nutrition & health, and people. Vion Food
uses these themes to classify its CSR-related
activities. In line with these themes, Vion Food
actively contributes to social issues with respect to
public health, animal health, animal welfare and
the environment.
Corporate Social Responsibility
Vion Food steers developments by introducing continuous improvements and collaboration throughout the entire agri-food supply chain, and constantly seeks the right balance between people, planet and profit. The focus is on creating a better quality of life for people and animals. This means that Vion Food’s production processes are organised as efficiently as possible and that optimal use is made of all resources. These measures all help to create the smallest possible ecological footprint.
“We are an excellent partner in the sustainable development of agricultural supply chains.”
“We provide a large selection of safe, healthy and nutritious meat products that fit into a healthy lifestyle.”
“Our approach makes a substantial contributi-on to reducing the total ecological footprint of our organisation.”
“We strive to be a commendable, attractive and stimulating employer.”
“We contribute to the welfare of the communi-ties in which we operate.”
V I O N A N N U A L R E P O R T 2 0 1 5 | 2 7
Collaboration with StarFarmers
2015 was the fifth consecutive year in which Vion
Food worked with the Good Farming Star concept
in the Dutch market. At the heart of this concept
is a ‘farm to fork’ chain featuring pig farmers who
take a more animal-friendly and sustainable
approach to farming. Good Farming Star is a
demand-driven and dynamic concept. It complies
with the one-star Beter Leven quality mark and
with the criteria of the “Varken van Morgen”
scheme. Over the past five years, Good Farming
Star has developed into a stable chain with 150
pig farmers. These pig farmers all supply to Vion
Food individually and since March 2015 have been
members of the StarFarmers suppliers’ association.
StarFarmers is aimed at strengthening the market
concept for all links in the chain, and hence also
for the pig farmers. The suppliers’ association was
established in 2015 and the Vion Food organisation
regularly consults with the association as a
discussion partner.
Sustainable Beef Production
Vion Food is an active member in the Platform Beef
Working Group’s sustainable agriculture initiative.
The European Beef Farm Sustainability Assessment
(FSA) was developed by the Platform Beef Working
Group in 2015. This FSA module is based on the
Sustainable Agricultural Initiative (SAI) Platform’s
Principles of Sustainable Beef Production launched
in 2013. The SAI Platform is the global food and
drink industry’s primary platform for driving
sustainable agriculture, and one of its key goals
is continuous improvement within sustainable
agriculture. It views sustainable beef production
as a journey and a pre-competitive process. It sees
benchmarking of beef assurance schemes against
the SAI European Beef Farm Sustainability
Assessment criteria as the first step to a
sustainability performance. Vion Food is a
member of the SAI Platform.
Vion Food is active throughout the entire supply chain, working closely with all links in the
production process. Vion Food firmly believes that an optimal connection between these links can
only be achieved based on professional collaboration with, and between, the various stakeholders.
There are solid, long-term relationships with all stakeholders within Vion Food’s divisions: Pork, Beef
and Food Service. These relationships are both on the supply side, with pig and cattle farmers, and
on the demand side, namely with processors and retailers. Vion Food wants to reduce the distance
between farmers and citizens and increase social acceptance.
AGRICULTURE
2 8 | V I O N A N N U A L R E P O R T 2 0 1 5
Sustainable Deployability:
new aspect of the HR policy in The Netherlands
It is Vion Food’s aim to employ high-quality people
with a healthy degree of diversity in the employee
pool. To attain this goal, Vion Food introduced the
concept of ‘Sustainable Deployability’ which was
launched as part of a sector project. It has been an
integral part of the HR policy since 2015.
Sustainable Deployability is aimed at improving
employee mobility and stimulating movement and
progression within the organisation. Vion Food
employees have the opportunity to develop within
the Company and advance to other roles. At the
same time, the Sustainable Deployability policy also
encourages them to consider roles outside of Vion
Food as a way of increasing employee turnover as
well as stimulating employees in their own personal
development.
This topic is discussed during appraisals, and em-
ployees also receive a budget for training courses
of their choice which they can use for their own
career development.
Setting employment standards for the German
meat industry
Vion Food has a strong and motivated workforce.
Part of this are also the employees of our third
party labor providers. Vion Food feels responsible
for the well-being of these employees and aims at
setting high industry standards for the
employment conditions of third party labor
workers.
Vion Food was one of the main drivers forming the
implementation of a minimum wage in the German
meat industry and also initialized the introduction
of a code of conduct for the meat industry
with regard to the working conditions and
accommodation for third party labor workers from
eastern European countries. This industry code
is meanwhile signed by all major players in the
industry.
In September 2015 Vion Food took part in the
discussions with the German Ministry of Economics
to introduce a Commitment of the Meat industry
for attractive employment conditions and was
among the first to sign this commitment.
Employees are paramount at Vion Food, because they are the Company’s most important asset. The
development of knowledge, skills and teamwork are key focus areas for Vion Food and employees
receive opportunities for personal development. Vion Food strives to create a pleasant, hygienic,
healthy and safe environment for its employees.
C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y
PEOPLE
V I O N A N N U A L R E P O R T 2 0 1 5 | 2 9
Sustainable transport
Transport is an important activity for Vion Food
because the supply of animals and the delivery of
meat products around the world involves a lot of
transportation. The Supply Chain Department that
handles the procurement of all logistics services
and network optimisation activities took significant
measures in 2015 to improve the sustainability and
reduce the costs of transport.
The trailers that are used for the temperature-
controlled transportation of meat are being fitted
with electrical refrigeration systems rather than
systems based on an internal combustion engine.
The energy used for refrigeration comes from the
energy grid, meaning that it does not produce
additional greenhouse gases or CO2 emissions.
Another advantage of electrical refrigeration is a
reduction in noise disturbance.
Since July 2015 Vion Food has been transporting
products to Italy by rail, which enables the trailers to
carry 20% more meat. This has considerably reduced
the greenhouse gas emissions, firstly because rail
transport consumes less energy and secondly
because larger loads result in fewer transport
kilometres.
Packaging is another important aspect of
logistics at Vion Food, because the meat is shipped
in special reusable crates. The Logistics & Planning
Department arranges for the crates to be collected
from the customers and returned to the Vion Food
facilities. In 2015 a project was initiated, resulting
in the formation of a central department that will
handle the planning for all locations from April
2016 onwards in order to plan the crate transport
more efficiently. This will minimise the unnecessary
transportation of packaging materials and hence
significantly reduce transport activities and green-
house gas emissions.
Water purification
In addition to meat, a slaughterhouse also produces
wastewater, which is why the Vion Food
slaughterhouse in Boxtel had a purification system
that partly purified the wastewater. The effluent
from that system was then further purified in
a regular wastewater treatment plant. In 2015,
however, in collaboration with the water Company
Brabant Water, Vion Food built an advanced
purification system. This system purifies the water
to such an extent that the resulting water is suitable
for reuse in the slaughterhouse.
A by-product of water purification is sludge. The
system in Boxtel includes a fermenter which
converts the sludge into biogas. Vion Food uses the
resulting gas for the heating processes in the
slaughterhouse, which generates a substantial
energy saving. The system also reduces Vion Food’s
greenhouse gases emissions or CO2 footprint by
producing cleaner water and decreasing energy
consumption.
Vion Food strives to minimise its environmental impact. To this end, various aspects affecting the
environment are regularly identified and evaluated based on continuous improvement processes.
This includes use of water and energy, emission of greenhouse gases and also the production of
energy in the form of biofuels. The water treatment approach used by Vion Food produces purified,
reclaimed and recycled water that has the same quality as nonpotable water.
ENVIRONMENT
3 0 | V I O N A N N U A L R E P O R T 2 0 1 5
Reduction of salt in meat
Vion Food continuously strives to further increase
the nutritional value and health aspect of its meat
products. Meat contributes to a healthy diet and
is naturally rich in proteins, minerals and vitamins.
The main focus is on the reduction of salt (sodium)
and fat in fresh and processed meat products. In
2015 salt reduction was achieved in minced meat in
combination with a clean label strategy. In response
to customer wishes, the salt and fat content in a
number of cooked-meat products was reduced.
Based on a large research project carried out in
cooperation with Top Institute Food and Nutrition,
Vion Food is able to reduce fat by 20 to 25% in
various meat products (i.e. smoked sausage,
Berliner sausage or dry-cured sausage) without
negatively affecting the sensory quality of the
products.
Soup for the homeless
The HR Department of Vion Food’s Pork division
works with the ‘Samen voor Eindhoven’ (Together
for Eindhoven) organisation, which is a local
platform for bringing companies into contact with
charities in order to strengthen community ties.
Companies that are keen to follow a policy of
Corporate Community Involvement (CCI) roll up
their sleeves and do their bit for good causes. This is
one way in which companies can give shape to their
CCI objectives and make a practical contribution to
society as a whole.
‘Samen voor Eindhoven’ forms ‘matches’ between
companies and charities so that they can work
together on concrete projects. In 2015, the HR
Department of the Pork division was matched with
The Salvation Army to support a project for the
homeless. Twice a week, The Salvation Army drives
around Eindhoven with a so-called ‘soup van’ to
offer food and drink to the city’s homeless
population. Vion Food provides the fillings for the
sandwiches and also personnel for the soup van.
This is organised by the HR Department employees,
who form part of the team along with people from
The Salvation Army and other volunteer
organisations, such as hotels that provide the soup.
This helps to ease the burden on the homeless
community in Eindhoven and is a meaningful way
for the volunteers to give something back to the
community.
C O R P O R A T E S O C I A L R E S P O N S I B I L I T Y
Every day, millions of people worldwide eat
meat that has been processed by Vion Food.
The Company is committed to providing all
those people with safe meat products and it
continuously invests to maintain – and, if ne-
cessary, expand – its knowledge with respect
to quality and food safety. Vion Food collects
information throughout the supply chain to
safeguard food safety. Vion Food also com-
plies with various internationally recognised
quality systems such as BRC Global Food Stan-
dard, IKB, QS, ISO 9001: 2000, HACCP, USDA
approved, TESCO approved and GlobalGAP.
Vion Food’s activities contribute to the
economic and social development of local
communities where the Company is based or
operates. Employees are actively encouraged
to become involved in the local community.
In the case of Vion Food’s operations causing
any inconvenience to local communities, the
Company looks for appropriate solutions in
close consultation with those concerned.
NUTRITION & HEALTH COMMUNITIES
V I O N A N N U A L R E P O R T 2 0 1 5 | 3 1
> 60 minutes worked in the garden per week > 14 years in a serious relationship > 1 holiday booked (to the Netherlands for the 4th time)
HEIKE NOWOTSCH
PRODUCT DEVELOPERFUNCTION
LOCATION
TODAY
Salomon Hitburger, Großostheim (DE)
> 2 new schnitzel coatings tested > 3 vegetarian finger food concepts developed
SHIFT
8:00 - 17:00
3 2 | V I O N A N N U A L R E P O R T 2 0 1 5
MANAGEMENT BOARD
Tasks and responsibility
The Management Board is responsible for Vion
Food’s strategy, its portfolio policy, the deployment
of people and resources, the risk management
system and the operating results. The
Management Board is accountable to the General
Meeting of Shareholders. The Management Board
makes decisions based on an absolute majority.
The Supervisory Board oversees Management
Board policy. To this end, the Management Board
provides all information to the Supervisory Board
that it needs for the proper performance of its
duties. Important Management Board decisions are
subject to the approval of the Supervisory Board.
The Management Board has laid down rules
regarding its composition and performance in rules
of procedure that can be found on the Company’s
website.
Appointment and conflict of interests
The Management Board members are appointed
by the General Meeting of Shareholders after the
prior binding opinion of the Supervisory Board has
been reached. The General Meeting of Share-
holders may only ignore the binding opinion of
the Supervisory Board with the consent of at least
two-thirds of the votes cast, which in turn
represents at least half of the issued capital. The
Management Board members are appointed for an
indefinite period.
Vion Food strives to achieve a reasonable gender
balance on the Management Board, with neither
the proportion of women nor that of men falling
below a minimum of 30%. While this goal is taken
into account, Vion Food’s principle is that the most
suitable candidate for the vacancy will be
appointed. After careful consideration of all
relevant selection criteria, a woman has not yet
been appointed to the Management Board. The
next time a vacancy arises the search criteria will
emphasise that the candidates should preferably
be female.
In the event of a conflict of interests with regard
to a particular topic, the Management Board
member in question may not participate in
discussions or decision-making on that topic.
Corporate governance
Vion Holding N.V. is a public limited liability company under Dutch law with its registered office in Best, The Netherlands. Vion Food is exempted from applying the Dutch regime for large companies, the so-called large company regime (structuurregime), because Vion Food is an international holding company. Vion Food has a two-tier board. The Management Board is responsible for managing the Company, while the Supervisory Board oversees the policy set by the Management Board and the general affairs of the Company. The Management Board is supported by the Executive Committee. Vion Food’s corporate governance consists of rules based on Dutch legislation, its articles of association, the Dutch Corporate Governance Code (the ‘Code’), and Vion Food’s own Code of Conduct.
V I O N A N N U A L R E P O R T 2 0 1 5 | 3 3
Remuneration
The Supervisory Board determines the
remuneration of the Management Board and the
other employment terms for the Management
Board members within the general remuneration
policy adopted by the General Meeting of Share-
holders.
EXECUTIVE COMMITTEE
The Management Board is supported by the
Executive Committee in achieving the objectives of
the Company and implementing the strategic
objectives set out in the strategy and business plan.
In addition to the Management Board members,
the other members of the Executive Committee
include the Chief Operating Officers (COOs) of
the Pork, Beef, and Food Service divisions and any
other by the Management Board appointed key
officers. The Management Board is ultimately
responsible for the actions and decisions taken
within the Executive Committee and the overall
management of Vion Food.
SUPERVISORY BOARD
Tasks
The Supervisory Board oversees the policies set by
the Management Board and the general affairs
of the Company, and provides the Management
Board with advice and assistance. In the
performance of its duties, the Supervisory Board
focuses on the interests of the Company and its
business. Important Management Board decisions
are subject to the prior approval of the Supervisory
Board. Important decisions are those that relate to
how Vion Food is structured and the nature and
scale of business operations and decisions affecting
the capital structure of the Company.
The Supervisory Board makes decisions based on
an absolute majority. The Supervisory Board may
only take valid decisions when at least the majority
of the Supervisory Board members in office are
present or represented. The Supervisory Board may
only take decisions outside its meetings, provided
that all Supervisory Board members have expressed
themselves in favour of the proposal concerned.
The Supervisory Board has laid down rules
regarding its composition and performance in rules
of procedure that can be found on the Company’s
website.
Independence
The Supervisory Board strives to achieve that the
majority of its members are independent in the
sense of best practice provision III.2.2 of the Code.
The section on the Corporate Governance Code
on page 36 includes information on the
independence of members of the Supervisory
Board.
Appointment
The Supervisory Board members are appointed for
a period of four years by the General Meeting of
Shareholders after the prior binding opinion of the
Supervisory Board has been reached.
Reappointment is possible for a maximum of two
terms of four years each. The General Meeting of
Shareholders may only disregard the binding
opinion of the Supervisory Board with the consent
of at least two-thirds of the votes cast, which in
turn represents at least half of the issued capital.
The General Meeting of Shareholders may grant a
fixed remuneration to Supervisory Board members.
Expenses will be reimbursed.
The Company strives to achieve a reasonable
gender balance on the Supervisory Board, with
neither the proportion of women nor that of men
falling below a minimum of 30%. The composition
of the Supervisory Board is established using
carefully defined profiles and competencies. Vion
Food is in this respect pleased that as of 1 October
2015 Marieke Bax has been appointed as
member of the Supervisory Board. As a result of
this appointment one out of seven members is at
this moment a woman. The next time a vacancy
arises the search criteria will emphasise that the
candidates should preferably be female.
The Supervisory Board has appointed an Audit
Committee and a Remuneration, Selection and
3 4 | V I O N A N N U A L R E P O R T 2 0 1 5
Appointment Committee from among its
members. The purpose of both committees is solely
to advise the Supervisory Board and thus these
committees will not take on the responsibilities of
the Supervisory Board.
Audit Committee
The Audit Committee supports the Supervisory
Board with respect to oversight. In this context, it
assesses in particular the financial reporting
process, the system of internal control and
management of (financial) risks, the audit process,
and the process that Vion Food uses to comply
with laws and regulations and with its own Code
of Conduct. The Audit Committee has laid down
rules on its composition and performance in rules
of procedure that can be found on the Company’s
website.
Remuneration, Selection and
Appointment Committee
The Remuneration, Selection and Appointment
Committee advises the Supervisory Board on the
selection, appointment and remuneration of
the Company’s Management Board members.
The Remuneration, Selection and Appointment
Committee has laid down rules on its composition
and performance in rules of procedure that can be
found on the Company’s website.
GENERAL MEETING OF SHAREHOLDERS
General
The General Meeting of Shareholders is held at
least once a year with the objective of adopting
the annual accounts. The General Meeting of
Shareholders is also held as often as the
Management Board or the Supervisory Board
deems necessary. Shareholders are entitled to ask
the Management Board or the Supervisory Board
to convene a General Meeting of Shareholders
provided they represent at least 10% of the issued
capital. In convening a General Meeting of
Shareholders, the topics to be discussed will be
reported.
Each shareholder is entitled to attend the
General Meeting of Shareholders and to speak
and to exercise voting rights. The Chairman of the
General Meeting of Shareholders is appointed by
the Supervisory Board.
The General Meeting of Shareholders shall take
decisions by an absolute majority, except when
stipulated in the law or articles of association that
a larger majority of votes is required for the
specific decision. The articles of association
stipulate that an amendment to the articles of
association or the dissolution of the Company
requires a two-thirds majority which in turn
represents at least two-third of the issued capital
in the event the initiative to do so was taken by
the General Meeting of Shareholders and is not
supported by the Management Board or the
Supervisory Board.
Important Management Board decisions are
subject to the prior approval of the General
Meeting of Shareholders. Important decisions are
those that relate to how Vion Food is structured
and the nature and scale of business operations,
and decisions affecting the capital structure of the
Company.
Stichting Administratiekantoor SBT
Stichting Administratiekantoor SBT (‘SBT’) is the
sole shareholder of the Company. SBT has issued
depositary receipts in bearer form for its shares in
the Company. The depositary receipts have been
issued without cooperation of the Company. All
depositary receipts are held by Noordbrabantse
Christelijke Boerenbond, Rooms-Katholieke
Vereniging van Boeren en Tuinders –
Ontwikkeling (‘NCB-Ontwikkeling’). The Board of
SBT consists of five members. According to the
articles of association of SBT three out of five
board members are appointed by
NCB-Ontwikkeling. The other two board
members are also appointed by NCB-Ontwikkeling
as holder of all depositary receipts. At this moment
one board member of SBT is also member of the
board of NCB-Ontwikkeling. NCB-Ontwikkeling is
C O R P O R A T E G O V E R N A N C E
V I O N A N N U A L R E P O R T 2 0 1 5 | 3 5
related to Zuidelijke Land- en Tuinbouworganisatie
(‘ZLTO’), mainly because the board of
NCB-Ontwikkeling consists of the same members as
the board of ZLTO and the members of
NCB-Ontwikkeling are also member of ZLTO.
Furthermore, the daily management of both
NCB-Ontwikkeling and ZLTO is in the hands of the
same director, who is also a board member of SBT.
ZLTO is an association for entrepreneurs working
in agricultural sectors and has approximately
15,000 members in Noord Brabant, Zeeland and
the southern part of Gelderland. NCB-Ontwikke-
ling acts as the investment fund of ZLTO.
AUDIT OF THE ANNUAL ACCOUNTS
Every year the Management Board draws up
annual accounts and an annual report. The annual
accounts are approved by signature of both the
Management Board and the Supervisory Board and
are presented to the General Meeting of
Shareholders for adoption. Vion Food engages
an auditor for the annual accounts. The General
Meeting of Shareholders is primarily responsible
for awarding this engagement.
The General Meeting of Shareholders may
completely or partially release the Management
Board from all liability for its management and the
Supervisory Board from liability for its oversight.
REGISTERED OFFICE AND HEADQUARTERS
The Company has its registered office in Best. Vion
Food’s headquarters are located in Boxtel.
CORPORATE GOVERNANCE CODE
Because Vion Food is not listed on a stock
exchange, the Code does not apply to Vion Food.
Nevertheless, Vion Food voluntarily applies the
Code as of 1 January 2016, while deviating from
the Code’s provisions in a number of instances.
Generally speaking, this is the case where the
provisions are not compatible with its legal
structure and the nature of its business or are
specifically written for listed companies with a
widespread ownership. Vion Food strives to report
on the application of the Code for the first time in
its 2016 Annual Report. Vion Food will in any event
not (fully) comply with best practice provisions
II.1.1 and III.2.1 as well as principle IV.2 of the Code
for the reasons set out below.
Provision II.1.1
(appointment of the Management Board)
Best practice provision II.1.1 of the Code states that
a member of the Management Board is
appointed for a period of a maximum of four
years. The Management Board members of Vion
Food are appointed for an indefinite period given
the importance of a long-term commitment of the
Management Board members to the Company.
Provision III.2.1
(independence of the Supervisory Board)
Best practice provision III.2.1 of the Code states
that all Supervisory Board members, with the
exception of one person, must be independent in
the sense of best practice provision III.2.2 of the
Code. More than one member of the Company’s
Supervisory Board at present can be considered not
independent in this sense.
Best practice provision III.2.2 specifies that a
member of the Supervisory Board shall not be
deemed independent if he or she is a member of
the board of a legal entity which holds at least
10% of the shares in the Company. Currently, two
members of the Supervisory Board (Hans Huijbers
and Toon van Hoof) are members of the board
of NCB-Ontwikkeling, which holds all depositary
receipts for the shares in Vion Food. As a
consequence Hans Huijbers and Toon van Hoof
may not be deemed independent in the sense of
the Code. This reflects the difference between
a listed company with a widespread ownership
versus the situation at Vion Food with only one
shareholder.
Best practice provision III.2.2 specifies that a
member of the Supervisory Board shall not be
deemed independent if he or she has been a
3 6 | V I O N A N N U A L R E P O R T 2 0 1 5
member of the Management Board in the five
years prior to the appointment. Tom Heidman
acted as interim CEO of the Company in the period
from 26 January up to and including August 2015
and therefore could be viewed as a non-indepen-
dent. Nevertheless he has been reappointed as
member of the Supervisory Board given the
interim nature of his term as member of the
Management Board and his important
contribution to the Supervisory Board.
Best practice provision III.2.2 specifies that a
member of the Supervisory Board shall not be
deemed independent if he or she has had an
important business relationship with the company
in the year prior to the appointment. This includes
the case where the Supervisory Board member is
a Management Board member of any bank with
which the company has a lasting and significant
relationship. In the year prior to his appointment
Sipko Schat has been a member of the
Management Board of Rabobank with which Vion
Food had a significant relationship at the moment
of his appointment. Sipko Schat could therefore
be viewed as not independent. Vion Food believes,
however, that Sipko Schat is a highly valuable
supervisory director, who offers considerable
added value in terms of his knowledge and
experience. In addition, Sipko Schat is no longer
a Management Board member (or employee) of
Rabobank and the banking relationship of the
Company with Rabobank ended in 2015.
Principle IV.2 (depositary receipts for shares)
Principle IV.2 and the related best practice
provisions cover depositary receipts for shares.
This principle is specifically written for listed
companies with a widespread ownership and
depositary receipts that have been issued with
cooperation of the company. In the case of Vion
Food the depositary receipts have been issued
without cooperation of the Company and are held
by one owner. As a consequence, the Company
deems the principle and the related best practice
provisions not applicable casu quo leaves it to
shareholders and holders of depositary receipts to
decide whether they will apply this provision.
C O R P O R A T E G O V E R N A N C E
V I O N A N N U A L R E P O R T 2 0 1 5 | 3 7
> 1 year married> 6,368 km travelled for a holiday in Australia> 45 minutes of sport> 35 Gundam models and action figures collected
ANDY LAU
SALES SUPPORT MANAGERFUNCTION
LOCATION
TODAY
Vion Food, Singapore (SG)
> 3 different products delivered> 25 calls made> 375 tons sent to Thailand> 162 tons sent to the Philippines
SHIFT
8:00 - 17:00
3 8 | V I O N A N N U A L R E P O R T 2 0 1 5
RISK APPETITE
Vion Food wants to take a prudent approach to
risk. Product quality and safety, worker safety and
compliance with laws and regulations are the
highest priorities. This means that reducing risks
related to food and worker safety to reasonably
practicable levels and meeting the legal
obligations will take priority over all other business
objectives.
Strategic: Vion Food will pursue strategies in order
to:
(i) lower the costs;
(ii) improve the valorisation of animals; and
(iii) gradually shift the product portfolio towards
higher added-value products.
The Company accepts the risk inherent in these
strategies.
Operational: the highest priority is managing
product quality and safety as well as worker safety.
Procedures are in place which are monitored and
audited by internal and external parties.
Financial and reporting: within respect to financial
risks, Vion Food has a prudent financing strategy,
including a balanced combination of self-insurance
and commercial insurance coverage.
Compliance: the objective is to comply with
applicable laws and regulations everywhere the
Company does business.
RISK MANAGEMENT
In order to facilitate and coordinate risk
management and to oversee compliance with
relevant laws, regulations and policies, Vion Food
has a risk and compliance committee in place.
This committee is chaired by the CFO, who is
assisted by specialists in different risk areas. The
Risk and Compliance Committee has the following
responsibilities:
1. To help the Executive Committee to set the
tone, develop a risk-conscious culture and
promote open discussion regarding risks such
that people at all levels manage key risks in
accordance with the Company’s risk appetite
and strategy.
2. To provide input to the Executive Committee
regarding risk appetite and strategy and to
assist the Executive Committee in determining
and communicating the Company’s risk appetite
and strategy.
3. To monitor the Company’s risk profile: its
ongoing and potential exposure to risks of
various types.
4. To oversee and facilitate the Company’s en-
terprise risk assessment and risk management
activities to provide a consistent approach to
identifying, mitigating and monitoring key
business risks throughout Vion Food.
5. To ensure that adequate internal control over
financial reporting is established and
Risk management, compliance and internal control
Risk management is an important part of Vion Food’s strategy. The undesirable consequences of risks must be restricted. At the same time, Vion Food wants to take advantage of opportunities in the markets in which it is active. Vion Food’s system of risk management and internal control is based on the COSO 2013 model.
V I O N A N N U A L R E P O R T 2 0 1 5 | 3 9
maintained. For this purpose Vion Food has
redesigned the Vion Food Financial Control
Framework. Based on this control
framework self-assessments are organised,
monitored and reported upon on a quarterly
basis.
6. To oversee the Company’s compliance efforts
with respect to relevant laws, regulations and
policies including, but not limited to, a quarterly
internal certification process.
Although Vion Food considers the management
of risks to be an important responsibility, it knows
that there are limitations for each form of risk
management and internal control. This means
that the management systems and procedures
cannot prevent specific inaccuracies, errors, fraud
or non-compliance with regulations in all cases.
KEY RISK CATEGORIES
Strategic
1. Market volatility risk
Vion Food operates in markets that are
characterised by fierce competition and price
volatility. The prices of raw materials and
agricultural products fluctuate and the purchase
costs for pigs and cattle are volatile as are sales
prices. This can lead to significant and unwanted
fluctuation in Vion Food’s financial results.
Managing market volatility risks
By distributing activities across different
geographical markets and channels, Vion Food
mitigates the specific market threats to some
extent. This distribution allows Vion Food to
exploit opportunities in various markets and
channels. Furthermore the Company aims to
reduce the impact of the market volatility by
agreeing into fixed-term purchasing and sales
contracts for a part of its business.
Operational
2. Food safety and quality risk
Wholesome and safe food is one of Vion Food’s
top priorities. In view of the nature of the
products, it goes without saying that Vion Food
stipulates high standards for food quality and food
safety. A quality problem, or even a change in the
quality perception of consumers or governments,
could have enormous consequences for the
Company’s reputation and market position. Clients
and governments are making increasingly
stringent quality demands of food manufacturers.
Managing food safety and quality risks
Food safety and quality are part of the Codes of
Practice at all production sites. In order to manage
its own processes such that customer satisfaction
and operational excellence are achieved, all Vion
Food production sites are ISO 9001 certified.
Besides the application of its own quality standards
within its operations, all the Vion Food facilities
operate according to at least one of the quality
schemes as recognised by the Global Food Safety
Initiative (GFSI), such as IFS, BRC and EFSIS.
3. Animal welfare and health risk
Wholesome and safe animal products can only be
derived from healthy livestock. There is a strong
RISK CATEGORY RISK
Strategic 1. Market volatility
Operational 2. Food safety and quality
3. Animal welfare and health
4. Health, safety and environment
5. Information management
6. Human capital
Financial 7. Financing
Compliance 8. Non-compliance
4 0 | V I O N A N N U A L R E P O R T 2 0 1 5
correlation between the welfare and health of
livestock, and in addition Vion Food also values
the integrity of animals. A large-scale outbreak
of animal disease could have significant
consequences for the continuity of supply to
the Company’s customers.
Managing animal welfare and health risks
Handling of livestock within the food supply chain
is integrated in the quality schemes. This implies
that humane handling of animals is
demonstrated at farm level, during transport and
within the slaughterhouses. Intermediaries and
hauliers in the supply chain also have to adopt
these standards. At all Vion Food’s slaughter
facilities, several animal welfare officers are
present who monitor the handling of animals
to ensure welfare standards are met.
4. Health, safety and environment risk
Risks in production processes can adversely affect
the results. These risks arise from areas such as
personal health and safety, process safety and
product safety. Unlikely scenarios can involve
major incidents with a high impact on the
Company’s internal organisation, causing business
continuity risks and reputational damage. Vion
Food has an active commitment to Health, Safety
and the Environment (HSE) for all its employees.
Managing health, safety and environment risks
In order to achieve these goals, Vion Food applies
a systematic approach to HSE management which
is designed to:
> Provide a framework for the setting of HSE
goals and performance objectives, and the use
of an effective management system;
> Monitor, evaluate and continually improve
the Company’s HSE performance through the
definition of operational standards, training,
assessments and audits;
> Educate employees, customers, contractors
and business partners on the safe and
environmentally responsible use of the
Company’s products, and how their actions
can influence HSE performance.
5. Information management risk
Vion Food’s longer-term information technology
strategy is aimed at converging its IT landscape
into fewer ERP systems and other critical
applications. The amount of digital exchanges of
business transactions with customers, suppliers
and other stakeholders is increasing. Non-
availability of critical IT systems or unauthorised
access, whether through cybercrime or other
events, can have a direct effect on the
production processes, the competitive position and
the reputation of the Company. The availability of
information at Vion Food is particularly
significant for the financial processes and for
production control. Some of the Manufacturing
Execution Systems (‘MES systems’) that are
currently used by Vion Food are outdated. This
poses a production continuity risk.
Managing information management risks
Two years ago, Vion Food initiated a programme
to replace outdated systems and to increase the
overall level of information management services.
Good progress has been made in 2015.
Additionally, an IT control framework has been
designed which will form the basis for
implementing and monitoring additional
measures in 2016.
6. Human capital risk
Having the right people, with the right capabili-
ties, experience and mindset can, to a large extent,
determine the success of the organisation.
Managing human capital risks
“Inspiring people to be best performers” is Vion
Food’s mission as an employer, in order to keep
people motivated so that they make a meaning-
ful contribution to the Company’s success. In this
respect it is important to have the right, suitably
qualified people in the right job at the right time.
It is Vion Food’s ambition to achieve this, both
qualitatively and quantitatively.
From an individual angle Vion Food’s aim is to
accommodate people in their careers – to offer the
R I S K M A N A G E M E N T , C O M P L I A N C E A N D C O N T R O L
V I O N A N N U A L R E P O R T 2 0 1 5 | 4 1
kinds of roles that employees of today would like
to work in. Important elements in this are: own
sense of responsibility, freedom to act, fun and
learning.
In order to inspire and support best performers
who have ambitions to work in leadership
positions in Vion Food’s market, the Company has
several HR systems and programmes in place or in
development.
Financial
7. Financing risk
To carry out its operations, Vion Food is partly
dependent on external financing. The potential
for further inability to pass on the effects of
fluctuation in important markets for Vion Food
could have an impact on the businesses’ ability to
generate free cash flow.
Managing the capital markets risks
Vion Food targets a strong liquidity position by
means of committed credit facilities. In the current
financial markets, obtaining credit from financial
institutions and investors is very much dependent
on a company’s financial position, its outlook and
its reputation. In 2015 Vion Food was able to
refinance, obtaining better interest conditions and
an extension of the maturity. Vion Food’s credit
facilities are contracted by Group Treasury. The
interest rates for interest-bearing borrowings are
variable. Vion Food has a negative net debt
position of € 52 million.
Managing financing risks
Vion Food monitors compliance with the
agreements with the financing banks. Periodically,
a revised forecast is drawn up that indicates the
extent to which the budget will be realised. The
revised forecast includes a detailed prediction
of the profit and loss statement, balance sheet,
working capital, cash flow and cash position. This
allows the outcome of the various ratios and
liquidity position to be forecasted so that timely
action can be taken, should this be deemed
necessary. This risk is monitored on an ongoing
basis by the Management Board.
Managing foreign currency risk
Vion Food uses derivative financial instruments to
hedge its exposure to foreign exchange risk arising
from operational, financing and investment
activities. Vion Food’s policy is not to hold
derivative financial instruments for speculative
purposes.
Compliance
8. Non-compliance risk
The risk that Vion Food is non-compliant with
applicable laws and regulations may adversely
affect Vion Food’s reputation and expose it to
financial losses.
Managing non-compliance risk
Vion Food is committed to comply with laws and
regulations in the various countries in which it
operates, as it can be held liable for the
consequences of non-compliance. In addition, cost
of compliance with, or changes in, any of these
laws and regulations could impact the operations
and thus could affect Vion Food’s financial
condition or reduce its profitability. Vion Food has
established policies and procedures aimed at
compliance with applicable legislation and
regulations. An example is the Vion
Competition Compliance Policy, which on a
detailed level instructs the Vion Food companies
on the do’s and don’ts in relation to the
competition.
Besides this, Vion Food has a Code of Conduct that
goes beyond the compliance within the legal and
regulatory framework by providing guidance on
behaviour. The Vion Food Whistleblower Policy
aims to support compliance with applicable laws,
integrity in financial management, a healthier and
safer work environment and effective corporate
governance. Vion Food conducts its business based
on the principles of fairness, honesty, integrity and
respect and, accordingly, wants to ensure that any
employee of Vion Food can make a report under
this Policy without the risk of retaliation and with
the assurance that all reports are treated
confidentially and are promptly investigated.
4 2 | V I O N A N N U A L R E P O R T 2 0 1 5
In addition to reporting directly to management,
Human Resources or the Management Board,
employees can contact the Whistleblower line
which is operated by an external service provider.
This allows employees to report issues
anonymously. During 2015, six complaints were
received through this line (2014: nine). These
complaints related to labour relations, health &
safety and conflicts of interest.
ASSESSMENT OF INTERNAL RISK MANAGEMENT AND CONTROL
The Management Board has evaluated the design
and the effectiveness of the internal risk manage-
ment and control systems, based upon continuous
monitoring and interaction with business and
corporate staff and by evaluating – amongst other
things – the following information:
> Letters of Representation signed by
management of operating companies and
divisions.
> Reports of the Internal Audit Department and
QA auditors on reviews and audits performed
throughout the year. Findings and measures to
address issues were discussed with local
management, the Division management
and/or the Audit Committee.
> Management Letter from the external auditor
with findings and remarks regarding internal
control. This letter has been discussed with the
Audit Committee and the Supervisory Board.
The Management Board concluded that risk ma-
nagement and internal controls require further
formalisation and standardisation.
For this purpose a project to redesign and
implement the Vion Food Financial Control
Framework was executed during 2015. Going
forward, the Management Board will monitor
the continuous improvement of this framework.
R I S K M A N A G E M E N T , C O M P L I A N C E A N D C O N T R O L
V I O N A N N U A L R E P O R T 2 0 1 5 | 4 3
> 87 minutes of sport> 30 pages read> 34 different 2 euro coins collected> 2 episodes of CSI watched
ANJA RAMLOW
COMPANY MANAGEMENT’S SECRETARIAL OFFICE
FUNCTION
LOCATION
TODAY
Vion Food, Bad Bramstedt (DE)
> 10 invoices sent> 43 calls received> 3 payment reminders sent> 2 languages spoken: German and English
SHIFT
8:00 - 17:00
4 4 | V I O N A N N U A L R E P O R T 2 0 1 5
Composition of the Supervisory Board
Tom Heidman temporarily stepped down on
26 January 2015 as member of the Supervisory
Board to act as interim CEO of Vion Food. As of
1 September 2015 he was reappointed as member
of the Supervisory Board. We thank Tom Heidman
for his contribution and great commitment to
the Company. On 19 May 2015 Cees van Rijn
stepped down from the Supervisory Board for
personal reasons. We thank Cees van Rijn for his
contribution. As of 1 October 2015 Marieke Bax
has been appointed as member of the Supervisory
Board. The Supervisory Board currently has seven
members. Next to Tom Heidman and Marieke Bax
the members are Sipko Schat (chairman), Hans
Huijbers (vice chairman), Toon van Hoof, Ton van
der Laan and Ronald Lotgerink.
Corporate governance
The section on the Corporate Governance Code on
page 36 includes information on the
independence of members of the Supervisory
Board. The members of the Supervisory Board do
not receive any remuneration that is dependent
on the financial performance of the Company. In
the event of a conflict of interests with regard to a
particular topic, the Supervisory Board member in
question may not participate in discussions or
decision-making on that topic. The Supervisory
Board has drawn up rules of procedure with
respect to the performance of its duties and to its
assigned tasks. Vion Food strives for a
composition of its Supervisory Board that is
balanced and in which the combination of the
member’s experience, expertise and independence
ensures the Supervisory Board can fulfil its various
duties on behalf of Vion Food and its stakeholders
in the best possible way.
Supervisory Board meetings
The Supervisory Board met 20 times in 2015. None
of its members were frequently absent. The
Supervisory Board received all information needed
to perform its tasks from the Management Board
and the Company’s external auditors. The agendas
for the Supervisory Board meetings were drawn
up by its chairman, in consultation with the
Management Board and the Corporate Secretary.
Remuneration, Selection and
Appointment Committee
The members of the Remuneration, Selection and
Appointment Committee are Sipko Schat, Tom
Heidman, Hans Huijbers and Ton van der Laan.
As of 1 September 2015, Tom Heidman joined the
Remuneration, Selection and Appointment
Committee. Tom Heidman succeeded Sipko Schat
as chairman as of 1 January 2016.
In 2015 the Remuneration, Selection and
Appointment Committee met two times and a
number of times in a full Supervisory Board
meeting. In addition to the remuneration policy
of the Management Board, the Remuneration,
Selection and Appointment Committee also
advised the Supervisory Board on various human
resources-related issues, among other things.
Report of the Supervisory Board
The Supervisory Board is pleased with the positive developments at Vion Food in 2015. With the appointment of Francis Kint as the Company’s CEO per 1 September 2015 and Joost Sliepenbeek as the Company’s CFO per 1 May 2015, we now have a new Management Board that can further improve and build Vion Food.
V I O N A N N U A L R E P O R T 2 0 1 5 | 4 5
Audit Committee
The members of the Audit Committee are Marieke
Bax (chairman), Toon van Hoof and Ronald
Lotgerink. Cees van Rijn stepped down as
chairman on 19 May 2015. Ronald Lotgerink
succeeded Cees van Rijn as chairman until 1
October 2015. As of that date Marieke Bax has
been appointed as chairman of the Audit
Committee.
The Audit Committee met eight times in 2015.
The Audit Committee advised the Supervisory
Board on Vion Food’s annual accounts for 2015
and the consultations with the external auditor
related to these annual accounts. The annual
accounts are drawn up by the Management Board
and approved by signature by the members of
both the Management Board and the Supervisory
Board. The annual accounts are adopted by the
General Meeting of Shareholders.
In the Audit Committee meetings the financial
restructuring process was discussed. In addition, a
lot of attention was focused on operational and
financial performance and the liquidity position
of the group. Compliance and internal
governance are topics that receive ongoing
attention by the Audit Committee and are fixed
agenda items. Both the external auditor and the
internal auditor attend the Audit Committee
meetings. In addition, the Audit Committee also
met with the external auditor without the
presence of members of the Management Board.
Annual accounts
The 2015 annual accounts were initially discussed
by the Audit Committee and then by the plenary
Supervisory Board together with the Management
Board and EY, the external auditor.
The Supervisory Board then approved the
Annual Report and Accounts. The Supervisory
Board proposes to the General Meeting of
Shareholders that the annual accounts 2015 be
adopted accordingly.
The Supervisory Board would sincerely like to
thank the management and all employees of Vion
Food for their great efforts over the past year.
BOXTEL, 7 APRIL 2016
On behalf of the Supervisory Board,
S.N. Schat, Chairman
PERSONAL DETAILS OF THE SUPERVISORY BOARD
S.N. (Sipko) Schat
Chairman
1960, Dutch nationality
Former functions
Member Executive Board Rabobank Nederland
and Director Stichting Administratiekantoor SBT
(shareholder of Vion Food)
Main other positions
Member Supervisory Board OCI N.V., Rothschild &
Co and Trafigura Group Pte Ltd
J.A.M. (Hans) Huijbers
Vice Chairman
1959, Dutch nationality
Function
Agricultural entrepreneur
Main other positions
Chairman Zuidelijke, Land- en Tuinbouw-
organisatie (ZLTO), Member Board LTO
Nederland, Chairman Steering Committee
Agricultural Innovation Noord-Brabant,
Member Governing Board Food, Farming and
Agriculture, Chairman Advisory Board HAS Den
Bosch and Member Board Agriplace
4 6 | V I O N A N N U A L R E P O R T 2 0 1 5
M. (Marieke) Bax
1961, Dutch nationality
Former functions
Various functions Sara Lee Corporation (among
which Head Strategy and M&A Europe for meat,
foodservice and textile division), CFO e-commerce
company, Managing Partner governance and
communication firm Gooseberry and Initiator
Talent to the Top
Main other positions
Member Supervisory Board VastNed Retail (Chair-
man Remuneration and Appointment Committee),
Member Board CLSA BV, Member Advisory Board
Fonds Podiumkunsten and Frans Hals Museum/De
Hallen, Member Supervisory Board Corbion and
Boardroom advisory KPMG
T. (Tom) Heidman
1959, Dutch nationality
Former functions
CEO C1000 and Retail Network, Operational and
Commercial Director Albert Heijn, Director
Gall&Gall and interim-CEO Vion Food (26 January
2015 until 1 September 2015)
Main other positions
Member Supervisory Board Rituals B.V., Vermaat
Groep and The European Candy Group
A.J.M. (Toon) van Hoof
1954, Dutch nationality
Function
Agricultural and recreation entrepreneur
Main other positions
Vice Chairman Zuidelijke, Land- en Tuinbouw-
organisatie (ZLTO), Member Board Council Animal
Affairs (Ministry of Agriculture and Innovation),
Chairman Board GD Animal Health Service
foundation, Portfolio holder Animal Welfare LTO
and Board member zuivel.nl
A.T.C. (Ton) van der Laan
1953, Dutch nationality
Function
CEO Nidera Capital B.V.
Main other positions
Member Supervisory Board of Royal Douwe
Egberts B.V. and Chairman Supervisory Board UTZ
Certification
R.E.M. (Ronald) Lotgerink
1960, Dutch nationality
Function
CEO Zwanenberg Food Group
Main other positions
Member Board ‘Ik Kies Bewust’ Foundation and
Member Advisory Board RAPS GmbH
ROTATION PLAN OF THE SUPERVISORY BOARD
Commencement date Current term Commencement Reappointment
first appointment expires date of latest term possible
Toon van Hoof 21 May 2003 2017 24 April 2014 No
Hans Huijbers 11 September 2009 2017 24 April 2014 Yes
Ton van der Laan 24 April 2014 2017 - Yes
Ronald Lotgerink 1 July 2014 2018 - Yes
Sipko Schat 1 October 2014 2018 - Yes
Tom Heidman 20 May 2014 2019 1 September 2015 Yes
Marieke Bax 1 October 2015 2019 Yes
R E P O R T O F T H E S U P E R V I S O R Y B O A R D
V I O N A N N U A L R E P O R T 2 0 1 5 | 4 7
> 1 dog taken for a walk> 4.7 km run> 5 courses eaten at dinner> 124 km driven from home to work and back
MARIEKE TEUNISSEN
HR ASSISTANTFUNCTION
LOCATION
TODAY
Vion Food, Scherpenzeel (NL)
> 1 job interview conducted> 3 recommendations regarding safety improvements given> 2 return-to-work discussions held> 2 training courses arranged for staff members
SHIFT
8:00 - 16:30
4 8 | V I O N A N N U A L R E P O R T 2 0 1 5
Annual accounts
V I O N A N N U A L R E P O R T 2 0 1 5 | 4 9
CONSOLIDATED BALANCE SHEET
as at 31 December 2015
(before result appropriation)
(in thousands of euros)
note 2015 2014
ASSETS
Fixed assets
Intangible fixed asset 1 32,324 9,347
Tangible fixed assets 2 229,911 206,376
Financial fixed assets 3 33,991 30,955
296,226 246,678
Current assets
Inventories 4 127,994 121,857
Receivables 5 398,308 413,588
Cash and cash equivalents 6 122,737 198,043
649,039 733,488
Total assets 945,265 980,166
LIABILITIES
Group equity
Equity 7 399,683 377,833
Minority share 8 16,777 19,552
416,460 397,385
Provisions 9 140,574 165,310
Long-term liabilities 10 23,844 10,702
Current liabilities 11 364,387 406,769
Total liabilities 945,265 980,166
5 0 | V I O N A N N U A L R E P O R T 2 0 1 5
(in thousands of euros)
note 2015 2014
INCOME
Net turnover 15 4,570,562 4,991,726
Changes in inventories of finished 6,231 -7,445
goods and goods being processed
Other operating income 16 35,778 28,243
Result related to the sale of group companies - -2,414
Total income 4,612,571 5,010,110
OPERATING COSTS
Cost of raw materials and consumables 3,607,247 3,936,988
Costs of subcontracted work and external costs 491,830 520,348
Wages and salaries 17 436,980 465,131
Social security contributions 18 33,134 37,839
Amortisation and depreciation of fixed assets 19 28,493 31,386
Impairment losses on fixed assets 1, 2, 20 - 5,883
Other operating costs 21 -16,074 -6,987
Total operating costs 4,581,610 4,990,588
Operating result 30,961 19,522
FINANCIAL INCOME AND EXPENSES
Interest income and similar income 1,313 2,475
Interest charges and similar expenses 22 -7,566 -24,611
Total financial income and expenses -6,253 -22,136
Result before tax 24,708 -2,614
Taxes 23 -407 -13,202
Share in the results of participating interests 174 -42
Result after tax 24,475 -15,858
Minority share -2,076 -4,893
Net result 22,399 -20,751
CONSOLIDATED PROFIT AND LOSS STATEMENT
V I O N A N N U A L R E P O R T 2 0 1 5 | 5 1
(in thousands of euros)
2015 2014
CASH FLOW FROM OPERATING ACTIVITIES
Operating result 30,961 19,522
Amortisation and depreciation 28,493 31,386
Impairment losses on fixed assets - 5,883
Result related to sales of assets and group companies -2,255 6,497
Increase / (decrease) in provisions -31,830 -14,923
(Increase) / decrease in current assets
> trade receivables 19,601 21,074
> inventories -6,137 14,668
> prepaid costs and other current assets -452 15,867
Increase / (decrease) in current liabilities
> trade liabilities 5,576 -10,119
> taxes and social security charges -2,521 -4,213
> other debts and accruals and deferred income -4,251 5,815
Net cash flow from business operations 37,185 91,457
Financial income received 4,182 1,310
Financial charges paid -8,092 -6,836
Tax received / (paid) on profit 583 -5,695
Net cash flow from operating activities 33,858 80,236
CASH FLOW FROM INVESTMENT ACTIVITIES
Investments in intangible fixed assets -5,413 -1,671
Divestments of intangible fixed assets 5 -
Investments in tangible fixed assets -58,765 -44,210
Divestments of tangible fixed assets 11,311 11,044
Investments in financial fixed assets -87 -1,250
Divestments of financial fixed assets 15 279
Acquisition of group companies -4,661 -8,000
Sale of group companies 5,393 1,527,004
Net cash flow from investment activities -52,202 1,483,196
CASH FLOW FROM FINANCING ACTIVITIES
Drawdown / (repayment) of debts to financial institutions (long-term portion) -450 -1,198,212
Drawdown / (repayment) of loans and credits (current portion) -53,607 -119,799
Dividends paid to minority shareholders -4,628 -5,524
Drawdown / (repayment) of non-bank debts 2,276 -3,530
Drawdown / (repayment) under the terms of Receivables Purchase Facility - -180,522
Net cash flow from financing activities -56,409 -1,507,587
Effect of differences in exchange rates -553 -1,814
Increase/ (decrease) in cash and cash equivalents -75,306 54,031
Cash and cash equivalents at the start of the year 198,043 144,012
Cash and cash equivalents at year-end 122,737 198,043
CONSOLIDATED CASH FLOW STATEMENT
5 2 | V I O N A N N U A L R E P O R T 2 0 1 5
GENERAL PRINCIPLES
The annual accounts of Vion Food have been
prepared in accordance with Title 9, Book 2 of the
Dutch Civil Code. The annual accounts have been
prepared by the Management Board on 7 April
2016.
The annual accounts are drafted on the basis of
going concern.
The general principle for the valuation of assets
and liabilities, as well as the determination of
result, is the historical cost. Unless stated other-
wise, assets and liabilities are recorded at cost.
An asset is included on the balance sheet when
it is likely that any future economic benefits will
accrue to the Company and the asset’s value can be
reliably determined. A liability is included on the
balance sheet when it is likely that its settlement
will involve an outflow of economically-valuable
resources, the value of which can be reliably
determined.
Income is included in the profit and loss statement
when there is an increase in economic benefits
related to an increase in an asset’s value or a
decrease in a liability, the amount of which can be
reliably determined. Expenses are included when
there is a decrease in future economic benefits
related to a decrease in an asset’s value or an
increase in a liability, the amount of which can be
reliably determined.
If a transaction results in all, or almost all, future
economic benefits and all, or almost all, risks with
respect to an asset or liability being transferred
to a third party, the asset or liability is no longer
included on the balance sheet. Furthermore, assets
and liabilities are no longer included on the
balance sheet from the date that the conditions
relating to likely future economic benefits or
reliability of the determination of the value are no
longer satisfied.
Income and costs are allocated to the period to
which they relate. Income is recognised when all
significant risks relating to the goods are trans-
ferred to the buyer.
All amounts specified in the annual accounts are in
euros. The euro is the functional currency and the
reporting currency of Vion Food and this has not
changed since the previous year.
Accounting policies
Vion Holding N.V. (‘Vion Food’ or the ‘Company’) is a public limited liability company under Dutch law with its registered office in Best, The Netherlands. Vion Food has one shareholder: Stichting Administratiekantoor SBT.
The Company is a holding company. Vion Food’s product portfolio consists of fresh pork and beef and derived convenience food products.
V I O N A N N U A L R E P O R T 2 0 1 5 | 5 3
Mergers and acquisitions
From the date control is obtained, the financial
data of the acquired companies are included in the
consolidated annual accounts as of the acquisition
date.
An acquisition is entered into the accounts in
accordance with the purchase accounting method.
Identifiable assets and liabilities as at the date of
acquisition are accounted for at fair value. The
difference between the purchase price and the
companies’ share in the fair value of the identifiable
assets and liabilities as at acquisition date is
accounted for as goodwill.
In the case of merging interests, the pooling of
interests method is used.
On 1 January 2015, the remaining 25% of the shares
in Salomon Hitburger GmbH were acquired. The
purchase price is based on an appraisal report from
an independent officer, which was appointed by
both parties. The seller did not agree on the resulting
purchase price. Management does not expect any
material adjustment of the purchase price.
On 25 May 2015, the remaining 30% of the shares
in Vion SA were acquired. The best estimate for
the transaction price is accounted for. The final
transaction price depends on an earn-out agreement
based on the future performance of Vion SA.
Any future adjustments to set the final transaction
price will affect the goodwill amount.
Divestments and increase of minority shares
The financial data for the companies divested in 2015
are no longer included in the consolidated annual
accounts from the moment that control is no longer
exercised over the companies concerned.
On 23 February 2015, the co-shareholder EGS
Erzeugergemeinschaften Südostbayern eG increased
its shareholding in Vion EGN Südostbayern GmbH
from 41.67% to 49%. Accordingly, the shareholding
of Vion Food decreased from 58.33% to 51%.
No significant dilution results have occurred.
On 24 September 2015, the co-shareholder EGB
Erzeugergemeinschaften-Beteiligungs GmbH
increased its shareholding in Vion SBL Landshut
GmbH from 42.86% to 49%. Accordingly, the
shareholding of Vion Food decreased from 57.14%
to 51%. No significant dilution results have
occurred.
Principles for the consolidation
The consolidated annual accounts record the
financial data of Vion Holding N.V. and its group
companies according to the full consolidation
method.
Where joint ventures are involved, the
proportional method is used for the consolidation.
The consolidated annual accounts of Vion Food
include the financial data of its group companies
and other legal entities where Vion Food exercises
control or which are subject to its central
management. Group companies are no longer
included in the consolidation as of the date that
decisive control ceases. The items in the
consolidated annual accounts are determined in
accordance with uniform accounting policies.
The financial data of the group companies and
other legal entities and companies pertaining to
the consolidation are fully included in the
consolidation after elimination of intercompany
balances and transactions. Third-party interests
in the capital and result of group companies are
disclosed separately in the consolidated annual
accounts.
Results of newly acquired group companies and
other legal entities and companies included in
the consolidation are consolidated from the date
of acquisition. On this date, the assets, provisions
and liabilities are recognised at the fair value. Any
goodwill paid is included as an asset, and
amortised over the economic lifetime. The results
of divested group companies are recognised in the
consolidation until the date that control ceased.
5 4 | V I O N A N N U A L R E P O R T 2 0 1 5
Foreign currency conversion
The consolidated financial statements are
denominated in euros as the functional and
reporting currency of Vion Food. The functional
and presentation currency of Vion Food and the
foreign activities have not changed compared
with the previous financial year. Individual group
companies set their own functional currency and
financial statement items are valued on the basis
of this functional currency. Transactions in foreign
currencies are at initial recognition valued against
spot rates of the functional currency.
Receivables, payables and liabilities are conver-
ted at the exchange rate as of the balance sheet
date. Transactions in foreign currencies during
the reporting period are included in the annual
accounts at the average exchange rate per month.
The exchange rate differences arising from the
currency conversion are included in the profit and
loss statement.
Foreign group companies and non-consolidated
foreign participating interests qualify as foreign
business operations. The exchange rate at the
balance sheet date is used for the currency
conversion for these business operations for
balance sheet items. The average rate per month is
used for the items in the profit and loss statement
The currency conversion differences that arise are
directly credited or charged to the group equity as
part of the legal reserve.
When a gain is realised on the sale of a foreign
group company, the accumulated exchange rate
differences are transferred within equity from the
exchange rate differences reserve to other
reserves.
Estimates
The preparation of annual accounts requires
management to make estimates and
assumptions that affect the application of
principles and reported values of assets, liabilities,
income and expenses. Actual results may differ
from these estimates. The estimates and
underlying assumptions are continually assessed.
Revisions to estimates are recorded in the period in
which the estimate was revised and in any future
periods affected by the revision. In the opinion of
the Management Board, the following
accounting policies are the most critical for
representing the financial position, and require
estimates and assumptions:
> valuation of assets related to impairments;
> provisions;
> valuation of deferred tax assets.
Impairments of assets
Each year, an impairment test is carried out for
the cash-generating units or groups of assets
when there are objective reasons to presume an
impairment, for example when results do not
meet the expectations. In this test, the book value
of the cash-generating units or groups of assets
is compared with the recoverable amount. The
recoverable amount is the higher of the value in
use and the direct net realisable value. The value
in use is assessed at the best estimate of future
cash flows discounted against the effective interest
rate of the applicable fixed asset. An impairment
loss accounted for in previous periods is reversed
only when this reversal results from objective and
sustainable circumstances occurring after the date
of initial impairment. The reversal will be limited
to the amount necessary to measure the fixed asset
at its book value if no impairment would have
occurred. The reversal is recorded through profit
and loss. If this test shows that the book value is
higher than the recoverable amount, then an
impairment is charged to the profit and loss
statement.
Offsetting
Assets and items for debt are offset in the annual
accounts only if and insofar as:
> a sound legal instrument exists to balance and
simultaneously settle an asset and liability;
> there is a firm intention to simultaneously settle
the balance or both items.
A C C O U N T I N G P O L I C I E S
V I O N A N N U A L R E P O R T 2 0 1 5 | 5 5
ACCOUNTING POLICIES FOR THE BALANCE SHEET
Intangible fixed assets
Intangible fixed assets acquired from third parties
are valued at acquisition cost less accumulated
amortisation and, if applicable, impairments.
Intangible fixed assets are amortised on a
straight-line basis over the estimated period of use,
with a maximum period of 20 years.
The estimated useful lives are as follows:
goodwill 10 to 20 years
software 3 to 5 years
other intangible fixed assets 3 to 5 years
Goodwill is determined as the acquisition cost of
the acquired company less the fair value at the
time of acquisition of the assets and liabilities of
the company based on Vion Food’s accounting
policies. Goodwill paid on the acquisition of
foreign group companies is converted using the
exchange rate on the transaction date.
The period of use of the goodwill for acquired
companies is determined per acquisition, using as a
basis the specific market, clients, products, facilities
and organisation. This predominantly concerns
acquired strategic market positions.
Disposals are recorded in the movement schedules
at net value.
Tangible fixed assets
Tangible fixed assets are valued at acquisition cost
less accumulated depreciation and, if applicable,
impairments. The depreciation is based on the
estimated period of use, and is calculated based on
a fixed percentage of the acquisition cost and any
residual value.
The estimated useful lives are as follows:
business premises 25 to 30 years
plant and equipment 10 to 15 years
other tangible fixed assets 3 to 15 years
Tangible assets are depreciated from the moment
that they become operational. Land is not
depreciated. Assets no longer in use are valued
at book value or the lower market value.
Impairments in the financial year are directly
deducted from the book value.
Any investment grants received are deducted from
the relevant tangible fixed asset.
Costs for scheduled major maintenance are
charged against net result at the time the
maintenance is carried out.
Disposals are recorded in the movement schedules
at net value.
Financial fixed assets
Participating interests in which Vion Food exercises
significant influence over business and financial
policy are valued using the equity accounting
method based on the net asset value. This is
calculated by valuing the assets, provisions and
liabilities, and calculating the result in accordance
with Vion Food’s accounting principles.
Participating interests in which Vion Food does not
exercise significant control over the business and
financial policy are valued at acquisition cost and,
if applicable, less impairments.
Deferred tax assets are recognised to the extent
that it is probable that these can be realised within
a planning period that is in line with the sectors
in which Vion Food operates. These deferred tax
assets are valued at face value, and are
predominantly of a long-term nature.
The receivables from and loans to participating
interests as well as other receivables are included
at fair value when first recognised, and
subsequently valued at the amortised cost using
5 6 | V I O N A N N U A L R E P O R T 2 0 1 5
the effective interest method less any allowances
deemed necessary. Dividends are recognised in the
period in which these are made payable.
Leasing
The assessment of whether an agreement includes
a lease is based on the economic reality at the time
that the contract was entered into. The contract is
deemed to be a lease agreement when fulfilment
of the agreement requires the use of a specific
asset or the right to use a specific asset.
In the case of financial leasing (where the
advantages and disadvantages of owning the lease
object are fully or almost fully borne by the lessee),
the lease object and the associated debt upon
entering into the agreement are included on the
balance sheet at the fair value of the lease object
at the time of entering into the lease agreement,
or at the cash value of the minimal lease payments
when this is lower than the fair value. The initial
direct costs for the lessee are included when the
asset is first recognised. The lease payments are
split into interest charges and repayments for the
outstanding liability in order to achieve a constant
interest rate for the remaining net liability.
In the case of operational leasing, the lease
payments are charged to the profit and loss
statement on a straight-line basis over the
duration of the lease period.
Financial instruments
Financial instruments include both primary
financial instruments, such as receivables and
payables, and financial derivatives. Please refer
to the notes on the separate balance sheet item
for the accounting principles used for the primary
financial instruments.
Derivatives
Vion Food uses derivatives to hedge exchange rate
risks on foreign currencies and interest rate risk.
For the exchange rate risk on the currency
conversion for the foreign operating activities,
Vion Food uses net investment hedge
accounting, whereby changes in the fair value of
the derivative, to the extent that these cover an
item included on the balance sheet, are included in
the exchange rate differences reserve. Vion Food
does not hedge the currency conversion risk on the
net result of foreign entities. Vion Food uses cost
price hedge accounting for the exchange rate risk
on foreign currency conversion transactions. Vion
Food hedges its currency positions with forward
contracts and currency swaps. Changes in the fair
value of derivatives that are designated and
qualify for hedge accounting are included in the
profit and loss statement together with changes
in the fair value of balance sheet items that are
allocated to the hedged risk. The foreign currency
component of forward exchange contracts that
functions as an instrument for hedging
future transactions is valued at cost, as long as the
hedged position has not yet been included on the
balance sheet.
Vion Food hedges its interest rate risk on
long-term debt financing with interest rate swaps.
Cost price hedge accounting is used for these
derivatives. The effective portion of the derivatives
allocated to cost price hedge accounting is valued
at cost. The ineffective portion is valued at fair
value. The value differences of the fair value of the
ineffective portion is directly included in the profit
and loss statement.
To the extent that derivatives are used to hedge
future rights and obligations (for which the
company has entered into commitments with fixed
terms and conditions), profits or losses on these
derivatives are not recognised until the moment of
settlement.
Hedge accounting
Derivatives are used to hedge currency and interest
rate risks. For derivatives that are part of an
effective hedging relationship, cost price hedge
accounting is used. Vion Food uses hedge
accounting based on generic documentation in
accordance with Dutch accounting standard RJ290.
All derivatives for which no hedge accounting is
used are valued at cost or the lower market value.
A C C O U N T I N G P O L I C I E S
V I O N A N N U A L R E P O R T 2 0 1 5 | 5 7
Measurement of the effectiveness of hedge
accounting is done by the assessment of the critical
characteristics (specifically duration and amount)
of the derivatives in comparison with the hedged
items concerned mainly sales orders. These are
both current items.
Inventories
The inventories consist of goods with a limited
shelf life.
Inventories are valued at the lower of cost of
acquisition or production and the recoverable
amount.
Inventories of finished goods are valued at
purchase price plus a premium allocated for
production costs. For products being processed,
the costs of raw materials and consumables, direct
production costs and a proportional share of
general production costs are recognised, taking
into account the stage of the production process.
If necessary, an amount is deducted from the
valuation for obsolescence.
Receivables
Receivables are initially included at fair value when
first recognised, and subsequently valued at the
amortised cost using the effective interest method,
which is equal to the face value less the necessary
allowances for doubtful debts. These allowances
are determined according to individual assessment
of the receivables.
Cash and cash equivalents
Cash and cash equivalents are stated at face value
and, unless stated otherwise, are at Vion Food’s
disposal.
Provision for deferred tax liabilities
The provision for deferred tax liabilities relates to
future tax liabilities resulting from the differences
between the economic valuation of assets and
liabilities in the annual accounts and their
valuation for tax purposes. The provision is stated
at face value based on the applicable tax rate.
Pension provisions
Separate pension plans are applicable in the
various countries where Vion Food operates.
Pensions are calculated according to RJ 271
guidelines.
The Netherlands
Vion Food has several pension schemes for its
Dutch employees which are all under the super-
vision of an independent pension
administrator. Premiums owed in the financial year
to the pension administrators are recognised as
costs. A liability is included for premiums not paid
as of the balance sheet date. These liabilities are of
a current nature and measured at their face value.
In case of prepayments of pension premiums, these
are recorded under current assets. Liabilities
besides the premiums owed to the pension
administrators are provided for on the basis that
a legally binding or constructive obligation is
present, that an outflow of cash is likely to settle
these obligations and that a reliable estimate of
the size of the obligation can be made. The
provision for any such additional liability is
measured at the best estimate of the amounts
needed to settle the obligation as at balance sheet
date. In case material, the provision is discounted.
Germany
Vion Food holds a separate pension scheme for its
foreign (German) operations. The elements of the
scheme itself are comparable to the Dutch pension
schemes. However, as the governance of the
German pension scheme differs Vion Food
accounts for the resulting liability following
RJ 271.321 letter a.
Pension liabilities arising from Vion Food’s foreign
(German) pension schemes are therefore included
at the best estimate of actual and legally
enforceable obligations on the balance sheet date.
This relates to obligations towards pension
administrators, employees and former employees.
For the calculation of the pension provisions a
full discount rate curve of high-quality corporate
bonds is used to determine the defined benefit
5 8 | V I O N A N N U A L R E P O R T 2 0 1 5
obligation. The curves are based on Towers
Watson’s Rate:Link which uses data of corporate
bonds rated AA or equivalent.
Other provisions
The provisions for reorganisations and other
obligations were created for the legally
enforceable or actual obligations that exist at the
balance sheet date, where the magnitude of the
amounts is uncertain, but which can be reasonably
estimated. These obligations are due to events
in the past, where settlement will occur after the
balance sheet date. Staff costs and other expenses
directly related to reorganisations are only
included if the following conditions are satisfied as
of the balance sheet date:
> During the financial year, a detailed plan was
drawn up for the reorganisation. The plan
included the relevant activities, locations,
expected number of employees with associated
job grades, related expenditures and the time
when the plan was to be implemented.
> A legitimate expectation was created among
those who would have been affected by the
reorganisation that the reorganisation would
take place because a start was made or its main
points were communicated to those who would
have been affected.
In addition, the staff costs associated with the
reorganisations are recognised in the financial year
that the reorganisation took place.
Furthermore, this item includes the costs directly
related to the reorganisations, including closing
costs, consultancy fees and other costs, such as
onerous contracts.
The other provisions are included at face value,
and are of a predominantly long-term nature.
Long-term liabilities
Long-term liabilities are payables with a residual
maturity greater than one year. The payables are
included at fair value when first recognised, and
subsequently valued at the amortised cost using
the effective interest method.
Current liabilities
Current liabilities are payables with an expected
maturity of up to one year.
ACCOUNTING POLICIES FOR THE PROFIT AND LOSS STATEMENT
General
The results are defined as the difference between
net turnover and all related costs allocated to
the reporting year. The costs are determined in
accordance with the aforementioned valuation
principles.
Profits are recognised in the year in which they are
realised. Losses are recognised in the year in which
they are foreseeable.
Other income and expenses are allocated to the
period to which these relate.
Net turnover
The net turnover included in the profit and loss
statement is the income from the supply of goods
and services to third parties, less permitted
customer discounts (excluding payment discounts),
and excluding turnover tax.
Income arising from the sale of goods is recognised
at the moment when all significant rights to
economic benefits and all significant risks have
been transferred to the buyer.
Other operating income
Other operating income includes, amongst others,
realised profits on the sale of fixed assets,
commissions, bonuses, governmental grants and
rental income.
Costs
Costs are included at the acquisition cost.
Costs of raw materials and consumables
These are the costs of raw materials and
consumables associated with the use of raw
materials and consumables, as well as changes in the
inventories of raw materials, and are valued at the
acquisition cost.
A C C O U N T I N G P O L I C I E S
V I O N A N N U A L R E P O R T 2 0 1 5 | 5 9
> 42 years old> 4 children> 10 km route driven daily
DIETGER KRATZ
SHOP FLOOR MANAGERFUNCTION
LOCATION
TODAY
FVZ Convenience GmbH, Holzwickede (DE)
> 10,000 litres of thermal oil used > 7,000 m² of production
space inspected> 6 production departments overseen, processing 85 tons of meat products each day
SHIFT
8:00 - 16:30
6 0 | V I O N A N N U A L R E P O R T 2 0 1 5
Costs of outsourced work and external costs
This item includes the direct and indirect selling
expenses, costs of energy and water and costs of
manufacturing and maintenance, among others.
This item is valued at acquisition cost.
Wages and salaries
This item includes wages and salaries of employees
who were employed within Vion Food, and
employees working on a temporary contract basis.
In addition, this item includes pension costs.
Social security contributions
This item includes the costs for social security
contributions for the employees who were
employed within Vion Food.
Amortisation and depreciation of fixed assets
The profit and loss statement includes
depreciation of tangible fixed assets and
amortisation of intangible fixed assets, which are
calculated on the basis of a fixed percentage of the
acquisition cost, taking into account the residual
value and the economic lifetime.
Impairment of assets
This item includes impairments of fixed assets that
occurred during the financial year.
If there are indications for an impairment of a
cash-generating unit or (group of) assets, the
recoverable amount for this is determined as the
higher of the directly net realisable value and the
value in use. If the recoverable amount is below
the book value, the associated cash-generating
unit or (group of) assets is adjusted to this lower
recoverable value.
Other operating costs
Other operating costs include changes in
provisions, rental costs for central headquarters
and local headquarters, lease costs for company
cars, travel and entertainment expenses.
Financial income and expenses
The financial income and expenses include interest
received and paid and exchange rate results, as
well as results from forward exchange contracts
and interest rate swaps on financial positions.
Tax on result
Corporate income tax on earnings is calculated
according to the profit and loss statement at the
applicable rate allowing for tax relief facilities and
limits that have a permanent influence on the tax
rate. The calculation allows for the change in
receivables and the provision for deferred
corporate income tax and applicable local tax
rates.
Share in the results of participating interests
The share in the result of non-consolidated
participating interests includes the share of the
group in the earnings of these participating
interests.
Minority share
This item consists of the share in the result to be
allocated to other shareholders of the Company in
which they participate.
ACCOUNTING POLICIES FOR THE CASH FLOW STATEMENT
The cash flow statement was prepared using the
indirect method. Issued dividends are included in
the cash flow from financing activities.
For payments arising from long-term loans, the
part relating to the interest rate is included in
the cash flow from operating activities. The part
relating to repayment is included in the cash flow
from financing activities. Cash flows in foreign
currencies are converted at an estimated average
exchange rate. Receipts and expenditures relating
to interest and profit taxes are included in the cash
flow from operating activities.
The impact of acquisitions and divestments of
group companies, including changes in assets and
liabilities, are included in the cash flow from
investing activities.
A C C O U N T I N G P O L I C I E S
V I O N A N N U A L R E P O R T 2 0 1 5 | 6 1
Notes on the consolidated balance sheet
Balance as at 1 January 2015 Goodwill Software In progress Other Total
Acquisition cost 6,401 36,313 937 13,210 56,861
Accumulated amortisation 203 34,317 - 12,994 47,514
Book value 6,198 1,996 937 216 9,347
Movements in the book value
Acquisition of group companies 20,936 - - - 20,936
Additions - 658 4,722 33 5,413
Divestments - - - -5 -5
Reclassification - 1,860 -1,686 -131 43
Amortisation -1,882 -1,528 - - -3,410
Balance 19,054 990 3,036 -103 22,977
Balance as at 31 December 2015
Acquisition cost 27,336 41,649 3,973 245 73,203
Accumulated amortisation 2,084 38,663 - 132 40,879
Book value 25,252 2,986 3,973 113 32,324
The acquisition of group companies amounting to € 20.9 million relates to the goodwill that arose due to
the acquisition of the remaining 25% of Salomon Hitburger GmbH and the remaining 30% of Vion SA.
The total purchase price amounted € 21.7 million.
The intangible fixed assets in progress relate to internally developed as well as external sofware
capitalised.
As at 31 December 2015
(In thousands of euros)
ASSETS
Note 1 - Intangible fixed assets
The movements in intangible fixed assets are as follows:
2015
6 2 | V I O N A N N U A L R E P O R T 2 0 1 5
Balance as at 1 January 2014 Goodwill Software In progress Other Total
Acquisition cost - 35,897 611 17,827 54,335
Accumulated amortisation - 30,081 95 17,582 47,758
Book value - 5,816 516 245 6,577
Movements in the book value
Acquisition of group companies 6.401 - - - 6,401
Divestment of group companies - -1,211 - -9 -1,220
Additions - 1,161 421 89 1,671
Reclassification - -2,445 - - -2,445
Amortisation -203 -1,325 - -109 -1,637
Balance 6,198 -3,820 421 -29 2,770
Balance as at 31 December 2014
Acquisition cost 6,401 36,313 937 13,210 56,861
Accumulated amortisation 203 34,317 - 12,994 47,514
Book value 6,198 1,996 937 216 9,347
2014
V I O N A N N U A L R E P O R T 2 0 1 5 | 6 3
Fixed
Business Other assets Non-
premises Plant and operating under productive
Balance as at 1 January 2015 and land equipment assets construction assets Total
Acquisition cost 641,672 629,313 17,903 17,351 799 1,307,038
Accumulated depreciation 528,718 554,112 17,033 - 799 1,100,662
Book value 112,954 75,201 870 17,351 - 206,376
Movements in the book value
Additions 3,435 13,251 285 41,794 - 58,765
Disposals -7,890 -2,393 -1 -50 - -10,334
Reclassification 7,609 8,538 804 -16,994 - -43
Depreciation -5,459 -19,109 -515 - - -25,083
Exchange rate differences 200 27 3 - - 230
Balance -2,105 314 576 24,750 - 23,535
Balance as at 31 December 2015
Acquisition cost 643,217 557,790 14,689 42,101 689 1,258,486
Accumulated depreciation 532,368 482,275 13,243 - 689 1,028,575
Book value 110,849 75,515 1,446 42,101 - 229,911
The reclassification of fixed assets includes a water treatment installation amounting € 7 million which is financed
by means of a financial lease.
The investment grants received are allocated to sustainable investments and investments that promote
employment opportunities. These investments are deducted from the relevant tangible fixed asset. As of 31
December 2015 the total book value for allocated investment grants amounted to € 0.4 million (2014: € 0.4 million).
Fixed assets under construction mainly relate to investment programs for the Landshut, Emstek and Boxtel
production sites.
The legal ownership is limited for fixed assets financed under financial lease (€ 6.8 million, 2014: € 7.0 million).
Note 2 - Tangible fixed assets
The movements in tangible fixed assets are as follows:
2015
6 4 | V I O N A N N U A L R E P O R T 2 0 1 5
Fixed
Business Other assets Non-
premises Plant and operating under productive
Balance as at 1 January 2014 and land equipment assets construction assets Total
Acquisition cost 851,076 804,210 23,502 8,032 1,443 1,688,263
Accumulated depreciation 730,897 726,082 23,502 589 - 1,481,070
Book value 120,179 78,128 - 7,443 1,443 207,193
Movements in the book value
Divestment of group companies -183 -650 -528 -2,323 - -3,684
Additions 7,604 15,140 142 28,324 - 51,210
Disposals -11,267 -2,873 -72 -477 -206 -14,895
Reclassification 7,236 8,898 1,924 -15,613 - 2,445
Impairments -4,572 -409 -29 - -873 -5,883
Depreciation -6,149 -23,029 -570 - - -29,748
Exchange rate differences 106 -4 3 -3 -364 -262
Balance -7,225 -2,927 870 9,908 -1,443 -817
Balance as at 31 December 2014
Acquisition cost 641,672 629,313 17,903 17,351 799 1,307,038
Accumulated depreciation 528,718 554,112 17,033 - 799 1,100,662
Book value 112,954 75,201 870 17,351 - 206,376
2014
N O T E S O N T H E C O N S O L I D A T E D B A L A N C E S H E E T
V I O N A N N U A L R E P O R T 2 0 1 5 | 6 5
2015 2014
Participating interests 7,949 7,889
Receivables from non-consolidated participating interests 479 479
Deferred tax assets 15,689 17,448
Other receivables 9,874 5,139
Balance as at 31 December 33,991 30,955
Participating interests
Movements during the financial year were as follows:
2015 2014
Balance as at 1 January 7,889 6,726
Divestment and deconsolidation of group companies and participating interests - -60
Movements in the share capital in participating interests -11 1,265
Share in the result 174 -42
Dividend distribution -103 -
Balance as at 31 December 7,949 7,889
This relates to the following participating interests with a share of 20% or higher:
Participating interest
Pigture Group B.V., Helvoirt (The Netherlands) 22.50%
Fleischversorgungszentrum Rhein-Main GmbH & Co. Vermietungs KG, Frankfurt (Germany) 24.41%
Zweckverband ‘Fleischzentrum Emsland’, Lingen (Germany) 33.34%
Premium Fleisch-Servicegesellschaft GmbH, Zeven (Germany) 42.86%
Fleischmarkt Nürnberg GmbH, Nürnberg (Germany) 23.80%
LQB Landwirtschaftliche Qualitätssich. Bayern GmbH (Germany) 28.00%
Best Hides GmbH, Eching-Weixerau (Germany) 40.00%
Receivables from non-consolidated participating interests
The movements are as follows:
2015 2014
Balance as at 1 January 479 744
Repaid during financial year - -265
Balance as at 31 December 479 479
The loan issued to the non-consolidated participating interest expires on 1 December 2019. An interest
rate is charged for the current facility amounting to the 3-month Euribor plus a mark-up of 4.0%.
Note 3 - Financial fixed assets
6 6 | V I O N A N N U A L R E P O R T 2 0 1 5
Deferred tax assets
The movements are as follows:
2015 2014
Balance as at 1 January 17,448 19,546
Reclassification of tax assets and tax liabilities 4,603 1,200
Divestment of group companies - -204
Withdrawal from / addition to result -6,523 -3,094
Exchange rate differences 161 -
Balance as at 31 December 15,689 17,448
For group companies, at year-end 2015 there were losses of approximately € 926 million available for
limited or unlimited offset (2014: € 915 million). Of these available losses, € 50 million was recognised at
year-end 2015 (2014: € 65 million) with a tax value of € 15 million (2014: € 19 million).
It is not expected that the available losses amounting to € 876 million (2014: € 850 million) will provide
actual compensation in a reasonable period of time. Accordingly, the related deferred tax assets are not
recognised.
The other deferred tax positions refer to timing differences.
Other receivables
2015 2014
Balance as at 1 January 5,139 131
Divestment of group companies - -4
Issued 2 5,026
Repaid -15 -14
Other 4,748 -
Balance as at 31 December 9,874 5,139
The € 5 million issued loan in 2014 was for deferred payment of the sales price for the divestment of the
Oerlemans group. This deferred payment expires on 28 May 2017. An interest rate of 4.0% is charged for
this loan. No security has been provided for this loan.
Other concerns an escrow account relating to deferred income of the sale of group companies in previous
years. Initially, the escrow amount was fully provided for. The current estimation is that the total amount
of claims to be received from the buyer is lower than the amount of the escrow. The remaining balance of
the escrow will become available to Vion Food in January 2017.
N O T E S O N T H E C O N S O L I D A T E D B A L A N C E S H E E T
V I O N A N N U A L R E P O R T 2 0 1 5 | 6 7
Note 4 - Inventories
Note 5 - Receivables
2015 2014
Raw materials and consumables 14,093 14,762
Goods in progress 866 398
Spare parts and other 10,266 9,268
Finished products 102,769 97,429
Balance as at 31 December 127,994 121,857
The allowance for obsolete inventories amounted to € 0.9 million (2014: € 0 million).
Among others, spare parts consist of packaging material.
2015 2014
Trade receivables 344,354 363,874
Taxes 32,136 27,712
Receivables from associated companies 4,494 6,179
Other receivables and accruals 17,324 15,823
Balance as at 31 December 398,308 413,588
A bad debt allowance of € 7.8 million has been included in trade receivables (2014: € 8.2 million).
The cash and cash equivalents include € 20 million (2014: € 55 million) that is only available to Vion Food
under certain conditions, as agreed with credit insurers.
LIABILITIES
For a breakdown of the movements in equity, please refer to the notes on the company balance sheet.
Consolidated statement of comprehensive income 2015 2014
Consolidated net result after taxes attributable to the legal entity 22,399 -20,751
Conversion differences related to foreign group companies -549 -2,459
Total direct movements in equity of the legal entity -549 -2,459
Comprehensive income of the legal entity 21,850 -23,210
Note 6 - Cash and cash equivalents
Note 7 - Equity
6 8 | V I O N A N N U A L R E P O R T 2 0 1 5
2015 2014
Balance as at 1 January 19,552 24,223
Divestments of group companies 2,393 -1,327
Movements in third-party interests -2,600 -2,479
Share of result 2,076 4,893
Dividend distribution -4,628 -5,524
Exchange rate differences -16 -234
Balance as at 31 December 16,777 19,552
2015 2014
Deferred tax liabilities 2,118 4,121
Pension liabilities 119,720 123,461
Other provisions 18,736 37,728
Balance as at 31 December 140,574 165,310
Deferred tax liabilities
2015 2014
Balance as at 1 January 4,121 14,808
Reclassification of tax assets and tax liabilities 4,603 1,200
Divestments of group companies - -11,204
Released to result -6,644 -683
Exchange rate differences 38 -
Balance as at 31 December 2,118 4,121
Note 8 - Minority share
Note 9 - Provisions
Pension liabilities
These are provisions for pension plans, pre-pension
and early retirement schemes, as well as jubilee and
leave arrangements. These provisions are typically
long-term.
The Netherlands
Vion Food has pension schemes for its employees
in The Netherlands, where the pension benefits are
based on a moderate career-average scheme. The
pension schemes are administered by the General
Pension Fund for the Meat, Meat Products, and
Convenience Foods and Poultry Sector (“Stichting
Bedrijfstakpensioenfonds voor Vlees, Vleeswaren,
Gemaksvoeding en Pluimvee”, abbreviated as VLEP),
the Pension Fund for the Butcher’s Trade, the
Pension Fund for the Transport Sector and a
premium pension institution.
The most important elements of the Dutch pension
schemes in place are:
> VLEP runs a defined benefit scheme for
pensionable salaries up to € 63,540 topped with
a defined contribution scheme for pensionable
salaries exceeding this, tax driven maximised at
€ 100,000.
> The Pension Fund for the Butcher’s Trade runs a
defined benefit scheme for pensionable salaries
up to the fiscal maximum of € 100,000.
> The Pension Fund for the Transport Sector runs a
defined benefit scheme for pensionable salaries
up to € 51,414 topped with a defined
contribution scheme for pensionable salaries
exceeding this, tax driven maximised at € 100,000.
> For Vion N.V. and ICT personnel a defined
contribution pension scheme up to the fiscal
maximum of € 100,000 is applicable.
If there are shortfalls in pension funds, Vion Food
is not obliged to make additional contributions
other than in the form of higher future premiums.
N O T E S O N T H E C O N S O L I D A T E D B A L A N C E S H E E T
V I O N A N N U A L R E P O R T 2 0 1 5 | 6 9
The movements in the pension liabilities of Vion Food can be summarised as follows:
2015 2014
Balance as at 1 January 123,461 127,532
Divestment of group companies - -17,210
Added from the result 3,617 23,049
Released to the earnings 232 -1,035
Used for the intended purpose -7,590 -8,875
Balance as at 31 December 119,720 123,461
The balance as per year-end includes an amount of € 2.6 million (2014: € 2.3 million) for jubilee arrange-
ments. The remainder fully relates to German pension plan liabilities.
An amount of € 7.7 million (2014: € 7.5 million) of the employee benefits liabilities has a term of less than
one year. The anticipated yearly pension payments for the coming 5 years varies between € 7.3 million and
€ 7.7 million.
Other provisions
2015 2014
Balance as at 1 January 37,728 41,962
Divestments of group companies -3 -1,980
Added from the result 8,946 42,795
Released to the earnings -13,988 -8,610
Used for the intended purpose -13,994 -36,499
Exchange rate differences 47 60
Balance as at 31 December 18,736 37,728
The other provisions are for reorganisation and restructuring costs amounting to € 13 million (2014:
€ 25 million). These are predominantly current in nature. In addition, there are provisions for various
claims and other obligations.
At year end, there was only a shortfall in the VLEP
contribution.
At year end, the coverage ratio was 96.1% (2014:
103.8%) for the VLEP pension fund, 108,4% (2014:
110.0%) for the Pension Fund for the Butcher’s
Trade, and 100,5% (2014: 111.5%) for the Pension
Fund for the Transport Sector.
Risks of future wage increases, price indexations,
adjustments to mortality tables and to investment
yields of fund assets may lead to future
adjustments in the annual contributions to the
pension funds. These risks are not provided for.
Other than the premiums due no further liabilities
from the Dutch pension schemes occur which need
to be provided for.
The actuarial method ‘projected unit credit
method’ is used to determine the provision.
Germany
The pension plan liabilities in the balance sheet fully
apply to the defined benefit pension schemes for
employees and former employees of the German
group companies. These schemes are moderate
career-average schemes with conditional indexation.
The schemes are not open to new participants.
A part of the schedules will be funded using a
so-called ‘Unterstützungsfonds’, while liabilities
are direct. The obligations are measured on the
basis of actuarial calculations using the Projected
Unit Credit method as at year-end and applying a
full discount rate curve of high-quality corporate
bonds. The curve is based on Towers Watson’s Rate:
Link which is comprised of data from corporate
bonds rated AA or equivalent. The discount rate for
2015 is 1.667% (2014: 1.4%). Local mortality tables
including the probability of marital status at death
are applied (“Richttafeln 2005G”). Average
remaining service amounts to 11 years.
7 0 | V I O N A N N U A L R E P O R T 2 0 1 5
2015 2014
Payable to financial institutions 690 1,050
Financial lease obligations 6,833 7,000
Other payables 16,321 2,652
Balance as at 31 December 23,844 10,702
Other payables relate for an amount of € 11.2 million to the acquisition of Salomon Hitburger GmbH and
Vion SA, consisting of future payments and earn out agreements related to the purchase price.
2015 2014
Financial institutions and other interest-bearing liabilities 46,473 100,080
Repayment obligations 360 450
Suppliers and trade payables 188,265 182,678
Taxes and social security contributions 12,679 9,495
Other payables, accruals and deferred income 116,610 114,066
Balance as at 31 December 364,387 406,769
Included within the current payable to financial institutions is an amount of € 46 million (2014: € 100 milli-
on) under the facilities as disclosed in note 12.
The negative net debt position as at 31 December
2015 amounted to € 52 million (2014: negative
€ 87 million).
CREDIT FACILITIES
In June 2015 Vion Food agreed a new financing
facility agreement of € 100 million. In July 2015 it
was increased to € 125 million. The facility includes
a German receivables purchase facility and a Dutch
borrowing base facility refinancing the existing
receivables purchase facility. The term for the
facility is two years, starting 24 June 2015. The
facility is provided by a group of international
banks.
The interest rate is based on Euribor plus a
margin. As a result of the refinancing the margin
has improved compared to the former facility.
The facility contains customary covenants including
a minimum liquidity cover, an EBITDA floor and
maximum capital expenditure. Liquidity is defined
as the freely transferable, convertible and
accessible cash including the evidenced
available facility headroom. EBITDA is calculated
on a 12-month rolling basis. During 2015, Vion
Food was in compliance with these covenants.
In the beginning of 2016, certain amendments
in the terms and conditions of the facility were
agreed with the lenders.
Vion Food has provided full securities for both
facilities with pledges on its trade receivables.
At 31 December 2015, an amount of € 46 million
(2014: € 100 million) was drawn under the credit
facilities.
Note 10 - Long-term liabilities
Note 11 - Current liabilities
Note 12 - Payable to credit institutions
N O T E S O N T H E C O N S O L I D A T E D B A L A N C E S H E E T
V I O N A N N U A L R E P O R T 2 0 1 5 | 7 1
FINANCIAL RISK MANAGEMENT
Vion Food is exposed to a variety of financial risks,
such as credit risk, foreign currency risk, interest
rate risk and liquidity risk. These risks are
inherent to the way Vion Food operates as a
multinational with several local operating compa-
nies. Vion Food’s overall risk management policy is
to identify, assess and, if necessary, mitigate these
financial risks in order to minimise potential adver-
se effects on its financial performance.
The Treasury policies include the use of derivative
financial instruments to hedge certain exposures.
The Management Board is ultimately responsible
for risk management. Financial risk management
is, except for credit risk of non-financial
counterparties, carried out by Group Treasury in
line with clearly formalised treasury policies.
Group Treasury identifies, evaluates and hedges
financial risks at corporate level and monitors
compliance with its policies within Vion Food. Vion
Food has a Risk Management and Compliance
Committee that advises the Management Board on
risk management.
The capitalisation and funding of operating
companies is a responsibility of Group Treasury,
but managed in close cooperation with Group
Tax as the combination of equity and short term
intercompany loans is mostly used as a financing
structure. Decisions regarding the debt-to-equity
ratio are based on various aspects including
minimum regulatory requirements and the
flexibility to change the structure. Vion Food has
no restrictions in paying intercompany cash
dividends or in repaying intercompany loans.
The divisions and operating companies are
primarily responsible for identifying and managing
financial risks, especially in relation to transactions
in foreign currencies.
Within the boundaries set in the Treasury policies,
the operating companies execute appropriate
foreign currency risk management activities. Vion
Food does not purchase or hold any financial
derivatives for trading purposes, and primarily
uses derivative financial instruments to manage its
foreign currency risk. These financial transactions
are all executed through Group Treasury and
qualify for hedge accounting. Therefore, gains or
losses arising from changes in the fair value of
derivatives are included in the profit and loss
statement (under cost price hedge accounting)
when these changes are compensated by an
equivalent change in the fair value of the hedged
items.
Group Treasury is responsible for reporting to the
Management Board on Vion Food’s exposure to
a number of financial risks, including liquidity,
foreign exchange and interest exposure.
CREDIT RISK
Credit risk represents the accounting loss that has
to be recognised on the reporting date if
counterparties fail to perform as contracted.
Credit risk is carried out by Corporate Credit Risk
Management (CCRM).
In line with clearly formalised policies, CCRM is
operating as a credit insurer. All guidelines and
procedures are audited and checked by banks and
insurance companies.
The group only trades with creditworthy
parties and has adopted procedures to monitor the
creditworthiness of these parties. Vion Food has
established guidelines to limit the magnitude of
the credit risk for each party. In addition, Vion Food
continually monitors its receivables and uses a strict
collection procedure. These measures minimise the
credit risk for Vion Food. There are no significant
concentrations of credit risk within Vion Food.
FOREIGN CURRENCY RISK
Vion Food is exposed to currency risks in the
following areas:
> transaction risk on anticipated sales, and on the
balance sheet receivables or payables arising
from such transactions;
> currency conversion risk arising from currency
conversion differences on intercompany and
external payables and deposits in foreign
currency;
> currency conversion risk on net investments in
consolidated foreign entities;
> currency conversion risk on the net result of
foreign entities.
Note 13 - Objectives and policy for managing financial risks
7 2 | V I O N A N N U A L R E P O R T 2 0 1 5
Vion Food makes use of a financial policy to deal
with currency risks. This policy states that
committed transactional positions should be
hedged using forward contracts. In general, the
average duration of these contracts is three to four
months. Vion Food generally strives to fund local
entities in their functional currency. The currency of
the external funding and deposits of Vion Food is
based on the financial policy coupled with the re-
quired funding of companies within Vion Food. This
can be either directly by external foreign currency
loans and deposits or through currency swaps.
The currency conversion risk on the capital invested
in consolidated foreign entities financed with their
own resources is partially hedged based on the
policy approved by the Management Board. If
these types of hedging transactions are entered
into, these are recognised as a hedge of a net
investment in a foreign entity. Vion Food does not
hedge the currency conversion risk on the net result
of foreign entities.
The notional value of the forward exchange
contracts to hedge the described currency risks,
particularly the US dollar and British pound,
amounted to a total of € 128 million net at year-
end 2015 (2014: € 120 million). The fair value of
these contracts at the balance sheet date was a
Some of the group companies have long-term
liabilities arising from the rental and operational
leasing of assets. The composition of these
obligations is as follows:
• < 1 year € 14 million (2014: € 10 million)
• 1 to 5 years € 20 million (2014: € 13 million)
• > 5 years € 8 million (2014: € 2 million)
For group companies, an amount of € 20 million
was issued in bank guarantees (2014: € 55 million).
Vion Food entered into long-term sales contracts
with minimum delivery requirements with different
customers. The relevant sales prices depend on the
market prices of the relevant products at the time
of sale.
negative amount totalling € 0.7 million (2014
positive € 0.8 million). Of this, a negative amount
of € 0.7 million (2014: positive € 0.8 million) is
disclosed off-balance sheet based on cost price
hedge accounting.
The fair values of all financial instruments
approximate the book values.
INTEREST RATE RISK
Vion Food is partly financed with interest-bearing
borrowings but overall has a negative net debt
position. Vion Food’s exposure to interest rate
risk (especially due to limited long-term debt) is
limited. Vion Food considers the financial policy to
deal with interest rate risk. This policy allows for
the use of derivatives. However, no interest rate
swaps were held in 2015.
LIQUIDITY RISK
The primary objective of liquidity management is
to provide sufficient cash and cash equivalents at
all times to enable Vion Food to meet its payment
obligations. Management monitors forecasts
of Vion Food’s liquidity reserves on the basis of
expected cash flows. Vion Food aims for sufficient
committed credit facilities and a strong liquidity
position.
Claims have been made against Vion Food and/
or its group companies that are contested by Vion
Food. Although the outcome of these disputes
cannot be predicted with certainty, legal advice and
the information available leads to the assumption
that this will not have a significant adverse effect
on the consolidated financial position.
With regard to the BSE inspections which were
incorrectly performed in the past, Vion Food has
an outstanding claim against the local authority
concerned. Although management and external
advisors believe that these claims will lead to
positive future cash flows, the amount and timing
of such revenue is impossible to predict at the time
of preparation of these annual accounts, and they
are therefore not included on the balance sheet.
Note 14 - Assets and liabilities not included on the balance sheet
N O T E S O N T H E C O N S O L I D A T E D B A L A N C E S H E E T
V I O N A N N U A L R E P O R T 2 0 1 5 | 7 3
The geographical composition of the net turnover is as follows: 2015 2014
Europe:
- Germany 2,061,079 2,302,008
- The Netherlands 554,529 610,948
- Italy 424,456 483,544
- United Kingdom 199,324 224,353
- Belgium 22,021 34,772
- Other EU countries 860,013 939,934
- Non-EU countries 65,706 71,488
Subtotal 4,187,128 4,667,047
Asia 310,280 277,983
United States of America 22,378 20,517
Canada 9,453 6,873
Other countries 41,323 19,306
Total 4,570,562 4,991,726
Vion Food is mainly active in the food industry; less than 10% of sales is generated by other lines of business.
This item accounts for different categories of other operating income. This concerns, among others,
commissions, bonuses and governmental grants amounting to € 21 million (2014: € 25 million), rental
income amounting to € 0.8 million (2014: € 1.1 million) and transport income amounting to € 1.1 million
(2014: € 0.8 million). In addition, this item also includes a profit from sales of fixed assets amounting to
€ 1.0 million (2014: loss of € 0.5 million).
The composition of the personnel costs is as follows: 2015 2014
Wages and salaries 190,836 213,691
Other personnel costs 2,157 7,626
Wages and salaries associated with reorganisations 4,955 17,982
Pension charges 9,680 11,827
Subtotal 207,628 251,126
Wage costs for employees on a contract basis 229,352 214,005
Total 436,980 465,131
At the end of 2015, Vion Food employed 4,233 FTEs (2014: 4,311). The average number of employees for
Vion Food was 4,228 in 2015 (2014: 5,243). Moreover, an average of 6,793 employees (2014: 7,396) were
employed within Vion Food via temporary employment agencies.
Notes on the consolidated profit and loss statement
(in thousands of euros)
Note 15 - Net turnover
Note 16 - Other operating income
Note 17 - Wages and salaries
7 4 | V I O N A N N U A L R E P O R T 2 0 1 5
The number of employees broken down by country are as follows: 2015 2014
The Netherlands 1,605 1,554
Germany 2,431 2,662
Other countries 197 95
Total 4,233 4,311
This item includes an amount of € 0.4 million (2014: € 1.5 million) in respect of social security contributions
relating to reorganisations.
2015 2014
Intangible fixed assets 3,410 1,637
Tangible fixed assets 25,083 29,749
Total 28,493 31,386
The impairment charge amounts € 0 million (2014: € 5.9 million). In 2014, the impairment charge was fully
attributable to tangible fixed assets.
This item includes € 4.3 million for rental costs for buildings and non production related equipment (2014:
€ 4.4 million), € 5.5 million for lease costs for company vehicles (2014: € 5.8 million), € 1.4 million (2014:
€ 5.5 million) for costs relating to reorganisations, and the effect of movements in provisions. For 2015,
€ 20.6 million (2014: € 24.4 million) is included that was released from divestment provisions formed in
previous years. It mainly relates to the sale of Moon entities and Vion Ingredients. For 2014, € 24.4 million
is included that was released from divestment provisions formed in previous years.
The decrease in interest charges and similar expenses as compared to 2014 is mainly due to lower amount
of financing needed in 2015 and a lower interest margin due under the new financing agreement as from
24 June 2015.
Note 18 - Social security contributions
Note 19 - Amortisation and depreciation of fixed assets
Note 20 - Impairment losses on fixed assets
Note 21 - Other operating costs
Note 22 - Interest charges and similar expenses
V I O N A N N U A L R E P O R T 2 0 1 5 | 7 5
The effective tax rate for ordinary operating results in 2015 amounted to 1.6% (2014: 497.1% negative).
The level of the effective tax rate depends on, amongst other things, the nominal tax rate and the tax
relief facilities and restrictions in the countries where the activities occur, as well as the extent to which
use can be made of existing off-set of losses available for offset.
Taking into account the nominal Dutch tax rate, the effective tax rate is determined as follows:
2015 2014
Result before taxes 24,882 -2,656
Nominal Dutch tax rate (25.0%) 6,221 -664
Differences due to foreign tax rate -1,692 -4,067
Weighted average 4,529 -4,731
Taxes on result in previous years -947 9,239
Change in valuation of available losses and timing differences 3,483 -64,316
Non-deductible expenses 2,378 180
Non-taxable/deductible income from participating interest -8,762 63,063
Withholding tax - 89
Other tax effects -274 9,678
Total tax charges 407 13,202
The tax impact on valuation adjustments to available losses and timing differences is caused by the
utilisation of tax losses and movements in deductible timing differences for which no deferred tax assets
were recognised. This is because it was unlikely that there would be sufficient future profits to offset. This
has a positive impact on the effective tax rate.
Note 23 - Taxes
N O T E S O N T H E C O N S O L I D A T E D P R O F I T A N D L O S S S T A T E M E N T
7 6 | V I O N A N N U A L R E P O R T 2 0 1 5
2015 2014
EY EY EY EY
The Netherlands International Total The Netherlands International Total
Annual accounts audit 721 899 1,620 1,246 817 2,063
Other audit related services 32 314 346 44 130 174
Tax related activities 130 - 130 346 - 346
Other 16 - 16 - - -
Total 899 1,213 2,112 1,636 947 2,583
The composition of this item is as follows: 2015 2014
Fixed remuneration 1,297 68% 1,382 31%
Variable remuneration 352 18% 1,330 30%
Pension charges 158 8% 66 1%
Termination payments 63 3% 1,679 37%
Other 50 3% 34 1%
Total 1,920 100% 4,491 100%
Remuneration paid to the Supervisory Board members amounted to € 380 thousand in 2015 (2014: € 328
thousand).
Stichting Administratiekantoor SBT (`SBT’) is the sole shareholder of the Company. SBT has issued depo-
sitary receipts in bearer form for its shares in the Company without cooperation of the Company. All depo-
sitary receipts are held by Noordbrabantse Christelijke Boerenbond, Rooms-Katholieke Vereniging van
Boeren en Tuinders - Ontwikkeling (`NCB-Ontwikkeling’). NCB-Ontwikkeling is related to Zuidelijke Land-
en Tuinbouworganisatie (`ZLTO’). ZLTO is an association for entrepreneurs working in agricultural sectors
and has approximately 15,000 members in Noord Brabant, Zeeland and the southern part of Gelderland.
Certain members of ZLTO are suppliers to the Company. This is on an individual basis and is not related to
their ZLTO membership. In addition, ZLTO supplies consultancy services to Vion Food. During 2015, ZLTO
carried out a number of projects for, and made facilities available to Vion Food, for which in total € 975
thousand was paid (2014: € 1 million).
Best Hides GmbH (`Best Hides’) is a joint venture with Darling International in which Vion Food owns 40%.
During 2015, Vion Food has sold hides to Best Hides for an amount of € 58.9 million (2014: € 65.8 million).
All transaction with related parties are at arm’s length.
Other information
(in thousands of euros)
Note 24 - Auditor’s fee
Note 25 - Director’s renumeration
Note 26 - Supervisory Board members’ renumeration
Note 27 - Related parties
V I O N A N N U A L R E P O R T 2 0 1 5 | 7 7
note 2015 2014
ASSETS
Fixed assets
Financial fixed assets a 407,649 385,816
407,649 385,816
Current assets
Receivables from group companies 54,714 83,880
Other receivables 15 -
Cash and cash equivalents 55 28
54,784 83,908
Total assets 462,433 469,724
LIABILITIES
Issued capital 2,285 2,285
Share premium reserve 372,716 372,716
Legal reserve 3,815 169
Exchange rate differences reserve -981 -432
Other reserves 3,095 23,846
Retained earnings 18,753 -20,751
Equity b 399,683 377,833
Current liabilities payable to group companies 62,749 91,848
Other current liabilities 1 43
Total liabilities 462,433 469,724
Company balance sheet
As at 31 December 2015
before result appropriation
(in thousands of euros)
7 8 | V I O N A N N U A L R E P O R T 2 0 1 5
Company profit and loss statement
(in thousands of euros)
Company accounting policies
2015 2014
Income from participating interests 17,634 -20,387
Other results 4,765 -364
Net result 22,399 -20,751
General principles
The Company annual accounts have been prepared
in accordance with the provisions of Title 9, Book
2 of the Dutch Civil Code. Unless stated otherwise
below, please refer to the notes on the
consolidated annual accounts for the general
principles used to prepare the annual accounts, the
accounting policies for the balance sheet and the
profit and loss statement, and the notes on of the
separate assets and liabilities and results.
Vion Food’s financial data is included in the
consolidated annual accounts. Therefore, the
Company profit and loss statement for Vion Hol-
ding N.V. only reports the share of the net result of
companies in which Vion Food has a participating
interest, and other net earnings, in accordance
with Article 402, Title 9 of the Dutch Civil Code.
Accounting policies for
the profit and loss statement
Income from and valuation of participating interests
The income from participating interests relates to
the share of Vion Food in the result of the
participating interests stated at net asset value.
Income from participating interests where
significant influence is exerted on the business and
financial policy is the share in the result from these
participating interests that accrues to the company.
This income is determined based on Vion Food’s
accounting policies for the balance sheet and
profit and loss statement.
For participating interests in which Vion Food does
not exert any significant influence on the business
and financial policy and that are valued at cost, the
dividends are regarded as income. This is included
in financial income and expenses.
Participating interests with a negative net asset
value are valued at nil. If the company fully or
partially guarantees the debts of the relevant
participating interest, an allowance is formed
primarily against the receivables from this
participating interest, and the remainder is
covered by the provisions, to the sum of the share
in the losses incurred by the participating interest,
or the expected payments by the Company for
these participating interests.
V I O N A N N U A L R E P O R T 2 0 1 5 | 7 9
ASSETS
Note A - Financial fixed assets
These assets include the investments in group companies. These investments are stated at net asset value.
The movements in Vion Food’s share are as follows: 2015 2014
Balance on 1 January 385,816 408,663
Results 17,634 -20,387
Exchange rate differences -549 -2,460
Release provision 4,748 -
Balance as at 31 December 407,649 385,816
Notes on the company balance sheet
(in thousands of euros)
8 0 | V I O N A N N U A L R E P O R T 2 0 1 5
LIABILITIES
Note B - Equity
The share capital of Vion Holding N.V. amounts to € 4.5 million divided into 100,000 shares with a
nominal value of € 45. Vion Holding N.V. holds 3,566 shares (2014: 3,566). On 31 December 2015, there
were 50,784 fully paid- up shares issued to third parties (2014: 50,784). The share premium reserve consists
of the income from share issues insofar as this income is higher than the nominal amount of the shares.
The legal reserve for exchange rate differences recognises exchange rate differences which result from the
conversion of the functional currencies of foreign business operations to the presentation currency. When
a group company is divested, the accumulated exchange rate differences for this group company are
included in the other reserves.
The movements in the individual components of equity capital are as follows:
Exchange
Share rate
Issued premium Legal differences Other Retained
capital reserve reserves reserve reserves earnings Total
Balance as at 1 January 2015 2,285 372,716 169 -432 23,846 -20,751 377,833
Result appropriation previous year - - - - -20,751 20,751 -
Exchange rate differences - - - -549 - - -549
Reclassification - - 3,646 - - -3,646 -
Result - - - - - 22,399 22,399
Balance as at 31 December 2015 2,285 372,716 3,815 -981 3,095 18,753 399,683
The € 3,646 million change in legal reserve mainly relates to hours included in total capitalised internally
developed software.
See note 1 of the consolidated financial statements.
Note C - Personnel
At the end of 2015, Vion Holding N.V. had 0 employees as converted into FTEs (2014: 0).
Note D - Off-balance sheet rights and obligations
Vion Holding N.V. heads the Dutch fiscal unity for corporate income tax. As a result, Vion Holding N.V. is
jointly and severally liable for the corporate income tax for the entire Dutch fiscal unity.
Through issuing a 403 declaration, Vion Holding N.V. has declared itself liable for the subsidiaries in The
Netherlands where it owns a majority interest.
V I O N A N N U A L R E P O R T 2 0 1 5 | 8 1
Registered Country Share in % (if not 100%)*Name office (if not NL) 2015 2014 A. Moksel GmbH Buchloe D Ahlener Fleischhandel GmbH Ahlen D 75.0% 75.0%Atlas Handelsgesellschaft mbH Munich D Bain 3 Ltd Sittingbourne UK BFU Beteiligungsgesellschaft für Food Unternehmen Buchloe D BV Destructor Zeeland Best CEMO GmbH Buchloe D Cymru Country Feeds Ltd Llay, Nr Wrexham UK Cymru Country Produce Ltd Livingston UK De Groene Weg BV Groenlo Distrifresh BV Boxtel Encebe Vleeswaren BV Boxtel Favor Parker Ltd Kings Lynn UKFVZ Convenience GmbH Holzwickede D G.u.P. Salomon GmbH Buchloe D Hy-Co Hybridschweine Cooperationsgesellschaft mbH Bad Bramstedt D 50.0%*** 50.0%Kühlhaus Hilden GmbH Hilden D Marox GmbH Buchloe D NFZ Convenience Produkte GmbH Buchloe D OFW Fleisch- und Wurstwaren GmbH Buchloe D PB Fleisch GmbH Duisburg D Peelse Barrier Holding BV & Co KG Buchloe D 94.3% 94.3%Peelse Barrier Holding BV & Co Zweite KG Buchloe D 94.3% 94.3%Prignitzer Fleischzentrum GmbH Perleberg D 89.0% 89.0%Salomon Food World GmbH Grossostheim D Salomon Hitburger GmbH Grossostheim D 75.0%Schlachtzentrum Gelsenkirchen Verwaltungs GmbH Gelsenkirchen D SFB Fleisch- und Kühlcentrale GmbH Holdorf D 50.0%*** 50.0%SFB Fleisch- und Kühlcentrale GmbH & Co. KG Holdorf D 62.5% 62.5%Sobel Best NV Best Südfleisch Bamberg GmbH Bamberg D Südfleisch GmbH Munich D Südfleisch Holding GmbH Munich D Südfleisch Italia GmbH Bruneck I Südfleisch Waldkraiburg GmbH Waldkraiburg D Südfrost Kühlhausgesellschaft mbH Buchloe D Südost-Fleisch GmbH Altenburg D Thorne Poultry Ltd Thorne UK Trägergesellschaft Schlachthof Minden GbR Minden D 95.0% 95.0%Unterstützungsfonds der Südvieh-Südfleisch GmbH Munich D VION Anhalt GmbH Rodleben D VION Anklam GmbH Anklam D VION Apeldoorn BV Apeldoorn VION Bad Bramstedt GmbH Bad Bramstedt D VION Boxtel BV Boxtel VION Buchloe GmbH Buchloe D VION Bulgaria EOOD Sofia BG VION Convenience GmbH Grossostheim D VION Crailsheim GmbH Crailsheim D VION Denmark ApS Holstebro DK VION EGN Südostbayern GmbH Vilshofen D 51.0% 58.3%VION Emstek GmbH Emstek D VION Enschede BV Enschede VION Farming België NV Wommelgem B VION Farming BV Boxtel VION Finance SARL Hunsdorf L VION Financial Services BV Son VION FKM Furth im Wald GmbH Furth im Wald D 70.0% 70.0%VION Fleischzentrum GmbH Buchloe D VION Food (NL Division) Ltd Sittingbourne UK VION Food Group Ltd** Livingston UK VION Food Hellas EPE Athens GR VION Food International (Holding) BV Son VION Food International BV Boxtel VION Food International Pacific Ltd Hong Kong HK VION Food International Singapore Pte Ltd Singapore SG VION Food Nederland BV Boxtel VION Food Nederland Overhead BV Boxtel
Note E - List of participating interests
Vion Holding N.V. consolidates the following participating interests:
8 2 | V I O N A N N U A L R E P O R T 2 0 1 5
Registered Country Share in % (if not 100%)*Name office (if not NL) 2015 2014
VION Food North GmbH Bad Bramstedt D VION Food Scotland Ltd** Broxburn UK VION France Eurl. Fourqueux F VION Frankfurt GmbH Frankfurt a. M. D VION Fresh Meat North GmbH Bad Bramstedt D VION Fresh Meat South GmbH Buchloe D VION GmbH Buchloe D VION Groenlo BV Groenlo VION Hilden GmbH Hilden D VION Holdorf TK GmbH Holdorf D VION Hungary KFT Érd HU VION ICT Services BV Best VION Ile de France EURL Fourqueux F VION Import Export S.L. Barcelona ES VION International BV Boxtel VION International GmbH Hamburg D VION International Ljubljana d.o.o. Ljubljana Slo VION IT Services GmbH Wunstorf D VION Lausitz GmbH Kasel-Golzig D VION Livestock BV ‘s-Hertogenbosch VION Luxembourg SARL Hunsdorf L VION Move GmbH Buchloe D VION NV Best VION Perleberg GmbH Perleberg D VION Pfarrkirchen GmbH Pfarrkirchen D 51.0% 58.3%VION Poland Sp.z.o.o. Warsaw PL VION Praha s.r.o. Prague CZ VION Property Emstek GmbH Emstek D VION Ramfood LLC Moscow RU 51.0% 51.0%VION Retail Groenlo BV Groenlo VION Retail Nederland BV Best VION Romania SRL Bacau RO VION Rundvee BV Boxtel VION Rusland BV Best VION SA Chiasso CH 70.0%VION SBL Landshut GmbH Landshut D 51.0% 57.1%VION Scherpenzeel BV Scherpenzeel VION Spain SL Barcelona ES VION Straubing GmbH Straubing D 51.0% 58.3%VION Subco GCF Ltd Livingston UK VION Subco GCFI Ltd Livingston UK VION Subco GCPB Ltd Livingston UK VION Subco JJT Ltd** Sittingbourne UK VION Subco MD Ltd Livingston UK VION Subco MFG Ltd Doncaster UK VION Subco TOC Ltd Sittingbourne UK VION Sweden AB Arsta SE VION Tilburg BV Tilburg VION Trading Company SRL Bacau RO VION Trading GmbH Hamburg D VION Trading Poland SP.z.o.o. Warsaw PL VION Veredelungs- und Vermarktungsgesellschaft mbH & Co. KG Buchloe D VION Vilshofen GmbH Vilshofen D 51.0% 58.3%VION Zeven AG Zeven D 60.9% 60.0%VION Zucht- und Nutzvieh GmbH Bad Bramstedt D VION FOOD Portugal, Lda Lisbon PT 50.0%*** 50.0%Vleesindustrie Valkenswaard BV Valkenswaard WBA Wasserwerkbetriebs GmbH Altenburg D ZVK Zuchtviehkontor GmbH Munich D 67.2% 67.2%
* The percentages reflect the actual shareholdings. ** The marked UK registered participating interests are exempt from the Companies Act 2006 requirements relating to the audit of
their individual financial statements by virtue of Section 479A of the Act as Vion Food has guaranteed the subsidiary companies under Section 479C of the Act.
*** These joint ventures are proportionally included in the consolidation.
The non-consolidated participating interests are disclosed in note 3 on financial fixed assets.
V I O N A N N U A L R E P O R T 2 0 1 5 | 8 3
BEST, 7 APRIL 2016
Management Board Supervisory Board
F.J.L.J. Kint, CEO S.N. Schat, Chairman
J.L.M. Sliepenbeek, CFO J.A.M. Huijbers, Vice Chairman
A.J.M. van Hoof
A.T.C. van der Laan
R.E.M. Lotgerink
T. Heidman
M. Bax
Profit appropriation according to the Articles of Association
Article 23 of the Articles of Association reads as follows:
PARAGRAPH 1
The Management Board, subject to approval by the Supervisory Board, will reserve amounts from the
result as specified in the annual accounts adopted by the General Meeting of Shareholders. The remaining
result is at the disposal of the General Meeting of Shareholders.
PARAGRAPH 2
The Company may only make distributions to the shareholders and other parties entitled to the result
available for distribution insofar as the equity exceeds the amount of the issued capital plus the reserves
that must be maintained by law.
Proposed profit appropriation
The proposal for the profit appropriation is to add the net result for 2015 to the other reserves.
Net result 2015 22,399
Other information(in thousands of euros)
Events after balance sheet date No subsequent events occurred that are significant to Vion Food.
8 4 | V I O N A N N U A L R E P O R T 2 0 1 5
Independent auditor’s report
To: Management Board of VION Holding N.V.
REPORT OF THE FINANCIAL STATEMENTS
We have audited the accompanying financial
statements 2015 of VION Holding N.V., Best which
comprise the consolidated and company balance
sheet as at December 31, 2015, the consolidated
and company profit and loss account for the year
then ended, the consolidated cash flows and the
notes, comprising a summary of the accounting
policies and other explanatory information.
Management’s responsibility
Management is responsible for the preparation and
fair presentation of these financial statements and
for the preparation of the annual report, both in
accordance with Part 9 of Book 2 of the Dutch Civil
Code. Furthermore management is responsible for
such internal control as it determines is necessary to
enable the preparation of the financial statements
that are free from material misstatement, whether
due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on
these financial statements based on our audit. We
conducted our audit in accordance with Dutch law,
including the Dutch Standards on Auditing. This
requires that we comply with ethical requirements
and plan and perform the audit to obtain reasona-
ble assurance about whether the financial state-
ments are free from material misstatement.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures
in the financial statements. The procedures selec-
ted depend on the auditor’s judgment, including
the assessment of the risks of material misstate-
ment of the financial statements, whether due to
fraud or error.
In making those risk assessments, the auditor
considers internal control relevant to the entity’s
preparation and fair presentation of the financial
statements in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An
audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness
of accounting estimates made by management, as
well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have ob-
tained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion with respect to the financial statements
In our opinion, the financial statements give a true
and fair view of the financial position of VION Hol-
ding N.V. as at December 31, 2015 and of its result
for the year then ended in accordance with Part 9
of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements
Pursuant to the legal requirement under Section
2:393 sub 5 at e and f of the Dutch Civil Code, we
have no deficiencies to report as a result of our
examination whether the annual report, to the ex-
tent we can assess, has been prepared in accordan-
ce with Part 9 of Book 2 of this Code, and whether
the information as required under Section 2:392
sub 1 at b-h has been annexed. Further we report
that the annual report, to the extent we can assess,
is consistent with the financial statements as requi-
red by Section 2:391 sub 4 of the Dutch Civil Code.
EINDHOVEN, 7 APRIL 2016
For and on behalf of Ernst & Young Accountants
LLP
sgd. R.E.J. Pluymakers RA
V I O N A N N U A L R E P O R T 2 0 1 5 | 8 5
8 6 | V I O N A N N U A L R E P O R T 2 0 1 5
www.vionfood.com