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STRATEGY AND MARKETS 10 • Bel Group 2011 Bel Industries Bel Industries is the Group division responsible for marketing and selling specially prepared dairy proteins to meet the needs of food industry customers, who make such products as ice cream, yogurt and other foods that use dairy products. In 2011, Bel Industries benefited from a 26% increase in whey powder commodity prices as a result of strong global demand. Sales to the ice cream segment were negatively impacted by unfavorable summer weather conditions in Europe and fall flooding in Thailand, which led to the temporary closing of ice cream factories. Conversely, export sales of proteins to other dairy segments accelerated. Sales momentum and extended product ranges bode well for a favorable upswing in global demand in 2012. 7% advance in sales The Greater Africa region, formed in 2008, covers the entire African continent, where Bel operates three subsidiaries in North Africa and some 15 distribution partnerships in sub- Saharan Africa and French overseas departments and territories. Following two consecutive years of double-digit sales growth, the region was negatively impacted by the Arab Spring uprising, instability in some sub-Saharan African countries and other geopolitical events. One extreme case was Libya, where sales were completely halted for seven months. Another growth weakening factor was the sharp increase in raw material prices, which could not be fully passed on to consumers in countries with low purchasing power and intense competition. Against this very particular backdrop, the Greater Africa region reported a very honorable 3% increase in volumes and a 7% advance in sales over 2010. Excluding Libya, volumes were up 11%. GREATER AFRICA ”Growth was spurred by a strong increase in sales of core brands.” Frédéric Nalis, Vice-President Bel Greater Africa Strong momentum continued apace in Algeria and Egypt, while Morocco, sub-Saharan Africa, and French overseas territories and departments reported fi rm growth under political and macroeconomic conditions that were at times unstable. Libya was the only country to report a negative performance versus 2010. The region’s growth was propelled by a robust 10% increase in sales of the Group’s core brands, particularly The Laughing Cow ® and Kiri ® . Despite the turbulent geopolitical conditions in the short term, the Greater Africa region continued to invest to develop its human resources through training and organizational buildup, its plants through capital expenditure to boost capacity, increase productivity and make improvements, and its distribution partners through sales force training programs. While 2011 was diffi cult year for Greater Africa, Bel remains confi dent in the long-term potential of the African continent, and it plans to capitalize on its leadership position in the region’s cheese sector.
NEAR AND MIDDLE EAST ”Sales volumes have doubled in fi ve years.” Joe Tayard, Vice-President, Bel Near and Middle East The Near and Middle East region is home to three manufacturing sites in Turkey, Syria, and Iran, and three sales subsidiaries in Lebanon, Saudi Arabia and the United Arab Emirates. The region’s sales volumes have doubled in the past fi ve years, underscoring the strong growth potential into which Bel has been able to tap. In 2011, market conditions were notably complicated by growing business uncertainty, government-imposed selling-price ceilings despite higher raw material costs, and aggressive local and regional competition. Despite those diffi culties, Bel’s strategy of being close to its markets and consumers paid off, with market share maintained and growth in sales, even in Syria, where volumes advanced 8% in 2011. Kiri ® , the core brand with the region’s highest sales volume, performed very well in the Levant countries, particularly the local Labneh version and its range of cheese spreads. Kiri ® also did well in Iran, where Kibi ® , the Iranian name of the brand, was successfully launched and confi rmed in 2011. The Laughing Cow ® was also introduced to Iran in 2011. Further, it benefi ted from a very effective advertising campaign in countries throughout the region on the www.albakara.com website. In Turkey, the recovery of the subsidiary acquired in 2006, continued apace with manufacturing improvements, improved distribution and efforts to better target the core brands. In all Near and Middle Eastern countries, Bel took advantage of its regional brands like Regal Picon ® , and its strong national brands like Picon ® in Lebanon and Rouzaneh ® in Iran which complete its range. In early 2011, the Americas region was expanded to form the Americas, Asia-Pacifi c region. The region has kept the momentum going with sales advancing 11.9% in 2011. The core brands continued to develop at a brisk pace in the U.S. market. Mini Babybel ® sales climbed 21%, making the U.S. the brand’s largest market and justifying the decision to invest heavily in the construction of a new production plant by 2014. North America proved to be a strong growth market for Boursin ® , whose sales increased some 30%. Sales of The Laughing Cow ® trended slightly down, particularly in the second half of the year versus 2010, when the launch of three new The Laughing Cow ® fl avors stimulated the market. The three variations continued to grow in 2011, and their performances demonstrated U.S. consumer demand for new products — demand that Bel must meet. 11.9% increase in sales AMERICAS, ASIA-PACIFIC ” The region maintained its momentum with sales up 11.9%. ” Éric de Poncins, Vice-President Bel Americas, Asia-Pacifi c In Mexico, a partnership set up with a local retailer and an effective advertising campaign pushed awareness of the La Vaca que rie ® brand up 40% by end 2011, establishing a solid base on which to build future sales of Bel products in this country. In Asia-Pacific, one priority has been a market review to continue a sales offensive in high growth countries like Japan and Vietnam, and to define strategies for potentially high-growth markets such as China, South Korea and Australia. In 2011, Japan and Vietnam reported strong growth, building on consumption habits and several innovations for Belcube ® and strawberry flavored Pik & Croq’ ® , auguring well for the development of sweet products in the region. Bel Group 2011 • 11
Page 1 and 2: 2011 BUSINESS AND CORPORATE SOCIAL
Page 3 and 4: An extraordinary brand portfolio Be
Page 5 and 6: PROFILE 17 marques nationales 8 mar
Page 7 and 8: 4.5% increase versus 2010 sales €
Page 9 and 10: ANTOINE FIÉVET, Chairman and CEO
Page 11 and 12: Sales breakdown 30 international an
Page 13: Bel Foodservice Bel Foodservice ope
Page 17 and 18: ● SENEGAL Closer to consumers In
Page 19 and 20: ● MOROCCO 90 years of nutrition T
Page 21 and 22: priority areas of action to be take
Page 23 and 24: 2011 Bel Group • 19
Page 25 and 26: Goal: One billion consumers by 2020
Page 27 and 28: 8% of Group sales generated by inno
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Page 33 and 34: ”People First”, the social char
Page 35 and 36: Two areas of concern emerged from t
Page 37 and 38: can help defi ne action plans that
Page 39 and 40: A patchwork of actions A child in h
Page 41 and 42: What will The Laughing Cow ® W TC9
Page 43 and 44: Preserving the environment Bel is l
Page 45 and 46: practices. In countries lacking suc
Page 47 and 48: Esabel In 2011, Esabel was started
Page 49 and 50: 33% reduction in CO2 emissions from
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Page 53 and 54: OUTLOOK FOR 2012 AND BEYOND The Gro
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Dividend On March 22, 2012, the Boa
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CONSOLIDATED BALANCE SHEET AT DECEM
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