Caring for Excellence. Perfetti Van Melle Benelux Annual CSR Report on the year 2012 June 2013, Breda

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1 Caring for Excellence Perfetti Van Melle Benelux Annual CSR Report on the year 2012 June 2013, Breda 1

2 About Perfetti Van Melle Perfetti Van Melle carries the name of its founders, the Italian brothers Ambrogio and Egidio Perfetti and the Dutch Izaak van Melle. Since the beginning of 1980 the Perfetti and the Van Melle families maintain a friendly business relationship. This friendship changed into collaboration when Perfetti acquires 37% of the Van Melle shares in The combination of product-, marketing- and distribution channels results in a fruitful collaboration and is the basis for the decision to merge the activities of Perfetti and Van Melle in March Perfetti Van Melle is a privately owned company and therefore it is not listed on a stock exchange. Company Strategy Perfetti Van Melle s strength lies in the complete and market covering offer of very nice and well known national and international sweets brands and an assortment of private label products of very high quality. All these quality products are produced at competitive cost prices. Perfetti Van Melle offers everything the market or the consumer desires. The company follows and anticipates social developments and not only offers products that are needed today but also those that will be needed in the future; whether it concerns flavours, packaging or types of sweets. Social responsible entrepreneurship is taking a more prominently place on the agenda and also within our organisation it is an important area of interest, whereby we have chosen a very pragmatic approach. At Perfetti Van Melle we work with talented employees with entrepreneurship, swiftness, clarity, vision and spirit. Strategy Our strategy remains based on improving procedures and processes within the direct and indirect organisations, so our organisation as a whole can work more efficient, more innovative and more competitive. The theme for 2012 was first of all further integration, innovation and expansion of our market share. That is integration of new products in our markets and systems and innovation on all areas, both in commerce and production. Of course we highly value improvement of our profitability. Dealing with the sharp increase in raw materials prices is very important. We are always in the process of making choices and updating our strategy in order to respond alert to developments inside and outside our organisation. Also for 2013 we have planned a number of important innovations regarding packaging forms as well as variety and portion size. Besides we aim to increase the amount of sugar free products. We go for a growth in the sugar free part of the turnover of 16,5% in 2012 to 17% in CSR at Perfetti Van Melle Benelux For every sweet moment Perfetti Van Melle wants to create a surprising event. The founders already had included the issue of Corporate Social Responsibility (CSR) in their corporate strategy. This is the third year that Perfetti Van Melle Benelux reports on its CSR policy and its results. In 2011 a new structure was introduced by the CSR steering committee in which the general manager, the business unit directors (also members of the Management team), the manager Quality and the manager Communication have a seat. In 2012 CSR objectives have been developed, concretized and - were possible - quantified. In 2013 Perfetti Van Melle will work on further implementing the objectives together with her employees. The Perfetti Van Melle Benelux CSR policy consists of four pillars: Responsible Trading Environment Employee & Society Health & Quality 2 3

3 Kees de Waard General Manager Perfetti Van Melle Benelux Chairman Steering committee CSR Perfetti Van Melle Benelux PREFACE The many voluntary initiatives of employees prove that our CSR policy is bearing fruit. The year 2012 was characterised by the far-reaching implementation of the CSR policy that was formalised in 2011 and consists of four pillars: Responsible Trading, Environment, Employee & Society, and Health & Quality. Many study groups, consisting of employees from all parts of the company, have taken concrete action on each of these subjects in order to achieve the CSR objectives. Because doing business with an eye for people and the environment pays. It drives innovation; we are continuously looking for sustainable alternatives for certain ingredients or raw materials, packaging and production processes. Despite of the fact that we have been aware of our environmental and social footprint for years now, there is always room for improvement. Like adjusting the well-known Look-O-Look hanging bags: by means of a small adjustment in the design we produce less waste. This concerns 6.5 million hanging bags! We are pleased with having achieved the ISO certificate for several locations, an extensive norm for environmental management. In 2012 other nice examples are our results in the sugar free assortment, with Klene Sugar free liquorice. In a number of new varieties we used the sugar replacing sweetener stevia. Remarkable are the successes achieved in Responsible Trading: by notifying suppliers for the SA 8000 certificate for social and ethical business we get a better and better picture of the chain. Of course facilitating sustainable and healthy behaviour of employees also continued in The many sport clubs and own initiatives of employees in this area show that this bears fruit. This is not only important because we highly value health but we also have to take the future and the vitality of our staff into account. The sustainable employability of our employees is high on our agenda for now and the years to come. For 2013 concrete goals have been set. Our priorities are known, as you can read, but we also pay attention to challenges. We are focussing on further measuring and reporting the progress made. This specifically applies to energy, water and waste, but also for the share of sugar free products in our assortment or the results of the education we offer. Next year we will enter into dialogue with our external stakeholders suppliers, consumers, customers, sector initiatives and social organisations more frequently. We will do this to ask feedback and to seek cooperation on important challenges, from sustainable purchase to our responsibility regarding responsible consuming and -marketing. A good example is our cooperation with JOGG (Young people at a Healthy Weight). Through our cooperation with JOGG we learn a lot about the eating habits of this group, their motivation and the way they choose, and how they can be pushed towards more exercising, so they can have a candy every now and then! Perfetti Van Melle Benelux In addition to the production of sweets Perfetti Van Melle Benelux is also responsible for the sales of these sweets in Northern and Western Europe. Perfetti Van Melle Benelux has offices in Breda, Hoorn, Weert, Andelst, Sittard, Berchem and Leuven. 927 employees in million Euro turnover (net) in products (SKU s) in ,699 ton turnover (volume) in

4 Number of employees and most important product per Our brands office Reference date 31 December The Netherlands 1 Hoorn 123 employees Production Klene Organisational Structure Andelst 53 employees Look-O-Look 3 Breda Head office 572 employees Production Mentos 4 Weert 119 employees Production Fruittella, Wybert Perfetti Van Melle Benelux is part of the international confectionery company Perfetti Van Melle Spa (www.perfettivanmelle.com). This company has been divided into six Business Units. The General Manager of the Benelux organisation, Kees de Waard, is also Vice-President & COO of the Business Unit North-, West-, Central- and Eastern Europe and he reports to the CEO of Perfetti Van Melle Spa. Because of his responsibilities from this Business Unit he is a member of the Executive Council of the Perfetti Van Melle Group, which meets four times a year to discuss the worldwide strategic direction. Management Team Perfetti Van Melle Benelux More than half of the management team is actively involved in the CSR theme, both in creating as well as in executing the policy Sittard 15 employees Production Frisk Belgium General Director Kees de Waard 6 Leuven 45 employees Packaging Frisk Director Export Marc van Campenhoudt Commercial Director Benelux Jan Heeling Manufacturing, Engineering & Environment Director Ko van Belois General Manager Look-O-Look Adrie Gerritsen Director Research & Development Henri Hendrikx Director HR & Communication Robbie Pastoor Director Finance & ICT Heinz-Peter Lauret Director Supply Chain Erik Brouwer 6 7

5 Vision on CSR Perfetti Van Melle Benelux has the ambition to be the ultimate trendsetter in the confectionery industry. We make every sweet moment a surprising event. Therefore we offer high quality confectionery and chewing gum, which are in line with the needs and wishes of the market. Perfetti Van Melle Benelux in Society Perfetti Van Melle Benelux attaches great value to a good relationship with stakeholders. Together with other parties in the chain we achieve a healthy and sustainable management and supply chain, for example with our suppliers of raw materials, packaging materials and services. At the same time we think it is important to be an involved neighbour in those places where our production sites are located. Good contact with the different government bodies plays an important role in this process. Amongst others Perfetti Van Melle Benelux participates in steering committees and study groups, such as in the CDU (Sustainability Committee) of the Dutch Federation Food Industry (FNLI) and the VBZ (Dutch Association of Bakery and Confectionery Industry). In Breda managers of Perfetti Van Melle are part of the management of the Chamber of Commerce, the Brabants Zeeuwse Werkgeversvereniging BZW (regional employers association) and of our Industrial site association. Our brands offer a large assortment: for everyone his/her own favourite flavour. Innovation is one of our main principles in order to be able to also meet the future demands of the consumer. In addition, innovation offers opportunities to further sustain our production, such as in the area of packaging (other materials or portions) and composition of products (use of stevia in sugar free products). Perfetti Van Melle Benelux has the ambition to increase its assortment and market share gradually. In this context responsible entrepreneurship is self-evident. At Perfetti Van Melle Benelux we support core values that endorse our vision on sustainable growth: Business with honesty and integrity Excel and improve Exceed expectations Care for our people Social and environmental responsibility Independence Transparency Doing business with respect for people and the environment is part of the Perfetti Van Melle culture. To us CSR is not just a project but it is incorporated in the entire organisation. From purchase to sales we pay attention to people and the environment. We do business in an honest and fair way thereby putting people at the heart. This means allowing consumers to enjoy our products in a responsible way and at the same time focus on sustainable development for people and the environment. We believe that embedding CSR in our operational management has a positive effect on society. With the energy and involvement of our employees much can be achieved. That is why we stimulate our employees to take their own initiatives and we offer them opportunities to use and develop their talents and knowledge. 8 9

6 CSR policy and long term embedding Policy and pillars Corporate Social Responsibility is not done on one s own; it is done together. Therefore we have chosen to actively involve a small group from throughout the company in this subject, in a study group or in the CSR steering committee. Based on ISO we defined four core themes that form the pillars of our CSR policy. These four core themes are being further explained on page 11. Embedding in the organisation Per theme a study group has been installed consisting of employees with relevant knowledge and experience who are dealing with the themes in their day-to-day job. Every study group is responsible for carrying out the activities. For the coming years objectives per theme have been determined and specific actions formulated. The coordination steering committee takes care of the attuning between study groups and the annual report. The study groups set their own priorities for the next few years and determine which measurable objectives match best. In cooperation with the steering committee, they are also responsible for measuring and evaluating progress. Feedback from external stakeholders, ideas from employees and reactions from consumers are taken in the CSR policy. The steering committee, which meets four times a year, consists of the chairmen of the study groups, the General Manager, the Quality manager and the manager Communication. The chairmen of the study groups are also member of the Management Team of Perfetti Van Melle Benelux. 1Responsible Trading caring for and paying attention to acting ethically and the improvement of the working conditions in the supply chain. 3 Employee & society STEERING COMMITTEE 2Environment the reduction of the impact of our Production and Distribution on the environment and the surroundings of the production sites. 4 Health & Quality stimulating the development possibilities for employees and create the possibility for them to make a positive contribution to a social problem. offering the best possible product quality to our customers and stimulate an active and conscious life style with consumers

7 1 Responsible trading Part of the Perfetti Van Melle CSR policy is safeguarding good working conditions and acting ethically in the production chain. We think it is important that the entire production chain operates and acts with care for people and the environment. We acquire raw materials from throughout the world. By building a structural dialogue with suppliers we make issues such as workingand environment conditions discussible and we look for real improvements. Social and ethical business In the summer of 2009 we were the first company in the Dutch food industry to obtain the SA 8000 certificate for social and ethical business for the sites in Breda, Hoorn and Weert. Insight into the processes of suppliers is essential in order to stimulate responsible trading. Via extensive questionnaires and (external) audits we gain insight into the organisation of our suppliers. We also send a questionnaire to new suppliers to get insight into several issues such as working conditions, quality, safety and environmental standards in the chain. In 2012 we sent the questionnaires to over 170 of our largest suppliers. In total we received the completed questionnaires from 97% of the addressed suppliers Objectives Study group Responsible Trading Greening the purchase of energy at similar conditions as compared to regular energy. Preferring (transport)suppliers that distinguish themselves in the area of environment and corporate social responsibility. Striving for one joined initiative in the area of environment and corporate social responsibility together with a number of suppliers. Investigating the possibilities to reuse more packaging material and to make packaging more sustainable

8 What is SA 8000? The SA 8000 certificate is an international standard developed by Social Accountability International. This standard offers an audit system for safeguarding honest and decent working conditions in the production chain. The themes in this standard are based on the Universal Declaration of Human Rights of the United Nations, the UN Convention on the Rights of the Child and several conventions of International labour organisations. An accredited certifying institution carries out independent audits to examine whether sufficient progress has been made. For more information: Since 2009 audits, carried out by an accredited certifying organisation (Lloyds) take place regularly at the offices of Perfetti Van Melle Benelux. Look-O-Look has obtained the SA 8000 certificate in In 2012 the three-yearly certification audit for SA 8000 was done in Breda, Hoorn and Weert. 5 Code of conduct In the Perfetti Van Melle code of conduct we have included standards that apply to all employees of Perfetti Van Melle, everywhere and throughout the production chain. This international code of conduct also applies to third parties with which Perfetti Van Melle has a business relationship. The purpose of this code of conduct is to communicate and protect our core values and standards in our relationship with customers, suppliers, authorities and the public. Every new employee receives the brochures on our code of conduct and SA For more information visit What Sugar Glucose/starch/flour Gelatine Arabic gum Fat (mainly coconut fat) Liquorice products such as salted wood Mint Where The Netherlands, France, Germany, Belgium The Netherlands, France, Germany, Belgium Belgium, France, Italy Soedan Indonesia, Malaysia and the Philippines China, former Soviet Union, Afghanistan, Turkey, Syria, Iraq, Iran India, United States How much in kg kg kg kg kg kg kg kg in the picture Whereas the first phase of CSR and SA 8000 focussed mainly on assessment, now we want to look further, also with our suppliers, at how to develop joined initiatives in the field of CSR which further reduce the impact on the environment. By notifying our suppliers again, we would like to assess if and how our suppliers have made progress in the social ethical field. Guurtje Kok Study group Responsible Trading Purchase of the most important raw materials mapped 14 15

9 In our department every employee has the aim to take on at least one CSR initiative. Further focus on chain responsibility We have an ongoing discussion with our suppliers aiming at having 90% of our suppliers committed to the SA 8000 defined norms and values in A code of conduct without validation is not good enough for us. Just like with our quality system, we test our suppliers at random on their compliance with the code of conduct. Sustainable purchase in the spotlight Within the Supply Chain department more attention has been paid to sustainable business in For years we have already been working on a sustainable mindset of our employees, for example by explicitly including sustainability in personal development objectives. In 2013 the CSR objectives of Perfetti Van Melle will be more aligned with the individual objectives of employees: every employee has the aim to take on at least one CSR initiative. New purchase conditions including CSR paragraph In 2012 we reformulated our purchasing conditions and we added a separate paragraph on corporate social responsibility. With this paragraph in our purchasing conditions that apply to all of our purchases, we make clear that we prefer suppliers that distinguish themselves positively in the area of corporate social responsibility. This actually means that at similar conditions of our suppliers, our purchasers will prefer suppliers that distinguish themselves positively in the area of corporate social responsibility. We will start using these new purchase conditions in Responsible purchase In 2012 we worked on the purchase of: 100% green electricity purchase of total green electricity for all locations. Alternatives for sugar. We succeeded with the launch of Klene liquorice with stevia (sugar replacing sweetener) also see chapter on Health & Quality. We also investigate the alternatives for products such as Arabic gum and gelatine. Taking into account the wishes of our customers is important to us. That is why we at Perfetti Van Melle Benelux are continuously looking for possibilities to reduce the amount of packaging material. Perfetti Van Melle is also working on the application of new and sustainable materials for packaging. This is an important priority for More information about packaging, especially on portion size and recycling, can be found in the chapter on Health & Quality

10 Cooperation in the chain At present we are surveying which sustainable initiatives and innovations we can develop (further) together with suppliers. Perfetti Van Melle Benelux has the ambition to support a number of suppliers in their initiatives to further stimulate sustainability in the chain and to share best practices. The departments Supply Chain and Quality Assurance work closely together to make this possible. Waste scan in Breda Together with waste service provider Van Gansewinkel, Perfetti Van Melle has performed a waste scan for the production location Breda in The various waste streams have been investigated to see how we can separate and collect our waste even better. From this scan followed an advice on optimising the waste streams. In 2013 this scan will be performed on all other Benelux locations and in addition they will look at synergy advantages between locations. Energy scan IT IT is responsible for 2% of all CO 2 emission worldwide. A large part of which is caused by unnecessary used IT equipment (source: Groene IT). Biannually Perfetti Van Melle makes an energy scan regarding the field of IT together with Groene IT. With this scan we look for improvement and saving possibilities. Next for the coming year a concrete action plan is set concerning printers, computers, power management, which states actions such as sharing the conscious printing policy with the end users. Besides the energy scan, we eliminate old IT equipment via IT Donation. They process the old equipment, where possible recycle the equipment and the revenues are donated to Right to Play. in the picture Transport Together with partners in the chain Perfetti Van Melle looks for sustainable alternatives, for example by reducing the co-packing. Co-packing or contract packing stands for packaging activities whereby Perfetti Van Melle has outsourced the packaging of her products to external packaging companies, for instance in Poland or the Czech Republic. Perfetti Van Melle is working on possibilities to organise the packaging herself as much as possible and thus reduce the transport of packaging materials. Of course this needs to be done carefully respecting the consequences of this development for the external packaging companies regarding employment. Furthermore the company is looking for sustainable alternatives for transport, for example by organising heavier loadings for the freight trains. Green temporary workers In 2012 temporary employment agency USG People has organised a pilot called the green flex employee. The CO 2 emission of flex employees in the workplace at Perfetti Van Melle in Weert is being compensated. Kees de Waard, General Manager Perfetti Van Melle: The nice thing about the green flex employee is, that it creates a win-win situation for us as customer because we can further implement our CSR policy and at the same time lower our footprint. We also hope to learn from this pilot and to take our lessons in the choices we make on our way to further lowering our footprint. The green flex employee is a certified guaranteed carbon neutral service of USG People. Part of the awareness on sustainability is also stimulated through initiatives with customers. At Makro, for example, we are looking at the possibilities to deliver on one point from now on instead of on 17 different addresses. Better drive one full truck once than three times a half empty one. We can kill two birds with one stone: less CO 2 emission and cost savings. Pim ter Heerdt Study group Responsible Trading

11 2 Environment Van Melle Benelux feels committed to the environment and has the ambition to reduce its impact on the environment. Perfetti Van Melle sees the necessity and urgency to reduce the remaining environmental damage with environmental improvement measures. All our investments are therefore examined for their possible impact on the environment and our surroundings. The existing environmental laws and regulations form the base for our aim for sustainability. Environmental management In 2011 we started creating an environmental management system according to the ISO 14001:2004 standard to be able to realise the goal for early 2012: certification of all production sites of Perfetti Van Melle Benelux. ISO is an internationally accepted standard with criteria for an environmental management system. This certificate (and with that an important objective) was obtained in Per site an Environmental Master Plan has been set up in which the related objectives are registered in a Green Card, as developed by Perfetti Van Melle Objectives Study group Environment 20 Concrete activities in the area of reduction of energy, water, and waste from the production process and local environmental issues (noise, air and soil) are set per location in the Environmental Master Plan and are updated and reported quarterly. Set energy objectives in the Green Card 2013: o Annual reduction of 2.5% natural gas consumption for all Perfetti Van Melle Benelux locations. o Annual reduction of 2.5% electricity consumption for all Perfetti Van Melle Benelux locations. o Annual increase of 1% production of biogas at production site Breda. Map the water footprint for all Perfetti Van Melle Benelux locations. 1% reduction of product loss for all locations of Perfetti Van Melle Benelux annually. Fully process waste streams from the production process in an external fermenting process. Map other solid waste streams for 100%. 21

12 Within the context of environmental management we also use the World Class Manufacturing (WCM) method, focus here is especially on the principal right first time. A Senior Project Engineer is responsible for broadening the knowledge within Perfetti Van Melle Benelux concerning technical environmental aspects. In order to formulate our objectives more precisely and to use additional activities, we defined the 2010 CO 2 footprint for the Breda site in In 2012 we took this one step further by also mapping the CO 2 footprint for all other sites. From now on we will monitor the CO 2 footprint annually. CO 2 footprint Distribution CO 2 emission scope 1 and 2 per location, 2011 The total CO 2 emission of Perfetti Van Melle was 25,151 ton in the year (This concerns scope 1 and 2: direct greenhouse gas of the company itself and the indirect greenhouse gas emission through purchased electricity). This equals the energy consumption of about 120 million car kilometres or the energy consumption of about 5,925 households. co 2 footprint Distribution CO 2 emission scope 1 and 2 per company, 2011 For all locations applies that most CO 2 emission is caused by energy consumption (94%). Leakage of coolants is responsible for 2% of the emission. The own and lease fleet, including pool cars, contribute for 3% to the CO 2 emission and the own truck fleet (only in Andelst) for less than 1%. The total CO 2 emission in 2011 (scope 1 and 2) has decreased with about 7% as compared to the base year 2010 from 27,065 ton to 25,151 ton CO 2 at an almost 4% higher production volume. CO 2 footprint Distribution CO 2 emission scope 1 and 2 per location, 2011 CO 2 footprint Distribution CO 2 emission scope 1 and 2 per company, 2011 CO 2 emission scope 3 (business car and air miles) The CO 2 emission of Perfetti Van Melle of the Scope 3 activities included in this analysis was 579 ton in the year 2011 (approximately 2% of the Scope 1 and 2 emission). 1 An average car kilometre causes 210 gram CO 2 emission (CO 2 prestatieladder 2.1, 18 July 2012). 2 Based on annual household consumption of 1,500m3 gas and 3,312 kwh of electricity (source: AgentschapNL, adjustment Nibud 2012). 58% Breda 22% Hoorn 4% Leuven 3% Sittard 12% Weert 2% Andelst 94% Energy consumption 2% Leakage coolants 3% Own fleet and pool cars 1% Own trucks in the picture That CO 2 footprint consists for the largest part of our energy consumption, so direct energy. For Perfetti Van Melle very important to know because that makes the effect of our measures and activities transparent. We hope to report our first results in the course of Lennert Goeijers Member of the study group Environment. CO 2 footprint Distribution CO 2 emission scope 3 (business car - and air miles) 95% Business air miles 5% Business kilometres with private cars 22 23

13 Economic use of energy Perfetti Van Melle Benelux has implemented a large number of energy saving and energy friendly initiatives. Examples of these are the implementation of an energy management system, the use of high frequent lighting, the reuse of residual heat or simply replacing aged parts of installations. Perfetti Van Melle Benelux also invests in sustainable energy. Like last year, in 2012 we purchased 100% green electricity. In 2013 investments will be made to implement a monitoring system for energy data, starting with Breda. In addition, this system will enable us to follow the performance of our production processes online and with that to implement right first time even better. Long-term agreement energy saving For three production sites - Breda, Hoorn and Weert we are committed to the MJA-3 (Long-term agreement) in the sector other industries. This sector has set itself the objective to be 30% more energy efficient in 2020 compared to Perfetti Van Melle Benelux had formulated an energy efficiency plan per participating location that ended in The new Energy Efficiency Plan includes all elements of the new long-term agreement, which covers the period Saving measures that contribute to the realisation of this objective of 2% energy efficiency per year are incorporated in this plan. All these measures are part of the Environmental Master Plan of the location concerned. Experimental terrain Breda In many occurring cases the Breda office is the experimental terrain when it comes to sustainable applications. All measures that provide sustainability will be applied as best practice where possible on our other locations. In Breda a reduction of natural gas has been realised by making adjustments in the steam boiler installations. We expect to reduce more than 5% natural gas per year. Improvements have been made also in the preparation of Mentos with which we saved 15% compressed air in 2012: this equals 250,000 kwh of electricity. Since 1997 we have solar panels on the roof in Breda, which saves about 65,000 m3 of natural gas annually. This equals the annual consumption of about 43 families (1,500 m3 per year, Nibud). Also PV panels (photovoltaic solar panels) on the roof provide part of our electricity needs. In 2012 a study was performed on the optimisation of heat generation via the solar panels and an even better use of the solar boiler system in combination with other existing heat recovery systems. In 2012 the brand building (location Breda) received a timer on the heating and cooling of the building. With these small and simple measures we save 88,000 kwh of electricity per year. An air treatment system for one of our processes has been replaced, of which the performance with constant norms for process conditions has resulted in a reduction of almost 60,000 kwh (which means a reduction in CO 2 of more than 27,000 kg). This was realised by working with time controlling of the system, applying high output motors and frequency control that manages the load of the ventilators with the load of the installation. But also on other locations saving measures are being implemented. For example, the Hoorn location has optimised the cooling plaza (the area where candy is being cooled/dried) with shorter drying times of the candy as objective (for example wine gums). The so-called delta-enthalpy scheme chooses, through measure- and control technology, between using outdoor air or to circulate air. The previous situation did not provide this possibility, and therefore too much energy was used for cooling and drying. This optimisation has resulted in 2% less consumption of energy (electricity and gas) for the Hoorn location. (per million) kwh ELECTRICITY (year) Electricity consumption HEAT RECOVERY Wa WaHeat recovery from: Flash distillation condensers of the cooking lines Condensate buffers Compressed air installation & flue gas condenser from a steam boiler Leuven Andelst Sittard Weert Hoorn Breda Annual saving 6,0 TJ 3,0 TJ 4,6 TJ (per million) m 3 GAS (year) Gas consumption Leuven Andelst Sittard Weert Hoorn Breda 24 25

14 Since 2008 the consumption of water has been significantly reduced by our efforts. Working together for less environmental impact Internal as well as external awareness are important parts of our environmental policy. We think it is important that employees are actively involved in reducing our environmental impact. Internally we set environmental objectives. We discuss these objectives in the operational teams of the production sites. We also have frequent discussions with other stakeholders such as municipalities and water boards. Do not let the bucket overflow At the production sites of Perfetti Van Melle Benelux several initiatives have been taken to reduce the consumption of water. Such as the implementation of efficient cleaning procedures, recycling of water, use of rainwater for secondary systems and preventive maintenance management. A continuous search for improvements in, for example process optimisation, change of behaviour of employees, the implementation of dry systems and reusing of water, will lead to a situation in which less water is being withdrawn from the environment. Since 2008 the consumption of water has decreased significantly because of these efforts. In 2012 we managed to reduce the total consumption of water of the Benelux locations with 8%. From wastewater to biogas The production site Breda has its own wastewater purification system in which the wastewater from the process is accumulated and purified with an efficiency of over 90%. During this process biogas is produced. With this biogas we meet 7 to 10% of our local gas requirement. By doing so we save on the consumption of fossil fuels. Also, a study is being started to process more washing water on site in the existing water purification plant. By doing so we optimise the weekend load and realise a higher production of biogas. Our washing water is a source of biogas that is now being bought by external companies. We are in the process of fermenting the washing water ourselves in the weekends, which releases the biogas. By doing so we excavate extra biogas for our own consumption, but we also save on natural gas consumption. A further advantage is that there is less CO 2 emission in the chain because of less transport. What to do with the rest? Limiting the waste streams is an ongoing point of attention for all locations. We would like to prevent and limit the waste streams resulting from our production activities as much as possible. For example waste streams from the production process that meet the qualitative demands are being used for reprocessing into ingredients for high quality animal feed. We also use a part for fermentation resulting in a reduction of fossil fuels. For 2013 it is our ambition to fully use the waste streams from the production process in an external fermentation process, instead of using it for animal feed. Perfetti Van Melle is studying this. In fact all waste streams that cannot be recycled have our attention. Within our waste stream policy we study the possibilities to use materials that are 100% recyclable and/or degradable, without affecting the quality of our products. Perfetti Van Melle also fully maps all other regular waste streams. (per thousand) m WATER (year) Consumption of water BIOGAS Leuven Andelst Sittard Weert Hoorn Breda (per thousand) V.E WASTE WATER (yaar) Water pollution in V.E. Weert Hoorn Breda Reducing environmental impact of transport Besides reducing the environmental impact of our production sites, a great deal is to be gained in our logistic processes. In 2011 we mapped the CO 2 impact of business travelling and our own fleet. Early 2012 we made a fleet scan with the objective of seeking out the possibilities to use our fleet in a cleaner and more economic way. This made clear that it is not yet possible for us to change our fleet to electrical or hybrid vehicles. In the meantime we will change to as economic as possible (fuel)cars. m 3 (per thousand) (year) Breda Biogas 26 27

15 3 Employee & Society At Perfetti Van Melle Benelux it is important that our employees are involved with the organisation. Their passion and involvement make our success. It is our ambition to involve employees in local (CSR) activities in and around our sites. We are also actively involved in supporting and stimulating the development of employees and their direct surroundings from a stage-oflife focused HR policy. In addition we continuously take steps to guarantee a safe and healthy working environment for our employees. Together with other Breda companies, we support the municipality of Breda as JOGG city. The JOGG initiative (Young People At a Healthy Weight) aims at making healthy food and exercise accessible and attractive for young people. Involved and satisfied employees At Perfetti Van Melle our employees are invaluable. We value an open atmosphere in which everybody is welcome and respected. From the introduction of the code of conduct and from obtaining the SA 8000 certificate it is evident that we care about people. Their commitment and involvement determine the success of the company. With the annual open door day, in 2012 ambitiously organised at the Mentos factory in Breda, employees can give their family and friends a look in the kitchen of a sweets organisation Objectives Study group Employee & Society Structural attention for working conditions specifically aimed at the safety and health of our employees. Further promote the vitality of our people, by stimulating sustainable and healthy behaviour of our employees and their families. Offering possibilities for development to employees (and their families). Involving employees in local social questions

16 About 80 students a year, take a oneweek traineeship at Perfetti Van Melle to identify themselves with technical professions. Score Every two year Effectory in Amsterdam carries out an extensive employee engagement survey for us. Based on the results we determine the areas of attention for the various departments and locations. In 2012 such a survey was held for the fourth time. In this survey we are compared with a benchmark of 30 similar companies. As a company we score better than the benchmark amongst others on the following subjects: 1. Satisfaction of employees about their job 2. The way in which employees stand behind the objectives of Perfetti Van Melle (commitment) 3. Safety (the degree of action taken following unsafe situations) 4. Confidence in the management of Perfetti Van Melle 5. Sufficient attention to CSR in the company 6. The way in which Perfetti Van Melle is able to attract new talent and to retain employees. 927 employees 66% 34% Cooperation with educational organisations Perfetti Van Melle works closely together with several educational organisations. Since 2011 a renewed cooperation with the Radius College and the Newman College in Breda exists to simulate young people to choose a technical profession. About 80 students a year, take a one-week traineeship at Perfetti Van Melle to identify themselves with technical professions. Technique and technology develop at such a pace that it is important for teachers but also for Perfetti Van Melle to exchange knowledge. In 2012 we gave guest lectures and we also offered project assignments and practical training. All of this is done to make the technical profession attractive again for young students. This cooperation will be continued in Stage-of-life policy To keep everyone vital and motivated at work, regardless of age, we have a stageof-life focussed HR policy. Initially this policy was focussed on the older-than-50. For this group a training has been developed - Conscious at in which employees from various disciplines work together to gain insight into this stage of life. There are also possibilities to take classes in management, time management, computer training, languages, and exchange programmes to have employees gain experience in other departments. At Perfetti Van Melle Benelux there is room for personal development for all employees, whereby the work life balance is the key. 7 Satisfaction Commitment Perfetti Van Melle 2012 Perfetti Van Melle 2010 Perfetti van Melle 2008 Benchmark 2012 We consider the satisfaction and involvement of employees as an important indicator for the performance of Perfetti Van Melle Benelux as employer. Since the first execution in 2008, we use the results from the survey for improvement of our HR policy and working culture. Based on the biannual survey we have established objectives to improve the vitality of our employees, and in the meantime improvement is tangible. Everybody is welcome Perfetti Van Melle works together with the sheltered employment. At this moment the packaging centres of Look-O-Look in Nijmegen, Arnhem, Purmerend and Sneek have over 500 persons working in the regular production process via sheltered employment. Challenge and talent development Every employee counts for Perfetti Van Melle Benelux. We therefore stimulate the development of knowledge and talents of all employees from a stage-of-life focused HR policy. Since the start in 2009 over 150 managers have followed the training Leadership at Perfetti Van Melle (Smaakmakend leiderschap), in which we share our vision on leadership. Besides attention for HR issues such as vitality and diversity, CSR is always on the agenda during training for managers. Sweet learning In 2010 seventy employees from the different production sites have started with the two-years training programme Sweet-learning (Lekker leren). This training is especially developed for Perfetti Van Melle employees with the purpose of giving every employee a chance to obtain a higher level. The Sweet-Learning class works with three Intermediate Vocational Education certificates: MBO 1, 2 and 3. In 2012 this training has been concluded with a recognised Intermediate Vocational Education (MBO) certificate for 32 group operators. All participants of the Sweet- Learning class have passed their exam! in the picture The training of the Sweet Learning (Lekker leren) programme is not without obligation. Perfetti Van Melle is committed to get everybody at Intermediate Vocational education (MBO) 2 level and that is absolutely essential. The shortage on the labour market, regarding technical- and production employees will only increase. And looking at IT; the developments in this area are going so fast that we have to educate our people continuously in order to be able to follow all innovations. Ben Miltenburg, Training coordinator Sweet Learning programme 30 31

17 Employee participation Our employees elect an employee participation council (OR). The OR discusses the state of affairs in the organisation with the management, but mostly they discuss the HR policy and the interests of the employees. This way, it is possible as an employee to have a say in the working conditions. We see it as our mission and responsibility to create a working place in which open communication and pleasure at work come first. Following the employee engagement survey the OR has taken on the point of action improving the communication. Per location study groups are looking for ways to further enlarge this support. Awareness amongst employees CSR was the central theme at the biannual Direct Report meeting in 2012 a meeting for which 60 managers, middle managers and OR members were invited. In June we played a big sustainability game with the purpose of increasing awareness. In December Izaak van Melle (former CEO) was our guest and he debated with Ko van Belois (Manufacuring, Engineering & Environment Director) about the difference between sustainability 15 years ago and sustainability. The outcome was that now, more than before, it is clear that sustainability pays off also from a business point of view. Safe and healthy working environment We feel very strongly about the safety and the health of employees. Developing a safe workplace is a process in which Perfetti Van Melle Benelux is continuously looking for improvements. Over the last few years a campaign on safety was run on the production sites. All workplaces have been equipped according to current laws and regulations. The internal occupational health and safety study groups and steering committee have been installed specifically to gradually improve working conditions and to monitor the progress. In 2011 several Risk Inventory & Evaluations have been drawn up at a number of locations, after which the related action plan has been implemented. This procedure will be continued in In 2008 the occupational health and safety steering committee of Perfetti Van Melle formulated the objective: Zero accidents with absenteeism in Awareness is the key word here. By providing information, training (including first aid and emergency response) and the introduction of a VCA training (VGM Checklist Contractors) in 2012/2013 for all production employees we want to make employees more aware about the measures they can take themselves to work safely and healthy at Perfetti Van Melle. Initiating periodical safety rounds by the employees themselves also fits in this framework. Just as in 2012, in 2013 employees van Perfetti Van Melle will receive a tailor-made training on the developments in the field of environment and safety. Besides we intend to organise a safety day. Last year, also as a result of the certification programme of environmental care (ISO 14001) the processes of projects and changes in the management have been optimised which has also led to improvements in the area of safe and healthy working. Finally in 2013 preparations will be made to introduce an e-learning module for visitors and suppliers to inform them about the company regulations. In 2011 an extensive analysis of the absenteeism data from the Breda office was made for the period Here we looked at causes for absenteeism, -percentage and frequency per department. Based on these results improvement actions have been initiated in Greening Wa lease policy Stimulate healthy and sustainable behaviour In various ways we stimulate healthy behaviour of our employees. Examples are a squash competition, a company hockey competition, joined spinning sessions and training for biking tours, up to a Wii Fit in the canteen mostly successful on their own initiative. Everyone living within a radius of 10 kilometres from the company may participate in the employee bicycle scheme. This contributes both to the health of employees and to the environment. Employees get a discount at health clubs in the vicinity of the sites and every year a team is delegated to the Nijmegen Four Days Marches. Employees of all locations have participated in running events in 2012, such as the Singelloop in Breda, the City-Pier-Cityloop in The Hague or the marathon in Hoorn. In 2012 we have included more healthy and sustainable products in the assortment of the canteen, such as free organic fruit. Finally we communicate more on the subject in our personnel magazine Proefnummer to make our employees more aware of sustainability and health. In 2013 we will continue and extend these activities as much as possible, for example by increasing the biological and sustainable assortment in our canteen. Greening the lease policy In 2012 Perfetti Van Melle has made progress towards a reduction of the CO 2 emission of the fleet. Firstly a paragraph Driving environmentally aware has been included in the lease settlement, giving drivers pieces of advice on driving environmentally aware. These tips are especially meant to increase the awareness. Furthermore as from 2012 only cars with an A or B label are permitted. Besides a maximum lease price also a maximum emission in gram per kilometre is set. If employees choose a car in the category perfect they will receive extra budget for their choice of car. Wa PETROL DIESEL Perfect choice Okay Not (no option) 140 g/km or below 141 t/m 178 g/km 178 g/km and above 116 g/km or below 117 t/m/ 150 g/km 151 g/km and above 32 33

18 In the centre of society Perfetti Van Melle Benelux stands in the centre of society and likes to contribute to the development of our surroundings. For example in 2012 we donated 130,000 Euro to several organisations. In Breda we have a permanent sponsorship for the Chassé theatre, the NAC Breda football club, the annual city run (Singelloop) and several sports and youth events. Also in Hoorn we sponsor the marathon. We donate products in kind to all sorts of organisations. Such as the Youth Four Day Walking Event, competitions of sports clubs, cultural events, neighbourhood and street festivals, but also travels for people with a handicap. We are also partner of the Foundation of Involved Entrepreneurs, Together for Breda. This organisation facilitates the Breda companies to really implement their Social Responsible Entrepreneurship. Young people at a healthy weight (JOGG) On behalf of the industry in Breda, Perfetti Van Melle is part of the regular Steering committee of JOGG. On 5 May Breda organised an enormous activity for the youngsters to stimulate exercise and Perfetti Van Melle was also actively involved in this. Within JOGG we participate in various workshops. Last year, for example, we promised to (co)develop a drinking water tap on a schoolyard. For 2013 sponsoring of the Gezonde Stadspicknick (healthy City picknick) on the annual Nassau Day is on the agenda again under the flag of JOGG. Together with employees Every year the commercial departments organise an afternoon in which all their employees actively contribute to society. In 2012 our employees worked at childcare Juzt for a day, where we gave the youth base a major overhaul. We also cleaned the exercise room and repaired playing devices. In 2013 we will continue this social responsible tradition. Several other departments pay more and more attention to social responsibility. The Maintenance and Engineering department organised a CSR-day in Prior to the annual department dinner colleagues joined forces in refurbishing Zorghuis de Werve (an old people s home in Breda). After painting the hallways and refurbishing the garden home they could end their department outing with a happy feeling. This year Perfetti Van Melle Benelux has donated 130,000 Euro to various organisations

19 4 Health & Quality Amongst others the study group Health & Quality focuses on continuous improvement of our products whereby natural ingredients and sugar free are most important. We also see the efficient use of packaging materials (reduction, recycling) and responsible advertising, especially commercials for children, as important subjects. New products and natural ingredients Perfetti Van Melle is continuously working on improving the composition of products. In 2012 Look-O-Look has introduced a family size bag with little strawberry sticks. This product contains natural colourings and fruit juice. Furthermore Fruittella has developed a new candy, the Happy Mega Mix. Like all Fruittella candy this candy is prepared with natural flavourings, natural colourings and fruit juice. Portion packaging Within the extensive confectionery assortment we also offer smaller portion packages. Such as the new portion pack Fruittella Pixels, in which smaller candies in portions of 8 gram are offered Objectives Study group Health & Quality Use natural ingredients as much as possible; for new products we take natural ingredients as a starting point. Offer consumers the best possible choice in portion size. Offer consumers the best possible choice in sugar free products with fewer calories. Go for responsible marketing. Further integrate social responsible entrepreneurship in the brand policy. Efficient use of packaging material per brand, with a focus on reduction or recycling. Inform consumers as comprehensive as possible about the composition of our products. For products produced in the Benelux we strive for better product information towards consumers through clear information on our packaging. Go for the highest possible quality and food security of our products

20 Information on the composition of our products Perfetti Van Melle Benelux feels it is important to inform consumers as comprehensive as possible about the composition of her products. We do this amongst others by stating Guideline Daily Amount (GDA) information on products. At this moment 24% of our products has a GDA statement. Our aim is to annually increase the number of products with a GDA statement. Despite our intentions we are sometimes limited by rules and regulations. New EU legislation requires more space for the GDA statement and this does not fit our small packages, like for example a roll of Mentos, so we are forced to drop the GDA statement on several products. Klene sugar free liquorice We pay more and more attention to the development of sugar free products, such as Klene sugar free liquorice. In a number of new varieties we use the sugar replacing sweetener stevia. Although the total liquorice market in the Netherlands is stable, Klene sugar free liquorice keeps growing. The number of people choosing liquorice without sugar is increasing every year. With this the proportional consumption of sugars in the liquorice segment decreases yearly. From 250 ton (9%) Klene sugar free in 2009 to 420 ton (15%) Klene sugar free in This represents a reduction of approximately 80 ton of sugar. Sugar free In % of our assortment consisted of sugar free products. In 2011 this was 16.4%. From the marketing budget we spend about half on sugar free products, products with natural colouring and flavouring, and small portion products. The brand Smint, also sugar free, is growing strongly. Here we make major progress. It is expected that the share of sugar free products within our assortment will only increase in the coming period with growth of the brands Smint, Klene sugar free and Mentos sugar free chewing gum. Responsible marketing Perfetti Van Melle Benelux supports the agreements made in the Code of Advertising for Food and the advice of the Federation of Dutch Food Industry (FNLI). Together with the branch organisation VBZ and the FNLI we are currently working on the tightening of this code in which the approach is not to aim commercials at children younger than 12 years old. For more information: nl/zorgvuldigereclame/perfettivanmelle.html. Brand policy and CSR Perfetti Van Melle is especially known for her brands. We strive for shaping our CSR policy per brand. Here we are still in the stage of developing ideas. Use of packaging materials Perfetti Van Melle strives for efficient use of packaging material, for example by reduction or recycling. An example from 2012 is the wellknown Look-O-Look hanging bag. For years the bags existed of two parts: a plastic part and a paper card on top. Since 2012 the packaging of 6.5 million Look-O Look hanging bags has been adjusted, now they consist only of plastic. With this adjustment we produce less litter, as confirmed by The Netherlands Schoon. What is GDA? GDA stands for Guideline Daily Amount. On a number of products we state how much energy (in calories), sugars, fat, saturated fat and sodium (salt) one portion contains. In addition, percentages indicate how much these substances contribute to your daily nutritional needs. For more information: Choosing consciously The sugar free liquorice and candy of Klene are a conscious choice within the product group and are therefore tagged with the Vinkje (tick), the logo for a conscious choice. What does the blauwe Vinkje (bleu tick) mean? These products contain less or little saturated fat, sugar and salt. More information can be found on Happy Tooth After extensive testing and meeting certain requirements, products that are friendly for teeth, can carry this logo. These products do not cause cavities or carries. Several varieties of Mentos sugar free gum carry the international accepted Happy Tooth logo. Food safety and quality Our objective is to make consumers enjoy our products. They can rely on our products to be safe and of good quality. Therefore we follow the safety and quality results via the quality management system at our production sites. Whereas from 1998 we first concentrated on food safety, over the last few years we have extended our systems to a complete package in which we focus on the following topics: Food Safety: Breda, Hoorn, Weert and Andelst have a HACCP, BRC and IFS certificate. Sittard and Leuven have an ISO certificate. Quality: Breda, Hoorn, Weert and Andelst have an ISO 9001 certificate. Sittard and Leuven will be integrated in Social ethical aspects, including internal working conditions as well as external, towards our suppliers: Breda, Hoorn, Weert and Andelst have a SA 8000 certificate. In 2013 Sittard will be incorporated in this certificate. Environment: All locations take part in the ISO certificate, which we have obtained in Reliability To show that it is more than just words, we have the above-mentioned topics of our management system certified by an external certifying organisation. In total we have had about 60 audit days in 2012, with which we have demonstrated that we meet the various standards. We attach value to quality certificates and systems to guarantee the quality of our products. Although no external certification for ISO exists, we based our current CSR policy on ISO So both you and we know that we start activities on all themes as identified by ISO. Zoals hopelijk wederom blijkt uit dit verslag, is het onze ambitie om MVO steeds verder te integreren in alles wat we bij Perfetti Van Melle doen. MVO biedt nieuwe kansen en die wekken altijd enthousiasme en nieuwe energie op. Tegelijkertijd moeten we ook niet weglopen voor de wat moeilijkere zaken en durven in de spiegel te kijken

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