EXEL industries - 2019 Universal Registration Document

Presentation of c the c Group 2

Business overview of the EXEL Industries group

„ amendment to the Machinery directive (directive 2009/127/ EC adopted by the European Parliament on April c 22, 2009). This amendment, that concerns only sprayers, supplements requirements laid down by the directive on machine safety with a speci fi c section on the “Environment”. As of December c 15, 2011, new sprayers marketed in the EU must comply with these new environmental standards. The EN ISO c 16119 standard speci fi es other speci fi cations; „ framework directive c 2009/128/EC on the sustainable use of pesticides (adopted by the European Parliament in January c 2009) establishes a framework for Community action with respect to the use of plant health products within Europe, through measures such as user training, obligatory inspection of sprayers, phytosanitary e ffl uent management, adherence to best practices, etc.; in-service inspection of sprayers is explained in the EN ISO c 16122 standard. Each EU Member State has developed a National Action Plan which form the basis for a number of national regulations, as the French regulations demonstrate; „ obligatory operating safety certi fi cation for high-clearance tractors, self-propelled vehicles and trailed sprayers, both in France and other European countries; „ decree of May c 7, 2007 on the use of phytosanitary products that notably encourages manufacturers to o ff er sprayers in France meeting new requirements for tank fi lling (over fl ow prevention systems), dilution of tank bottom residue and reduction of spray drift; „ new French “Water Act”, adopted on December c 20, 2006, that has imposed a requirement for regular technical inspections (every fi ve years) of all sprayers, mandatory since January c 1, 2009; „ the Water Framework directive (2000/60/EC) has also had some impact by improving accuracy in order to reduce drift; „ the Ecophyto action plan adopted by the French government to reduce the use of plant health (phytosanitary) products and strengthen prevention measures in the area of user safety and health; „ French Agricultural Act c 2014-1170 of October c 13, 2014, laying down new provisions on plant treatment restrictions near public places; „ upcoming appearance of a decree to establish untreated areas near residential areas and the possibility of altering the safety distance depending on the type of spray used; „ classi fi cation of vineyard sprayers according to their environmental agricultural performance (LabelPulvé); „ EU road transport approval requirements and the new brake regulation are also imposing an increased workload on all design departments. EU Regulation No. c 167/2013 of the European Parliament and of the Council of February c 5, 2013 on the approval and market surveillance of agricultural and forestry vehicles. As a result, these requirements call for a high level of precision in the application of plant health (phytosanitary) products and demand that the “right dose in the right place at the right time” be applied at all times. For example, nozzle fl owmust not vary by more than 5% from nominal fl ow, and transversal distribution under the boom must be perfectly uniform (<7% variance). The annual cost of the spraying equipment is often less than 5% of the annual plant protection budget, whereas the sprayer actually controls and plays an essential role in achieving good application results. This gives us a better understanding of the importance of its performance quality in contributing to controlling and optimizing farmers’ operating costs, when faced with the new challenges of globalization and changing agricultural subsidy policies (in particular the EU’s Common Agricultural Policy).

2.3.1.1 Agricultural Spraying Sales: €356.0 ƭ million, or 45.8% of total Group sales Number of employees: 1,708 (permanent contracts) Production sites: 14

Description Agricultural Spraying involves protecting and enabling crop yields to be improved by accurately delivering the right dose of plant health products to protect and treat plants as needed. The optimized use of the phytosanitary products applied, including herbicides (to fi ght against weeds), insecticides (to protect against attack by insects), fungicides (to protect against fungal and mildew attack), liquid fertilizers, and other products requires ever more accurate and e ffi cient application so that only the plant is protected and any dispersion of sprayed products is prevented. Spraying equipment may be motorized (self-propelled), carried or trailed by a tractor. It costs between €2,000 and €400,000 depending on the size, performance and degree of sophistication. The most elaborate may offer a number of options (on folding, geometry, height, etc.). For fertilizers and plant care products di ff erent spraying techniques are used. For example: „ air blast sprayer : droplets are created by pressurization of the liquid (2 to 50 c bars); „ aero-convection or carried jets : the droplets generated by the pressure of the liquid are transported by a stream of air created by a ventilator. It is often used in arboriculture to ensure the droplets reach deep into the foliage; „ pneumatic : this form of spraying is produced by the high air speed (several hundred km per hour) generated by a centrifugal ventilator which also sprays the liquid arriving at the center of the air jet. This technique is used in vineyards or crops needing a strong penetration at a highly localized position; „ centrifuga l: the liquid is directed without pressure to the center of a disc carried at high speed by an electric motor and is sprayed on its periphery. The size of the drops is directly related to the speed of the disc which provides a highly homogeneous spectrum of droplets. This technique is used to applymuch more concentrated products (with ten times less water transported), for example to treat cotton in Africa by using wind drift. A wide range of sprayers is o ff ered by each of the Group’s major brands: AGRIFAC, APACHE, BERTHOUD, CARUELLE, EVRARD, HARDI, MATROT, NICOLAS, SEGUIP, THOMAS and TECNOMA, to cover all market requirements. Regulatory constraints Spraying equipment design requires expertise in cutting-edge technologies that are both environmentally friendly and safe for the operators. This equipment must complywith a signi fi cant number of demanding safety and environmental standards. For this reason, new players need to obtain product certi fi cation before they can be introduced on the market. A summary of key regulations and standards in force is provided below: „ European directive 2006/42/EC (the amended “Machinery directive” entered into effect on December c 29, 2009) setting key European safety requirements for agricultural equipment manufacturers. For sprayers, this directive is based on EN c ISO c 4254, parts c I and c VI;

EXEL Industries Group I 2019 Universal Registration Document 10