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ANNUAL REPORT2014-2015

BETTER COWS | BETTER LIFE

MESSAGE FROM THE CHAIRMAN 3

CRV: BETTER COWS | BETTER LIFE 4

MAJOR EVENTS 6

THE RIGHT INFORMATION FOR GOOD HERD MANAGEMENT 10

THE RIGHT ANSWER FOR EVERY BREEDING QUESTION 12

BUSINESS REVIEW CRV HOLDING 16

Photography: Eveline van Elk, Els Korsten, Mark Pasveer, Martine Sasakova,

Michel Zoeter and CRV

CONTENTS

MESSAGE FROM THE CHAIRMAN

IMPRESSIVE RESULT FOR CRV CRV is on track. This is amply demonstrated by the impressive result we achieved in the 2014-2015 financial year. The year was a less positive one for our members and customers, however. Low prices and new legislation in the Netherlands caused a great deal of financial uncertainty and anxiety. As a cooperative, we therefore decided to pay out the member dividend of €3.1 million as soon as possible.

Our impressive result is partly explained by a growing herd. The abolition of the milk quota in Europe felt like a liberation to many dairy farmers and led to an increase in herd sizes. Like many of you, I have also grown my herd – to the max, in fact. My barn is full and my herd is optimised wherever possible. And that’s all down to CRV products. In a market in which price fluctuations are becoming ever more marked, CRV helps every farmer optimise their herd in line with their individual needs. To do so, during the past financial year we introduced new fertility indexes and expanded Ovalert by adding a sensor that also records rumination activity, to mention but a few examples.

For me, this past financial year was the year I renewed my acquaintance with CRV as a board member. I am honoured that our members think I am the right person for the role of Chairman of the Supervisory Board. The work requires a lot of time and energy, but I am only too happy to put in that effort. To be a member of the board of a herd improvement organisation chimes perfectly with my passion for cows. But equally important for me is that it is also a role that involves working with people. The work of the Supervisory Board is done with a group of people who work together well but who do not shy away from lively discussion.

I am looking forward to the future with great anticipation. In the current financial year, 2015-2016, we have launched a new testing programme which takes us another step closer to a system without waiting bulls. I am also looking forward to the investments we will be making in our new location at Leeuwarden in the north of the Netherlands, where our nucleus is to be housed. In short, we are continuing to invest in ensuring the very best herd management on the farms of our customers.

Peter Broeckx | Chairman CRV

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CRV: BETTER COWS | BETTER LIFE

CRV is an innovative herd improvement organisation.

We help beef and dairy producers to continuously

improve their herds and herd results. Our shareholders

are the Dutch co-operative CR Delta U.A. and the Flemish

co-operative VRV vzw. More than 26,000 Dutch and

Flemish dairy and beef producers are the members of

these co-operatives and are therefore our owners:

by farmers for farmers.

CRV operates internationally and employs about 2,000

people worldwide.

CRV operates in an international structure with business units that serve our local customers. This enables us to always talk to our customers in their own time zones and culture zones, and it also helps us know what our local customers want. We supply our products and services to approximately 60 countries. Our head office, located in Arnhem, supports all our business units and local branches.

STRATEGYGrowth is key to CRV. Current worldwide trends and developments in markets and customers call for significant investments in innovation, technologies, products and solutions. To be able to make these investments with a view to maintaining our position as the leading herd improvement organisation, we need to grow both nationally and internationally. But we want to grow in a focused way, so that we can use available resources as efficiently as possible. We offer innovative solutions and concepts that meet the needs of our customers: dairy and beef producers worldwide. We can respond to changes quickly by investing in innovation, but also by keeping a constant eye on these changes in the market and those affecting our customers. In all of this, our focus lies clearly on sustainability.CRV aims to continue to supply its customers with high quality products and services going forward. For example, CRV is committed to achieving sustainable and efficient herd management solutions that support the continuity of its members’ and customers’ businesses. So dairy and beef farmers have a great influence on CRV’s policy through the advisory bodies and member committees of the co-operative association.

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CRV annual report 2014-2015

CHANGES AT THE TOPAt the joint meeting of the members councils of CR Delta and VRV on 12 March 2015, Noël Van Leeuwe stepped down as interim chairman of the Supervisory Board of CRV. Van Leeuwe also stepped down as chairman of VRV vzw in Flanders. He did so in accordance with the articles of association and was not eligible for reappointment. Peter Broeckx succeeded Noël Van Leeuwe.

DIRECTOR ATE LINDEBOOM LEAVES USDirector of Operations & Development Ate Lindeboom handed over his duties to Alfred de Vries on 1 January 2015. Lindeboom worked in cattle improvement for 41 years. He started out as a breeding assistant with the Frisian AI association in Leeuwarden in 1973 and spent the last 13 years of his career as a director of CRV. “Ate is synonymous with stability, focusing in particular on the environment and the community in which the sector operates. He drew rigorously on his many years of experience to make correct and informed decisions for CRV”, former chairman Noël Van Leeuwe said.

CRV SUPERVISORY BOARD (as of 31 August 2015)– P. J. D. (Peter) Broeckx, Dessel

Chairman– B. E. G. (Bert) ten Doeschot, Hengelo

Vice chairman– E. J. M. (Etienne) Cosyns, Leuven– W. (Wietse) Duursma, Bellingwolde

– K. J. (Kurt) Faes, Meer– G. A. E. J. (Linda) de Groot, Rossum– H. L. M. (Henk) Hermsen, Havelte– A. P. H. J. (Fons) Kersten, Sevenum– D. R. M. (Dirk) Ryckaert, Dikkelvenne– S. (Sjoerd) Schaap, Tirns– B. (Bernard) Uyttendaele, Den Haag

CRV EXECUTIVE BOARD IN 2013-2014– R. M. A. (Roald) van Noort

Chairman of the CRV Executive Board– J. F. H. M. (Joop) Kersten

Executive Director Finance & Organisation– A. G. (Alfred) de Vries

Executive Director Operations & Development

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CRV: BETTER COWS | BETTER LIFE

MISSION: CRV is a leading customer-focused cattle improvement co-operative, fully committed to adding value for farmers

CRV Executive Board (from left to right): Alfred de Vries, Roald van Noort, Joop Kersten

CRV Supervisory Board (from left to right): W. Duursma, L. de Groot, S. Schaap, D. Ryckaert, P. Broeckx, B. Uyttendaele, A. Kersten, E. Cosyns, H. Hermsen. Not in the picture: B. ten Doeschot and K. Faes

MAJOR EVENTS

SEPTEMBER 2014– On its trip to Brazil the Supervisory Board of CRV visits CRV Lagoa as

well as various farms with local dairy breeds Gir and Girolande.

OCTOBER 2014– CRV launches its revised Better Life Efficiency and Better Life Health

indexes at the World Dairy Expo in Madison, USA. The existing indexes are supplemented with two unique breeding values for feed intake and ketosis.

– With 800,000 doses, CRV bull Backup is the world record holder for the number of straws produced by a Nelore bull. He turned 14 this month.

NOVEMBER 2014– The auction of bulls and heifers of the Brazilian beef breed Senepol

is broadcast live on TV. All the animals sold were tested at the CRV Lagoa Performance Centre. The auction strengthens CRV Lagoa’s relationship with Senepol breeders.

– CRV Germany shows daughter groups of Holstein bull Atlantic and Fleckvieh bull Rumbo at the international livestock fair EuroTier in Hannover.

DECEMBER 2014– CRV shows a Dutch daughter group of Hunter, CRV’s best-selling

American bull, for the first time at the Dutch HHH show in Zwolle. – In New Zealand, Firenze son Maelstrom is the first CRV bull to reach

300 points in both the Breeding Worth and New Zealand Merit indices. This places Maelstrom in an elite group of New Zealand bulls.

– The data on Fleckvieh from the Czech Republic is now included in the joint breeding value estimation of Fleckvieh from Germany, Austria and the Czech Republic.

– CRV announces the relocation of its nucleus and associated activities to Leeuwarden in the north of the Netherlands. The complex will be built near the Dairy Campus.

– CRV Ambreed opens its new semen production location and logistics centre. The centre is state-of-the art and is approved for the production of semen for export.

– In Beijing, China, CRV signs up to the Sino-Dutch Dairy Development Centre partnership. This means that from now on, CRV will also share

its expertise on breeding and herd management with partners in the Chinese dairy sector.

JANUARY 2015– CRV’s Dutch IVP laboratory is temporarily housed in a Portakabin in

Terwispel. The IVP laboratory will eventually form part of the ET and IVP laboratory in the new Delta nucleus complex in Leeuwarden.

– In Brazil, Ovalert systems were installed as a pilot on Gir and Holstein farms. Both heat detection and calving intervals have

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Dutch Hunter daughter group at the HHH show in Zwolle

Breeding value estimation for Fleckvieh now takes place jointly in Germany, Austria and the Czech Republic

improved on these farms. This is a prelude to the launch of Ovalert on the Brazilian market.

– At the CRV Cow Expo in Ghent, CRV shows the first Flemish G-Force daughter group. Five large heifers with plenty of length, a firm top line and a good youthful attitude, but with slightly narrower forequarters, showcase their qualities.

FEBRUARY 2015– With Ovalert, farmers can now also opt to measure rumination

activity via a sensor from the Israeli company SCR Engineers Ltd. This enables farmers to manage their herds even better in line with their own needs.

– Jersey bull Manzello leaves a strong legacy in New Zealand after his death. CRV Ambreed sold 250,000 doses from this top bull in his first three years as a breeding bull.

MARCH 2015– Peter Broeckx (51) from Dessel in Flanders is appointed chairman

of the Supervisory Board of CRV. In addition, Kurt Faes (45) from Meer and Linda de Groot (48) from Rossum are appointed as new members of this board.

– CRV pays €3.4 million in member dividend to its members in the Netherlands and Flanders.

– In the Netherlands and Flanders, CRV introduces three new indices in the VeeManager fertility module: insemination rate, conception rate and pregnancy rate. These will be launched in Germany and the Czech Republic at a later date.

APRIL 2015– The April index run in the Netherlands and Flanders is all about

the five-year base change. According to the GES indices, CRV’s black-and-whites are now producing 260 kg milk and 18 kg fat and protein extra. Red-and-whites are producing an extra of 236 kg milk and 16 kg fat and protein.

– A survey of farmers reveals that CRV Lagoa has a good reputation in Brazil. In the AI category, CRV Lagoa won the ‘Top of Mind’ prize for the 18th time in a row.

– For farmers who keep both beef and dairy cattle, the cattle management system VeeManager is split into two parts, making it easier to manage both herds separately on one farm.

– CRV launches its claw management system DigiKlauw for farmers who trim their herds’ claws themselves. It has a simple app for recording findings during trimming. The data from DigiKlauw forms the basis for the breeding values for claw health.

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MAJOR EVENTS

The new sensor in Ovalert also measures rumination activity

CRV launches new fertility indices

MAY 2015– The interface between CRV VeeManager and the Lely milking robot

range is now available to dairy farmers with a Lely milking robot. The interface saves farmers a lot of time and reduces the risk of errors.

– A total of nine Ovalert systems have been installed in the Czech Republic, covering a total of 3,200 cows. The good results are helping Ovalert to establish itself firmly on the Czech market.

– CRV announces a reduction in the number of Holstein bulls to be tested from 1 September 2015. This is partly due to farmers’ increasing confidence in genomic breeding values. The bulls still being used for the various breeding programmes come from a larger pool, however.

JUNE 2015– Innovations in the production process for sexed semen have

improved the fertilisation capacity of SiryX by 3.1%. – CRV shows eight Dutch daughter groups at the CRV Cow Expo

in Den Bosch. For the first time, CRV shows daughter groups based on their specialism: efficiency, health, fertility, production and longevity. CRV also presents the figures for these cows: performance in practice and genomic breeding values are on a par.

– Brazilian users of the bull advice program SireMatch now have access to the genomic breeding values of CRV bulls.

JULY 2015– CRV launches the Production Planner. The Production Planner

provides a reliable and up-to-date overview of the herd’s milk

production for the next twelve months (including fat and protein).– German scientists have discovered a genetic defect, CDH, which

causes fatal calf diarrhoea. The defect can be traced back to the Canadian bull Maughlin Storm. CRV immediately takes a series of steps to remove this defect.

AUGUST 2015– In Australia, CRV and LIC sign an agreement to supply Australian

dairy farmers with a wider range of genetic products using LIC’s distribution network.

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MAJOR EVENTS

The CRV Cow Expo in Den Bosch attracts lots of visitors

The CRV themes of efficiency, health, fertility, production and longevity are relevant to every herd

THE RIGHT INFORMATION FOR GOOD HERD MANAGEMENT

Farmers need the right information to manage their herds

properly. CRV transforms data into useful information,

thus helping the farmer with his herd management.

The herd is at the heart of everything CRV does. How can the farmer achieve the best results from his herd? CRV is on hand to support the farmer every step of the way, with good genetics, information products and advice. The people at CRV – from milk sample observers and fertility consultants to inseminators and herd consultants – work intensively with the cattle farmers on their farms to bring out the very best in their herds.

MANAGING THE HERD EFFECTIVELYEffective herd management begins with an analysis of the available information. VeeManager, CRV’s online herd management program, is the best source of information for many farmers. It provides alerts, indices, production data, lineages and much more besides.

VeeManager is constantly being updated behind the scenes. Some of these improvements are immediately visible to users. For example, the fertility dashboard in VeeManager has been improved. The program also has been made much more user-friendly for farmers with both beef and dairy cattle. The two herds are managed in separate modules, dairy cattle in VeeManager Milk and beef cattle in VeeManager Beef, so the farmer can monitor and adjust the fertility status of each group separately.

MORE SENSORSThe Ovalert fertility management system continues to help farmers manage fertility. This CRV system also undergoes constant development. A new feature this year is the option of another sensor. Farmers can

now choose between a leg strap with activity measurement, a collar with activity measurement and eating monitoring, or a collar with activity measurement and rumination activity measurement. Besides fertility monitoring, this also enables health to be monitored. CRV also improved the way Ovalert presents data, with new heat graphs.

Ovalert is now being used by farmers in Germany, the Czech Republic, Spain, Italy, Denmark, the Netherlands and Belgium. After having been successfully tested with improved heat detection and a lower calving interval on commercial farms, the system has now also been launched on the Brazilian market.

In the Czech Republic, CRV last year focused on the added value Ovalert offers compared with alternative systems, that focus only on heat detection. The first Ovalert users – the system is being used on a total of 3,200 cows in the Czech Republic – are delighted with the combination of heat detection and insemination data, gestation control, milkrecording results and so on. CRV will be continuing to roll out Ovalert in the Czech Republic on this basis. For example, we are also launching the ‘semen-inclusive’ concept, in which farmers pay per gestation instead of per dose of semen.

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NEW INDICESDuring the year under review, CRV launched three new fertility indices to help farmers manage the fertility of their herds even more effectively. These indices give farmers – especially those on large farms – rapid insight into the fertility of their herd. The figures for farms with more than 150 dairy cows are updated daily, while those for farms with up to 150 cows are updated every three weeks. The insemination rate, the conception rate and the pregnancy rate give an immediate and clear picture of the development of fertility on a farm. If fertility in a herd drops slightly, the farmer gets to know about it more quickly with the new indices.

DIGIKLAUW FOR FARMERS TOOThe DigiKlauw claw management system is an important tool for obtaining reliable figures on claw health in the herd. Good claw health is of course an important prerequisite for profitable production and sustainable farming operations. Up to now, data registration in DigiKlauw, a CRV and Animal Health Service product, was only available for hoof trimmers. In the year under review we launched a handy app which also enables farmers who trim their cows’ claws themselves to register their findings. The app also makes it easy for farmers to share their results with their vet and feed consultant, thus delivering an integrated approach to claw problems. The DigiKlauw claw health data forms the basis for the breeding values for claw health which CRV calculates.

PRODUCTION PLANS AND DATA EXCHANGETo optimise milk production, CRV has developed the Production Planner, a follow-up to the Quota Planner. The abolition of the EU milk quota made the Quota Planner redundant. When it became clear that farmers still needed to be able to plan their milk production, CRV responded fast with the development of our new Production Planner. The Production Planner gives a practical, at-a-glance insight into the development of current production and provides a forecast over the next 12 months.

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THE RIGHT INFORMATION FOR GOOD HERD MANAGEMENT

The CRV advisers stand alongside the farmer

FERTILITY GRADUALLY IMPROVING In the 2014-2015 financial year, the year the milk quota was abolished, the annual statistics published by CRV revealed that the herd in the Netherlands and Flanders was growing faster than before and there had been a gradual decline in calving intervals for the past five years.

The increase in the average number of cows per farm was comparable to that of previous years, although numbers seemed to pick up in the second half of the financial year. In the Netherlands, the average herd size increased from 90 to 93 during the financial year. By 1 September 2015, the first day of the new financial year, it had already reached 96.

The lifetime production of Dutch cows showed a stable result in the year under review and now stands at 30,868 kg milk per culled cow. As in the previous year, the average calving interval fell by one day and now stands at 415 days.

Lifetime production in the Netherlands, 2010-2015

31.000

29.000

27.000

25.000

23.000

21.000

19.000

17.000

lifetime production

KG

MIL

K

YEAR OF CULLING

2010 2011 2012 2013 2014 2015

30.000

THE RIGHT ANSWER FOR EVERY BREEDING QUESTION

So many farmers, so many different criteria on their wish

lists: a healthy cow, a strong cow, a cow that can withstand

hot temperatures well. This variation calls for a broad

approach with targeted breeding programmes.

In our Better Life Health and Better Life Efficiency indexes, we provide two unique tools that enable farmers to breed healthy, efficient cows more easily anywhere in the world. An update of these indexes was launched in the 2014-2015 financial year. CRV Director Roald van Noort presented the innovations in both indices during the World Dairy Expo in the USA. The new indexes have been operational and integrated into the sire advice programmes since the December 2014 index run.

Better Life Health has been improved with a breeding value for ketosis. Better Life Efficiency has been improved with a breeding value for feed intake. These two unique breeding values were developed by CRV, working on the feed intake breeding value in collaboration with the Dutch Milk Marketing Board.

GENOMIC BULLS WIDELY ACCEPTEDIn the year under review, the use of genomic bulls in the Netherlands and Flanders increased to 55% in black-and-whites and 45% in red-and-whites. The success of genomics can also be seen in the success of CRV’s most popular breeding bulls. Atlantic, G-Force and Stellando, for example, started their careers as InSire Top Bulls.

The integration of the genome system into the breeding programme prompted CRV to modernise its breeding programmes. The plan for the modernised breeding programmes was approved by the Supervisory Board in April 2015. As a result, CRV has been using fewer InSire Holstein bulls in the Holstein breeding programmes since September 2015.

Naturally polled bulls are playing an ever greater part in the NVI breeding programme. CRV is increasing the proportion of polled bulls in consultation with the Breeding Council. In the breeding programme, we now opt for a polled dam or sire in 20% of our matings.

USE OF NEW BULLSIn the European breeding programme, CRV has once again been using national and international top bulls as bull sires. The proportion of young genomic bulls used as sires in black-and-whites rose to 90%, and in red-and-whites we exclusively used young genomic bulls.

In the year under review, CRV used a total of 95 Holstein black-and-whites InSire bulls. These young bulls had 48 different sires, the most widely used being Snowfever (6 sons), Snowrush (6 sons), Fanatic (5 sons) and Atlantic, Chevrolet, Maik and Sherlock (4 sons each).

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GENOMIC BREEDING VALUES IN BRAZILGenomic breeding values are becoming ever more popular, not only in CRV’s home market, but also in countries like Brazil, for example. CRV Lagoa uses genomic information in its breeding programme for milk. It obtains this genomic information from the Zoetis Clarifide Milk program. This technology is available to all CRV Lagoa customers.

The InSire black-and-white bulls CRV used scored an average of 229 NVI, +4.5% for Better Life Health and +8.5% for Better Life Efficiency. These bulls scored an average of 102, 104 and 107 for the traits of fertility, claw health and udder health respectively.

In red-and-whites, a total of 36 InSire bulls from 18 different sires were used. The most widely used sires were Aikman, Direct, Maddock, Souverein and Try, with three sons each. The 36 bulls used score 199 for NVI, +2.7% for Better Life Health and +6.3% for Better Life Efficiency. These bulls scored an average of 100, 103 and 104 for the traits of fertility, claw health and udder health respectively.

More than 3,500 young bulls were identified for the red-and-white and black-and-white European programme in the year under review. Of these, the 42 best black-and-whites and the 18 best red-and-whites will be used during the next financial year.

CO-OPERATION IN PEAKIn the USA breeding programme, CRV works closely with Alta in the Peak programme. CRV selected the first bulls from this programme in April 2015. This collaborative arrangement enables CRV to offer better bulls on the North American market, but also for export to many other countries that prefer TPI bulls. Some of these bulls will also be available for European markets.

EXCELLENT RESULTS FROM THE INDEX RUNEvery publication of new breeding values is an exciting event – both for many farmers as well as for CRV. Which bulls are doing well and which are not living up to expectations? This excitement is felt in all our branches worldwide.

For example, after the index run in Brazil it turned out that CRV bagged the no. 1 and no. 2 slots in the ranking of the tropical dairy breed Gir with our bulls Sansão and Fardo. Both bulls are also top performers in the national Gir breeding programme.

The April 2015 index run in the Netherlands and Flanders coincided with the base change. This clearly underscores the continuing progress Dutch and Flemish herds are making, and CRV bulls are

a key driving force in this process. In addition, in this index run the general type characteristics for conformation were calculated directly from linear traits for the first time.

MORE TROPICAL CROSS-BREEDSCRV Brazil has a special breeding programme for tropical dairy breeds. But there is increasing interest in these breeds in New Zealand as well. CRV Ambreed has introduced the Sahiwal and Gir breeds into its breeding programme in order to combine traits such as heat tolerance and tick resistance with the genetics of its grazing breeds. New Zealand dairy farmers who have to deal with subtropical conditions use this cross to better protect their herds against these conditions. In Brazil, there is a shift in breeds on beef cattle farms. Because crosses produce better technical results in terms of growth and efficiency, there is more demand for Angus semen. As a result, for the first time in its history CRV Lagoa sold more doses of Angus than of the traditional tropical beef breed Nelore.

NEW FACILITY IN NEW ZEALANDCRV Ambreed in New Zealand has opened a brand new semen production and distribution facility. The bigger capacity CRV Bellevue Production and Logistics Centre equips CRV Ambreed perfectly for the future. It meets the highest standards in terms of product safety and animal welfare. The centre has a semen collection facility, a semen processing laboratory, storage space for exports and domestic products, and 38 hectares of housing for bulls.

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Snowrush is one of the bulls used as bull sire

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PLENTY OF INTEREST IN EMBRYOS CRV produced more than 7,000 embryos in the Netherlands and Flanders in the year under review. Embryos are an important source of InSire bulls for CRV. They are used on our Delta Satellite farms, from which we buy back the best cow and bull calves for our European breeding programme.

Our FokkerijData Plus (Breeding Data Plus) programme also aroused a lot of interest in the year under review. With FokkerijData Plus – which collects data via milkrecordings, type classification and DigiKlauw in combination with marker analysis – CRV aims to increase the reliability of its genomic breeding values. With 10,000 extra female animals in the analysis, an average increase of 2% in the reliability of genomic breeding values can already be observed. RAPID RESPONSE TO GENETIC DEFECTIn the summer of 2015, German scientists discovered a genetic defect which causes fatal calf diarrhoea. CRV immediately took a series of steps to prevent the occurrence of the Cholesterol Deficit Haplotype (CDH). All male carriers are now excluded from the breeding programme. Existing carriers in the current range have been published and the CRV sire advice programmes exclude matings that could lead to problem calves.

SIRYX FERTILISES EVEN BETTERDevelopments in the sexed semen production process have brought about an improvement in fertilising capacity. The percentage of

successful fertilisations with SiryX is up by 3.1% and is now just 7% below that of conventional semen. SiryX now has a non-return percentage of more than 65% in maiden heifers.

DAUGHTER GROUPS PRESENTED BY PERFORMANCEDuring the year under review, CRV staged two successful editions of the CRV Cow Expo. A Flemish G-Force daughter group was shown for the first time at the CRV Cow Expo in Ghent in January 2015. The group consisted of five large heifers with plenty of length, a firm top line and youth.Eight Dutch daughter groups and a demonstration group were led into the ring at the CRV Cow Expo in Den Bosch in June 2015. CRV presented the daughter groups on the basis of the five result themes for herd performance: efficiency, health, fertility, production and longevity. This gave farmers a good impression of each bull’s strongest points and enabled them to identify the bull that best matches their own breeding choices. The daughter groups of bulls Delta G-Force, Cookiecutter Mom Hunter, Delta Atlantic, De Vrendt Reality, Camion van de Peul, Batenburg Stellando RF, Diepenhoek Rozello and MRIJ bull Rivaal all put their best foot forward. A group of Fleckvieh crosses also showed what they were made of, especially in terms of fertility.

The outstanding Stellando daughter group

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CRV HOLDING BUSINESS REVIEW

CRV’s sales grew by more than 3% in the year under

review. The operating result shows a significant

improvement from €0.3 million to €4.2 million.

Member dividend amounts to a total of €3.1 million.

Having been able to take full advantage of the favourable conditions in Europe, CRV has achieved good turnover and profit development in Western Europe. Brazil lags behind in both turnover and profit development, however. New Zealand has achieved roughly the same turnover and profit as in the previous year, so the expected growth did not materialise. Profits are up in Central Europe, while a positive trend can be seen in the US in terms of both turnover and operating profit development.

MORE THAN 3% GROWTHBased on actual exchange rates, CRV’s turnover in the year under review grew by 3.3% compared with the previous financial year. So CRV did not fully achieve its growth target. However, combined with the efficiency improvements and significantly lower net depreciation due to impairments on intangible and tangible assets, the growth in turnover has resulted in a substantial improvement in the operating result from €0.3 million in 2013-2014 to €4.2 million in 2014-2015. The net result remains slightly behind the figure for the previous financial year on account of the book profit on the disposal of a participation in the previous financial year. As a result, our net profit, and therefore the member dividend we were able to pay out, also remained almost at 2013-2014 levels. We paid €3.1 million in member dividend compared with €3.4 million in 2013-2014.

As a result of the positive growth in profits and the favourable development of the working capital, liquidity has risen by more than €6.8 million.

DOING BUSINESS SUSTAINABLY Sustainable food production has become a must in the agricultural sector. At CRV we take our responsibility in this regard extremely seriously, so we have made sustainability one of our strategic cornerstones and an integral part of our operational management. We are committed to offering products and services with added value for all our members and customers. We do this by focusing on improving and safeguarding the health, longevity and productivity of animals, making efficient use of raw materials and at the same time reducing CO2 emissions.

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In the year under review CRV worked on further developing the Better Life indices in order to help our members and customers improve the health and efficiency of their herds. A 30% reduction in our carbon footprint by 2020 is one of our internal operational goals. To reduce our carbon footprint even further, in 2014 we made our vehicle fleet greener by setting a ceiling for CO2 emissions from company cars. As a result, our average CO2 emissions fell by 7% compared to the end of 2013.

WORLD MARKET FLUCTUATINGMilk prices and margins came under pressure in various countries during the 2014-2015 financial year. This was partly due to the slow-down in the Chinese economy and the Russian trade embargo, both of which led to a decline in demand for dairy. The price of milk in New Zealand plummeted, putting pressure on the sector. In Europe, milk prices are around €8 per 100 kg lower than in the previous year, while milk prices in the US are slightly higher. Beef exports from Brazil continue to develop positively due to the Russian embargo and the dollar exchange rate. The EU milk quota was abolished on 1 April 2015. The herd in the Netherlands grew strongly in anticipation of this event. Any further increase is now tempered by uncertainty over the new ceiling based on environmental limits.

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CRV FINANCIAL KEY FIGURES

(X EUR thousand) 2014-2015 2013-2014 2012-2013 2011-2012 2010-2011

net sales before member dividend 176,663 170,955 168,458 169,569 155,797

member dividend -3,118 -3,369 -517 0 -2,991

net sales after member dividend 173,515 167,586 167,941 169,569 152,806

operating results before amortisation of goodwill, member dividend 10,693 6,645 3,900 2,270 8,986

amortisation of goodwill -3,330 -3,011 -3,086 -2,986 -1,763

member dividend -3,118 -3,369 -517 0 -2,991

operating result 4,245 265 297 -716 4,232

result after taxation 3,118 3,369 518 -786 2,991

shareholders’ equity 75,454 76,028 71,773 75,078 76,414

balance sheet total 111,032 111,983 108,498 115,826 123,149

working capital (including liquid assets) 39,912 36,251 26,501 26,118 31,009

liquidity (current ratio) 2.26 2.14 1.85 1.82 1.86

solvency 68% 68% 66% 65% 62%

The above table shows the development of CRV over the past five financial years. To enable comparison, the key figures are shown inclusive and exclusive of member dividend and amortisation of goodwill

WESTERN EUROPE: MILK QUOTA ABOLISHED The 2014-2015 financial year was a special year for the Western Europe business unit. The milk quota was abolished on 1 April 2015 after 31 years. Many farmers anticipated this by significantly expanding their herds. A few months after the abolition of the milk quota, legislation based on a phosphate ceiling was announced in the Netherlands. The consequences of this are not yet known and have had little impact on CRV’s results in the year under review. Partly due to the growth in the herd, third party turnover rose by more than 5% and the return on sales showed a further improvement. CRV’s strong bull offering also played a role in these positive developments, with Atlantic once again being the best-selling bull.

In terms of bulls used, there was a more rapid increase in the use of the Belgian Blue as a terminal cross.

SOUTH AMERICA: DIFFICULT MARKET CONDITIONSLike previous financial years, the year under review was a difficult one for CRV in Brazil. The poor market conditions had already required us to put measures in place. The reorganisation that had been set in train, from management right down to the shop floor, was completed. In addition, the revised strategy was put into action and the efficiency improvement measures were developed further.

The disappointing prices in the dairy sector and the strong dollar are impacting heavily on the results of the Brazilian business unit. The market for dairy cattle has merely stabilised, with no evidence of recovery from

the low dairy prices as yet. The development of beef cattle sales and the rise in sales of CRV’s Angus product are showing a very positive trend, however.

OCEANIA: SATISFACTORYAlthough the year under review got off to a strong start in Oceania, with a milk price of NZD 8.40 per 100 kg, the milk price dropped to record low levels during the course of the year. Despite these developments, the Oceania business unit’s financial year ended satisfactorily. The business unit is expected to be significantly affected by lower farm incomes in the forthcoming financial year. In 2014-2015 CRV Ambreed posted good profits and Liberty Genetics continued to grow towards its profit target.

The competitive market situation and the ongoing pressure on profitability in Australia have led to the transfer of the distributorship for global CRV products in Australia to LIC.

CENTRAL EUROPE: UPWARD TREND CRV in the Czech Republic continued along the trajectory that began last year and is seeing further recovery in both turnover and profits. This year it took a major step forward in the Fleckvieh programme with the launch of a joint Fleckvieh index for Germany, Austria and the Czech Republic. It also started selling bulls based on genomic breeding values.

The first Ovalert systems were successfully launched. To continue to

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Our operating result rose from €0.3 million to €4.2 million

prepare the Czech branch for the future, plans were made for some changes over the next three years.

NORTH AMERICA: STRONG RISE IN TURNOVER In the year under review, CRV USA once again focused primarily on improving its operating result and implementing its new sales strategy, targeting the so-called ‘cheese segment’. Turnover showed a strong increase and the operating result also improved. Exports of Angus bull semen to Brazil rose. The financial contribution made by CRV USA to the global CRV breeding programme has continued to grow.

IBD: SUCCESSFUL YEARThe International Business Development unit can once again look back on another successful year. Turnover rose by 14% and its operating result is well above that of the previous financial year. CRV XSeed in South Africa grew by more than 10% in the year under review and shows a healthy profit. CRV Avoncroft in the UK still lags behind somewhat in terms of turnover but nonetheless shows a positive result. CRV Spain also showed a marked improvement in its result. The South American market outside of Brazil developed well. Further growth is expected there in the coming years: both Holstein and the New Zealand grazing product are popular in South America. The strong growth in exports to China was tempered by disappointing milk prices in the second half of the year. IBD is in discussion with several parties in China with a view to jointly expanding sales. The SDDDC (Sino-Dutch Dairy Development Centre), which CRV joined this year, continues to take shape.

FORECAST FOR 2015-2016 At CRV we expect a number of aspects to impact on the markets and on our operations in the 2015-2016 financial year: – The introduction of a production ceiling in the Netherlands will

impact negatively on our turnover and margin development. – Geopolitical tensions will maintain volatility on the international

dairy markets. This could have an indirect impact on our margin development.

– The drop in the milk price in New Zealand will lead to lower turnover and results for the Oceania business unit.

– Construction of the DairyBreeding Centre in Leeuwarden and Campo Verde in Brazil, which will replace Bela Vista’s and CRV Lagoa’s current production facilities.

– Renovation and continued future-proofing of the information product infrastructure.

– CRV will implement its new strategy in the 2015-2016 financial year. This will result in:

– greater focus on growth and upscaling, enabling us to invest on behalf of our members and customers;

– greater focus on future-proofing the cooperative, both structurally and in terms of implementation.

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MEMBER DIVIDEND PAID EARLYDue to the pressure on milk prices in the Netherlands and Flanders and the uncertainty caused by new laws and regulations, CRV decided to distribute its member dividend early. Member dividend totalling €3.1 million, half of our net profit, were paid out in December 2015 instead of March 2016. The benefits for each individual farmer are calculated in proportion to the volume of CRV products and services they purchase.

Members not only benefit from the profits we generate in our home market but also from our worldwide profits.

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CONSOLIDATED BALANCE SHEET CRV

ACTIVA 31-8-2015 (x € 1,000) 31-8-2014 (x € 1,000)

FIXED ASSETS

intangible fixed assets 1,993 6,081

tangible fixed assets 35,712 35,831

financial fixed assets 2,120 2,063

total fixed assets 39,825 43,975

CURRENT ASSETS

inventories 13,769 14,909

account receivable 26,283 28,735

cash at bank and in hand 31,155 24,364

total current assets 71,207 68,008

total 111,032 111,983

PASSIVA 31-8-2015 (x € 1,000) 31-8-2014 (x € 1,000)

shareholders’ equity 75,454 76,028

group equity 75,454 76,028

provisions 4,271 4,084

long-term debt 12 117

current liabilities 31,295 31,754

total 111,032 111,983

KEY FIGURES CRV HOLDING BV

GENERAL 2014-2015 2013-2014

employees (full-time; on average) 1,343 1,332

milk samplers (full-time; on average) 127 132

RESULTS (consolidated)

net turnover (€1 mln) 173.5 167.6

operating result (€1 mln) 4.2 0.3

result after taxation (€1 mln) 3.1 3.4

BALANCE SHEET (consolidated)

group equity (€1 mln) 75.5 76.0

balance sheet total (€1 mln) 111.0 112.0

solvency (shareholders’ equity/balance sheet total) 68% 68%

cash flow (€1 mln) 6.8 6.7

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ACTIVA 31-8-2015 (x € 1,000) 31-8-2014 (x € 1,000)

FIXED ASSETS

intangible fixed assets 1,993 6,081

tangible fixed assets 35,712 35,831

financial fixed assets 2,120 2,063

total fixed assets 39,825 43,975

CURRENT ASSETS

inventories 13,769 14,909

account receivable 26,283 28,735

cash at bank and in hand 31,155 24,364

total current assets 71,207 68,008

total 111,032 111,983

PASSIVA 31-8-2015 (x € 1,000) 31-8-2014 (x € 1,000)

shareholders’ equity 75,454 76,028

group equity 75,454 76,028

provisions 4,271 4,084

long-term debt 12 117

current liabilities 31,295 31,754

total 111,032 111,983

CONSOLIDATED PROFIT AND LOSS ACCOUNT CRV

2014-2015 (x € 1,000) 2013-2014 (x € 1,000)

NET TURNOVER

genetic material 83,826 80,826

information products 22,302 21,620

services 61,750 60,229

management 8,755 8,280

net sales before member dividend 176,633 170,955

member dividend -3,118 -3,369

net sales after member dividend 173,515 167,586

changes in inventories 171 -794

capitalised production 647 798

other operating income 662 583

total operating income 174,995 168,173

OPERATING EXPENSES

purchases 12,620 12,333

production costs 32,033 31,953

staff costs 87,463 83,588

travelling and car expenses 10,654 10,755

accommodation expenses 3,396 3,283

depreciation, amortisation and book results 9,787 11,248

other operating expenses 14,797 14,748

total operating expenses 170,750 167,908

operating result 4,245 265

2014-2015 (x € 1,000) 2013-2014 (x € 1,000)

VARIOUS RESULT COMPONENTS

financial income and expenses, on balance 249 205

result from participating interests 482 4,265

result from ordinary operations before taxation 4,976 4,735

taxes -1,858 -1,366

result after taxatation 3,118 3,369

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