2022

Unless otherwise indicated, “Louis Dreyfus Company”, “LDC”, “Group”, “Louis Dreyfus Company Group” and related terms such as “our”,“we”, etc. used in this report refers to the Louis Dreyfus Company B.V. Group.

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LDC at
a Glance

As a leading global merchant and processor of agricultural goods, we rely on our expertise and global network to source, transform and transport approximately 80 million tons of products for customers and consumers around the world, every year.

We develop sustainable solutions to bring agricultural goods from where they are grown to where they are needed. This involves a complex chain in which our people and partners play a vital role, ensuring a smooth journey for our products and adding value along the way.

1. Originate & Produce

Sharing our expertise with farmers and producers throughout our global origination network.

2. Process & Refine

Processing and refining the finest quality agricultural materials.

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3. Store & Transport

Efficiently managing logistics across the value chain.

4. Research & Merchandize

Leveraging our market knowledge to ensure reliable and responsive supply.

5. Customize & Distribute

Tailoring and delivering products to a range of customers, from multinationals to local enterprises and final consumers.

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Reflecting on 2022, it is impossible to look back without noting the geopolitical tensions that had such far-reaching macro- and socioeconomic impacts on industries, countries and populations around the world. In food and agricultural production, the trade disruptions caused by these events created uncertainty for all stakeholders - from farmers to end consumers. 

Amid these and additional challenges and disruptions due the ongoing pandemic and climate-related uncertainty in many geographies, agribusinesses like LDC diversified their supply chains and expanded into new markets, as they sought to keep food and feed chains moving, meet commitments to customers and maintain global access to essential products.

In order to shape a more sustainable food and agriculture system, able to sustain the world’s growing population for the long-term, collaboration will be critical in the years ahead. Farmers, agribusinesses, governments, financial institutions, NGOs, food manufacturers and final consumers must work together to produce and consume responsibly - conserving native vegetation, biodiversity and soil health, reducing greenhouse gas emissions and ultimately safeguarding the natural resources we all depend on. 

This shift will require innovation to develop new products, solutions and technologies with the potential to transform food and agricultural production, as well as regulations that incentivize both sustainable production and consumption. 

From the millions of smallholder farmers who grow over a third of the world’s food, to the world’s billions of individual end consumers, it is crucial that policies, investments and developments seek to ensure fair outcomes for all supply chain stakeholders, in order to secure access to safe, healthy and affordable sustenance for all.

Despite new and unprecedented challenges arising from geopolitical and macroeconomic uncertainty in 2022, LDC worked alongside many stakeholders and organizations - including the Louis Dreyfus Foundation - to advance progress in this sense, continuing to invest in transformative innovations and technologies, accelerating efforts for supply chain decarbonization and engaging with thousands of farming communities worldwide to promote more sustainable agricultural practices. 

I would like to take this opportunity to thank all our business counterparts around the world for their trust and partnership throughout 2022, and equally all our employees globally for their outstanding commitment to LDC’s important mission and purpose. 

In the extremely complex environment we face together, collaboration across value chains is more essential than ever to find shared solutions to common challenges and help provide sustenance for people worldwide.

Looking ahead, we therefore remain committed to playing our important part in creating a more sustainable and equitable food system, one that can withstand the challenges of our rapidly changing world, and we invite our fellow value chain stakeholders to join us in this goal, prioritizing collaboration, innovation and peace as the best avenues to address the increasingly urgent climate challenges facing our planet, build a more sustainable agriculture system and ensure global access to essential food and agricultural products.

Margarita Louis-Dreyfus

Chairperson

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After navigating unprecedented pandemic-related market impacts since 2020, our teams faced new and complex challenges as a result of geopolitical, macroeconomic and environmental uncertainty in 2022. As ever, our priority in this context remained the safety and wellbeing of our people and their families, while keeping essential supply chains moving safely, reliably and responsibly.

Since the start of the Russia-Ukraine crisis in February 2022, resulting supply chain disruptions, ensuing food and energy crises, and concerns over potential global recession, contributed to a volatile and complex market and operating environment for most of LDC’s business lines, compounding the effects of accelerating climate challenges and continued Covid-related impacts.

In the face of strong headwinds, we were guided by LDC’s mission to bring the right products to the right place, at the right time, remaining focused on keeping essential food, feed, fiber and ingredient supply chains moving.

Leveraging our global network, market insight and expert risk and compliance management, we continued to keep our people safe, meet commitments to customers worldwide and advance with our strategic growth plans, while securing strong financial and operating results this year again.

Changing for Growth, Growing for Change 

Aiming to balance strength and leadership in our core business, with evolution for long-term relevance, we continued to reinforce core merchandizing capabilities at both origin and destination, expand downstream and diversify through value-added products and services, and embrace innovation and digitalization to prepare our business for the future.

In Asia, our Grains & Oilseeds Platform significantly expanded its origination network and capacity with the acquisition of a grains business in Australia, and we broke ground or advanced the construction of strategic facilities such as Fuling Food Industrial Park in Nansha and an additional oilseeds crushing plant in Zhangjiagang, both in China, as well as our joint venture instant coffee plant in Vietnam.

We also continued to develop and enhance our industrial asset network in the Americas, with storage and logistics expansion in Latin America, from juice to fertilizers and from coffee to cotton, and the inauguration of a new soy liquid lecithin plant at our existing facility in Claypool, Indiana, US, to support the growth of our ingredients business as part of LDC’s new Food & Feed Solutions Platform established in January 2023. 

In parallel, we continued to embrace innovative products, solutions and technologies with the potential to transform food and agricultural production, drive more efficient operations, support commercial decision-making and shape more transparent and sustainable value chains. Through our venture capital program and partnerships with innovation accelerators - such as MassChallenge in Switzerland and The Liveability Challenge in Singapore - we connected with and invested in more early-stage companies whose innovations and technologies could disrupt our industry and complement our business activities.

In the US, we opened a research and development facility as the foundation for our new Plant Proteins business, created to drive LDC’s participation in the growing plant-based foods and beverage

market through the development of high-quality protein formulations. Our well-established business lines also continued to diversify their portfolio and offer to address consumer trends, such as our new reduced-sugar, high-fiber orange juice and an expanded range of cooking oils. 

Meanwhile, ongoing digitalization efforts across the Group continued to reinforce customer relationships and enhance commercial and operational decision-making, enhancing our service offering through shared data and insights, traceability, customization and more, and empowering our teams with real-time market, industrial and sustainability intelligence and analytics.

New Strides for Sustainable Development

Our sustainability journey, central to our business model and transformation roadmap, also accelerated in 2022 - most notably with our commitment to zero deforestation and conversion of native vegetation by 2025, including parameters that go beyond sectoral roadmaps, as well as important groundwork by our Carbon Solutions team to measure our greenhouse gas emissions, as a basis for subsequent target-setting and reporting. 

Sustainability and decarbonization efforts also advanced in specific businesses and geographies – for example, with growing volumes of certified soy processed and shipped, several renewable power purchase agreements, and a successful biofuel trial on LDC’s first carbon neutral juice shipment, among a range of innovative sustainability projects advanced by our Freight Platform.

At LDC, we also believe our work with farmers is key to promoting responsible practices and creating lasting positive change at the heart of agricultural chains. To help transform coffee grower communities, we launched a new, five-year sustainability strategy for coffee that aims to support the production of certified and verified coffee by thousands of farmers in our global network, while restoring soil health and mitigating climate change through coalition-led investments that support sustainable practices.

We also continued to collaborate on joint projects to engage, train and empower smallholder farming communities, many of these in collaboration with the Louis Dreyfus Foundation, supporting local communities connected with our operations and activities around the world – for example in India, with our new program to train cotton farmers on more sustainable practices.

Positive Group Outlook

All these and many other efforts and achievements have contributed to continued strong performance, with a positive outlook ahead, for the Group, and are reflected in multiple awards and recognitions received in 2022 by our teams, whom I take this opportunity to thank again for their exceptional commitment and resilience. 

Their professionalism, dedication and solidarity enabled LDC to continue delivering for its suppliers, customers, partners and shareholders in a very complex, challenging and uncertain environment. 

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Our work does not stop here, as we step up activation of our strategic plans to maintain the positive momentum we have built, adapting to the fundamental shifts we see playing out: evolving consumption trends toward alternative proteins and healthier diet options, digitalization and disruptive innovation in agriculture and food production, and accelerating developments to address the increasingly urgent need for decarbonization and a more sustainable food system amid global climate and macroeconomic uncertainty.

Our success in these endeavors will depend significantly on the ability of our talented teams to develop, embrace new ideas and skill sets, and work with one mind as we transform together for tomorrow - in 2023 and beyond.

Michael Gelchie

Chief Executive Officer

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Financial Highlights

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Message From Our CFO

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Foreword

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Income Statement Analysis

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Balance Sheet Analysis

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Net Sales:

US$59.9 billion
(US$49.6 billion for the year 2021)

Segment Operating Results1:

US$2,611 million
(US$1,834 million for the year 2021)

EBITDA2:

US$2,347 million
(US$1,623 million for the year 2021)

Return On Equity3, Group Share:

18.7%
(14.3% for the year 2021)

Working Capital Usage: 

US$7.3 billion  

(US$8.7 billion as of December 31, 2021)

Total Assets: 

US$21.6 billion 

(US$23.6 billion as of December 31, 2021)

Adjusted Net Debt: 

US$0.4 billion

(US$1.5 billion as of December 31, 2021)

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4 Adjusted net debt to EBITDA

5 Adjusted net debt to total stockholders’ equity and non-controlling interests

6 Volumes shipped to destination

7 Cash and cash equivalents, other current financial assets at fair value, readily

marketable inventories (RMIs) and undrawn committed bank lines

8 Purchase of fixed assets and additional investments, net of cash acquired

Net Income, Group Share:

US$1,006 million 
(US$697 million for the year 2021)

Income Before Tax:

US$1,226 million 
(US$864 million for the year 2021)

Adjusted Leverage4 Ratio:

0.2x
(0.9x as of December 31, 2021)

Adjusted Net Gearing5:

0.07
(0.27 as of December 31, 2021)

Volumes6:

down 1.3%
year on year

Liquidity Coverage7: 

3.7x current portion of debt 

(2.2x as of December 31, 2021)

Capital Expenditure8: 

US$549 million 

(US$372 million for the year 2021)

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In 2022, LDC leveraged its strengths and capabilities to successfully manage risks and secure profitable and resilient operations in an uncertain business environment marked by the Russia-Ukraine crisis, inflationary pressure and other challenges. Our strong operational performance combined with prudent capital deployment further strengthened our position for growth.

Both of our business segments contributed to LDC’s improved financial performance in 2022, delivering Segment Operating Results (SOR) and EBITDA at US$2,611 million and US$2,347 million respectively. Value Chain SOR were driven by strong demand for Grains & Oilseeds products, higher processing margins, and Freight business expansion and innovation, while Merchandizing SOR was supported by our globally diversified Cotton origination capabilities and customer base expansion in Sugar and Rice.

2022 was an unusual year in many aspects, with the Russia-Ukraine crisis since late February 2022 fueling significant business disruptions that added to geographical imbalances and uncertainty on supply for some of the world’s most consumed agri-commodities. Combined with weather events, persistent logistics challenges, Covid-19 resurgence and concerns over potential global recession, this contributed to greater volatility.

Our global presence at both origin and destination, the diversity of our business portfolio, our risk management capabilities and our edge in core merchandizing activities were key to overcome challenges posed by this environment and meet customer needs. Thanks to the expertise, commitment and customer focus of our teams, we expanded our commercial reach and helped ensure supply chain continuity for essential products.

Our strong operational performance, cautious cost management in an inflationary context and cost-efficient financing, drove an 18.7% return on equity for the year.

In 2022, we continued to invest in the improvement and maintenance of existing facilities, new product flows and expansion into new business areas. For example, we acquired Emerald Grain in Australia, began the construction of Fuling Food Industrial Park joint venture in China and opened an R&D center in the US dedicated to our new Plant Proteins business.

We also adjusted our Group’s debt structure to reduce the subordination risk for bondholders. As a consequence, S&P Global Ratings announced on January 5, 2023 the rating upgrade of the bonds issued by LDC to BBB, now aligned with the Group’s rating.

Our strong operational performance in 2022, combined with a prudent capital expenditure deployment contributed to significant deleveraging, with adjusted leverage ratio at 0.2x and adjusted net gearing down to 0.07 as of December 31, 2022. Our liquidity position as of December 31, 2022 remained stable compared to December 31, 2021 with US$10.9 billion available liquidity, resulting in a coverage of 3.7x the current portion of debt.

We also continued to drive sustainability-linked financing models across our value chains: the majority of new long-term financing agreements and all Revolving Credit Facilities renewed in 2022 include sustainability-linked mechanisms. Sustainable practices in our own operations and in the value chain have always been a focus for our businesses, and we are working to materialize effort and progress into actionable levers supporting our strategic ambitions, guided by our purpose to create fair and sustainable value.

At the end of 2022, LDC’s group equity reached US$6.1 billion, the highest level in our history so far, thanks to a strong operating performance, driven by our teams’ expertise and excellent delivery.

With our balance sheet and operational capabilities further strengthened, LDC is well positioned to address future challenges and deliver on its strategic ambitions.

Patrick Treuer

Chief Financial Officer

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Russia-Ukraine Crisis

Since late February 2022, the Russia-Ukraine crisis and resulting logistics challenges put pressure on wheat, corn and vegetable oil supplies, causing concern over potential global shortages and driving already high market volatility and prices.

In the year ended December 31, 2022, products originated by LDC from these two countries represented 2% of Group net sales in dollar terms, compared to less than 4% the year before.

Under its policy to insure assets against political and war risks whenever possible, the Group mitigates a large share of its exposure in Ukraine and Russia.

Ukraine

LDC runs origination operations in Ukraine, mainly for wheat, corn and barley, with over 300 Ukraine-based employees. LDC operates  silos, railcars and a multi-commodity export terminal in Odessa port.

In anticipation of a potential conflict, the Group had defined contingency plans to support Ukraine-based employees and their relatives with transport to safe locations, and to secure the physical integrity of its assets in the country. As of the date of this report, there has been no reported LDC employee casualty. A few railcars localized in the conflict zone were fully depreciated and wheat inventories in a third-party silo were destroyed.

Operations in the country slowed significantly since the start of the crisis, with maritime exports at a standstill until August 2022 under martial law. Shipping routes have since reopened, allowing exports to resume, though still with limited cargo volumes. In this context, and whenever possible to do so safely and in compliance with all applicable laws, LDC also resorted to other export logistic channels (rail, trucks or barges) to meet commitments to business partners, at significantly higher cost and with lower volumes than via usual export routes. In the current circumstances, the ability to continue using these channels is unknown. In order to support its operations in the area, the Group incorporated a new legal entity in Romania. The extra cost of alternative export routes and means is considered in the valuation of LDC inventories in Ukraine as of December 31, 2022.

As the consequences of the ongoing crisis may limit the ability of some LDC stakeholders to meet their contractual commitments, the Group runs regular assessments of potential performance risks and considers these in the valuation of open contracts as of December 31, 2022.

In relation to its operations in Ukraine, as of December 31, 2022, the Group held total assets of US$125 million and liabilities for US$62 million.

Russia

LDC runs a grains origination business in Russia, with owned silos and a grain terminal in Azov. The Group is also engaged in a joint venture for the development and construction of a deep-sea terminal in the Taman peninsula. As of December 31, 2022, the Group recognized a US$156 million impairment related to this project. The Russia-Ukraine crisis adds uncertainty to the project timeline and financial projections, which are highly dependent on business conditions in the area.

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The Group suspended its operations in Russia at the start of the crisis, taking the necessary time to assess and adapt to the situation. In a challenging, complex and rapidly-evolving environment, LDC later resumed its operations in the country to the extent possible, aiming to meet commitments to and demand from customers, while complying with all applicable sanctions, laws and regulations.

In Russia, total assets and liabilities amounted to US$74 million and US$36 million respectively, as of December 31, 2022.

In this global context, LDC focused on fulfilling its role as a leading global merchant and processor of agricultural goods, bridging supply and demand gaps across essential food and feed value chains, from farmers to end-consumers. The Group continued to take steps to ensure efficient and reliable operations, and minimize disruptions at our facilities and in our logistic chains, always with employee safety and well-being as a priority.

Uncertainty over potential global supply chain disruptions, a crisis involving two of the world’s largest grains exporters, evolving international trade rules, container shortages and rising freight rates, all contributing to volatile agri-commodities markets, required thorough risk and compliance management to meet commitments to stakeholders, while protecting our teams and securing financial performance.

The Group maintained its reinforced risk management framework applied since the advent of Covid-19 in 2020, continuing to hold both regular and ad hoc meetings to examine and mitigate risks, and actively monitoring counterparty risks across all business lines in a high-price, high-volatility environment. The Group also reinforced its already strong compliance procedures to protect the Group’s and its stakeholders’ reputation and assets in a global trade environment marked by sanctions.

In 2022, the Group took significant and concrete steps to advance its commitment to shaping more sustainable value chains. We made a commitment to eliminate deforestation and conversion of native vegetation for agricultural purposes in our supply chains by the end of 2025. We set out a new global sustainability strategy to promote more sustainable coffee production through certification, verification, and training and support to coffee farming communities, facilitated by coalition-led investments as part of our Stronger Coffee Initiative . Our Carbon Solutions team worked on measuring  the Group’s greenhouse gas  emissions in 2022, as a baseline year for emissions reductions by target year 2030.

In addition, we set new sustainability targets for the years leading up to 2030 in our latest Sustainability Report, underlining LDC’s continual efforts to shape increasingly fair and sustainable food and agricultural value chains by creating a safe and inclusive workplace, driving supply chain traceability and transparency, reducing its environmental footprint, and engaging and supporting business partners to do the same - including the farmers whose activities and produce we all depend on.

As global trade challenges and disruptions of recent years persisted, compounded by the Russia-Ukraine crisis, LDC leveraged its expertise and experience, diversified business portfolio, and global presence and network, to keep essential supply chains moving safely, efficiently and reliably.

As a result, Segment Operating Results amounted to US$2,611 million for the year ended December 31, 2022, up 42.4% from US$1,834 million for the year ended December 31, 2021, and EBITDA reached US$2,347 million, up 44.6% compared to 2021.

Income Before Tax for the year ended December 31, 2022 reached US$1,226 million, up 41.9% year on year, while Net Income, Group Share landed at US$1,006 million, up 44.3% from US$697 million for the same period in 2021.

Net Sales

Net Sales amounted to US$59.9 billion for the year ended December 31, 2022, up 20.9% compared to 2021, mainly reflecting higher prices, while volumes shipped by the Group decreased 1.3% year on year.

•The Value Chain Segment’s net sales rose 15.2% year on year, mainly owing to higher prices of products merchandized by Grains & Oilseeds. Volumes shipped by the Grains & Oilseeds Platform fell overall due to lower soy product deliveries, although volumes of grains shipped slightly increased. Volumes shipped by the Juice Platform grew year on year, and the Freight Platform grew its services to third parties in 2022.

•The Merchandizing Segment’s net sales increased by 36.0% year on year, owing to higher prices across all product lines in this segment, and higher volumes shipped by Cotton, Sugar and Rice platforms. Volumes shipped by the Coffee Platform decreased from high levels in 2021.

Segment Operating Results

Segment Operating Results increased to US$2,611 million for the year ended December 31, 2022, up 42.4% from US$1,834 million over 2021. LDC leveraged its global footprint and market intelligence to capture profitable origination and sales opportunities, secure purchases and successfully manage risks to meet customer demand in an uncertain and complex global trade environment.

Value Chain Segment

Segment Operating Results amounted to US$1,817 million for the year ended December 31, 2022, up 52.6% compared to US$1,191 million over 2021.

The Grains & Oilseeds Platform further increased its operating results, after an already strong 2021. Navigating volatility remained complex across all products merchandized by the Platform, as the doubts cast by the Russia-Ukraine crisis amplified existing drivers of significant and rapid market price moves, such as uncertain crop size prospects and concerns over ongoing supply chain logistics challenges. Grain and vegetable oil prices rose rapidly in the first half of 2022, driven by concerns over global supply and demand imbalances for goods usually exported from the Black

Sea region, and corn and soy supply shortages due to drought in Argentina and Brazil. Market volatility was further fueled by export duty increases (on soy meal and oil in Argentina, for example), export restrictions (particularly on palm oil in Indonesia and wheat in India) and concerns over the consequences of Covid-19 resurgence in China. Prices began to decrease in June 2022, on the back of global recession fears and ahead of the opening of a grain export corridor out of Ukraine. Although prices stabilized overall during the second half of the year, volatility remained high. Operations in EMEA were negatively impacted by limited and costly logistics in the Black Sea. Globally, demand for grains (particularly corn, wheat and sorghum) remained strong throughout the period as destination countries sought to secure supply. Ethanol prices were bolstered by the rally in crude oil prices, as global demand for biofuels continued to grow to support carbon emission reductions. Demand for vegetable oil remained resilient in a context of high prices overall. Despite increasing production costs due to inflation and high energy prices, processing activities contributed significantly to the Platform’s performance and growth thanks to strong processing margins, particularly in the US, Canada, Brazil and China.

The Juice Platform also saw significantly improved Segment Operating Results year on year. In an inflationary context, the Platform managed to maintain flat unitary fixed costs thanks to volumes growth, allowing for improved processing margins. Expansion to US destinations drove growth in volumes sold, while revenue diversification toward a larger share of not-from-concentrate (NFC) juices, ingredients, apple juice and innovation, with the launch of a new reduced-sugar, higher-fiber product made from NFC orange juice, contributed to enhanced margins. The Platform achieved a historical production record for NFC volumes processed in 2022. In 2021, the Platform impaired the remainder of goodwill for US$13 million.

The Freight Platform’s operating results reached a record high, owing to itinerary optimization in a context of high volatility in 2022. As global trends from 2021 prevailed, freight rates increased over the first half of 2022, with recovering demand from northern hemisphere economies and strong demand from China, combined with port congestions, tightening the overall freight market. The Platform grew its sales to third parties, now representing the larger share of Platform revenue. The Russia-Ukraine crisis added to the global freight imbalance, with vessels blocked in the Black Sea and dry bulk trade routes reshuffled, leading to greater ton-mile transportation demand. As concerns arose over potential global recession and China lockdowns, freight rates eased towards the end of the year. All vessel sizes contributed to the Platform’s strong results, successfully navigating persistently high volatility and logistics bottlenecks thanks to its proprietary analytics and innovative operational model. Broadened use of our chartered fleet, enhanced cross-ocean strategic geopositioning, and further integration of decision-making tools for itinerary optimization and engine efficiency measurement in collaboration with shipowners, all contributed to the Platform’s excellent results.

The Global Markets Platform once again provided strong support to the Group through efficient interest rate and foreign exchange risk management across all significant currencies in LDC’s business, while keeping pace with the market’s constant evolution and needs.

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9 interest income, Interest expense and Other financial income and expense.

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Our Carbon Solutions team worked on measuring the Group’s greenhouse gas emissions in 2022, as the baseline year for emissions reductions by target year 2030. Ongoing decarbonization efforts and initiatives continued in 2022, through projects such as the signing of a long-term purchase agreement for renewable power in Argentina, and a successful regional emissions trading program pilot in Tianjin, China. The Platform’s contribution to the Segment’s improved results was limited, as voluntary credits markets were hit by a drop in prices and liquidity due to the Russia-Ukraine crisis and concerns over a potential global recession. In this changing, low-liquidity environment, the Platform worked to build a portfolio of high quality credits.

Merchandizing Segment

Segment Operating Results reached US$794 million for the year ended December 31, 2022, up 23.5% compared to US$643 million for 2021.

The Cotton Platform further grew its operating results year on year. Cotton prices increased in early 2022, reaching a 10-year high in early May on the back of strong demand and a tightening global balance sheet, coupled with global shipping congestion. Prices plummeted in the second half of the year, as managed money began to exit the cotton market and concerns over a potential global recession started to settle. Logistics bottlenecks in the US, both at ports and for inland freight, resulted in significant supply chain costs for the Platform, severely impacting results. Despite these unprecedented challenges, the Platform recorded positive earnings overall due to a successful hedging strategy and favorable merchandizing margins from origins outside the US.

The Coffee Platform’s operating results for the year ended December 31, 2022 were supported by strong volumes and origination margins in Asia, while low farmer selling in Brazil weighed on the overall Platform’s performance. Global market challenges prevalent in 2021 started to fade toward the end of 2022. Concerns over coffee supply due to limited crop post frost in Brazil eased as rains stabilized production forecasts. Demand slowed in an inflationary and uncertain context for end consumers. The Platform intensified its suppliers base through supplier partnerships, while developing its marketing reach. The five-year Coffee Sustainability Strategy launched in 2022 clarifies LDC’s role in the pathway to a more sustainable coffee value chain.

The Sugar Platform delivered higher results year on year, with strong demand throughout 2022 as consumption growth combined with stocks built up by countries looking to minimize future supply risks. Crop size in India grew 10% year on year while exports doubled, compensating for deteriorated cane yields in Brazil due to dry weather and shifting origination opportunities. Efficient risk management and logistics, and established geographic diversification allowed for profitable growth in volumes originated and monetization of arbitrage opportunities. An enhanced customer-centric approach supported higher sales and customer base expansion in Africa for white sugar. Ethanol

and energy activities did not perform as well as in 2021, but the successful launch of our power business in Brazil delivered good results. The Platform’s financial performance was also supported by improved processing margins in North America, as sugar prices increased throughout the year ended December 31, 2022 on global supply shortage expectations.

The Rice Platform grew its operating results year on year in a challenging business environment. In particular, the hedging strategy initiated in 2021 on freight costs allowed the Platform to secure competitive pricing, while preserving margins in a year marked by volatile freight prices. The Platform expanded its geographical footprint with a new customer base in the Middle East, driving record-high volumes shipped in 2022.

Net Finance Costs

Net Finance9 Costs amounted to US$(288) million for the year ended December 31, 2022, compared to US$(230) million in 2021. Interest expenses increased by US$(54) million year on year on the back of a higher London Inter-bank Offered Rate (LIBOR), from 0.10% on average for the LIBOR 1M over 2021, to 1.92% on average over 2022 (i.e. a 182bps increase). The increase in interest expenses was curbed in 2022, thanks to cost-efficient long-term debt raised prior to 2022. Interest income decreased by US$30 million, following the full repayment, in September 2021, of the US$1,051 million loan to Louis Dreyfus Company Netherlands Holding B.V. (LDCNH).

Other Gains and Losses

Considering the conclusion of proceedings in the arbitration issued by the International Chamber of Commerce in London and re-assessing the economics of its Taman project as of December 31, 2022, the Group recognized a US$156 million impairment. The Russia-Ukraine crisis drove a higher discount rate for investments in the region and added uncertainties on project timing and returns.

Income Before Tax

Income before tax increased 41.9% year on year to US$1,226 million for the year ended December 31, 2022, compared to US$864 million for 2021.

Taxes

Taxes amounted to US$(219) million for the year ended December 31, 2022, resulting in a 17.9% effective tax rate, compared to 19.3% for 2021. The reduction in effective tax rate year on year was due to the change in geographical mix and the negative impact in 2021 from the increase in Argentine corporate income tax rate.

Net Income, Group Share

Net income, Group Share, settled at US$1,006 million for the year ended December 31, 2022, up 44.3% from US$697 million for 2021. Return on equity rose from 14.3% for the twelve-month period ended December 31, 2021 to 18.7% for the twelve-month period ended December 31, 2022.

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Non-Current Assets

As of December 31, 2022, non-current assets amounted to US$4,804 million, down from US$4,879 million as of December 31, 2021:

•Fixed assets landed at US$3,963 million, compared to US$3,989 million as of December 31, 2021.

•Investments in associates and joint ventures increased from US$227 million as of December 31, 2021, to US$230 million as of December 31, 2022. The US$3 million increase is mainly attributable to additional capital injections in Terminal Exportador de Santos S.A. and Covantis S.A., and LDC’s share in the entities’ net income for the year.

•Non-current financial assets decreased from US$299 million as of December 31, 2021, to US$164 million as of December 31, 2022, as a consequence of the impairment of the loan to our partner in the Taman project.

•Deferred income tax assets landed at US$163 million as of December 31, 2022, up from US$129 million as of December 31, 2021.

•Other non-current assets amounted to US$284 million as of December 31, 2022, up from US$235 million as of December 31, 2021.

Capital Expenditure and Divestment

Maintaining its highly selective investment policy, LDC invested US$549 million during the year ended December 31, 2022, supporting its strategic ambitions while securing solid cash flows and remaining prudent in its capital deployment, as a volatile and uncertain market environment persisted. With the majority of capital expenditure remaining discretionary as per the Group’s investment policy, LDC is well-positioned to adapt to and capture emerging opportunities as they arise.

The Group invested in planned and custom maintenance, and enhancements to ensure the continued operational performance and safety of its existing assets. LDC also moved forward with strategic long-term projects for the expansion of its processing capacity and diversification downstream through research and development. Systems developments and improvements remained a significant investment area for the Group, particularly the roll-out of its global back-office enterprise resource planning (ERP) system, and the deployment of an upgraded version of its existing front-office system, common to Grains & Oilseeds, Sugar and Rice. Systems harmonization and enhancement is part of the Group’s digitalization efforts, aiming to generate efficiency and support cost-effective business management in an increasingly complex environment.

Value Chain Segment

The Segment invested US$473 million over the year ended December 31, 2022, mostly to expand grains and oilseeds processing capacity and support developments downstream.

The Grains & Oilseeds Platform acquired Emerald Grain Pty. Ltd. (Emerald Grain), a leading grain handling business in Australia, with a network of seven grain storage and receival facilities with combined storage capacity of approximately one million metric tons, as well as marketing offices and a grain export terminal

at the Port of Melbourne. In China, the Platform invested in the construction of a soybean processing facility as part of Fuling Food Industrial Park at the Port of Nansha, Guangzhou, in collaboration with Chinese partners DONLINK Group and HAID Group. In Brazil, the Platform made a seventh planned capital injection into our Terminal Exportador de Santos S.A. joint venture. The Platform also continued to invest in the expansion of its facilities in Claypool, Indiana, US, including a new lecithin unit inaugurated in early August 2022.

The Juice Platform invested to enhance its operational performance and optimize production costs through higher not-from-concentrate juice storage capacity and citrus grove replanting. Investments also focused on industrial asset maintenance and continuous improvements, largely in Brazil, as well as operational safety enhancements.

Merchandizing Segment

Over the year ended December 31, 2022, platforms in the Segment invested US$76 million in industrial asset maintenance, expansion of US cotton warehousing and Brazilian coffee milling assets, and the construction of a freeze-dried instant coffee plant in Vietnam, as part of a joint venture with Instanta Sp. z o.o., to address growing instant coffee demand.

Working Capital

Working capital usage (WCU) decreased to US$7.3 billion as of December 31, 2022 from US$8.7 billion as of December 31, 2021. While Value Chain Segment platforms increased their working capital needs as of December 31, 2022 compared to December 31, 2021, the decrease in Merchandizing Segment working capital needs set the trend at Group level:

•The Grains & Oilseeds Platform drove the trend through a significant increase in inventories following the expansion of its activities in Australia through the acquisition of Emerald Grain and strong farmer selling at the end of 2022, while Juice Platform WCU remained stable year on year.

•Merchandizing Segment working capital needs decreased compared to 2021 year-end levels. Inventories held by the Cotton Platform reduced as a consequence of low crop sizes, particularly in the US, as well as lower prices. The reduction in coffee inventories was driven by lower prices and volumes in hand.

Due to their highly liquid nature, certain agricultural inventories are treated as Readily Marketable Inventories (RMIs), which are readily convertible into cash due to widely available markets and international pricing mechanisms. LDC considers that trading inventories with a liquidity horizon of less than three months qualify as RMIs if they can be sold without discount. As of December 31, 2022, RMIs represented 96.1% of the Group’s trading inventories, compared to 94.2% as of December 31, 2021.

Financing

LDC’s funding model is designed to support its long-term strategy. To preserve a balanced capital structure and match financial resources with funding requirements, the Group’s key guidelines are that long-term debt is primarily dedicated to support long-term investments, while short-term debt is used to support ongoing business in financing its main working capital needs.

10  Current and non-current portion of the long-term debt.

11  Short-term debt plus financial advances from related parties, net of repurchase agreements and securities short positions.

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LDC’s operations to originate, store, transform and distribute agricultural commodities throughout the world require sizeable amounts of capital, and its funding model is flexible enough to allow the Group to adapt funding to volatile market conditions. To guarantee continued access to capital, LDC implemented a funding strategy based on the following pillars:

•Diversified sources of funds: 35.3% of long-term financing came from debt capital markets as of December 31, 2022;

•Stable debt maturity profile: average maturity of non-current portion of long-term financing was 4.0 years as of December 31, 2022;

•Sizeable proportion of committed facilities: 45.0% of total Group facilities were committed, of which US$4.0 billion with maturities beyond one year remained undrawn as of December 31, 2022;

•Sustainability-linked facilities: US$4.2 billion facilities embedding pricing mechanisms based on reductions in environmental key performance indicators; and

•the Group’s public investment grade rating (BBB/A2 with a stable outlook) by S&P Global Ratings.

Early in January 2023, S&P Global Ratings raised Louis Dreyfus Company B.V.’s long-term senior bonds rating to “BBB” (up from “BBB-“), following recent changes to the Group’s debt structure. The Group transferred its US$955 million Farm Credit System loan to a new financing vehicle (fully indirectly owned by Louis Dreyfus Company B.V., the holding company, and assimilated to Louis Dreyfus Company B.V.) and its JPY64.9 billion Samurai loan to Louis Dreyfus Company B.V., both initially held in operating subsidiaries. As of December 31, 2022, the holding perimeter regrouped the majority of the Group’s long-term financing on top of the existing short-term commercial paper program, improving bondholders' subordination risk profile.

Debt and Leverage

As of December 31, 2022, long-term debt10 stood at US$4.8 billion, stable compared to December 31, 2021. The €400 million 5-year bond repayment in February 2022 was offset by various long-term financing raised during the year.

Short-term debt11 decreased from US$4.0 billion on December 31, 2021 to US$2.0 billion as of December 31, 2022, following the combined effect of decreased working capital usage and operational cash flow generation throughout the year. Cash and cash equivalents stood at US$1.2 billion as of December 31, 2022, compared to US$0.7 billion at the end of 2021.

In line with common practice in the agribusiness sector, short-term debt should be netted against RMIs, as those inventories can be considered as quasi-cash due to their highly liquid nature. Adjusted net debt reached US$0.4 billion as of December 31, 2022, with an adjusted leverage ratio of 0.2x, compared to the 0.9x mark as of December 31, 2021. Adjusted net gearing stood at 0.07 as of December 31, 2022, compared to 0.27 as of December 31, 2021.

Liquidity

The Group prudently manages financial risks, ensuring sustained access to liquidity. As of December 31, 2022, the Group had US$4.2 billion of undrawn committed bank lines, of which US$4.0 billion with maturities beyond one year. Available liquidity, which comprises current financial assets, RMIs and undrawn committed bank lines, remained very strong throughout the period and stood at US$10.9 billion as of December 31, 2022, enabling the Group to cover 3.7x the current portion of its debt at this date.

Financing Arrangements

Revolving Credit Facilities (RCFs)

The Group has six syndicated RCFs in three of its regional hubs (Singapore, Switzerland and US), as well as a bilateral one with the European Bank for Reconstruction and Development, for a total amount of US$3.9 billion as of December 31, 2022. The Group mitigates the risk of refinancing by maintaining geographical diversification and staggered maturity dates. To that end, each of its three regional hubs usually refinances one of its RCFs each year, one year ahead of maturity when market conditions are deemed favorable.

In May 2022, Louis Dreyfus Company LLC refinanced and increased its US$750 million RCF into a three-year US$800 million RCF, maturing in May 2025.

In August 2022, Louis Dreyfus Company Asia Pte. Ltd. refinanced its US$269 million RCF one year ahead of its maturity, into a three-year US$700 million facility maturing in August 2025. 

In December 2022, Louis Dreyfus Company Suisse S.A. refinanced and increased its US$348 million RCF into a three-year US$455 million facility maturing in December 2025.

Consequently, as of December 31, 2022, out of US$3.9 billion of committed RCFs, US$3.8 billion were maturing above one year.

All the Group’s RCFs are guaranteed by Louis Dreyfus Company B.V., and all syndicated RCFs included a sustainability-linked pricing mechanism as of December 31, 2022.

Long Term Financing

In May 2022, Louis Dreyfus Company Funding SSEA Pte. Ltd., a financing entity of the Group (indirectly owned by Louis Dreyfus Company B.V.), co-borrower with Louis Dreyfus Company B.V., closed a US$100 million term loan facility with Asian Development Bank maturing in May 2025.

In June 2022, the Group transferred its JPY64.9 billion Samurai loan from Louis Dreyfus Company Suisse S.A. to Louis Dreyfus Company B.V.

In July 2022, Louis Dreyfus Company Sucos S.A., a Juice subsidiary of the Group, closed a US$40 million term-loan facility with Proparco. The loan is amortizing and matures in July 2032. A significant share of the funds will be allocated to Juice business capital expenditure needs for climate change impact mitigation and sustainable development projects, integrating social KPIs to support the Group’s supplier certification in line with the Sustainable Agriculture Initiative Platform’s Farm Sustainability Assessment (SAI/FSA) metrics. The loan is guaranteed by Louis Dreyfus Company B.V.

Balance Sheet Analysis

In September 2022, Louis Dreyfus Company B.V. raised a JPY10.0 billion private placement maturing in September 2027 with a Japanese investor, including a sustainability-linked pricing mechanism against the same environmental KPIs as the Group’s RCFs, targeting reductions in CO2 emissions, electricity and energy consumption, water usage and solid waste sent to landfill.

In September 2022, Louis Dreyfus Company B.V. raised an EUR80 million bilateral term loan with an international bank, maturing in September 2027.

In September 2022, Louis Dreyfus Company Finance B.V., a financing entity of the Group, raised a US$275 million A/B loan with the International Finance Corporation and a syndicate of international banks (of which US$50 million to be drawn in 2023). The A and B loans are amortizing and mature respectively in 2029 and 2027. The proceeds of this facility will be dedicated to finance soy and corn purchases from farms in Brazil that can demonstrate zero deforestation and conversion of native vegetation. The facility is guaranteed by Louis Dreyfus Company B.V.

In December 2022, the Group closed the change in borrower of the US$955 million Farm Credit System loan from Louis Dreyfus Company LLC to Louis Dreyfus Company NA Finance One LLC, a financing vehicle of the Group (indirectly owned by Louis Dreyfus Company B.V.). This facility remains guaranteed by Louis Dreyfus Company B.V. 

EU Commercial Paper Program

Louis Dreyfus Company B.V.'s rated EU Commercial Paper Program allows the Group to benefit from diversified access to short-term financing, with an outstanding amount of US$521 million as of December 31, 2022 (versus US$397 million as of December 31, 2021) and a 2022 average of US$729 million across maturities ranging up to 12 months.

Equity

Equity attributable to owners of the company increased from US$5,383 million as of December 31, 2021 to US$6,096 million as of December 31, 2022, with total equity of US$6,139 million at the same date.

The US$713 million increase in equity attributable to owners of the company over the year ended December 31, 2022, mainly resulted from the US$1,006 million of net income, Group Share for the period, net of the payment of a US$348 million dividend.

Risk

Identifying and quantifying risks is central to LDC’s business model, and the Group has long been committed to developing appropriate organizational structures to mitigate and manage these risks.

As usual, the Group closely monitored its daily value-at-risk (VaR) and kept it significantly below 1% of its equity, with an average VaR usage of 0.39% during the year ended December 31, 2022, compared to 0.42% for the year ended December 31, 2021. VaR is only one of the risk metrics within LDC’s wider risk management system.

Subsequent Events

No material subsequent event occurred as of the date of this report.

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Reconciliation of Non-GAAP Indicators

Reconciliation With the Consolidated Financial Statements

Unless otherwise stated in the ‘Notes’ column of the following tables, all figures can be found either in the ‘Consolidated Income Statement’, the ‘Consolidated Balance Sheet’ or the ‘Consolidated Statement of Cash Flows’.

EBITDA (year ended December 31)

Adjusted Net Debt (as of)

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To the Managing Directors of Louis Dreyfus Company B.V.

Opinion

We have audited the accompanying consolidated financial statements of Louis Dreyfus Company B.V. and its subsidiaries (the “Group”), which comprise the consolidated balance sheet as of December 31, 2022, and the related consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including the significant accounting policies and other explanatory notes.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Group as of December 31, 2022, and of its consolidated financial performance and consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Basis for Opinion 

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

•Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

•Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

•Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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•Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

•Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Applicable Law

This report is governed by, and construed in accordance with, French law. The Courts of France shall have exclusive jurisdiction in relation to any claim, difference or dispute which may arise out of or in connection with our engagement letter or this report. Each party irrevocably waives any right it may have to object to an action being brought in any of those Courts, to claim that the action has been brought in an inconvenient forum or to claim that those Courts do not have jurisdiction.

Paris-La Défense, France, March 21, 2023

Deloitte & Associés

François BUZY

Year ended December 31

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Comprehensive Income

Year ended December 31

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As of December 31

30

As of December 31

31

Consolidated Statement of Cash Flows

Year ended December 31

32

Consolidated Statement of Changes in Equity

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Louis Dreyfus Company B.V. (“LDC” or the “company”) is a privately owned company incorporated in the Netherlands on December 28, 2004, registered at the Chamber of Commerce under registration number 24371219. The address of its registered office is Westblaak 92, 3012 KM Rotterdam, Netherlands. LDC is an indirect subsidiary of Louis Dreyfus Holding B.V. (LDH), a privately owned Dutch company controlled by the family foundation established by Robert Louis-Dreyfus.

In 2017, LDC completed the issuance of two unrated senior bonds: one in February for €400 million (5-year, 4% coupon) which was reimbursed in February 2022 and one in June for US$300 million (6-year, 5.25% coupon). In November 2020, LDC completed the issuance of a rated senior bond for €600 million (5-year, 2.375% coupon) completed in February 2021 by an additional €50 million through a reverse inquiry. In April 2021, LDC completed the issuance of a rated senior bond for €500 million (7-year, 1.625% coupon). These bonds are listed on the Luxembourg Stock Exchange (refer to Note 5.2).

1. Accounting Policies and Consolidation Scope

1.1 Accounting Policies

The consolidated financial statements of LDC are prepared in US Dollars, which is the functional currency of the main subsidiaries of the Group.

Accounting policies used to prepare these Financial Statements are the same as those used to prepare the consolidated financial statements as of and for the year ended December 31, 2021, except for the adoption of new amendments, standards and interpretations as of January 1, 2022, as detailed below.

New and Amended Accounting Standards and Interpretations Effective in 2022

The Group did not adopt any standard, interpretation or amendment that was issued but is not yet effective.

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•Amendments to IFRS 16 “Leases: Lease liability in a Sale and Leaseback”. The amendments will come into effect as of January 1, 2024 with early application permitted.

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Use of Estimates

36

Cash flows from operating activities are reported using the indirect method: net income is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows.

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The consequences of the Russia-Ukraine crisis for the Group are described in the Management Discussion & Analysis of this report. As mentioned, the Group is closely monitoring the complex evolving situation with a focus on people safety and business continuity while operating in compliance with international sanctions, laws and regulations.

The impact of the crisis on the Taman project is described in Note 5.4. The Group may be impacted by future developments in the conflict and associated geo-political uncertainties.

On April 8, 2021, the Group completed its capital injection into a newly created entity Guangzhou Fuling Food Technology Co., Ltd., for a total consideration of US$20 million representing 51% of shares. This entity will build and operate a food industrial park in the port of Nansha, Guangzhou, China. The governance rules established for Guangzhou Fuling Food Technology Co. Ltd. allow the Group to control, within the meaning of IFRS 10, the entity which is thus fully consolidated. Its equity is split between 51% attributable to owners of the company and 49% to non-controlling interests.

On June 11, 2021, the Group finalized the sale of LDC (Shaanxi) Juices Co. Ltd. to Xi’an Chunguo Beverage Co., a private company based in Xi’an, Shaanxi, China. The selling price of this transaction amounted to CNY21 million (US$3 million equivalent). The transaction did not generate any material gain or loss on sale in 2021.

No other significant change in the list of consolidated companies occurred during the years ended December 31, 2022 and December 31, 2021. 

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