Sapec : 21/06/2016 - Chairman’s message GM 2016

c7ccbab6-8283-4016-9c9b-90d0e63da78e.pdf THE CHAIRMAN'S MESSAGE TO THE GENERAL MEETING OF SHAREHOLDERS OF SAPEC S.A. ON 21 JUNE 2016

As regards the Group's overall operation, Agro Business has continued to grow, recording a strong increase in 2015 in its pre-tax results. Logistics and distribution of chemical products in Portugal improved their operating results, the former due to an improved business momentum and the latter due to reorganizational measures implemented. Our interest in the environmental sector in Portugal was subject to a strategic assessment: we sold our stake in ECOSOURCING to our partner Carmona and adjusted our stake in CITRI, as a result of the offer under discussion in December 2015.

In Spain, Interpec Iberica has continued to focus on Argentinean soybean products, closing the year with a significant improvement compared to 2014.

The consolidated EBITDA for the entire Group amounts to 31,576 k€ at the end of 2015 compared to 28,515 k€ at the end of 2014, that is, increasing by 11 %, recurring EBITDA increasing from 31,622 k€ in 2014 to 35,470 k€ in 2015, i.e., +12 %. The sharp decrease in financial expenses enabled a very significant increase in the Group's consolidated results before and after tax from continuing operations.

In my message, I will come back to the decision to book a write-down in the environment sector.

Regarding our different businesses, their performance and the important decisions made in 2015, I would like to refer you to the management report of our annual report, the same applying for the development of our stake in the Group Naturener and the relation with Novo Banco. Mr Antoine Velge will be available, latter, to answer your queries.

Regarding the current year:

As some of our businesses depend on the Iberian market, let me share with you some indicators on the evolution of the economic and political environment in the two Iberian countries.

While in 2015 the Spanish and Portuguese economies have signalled that they are getting back on track, the results of parliamentary elections in both countries have caused some uncertainty, shaking the confidence of both national and international investors.

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Spain and, especially, Portugal still urgently need to take strengthening measures to ensure greater competitiveness and to make the high public and private debt levels sustainable. The new policy measures implemented in Portugal by the new Socialist minority government supported by left- wing parties do not seem to be a step in the right direction.

The Spanish will vote again in late June, after the political deadlock following the November 2015 elections; opinion polls are not clear, and we will have to wait for the results so we can form an opinion.

Not only the South but other European countries are experiencing important political turmoil, and we hope that common sense prevails and that the European project can continue to take further steps to a better economic growth, as a necessary condition to guarantee social progress.

Regarding our activities:

Agro Business continues its upward trend, internationalisation has continued at a good pace, as well as the rollout of new agriculture products and solutions underpinning the objectives of growth and penetration into new markets.

The sector is gaining critical mass and continues to enhance shareholder value.

We cannot, however, ignore the new wave of consolidation taking place in the sector, especially that of crop protection, and the possible implications of this new environment taking shape.

Crop protection: Spring crop season is ongoing under normal circumstances in the Iberian Peninsula, having been much delayed due to climate conditions; however, they should meet our expectations.

Regarding sales outside the Iberian market, we should be able to carry out a good autumn crop in France with the arrival of new products to this market.

In Italy, the new policy and the sales strategy to address regional distribution are in place and we should reap the benefits in the second half of the year.

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Crop protection should, therefore, be able to record again in 2016 a growth in its activity.

Crop nutrition: Sales in the Iberian Peninsula are progressing well compared to 2015, accompanied by an improvement in gross margin.

In international markets, sales have risen overall, despite delays in campaigns reported in some regions. The ongoing rollout of new products and nutrient solutions significantly benefits the positive growth in the average gross margin abroad, and the increase in operating results.

In Brazil, the subsidiary started the year under a new structure, with new objectives and a new management. Initial indicators are positive and Brazil should end the first half of the year in line with our expectations. We know that the crop year in Brazil takes place chiefly in the second half of the year, so we will have to wait until year-end to draw more definitive conclusions.

Products containing seaweed extract, of our subsidiary in Ireland, are experiencing widespread success and are responsible for the substantial improvement in the recorded gross margin.

Agro commodities distribution: The results of INTERPEC, which switched its focused to soybean activity, recorded in the quarter are in line with our expectations and those of 2015. This focus has spurred a drop in sales volumes and turnover, but has reduced working capital needs and neutralizes decision making risks inherent to a normal trading activity. INTERPEC must therefore record in 2016 recurring results slightly greater than those of 2015.

Chemical products: The overall situation in Portugal has not changed much in the last three years; no overall growth, increased vigilance on the development of clients' cash positions, and increased competitive pressure on the remaining good clients.

In this bleak context, the priorities of the sector should be to focus on the product sales at the best margin possible, and to continue to optimize costs.

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These two priorities were achieved in the first quarter, enabling the sector to end the quarter with results in line with expectations. The rest of the year may prove to be somewhat more dynamic, allowing the sector to improve its results in 2016.

Logistics: In the first quarter of 2016, land logistics was affected by a new prolonged strike of the port sector in Lisbon. This strike and the contraction of exports to Angola and Brazil, in the wake of economic difficulties felt by these two countries, weighed on the performance of the land sector in the first quarter.

Despite the decrease in Portuguese exports in the second quarter, we believe that the rest of the year will be achievable in a more positive social climate.

As regards port activities, our volumes were greater than those of 2015, this increase having a positive influence on results.

For the entire sector, the indicators we have for the second quarter and half year are generally encouraging, and this activity should, therefore, be improved in 2016 compared to 2015.

Regarding the environment sector:

While the volume of waste received in landfills increased in the first quarter, market competition and the waste mix lowered the average landfill prices. The new management has continued its plan to reduce operating costs and organised the discharges in order to develop other opportunities, such as the treatment of contaminated soils, sludge and wastewaters.

A strategic plan was presented by management at the end of 2015 to reposition CITRI in a strongly growing market where preference to re-use waste in all its forms rather than use landfills is a clear trend. From this analysis, it appears that a single significant investment programme could boost CITRI, but this would be highly risky given the current characteristics of the Portuguese market. The best option left for the Group would be to dispose of this asset. Negotiations were finalized with a prospective candidate, and a SPA was signed. The effective date for the

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