Letter to the Shareholders Nordzucker AG - 1/2016 - February 2016

Letter to the shareholders Current information for the shareholders of Nordzucker AG, Nordzucker Holding AG and the partners of Union-Zucker SĂźdhannover GmbH Issue 01 | 4 February 2016

Dear shareholders, The first nine months of the financial year 2015/16 were very challenging for Nordzucker, but they are now behind us. We would like to provide you with an overview of the company’s current performance, the market situation and the latest information about shareholders’ delivery rights.

Slightly positive earnings despite challenging market situation The tense situation on the sugar market continues to have a significant impact on our business. However, we were able to avoid the expected loss thanks to comprehensive cost-cutting measures and the slowly emerging recovery of sugar prices. Altogether, the figures are better than expected. In the first nine months, the Nordzucker Group generated revenues of EUR 1,204 million. This is around 17 per cent less than in the previous year. The drop in revenues was the result of the sharp fall in prices for quota sugar and lower sales volumes of non-quota sugar. Revenues for bioethanol benefited in the same period from a noticeable recovery in prices. The operating result (EBIT) amounted to EUR 0.1 million, compared with EUR 95.4 million in the same period of the previous year. Net income for the period was EUR 0.4 million, having been at EUR 74.4 million in the same period of the previous year. Overall, we were, however, able to prevent a loss in the first nine months of the financial year.

Balanced earnings a possibility We will all have to make a concerted effort if we want to stay out of the red for the year as a whole. Looking at the facts currently available to us, we believe we could, ultimately, have a balanced figure as our earnings. Our comprehensive FORCE efficiency programme, launched at the beginning of the 2015 calendar year, has already delivered initial cost savings and will make a substantial contribution to improving our earnings in the years ahead. Our aim is to achieve annual savings of at least EUR 50 million. The focus is on reducing costs in purchasing, production and all administrative areas.

Significant changes will make their mark However, a mere savings programme is not enough to prepare ourselves for the new demands of the market when the quota system expires. We have to ensure that the company is oriented to both customers and the market. To do so, we intend to optimize many of our workflows, not only to make them faster and more cost-effective, but also to improve the quality of our products and services still further.

Nordzucker AG l Post box 49 21 l D-38039 Braunschweig l Telephone +49 531 2411-0 l ir@nordzucker.de l www.nordzucker.de

Stable processing output Now completed, the campaign was characterized by a stable processing output at all of the plants. This was the result of targeted maintenance and of preparation for campaigns planned to run as smoothly as possible. The 2015/16 campaign clearly bore the hallmarks of the market and demonstrated that we can manage both extremely long campaigns, as in the previous year, as well as relatively short ones, such as this year. We are able to deal with fluctuations in the market flexibly, because we have the appropriate technologies at our disposal.

Delivery rights as of the 2017 growing year – calling all shareholders Planning is well underway for the 2017 growing year and its new conditions. In preparation, all Nordzucker Holding AG shareholders and Union-Zucker Südhannover GmbH partners were asked in November 2015 to provide information about exercising the delivery rights connected to their shares and partnership interests. Nordzucker Holding AG has received an impressive response: so far, some 71 per cent of all shareholders have indicated what they want to do with their delivery rights. By way of an interim summary, we can say the following: Almost 80 per cent of total delivery rights will be used; a good 2 per cent of respondents have stated that they will not make use of their delivery rights and just under 18 per cent have so far either failed to respond or their responses are unaccounted for. Regarding this figure, it must be born in mind that many share transfers have not yet been concluded. Statements regarding delivery rights usage as of 2017 can be submitted until 15 February 2016. We would ask you to note that unused delivery rights and delivery rights lacking statements of intent will be included in the “free volume” following 15 February 2016.

Media reports on antitrust proceedings At present, the media is reporting frequently and in very different ways on the legal proceedings related to the antitrust investigations. Our views and position have not changed and remain clear: The antitrust proceedings against Nordzucker AG were concluded in February 2014. This marked the end of the regulatory proceedings concerning the breach of competition law. Nordzucker subsequently worked proactively with a large number of its customers to develop a forward-looking framework for commercial relations and to reach out-of-court settlements. It was to be expected that additional claims against Nordzucker AG would be pursued – including via the courts. The company remains confident that no damage was incurred by customers as a result of the circumstances ascertained by the German competition authority.

The company expects that it will take years before the first court rulings are issued. Possible risks arising from the proceedings have been accounted for appropriately. The Executive Board of Nordzucker will safeguard the owners’ assets using all legal and court instances at its disposal.

Beet cultivation is sustainable Our biggest sugar customers expect us to cultivate sugar beet in a sustainable manner.

Furthermore, they expect us to be able to provide evidence of this. The Sustainable Agriculture Initiative (SAI) has designed a checklist that can be used to define beet cultivation’s level of sustainability. We performed this assessment in Germany, Sweden and Poland in 2015, and our findings were consistently positive. For example, an external observer confirmed that our farmers have already achieved the highest level of sustainability.

Well-prepared for 2017 In the long term, we are in a very strong position both technically, financially and in terms of our market strength, and we are therefore confident that we will soon return to profitability. Nordzucker will remain a strong company in the European sugar market after 2017. We are counting on your support and your confidence in our company and its development.

Nordzucker AG The Executive Board

The full interim report for the first nine months is available here: http://www.nordzucker.de/aktionaere/service-kontakt/downloads/zwischenberichte.html

Nordzucker AG l Post box 49 21 l D-38039 Braunschweig l Telephone +49 531 2411-0 l ir@nordzucker.de l www.nordzucker.de