May 2011 This document: Arrowhead Code: EPA: NRX. Ticker: : 4 June i Thierry. Lambert Website: Market Dataa.

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1 Due Diligence and Valuation Report Arrowhead Code: Coverage initiated: 14 May 2011 This document: 4 June 2012 Fair share value bracket: to i Share price on date: ii Analyst Team Vishal Pasari Rashmi Shah vishal.pasari@arrowheadbid.com rashmi.shah@arrowheadbid. com Market Dataa 52-Week Range: Average Daily Volume: 8,935 iv Market Cap. on date: MM v Financial Forecast Data (in EUR) 12E 13E 14E 15E 16E 17E 18E High profit/ (loss) MM High EPS EUR Low profit/ (loss) MM Low EPS EUR Fiscal Year (FY) Summary 1 st 02 iii January 31 st December Naturex is a global leader in specialty plant-based natural ingredients and focuses on three strategic markets (food & beverage, nutrition & health and personal care). The Company produces and markets specialty plant-based pharmaceutical and cosmetic industries. Naturex employs more than 1,200 people and has 15 industrial facilities all over the globe and has a product range of over 1,500 products. It has a global presence through a dedicated network of sales offices in 21 countries and geographic footprint in 22 countries. The Company s head office is based in Avignon, France and is listed on NYSE Euronext Paris. The sales generated in 2011 amounted to 253.6MM, an increasee of 12.0%.. At constant scope and exchange rate, the growth in sales was 12.3%. Over the years, Naturex benefited from favorable trends for natural products, and outperformed the market, with both strong organic growth and acquisitions in all geographical regions particularly in the emerging economies. The Asia -Pacific zone recorded ingredients for the food, nutraceutical, Company: Naturex SA Ticker: : EPA: NRX Headquarters: Avignon, France CEO and President: Jacques Dikansky Vice President and CFO: Thierry Lambert Website: growth of 17.8% driven by strong sales growth in Asia and a buoyant activity in Australia over the last two quarters of the year. In March 2012, Naturex announced acquisition of Valentine, an Indian company specializing in production of fruit and vegetable powders and natural colors for food industry. The acquisition markss strategic entry for company into emerging economy and allows it to become local producer in India. The company has identified 5-6 acquisition targets and has completed 3 acquisitions in Q and Q including Burgundy and Pektowin; integration process of Burgundy is currently nearing completion. In Q company reported net revenue of 73.5MM. Operating income increased by 12.5% to 8.8MM while net income decreased by 12.2% to 4..2MM which due to acquisition of BURGUNDY and discontinued operation of Pektowin. Food and Beverage contributed 65.1% of revenue. Personal Care revenue grew 135.9% y-o-y on account of acquisition of BURGUNDY and targeted marketing initiatives. Europe and America are the main regions for growth with Emerging Markets witnessing a growth of 14.6% y-o-y. In October 2011, through capital increase program, the company raised gross proceeds of 48.8MM by issue of 1.28MM new shares. This capital provides company with resources to pursue development program enabling to fund a new round of acquisitions. Also, on 19 December 2011,, Naturex implemented a Level I ADR program with ratio of 4 ADRs for 1 share. In Arrowhead s view, the market dynamics coupled with the company s product portfolio and strategic partnerships are major positives for Naturex s prospects. Given due diligence and valuation estimations based on intrinsic revenue capacity of existing assets, Arrowhead puts the company s fair share value in the to bracket. Naturex SA Arrowhead BID 1 EPA: NRX See important disclosures on page 37 of this report.

2 Table of Contents Company Presentation... 3 Market Positioning... 9 Key Market Trends and Drivers News Listing Information Management and Governance Segments and Marketing Company Products and Activities Peer Comparison Competitors by Product Range Risk Assessment SWOT Analysis Value Analyst Certifications and Important Disclosures Valuation Naturex SA Arrowhead BID 2 EPA: NRX

3 Company Presentation Naturex a global leader in specialty plant-based natural ingredients is organised around three strategic markets (food & beverage, nutrition & health and personal care). Naturex s head office is based in Avignon, France and produces and markets specialty plant-based ingredients for the food, nutraceutical, pharmaceutical and cosmetic industries. The company employs more than 1,000 people and has manufacturing operations across 14 sites in Europe (France, Italy, Spain, the United Kingdom, Switzerland, and Poland), Morocco, United States, Brazil and Australia. It also has a global presence through a network of sales offices in 19 countries (France, Italy, Spain, the United Kingdom, Belgium, Germany, Poland, Russia, U.A.E., Thailand, Singapore, Japan, China, Korea, Australia, the United States, Canada, Brazil and Mexico). Revenue Growth 140% 120% 100% 80% 60% 40% 20% 0% 13% 44% 10% 32% 8% 20% 17% Source: Company Reports 12% 13% 10% 14% 132% 12% 11% 12% 12% 10% 12% E Revenue Growth Operating Margin 8% 6% 4% 17% 2% 0% Operating Margin In Q1 2012, the company generated sales grew 14.8% y-o-y to 73.5MM including 3.8MM revenue generated by additional sales from new acquisitions, BURGUNDY and Pektowin. The company s operating income increased 1.4% y-o-y to 7.9MM and reported a net profit of 4.6MM. At constant currency rate sales grew at 12.6% y-o-y and revenue from historical scope grew by 8.8% to 69.6MM. Food and Beverage segment grew 19.1% y-o-y and contributed 65.1% of total revenue with 47.8MM of sales while Nutrition and Health grew 12.5% y-o-y and contributed 30% of total revenue with 22.03MM of sales. The growth in sales of Nutrition and Health confirms company s strong positioning in the nutraceutical market and its penetration in the pharmaceutical sector after acquisition of Burgundy. The mature markets in Europe and North America are still the main contributors to growth with sharing 89.5% of revenue among themselves. The emerging markets in Eastern Europe, Asia, Latin America, Africa and the Middle East benefited from dynamic conditions, rich in growth opportunities. NATUREX has decided to no longer book sales corresponding to the secondary activities of Pektowin which are in the process of being discontinued, and group s net profit of 4.2MM includes 0.3MM in net losses linked to the secondary activities of Pektowin. Naturex s sound performance is linked to the fast-growing demand for natural products and its capacity to provide manufacturers with personalized means to meet the requirements of their end-consumers. Naturex has commercial coverage of 19 locations which enables company to catch the growth of both mature markets and emerging markets. The Europe/Africa zone recorded a growth of 12.1% y-o-y in 2011 in spite of the difficult macroeconomic context. The emerging markets of Eastern Europe, Asia, Latin America, Africa and the Middle East which represented less than 10% in 2010 of the Group s sales increased its share in group s profit to 14% in 2011 offering highly promising development prospects. In April 2012, company announced acquisition of Valentine, an Indian company which specializes in production of fruit and vegetable powders and natural colors for the food industry. Valentine has two production sites in India and marks company s entry in the fourth largest emerging economy as a producer and enables penetration. This is company s third acquisition since the capital increase in October 2011, after Burgundy and Pektowin and fits with Naturex's strategy to accelerate its development and target dynamic markets with high growth potential. Naturex s Segment Portfolio The company operates through its three segments Food and Beverages, Nutrition and Health, and Personal care. It provides various sub-products in each segment, customized as per user needs. Naturex SA Arrowhead BID 3 EPA: NRX

4 The company s leading segment Food and Beverage accounted for nearly 60.5% of 2011 core revenues. Nutrition and Health division, which is the second most important end market and number one in the US in nutritional supplements, accounted for 33.3% of 2011 core revenues. Personal Care division, currently at nascent stage, accounted for nearly 1.2% of core 2011 revenues A 2009A 2010A 2011A Q1 2012A 2012E Food and Beverage Nutrition and Health Personal Care Others Source: Naturex reports The company s segment portfolio includes: Food and Beverage This segment encompasses natural flavoring, coloring, preservative, and healthy ingredients. The integration of the Ingredients division of Natraceutical Group in 2010 has enriched the company s product portfolio with powders of fruits and vegetables, fruit pectin, dyes, natural yeast and Talin. The products include: - NAT stabil : The company develops and markets a range of innovative plant extracts which substitute chemical antioxidants, thus widening the shelf life of food and beverage products without affecting taste and appearance. - NAT arom : The company s expertise in extraction technologies ensures the specific aromatic profile of each botanical ingredient. Under this product line, it offers rich palette of plant extracts, oleoresins and essential oils. - NAT color : Nat Color contains two product lines: (i) natural coloring extracts (E-colors) and (ii) Coloring Foodstuffs (VegeBrite) fruit and vegetable concentrates with coloring properties and which have not been isolated selectively). Ingredients provided by the company form an essential part of food and beverage products including dairy, baked, savory and confectionary among others. - NAT healthy : It is a line of botanical extracts known for their health benefits, formulated for functional food and beverage manufacturers. - NAT textur : Naturex, manufactures a range of pectins that offers a wide range of texturing solutions as an ingredient in jams, fruit spreads, dairy products, confectionary, desserts, glazing and beverages. Acquisition of Pektowin is expected to further strengthen the company s capacity in Pectin. - NAT taste : The company provides ingredients to improve the taste of food and beverage products. Talin which is a natural protein improves the taste profile of food and beverages. It is also used in pharmaceutical industry for masking bitterness. Kemfe TM capable of improving the total taste profile is used for flavoring purpose and complies with definition of flavoring preparations under EU flavor regulations. - NAT F&V : The Company manufactures fruit and vegetable powders that retain the flavor, color and quality of the original raw material. Nutrition and Health This unit specializes in the development of botanical extracts and branded ingredient concepts supported by scientific studies for nutraceutical applications and plant extracts for pharmaceutical products. In 2010, the company expanded its product portfolio through a set of 50 standardized extracts of polyphenols for NAT activ range. Naturex SA Arrowhead BID 4 EPA: NRX

5 - NAT life : This is a line of branded ingredient concepts backed by scientific studies for dietary supplements, functional food and nutraceutical product manufacturers - NAT activ : This is a line of botanical extracts for health benefits and formulated for dietary supplement and nutraceutical product manufacturers. - NAT pharma : This is a line of plant extracts with active substance master files for pharmaceutical product manufacturers. Personal Care Personal Care unit specializes in the development of natural ingredient concepts supported with biological studies, botanical extracts and functional raw materials for cosmetic applications. The products include: - NAT beauty : This line of branded active ingredients comprises Macaderm (anti-aging agent based on peruvian MACA), Effineo (diet agent without caffeine, based on green coffee), Seveov (hairstimulation agent), Aurealis (hydrating agent from orange blossoms) and Dragon s Blood (skin care products). - NAT select : This is a collection of botanical extracts specifically formulated for cosmetic applications. Since botanical extracts must be standardized with strict quality controls for consistent composition, safety and potency. - NAT protect : This division comprises extracts with preservative properties. These are organized in two sub-range categories: antioxidants under the Natrox brand and antimicrobials under the Efficlear brand. For more detail on Segments, see the Company Products and Activities section of this report. Naturex s Portfolio and Company Risks Naturex with diversified range of products, global footprint and expertise in natural ingredients is uniquely positioned to benefit from positive trend of consumer focus towards healthy and natural products. As Naturex primarily generates sales in euro and US dollars, its exposure to foreign exchange fluctuations is high. Its main exposure is to dollar, but as the costs are also in US dollars, it is naturally hedged against currency changes with minimal impact on currency conversions. Additionally, Naturex is exposed to fluctuations in its variable and fixed interest rates. However, with the refinancing of its debt in 2010, it is now mainly financed by fixed rate and has, therefore, significantly reduced its exposure to interest rate increases. Also the company has successfully completed capital raising program of 48.8MM which gives company a guard for interest rate risk. The other major risk related to Naturex's industrial sites is the handling of inflammable liquids (solvents used in plant extractions). Though the quantities used remain well below the thresholds recommended in the Seveso directive, it still poses a risk as the consequences can be high. For a detailed risk assessment, please refer to the Risk Assessment section. Naturex s Corporate Strategy Naturex operates through three strategic segments Food and Beverage, Nutrition and Health, and Personal Care. In each segment, the company has followed a balance of organic and inorganic approach to generate revenues. In the last two decades, the company has also launched several new products to cater to users specific demands. The company has done 11 acquisitions in last 10 years of which 9 acquisitions in 9 years have been successful, bearing the synergies and has proven expertise in acquisition and integration of companies. The company has widened geographic footprint to 22 countries and has 21 sales offices all over the world. Naturex has created real proximity with local and regional customers, enabling it to catch the growth of both mature markets and emerging markets. Though the regulations in developed countries are getting tougher, increasing focus by consumer to healthy products is expected to make company grow. Company expects to achieve rapid growth in emerging countries and has already acquired Valentine in one of the fastest growing economies. The company post its capital raising program has got liquidity to acquire potential targets and has managed to complete acquisition of Burgundy, Pektowin and Valentine. The company announced 12% growth in revenues in the year 2011 y-o-y. The integration of Burgundy is Naturex SA Arrowhead BID 5 EPA: NRX

6 near completion and company expects to significantly reduce structure costs with restructuring and complete transfer of assets and liabilities. Pektowin integration is on track and dedicated line of juice concentrates is expected to start production in H The key strategic steps taken by the company to achieve it are as follows: Food and Beverage: With the Natraceutical deal in 2009, Naturex acquired skills in fruit and vegetable powder and in pectin, which are strengthen by the acquisition of Valentine which not only includes manufacturing units but also gives company foothold in India to serve its customers more closely. The acquisition of Pektowin represents an opportunity for Naturex to gain a new production capacity in the field of juice concentrates and broaden its product range. Naturex s strategies are focused in line with several regulatory changes in the food ingredients segment. The guidelines 2010/67/EU and 2010/69/EU that establish purity standards for antioxidants and rosemary extracts the maximum doses used in applications where their use is authorized, took effect in April The Southampton study in 2007 which showed that a mixture of dyes and a preservative could have an effect on hyperactive children, knowing that most of these dyes and the preservative (E211, sodium benzoate) are mostly found in sweets and drinks. In July 2008, the European Parliament has decided to require manufacturers to customize the labels of products containing these substances by endorsing mandatory "may have undesirable effects on activity and attention in children", forcing food manufacturers to remove these products from their manufacturing process and encourage the use of natural colors. Nutrition and Health: With strong foothold in the US, the group is heading strong in Europe, offering a growth driver for the division. A real industrial site has been approved by the Italian Ministry of Health for the manufacturing of Active Pharmaceuticals Ingredients (API). The acquisition of Burgundy Botanical Extracts strengthen Naturex s industrial base and ability to meet customer needs by developing expertise in the nutraceutical, pharmaceutical and personal care markets through its complementary product portfolio. Burgundy products are distributed to a diverse customer base including major global pharmaceutical companies and client in the cosmetics and nutraceutical industries in 35 countries. Burgundy's acqusition will strengthen company s expertise in the nutraceutical, pharmaceutical and personal care markets through its complementary product portfolio of active substance master files, new botanical extracts, and active ingredients. The acquisition of Hammer Pharma in 2007 is benefiting the company from regulatory changes in Europe as Naturex had consolidated products dedicated to pharmaceuticals. European regulation is being reinforced relative to: (i) Traditional Herbal Remedies (only vegetal substances within the pharmaceutical categories are not concerned by this): developers/manufacturers have to perform clinical trials proving the product has health benefits to obtain an authorization to market these products. Also, these products must be manufactured according to Good Manufacturing Practice (GMP). (ii) Products with specific allegations (performance cognitive enhancement, blood circulation enhancement) for which it is necessary to file an Active Substance Master File (ASMF). ASMF is a document which contains information on the preparation of an active medicine (articles 13.5 and 14 of European regulation). Personal Care: With the integration of Natraceutical s Ingredients division, the company had been able to launch several complementary product lines in personal care division in Though it only represented a small fraction (1.2%) of Naturex s revenue in 2011, Personal Care is an important market for the Company s future and is expected to reap the benefits of new product launches in the coming quarters. Outlook The capital increase through the exercise of shares with warrants allowed Naturex to raise 48.8MM which is intended to finance future external growth projects, i.e. five or six identified targets for acquisition. Three of these targets, Burgundy and Pektowin and Valentine have been acquired in Q and Q Burgundy's existing operating losses as well as the acquisition and restructuring costs are expected to have affected Naturex's operating profitability during Q and Pektowin s discontinued operation affected the company s net income in Q However such effects are expected to reduce subsequently and improve company s overall profitability. Naturex SA Arrowhead BID 6 EPA: NRX

7 History of Key Acquisitions Over the years, the company has grown both organically and inorganically for ongoing expansion of its business. It has a good history of acquisitions which has proved to be very beneficial to the company. With the help of strategic acquisition the company is able to increase its business in terms of revenue, product mix and global presence faster than its competitors. The company s strategy of seeking acquisition prospects will further enhance its diversification opportunities. Some of the significant acquisition s since its incorporations are: Company Acquired Brucia Plant Extracts Inc. Year of Acquisitio n Interest acquired % Business Brucia Plant Extracts, Inc. manufactures nutraceutical and botanical ingredients. The acquisition of this business sstrengthened Naturex s position in America Sales* (MM) EUR8 Deal Price (MM) US$10 No. of employees* RFI Ingredients and Hauser 2004 Rosemary plant extracts business The division specializes in rosemary extracts which are used to add rosemary aroma to foods. Naturex became leader in antioxidant market with access to two leading brands and four major patents on purification of rosemary extracts EUR3 Pure World Inc % Extraction and formulation of plant extracts for the food and flavor, nutraceutics and cosmetic industries. The acquisition helped Naturex to increase its presence in American Market EUR31 US$ Hammer Pharma % Specialized in the research and development and production of plant extracts for the pharmaceutical and nutraceutical industry. This acquisition helped Naturex in gaining access to a genuine pharmaceutical site EUR8 EUR35 48 HP Botanicals % HP Botanicals specializes in the formulation and sales of plant extracts for the nutraceutical industry EUR3 EUR2.2 5 Chart Corporation % The company specializes in the production of natural flavor ingredients for the beverage and flavor industries. This acquisition helped Naturex in increasing its offering for flavoring and beverage industry EUR8 US$17 35 Berkem (Actifs Innovants) 2008 Purchased the actifs innovant business Company s division consists of clinically tested and trademarked plant extracts which are supplied to the pharmaceutical, nutraceutical, cosmetic and food industries. Through this, highly effective innovative plant extracts added to Naturex products offering. EUR4 EUR9.5 6 Natraceutical 2009 Purchased ingredient division The division has the expertise to produce natraceutical, flavoring, coloring agents, antioxidants and cosmetics. EUR Burgundy % Burgundy Botanical Extracts manufactures and supplies plant extracts for the nutraceutical, pharmaceutical and personal care industries. EUR10 EUR Pektowin % Pektowin specializes in the production of apple and citrus pectins, fruit and vegetable juice concentrates and, for a smaller proportion, the preparation of processed food products. EUR8 EUR8.2 Valentine % Valentine has two production sites located near Mumbai and is among the main Indian players in the fruit and vegetable powders and natural colors market. EUR2 50 Naturex SA Arrowhead BID 7 EPA: NRX

8 ORGANISATION CHART NATUREX S.A. France 100% Naturex AG Switzerland 100% Naturex Spain SL Spain 100% Naturex SpA Italy 100% Naturex Ingredients Naturals Ltd Brazil 100% Naturex SPRL Belgium 100% Naturex Inc USA 100% Naturex Ltd United Kingdom 100% The Talin Co. Ltd United Kingdom 100% Naturex Holdings Inc USA 99.99% Naturex Cooperatief U.A Netherlands 100% KF Specialty Ingredients Australia 100% Naturex GmbH Germany 100% Naturex Cooperative LLC USA 100% Naturex Australia Pty Ltd Australia 100% Naturex UK Ltd United Kingdom 96.5% Naturex Maroc SA Morocco 100% SCI Les Broquetons France 99% Naturex LLC Russia 100% Naturex Trading Shanghai Co. Ltd China Naturex SA Arrowhead BID 8 EPA: NRX

9 Market Positioning Naturex, with acquisition of 11 companies in 11 years of f which 9 in 9 years were successful, have become one of the major leaders in all its markets in termss of revenue. Its high performance industrial facilities, well supported research & development department, access to a large choice of raw materials and a wide range of customized solutions has enabled it to develop close relationship and be a privileged partner of distinguished clientele. Production and Sales Sites Source: Company report Geographically, the company is expected to tap growth stories in emerging markets, aiming to double its exposure in those markets in four to five years. The ramp-up of the company s implantation, planned openings, availability of manufacturing unit and ability too respond to local customers in India with acquisition of Valentine and other emerging markets could accelerate its development, thus becoming a new growth driver for Naturex. In 2011, company opened three subsidiaries for sales in Korea, Mexico and Canada and now has 21 sales offices. Also, the companyy sees a fast-growing cosmetics demand and substantial demand in Food and Beverage mainly coming from China and Latin America (Brazil). Sales office in Poland was opened in January 2012 with the completion of the acquisition of Pektowin. The American zone continues to progress supported by the dynamism of sales in North America and the acceleration of sales in Latin America, particularly in Brazil; The emerging markets of Eastern Europe, Asia, Latin America, Africa and the Middle East represented 14% of the Group s sales over 2011, compared with less than 10% in 2010 and offers highly promising development prospects. The Asia/Oceaniaa zone recorded good performance in 2011, driven by strong sales growth in Asia and a buoyant activity in Australia over the last two quarters off the year In Q the company continued with the momentum generated in 2011 in all the geographies. Even though mature markets in Europe and North America were still the main contributors to growth amid tightt consumer trends in Europe over the quarter, Asia / Pacific region recorded goodd growth, driven by solid activity in Australia along with fast sales growth in Asia. The emerging marketss benefitted from dynamic conditions, rich in growth opportunities and represent 15.9% of the Group's sales in Q Naturex SA Arrowhead BID 9 EPA: NRX See important disclosures on page 37 of this report.

10 Key Market Trends and Drivers Food and Beverage As per Global Industry Analyst (GIA) the world food addictive market is expected to exceed US$34BN by the end of Even though the rising price of raw materials such as animal feed, energy, and other commodities such as packaging materials are concerns for the producers, emerging markets such as China, India, Brazil and other emerging economies are seen as drivers of growth as the recession contracts consumer spending in developed markets. Flavors segment has the largest share in the overall food ingredients market followed by hydrocolloids, sweeteners, emulsifiers, preservatives, colors and food cultures. Over the years, there has been a shift towards natural colors as more and more consumers associate natural products with superior quality. The industry is expected to see consolidation amid changing consumer preferences and increasing government regulations. vi The food and beverage industry is highly fragmented, with the top ten companies in 2007 accounting for only 12.9% of the global market. The EU is the key player in the global trade, being the world s largest exporter and importer of food and beverage products worldwide. However, due to the increased shares of Brazil and China in recent years, the share of the EU declined from 24.6% in 1998 to 19.8 percent in The US ranks second in the world trade, followed by Brazil and China. vii In response to the global economic downturn, it is observed that consumers have curbed their spending on non-essentials such as home furnishings. However, spending on essentials such as food and beverage has remained fairly robust. Although the economic downturn has had an impact on spending habits and priorities, concerns for quality, health and sustainability still play an important role. For instance, sales of organic foods have remained broadly stable in the US. With global markets recovering and consumer spending in food and beverage increasing, the sector valuations are expected to be attractive. As per IMAP, the global Food and Beverage sector, valued at US$5.7 trillion in 2008, is poised to increase to US$7 trillion by Executives from the global food and beverage industry expect increased levels of consolidation and anticipate that there will be increase in mergers and acquisition activity in due to increasing cost pressures, new consolidation opportunities, and the weak liquidity position of many small companies. viii In the last decade, prices of key commodity ingredients for instance wheat, corn, sugar, vegetable oil climbed as much as %, a near-record rate that has translated into price increases at all points in the supply chain. Following various retail pricing revisions during , some major industry players were forced to pass on these commodity prices to consumers. Danone said that last year, if not for previous cost-cutting procedures, the rising material costs almost eroded its revenue growth. - Rapid demographic growth and ageing population are having major consequences on food and health - Consumers are better informed as they adopt a healthier lifestyle and guide their choices towards natural products for better comfort, health or appearance - Industry players are multiplying market launches for products with natural health claims - Regulatory changes are strengthening barriers to entry (Southampton study/risks of synthetic coloring for children hyperactivity/asmf for Traditional Herbal remedies/gmp standards) Nutrition and Health Growth trajectory of OTC medication market, in which Naturex operates, has invited new players such as Pfizer and Roche to drive their revenue growth and future profitability. These large pharmaceutical companies are aggressively pushing OTC medication drugs through their supply channels, along with building brand identities, to drive sales. This has raised OTC medication awareness and acceptance among consumers. OTC medication market showed major worldwide growth trend in the past decade, clocking compounded annual growth rate (CAGR) of 7% for Consumer spending in developing countries, which accounts for almost 77% of global OTC medication market, has started affecting the global growth dynamics of OTC medication market. Naturex SA Arrowhead BID 10 EPA: NRX

11 Major driving force behind OTC medication market growth is rapidly growing healthcare costs, preference to preventive measures among consumers, increasing consumer health consciousness and awareness of the benefits of the OTC medication and nutritional supplements. Even Pharma companies are turning to OTC versions to continue profit streams as brand-name prescription drugs encounter tough competition from OTCs and generics ix. One of the greatest opportunities in the supplement industry is dietary supplements which are an integral part of health and wellness now. However, due to heightened regulations and the downturn in the economy, the dietary supplements industry will likely experience changes in consumer activity and see more emphasis on manufacturing standards. x Personal Care The global household and personal products industry is comparatively mature in most of the more developed economies. However, leading players can continue to obtain growing revenues by strategies such as development of strong brands, enhancing products to charge premium prices, and micro selling in markets where personal incomes are low. Growth in the global cosmetics and toiletries market remained sluggish at 5% in 2008, down from 6% in 2007, on increased price sensitivity among consumers. Growth in the US consumer products industry is expected to benefit the personal care sector, indicating a much stronger year ahead. According to Kline & Company, the market witnessed 3% growth since 2005, and is projected to grow further at a CAGR of 2.2% through Key Variables in Determining Naturex s Revenue Estimates - Segment-level growth premiums - Nominal GDP growth rate - Consumer spending on food and health growth rate Naturex SA Arrowhead BID 11 EPA: NRX

12 News - Naturex announced operational performance for Q (May 22, 2012) Naturex announced its results for Q with 14.8% y-o-y growth in revenue to 73.47MM. The company in Q showed good growth. Q gross margin was 43.5% up 16.3% y-o-y and operating margin was 7.9MM at 10.8% of revenue and 12.2% of revenue excluding the impact of integration of Pektowin and BURGUNDY, same as for Q Group income for Q was 4.2MM including, 4.6MM net income from current activities of the Group and 0.3MM in net losses linked to the secondary activities of PEKTOWIN, which are in the process of being discontinued. - Naturex announced sales for Q (April 26, 2012) Naturex announced its results for Q with 14.8% y-o-y growth in revenue to 73.47MM. The company in Q showed good growth. Q continued dynamism of the previous year, under the combined effects of an enriched range of products, targeted marketing initiatives and commercial synergies that benefitted the three segments and all geographical regions, with accelerated growth in the Personal Care segment. The mature markets in Europe and North America were the major contributors to growth despite tighter consumer trends in Europe over the quarter. - Naturex announced temporary unavailability of President and CEO (April 13, 2012) Naturex informed its shareholders of temporary unavailability of President and CEO of the company Jacques Dikansky due to health reasons. Thierry Lambert, in his capacity as director and Vice- President, will chair the meetings of the Board of Directors during this period and will ensure the proper execution of the Board's work. Integrated management of various subsidiaries will continue with the execution plans action plans set up for Naturex announced Consolidated annual results 2011(March 28, 2012) Naturex announced its annual results for 2011 with 11.9% y-o-y growth in revenue to 253.6MM and 10.4% y-o-y growth in operating income to 30.1MM. Company s current operating margin is 11.9% and net profitability is at 6.2%. FY2011 continued dynamism of the previous year, under the combined effects of a reinforced structure, an enriched range of products and commercial synergies that benefitted the three segments and all geographical regions, with accelerated growth in the emerging countries. The capital increase in October 2011 substantially decreased the Group's debt and as on December , net financial debt amounted to 68.2MM after incorporating the payment for the acquisition of Burgundy, compared to 102.1MM as on December Naturex announced acquisition of Valentine, Indian producer of fruit and vegetable powders and natural colors (March 21, 2012) Naturex announced acquisition of Valentine, an Indian company specializing in the production of fruit and vegetable powders and natural colors for the food industry. The acquisition makes Naturex a local producer and fits with its strategy to target high growth potential markets. The acquisition also gives nature a strategic entry in to one of the fastest emerging economies and enhances its ability to serve its customer. This is the first industrial setup in Asia and is expected to supplement the Group's regional production centers in Europe and Americas, in particular for natural colors. - Naturex announced definitive completion of the acquisition of Pektowin (March 06, 2012) Naturex confirmed the finalization of acquisition of 100% capital of Pektowin following the agreement with Polish Industrial Development Agency. The definitive acquisition of Pektowin was signed for an enterprise value of about 8.4MM. The consolidation of Pektowin in group accounts will begin from 1 st January Pektowin s main activity is production of pectins and fruit and vegetable juice concentrates and is expected to boost company s food and beverage segment. The acquisition also strengthens company s presence in Europe and specifically in Eastern Europe. - Naturex announced additional contribution to liquidity contract (February 22, 2011) Naturex made an additional contribution of 0.3MM on February , pursuant to the liquidity contract granted to Natixis. As on December the liquidity contract included 4,660 Naturex shares and 0.15MM. - Naturex announced annual sales figure for 2011 (January 25, 2011) Naturex recorded excellent levels of activity over all markets and in all geographic areas where the Group is established. In October 2011, Naturex performed the acquisition of Burgundy sales of which have been consolidated from 1st October Sales generated over the year 2011 amounted to Naturex SA Arrowhead BID 12 EPA: NRX

13 253.6MM, an increase of 12.0%. At constant scope and exchange rate, the growth in sales was 12.3%. The sales for the 4th quarter of 2011 thus amounted to 62.4MM, up 12.0%. The activity of the 4th quarter of 2011 was in the same growth dynamic as the previous quarters and the integration of the activities of Burgundy within Naturex generated additional revenue of 2.7MM. - Naturex announced the acquisition of Pektowin, a Polish company specialized in pectins and fruit and vegetable juice concentrates (December 21, 2011) Naturex announced that it has reached an agreement with the Polish Industrial Development Agency (Agencja Rozwoju Przemysłu S.A - ARP), to acquire 100% of the capital of ZPOW PEKTOWIN SA, a Polish company based in Jaslo which specializes in the production of apple and citrus pectins, fruit and vegetable juice concentrates and preparation of processed food products. The full completion of this acquisition is subject to the final agreement of the Polish Ministry of the Treasury which should confirm the privatization of Pektowin by the end of January Implementation of a Sponsored Level I American Depositary Receipt (ADR) program (December 19, 2011) Naturex S.A announced that it has implemented a Level I American Depositary Receipt (ADR) program, sponsored by BNY Mellon, as the depositary bank. The ADRs issued are eligible to begin trading on over-the-counter market in the United States from 16 December 2011, under the symbol NTUXY. To facilitate trades, ADRs were issued using a ratio of 4 ADRs for one ordinary share of NATUREX. The company s ordinary shares are currently listed on Compartment B on NYSE Euronext Paris under the symbol NRX. - Naturex presented its consolidated 9 month results (November 30, 2011) Over 9M 2011, Naturex generated revenue of 191.2MM, up 12.1% compared to 9M 2010, and 12.7% in constant currencies. The two main activities, Food & Beverage and Nutrition & Health, contributed substantially to this growth. From a geographical standpoint, the mature markets in Western Europe and North America confirmed their solidity, while the emerging markets showed excellent dynamism. The gross margin enjoyed significant growth of 19.4% compared to 9M 2010, standing at million. - Disclosure of stabilization operations performed (November 25, 2011) CIC Securities, acting in his capacity as manager of the stabilization in the context of the capital increase of NATUREX, declared, pursuant to Article of the General Regulations of the AMF (French Market Authorities) that it has conducted stabilization operations. The first stabilization operation was conducted on October 7, 2011 and the final stabilization operation was conducted on October 13, The stabilization operations were performed in the range of 47.63MM MM for Nautrex shares. - Naturex rewarded for its revenue development as a winner in the "Deloitte Technology Fast 50" (November 16, 2011) The "NYSE Euronext Méditerranée" award was bestowed on Naturex within the framework of the "Deloitte Technology Fast 50". This distinction rewards listed French companies for which the revenue has had the most growth over the last 5 years. This award recognizes Naturex's external growth strategy, the successful integration of the Ingredients Division of Natraceutical, which is the Group's eighth acquisition in eight years. The acquisition allowed Naturex to become the world leader in specialty plant-based ingredients. - NATUREX will participate at Actionaria trade show on 18 and 19 November 2011 (November 10, 2011) NATUREX, world leader in specialty plant-based ingredients, informed its shareholders that it will participate in Actionaria exhibition, taking place on 18 and 19 November 2011 at the Palais des Congrès in Paris. - End of the concert between J. DIKANSKY/SGD and NATRA Group (November 02, 2011) Naturex has announced the end of the concert between J. DIKANSKY/SGD and NATRA Group, and the completion of all outstanding points with Natraceutical. On 28 October 2011, SGD, reference shareholder of Naturex S.A, purchased 400,000 Naturex shares from Natraceutical, for a price per share. According to this transaction, NATRA Group owned less than 5% of the voting rights of the company causing automatic termination of the Shareholders Agreement concluded Naturex SA Arrowhead BID 13 EPA: NRX

14 between the parties on 30 December 2009, with immediate effect. As a consequence, the parties have decided to end the concert existing between them since 30 December Naturex announced turnover for 9 months (1 st January th September 2011) (October 27, 2011) Over 9M 2011 Naturex recorded a turnover of 191.2MM, up 12.1% in comparison to the 9M The organic growth amounted to 12.7%, in line with the 2011 annual objectives. The foreign exchange effects impacted the growth of the Q3 in proportions identical to the previous quarter. At constant currency, the growth of the Q3 was 12.0%. - Naturex announced the acquisition of Burgundy Botanical Extracts (October 24, 2011) Naturex announced acquisition Burgundy Botanical Extracts, a French manufacturer and supplier of plant extracts for the nutraceutical, pharmaceutical and personal care industries. Consideration for this acquisition was paid in cash according to an enterprise value based on a multiple of 1.2 to sales ( 14MM over the last twelve months). Burgundy will be consolidated by Naturex Group in its financial statements as of 1 October Naturex closes capital increase program; raises 48.8MM (October 21, 2011) The capital increase launched by Naturex on 04 October 2011 met with very high take up by shareholders: 95% of the total numbers of share warrants were exercised representing 1.22MM new shares or a total amount of 46.35MM. The new shares were sold through a placement at a price of per share resulting accordingly in a unit price for the repurchase of unexercised BSA of Sale of the share warrants allotted to Natraceutical Group for the Naturex capital increase (October 13, 2011) Natraceutical Group possessing 31.08% of the share capital and 11.89% of the voting rights has sold all of its 2.0MM warrants. These BSA have been sold close to the prevailing market price to institutional European investors independent from the concert members and to SGD, possessing 13.08% of the share capital and 16.41% of the voting rights. - Naturex achieves the highest rating in BRC certification across its production sites (September 13, 2011) Naturex Inc. successfully complied with the rigorous and thorough inspections of the BVQI certification body. The BRC Global Standards are a leading global product safety and quality certification program used by suppliers in over 100 countries. A growing number of European and North American retailers and major manufacturers require this independent certification from their suppliers. This new BRC certification demonstrates the commitment and the global approach of Naturex to meet the highest existing quality assurance standards. Aurealis TM, the moisturizing active, achieves outstanding scientific results (June 28, 2011) The latest ex-vivo study from the company revealed that Aurealis TM increases the epidemis thickness by 82% protecting body against daily exposure to dry air, cleaning products, extreme temperatures and other environmental factors. Violation of EU norms by companies providing rosemary extracts (May 19, 2011) Naturex has claimed that several companies offering deodorized rosemary extracts for preservation purposes have been misleading food processors regarding labeling requirements. The claim has come out in light of a new EU norm enforced in April 2011, clarifying the legal status of rosemary extracts and the criteria to ensure they are safe. Naturex unveils its latest developments in Geneva (May 10, 2011) Naturex showcased its extensive range of ingredients at booth 840, in an endless array of applications in the form of dietary supplements, beverages, fruit bars, chocolates and candies. The company launched new enhancements in its product range such as NAT activ, NAT life, NAT pharma and NAT healthy. Naturex launches a new active for rejuvenation during in-cosmetics (April 11, 2011) Naturex introduced a new dragon s blood extract, a revitalizing active. Dragon s blood (Croton lechleri), called both Sangre de Drago and Sangre de Grado, is the primary topical aid for skin care in the Amazon. It protects the skin, due to its high content of proanthocyanidins that provide a powerful antioxidant activity. Dragon s blood extract, standardized to taspine, stimulated the early Naturex SA Arrowhead BID 14 EPA: NRX

15 phase of wound healing, by stimulation of the fibroblasts. Dragon s blood sap protected skin cells and regenerate the whole tissue. Naturex receives an Award for Talin at Malta Stevia 2010 Conference (November 26, 2010) Naturex announced that Talin, its ultimate ingredient for naturally enhancing and modifying flavor, was presented the Best Innovative Stevia Product 2010 award at the Malta Stevia 2010 conference organized by International Society of Antioxidant in Nutrition and Health (ISANH). Naturex unveils its latest developments at Health Ingredients Europe (November 19, 2010) Naturex integrated Nutraceutical s Ingredients division. The company strengthened its ingredients portfolio even further with the addition of fruit and vegetable powders, pectins, natural colors, coloring foodstuffs, inactive dried yeast and Talin (Thaumatin), a multi functional ingredient which offers flavor improvement, sweetness and bitterness masking benefits. Naturex enriches its offering for the food and beverage industries (July 26, 2010) Rising consumer interest for all natural food products drives innovation within the food and beverage industries. Naturex developed an approach to meet both industrial expectations for highly effective ingredients and consumer demand for all natural food products. The company develops and markets a range of innovative natural specialty ingredients that substitute chemical products. It launched the following new developments: Naturex enriches its offering for the Personal Care industry (April 14, 2010) Naturex unveiled Seveov, a new hair care active, from its NAT beauty line. Naturex Research & Development showed a stimulation of hair growth of 93% combined with deep protection of the hair bulb, where growth begins. This exclusive double activity perfectly fits anti-hair loss formulations. Naturex welcomes Rosemary extracts approval as antioxidants by the EU (March 11, 2010) The use of antioxidant rosemary extracts in organic food products is now permitted with the publication of the European Regulation 344/2011/EU. Naturex welcomed this new step in which the company has been a key influence and a driving force in the approval process. Naturex SA Arrowhead BID 15 EPA: NRX

16 Listing Information NATUREX has been listed on segment B of NYSE Euronext Paris since October Number of shares in the capital: 7,711,076 6,953,768 ordinary shares (ISIN FR ) 757,308 preferred shares (ISIN FR ) Naturex is a component of the CAC Small and Gaïa indexes. Naturex is eligible for "long only" Deferred Settlement Service (SRD). Naturex has implemented a Sponsored Level I American Depositary Receipt (ADR) program, which trades on over-the-counter market in the United States under symbol NTUXY. Ticker: Reuters: NATU.PA; Bloomberg: NRX FP; DR Symbol: NTUXY Major Shareholders xi Shareholder Ordinary Preferred Number of % of Voting % Capital Shares Shares Voting Rights Rights Jacques Dikanksky 13, % 13, % SCG 1,605, % 1,605, % Action in concert 1,618, % 1,618, % NATRA Group 604, , % 604, % Free Float 4,724, % 4,936, % Auto-detention 6, % - - Total 6,953, , % 7,159, % Naturex SA Arrowhead BID 16 EPA: NRX

17 Management and Governance The management team at Naturex comprises experienced professionals with a proven track record. Jacques Dikansky President and CEO Mr. Jacques Dikansky is the President and Chief Executive Officer of Naturex SA as of June 14, He is also Chairman and CEO of Naturex Inc, Naturex Cooperative LLC, Manager of Les Broquetons SCI, Chairman of the Board of Naturex SpA, Director of Naturex UK, Chairman and CEO of Naturex Maroc, among others. Naturex on April informed its shareholders of temporary unavailability of Jacques Dikansky due to health reasons. Integrated management of various subsidiaries will continue with the action plans action plans set up for Thierry Lambert Vice President and Director Mr. Thierry Lambert holds the position of Vice President and Chief Financial Officer. He is also Manager of Les Broquetons SCI, Vice Chairman and Treasurer of Naturex Inc, Director of Naturex SpA and Naturex UK and Deputy Chief Executive Officer of Naturex Maroc, among others. Thierry Lambert, in his capacity as Director and Vice-President, will chair the meetings of the Board of Directors during absence of Jacques Dikansky and will ensure the proper execution of the Board's work. Stephane Ducroux Vice President USA Mr. Stephane Ducroux is Director of Naturex SA as of June 27, He is also Vice Chairman of Naturex Inc. Other management team members: Management member Marc Roller Benoit Brochet Maxime Angelucci David Yvergniaux Samuel Menard Antoine Dauby Frederic Seguin Serge Sabrier Carole Alexandre Position Scientific Director Director of Sales, Europe Director of Sales, Europe Director of Sales, USA Director of Sales, USA Group Director of Marketing Industrial Director Director of Purchasing Supply Chain Manager, Investor Relations Naturex SA Arrowhead BID 17 EPA: NRX

18 Segments and Marketing Overview Naturex is a plant-based natural ingredients producer with three strategic business segments Food and Beverage, Nutrition and Health and Personal Care. Food and Beverages Sector Overview Food ingredients are a broad category of substances which are added to food and beverages to improve their appearance, quality or nutritional value. These are pre-dominantly used to facilitate processing, maintain product consistency, extend shelf life, ensure microbiological safety, improve or maintain nutritional value, or enhance the flavor, color and texture of the finished product. Globally, food ingredients industry is a multibillion dollar industry and its estimated size is approximately US$34 bn. xii Flavors segment has the largest share in the overall food ingredients market followed by hydrocolloids, sweeteners, emulsifiers, preservatives, colors and food cultures. Usage of colorants is highest in soft drinks, confectionery and meat & savory products. There has been a shift towards natural colors as more and more consumers associate natural products with superior quality. However, the global food and beverage sector post recession is gaining momentum with growth in various sub-industries such as farming, food production, distribution, retail and catering. As per IMAP, global food and beverage sector, valued at US$5.7 trillion in 2008, is poised to increase to US$7 trillion by Notably, in last decade, the food and beverage expenditure in the developed countries has been in line with the nominal GDP growth rate. Revenues for organic food & drink are projected to approach US$60BN in 2011 and are expected to expand nearly 3 times from US$18BN in xiii Structurally, the global food and beverage industry is fragmented as some key players Nestlé, Kraft Foods, Unilever and Cargill account for less than 5% of the overall value, leaving enough space for small and medium companies. Among the European Union members, around 99% of the participants in the industry are small and medium enterprises. The food and beverage industry is highly fragmented, with the top ten companies in 2007 accounting for only 12.9 percent of the global market. The EU is the key player in the global trade, being the world s largest exporter and importer of food and beverage products worldwide. For companies such as Naturex, this implies a diverse client base and the need of wide product offerings. Market trend and growth drivers Food & Beverage Natural and Organic Foods: 10% 2011/Worldwide F&B with Health Claim: 22% /Worldwide $179 bn F&B Bio: 34% /Worldwide $30.5 bn According to Euro monitor, the natural ingredients market in the world will reach EUR155BN in 2012 and the market for organic products will reach EUR24BN, with an estimated growth rate of 10%. In the American Market these two categories is expected to have significant growth rates of 13% and 7% respectively by Recent market analysis (from Frost & Sullivan) confirms this to be true and projects that the market for coloring foodstuffs will increase by 10 15% over the coming years. xiv The natural coloring market is estimated to be about EUR MM, compared to EUR MM for synthetic colors and EUR MM for semi-artificial colors. In 2010, out of the total colors market of US$1.7BN, natural colors comprise US$650MM and this share grew by 6.5%in 2011, higher than the total colors growth of 4% xv. According to the Global Industry Analyst (GIA) the world food additive market is expected to exceed US$34BN by the end of The Naturex SA Arrowhead BID 18 EPA: NRX