ID Logistics : Integrated Report 2022

INTEGRATED REPORT 2022

FOCUSED ON A SHARED FUTURE

INTEGRATED REPORT 2022

Contents

Section 1

A YEAR OF GROWTH AND ROLLOUT

Key metrics for ID Logistics

p. 10 > 19

Section 2

PEOPLE-DRIVEN

• 2.5bn

revenues

95%

customer retention rate

MOMENTUM

p. 20 > 27

Section 3

COMMITMENTS FOR A SUSTAINABLE FUTURE

p. 28 > 41

Section 4

	30,000
	employees
365	+8 million m2
sites	of warehousing

17

countries

GOVERNANCE & RESULTS

p. 42 > 51

10

CSR targets for 2030

2

innovations

per site, per year

02

03

INTEGRATED REPORT 2022

Following on from this outstanding year, we'll continue to develop our core models to support organic growth and pursue our drive for geographic balance.

INTERVIEW

WITH Éric Hémar,

Chairman & CEO at ID Logistics

What is your analysis of 2022?

E. H.: Despite the complexities of the economic landscape, 2022 proved to be both an exceptional year in terms of our performance, and a turning point in the development of

ID Logistics. We have been able to report revenue growth of 31.9%, which includes organic growth of 11.9%, and a 48.8% increase in operating income. Our cash flow generation performance in 2022 has reduced our debt level to below twice EBITDA, despite the substantial capital investments made during the year.

At the same time, our recent acquisitions have reshaped our profile, and we've clearly moved on to a new stage in our development.

40%

of Group growth was driven by new customers

So could you tell us more about the new profile of the Group?

E. H.: We now occupy significant market positions in all the countries where our largest customers are continuing to expand their operations. So France now accounts for just over one-third of our business, other European countries for 40%, and the USA for more than 20%. Our plan is to gradually balance the spread of our business across these three regions.

What drove your growth in 2022?

E. H.: The Group's strategy hasn't changed

over the past twenty years: we support our international customers by providing them with logistics services that are fully integrated into their sales and distribution strategies. So our revenues grow alongside theirs. Historically, our key customers have been major retailers. Our recent acquisitions have effectively strengthened our presence in the FMCG and e-commerce markets. In each of these categories, we adopt and implement an approach based on our customers' core models to ensure that we can provide an equally effective response in all locations.

How do your latest acquisitions align with Group strategy?

E. H.: With these acquisitions, we're seeking to balance growth across the major national markets served by our customers. Integrating GVT has consolidated our position in the Netherlands, which is essentially the logistics heartland of Europe. Kane Logistics has enabled us to achieve critical mass in the USA, gain access to industrial customers and develop expertise in areas like co-packing,

which we also plan to roll out in Europe. Lastly, Colisweb has expanded our range of last-mile services to include heavy and bulky parcels; a channel that DIY and homewares customers are focusing on as potentially the best solution for meeting their needs.

How does ID Logistics plan to respond to the major challenges facing the sector?

E. H.: We're developing our commercial and operational organisations to make us even more responsive to the needs of customers who are demanding closer and closer integration of their logistics structures with their industrial and distribution strategies, which is a particularly strong trend in consumer goods and e-commerce. Given the pace of our growth, we're also introducing a more structured talent attraction and retention policy. We've set ourselves the ambition to

be the benchmark employer in our sector, because we really need to attract and train qualified people with more specific skill sets. We also took a crucial step forward two years ago when we set quantifiable CSR targets to be achieved within specific lead times. These set out strong markers for our customers and our teams, and are the cornerstones of our ongoing development.

+31.9%

revenue growth in 2022

How do you see the outlook for 2023?

E. H.: We've now taken our first steps in Italy to provide continuity of support for one of our largest customers. Our core model approach meant that we were able to get that site up and running in just nine weeks, which is a new record and further proof of its effectiveness. Italy is a country with great potential for us, and one where we intend to carry on developing our business. In fact, the team there is already signing new contracts. We have also completely halted all activities in Russia, and are working to ensure the smoothest-possible transition solutions for our Russian customers. So within this new geographic scope, we will continue to grow organically, at the same time as remaining proactive when acquisition opportunities arise.

04

05

INTEGRATED REPORT 2022

Our 2022 financial and extra-financial performances underline the stability and strength of our Group business model and values.

INTERVIEW

WITH Christophe Satin,

Chief Operating Officer

How is the process of integrating your latest acquisitions progressing?

C. S.: The process of integrating GVT, Kane Logistics and Colisweb was actually completed ahead of schedule. We've clearly defined their objectives and organisational structures to ensure that their teams feel confident and comfortable in their new environment. That stability is now in place, and everyone

is fully on board with our business plan. But throughout that process, our priority has been to avoid any disruption for our new customers, and I'm pleased to say that all of them have stayed with us. Our decentralised structure and standardised processes mean that we can implement all our operational and digital management tools very quickly in newly acquired businesses.

And to harmonise our internal and customer communications, we've rebranded all our subsidiary companies with the ID Logistics identity, and grouped all our retail distribution activities together under the Colisweb brand. The new website designed to reflect our new organisational structure went live at the end of March 2023. In parallel with that development, we also introduced a consistent set of communication tools right across the Group.

10

centres of expertise across Europe

How have you coped with the sudden return of inflation?

C. S.: Inflation was a major focus for us in 2022, because it's been virtually absent for the last two decades. But the first thing to remember is that all our contracts contain indexation clauses. In return, our customers expect us to deliver significant productivity gains every year. So we've reworked our continuous improvement plans in three key areas:

• With each customer, we've used our tried and tested Customer Workshop methodology to review every link in their supply chain to identify new sources of improvement,
• On our operating sites, our processes encourage continual day-by-day feedback of new sources of productivity. Two years on from its introduction, the Short Interval Management (SIM) methodology has proved its worth in France, and is supported by digital tools that make life easier for our teams. In this way, everyone at every level
  in the organisation is able to make their own contribution to operational excellence. We've started to roll out this model in all Group countries on the basis that it delivers improvements that are very accurately targeted and relevant, because they come from the people who do the jobs concerned.

• Lastly, we've taken the cross-functional approach to nominate one particular site for each customer category, such as cosmetics or e-commerce, as its centre of expertise. We then use those centres to drive innovation and research in real-world situations. The resulting innovations are then rapidly duplicated in other similar sites with a high level of responsiveness.

A CSR trajectory aligned with the Group roadmap

Operational excellence is a Group key value. How was that value actioned in 2022?

C. S.: Operational excellence demands a commitment to performance and efficiency at every level. So it applies not only to industrial performance, but also to social and environmental issues. Our CSR roadmap is fully integrated into our management systems, and very much a part of our core expertise. Now that we have the relevant indicators in place, we've been able to confirm that we were on track with our ten commitments in 2022. From now on, we'll be expanding our progress plans every year. This year, for example, we are focusing on initiatives that promote inclusion, like the each One for Business programme to integrate and train refugees, and welcoming people with disabilities.

How are you using your Let's develop our ID Logistics together employer brand programme to establish your Group as the employer of choice in your sector?

C. S.: Our approach is structured around this programme. We began by conducting the wide-rangingHappy At Work survey in all our countries to hear what our employees think. We then used the survey findings as the basis for building a detailed action plan to deliver the best-possible response to the expectations around quality of working life, ambition and training. We've also formalised our career review and talent management processes across the board. Lastly, we're currently developing a communication plan to raise the profile of our career opportunities internally and externally, and we'll then be channelling that heavily through social media.

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07

INTEGRATED REPORT 2022

ID LOGISTICS,

A PURE PLAYER IN CONTRACT LOGISTICS

A STRUCTURALLY GROWING MARKET

• Changes in consumption patterns
• Supply chain optimisation by major customers
• Growth in outsourcing
• Integration of sustainable development concerns

RESOURCES

Human capital

. 30,000 employees worldwide

. Average age of 39

. An uncompromising health and safety policy

. A strong employer brand

Innovation capital

. 50 sales engineers worldwide

. 3 innovation campuses (Brazil, Netherlands and France)

The Group's business lines: logistics solutions for every link in the supply chain

Warehousing	Transport
and value-added	and flow
services	organisation
Supply chain	Delivery of
optimisation	turnkey projects
Dedicated
e-commerce
solutions

A balanced customer portfolio

Our strategic pillars

A totally customer-centric organisational structure

Stable and experienced teams

Optimally consistent quality of service

A commitment to CSR throughout the history of the Groupe

An ongoing innovation process

A presence in 17 countries

ID Logistics consolidates its market shares through a combination of organic and external growth

VALUE

CREATED

For customers

. Year-on-year organic growth of 11%*

. 18 new customers per year*

. Contract renewal rate > 90%

For employees

. In the HappyAtWork Top 10

. 7,600 hires per year*

. 30% of sites mechanised worldwide

Financial capital

. €325 million in shareholders' equity

. A debt ratio limited to 1.9 x EBITDA

. A Group listed on Euronext Paris

Societal and environmental capital

. Responsible Procurement Charters

. Member of the Demeter Club

. Member of the UN Global Compact

25%			18%			6%		4%		2%
E-commerce		Consumer		Technology		Industry		Healthcare
	22%	goods	15%		5%	3%
Food retail	Non food	Cosmetics	Fashion
				retail

4 fundamental values

SOLIDARITY

To encourage social promotion and inclusion at all levels of the company; engage with local communities.

ENTREPRENEURSHIP

To offer all employees the possibility of imagining, undertaking and creating. Support them in their achievements and projects.

DEMANDING

STANDARDS

To be demanding of ourselves and our customers, to act as a responsible company and to control our environmental, social and societal impacts.

OPERATIONAL

EXCELLENCE

To guarantee the highest level of logistics services with a view to performance and customer satisfaction.

. 209,000 hours of training per year*

. A 30% reduction in the occupational accident frequency rate (Group-wide 2022 vs. 2018)

For the planet

. 69% of waste recovered

. 22% reduction in carbon footprint

. Eco-responsible solutions for our customers

For the community

. 60% of suppliers have signed the CSR & Responsible Procurement Charter

. A longstanding commitment to local communities

* Over 5 years.

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