ANNUAL REPORT 2018 #GrowingTogether

Royal Lemkes has a green heart. We believe in plants, as they can create a better life, stronger businesses and contribute to a healthier, green world. We strive for sustainable growth. Of our people, of our relationships, of our common business and of the world we live in. Plantify® = Creating a better life, stronger businesses and a healthier, green world with plants. 2

Contents 04 What we believe in is what we stand for 06 Summary 2018 on behalf of the executive management team 08 Our highlights 12 Horticulture Entrepreneur Award innovative and sustainable entrepreneurship 14 2018 in figures 18 Our people growing together as colleagues 28 Our business relationships together, we create a strong plants category 42 Our sustainable mission together, we create a greener future 50 Royal Lemkes Foundation sharing is multiplying 54 Financial results growing together sustainably 58 Green Sparkle stewardship 3

What we believe in R IS WHAT WE STAND FOR oyal Lemkes has a green heart. There are three elements to this green heart: our roots as a grower, our knowledge of plants and the sustainable ethos of our shareholder, management and staff. OUR VISION We believe in plants. Plants are a beautiful and healthy addition to our lives and also strengthen our customers’ business. Plants also play an important role in making the world greener, which is sorely needed given the trend towards increasing urbanisation and the environmental issues we currently face. OUR MISSION We strive for sustainable growth. Our aim is not to maximise profit but to maximise impact. Naturally, we need a ‘minimum viable profit’, but that results from and is a condition for a healthy company. Our aim is the sustainable growth of our people, of our relationships and of our common business; if we succeed in that, the company will grow naturally. We also strive for a green supply chain and a liveable planet, not just for ourselves but also for future generations. 4

We don’t just believe in plants. We also believe in: ‘Business as a force for good’. Companies like Royal Lemkes play an important role in making our world liveable and keeping it that way. People. It is people who make the difference. That’s why we continually invest in our employees and our relationships. Togetherness. Together we can move forward with our stakeholders, retail partners and suppliers as well as our departments and colleagues. The uniqueness of the plants category. A good price-quality ratio is extremely important. This requires strategic partnerships and supply chain optimisation. Scale. Size matters, in terms of sourcing, supply chain and professionalism. Data. Possessing the right information is indispensable when making the right choices for our customers. Doing better every day. That’s why we work with Lean Management and continuously evaluate our processes. 5

Summary 2018 O #GROWINGTOGETHER ur mission is sustainable growth. Looking back at 2018, we are proud of the sustainable growth achieved by our customers, our suppliers, our business and the wider world in which we live. But we are especially proud of the growth of our employees: many of them followed one or more training courses at our Plantify Academy. Sustainable growth also defined our business relationships. All our customers had a positive index and customer satisfaction further increased. All in all, this resulted in a highly satisfactory revenue growth of €16 million or seven per cent. In addition, we switched to an exclusive, transparent partnership with two customers, and at the end of the year, we welcomed a beautiful UK-based retailer as a new customer. However, we can only continue the transition to a sustainable, profitable plants category by working with our partners: colleagues and customers as well as suppliers, transport companies, temporary employment agencies and social enterprises. Together, we are Royal Lemkes, and together, we are delivering on our mission. We again took significant strides in 2018 to move from ‘good to great’ and made further investments in sustainability and professionalisation. This is reflected, for example, in our invest6 ments in robotics, which will guarantee and perhaps even improve the level of service to our customers in the long term. In general, we continued to improve the quality of our organisation and our processes. It all forms a healthy foundation for the future as we step up our efforts ‘to make a difference’, not only for our customers but also for our other business partners as well as people, the planet and society. In this report, we look back on an eventful year. We continued to build for a sparkling future based on leading customers, a vibrant organisation and a strong dose of craftsmanship. We expect a healthy increase in revenue in 2019 and will continue to invest in our people, in sustainability and in IT; but, above all, in our relationships. At Royal Lemkes, we are fully committed to sustainable growth. That is our mission and we will take a leading role in it. After all, our theme for this year is ‘Growing Together’. In January 2018, we won the prestigious Horticulture Entrepreneur Award. We are very proud and especially grateful for this recognition. You can read about this and many other proud moments in the annual report. We hope you enjoy reading it as much as we enjoyed creating it. Last but not least, we would like to thank you for your ongoing trust in Royal Lemkes. On behalf of the executive management team.

Michiel van Veen Director Operations & Supply Chain Michiel de Haan Managing Director Cees van der Meij Director and Majority Shareholder 7

Our highlights JANUARY Horticulture Entrepreneur Award On 10 January, we received the prestigious Horticulture Entrepreneur Award. FEBRUARY Suppliers’ Day A very successful day full of inspiration and interaction with our top suppliers. Watch the aftermovie on our website: https://www.royallemkes.nl/our-company/ videos/ MARCH Personal Leadership Programme Successful completion of the fourth Personal Leadership Programme. APRIL 25-year partnership with ALDI We are proud of our 25-year partnership with ALDI. 8

MAY EenVandaag EenVandaag’s film crew (NPO 1) presented our vision on Brexit. JUNE Annual summer BBQ To mark the end of the peak season, we held our annual summer BBQ. ocal trade officials at the Dutch Embassy We gave an inspiring presentation on Royal Lemkes’s sustainable mission to trade officials based at the Dutch embassy. JULY Introduction Day We organised three introduction meetings for newly appointed staff in 2018. During one of these special introduction days, we welcomed this wonderful group of new, enthusiastic colleagues. 9

AUGUST Transport Day Successful event for our carriers aimed at working together on our sustainable relationship and a greener future. Watch the aftermovie on our website: https://www.royallemkes.nl/our-company/videos/ Internal inspiration session We host inspiration sessions and invite external speakers to give inspiring talks three times a year. In August, we gave the floor to Bloemenbureau Holland and online platform and influencer Roomed. SEPTEMBER ustainable Thursday We organise this annual event to raise wareness among our employees and partners of the impact we have on the world. Three passionate speakers – Reinier van den Berg (meteorologist), Harmen Spek (Plastic Soup Foundation) and Ruud Koornstra (the first National Energy Commissioner of the Netherlands) – inspired one and all with their stories and made us reflect on our roles. Watch the aftermovie on our website: https://www.royallemkes.nl/ our-company/videos/ OCTOBER Vitality scan Some 70 per cent of employees took part in the vitality scan to gain insight into their health. 10

NOVEMBER Hillenraad SUB40 Hillenraad chose Royal Lemkes as one of the most attractive employers for young talent in the horticulture sector. 10-year partnership with IKEA It was 10 years ago that we first began supplying IKEA stores. Today, we supply our plants to all IKEA stores in 31 countries across Europe. DECEMBER Royal Lemkes Foundation We handed out cheques to charities selected by our employees at our annual Christmas breakfast. New logistics colleagues In December, we welcomed 24 new operational colleagues. They officially joined the company on 1 January 2019. 11

Horticulture Entrep O INNOVATIVE AND SUSTAINABLE ENTREPRENEURSHIP n 10 January, we received the prestigious Horticulture Entrepreneur Award! We proudly accepted the role of ambassador for the horticultural sector and were honoured to be able to promote our vision of ‘business as a force for good’ on many stages. This award serves as an additional incentive for us to continue to develop and improve, which is why we invested heavily in people and our organisation in 2018. According to the Horticulture Entrepreneur Award jury: “The jury is of the opinion that the company’s entrepreneurs initiate and take responsibility for many projects which make the business and the the supply chain more sustainable. Royal Lemkes establishes long-lasting relationships with its suppliers and customers. A unique aspect is the HR policy, which is based on the principle that employees and their environment are central to the business. From this position, the company – together with its employees – can optimally serve its customers. With a strong corporate identity and acting as a trailblazer within the industry, Royal Lemkes scores well on all elements of entrepreneurship and is therefore the winner of the 2018 Horticulture Entrepreneur Award.” Royal Lemkes executive management team 12

preneur Award m 13

34 countries Our globetrotting plants made their way to 34 countries across Europe revenue in 2018 10 million 25 million 40 million 50 million 0 Phalaenopsis Lavandula Hydrangea Areca 2 14 1 3 Top three (euro sales) houseplants and garden/patio plants Citrus Ficus consumers online/mobile, plants are hot, sustainability, local for local trends

265 791 million revenue 102,760,773 plants delivered 18,828 different products suppliers 2,523 shops 255 255 kilometres of loaded lorries 2018 IN FIGURES EVERY SECOND Three plants find a new home 81% The percentage of sustainably traded product is 81%. retail e-fulfilment, socially responsible products, trade marketing, central sourcing horticulture sustainable production, economies of scale, internationalisation technology digitalisation, platforms, data, robotics other economics, politics, labour market, transport market 15 Figures

MAY WE INTRODUCE… Yolanda prepares healthy lunches for more than 100 people a day. Is crazy about ice cream. Gets the jitters from office jobs. Still makes packed lunches for her daughters (19 and 20). Is very healthy according to the vitality check. 16 “ It’s in my nature to make people happy. ”

An interview with Yolanda Moor WHAT DO YOU LIKE ABOUT PLANTS? “I’m a huge plant freak. There’s not a single plant I find ugly. I even met my husband through plants – he’s a buyer at Intratuin. If I were a plant, it would be one that flowers abundantly, like a hydrangea or a ‘slender’ orchid” WHAT MAKES YOUR WORK ENJOYABLE? “I love the combination of plants and catering. It’s in my nature to make people happy, whether they’re co-workers or international visitors. I work well with my close colleagues and get to set my own schedule. What more could you want?” WHAT ARE YOU MOST PROUD OF? “Many of us at Royal Lemkes did a vitality check. To keep my colleagues healthy, I’ve introduced more variety in the company lunches. In addition to sandwiches, cheese, lunch meats and milk, I also serve raw vegetables and a different salad every day. The lunches are also becoming more and more sustainable. We have introduced ‘Meatless Monday’ and I try to source seasonal and local products as much as possible, such as pears and apples from a local orchard. But there’s still a lot of room for improvement when it comes to disposable plastics. However, we’re moving towards bigger packaging, which results in less waste.” HOW DO YOU GROW ‘TOGETHER’? “We show mutual appreciation for and take care of each other at Royal Lemkes. Everyone is treated equally, from reception to management. I like to offer people a listening ear. Colleagues sometimes come to me to vent their frustration when the pressure gets too much during the busy season. Their stories are safe with me.” 17

Our people #GrowingTogether

Our people A s it is our people who make the difference, our main goal is for them to grow sustainably and feel at home. In 2018, we had the honour of being voted ‘Best Employer***’. We were also ranked by Hillenraad SUB40 as one of the 10 most attractive employers for young people in the horticulture sector. PERSONAL GROWTH People blossom when they are empowered. We are a learning organisation that encourages and supports employees in their personal growth. In 2018, many Plantify colleagues again Academy. attended a workshop or training course through our Highlights included our fifth Personal Leadership Programme, the second Talent Development Programme for 12 young employees and the Personal Growth Programme that was launched during the year. Two university graduates also started a two-year internship as part of a traineeship programme which we developed. VITALITY To increase employee vitality and prevent absenteeism, we set up absenteeism as a specialism within the HR Department. During 2018, absenteeism fell from 4.12 per cent to 2.61 per cent. In addition, 70 per cent of our colleagues took part in a preventive medical examination, following which 20 GROWING TOGETHER AS COLLEAGUES we started various initiatives such as STOPtober, the Food & You workshop and Alpe d’HuZes. DIVERSITY We believe in diversity – whether it concerns gender, age, experience or nationality – and feel that differences certainly enhance our company. The majority of our employees have completed a ‘colour code analysis’ and this is discussed during team coaching sessions. Our company employs no fewer than 11 different nationalities. We also actively employ people from sheltered workshops to give everyone the chance to make a difference. IN/OUTFLOW & ADVANCEMENT We have a clear vision and we invest and believe in our people. This attracts ambitious, enterprising employees. We have noticed a marked increase in our appeal in the labour market and welcomed many new colleagues in 2018. An essential principle during this growth phase is that everyone embraces our family culture, understands our company and is able to deliver on our mission.

Talent Development Programme with 12 talented young people “ Our HR policy is aimed at allowing people to grow sustainably by offering courses and learning programmes. We believe it is important that our employees feel connected with each other and with our beautiful company. ” Jeannette Jongeleen HR Manager, Royal Lemkes 21

MAY WE INTRODUCE… Ben is team leader operations. Has been with Royal Lemkes for over 20 years. Is keener on animals than plants. Enjoys going fishing with his children. Feels happy surrounded by summer bloomers. Completed the Personal Leadership Programme. 22 “ I now know what I want. ”

An interview with Ben de Ridder WHAT MAKES WORKING AT ROYAL LEMKES ENJOYABLE? “The way we treat each other as colleagues. When one of us is going through a hard time, the other helps out. People do a lot for each other here.” WHAT HAS THE PERSONAL LEADERSHIP PROGRAMME BROUGHT YOU? “It has helped me a lot, especially on a personal level. I’ve had a hectic time and recently went through a divorce. This programme gave me the space to reflect on what I stand for and what I think is important; I never gave myself time for that before. I literally emerged from this period a different person. Because I now know what I want, I’m a lot calmer, which is a big advantage in my work. It helps me be more patient with colleagues who may be quite different from me.” WHAT ARE YOU MOST PROUD OF WHEN YOU LOOK BACK AT 2018? “In previous years, it was difficult to find enough people for production, so the work pressure was high and we worked long hours. As the pay for temporary workers has been increased, we now have many more motivated people, which makes the work a lot more fun.” HOW DO YOU GROW ‘TOGETHER’? “As a team leader, I think it’s important for everyone to feel valued. I also expect every employee to think about how we can do better each day. That’s why I try to have more oneon-one conversations with colleagues, present them with a problem and listen to their solutions. You never know what brilliant ideas they might come up with.” 23

Plantify Academy® Leadership programmes Personal Leadership Programme PPL4 (completed) Personal Leadership Programme PPL5 (started) Talent Development Programme TDP2 (started) Pizza with Covey Personal Growth Programme Mid-Management Training Professional programmes Plant courses Language courses Personal Effectiveness Programme Various Microsoft courses Master classes in Trade Marketing, Category Management 12 participants 11 participants 12 participants 18 participants 9 participants 8 participants 20 participants 10 participants 20 participants 20 participants 35 participants In addition, various colleagues followed tailored programmes, such as MBAs, higher professional education courses, NEVI, etc. Tailored Leadership Personal Leadership Programme Knowledge & skills Personal Eff ectiveness Programme Management skills Individual training courses focused on professional challenges and career development Talent Development Programme Professional programmes for account and product managers Pizza with Covey Personal Growth Programme GreenSales Plant courses Microsoft Offi ce courses Language courses programmes Lean Management 24

Royal Lemkes figures age distribution 20-24 years 25-34 years 6 4 24 23 35-44 years 20 31 45-54 years 22 37 55-59 years 7 18 >60 years 4 7 83 120 years of service 24 78 <1 1 to 5 6 to 10 11 to 15 16 to 20 21 to 25 >25 33 26 21 4 17 22 10 12 outflow inflow 26 advancement 14 14 12 6 8 25 sickness absenteeism -36% decline from 2017 2.61% 0.96% 0.82% 0.83% 203 employees 41% 59% percentage male/female long moderate short

MAY WE INTRODUCE… Kimberley is a BI consultant. Has a weakness for amusement parks. Has played football since she was four. Is the mother of twins. Goes by her maiden name at Royal Lemkes but is now actually called Vermeulen. 26 “ I like my work a little too much. ”

An interview with Kimberley Houwaart WHAT DO YOU LIKE ABOUT PLANTS? “Nothing in particular, really. I could never keep them alive. But my house has become a lot greener since I joined Royal Lemkes. This wonderful family business gives me the confidence to grow and space for personal development.” WHAT MAKES YOUR WORK ENJOYABLE? “When I tell people at birthday parties that I work as a business intelligence consultant, I get a lot of strange looks. I studied psychology and like statistics a lot. At Royal Lemkes, I get to combine my love for people and my passion for data. I try to change the general misapprehension around ‘scary data’ into ‘wow, this really works!’ I enjoy my work a little too much and sometimes end up working too long or waking up at night with a good idea.” WHAT ARE YOU MOST PROUD OF? “We are completely rebuilding Diver, the system we use to analyse data, from the ground up. We have changed the look and feel and it is today more user-friendly. Colleagues can now compile their own reports and click through to the most detailed level. Getting the system delivered and live was hard work, but I’m so happy with the result!” HOW DO YOU GROW ‘TOGETHER’? “Some colleagues have been doing their work the same way for many years. It’s not my job to say: you have to do your work differently. But you can make better decisions with the right data. So, I give my fellow workers all the relevant information and then let them make better choices themselves. When I build something new, I always involve the colleagues for whom I’m building it. By genuinely working together, I’m more aware of their needs and wishes.” 27

Our business relationships #GrowingTogether

Our customers O TOGETHER, WE CREATE A STRONG PLANTS CATEGORY ur customers are renowned European retail players from different segments with whom we maintain an exclusive or preferred partnership: IKEA (31 countries), OBI (10 countries), Kingfisher (B&Q, Castorama and Brico Depot: six countries), Maxeda (Praxis and Brico: two countries), ALDI (four countries), System U, Jardiland, Truffaut and Dobbies. In 2018, we forged a new partnership with a beautiful UK-based retailer. Revenue grew for all our customers in 2018. 30

“ We grow together by having common goals and by sharing the same values. We learn together, but we also strengthen each other through high demands and challenges. With a high level of trust, we both give and take responsibility. And – last but not least, we celebrate mutual success! Marcus Schaaf Business Developer Green Plants IKEA Group ” “ ALDI customers are very satisfied with our plant offers: excellent products at the familiar and affordable ALDI prices. This is the result of years of consistent cooperation with our growers and Royal Lemkes. Last year, we celebrated our 25year partnership – proudly but modestly. We are also proud of the brand we recently launched together with Royal Lemkes: Kwekers Trots. For ALDI customers, this is a guarantee of high-quality, sustainable plants that make people happy. ” Jan Heijstek Manager Buying ALDI Nederland 31

OUR SERVICES Large-scale retail is undergoing a transformation. Each retail partner is responding to the changes involved in its own unique way and Royal Lemkes is helping by providing customised solutions. In addition to our two main services, Sourcing & Advice and Operations & Supply Chain, we offer numerous additional services: Trade Marketing Concept Development Shelf Presentation Category Management Brand Development Supply Chain Services Trolley Management Network Optimisation Supply Chain Finance Qasus Sustainability Advice Quality Advice E-fulfilment Through our sister company REGUARDZ Data & Digital Business Intelligence Online Stores Apps Replenishment TRADE MARKETING Trade marketing is one of the additional services we provide because the need to offer a unique and distinctive plant range is increasingly important for our customers. Together with the customer, our experts look at the best marketing approach for the target group, given the possibilities and the customer’s wishes. This enhances the buying experience and increases shoppers’ spending. In 2018, for example, we developed the Mediterranean concept and the Growers’ Pride (Kwekers Trots) brand. “ We aim for intrinsic collaboration in our industry with partners such as Royal Lemkes. Together, we create better results to ensure the best achievements in innovation, sustainability and business practices. Progress is assured when working collectively, especially when it concerns commitment to our people and our planet and to securing a leading position for the Netherlands in our industry. Noelia Mansilla Senior Vice President Commercial Operations EMEA Dümmen Orange ” 32

SUPPLY CHAIN SERVICES The perishable plants supply chain requires specific knowledge and skills. Our expertise allows us to continuously improve the supply chain. Due to our innovations in customer service, forecasting, network planning and robotics during 2018, we are aiming to further improve our customer delivery services at the lowest possible total costs. Mediterranean project (visual FloraMedia) QUALITY ASSURANCE (QASUS) In 2018, we passed the certification audit for the new ISO 9001:2015 standard with flying colours and have now switched to professional software to further optimise our operational processes and make them easily accessible to our employees. The various external audits performed at the request of our customers have also all gone smoothly due to the good collaboration and deep customer engagement of our staff. The shift from a quality manual to a quality culture has been set in motion, partly thanks to the use of Lean Management. As a result, employees are closely involved in continuously improving our operational processes. 33

E-FULFILMENT: REGUARDZ We transferred our e-fulfilment activities to Reguardz in 2018, a separate limited company. Dedicated to e-fulfilment in horticulture, Reguardz aims to optimise the services outlined below in close consultation with retailers. Reguardz is here to support your e-commerce strategy. DIGITAL & DATA In 2018, we launched new online stores for three customers, making it easier for shop employees to place orders and consult other information. We also optimised the replenishment module for one customer. 34

Customer Service Team CUSTOMER SERVICE In the past year, customer satisfaction at store level increased. We achieved this by having first points of contact who speak the customer’s language and by proactively contacting retailers in the event of deviations from orders or deliveries. We also successfully rolled out the ‘special care’ concept for stores that required extra help. And because we developed a dashboard for each customer, we were also able to manage KPIs better: ‘in full, on time, no error’. “ For the first time in Kingfisher’s horticulture history, we will be able to say that we are a completely open book and transparent with our supplier. By Kingfisher and Lemkes working as one, we can get the best prices and quality as well as a full logistics service provision across our European stores. We are looking forward to what this partnership can bring. ” Kirsten Ferguson Group buyer Christmas, Garden Care and Horticulture, Kingfisher 35

Our growers W e work closely with the best growers and breeders in the world. By working together intensively and by focusing on long-term partnerships, we create a sustainable chain and a distinctive range for our customers. STRATEGIC SOURCING A wide sustainable range can only be offered in close cooperation with suppliers. In 2018, we intensified cooperation with our top 100 growers and made long-term agreements. Thanks to our buying volume, our customers can benefit from a high-quality product range at competitive prices. Moreover, we believe in the growing importance of ‘local for local’ and are therefore committed to ongoing local sourcing of our offer for the international market. “ TOGETHER, WE CREATE A DISTINCTIVE PRODUCT RANGE SUSTAINABLE SOURCING POLICY At the end of 2018, we further outlined our sustainable sourcing policy. Four themes will guide us in the coming years: Promoting of integrated pest management Reduction of the use of plastic in the supply chain Reduction of CO2 emissions Working conditions in the supply chain SELF-BILLING FINANCE In 2018, self-billing went live. With this service, Royal Lemkes takes the administrative burden of invoicing off our suppliers’ hands. This form of cooperation saves both the supplier and Royal Lemkes a lot of time and ties in perfectly with the earlier introduction of supply chain finance. At Kwekerij Wouters, we have for years believed in building long-term partnerships with the aim of growing together. Transparent, professional, reliable and working collaboratively: that’s what our relationship with Royal Lemkes represents. Together, we look for sustainable, new products and packaging, so we can continue to surprise and impress customers. We are proud to have been a supplier to Royal Lemkes for so many years. ” René Wouters Kwekerij Wouters 36

“ Genuinely good cooperation is based on at least two pillars: truly wanting to understand each other and truly respecting each other. I know I’m not only speaking for myself when I say we have every confidence that Royal Lemkes truly wants to understand us and truly respects us. This trust translates into opening new doors together and working collaboratively to make the world a bit more beautiful. We shall continue to strive for this in 2019. ” Thomas Bunnik Bunnik Plants Suppliers’ Day: In January, we received our top 100 suppliers and updated them on opportunities and developments in the retail sector. 37

Our logistics partner E TOGETHER ON THE ROAD TO A SMART SUPPLY CHAIN ach year, we deliver more than 100 million plants directly to over 2,500 retail outlets in 34 countries. We cooperate closely with our supply chain partners: from the best growers and suppliers to the most reliable temporary optimise the employment agencies and carriers who meet retail conditions. Together, we can continuously supply chain to make it more efficient, more reliable and more sustainable. The past year certainly had its challenges as a result of both growth and availability: growth in revenue and customers’ expectations regarding our services; and availability in terms of plant supply, temporary staff and transport capacity. “ We all want efficiency, effectiveness and integration. The same goes for Royal Lemkes and Mandersloot. We are therefore joining forces to generate ongoing innovation in the field of automation with a view to the future. After all, working smarter, sharing data through the cloud and the standardisation of documents and data – such as transport orders, invoices and statuses – is essential in these times. Looking ahead, we want to work together on more advanced forecasting tools to gain ever better insight into volumes. By working jointly, we can grow together in an increasingly digitised world. ” Henri Groothuis IT Manager, Mandersloot 38

rs SUPPLY CHAIN PLANNING In 2018, we therefore established the Supply Chain Planning Department to improve planning and prevent problems rather than having to solve them. We continuously measure our performance based on various ‘on time, in full, no error’ scores for each customer and supplier. During the year, we also further intensified our cooperation with carriers and temporary employment agencies. ROBOTICS A long-term response to growth, complexity and scarcity involves robotics, with the ultimate goal of making our services even better. The green light for the robotics project in 2018 means that we are currently testing and developing our robotics and automation processes at full speed. “ Expanded cooperation during 2017 helped our partnership reach new heights. Moreover, high service level requirements pushed our operating model to excel every single day. The need to find creative, innovative solutions to daily challenges enhanced our collaboration even further. Royal Lemkes’s core values, such as reliability, strong engagement and craftsmanship, paved the way for our cooperation. These values thoroughly encompass the essence of SIGR Bizjak as well. We keep our promise, which is to always go the extra mile for Royal Lemkes and its customers. ” Natascha Pogacnik Group CEO, Sigr Bizjak 39

MAY WE INTRODUCE… Jeroen is a project manager at Royal Lemkes. Has been with the company for 25 years. Owns a paludarium. Enjoys whisky. Is aiming for Lean Black Belt certification. 40 “ I’m still growing every day. ”

An interview with Jeroen Ruijs DO YOU HAVE A FAVOURITE PLANT? “That would have to be bromeliads. I have them at home in my paludarium – a tropical rainforest within an aquarium – which also hosts four poison frogs. I’ve never been to a real tropical rainforest, but Costa Rica is high on my bucket list.” WHAT ARE YOU MOST PROUD OF WHEN YOU LOOK BACK AT 2018? “Robotisation, which is currently in full swing. This technology is not to replace people but to help us work more efficiently and accurately and be less dependent on flex workers, who are increasingly difficult to find. The first five robots that can drive Danish trolleys are currently being tested in our halls. You won’t find these robots anywhere else in the world. I’m incredibly proud of that.” HOW DO YOU APPLY WHAT YOU LEARNED ABOUT LEAN MANAGEMENT IN YOUR DAILY WORK? “When there’s a problem, we often rush to find solutions. With Lean, you take a step back. Sometimes, you must ask ‘why’ five times before you get to the core of the problem. For eight weeks during the programme, I had to make a daily video in which I explained what I would do better the next day. It forced me to apply Lean immediately. Even though I’ve been working at Royal Lemkes for 25 years, I’m still growing every day.” HOW DO YOU GROW ‘TOGETHER’? “By first developing yourself and then coaching others. Instead of solving problems myself, which may be the fastest course of action, I want to take time to help others. That benefits the entire organisation.” 41

Our sustainable mission #GrowingTogether

Our sustainable miss A TOGETHER, WE CREATE A GREENER FUTURE lthough plants make the world a more beautiful and greener place, our sector still faces a number of challenges in the area of sustainability. CO2 emissions, plant protection products and plastics: we can and must do better. We are working hard to improve every day. At Royal Lemkes, we have taken up the role of frontrunner in the sector. We want to make the entire chain more sustainable, from grower to consumer. We do this by working together, by connecting all partners and by sharing knowledge. SUSTAINABLE DEVELOPMENT GOALS An end to extreme poverty, hunger, inequality, injustice and climate change. A peaceful, fair and sustainable world. This is what the United Nations wants to achieve by 2030 through 17 Sustainable Development Goals (SDGs). Royal Lemkes supports these goals through our parent company, Green Sparkle (see page 60). We contribute to achieving the SDGs by providing financial support, sharing knowledge and connecting parties based on ‘business as a force for good’. Our focus on a number of SDGs has therefore been embedded in our strategic ambitions. 44

ssion SIX SUSTAINABILITY THEMES At Royal Lemkes, we focus on ‘planet-related’ themes, such as climate, biodiversity and natural resources; however, sustainability is much broader. Society also deserves our attention and we do our bit in this respect. For example, we donate unsold plants to care homes and food banks, and of course, we promote safe and socially responsible working conditions throughout the horticulture supply chain. We have enshrined this in three ‘people-related’ themes. For each theme, we have defined our ambitions for 2020 as well as the steps we must take to achieve them. The section ‘Our People’ sets out the ambitions for our employees. Our focal points for sustainable development employees climate working conditions biodiversity society natural resources 45 planet people

SUSTAINABILITY THEME 1: CLIMATE Our contribution to SDG number 13 klimaatclimate Through various energy saving solutions and the use of renewable energy in our building, the CO2 footprint of our gas and electricity consumption has decreased considerably in recent years. A small portion remains that cannot be covered by our battery container or the installation of an extra heat pump. The increase in consumption for this portion in 2018 was due to the exceptionally cold months of February and March. In 2018, we entered into a partnership with FairClimateFund, through which we compensate the CO2 emissions of our business travel. We have chosen to support a biogas project in India. Our aim for 2019 is to offset not only our business travel but also our consumption of gas and electricity. “ To succeed in sustainability, cooperation is essential. Royal Lemkes, Royal FloraHolland and three other large trading companies are working together to accelerate sustainable development. Royal Lemkes demonstrates leadership on various themes, such as certification and packaging. Consumers want to know where a product originates from and that it is produced with respect for people and the planet. Royal FloraHolland wants to support customers like Royal Lemkes by placing even more emphasis on offering reliable information in its marketplace, for example about the certification status. This allows growers to raise their profile and customers to purchase more effectively. ” Stefanie Miltenburg Sustainability & Sector Partnerships Royal FloraHolland There are 5 charging points in our car park. 46

Development CO2 emissions* 2012 gas and light 2013 2014 business fleet 2015 2016 2017 business travel 2018 compensation *Emissions from our business travel have in recent years been based on CO2 indicators made available by the Dutch government. From 2018, we are able to report exact emissions data from our leasing company. This information has revealed we have underreported emissions in previous years. We have applied a correction for this. The Royal Lemkes premises There are 3,900 solar panels on the roof of Royal Lemkes. All the lighting in our building is LED. Our battery stores energy which enables us to provide 45 employees’ homes with 100% sustainable solar energy. We have 4 e-bikes available for employees, with which we cycled 3,827 km this year. 47 Revenue in € million CO2 emissions

SUSTAINABILITY THEME 2: NATURAL RESOURCES Our contribution to SDG numbers 12 and 14 natural grondstoffen resources In 2018, we turned our attention to the use of plastic in the horticulture supply chain and focused on three areas: reduction of plastic, recycling or reuse of packaging and renewal. In association with peer competitor Van Dijk Flora, we have signed up for the Plastic Packaging Waste as Raw Material (KVG) pilot. During the pilot, we shall investigate the possibilities for using recycled household plastic waste in packaging materials for the horticulture sector. The results will be presented in November 2019. In addition, we are in talks with three customers to start pilots for reducing plastic in 2019. SUSTAINABILITY THEME 3: BIODIVERSITY Our contribution to SDG numbers 12, 13 and 15 biodiversity Together with our suppliers as well as various knowledge and sector initiatives, including Glaskracht Nederland, Floriculture Sustainability Initiative, Dutch trade association Tuinbranche Nederland and MPS, we are working on improving sustainable production and how best to use integrated pest management. During the sustainability workshop on Suppliers’ Day and again on Sustainable Thursday, we also entered into discussions with our suppliers about making the sector more sustainable. In addition, we are closely involved with peer competitors Royal FloraHolland, FleuraMetz, Waterdrinker and Dutch Flower Group in an accelerator initiative to improve transparency in the supply chain and increase the percentage of sustainably traded products. Last year, the proportion of sustainably traded products at Royal Lemkes rose from 73 to 81 per cent. omstandighedenconditions working arbeids Working conditions in the supply chain is one of the pillars of our sustainable sourcing policy. We notice that working conditions are becoming increasingly important for our customers as well. They request demonstrability through certifications such as GRASP, BSCI and Sedex. By providing our buyers with a so-called ‘buyer’s checklist’ when they visit suppliers, we are helping to raise awareness in this area. SUSTAINABILITY THEME 4: WORKING CONDITIONS IN THE SUPPLY CHAIN Our contribution to SDG numbers 1 and 8 *Sustainably sourced and traded products: Good Agricultural Practice (GAP) certified and both GAP and Global Social Compliance Programme (GSCP) certified in high-risk countries. 48

SUSTAINABILITY THEME 5: SOCIETY Our contribution to SDG numbers 3, 6 and 9 society In 2018, we supported various social projects, including the Waterpas Foundation and the Plastic Soup Foundation. For more information about the Royal Lemkes Foundation, see page 50. We also worked with DSW sheltered workshop and delivered plants to numerous care homes. “ At DSW, we are proud of our longstanding cooperation with Royal Lemkes. Our employees find it hard to enter the labour market. Royal Lemkes gives them the opportunity to participate and develop their talents. They certainly enjoy working in the logistics heart of this wonderful, socially-minded company. Inclusive entrepreneurship is the new ‘normal’. Royal Lemkes is a company which other employers can learn from when it comes to inclusive employment. Practice has shown that where there is a will, there is a way. This does, however, require thinking in terms of possibilities, taking a conscious step and engaging in corporate social responsibility. Royal Lemkes and DSW are perfect partners when it comes to growing and developing employees. ” Johan van den Berg Jobhouse Manager, DSW & Fransje Dofferhoff Senior Accountmanager, DSW Sustainable Thursday 49

Royal Lemkes Foun T SHARING IS MULTIPLYING he Royal Lemkes Foundation believes that people can make a difference by working together. We would like to see the economy and society move closer. This would mean the economy again being at the heart of society, whereby a better understanding of different groups and a belief in everyone’s potential is encouraged. In turn, this would lead to an increase in mutual appreciation, empathy and a service-oriented attitude, resulting in better relationships between people, a more sustainable living environment and a stronger economy. The Royal Lemkes Foundation therefore supports projects that focus on ‘green and togetherness’. CHRISTMAS BREAKFAST During the 2018 Christmas breakfast, 20 cheques were handed to employees who had nominated charities as part of the ‘Gesture of Encouragement’ donation project. The following social initiatives received a financial contribution: Logeerhuis De Buren, Bij Anders Foundation, All the Way Foundation, Santa Run Den Haag, Samen Sterk zonder Stigma, Mariëtte’s Child Care Foundation, Bake for Life Foundation, ElizaYo Foundation, Hartige Samaritaan Foundation, Woord en Daad Foundation, Plastic Soup Foundation and Waterpas Foundation. In their own different ways, these initiatives aim to make the world a better place, not least by ensuring that no one is excluded from society. We are also in talks 50 with several organisations that are eligible for structural aid over a threeyear period, such as Waterpas Foundation, an organisation that provides clean drinking water in Mombasa.

ndation 2018 Christmas breakfast: presentation of cheques to employees “ We focus on improving the living environment and working conditions at home and abroad by making our knowledge of agriculture and horticulture available for free, for example, or by granting microcredits. ” Marion Faas Secretary of the Royal Lemkes Foundation 51

MAY WE INTRODUCE… Aad is a quality controller at Royal Lemkes. Can’t sit still. Used to be a dairy farmer. Has a farm with 250 livestock. Feels he’s never too old to learn. Followed the Personal Growth Programme and Pizza with Covey. 52 “ Together, you can create something beautiful. ”

An interview with Aad Westerveld IF YOU WERE A PLANT, WHICH ONE WOULD IT BE? “I wouldn’t be a plant because I can’t sit still. As a quality controller, I sometimes walk more than 20 kilometres a day – at least, that’s what my pedometer says. And I don’t sit still at home either, as I keep chickens, rabbits, guinea pigs, dogs and horses on my farm. Once a month, I convert my chicken shed into a pub with a live band and friends. New friendships form at these get-togethers, so there’s a lot of added social value.” WHAT ARE YOU MOST PROUD OF WHEN YOU LOOK BACK AT 2018? “I’ve learned a lot thanks to courses like Personal Growth. At times, I say what’s on my mind without a filter, so I want to learn to communicate even better. A lot is invested in the younger employees, but continuous learning is just as important for the older ones.” WHAT DO YOU DO DIFFERENTLY BECAUSE OF THE COURSE? “Before, I mainly used to tell other people what to do; now I’m more inclined to ask colleagues how they would solve a certain problem. And sometimes, someone has a brilliant plan. By treating each other with respect, you build goodwill and can put up with much more from each other.” HOW DO YOU GROW ‘TOGETHER’? “By talking to people. At the Pizza with Covey sessions by ‘Covey guru’ Michiel de Haan, colleagues from different generations and departments sit together at the table. That creates a really valuable bond. It makes it easier to approach each other and make use of everyone’s expertise. Together, you can create something beautiful.” 53

Our figures #GrowingTogether

Financial results A GROWING TOGETHER SUSTAINABLY lthough revenue and profit are not our main motives, we do believe in economies of scale. Growth helps us to professionalise our business and make an impact. We believe in a ‘minimum viable profit’ and for our company that is between 1.5 and 2 per cent. We intend to continue to invest in the coming years, including in robotics. REVENUE DEVELOPMENT In terms of revenue development, our revenue grew to 265 million euros in 2018 and increased with all our customers. Last year, we welcomed a new customer from the UK. In 2019, we again anticipate revenue growth with almost all our customers and expect to welcome another new customer. 280 270 260 250 240 230 220 210 200 Revenue development 275 265 249 249 222 2015 2016 Net revenue in € million 2017 2018 2019 forecast 56

RESULT DEVELOPTMENT Our bottom line increased slightly. This was partly due to a better revenue mix and margin, but we also managed costs more effectively and improved the quality of our services. Claims and failure costs were therefore reduced. We expect a similar result in 2019, which will require a great deal of effort in managing cost-price increases effectively on a number of fronts. The solvency for 2018 has increased to over 30 per cent, placing it significantly above our internal standard. 1.50% 1.40% 1.30% 1.20% 1.10% 1.00% 0.90% 0.80% 0.70% Result development 1.34% 1.28% 1.18% 1.09% 0.98% 2014 Pre-tax profit (%) 2015 2016 2017 2018 57

Green Sparkle #GrowingTogether

Green Sparkle G STEWARDSHIP reen Sparkle is Royal Lemkes’s parent company and the family trustee fund of our owner Cees van der Meij. Several companies fall under the Green Sparkle umbrella and are separated into three divisions: Horti Entrepreneurs, Social Entrepreneurs and Impact Entrepreneurs. All companies under the Green Sparkle banner support the UN Sustainable Development Goals (see page 44). GROWING GREEN Profitability is essential to a company’s survival. Only by making a healthy profit can we continue to invest in our mission sustainably – in other words, green! We want to lead the way. A healthy profit with respect for people and the planet is at the heart of everything we do. GROWING CHANGE We care about the world around us, so we look beyond financial gains. Above all, we want to have a positive impact and help create a better world. A world where we pay attention to the quality of life, to human dignity and to our beautiful Earth. GROWING TALENT We need people who are willing and able to make a difference. That is why we encourage people to develop their talents. To be inquisitive and to seek challenges and acquire knowledge. Because when talented people are given all the space and support they need, great achievements are possible. Horti Entrepreneurs Social Entrepreneurs Impact Entrepreneurs 60

“ Green Sparkle is an incubator for sustainable entrepreneurs and creative minds who want to do things differently and make a positive difference based on three important core values: Growing Green, Growing Talent and Growing Change. Doing business sustainably, growing together and creating a better world together. A single spark can unleash a blaze of sustainable change. ” Cees van der Meij Owner of Green Sparkle 61

MAY WE INTRODUCE… Fred Is OBI senior account manager at Royal Lemkes. Doesn’t have green fingers but does have a knack for setting up successful plant supply chains. Loves motorcycling. Completed the Personal Leadership Programme and the NEVI Procurement Programme. 62 “ We solve it together. ”

An interview with Fred Cornelissen IF YOU WERE A PLANT, WHICH ONE WOULD IT BE? “A cactus, maybe? Spiny on the outside, soft on the inside. I expect people to do their work properly, but the social aspect is just as important to me. So, I keep team spirit high and together we celebrate our successes.” WHAT ARE YOU MOST PROUD OF WHEN YOU LOOK BACK AT 2018? “Due to planning issues, we often had to deal with huge quantities of plants in a short space of time. Before, this used to lead to frustrations on a personal level, but this year we kept it professional. Everyone could look each other straight in the eyes and the customer was satisfied. We were completely exhausted by the time we went on holiday, but we were proud of what we had accomplished together.” HOW DO YOU APPLY WHAT YOU LEARNED IN THE NEVI PROCUREMENT PROGRAMME? “When I started as a buyer at Royal Lemkes, we often sourced plants based on a trading relationship with growers. Thanks to NEVI, I have learned to apply supplier management to create as much value in the supply chain as possible together with growers. It is precisely because I can continue to develop at Royal Lemkes that I am still here, in the right place.” HOW DO YOU GROW ‘TOGETHER’? “I tend to be a control freak and have had to learn to let go. I now aim to connect our customers directly to my team members. After all, they have more specific product knowledge than I do. I like that some team members take the initiative to do things that are not in their job description. They must feel confident to do it their own way. If something goes wrong, we solve it together.” 63

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