Summary
ANNUAL REPORT
2006
100
YEARS OF
A Innovation
100
YEARS OF SIOEN AND TEXTILES Innovation
Expertise Expertise
Vision
Vision
Profile Our products 100 years of Sioen Innovation Letter to shareholders Mission & Strategy Expertise Expertise right down the line Group Structure Sioen worldwide Coating division Apparel division Industrial applications Vision Human resources Research & Development Quality Environment
1 2 4 6 8 10 12 14 15 16 18 24 28 30 32 33 34 35
Corporate information Letter to shareholders Report from the Board of Directors Group Structure Share Information Corporate Governance General information
1 3 5 9 10 12 16
Financial overview
19
Definitions Addresses
77 78
Only the English version of the annual report has evidential value.
Summary
ANNUAL REPORT
2006
100
YEARS OF
A Innovation
100
YEARS OF SIOEN AND TEXTILES Innovation
Expertise Expertise
Vision
Vision
Profile Our products 100 years of Sioen Innovation Letter to shareholders Mission & Strategy Expertise Expertise right down the line Group Structure Sioen worldwide Coating division Apparel division Industrial applications Vision Human resources Research & Development Quality Environment
1 2 4 6 8 10 12 14 15 16 18 24 28 30 32 33 34 35
Corporate information Letter to shareholders Report from the Board of Directors Group Structure Share Information Corporate Governance General information
1 3 5 9 10 12 16
Financial overview
19
Definitions Addresses
77 78
Only the English version of the annual report has evidential value.
CONSOLIDATED KEY FIGURES (in millions of euros)(1)
Profit & Loss Net sales Operating profit (EBIT) Financial result Profit on ordinary activities before taxes Profit on ordinary activities after taxes EBIT (8) EBITDA (9) Cashflow (4) Net profit (group share) Depreciation Personnel costs Number of employees (in units) Balance sheet Equity Long-term financial debt Net financial debt (2) Balance sheet total Working capital (3) Net investment in tangible fixed assets (10) Fixed assets Ratio’s EBIT (8) EBITDA (9) Net profit margin (7) Cash flow/net sales Liquidity (current assets/current liabilities) Solvency (equity/balance sheet total) Net financial debt/equity Return on equity (5) Return on capital (6)
2006 EUR
2005 EUR
2004 EUR
2003 EUR
2002 EUR
2001 EUR
2000 EUR
1999 EUR
1998 EUR
1997 EUR
1996 EUR
339.4 25.9 (6.6) 19.3 12.2 25.9 44.8 31.5 12.2 17.9 67.6 4 645
316.2 25.5 (5.5) 20.0 13.6 25.5 43.6 29.5 13.6 17.9 63.5 4 645
309.8 27.0 (7.3) 19.6 13.1 27.0 44.8 31.1 12.3 17.8 61.7 4 500
272.8 27.2 (11.0) 16.2 8.9 24.4 52.8 37.3 8.6 22.1 54.5 4 689
237.7 24.6 (8.7) 15.9 11.0 23.1 42.8 30.2 10.0 19.8 47.0 4 271
226.0 33.8 (6.7) 27.1 17.3 32.4 50.9 35.8 16.9 18.6 42.8 3 924
192.4 32.6 (3.0) 29.6 19.0 31.5 45.0 32.5 18.8 14.1 34.5 3 420
161.1 28.4 (1.3) 27.1 17.6 27.3 37.8 29.5 18.6 11.6 30.9 2 857
141.2 19.6 (1.7) 17.9 12.3 19.0 27.1 20.7 12.2 7.1 24.1 2 555
107.9 15.0 (1.2) 13.8 9.1 14.5 19.6 14.2 9.0 4.7 17.3 1 552
85.1 9.7 (1.1) 8.6 6.8 9.2 13.2 10.8 6.5 3.2 13.0 1 231
135.8 128.5 147.8 371.8 115.2 23.1 150.4
129.4 66.9 126.8 337.7 107.6 16.6 142.3
118.3 68.5 117.7 330.7 90.9 7.1 141.4
123.5 89.0 148.1 346.9 108.9 11.9 175.8
125.3 95.1 134.6 331.8 118.5 30.6 153.1
123.9 83.4 118.4 310.3 117.3 27.1 138.9
112.0 66.2 91.6 262.9 101.4 27.4 115.7
97.5 57.3 71.1 227.6 81.4 28.3 99.5
79.8 42.5 56.7 185.3 73.6 22.4 73.6
33.6 35.8 44.7 112.6 43.6 15.6 40.7
25.1 30.3 40.6 89.5 40.7 10.9 29.1
7.6% 13.2% 3.60% 9.30% 2.11 36.5% 1.09 9% 6.23%
8.1% 13.8% 4.30% 9.34% 1.38 38.3% 0.98 11% 7.09%
8.7% 14.5% 4.24% 10.04% 1.33 35.8% 1.00 10% 8.13%
9.0% 19.4% 3.3% 13.7% 1.40 35.6% 1.20 6.9% 10.0%
9.7% 18.0% 4.4% 12.7% 1.78 37.7% 1.07 8.1% 9.6%
14.3% 22.5% 7.6% 15.8% 1.91 39.9% 0.96 15.1% 15.6%
16.4% 23.4% 9.9% 16.9% 2.05 42.6% 0.82 19.3% 18.1%
17.0% 23.5% 11.8% 18.3% 2.11 42.8% 0.73 23.4% 19.3%
13.5% 19.2% 8.9% 14.6% 2.12 43.1% 0.71 36.3% 23.3%
13.5% 18.1% 8.5% 13.2% 1.92 29.8% 1.33 35.7% 21.5%
10.8% 15.5% 7.9% 12.7% 2.00 28.1% 1.62 34.8% 18.3%
(in millions of euros) 60
400 350
15
300 250
10
200
50
150 5
100 50
0 93
94
95
96
97
98
99
00
01
02
03
04
05
0
06
40 93
94
93
94
2005 EUR
2004 EUR
2003 EUR
2002 EUR
2001 EUR
2000 EUR
1999 EUR
1998 EUR
1997 EUR
1996 EUR
1.21 0.57 0.57 1.47 6.35 0.2600 0.1950 45.6% 10.41 8.00 9.60 16% 16.8 6.5 13 396 274 892 30.1 21 391 205.3
1.19 0.64 0.63 1.38 6.05 0.2400 0.1800 37.8% 10.49 7.85 8.30 -19% 13.1 6.0 12 771 268 200 29.5 21 391 177.5
1.26 0.61 0.57 1.45 5.53 0.2200 0.1650 38.4% 10.70 8.24 10.29 35% 18.0 7.1 6 550 137 550 16.2 21 391 220.1
1.27 0.42 0.40 1.74 5.77 0.20 0.15 49.8% 9.16 4.70 8.24 8% 20.5 4.7 4 406 92 895 8.3 21 391 176.3
1.15 0.52 0.47 1.41 5.86 0.17 0.13 35.9% 14.95 6.00 7.65 -33% 16.4 5.4 5 310 112 837 10.4 21 391 163.6
1.58 1.27 0.79 1.67 5.79 0.16 0.12 20.2% 23.51 10.1 11.50 (45%) 14.5 6.9 5 104 107 194 20.7 21 391 246.0
1.52 0.89 0.88 1.52 5.24 0.14 0.11 15.8% 33.65 18.4 20.90 (36.7%) 23.8 13.8 9 548 199 710 63.7 21 391 447.1
1.33 0.82 0.87 1.38 4.56 0.12 0.09 14.2% 47.5 28.5 33.00 (14%) 37.9 23.9 13 216 277 530 122.5 21 391 705.9
0.92 0.58 0.57 0.97 3.73 0.09 0.07 15.7% 43.13 9.92 38.18 283% 67.0 39.4 26 671 557 863 162.6 21 391 816.6
0.75 0.43 0.45 0.71 1.68 0.07 0.05 15.5% 10.68 3.92 9.97 154% 22.1 14.0 20 950 434 762 33.9 19 965 199.0
0.48 0.32 0.32 0.54 1.26 0.05 0.04 14.5% 4.02 3.84 3.92 13% 12.1 7.3 43 410 855 860 8.2 19 965 78.2
96
97
98
99
00
01
02
03
04
Investments 1993-2006
Financing of assets 1993-2006
(in millions of euros)
(in %)
95
96
97
98
99
00
05
06
05
06
Added value Gross margin Turnover Gross margin %
01
02
03
04
05
06
93
94
95
96
97
98
99
00
01
02
03
04
Capital & reserves/minority interests Provisions ST liabilities LT liabilities
Coating Apparel Industrial applications
2006 EUR
95
Group profit Consolidated Cashflow EBIT EBIT/Turnover Cashflow/Turnover
CONSOLIDATED KEY FIGURES PER SHARE (1)(2)
(1) Since 2004 IFRS/Before BGAAP (2) Recalculated after the 1 to 55 share split on 13/09/96 and the 1 to 10 split on 05/11/98. (3) On 14 March 2007 the Sioen Industries share was trading at EUR 9.56. (4) 1996 data are strongly influenced by heavy trading shortly after the stock market flotation on 18 October 1996. (5) Price at end of December (6) Share price / net profit per share (7) Share price / cash flow per share
Key figures 1993-2006
(in millions of euros) 20
Definitions see p77 (1) Since 2004 IFRS/before BGAAP (2) Financial debt - other investments & deposits and cash & cash equivalents 3) Financial fixed assets + current assets (less other assets & deposits and cash & equivalents) - non-financial liabilities up to one year - accrued charges and deferred income. (4) Consolidated net profit + depreciation - + provisions for liabilities and charges + impairments and valuation allowances + deferred taxes (5) Net profit (group share) / equity (6) Operating profit / (equity + minority interests + provisions for liabilities and charges + net financial debts) (7) Net profit / net sales for the financial year (8) Earnings Before Interest and Taxes = Operating profit - amortization of consolidation differences (goodwill) (9) Earnings Before Interest, Taxes, Depreciation and Amortizations = Operating profit + depreciation + provisions for liabilities and charges + impairments and valuation allowance (10) Acquisition of tangible fixed assets
Operating profit Profit on ordinary activities after taxes Net profit (group share) Cashflow Consolidated equity Gross dividend Net dividend Pay-out (%) Maximum share price Minimum share price Price at end December (3) Change in share price (5) Price/Earnings ratio (5) (6) Price/Cash flow ratio (5) (7) Average daily trading volume (no. of shares) (4) Average monthly trading volume (no. of shares) (4) Annual trading volume (in EUR millions) Number of Sioen shares outstanding (in thousands) (2) Stock market capitalization (in millions) (5)
Key figures 1993-2006
Development of employment 1993-2006
Stock price (to 14-03-07) (in EUR)
5000 4000 3000 2000 1000 0 93
94
95
96
97
98
99
00
Total Coating Apparel Industrial Applications
01
02
03
04
05
06
50
50
40
40
30
30
20
20
10
10
0
96
97
98
99
00
Sioen Eurostoxx50
01
02
03
04
05
06
0
CONSOLIDATED KEY FIGURES (in millions of euros)(1)
Profit & Loss Net sales Operating profit (EBIT) Financial result Profit on ordinary activities before taxes Profit on ordinary activities after taxes EBIT (8) EBITDA (9) Cashflow (4) Net profit (group share) Depreciation Personnel costs Number of employees (in units) Balance sheet Equity Long-term financial debt Net financial debt (2) Balance sheet total Working capital (3) Net investment in tangible fixed assets (10) Fixed assets Ratio’s EBIT (8) EBITDA (9) Net profit margin (7) Cash flow/net sales Liquidity (current assets/current liabilities) Solvency (equity/balance sheet total) Net financial debt/equity Return on equity (5) Return on capital (6)
2006 EUR
2005 EUR
2004 EUR
2003 EUR
2002 EUR
2001 EUR
2000 EUR
1999 EUR
1998 EUR
1997 EUR
1996 EUR
339.4 25.9 (6.6) 19.3 12.2 25.9 44.8 31.5 12.2 17.9 67.6 4 645
316.2 25.5 (5.5) 20.0 13.6 25.5 43.6 29.5 13.6 17.9 63.5 4 645
309.8 27.0 (7.3) 19.6 13.1 27.0 44.8 31.1 12.3 17.8 61.7 4 500
272.8 27.2 (11.0) 16.2 8.9 24.4 52.8 37.3 8.6 22.1 54.5 4 689
237.7 24.6 (8.7) 15.9 11.0 23.1 42.8 30.2 10.0 19.8 47.0 4 271
226.0 33.8 (6.7) 27.1 17.3 32.4 50.9 35.8 16.9 18.6 42.8 3 924
192.4 32.6 (3.0) 29.6 19.0 31.5 45.0 32.5 18.8 14.1 34.5 3 420
161.1 28.4 (1.3) 27.1 17.6 27.3 37.8 29.5 18.6 11.6 30.9 2 857
141.2 19.6 (1.7) 17.9 12.3 19.0 27.1 20.7 12.2 7.1 24.1 2 555
107.9 15.0 (1.2) 13.8 9.1 14.5 19.6 14.2 9.0 4.7 17.3 1 552
85.1 9.7 (1.1) 8.6 6.8 9.2 13.2 10.8 6.5 3.2 13.0 1 231
135.8 128.5 147.8 371.8 115.2 23.1 150.4
129.4 66.9 126.8 337.7 107.6 16.6 142.3
118.3 68.5 117.7 330.7 90.9 7.1 141.4
123.5 89.0 148.1 346.9 108.9 11.9 175.8
125.3 95.1 134.6 331.8 118.5 30.6 153.1
123.9 83.4 118.4 310.3 117.3 27.1 138.9
112.0 66.2 91.6 262.9 101.4 27.4 115.7
97.5 57.3 71.1 227.6 81.4 28.3 99.5
79.8 42.5 56.7 185.3 73.6 22.4 73.6
33.6 35.8 44.7 112.6 43.6 15.6 40.7
25.1 30.3 40.6 89.5 40.7 10.9 29.1
7.6% 13.2% 3.60% 9.30% 2.11 36.5% 1.09 9% 6.23%
8.1% 13.8% 4.30% 9.34% 1.38 38.3% 0.98 11% 7.09%
8.7% 14.5% 4.24% 10.04% 1.33 35.8% 1.00 10% 8.13%
9.0% 19.4% 3.3% 13.7% 1.40 35.6% 1.20 6.9% 10.0%
9.7% 18.0% 4.4% 12.7% 1.78 37.7% 1.07 8.1% 9.6%
14.3% 22.5% 7.6% 15.8% 1.91 39.9% 0.96 15.1% 15.6%
16.4% 23.4% 9.9% 16.9% 2.05 42.6% 0.82 19.3% 18.1%
17.0% 23.5% 11.8% 18.3% 2.11 42.8% 0.73 23.4% 19.3%
13.5% 19.2% 8.9% 14.6% 2.12 43.1% 0.71 36.3% 23.3%
13.5% 18.1% 8.5% 13.2% 1.92 29.8% 1.33 35.7% 21.5%
10.8% 15.5% 7.9% 12.7% 2.00 28.1% 1.62 34.8% 18.3%
(in millions of euros) 60
400 350
15
300 250
10
200
50
150 5
100 50
0 93
94
95
96
97
98
99
00
01
02
03
04
05
0
06
40 93
94
93
94
2005 EUR
2004 EUR
2003 EUR
2002 EUR
2001 EUR
2000 EUR
1999 EUR
1998 EUR
1997 EUR
1996 EUR
1.21 0.57 0.57 1.47 6.35 0.2600 0.1950 45.6% 10.41 8.00 9.60 16% 16.8 6.5 13 396 274 892 30.1 21 391 205.3
1.19 0.64 0.63 1.38 6.05 0.2400 0.1800 37.8% 10.49 7.85 8.30 -19% 13.1 6.0 12 771 268 200 29.5 21 391 177.5
1.26 0.61 0.57 1.45 5.53 0.2200 0.1650 38.4% 10.70 8.24 10.29 35% 18.0 7.1 6 550 137 550 16.2 21 391 220.1
1.27 0.42 0.40 1.74 5.77 0.20 0.15 49.8% 9.16 4.70 8.24 8% 20.5 4.7 4 406 92 895 8.3 21 391 176.3
1.15 0.52 0.47 1.41 5.86 0.17 0.13 35.9% 14.95 6.00 7.65 -33% 16.4 5.4 5 310 112 837 10.4 21 391 163.6
1.58 1.27 0.79 1.67 5.79 0.16 0.12 20.2% 23.51 10.1 11.50 (45%) 14.5 6.9 5 104 107 194 20.7 21 391 246.0
1.52 0.89 0.88 1.52 5.24 0.14 0.11 15.8% 33.65 18.4 20.90 (36.7%) 23.8 13.8 9 548 199 710 63.7 21 391 447.1
1.33 0.82 0.87 1.38 4.56 0.12 0.09 14.2% 47.5 28.5 33.00 (14%) 37.9 23.9 13 216 277 530 122.5 21 391 705.9
0.92 0.58 0.57 0.97 3.73 0.09 0.07 15.7% 43.13 9.92 38.18 283% 67.0 39.4 26 671 557 863 162.6 21 391 816.6
0.75 0.43 0.45 0.71 1.68 0.07 0.05 15.5% 10.68 3.92 9.97 154% 22.1 14.0 20 950 434 762 33.9 19 965 199.0
0.48 0.32 0.32 0.54 1.26 0.05 0.04 14.5% 4.02 3.84 3.92 13% 12.1 7.3 43 410 855 860 8.2 19 965 78.2
96
97
98
99
00
01
02
03
04
Investments 1993-2006
Financing of assets 1993-2006
(in millions of euros)
(in %)
95
96
97
98
99
00
05
06
05
06
Added value Gross margin Turnover Gross margin %
01
02
03
04
05
06
93
94
95
96
97
98
99
00
01
02
03
04
Capital & reserves/minority interests Provisions ST liabilities LT liabilities
Coating Apparel Industrial applications
2006 EUR
95
Group profit Consolidated Cashflow EBIT EBIT/Turnover Cashflow/Turnover
CONSOLIDATED KEY FIGURES PER SHARE (1)(2)
(1) Since 2004 IFRS/Before BGAAP (2) Recalculated after the 1 to 55 share split on 13/09/96 and the 1 to 10 split on 05/11/98. (3) On 14 March 2007 the Sioen Industries share was trading at EUR 9.56. (4) 1996 data are strongly influenced by heavy trading shortly after the stock market flotation on 18 October 1996. (5) Price at end of December (6) Share price / net profit per share (7) Share price / cash flow per share
Key figures 1993-2006
(in millions of euros) 20
Definitions see p77 (1) Since 2004 IFRS/before BGAAP (2) Financial debt - other investments & deposits and cash & cash equivalents 3) Financial fixed assets + current assets (less other assets & deposits and cash & equivalents) - non-financial liabilities up to one year - accrued charges and deferred income. (4) Consolidated net profit + depreciation - + provisions for liabilities and charges + impairments and valuation allowances + deferred taxes (5) Net profit (group share) / equity (6) Operating profit / (equity + minority interests + provisions for liabilities and charges + net financial debts) (7) Net profit / net sales for the financial year (8) Earnings Before Interest and Taxes = Operating profit - amortization of consolidation differences (goodwill) (9) Earnings Before Interest, Taxes, Depreciation and Amortizations = Operating profit + depreciation + provisions for liabilities and charges + impairments and valuation allowance (10) Acquisition of tangible fixed assets
Operating profit Profit on ordinary activities after taxes Net profit (group share) Cashflow Consolidated equity Gross dividend Net dividend Pay-out (%) Maximum share price Minimum share price Price at end December (3) Change in share price (5) Price/Earnings ratio (5) (6) Price/Cash flow ratio (5) (7) Average daily trading volume (no. of shares) (4) Average monthly trading volume (no. of shares) (4) Annual trading volume (in EUR millions) Number of Sioen shares outstanding (in thousands) (2) Stock market capitalization (in millions) (5)
Key figures 1993-2006
Development of employment 1993-2006
Stock price (to 14-03-07) (in EUR)
5000 4000 3000 2000 1000 0 93
94
95
96
97
98
99
00
Total Coating Apparel Industrial Applications
01
02
03
04
05
06
50
50
40
40
30
30
20
20
10
10
0
96
97
98
99
00
Sioen Eurostoxx50
01
02
03
04
05
06
0
Profile As an integrated industrial group Sioen Industries is the most important player in the technical textile worldwide. Vertical and horizontal integration, diversification and permanent growth are the key concepts that allow Sioen Industries to look ahead with great promise.
Our
business
Sioen Industries is: - The world market leader in coated technical textiles, - A market leader in industrial protective clothing, - A specialist in fine chemicals - A global player in the processing of technical textiles
Our
strengths
- Vertical integration, making us independent of outside suppliers and giving us unrivalled expertise. - Technical expertise. Sioen products predominate where technical specifications are decisive. - A ÂŤhands-onÂť, unbureaucratic corporate culture
Where
we’re going
Exploiting our technology base to enter new markets and develop new products and processes as opportunities present themselves in Europe and elsewhere.
S I O E N I NDU S T R I E S
I
O UR P R O DUC T S
our produc ts : sioen i ndu stries – pa rt of our dai ly lives Discreetly, without our realizing it, Sioen products
Automobile
play an important part in our daily lives, protecting
Airbags, dashboards, sun shades, door panels,
us and those providing us with essential services, and
gearlever covers, floor mats, seats, filters, trunk
generally improving our quality of life.
curtains
Sioen provides filters to treat the water we drink,
Construction and road wo r k s
the side curtains on the trucks bringing food to our
Reinforcement for gyproc plates, insulation, road
supermarkets, and protective clothing for medics,
fortification, rubble nets for scaffoldings, high
firefighters, police forces, soldiers and pilots
visibility protective clothing, silos, storage tents, sun
on whom our society depends. Sioen products
screens, sewage, filters
strengthen our roads, improve the safety and comfort of the cars we drive, and allow us to enjoy outdoor sports in all weathers.
Agriculture, horticulture, f o r e s t r y and food industry Windbreak nets, drainage, protective clothing, damming film, filters, pond foil, ultra-low
Transport
temperature clothing, hygienic protective clothing
Truck tarpaulins and curtains, mud flaps, inflatable industrial clothing for railway, bus, transport and
Chemical and petrochemi c a l industries
airline companies
Specific protective clothing, oil dams, filters
containers, railway wagon tarpaulins, protective and
Sioen provides filters to treat the water we drink, the side curtains on the trucks bringing food to our supermarkets, and protective clothing for medics, firefighters, police forces, soldiers and airmen on whom our society depends. Sioen products strengthen our roads, improve the safety and comfort of the cars we drive, and allow us to enjoy outdoor sports in all weathers.
M e d i c a l s e ctor
Sports
Medical protective clothing, air filters, mattress
Gym mats, safety nets, children’s playing mats,
covers, pillow-cases
clothing for hunters, golfers and fishermen, motorcyclist’s clothing, reflective clothing for joggers,
A i r a n d wa ter treatment
cyclists and other outdoor sportsmen, pool covers
Filters, air conditioning and mine shaft air ducts
and pool reinforcement nets, surfer’s, ski and skater’s clothing
N av i g a t i o n , fishing industry and wa t e r s p o r t s
Tents
Flotation suits, life jackets, protective aquatic
Camping tents, party tents, awnings, canopies, halls,
clothing, inflatable boats, boat tarpaulins, yacht
semi-permanent buildings, kadors
canvas, ship tarpaulins
P u b l i c i n s t i tutions Clothing, firemen’s clothing, clothing for police and
Publicity and promotion Indoor and outdoor publicity banners, promotional clothing
army, railways, airlines and post offices, tents and truck tarpaulins
Corporate identity wear Clothing for courier services, electricity companies,
I n t e r i o r d e coration
petrol stations, breweries, telecom companies,
Yarns and pigments for carpets, wall coverings,
airlines, etc.
insulation, ceilings, etc.
S I O E N I NDU S T R I E S
100
I
1 0 0 y ea r s o f S ioe n te x ti l es t r a d itio n
Y EARS O F Sioen textiles tradition
1907 – Adolf Sioen starts a weaving mill in
people in apparel, 30 in coating and 20 in sales and
Rumbeke under the name Sioen-Sabbe. This is the
administration
golden age of the cloth weaving industry in western Belgium. Adolf Sioen is succeeded by Daniel Sioen,
1980s – The company expand export into
who continues to run Sioen-Sabbe.
neighbouring countries and further afield. Acquires production sites in France, Ireland and Tunisia. In 1989 Jean-Jacques Sioen receives the export prize from Prince Albert.
1991 – Fire destroys Ardooie plant. All persons are temporary out of work, and all of the production is lost.
1950 onwards: the Flemish and Northern French textile industry enters a period of slow decline,
1993 – New, state-of-the-art plant inaugurated on
with growing competition from cheap imports and
the Ardooie site. In 1993 it reports sales of EUR 45
synthetics.
million and a workforce of 600.
1960 – Daniel’s son Jean-Jacques Sioen, then aged
1990s – Sioen continues its expansion, especially
25, creates his own company in the up-and-coming
in coated textiles. Apparel division opens additional
area of technical textiles, with a first primitive
production facilities in Indonesia. Industrial
coating line at Beveren. The company is successful,
Applications begin.
producing at first artificial leather, plastic tablecloths and later truck tarpaulins. A major early order is
1996 – Sioen goes public with an IPO on the
coated textile for beanbags.
Brussels stock exchange. At this stage it has a turnover of 85 million and 1500 employees.
1967 – Jean-Jacques’ wife Jacqueline Sioen starts an apparel workshop in Roeselare, using Sioen coated
2000 – At the end of the century Sioen employs
textiles. Initial products include heavy duty clothing
3,400 people and has a turnover of just under EUR
for amongst others fishermen and farmers.
200 million a year.
2000nd – The company continuously invests in new applications, new processes and techniques and focuses on profitability and growth.
2006 – The companies turnover amounts to EUR 339.4 million and now hold 38 subsidiaries in
1970s. The company continues to grow, despite
14 different countries. 4,687 people are currently
the oil crisis and economic slowdown of the 1970s
employed by Sioen.
and early 1980s. By the mid-1970s the two buildings at Beveren and one at Roeselare have become too
small.
1977 – Company moves to a single new site at Ardooie. At this stage it employs around 100
Innovation
Expertise
Vision
Jean-Jacques Sioen
When Jean-Jacques launched his first coating line in 1960, it was the start of Sioen Industries as we know it today - a healthy stock listed company. Although the Sioen industries group was born 47 years ago, the Sioen textiles tradition is over a 100 years old. First in Rumbeke, then in Beveren and Roeselar e and now in Ardooie (all three cities in Belgium). In addition, the group has now plants in 14 countries all over the world. The philosophy of Mister Sioen has always been a pragmatic one: be better, faster and more innovative in all activities he deployed. From that point of view grew the company adagio: “PROTEC TION TH RO UGH I NN OVATION”. After 45 years as CEO and chairman of the company, Mister Sioen passed the presidency of the company in 2005 to his oldest daughter Michele. Today he is chairman of the board of directors.
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SI OEN I NDU STRIES
INNOVATION
Innovation
“Protection through Innovation” is Sioen’s corporate slogan. Along with creativity, know-how and quality, it is central to Sioen’s corporate culture. Innovation keeps us ahead of the market with new products, processes and applications based on our core coating exper tise. Over 25% of our 2006 sales were of products developed over the past 5 years. Over 40% were in markets we were not in 10 years ago. Since 2000 we have spent well over EUR 100 million on innovative manufacturing processes. To be innovative we must know our markets and our customers. This input we get from our dedicated and effective sales and marketing team. Our R&D department and technical experts are at the cutting edge of our technologies. We must be able to communicate internally but also externally with suppliers, customers, R&D institutions and experts. We must be entrepreneurial – take risks, learn from our mistakes. This we are.
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DEAR MADAM, D EAR SIR,
“ We are optimistic on our short a n d long-term future.”
Rising raw materials prices we were able to offset with cost reduction and price increases. We invested in a new (additional capacity) varnish line and a
2006 was another year of strong growth at Sioen
new direct coating machine to meet strongly rising
Industries in terms of production and sales. It was
demand. With its extensive range and flexible
also a year of innovation par excellence, in which
production apparatus, Sioen Coating has succeeded
investment projects were completed, R&D centres
in capturing much of the growth in traditional
opened, markets explored, and production processes
markets (transport, camping, textile architecture).
upgraded. In 2006 the strategy of extending our fine chemicals We are optimistic on the future of Sioen Industries.
activities took further shape. Under the common
Even if raw material prices are placing pressure on
denominator of Sioen Chemicals we now produce
earnings and competition is very sharp on certain
colour pigment pastes, inks, varnishes and granulates.
low-end markets, Sioen is showing itself to be
We invested in a new production hall at the Bornem
resilient and able to react fast to events.
site, took over part of the assets of Siegwerk Benelux and acquired the French company Richard Colorants.
Sioen Industries is a growth company in every field:
And in January 2007 we bought the Belgian company
we are focused on growth and profit, think long-term,
Fillink, which specializes in inks for wide format
and aim for market leadership in all our activities.
printers. In short we have, in a very short space of
Our corporate slogan is “protection through
time, built up an unique position that guarantees
innovation”. It is innovation, know-how and vision
further expansion in these sectors.
that take Sioen forward. Innovation is embedded in our corporate culture, providing us with new
To react better and more effectively to a competitive
products, new processes, new applications and new
and constantly evolving market, the Apparel division
markets. Know-how and expertise are key assets, with
optimized its internal organization. We achieved ever
over 45 years’ experience of coating technologies,
greater successes in technical markets like firefighting
markets and standards. Vision is our strength: we
clothing and flame retardent apparel. This division
possess entrepreneurship and creativity, a nose for
also continues to perform well in its core industrial
good business opportunities and are always ready for
protective clothing activities.
new challenges. The Industrial Applications division, in which we
“ We are confirming ou r market l e adership and achieving s u bstantial progress”
process technical textiles, did very well in 2006. The lion’s share of the growth in this product line came from transport-related activities. We will also be investing further in larger production shops,
For the Coating division 2006, was a year in which
automation and wide-format printing.
we confirmed our market leadership and achieved substantial progress. It was also a year of challenges
“ R&D is a state of mind”
with further rises in raw materials prices, rapidly growing competition in transfer coating activities and
We are proud to announce that 2006 was a strong
capacity shortages in direct coating and elsewhere.
year. We are continuing with the same dynamism
to carry out various investment projects which
our employees, at every level. Workers, salespeople,
will increase capacity and, through far-reaching
foremen, chemists, production managers, general
automation, improve cost control.
managers, we are all in our own way concerned with improvement and innovation.
We continue to focus on growth and on profit, with a permanent emphasis on R&D. This research and
With this annual report we provide an overview of
development is providing us with new products,
the activities of Sioen Industries, a glimpse behind
new markets, new production processes and new
the scenes, how we see the business, where we stand
technical features. Sioen intends to be a market
and where we intend going.
leader in each of its activities. We are convinced that this vision, dynamism and In 2006 we extended our ultra-modern central
team spirit will enable us to advance with unflagging
R&D centre at Ardooie with a brand-new section
ĂŠlan. We thank all Sioen employees for their devotion
specializing in testing and research on industrial
and commitment in putting all this into practice day
protective clothing. R&D is a cornerstone of our
after day. Finally we thank you, our shareholders, for
organization. It is a state of mind, an attitude of all
your continuing trust in Sioen Industries.
Jean-Jacques Sioen
Michèle Sioen
Chairman of the Board CEO Sioen Industries n.v.
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Mission and strategy
M ission
We seek to offer our shareholders a sound investment with reliable results and a growing
Our task is to offer our customers high quality,
dividend stream.
innovative products, made-to-measure solutions and flexible service in every area in which we
We work with well-trained, result-oriented
are active: technical textiles, protective clothing,
employees, with a concern for safety and the
industrial applications and fine chemicals.
environment as fundamental values.
We intend to retain and further extend our market
Strategy
leadership in all segments, with an emphasis at all times on technically sophisticated products
At Sioen strategy consists first and foremost of
and innovation, and on seizing opportunities
focusing on and pursuing its key success variables,
for new markets and processes as these present
the things that Sioen does well and which will ensure
themselves.
its future success. These include:
At Sioen, strategy consists first and foremost of focusing on and pursuing its key success variables, the things that Sioen does well and which will ensure its future success. 10
vertical integration Mastering the entire value chain from the spinning
closely with customers to optimize quality and delivery and respond to new needs.
of yarn through to final production gives Sioen a knowledge base unrivalled in the industry and valuable independence from outside suppliers.
innovation and new markets Sioen is constantly looking for new areas in which to profitably apply and expand its expertise. It has
technical expertise
repeatedly proved its ability to react rapidly to seize
Sioen dominates where technical specifications are
new opportunities. The recent expansion into fine
decisive. Sioen is constantly working to maintain a
chemicals is one example of this.
technical lead in its key product areas, and to make sure innovative ideas are available across the group.
a hands-on, unbureaucratic corporate culture The Sioen style is straightforward, plain talking,
R&D
appreciated by customers and employees alike.
Sioen continuously invests in R&D. Sioen works
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SI OEN I NDU STRIES
EXPERTISE 12
Solutions
Know-how is one of Sioen’s great strengths. With over 45 years in the business, it shows more accumulated know-how of textile coating technology and coated textile applications than any other company in Europe. No other single company masters five different textile coating techniques. N o other company has as much experience and knowledge of standards and rules. N o other company has experience of as many industrial textile applications or as many markets. This know-how is gained through systematically searching for solutions to practical problems, much of the time in close cooperation with our customers. It is expanded by using existing know-how as a basis for entering new markets. It is protected by strong employee loyalty and motivation.
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“Expertise r ight down the line”
Sioen is involved at every stage of the production
Its command of the complete chain, including all
and application of coated textiles, from spinning
main coating processes and a variety of processing
the yarn, through weaving and coating to specialist
technologies, provide it with an unrivalled fund of
processing.
expertise and a leading place in its specialist areas.
Base material 1
1. Spinning of polyester high-tenacity and/or polyamide yarns 2. Weaving of the yarn into various base textiles 3. Preparation of colourings (pigment pastes and dyes) = Sioen Chemicals
2
3
Coating stage 4 4. Application of coatings (direct coating, transfer coating, online coating, extrusion coating, calendering)
Finishing 5
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5. Coated fabrics sold as semi-finished products to outside manufacturers
6
6. Apparel Division Production of protective clothing for industrial and leisure use
7
7. Industrial Applications Division – Processing of heavy-duty coated textiles for specialist niche markets
SIOEN INDUSTRIES NV
COATING DIVISION 99%
100%
100%
100%
100%
100%
Sioen Coating n.v. Direct Coating Belgium
99%
Sioen n.v. Apparel Belgium 89%
Sioen Coating Distribution n.v. Sales Office Belgium
Donegal Protective Clothing Ltd (4) Apparel Ireland
100%
Sioen Fabrics s.a. Weaving/Transfer Coating Belgium
100%
Sioen Fibres s.a. Spinning Belgium
95%
Sioen Shanghai (3) Sales office China
95%
100%
TIS n.v. Weaving Belgium Veranneman TT n.v. Weaving/Direct Coating Belgium
100%
Mullion Manufacturing Ltd Apparel U.K. P.T. Sioen Indonesia Apparel Indonesia
5%
P.T. Sungintex Apparel Indonesia
5%
Sioen Fibres s.a. Central Distribution Unit Belgium Sioen France s.a.s. Sales office France
100%
100%
25% 75% (2)
Saint Frères Confection s.a.s. Heavy-duty manufacturing France
100%
Sioen Nordifa s.a. Filter production Belgium
100%
Roland International b.v. (6) Manufacturing of truck tarpaulins
100%
Roltrans Group America Inc.
100%
Roland Planen GmbH
100%
Roltrans Group Polska sp.z.o.o.
100%
Roland Ukraine Llc (7)
100%
Roland Tilts UK Ltd.
100%
Sioen Tunisie s.a. Sales office Tunisia
100%
Pennel Automotive s.a.s. Calendering France
99%
Sioen Zaghouan s.a. Apparel Tunisia
100%
Inducolor s.a. Ink production Belgium
95%
Sioen USA Inc. (5) Sales office
90%
Coatex n.v. Processing of coated fabrics and films Belgium
Confection Tunisienne de Sécurité s.a Apparel Tunisia
Siofab s.a. Transfer Coating Portugal
10%(2)
INDUSTRIAL APPLICATIONS DIVISION
Saint Frères s.a.s. Direct Coating France
100%
99%
APPAREL DIVISION
European Master Batch n.v. Master batch production Belgium Richard s.a.s. (8)
100%
Copidis s.a.s. (9)
100%
Astra Colorants s.a.
100%
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Quoted percentages have been rounded, and reflect the situation at 31 December 2006 Via Sioen Coating nv The official name is Sioen Coated Fabrics Shanghai Trading Ltd. The official name is Gairmeidi Caomhnaithe Dhun na nGall Teoranta. 5% via P.T. Sungintex Via Monal s.a. and Roltrans Group b.v. In December 2006 Roland International b.v. acquired 100% of the shares of Roland Ukraine Llc The Richard group was acquired in October 2006 The official name is Colorants Pigments Distribution
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Sioen worldwi de 1
Sioen Coating Division/Apparel Division
ARDOOIE
Veranneman TT Sioen Coating Distribution
2
European Masterbatch/EMB
BORNEM
Fillink Technologies
3 4 5 6
TIS
KERKSKEN
Sioen Nordifa
LIÈGE
Inducolor
MESLIN-L’EVÊQUE
Sioen Fibres - distribution/spinning
MOUSCRON
Sioen Fabrics - weaving and coating
7
Coatex
POPERINGE
2 1
7
3
6
4
5
COATING APPAREL INDUSTRIAL APPLICATIONS
8 9 10
Sioen Shanghai Saint Frères - Saint Frères Confection Richard Colorants Copidis s.a.s.
16
11 12 13 14 15 16 17 18 19 20 21 22 23 24
Astra Colorants s.a. Sioen France Pennel P.T.Sungintex P.T.Sioen Indonesia Donegal Protective Clothing Roltrans Group Polska Siofab Roland International Sioen Tunisie - CTS - Sioen Zaghouan Roland Ukraine Roland Tilts UK Mullion Manufacturing Ltd. Roltrans Group America
SHANGHAI FLIXECOURT Lomme LOMME Lyon NARBONNE ROUBAIX BEKASI BARAT JAKARTA DONEGAL KONIN SANTO TIRSO TEGELEN TUNIS RIVNE BRADFORD SCUNTHORPE TEXAS
CHINA FRANCE FRANCE FRANCE FRANCE FRANCE FRANCE INDONESIA INDONESIA IRLAND POLAND PORTUGAL THE NETHERLANDS TUNESIA UKRAINE UNITED KINGDOM UNITED KINGDOM UNITED STATES
24
16
23 22 17 9
10
19
13 21 11
12 18
20
8
17 14 15
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COATI NG D IVISION he product – technical coated T textiles
Spinning -
Sioen has one of the most modern
spinning mills in the world, with an output of approximately 15,000 tons of polyester high-tenacity
Sioen has been specializing in the coating of
and/or polyamide yarns. A part of the yarns is twisted
technical textile fabrics for nearly 50 years. Put in
in the twisting plant.
simple terms, coating is the covering of a support with a protective layer (PVC, PU, silicon or another
Weaving - The yarn is supplied as raw material
polymer), to make the material waterproof, fireproof,
to the three weaving mills, each with its own
anti-static, breathable, printable, and so on, and
specialization: sailcloth, open structure textiles,
to afford protection against wind, water, cold and
polyester high tenacity textiles, airbag textiles, etc.
chemical matter.
The fabrics all meet high technical requirements as tensile strength, tear resistance. Sioen has also
P roduction
- vertical
integration
secured certificates of approval for automotive applications. Sioen also produces needle punch non-woven (Liège)
Sioen handles the entire production process:
which is used, among other things, as a support in
spinning, weaving and coating.
extrusion coating.
Sioen Industries masters 5 coating techniques and has a firm control of all steps of the production process. We spin the yarn, weave a base fabric which we then coat with a home-made paste.
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Preparation of coating layer/colouring
Applications: curtains for lorries and train
The coating layer can consist of PVC, polyurethane,
compartments, sports mats, swimming pool covers,
silicon or other polymers, which are sourced from
tarpaulins, advertising, ‌
major chemicals companies. Sioen produces its own pigment pastes and granulates used for colouring the
Transfer coating: The coating paste
coating layer. Pastes are mixed in fully automatic
(polyurethane, silicone, etc.) is applied to the fabric
paste kitchens and then brought to the coating line by
using a paper support.
robots. Applications: protective clothing, outdoor sports
Coating
clothing, shoe protectors, mattress protectors, airbags
Sioen Industries applies five main coating processes, at seven coating plants (4 in Belgium, 2 in France
Online coating: In online coating, the fabric
and 1 in Portugal), with some of the most advanced
passes from the loom into a coating bath before being
production lines in the world.
wound. This technique is used to manufacture open structure textiles.
Direct coating: the PVC coating paste is directly applied to the fabric.
Applications: geogrids, swimming pool covers, reinforcement nets, windbreak nets, filters, etc. ...
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Extrusion coating: This technique allows other
meaningful figures for sales in each sector as these
base materials (textiles, non-woven, knitted fabrics,
can vary considerably from one year to the next.
etc.) to be coated with various polymers.
The tarpaulin and side curtains sector is by far the largest, accounting for around 40% (in some years
Applications: ventilation tubes, plastic sheeting for
more) of external turnover of the Coating division.
ponds, plastic film for windows, sewer renovation,
The balance is shared by the other markets, with the
etc. ...
individual percentages varying considerably from year to year.
Calendering (rolling): TPO (Thermoplastic polyolefin) and PVC films are processed with rollers in
Tarpaulins and side curtains (direct
order to achieve the required motif/texture.
coating): The market for PVC coated tarpaulins and side curtains for trucks and railway wagons is the
Applications: car dashboards and door panels, wall
most important segment.
coverings etc. ...
Sioen is the undisputed market leader here with an estimated 50% market share.
M ain product markets
This market, for both new and replacement tarpaulins and side curtains, is mainly located in Western
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The majority of the total production from the
Europe, where the large trailer builders are situated.
coated division is sold to external manufacturers
The use of tarpaulins has not yet become customary
in the areas given below. It is difficult to give
in the American market, where trailers are usually
hard-bodied. Recent innovations include Siosteel, a
Automotive (direct coating, transfer coating,
combination of PVC coated technical textile with a
calendaring): about 11% of the Coating division’s
coated steel net, which offer better protection against
production is for the automotive sector: TPO and
vandalism. Sales of this product gathered momentum
PVC films for car interiors, trunk covers and airbags.
when certain insurance companies began offering
Technical textile for car interiors is produced and
cheaper insurance premiums to hauliers that equip
sold by Pennel Automotive, a long-established French
their trucks with Siosteel.
company with a strong presence in its home market and an estimated market share of 20%.
Geotextiles and roofing (online coating):
Sioen profiles itself as a full service supplier in the
Technical textile is used as reinforcement
airbags market. Sioen extrudes the polyamide yarn
netting for roads, roofs and all types of plates.
in its own spinning mill, weaves it into a carrier
With approximately 50% of the market Sioen
and coats it in one of its plants. As an extra service
is the European market leader in this segment.
Sioen cuts the fabric with high tech laser cutters in
Geographical expansion to the US and elsewhere is
its Coatex plant (a part of the Industrial Applications
one of the goals for the coming years.
division).
The yarn is produced in the spinning mill. This hightech spinning mill is one of the most modern in the world. The yarn is then processed into fabrics that are then coated in one of the coating plants.
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Flexible, breathing technical textile
G eographical
markets
(transfer coating): For clothing and mattress covers. Thanks to its modern production system, large
87% of the Coating Division’s turnover comes from
volumes, R&D and know-how and the advantages
the traditional Western European countries, with
of vertical integration, Sioen can hold its own in this
France, Germany, the Benelux and Great Britain the
nonetheless competition-sensitive market.
largest markets. Eastern Europe and Asia are other important markets. Since 2006, we are again fully
Swimming pool covers and pool liners (direct
active on the USA market, with an own salesoffice,
coating, extrusion coating). Sioen is by far the largest
Sioen Coating USA.
global supplier of technical textiles for this segment.
The geographical distribution reflects the location of
The greater proportion of the turnover comes from
final producers. Several large trailer manufacturers
France, where the major producers of swimming pool
are based in Germany and the UK, Germany has
covers and overground pools are located.
a rich tradition of using geo-textiles, France has a large number of swimming pool cover and mattress
Sign and textile architecture (direct,
cover makers, the largest digital printers are based in
extrusion and online coating): Sign is the collective
Western Europe and Pennel Automotive has a long
name for all types of publicity banners. Textile
history of contacts with French car makers.
architecture is understood as technical textiles for
Although the traditional Western European countries
tents and structures. These two growth markets will
comprise the largest proportion of turnover, the
be able to reap the benefits of R&D efforts in coming
Eastern European market is growing in importance.
years.
Technical textiles for digital printing and truck
Sioen Chemicals Sioen has long produced masterbatches and pigment pastes used for dyeing all kinds of coatings, as well as producing special varnishes, compounds and all types of lacquers. In 2006 Sioen took the strategic decision to expand its business in fine chemicals used in colouring pastes, plastics and other materials, of which its own Coating division is a heavy user, and in the same year purchased the decorative inks and varnishes business of Siegwerk-Benelux AG and later Richard Colorants, France’s leading producer of water-based colour pigments. The Sioen Industries range of fine chemicals now includes: • p igment pastes for colouring polyurethane and PV C coatings, epoxies, acrylic resins and silicones 22
tarpaulins and side curtains in particular are finding
in Flixecourt (France). This investment, costing
their way to Eastern European customers.
EUR 5 million, adds an addition 50% of production capacity and provides considerable cost savings.
C o m p e t i tive
position In 2007 Sioen will be investing to double its capacity
Sioen accounts for over 40% of total coating capacity
in open structure fabrics (anchoring nets, geotextiles,
at European level. The remainder is shared among some
windbreak nets and advertising banners)
German competitors and a large number of smaller and increasingly specialized competitors in France, Spain,
S ales
organization
Italy, Austria, Germany, France, Scandinavia, etc. In addition to the permanent sales staff operating out N e w
p r o ducts and d e ve l o p ments
of the Ardooie, Mouscron and Roubaix plants, and a number of local agents, the Coating division has its own sales offices in Germany France, China and the
In early 2006 Sioen invested in a new direct
USA (Sioen Coating USA).
two-sided coating line and automated kitchen
• g ranulates for injection moulding, extrusion and blow-moulding • a wide range of varnishes and inks with applications including vinyl floor and wall coverings, paints, glues, PU foams, shoe polishes, finger paints and wax crayons In 2006, EMB inaugurated a new factory building in Bornem (Belgium), with brand new machines for producing varnishes, inks, pigment pastes and pigment granules. In January 2007, Sioen acquired Fillink Technologies n.v. This Belgian company is specialized in eco-solvent, solvent and UV inks for wide and super wide format digital printers. Its experience with unique product formulations and wide market knowledge represent a real added value for Sioen Chemicals.
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APPAREL D IVISIO N
The product
strategically on products and applications with a high degree of technical complexity such as bullet and
Sioen is Europe’s leading producer and seller of
knife proof vests, flotation suits, fire fighting packs,
protective clothing for both industrial and leisure use.
protective clothing for the petrochemicals sector,
Part of the clothing is produced from in-house coated
forestry clothing, etc. The technical complexity
textiles in Sioen’s own factories.
of these products means that competition is more limited, and with international and European
The Industry range accounts for the greater part of
standards and regulations becoming increasingly
the Apparel Division’s turnover. It includes protective
stringent, demand for these products is continuing to
clothing ranging from simple rainwear to extremely
rise.
technical protective clothing. With sustained commercial pressure on largervolume, low technicity markets, Sioen is focusing
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D e s i g n a nd production
has the most recent ISO 9002/ EN 29001 certification as well as the AQUAP Certificate.
With an eye for detail and expert knowledge of production techniques and raw materials, our creative designers and textile engineers develop
Application areas
functional and comfortable protective clothing which meets all legal regulations and technical
The application areas for the standard range are as
requirements.
divergent as they are extensive: Sioen protective clothing is used in the petrochemicals industry, the
Each design is produced carefully to the strictest
food sector, road construction and public works,
quality standards in one of our modern production
agriculture, gardening and the fisheries sector. Sioen
centres in Tunisia and Indonesia and elsewhere. We
serves public authorities (municipal services, police,
are continually investing in the latest technologies to
army, firefighting, postal services, etc.) and private
enable us to meet the highest quality standards. Sioen
companies.
New sh owroom and laboratory facilities In 2005 a former storeroom and warehouse at the Ardooie headquarters were converted into an immense showroom. As well as telling the story of Sioen from production process through to final products, the Apparel Division’s range of protective clothing is given special prominence with more than 200 mannequins throughout the display area. In 2005, the Apparel D ivision constructed a new ultramodern lab in Ardooie. With its own sophisticated test equipment, it is able to conduct flame tests (EN3 67) and thermal radiation tests (E N ISO 6942) inhouse. This has enabled it to be one of the first producers in Europe to obtain certification for the new standard EN4 69:2005, covering protective clothing for firefighters. This opens the way for Sioen to play a leading role in the development in fire-retardant clothing. The lab also includes a shooting laboratory where the impact of bullets is tested on body armour.
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Sioen outdoor leisurewear is aimed mainly at hunters, anglers, horse riders, motor cyclists, hikers and golfers (Baleno trade mark). Sioen is also a valued partner for certain skiwear brands.
Developments during 20 0 6 During 2006 the division optimized its internal organization, both in Belgium and at its manufacturing plants in Tunisia and Indonesia. In 2006 Sioen also extended its ultra-modern R&D centre at Ardooie with a brand-new section
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specializing in testing and research on industrial
Sales and distribution
protective clothing. The sale of protective clothing is centralised at the Whenever quality and technical excellence are vital
headquarters in Ardooie. Sioen Apparel also has a
in protective clothing, Sioen has an appropriate
number of local sales units and agents in France,
solution.
Scandinavia, Indonesia, Germany and the UK serving local markets.
G e o g ra p hical markets The finished products are shipped from the various The vast majority of products (around 75%) are sold
production centres to a fully automated dispatch and
in Sioen’s traditional European markets (France,
distribution centre in Mouscron, and from there to
Belgium UK, Netherlands and Germany).
customers.
From our production centers in Tunesia and in Indonesia, the finished products are sent to the central dispatch and distribution centre, where they are temporarily stored before being sent on to our customers.
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INDU STR IA L APPLICATIO NS
Product
Processing
The Industrial Applications division processes heavy-
Different plants in France, Belgium, Germany, Poland
duty coated textiles, mainly produced in-house, in a
and Ukraine each provide different specialty products
wide variety of often highly specialist areas.
and services.
Kadors: Sioen processes in-house coated technical Markets
fabric into kadors (flexible PVC tubes surrounded by a technically coated fabric, used for instance for
The markets in the division are as extensive as
sliding a tent on to a caravan.
they are divergent: the automotive industry, the
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leisure sector, the food industry, heavy industry and
Sio-steel: Sio-steel is a patented composite
chemicals, transport, construction, mining etc.
consisting of a PVC coated steel net and double-
sided PVC coated polyester fabric, used primarily
Truck side curtains and tarpaulins:
for intrusion-resistant truck and train tarpaulins and
Roland International (production units in Germany,
side-curtains.
Poland, Ukraine, Romania) is the world’s largest producer of tarpaulins and curtains for new trailers
Cutting: Cutting of lining materials and multi-
(45% of the market), using technical fabrics produced
layer laser cutting of all kinds of materials, including
by the Coating Division. Acquired by Sioen in
airbags for the automotive industry.
2003, the company focuses on large volume, batch production.
Pond and dam sheeting: Cutting, splicing and packaging of pond sheeting and sheeting for water reservoirs, used in the construction of recreational
Geographic markets
ponds and industrial reservoirs, cultivating beds and dam sheeting, for customers worldwide.
Germany is by far the largest market, with 40% of turnover, due mainly to the automobile and truck
Filters and filter cloths: Sioen specializes in
tarpaulin activities). Another 40% is divided between
the production of felt and derived products such as
France, Belgium, the UK and Netherlands. Eastern
filters and filter cloths for the food industry (water
Europe and the USA both offer scope for growth.
and air treatment in sugar refineries, breweries, etc.), heavy industry - metallurgy, coke industry, mining, power stations, paper processing, cement companies, - the chemicals industry (dye production), city water
S ales and distribution organization
purification and after-burning plants. It recently started producing acoustic and thermal insulation
Sales and distribution channels differ from one
panels for both visible and invisible use.
product to another. Increasing emphasis is being placed on cross-selling.
Tents, covering systems, roll-down shutter doors, compartment covers and silos: In-house coated fabric is processed into finished products for high-tech niche markets such as the army, the railways, the airline industry, and the construction sector.
Camouflage fabric: Sioen specializes in the design, production and marketing of camouflage fabric and multi-spectral camouflage netting. This high-tech market calls for considerable technical knowledge and research and development. Worldwide there are only a few companies active in this segment.
29
S I O E N I NDU S T R I E S
I
VISION
SI OEN I NDU STRIES
VISION 30
Vision
This element of Sioen’s corporate culture is at once all-pervasive and more difficult to define. It is the ability to remain vigilant and focused, with perfect knowledge and mastery of our profession, ready to move forward and seize opportunities when they arise, push open new doors, strike out on new paths. It is a rock-solid confidence in our own expertise and ability to tackle new areas. It is a clear and realistic vision of own strengths and weaknesses, where to push forward, where not to. It is demonstrated in Sioen’s ability in recent years to repeatedly enter new and profitable markets at the opportune moment.
31
S I O E N I NDU S T R I E S
I
VISION
HUMAN RESOURCES
On December 31, 2006 Sioen Industries employed
The “Group” in personnel per division relates to
4.687 people in 16 different countries: Belgium,
the group services structure covering personnel
China, Germany, France, Ireland, Indonesia, Portugal,
management, financial and treasury management,
Tunisia, UK, the Netherlands, Poland, USA, Austria,
budgeting, ICT and legal affairs from the group
Denmark and Finland. This compares with 4.645 at
holding company Sioen Industries n.v. in Ardooie (B)
the end of December 2005. 3.816 (81%) were blue
(62 employees).
collar and 871 were white collar (19%) workers. The large number of workers in Indonesia, Tunisia
Working environment
and Poland are nearly all employed in the labourintensive apparel industry. As rationalization and
Producing quality is impossible without a quality
automation continue in this industry, there will be
working environment. The creation of a stimulating
less call on manual operatives and more on highly
working climate in which everyone has the
qualified personnel.
opportunity to develop their capacities to the full, is
Although the activities of the coating division are
one of the cornerstones of the Sioen Industries group.
capital intensive, this division employs 937 persons,
Accordingly, our employees’ satisfaction is regularly
an increase of 24% compared with last year.
surveyed and analysed.
Our quality policy includes an ongoing improvement process, with customer service being the motivation behind all our efforts.
32
QUAL ITY Quality
Quality monitoring
Quality means satisfying the customer’s expectations
The quality of the delivered product must meet the
in terms of products and delivered services. The
customer’s most stringent criteria. To achieve this,
customer can be both external and internal. For this
Sioen Industries does not confine itself to inspecting
reason the principle of meeting all the customer’s
the end product, but monitors for quality throughout
expectations applies throughout the organization,
the production process. This starts with the screening
and is not confined to those departments which
of suppliers, from whom a consistent quality level
come into direct contact with the customer. Quality
is required. Permanent workfloor supervision and
is a key principle for all employees of the Sioen
sampling take place during production, using the
Industries group as they perform their work, whether
latest communication and IT applications.
in production, sales, accounting, customer service, R&D or purchasing, etc.
Certification
Our quality policy includes an ongoing improvement
The Apparel Division has met ISO 9001 standards since
process, with customer service being the motivation
1996. It has also won AQAP-120 certification, the
behind all our efforts.
quality label for military tenders. Thanks to a constant concern for quality the Coating Division was one of the first coaters to acquire the ISO 9001 certificate.
33
S I O E N I NDU S T R I E S
I
VISION
R ESEARC H A ND D EVELOPMENT
Sioen has a concerted focus on knowledge,
with continuous process optimisation are making a
innovation and creativity: on new materials, new
substantial contribution to the group’s effectiveness.
production processes, new services, new niches, new markets and new requirements. Knowledge is its fundamental principle - yesterday’s, today’s and
A “spider’s web” R& D str u c t u r e
tomorrow’s capital. Keeping ahead of the market means ongoing Sioen organizes its research and development
investment in research and development. In 2001 the
activities around three main areas: product
group therefore inaugurated a central R&D unit at its
development, process improvement and
headquarters in Ardooie, where professionals work
technological innovations, because the products
on product development and innovation and on
we develop must be those which both meet
process improvement with state-of-the-art facilities.
customer expectations and create added value for
50 people are involved in R&D and testing, and
the business. Technological innovations connected
their operating costs amount to EUR 3.272 million,
Sioen organizes its research and development activities around three main areas: product development, process improvement and technological innovations, because the products we develop must be those which both meet customer expectations and create added value for the business. 34
excluding production time excluding production
universities, European research institutes and
time and costs. If we add the costs, the total annual
scientific funds. Sioen has a privileged relationship
R&D costs amount to 7.021 mio EUR (= 2,07% of
with the textiles engineering department of Ghent.
turnover). As well as its central R&D unit, Sioen has ten other
Top flight test facilities
research teams at major production sites, conducting specific research and product testing in more
Sioen’s R&D centres and labs are fully equipped
restricted rareas. Work done at the various research
with the latest testing equipment. Testing for tractile
centres is coordinated and managed from the central
and breaking strength, flame retardation, chemical
R&D unit in Ardooie.
resistance, water column, colour fastness, ageing and so on are all performed inhouse, and Sioen can stand
Sioen’s central and regional R&D teams cooperate
comparison with the world’s top research institutes in
closely with various national and international
this area.
35
S I O E N I NDU S T R I E S
I
VISION
ENVIR ONMENT
For Sioen Industries, care for the environment is a
The direct coating sites have also been fitted with
constant concern. As a responsible corporate citizen,
distillation columns, allowing hot air to be recovered
the group complies with all legal requirements. As
and used to pre-heat ovens. Another series of
a market leader also seeks to operate a proactive
distillation columns enables contaminated solvents to
environmental policy, investing every year to keep its
be distilled for re-use.
emission of harmful substances to a minimum, and applying stricter standards than those required by law.
In addition to developing new products, technologies and processes, the R&D team is also intensively
The group is making increasing use of recycling and
engaged in researching and developing recycling
energy recovery technologies. Distillation towers
options. Possibilities include the recycling of used
at plants, for example, reducing emissions to a
technical textiles in bags, insulation materials, mud
minimum and recovers valuable raw materials.
flaps and so on.
The group is making increasing use of recycling and energy recovery technologies.
36
Corporate InfoRM AT ION FINANCIAL OVERVIEW
Corporate Information
Letter to shareholders
3
I Report of the Board of Directors
5
II Group Structure
9
III S hare Information
10
IV C orporate Governance
12
V General information
16
Letter to s harehold ers
Dear Shareholder,
It is innovation, know-how and vision that take Sioen forward. Innovation is embedded in our corporate
“We are positive on our short and long-term future.”
culture, providing us with new products, new processes, new applications and new markets. Know-how and
2006 was another year of strong growth at Sioen
expertise are key assets, with nearly 50 years’ experience
Industries in terms of both production and sales.
of coating technologies, markets and standards. Vision is
It was also a year of innovation par excellence, in which
our strength: we possess entrepreneurship and creativity,
investment projects were completed, R&D centres
a nose for good business opportunities and are always
opened, markets explored, and production processes
ready for new challenges
upgraded. “We are confirming our market leadership and At EUR 339.4 million, consolidated turnover was up 7%
achieving substantial progress”.
on 2005. Gross margin was 50.72% of sales. EBITDA and EBIT rose 3% and 2% respectively to EUR 44.8
For the Coating division 2006 was a year in which
million and EUR 25.9 million.
we confirmed our market leadership and achieved substantial progress. It was also a year of challenges
These results enable Sioen Industries to pay a dividend
with further rises in raw materials prices, rapidly
of EUR 0.26 per share to its shareholders. On the
growing competition in transfer coating activities and
stock market too, Sioen Industries gave a dynamic
capacity shortages in direct coating and elsewhere.
performance, with the share price rising by more than
Rising raw materials prices we were able to offset with
16% year-on-year.
cost reduction and price increases. We invested in a new (additional capacity) varnish line and a new direct
We are bullish on the future of Sioen Industries. Even if
coating machine to meet strongly rising demand. With
raw material prices are placing pressure on earnings and
its extensive range and flexible production apparatus,
competition is very sharp on certain low-end markets,
Sioen Coating has succeeding in capturing much of the
Sioen is showing itself to be resilient and able to react
growth in traditional markets (transport, camping, textile
fast to events.
architecture).
Sioen Industries is a growth company in every field:
In 2006 the strategy of extending our fine chemicals
we are focused on growth and profit, think long-term,
activities took further shape. Under the common
and aim for market leadership in all our activities. Our
denominator of Sioen Chemicals we now produce
corporate slogan is “protection through innovation”.
colour pigment pastes, inks, varnishes and granulates.
S I OEN I N D U S TR I E S
I
C ORPORATE I NFOR M AT I ON
We invested in a new production hall at the Bornem
development is providing us with new products, new
site, took over part of the assets of Siegwerk Benelux
markets, new production processes and new technical
and acquired French company Richard Colorants. And
features. Sioen intends to be a market leader in each of
in January 2007 we bought Belgian company Fillink,
its activities.
which specializes in inks for wide format printers. In short we have, in a very short space of time, built up
In 2006 we extended our ultra-modern central R&D
an unique position that guarantees further expansion in
centre at Ardooie with a brand-new section specializing
these sectors.
in testing and research in industrial protective clothing. R&D is a cornerstone of our organization. It is a state of
To react better and more effectively to a competitive
mind, an attitude of all our employees, at every level.
and constantly evolving market, the Apparel division
Workers, salespeople, foremen, chemists, production
optimized its internal organization. We achieved ever
managers, general managers, we are all in our own way
greater successes in technical markets like firefighting
busy with improvement and innovation.
clothing and arc flame resistant apparel. This division also continues to perform well in its core industrial
With this annual report we provide an overview of
protective clothing activities.
the activities of Sioen Industries, a glimpse behind the
The Industrial Applications division, in which we
scenes, how we see the business, where we stand and
process technical textiles, did very well in 2006. The
where we intend going.
lion’s share of the growth in this product line came from transport-related activities. We will also be investing
We are convinced that this vision, dynamism and team
further in larger production shops, automation and
spirit will enable us to advance with unflagging élan.
wide-format printing.
We thank all Sioen employees for their devotion and commitment in putting all this into practice day after
“R&D is a state of mind”.
day. Finally we thank you, our shareholders, for your continuing trust in Sioen Industries.
We are proud to announce that 2006 was a strong year. We are continuing with the same dynamism to carry out various investment projects which will increase capacity and, through far-reaching automation, improve cost control.
We continue to focus on growth and on profit, with
Jean-Jacques Sioen
a permanent emphasis on R&D. This research and
Chairman of the Board
Michele Sioen CEO Sioen Industries n.v.
I Report of the Boar d of Directors
S ioen Industries group
to the extent that they are now just as important as corporation tax.
Sioen Industries is the leading world producer of coated technical textiles, European market leader in industrial protective clothing, a niche specialist in fine chemicals
Operating cash flow (EBITDA) rose 3% to EUR 44.8 million.
and a major world player in processing technical textiles into semi-finished products and technical end products.
Financial costs were approx. EUR 1 million higher than in 2005. This is due primarily to a
In 2006 Sioen posted net group sales of EUR 339.4 million, (of which EUR 3.7 million from
EUR 21 million increase in net financial debt to
new acquisitions), up 7% on an annual basis from
takeovers and the relatively heavy investment
EUR 316.2 million the year before.
programme in 2006.
Despite historically high raw materials prices and increased competition, the group succeeded in
The effective tax rate rose from 32% to 37%, due to the non-recognition of deferred tax assets in respect
maintaining its gross margin.
of losses in certain subsidiaries.
Services and miscellaneous goods rose proportionally with sales. The largest increases in
This brings the final net profit for 2006 to EUR 12.1 million, compared with EUR 13.6 million in
this area were in energy and energy-related costs
2005.
EUR 147.7 million, occasioned essentially by
(gas, electricity, fuel and energy). Personnel costs also rose in step with sales. To be borne in mind here are obviously the two acquisitions in the Chemicals group and sharply rising demand in the Industrial Applications
Net operating cash flow rose EUR 2 million from EUR 29.5 to 31.5 million. In 2006 dividends of EUR 0.24 per share (gross) were paid in respect of 2005.
division. Also included are a number of one-off costs.
The Board of Directors will be proposing to the Annual Meeting of Shareholders that the company
Other operating costs consist mainly of a number of non-profit related taxes such as property tax, taxe
declare a dividend of EUR 0.26 (gross) per share in respect of 2006.
professionnelle in France and the like. Every year these non profit-related taxes grow more onerous,
S I OEN I N D U S TR I E S
I
C ORPORATE I NFOR M AT I ON
COAT ING D ivisi on
The Coating Division specializes in the integrated
found in improved production efficiency and price
coating of technical textiles, of which it masters the
increases.
entire production process from the extrusion of the yarn (spinning), to weaving the technical fabric, producing
In 2006 the strategy of extending our fine chemicals activities took further shape. The colour chemicals
pigment pastes, granulates, varnishes and inks, and
department, located in our EMB (European Master
coating with various materials. The group is the only
Batch) subsidiary, grew spectacularly in 2006. This
player in the world with proficiency in five different
growth came both from our traditional markets of
coating technologies. Sioen enjoys a prominent position
pigment pastes and silicones, including investment
in markets where technical excellence is a decisive
in a new production hall at our Bornem site and in
sales argument.
a new varnish line, and from two acquisitions that
For the Coating division 2006 was a year in which
opened up new sales markets:
we confirmed our market leadership and achieved
First the takeover in September 2006 of a number
substantial progress. It was also a year of challenges
of assets of Siegwerk Benelux. In this way EMB
with further rises in raw materials prices, rapidly
acquired Siegwerk Benelux’s sales in the decorative
growing competition in transfer coating activities and
inks and varnishes market, and acquired a number
capacity shortages in direct coating and elsewhere. With
of new product formulae, with applications in
its extensive range and flexible production apparatus,
various markets in which EMB already supplies a
Sioen Coating succeeding in capturing much of the
number of related products:
growth in traditional markets (transport, camping, textile
• Floor coverings (vinyl, laminates)
architecture).
• Wall coverings (flexo, gravure and screen printing inks for paper and vinyl substrate)
The favourable economic climate in the transport sector produced a sharp rise in demand for trucks &
• Decorative paper (inks for gravure printing on
trailers. This resulted in attractive growth in terms of
etc.)
paper and vinyl for decorating furniture, laminates,
product and price for our direct coating line, and in
• Rigid and flexible PVC panels.
particular for products used for trailer and railway
Scarcely one month later EMB also acquired
tarpaulins. We invested in a new direct coating
the French company Richard Colorants. Richard
machine to meet strongly rising demand.
Colorants is France’s leading specialist producer
Our open structure fabrics product line (anchoring nets, geotextiles, windbreak nets, advertising
of water-based colour pigments. These pigments
banners) continued its solid advance. To meet
liquid form for colouring:
fundamentally rising demand, we are bringing
• paint, ink, varnish, glues and textile coatings,
forward to 2007 our planned investments to double
• wallpaper, paper and laminated paper,
our capacity.
• floor coverings, PU foam, plaster,
Despite price pressure in our traditional markets (mattress protection and protective clothing) and
• shoe polish, sponges and gloves,
higher raw materials prices, the transfer coating
And in January 2007 we purchased the Belgian
unit maintained its market position. New projects
company Fillink, which specializes in inks for wide
provided further sales increases.
format printers (see under “Events after balance
Notwithstanding constant price increases for the main raw materials (polyester granulate, PVC
sheet date” below).
are used in all applications which need colours in
• finger paints, wax crayons.
powder, plasticizers and technical fillers), the
In short we have, in a very short space of time, built up
coating division was able to increase its operating
an unique position that guarantees further expansion in
cash flow (EBITDA) by 15%. The reasons can be
these sectors.
APPAREL DIVISI ON
The Apparel division designs and produces high quality
to the customer’s own specifications.
protective clothing for industrial applications. Sioen’s
- Europe’s leading deep-frozen products
reputation is based here on quality and flexibility.
transportation and logistics company recently opted for Sioen protective clothing for its 7,500
During 2006 the division optimized its internal organization, both in Belgium and at its
employees. - Nantes, Bordeaux, Toulouse and Lyon are just a
manufacturing plants in Tunisia and Indonesia.
few French cities in which Sioen won tenders for
Together with a focus on professional markets, this led to a slight drop in absolute sales, but provided
rain protective clothing.
- more importantly - a 6% increase in operating
retardant and anti-static rainwear to a major gas
cash flow. Operating result fell by 0.2 million to
producer.
EUR 3.2 million. This is explained mainly by a
- Dutch police motor cyclists will in future be clad
number of one-off costs involved in redirecting
in Sioen rain overalls.
activities towards professional markets.
- The public tender to provide protective clothing
In 2006 Sioen also extended its ultra-modern R&D centre at Ardooie with a brand-new section
for Belgium’s fire fighting services for the next three
specializing in testing and research on industrial
- The Belgian ports authority has chosen Mullion
protective clothing
lifejackets for its harbour pilots.
Examples of where Sioen is called on to produce protective clothing abound: - For a handling company at Brussels-National airport Sioen supplied water and windproof jackets
- In the Netherlands Sioen supplies high-tech flame
years has just been awarded to Sioen.
Whenever quality and technical excellence are vital in protective clothing, Sioen has an appropriate solution.
I NDUS TRIAL APPLICATIONS D ivisi o n
The Industrial Applications division processes coated
on-year) in curtains and tarpaulins. Three factors lie
fabrics and PVC film into a range of industrial items.
behind this growth:
The Sioen Group successfully prospects and supplies a number of markets in the transport sector, via various subsidiaries. For truck and container
of Central European countries following their accession to the EU;
curtains and tarpaulins Sioen is the preferential supplier of Europe’s best known trailer builders. The group also produces train tarpaulins. A number of technical innovations in production have again
- the strong economic development of a number
- rising demand for more complex and higher added value products;
- increasing professionalization in the sector (production, logistics etc.)
given Sioen a significant position on the European
Sioen also supplies the military market with truck and jeep covers (with or without printed
market.
camouflage patterns), camouflage nets, tents, etc.
2006 saw an unprecedented boom (+ 33% year
The group is hard at work on a number of tenders
S I OEN I N D U S TR I E S
I
C ORPORATE I NFOR M AT I ON
for the armed forces, in particular for camouflage
prizes for the innovative development of:
netting, and has high hopes of winning a
• a Polylactyl-based biodegradable non-woven;
substantial portion of these orders.
• a non-woven with specific acoustic features; and
The Sioen group is applying its knowledge in a very wide range of industrial markets. For example
• a non-woven that can separate out oil and water, with
with kadors (PVC-based coated fabric) for tents and
A lack of production capacity led to the use of subcontractors and the recruiting and training of
inflatable silos. We also cut airbags.
the oil then broken down by bacteria.
the non-wovens market (needlefelt) we also made In significant technical breakthroughs that will ensure
a relatively large number of new workers. This
the continued development of this activity. Our
which depressed the operating result.
occasioned a number of unforeseen expenditures
subsidiary Sioen Nordifa has won no less than three
O U TL OOK
E VENT S AFTER BA LANC E SHEET DATE
Sioen Industries continues to focus on technical
In January EMB acquired Zaventem-based Fillink
excellence and innovation. The first months of 2007
Technologies n.v. Fillink specializes in eco-solvent,
have continued the trends of the previous year, with
solvent and UV inks for wide format and superwide-
high demand for technical textiles. This demand set to
format digital printers. The group expects this new
remain strong in the truck tarpaulins sector, where trailer
takeover to add around EUR 7 million of sales in 2007.
builders’ prognoses are very optimistic right through
In January the smaller of our two Indonesian production
2007. A number of capacity extension investments
facilities suffered from flooding. Assets and loss of
are ready for finalization in the first half of the year.
business are both insured. The group is doing everything
These will give us additional capacity in online coating,
possible to minimize the operational and financial
calendering and direct coating from 2008 onwards.
implications.
II GROUP STRUC TU RE
SIOEN INDUSTRIES N.V.
COATING DIVISION 99%
100%
100%
100%
100%
100%
Sioen Coating n.v. Direct Coating Belgium
APPAREL DIVISION 99%
Sioen n.v. Apparel Belgium Confection Tunisienne de Sécurité s.a Apparel Tunisia
89%
Sioen Coating Distribution n.v. Sales Office Belgium
Donegal Protective Clothing Ltd (4) Apparel Ireland
100%
Sioen Fabrics s.a. Weaving/Transfer Coating Belgium
100%
Sioen Fibres s.a. Spinning Belgium
95%
Sioen Shanghai (3) Sales office China
95%
Mullion Manufacturing Ltd Apparel U.K. P.T. Sioen Indonesia Apparel Indonesia
5%
P.T. Sungintex Apparel Indonesia
5%
Siofab s.a. Transfer Coating Portugal
100%
TIS n.v. Weaving Belgium
Sioen France s.a.s. Sales office France
Veranneman TT n.v. Weaving/Direct Coating Belgium
Sioen Tunisie s.a. Sales office Tunisia
100%
100%
Sioen Fibres s.a. Central Distribution Unit Belgium
100%
Pennel Automotive s.a.s. Calendering France
99%
Sioen Zaghouan s.a. Apparel Tunisia
100%
Inducolor s.a. Ink production Belgium
95%
Sioen USA Inc. (5) Sales office
90% 10%(2)
Coatex n.v. Processing of coated fabrics and films Belgium
Saint Frères s.a.s. Direct Coating France
100%
99%
INDUSTRIAL APPLICATIONS DIVISION
100%
25% 75% (2)
Saint Frères Confection s.a.s. Heavy-duty manufacturing France
100%
Sioen Nordifa s.a. Filter production Belgium
100%
Roland International b.v. (6) Manufacturing of truck tarpaulins
100%
Roltrans Group America Inc.
100%
Roland Planen GmbH
100%
Roltrans Group Polska sp.z.o.o.
100%
Roland Ukraine Llc (7)
100%
Roland Tilts UK Ltd.
100%
European Master Batch n.v. Master batch production Belgium Richard s.a.s. (8)
100%
Copidis s.a.s. (9)
100%
Astra Colorants s.a.
100%
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Quoted percentages have been rounded, and reflect the situation at 31 December 2006 Via Sioen Coating n.v. The official name is Sioen Coated Fabrics Shanghai Trading Ltd. The official name is Gairmeidi Caomhnaithe Dhun na nGall Teoranta. 5% via P.T. Sungintex Via Monal s.a. and Roltrans Group b.v. In December 2006 Roland International b.v. acquired 100% of the shares of Roland Ukraine Llc The Richard group was acquired in October 2006 The official name is Colorants Pigments Distribution
S I OEN I N D U S TR I E S
I
C ORPORATE I NFOR M AT I ON
III SHARE I NFORMAT ION
Listing
Shareholders structure
In order to support and secure the company’s fast growth, and in the conviction that a transparent policy would further strengthen the group’s growth
Shell: 3.4%
possibilities, the Sioen Industries share was introduced on the cash market, double fixing, of the Brussels Stock Exchange, on 18 October 1996. A year later the share was listed on the semi-continuous segment of the forward market. Since 11 March 1998
Public: 36.3%
it has been quoted on the continuous segment of the Brussels forward market, which has since become Euronext Brussels. At the moment 7,758,538 shares or 36.3% of the total
Sihold: 60.3%
number of shares are spread among the public. 60.3% 50
50
are controlled via the holding company Sihold n.v., 40
40
30
30
20
20
10
10
0
0
controlled by the Sioen family, and 3.4% are held by Shell Pension Fund
Evolution of the share in 2006 The share was quoted at its highest price on 12Sioen
and profit, a presence in the Next Prime segment and an
December 2006, at EUR 10.41. On 31 December 2006,
active communication policy, Sioen is seeking to pro-
at EUR 9.60, the share noted 16% higher than its price,
actively stimulate investor interest. Market capitalization
on 30 December 2005 (EUR 8.30). With a combination
amounted on 31 December 2006 to EUR 205.3 million.
Eurostoxx50
of steady growth of turnover, cash flow
3
250,000
50
200,000
40
150,000
30
100,000
20
50,000
10
0
96
97
98
99
00
10 Sioen Volume
01
02
03
04
05
06
0
I ndices
Fi n a n c i a l c o m m u n i c a t i o n p o l i cy
In mid June 2000 the Sioen Industries share was
The Sioen Industries share is included on Euronext
included in the IN.flanders, a share index made up of
Brussels in Compartment B (Mid-Caps).
the 100 most important listed employers in Flanders. The selection and weighting of the companies in the index
D iv i d e n d p o l i cy
are a function of employment, established on the basis: for subsidiaries of foreign enterprises, the number of employees in Flanders
The Board of Directors aims for a pay-out ratio of more
for Flemish enterprises, the number of employees worldwide
in order to have the dividend closely linked to cash flow
t he evolution of employment in Flanders for the subsidiaries, or worldwide for the Flemish company.
reward shareholders’ confidence in the company.
than 15%, with the dividend increasing year after year, expectations on the one hand, and on the other hand to The pay out ratio for 2006 amounts to 45.6%, as compared to 37.8% last year. At EUR 0.26 gross
The Sioen Industries share in this index is 1.22%
(EURÂ 0.1950 net), the dividend is 8.3% higher than last
(31/12/2005).
year. The dividend is payable at Dexia Bank, ING-Bank, Fortis Bank and KBC Bank from 8 June 2007.
ISIN
BE0003743573
MEP
BRU
Euronext code
BE0003743573
Mnemo
SIOE
Type
Stock - Ordinary stock - Continuous
Market
Euronext Brussels - Eurolist - Local shares
Local
Compartment B (Mid-Caps)
ICB Sector classification 3000, Consumer Goods 3700, Personal & Household Goods 3760, Personal Goods 3763, Clothing & Accessories
Reuters SIOE.BR Bloomberg SIO.BB
Datastream B:SIO
11
S I OEN I N D U S TR I E S
I
C ORPORATE I NFOR M AT I ON
IV Corporate Governance
The Sioen family has been supported by external,
Belgian Corporate Governance Code. The Corporate
independent directors since 1986. Their expertise
Governance Charter has been in force since the 2005
and experience contribute to the proper and effective
General Meeting, and can be consulted on the Sioen
management of the company.
Industries website (www.sioen.com).
On 22 March 2005 the Board of Directors adopted a
No changes have been made to the Corporate
Corporate Governance Charter, in accordance with the
Governance Charter since it came into effect.
The board of directors Composition (situation as at 1 April 2007)
CHAIRMAN
Mr J. J. Sioen (1), chairman/director in various other companies
MANAGING
MJS Consulting b.v.b.a.
DIRECTOR
Represented by Ms M. Sioen (1) Director in various other companies
DIRECTORS (5)
Ms J. N. Sioen-Zoete (1), director in various other companies D-Lance b.v.b.a. (1) Represented by Ms D. Parein-Sioen (2) Director in various other companies
P. Company b.v.b.a. Represented by Ms P. Sioen (1) Director in various other companies
Pol Bamelis n.v. Represented by Mr P. Bamelis (3) Director in various other companies
Revam b.v.b.a. Represented by Mr W. Vandepoel (3) Managing director Lessius Corporate Finance n.v.. Director in various other companies
Sheng n.v. Represented by Mr L.-H. Verbeke (3) Chairman of Mitiska n.v.. Director in various other companies
K.E.M.P. n.v. Represented by Mr L. Sterckx (3) CEO of SPE/Luminus. Director in various other companies
Vean n.v.
SECRETARY STATUTORY AUDITOR (4)
12
Represented by Mr L. Vansteenkiste (3) Managing director of Recticel n.v. Director in various other companies Mr G. Asselman CFO Sioen Industries Group Deloitte Bedrijfsrevisoren c.v.b.a. Represented by Mr G. Verstraeten and Mr G. Wygaerts
(1) Executive director (2) Non-executive director (3) Independent director. In defining which directors are independent, the Company has opted for the criterion whereby a director may not remain in his post for more than three four-year mandates, as from the General Meeting of 2005. The consequence of this is that three current directors are considered as independent, although they have already held directorships for more than twelve years in the Sioen Group. This is to ensure the continuity of the Company and its management. (4) The Statutory Auditor’s mandate expires at the ordinary general meeting in 2008. (5) The directors’ mandates expire at the 2008 general meeting.
The Board of Directors and how it works
Wo r k i n g c o m m i t t e e s The Sioen Industries Group has three working
In accordance with the Articles of Association, the
committees:
Board of Directors meets regularly as a function of the company’s needs and interests. In 2006 it met six times.
a) Audit Committee: In 2006 the Audit Committee consisted of four
The number of meetings attended by the individual
independent directors, namely Messrs Vandepoel
directors in 2006 were as follows:
(Chairman), Bamelis, Verbeke and Sterckx.
Mr Jean-Jacques Sioen
6
The Audit Committee met six times in 2006. The
Ms Michèle Sioen
6
number of meetings individually attended by the
Ms Jacqueline Sioen-Zoete
5
members of the Audit Committee in 2006 was as
Ms Danielle Sioen
6
follows:
Ms Pascale Sioen
6
Mr Pol Bamelis
6
Mr Wilfried Vandepoel
6
Mr Wilfried Vandepoel
6
Mr Pol Bamelis
3
Mr Louis-Henri Verbeke
6
Mr Louis-Henri Verbeke
6
Mr Luc Sterckx
6
Mr Luc Sterckx
3
Mr Luc Vansteenkiste
6 b) Remuneration Committee
The permanent agenda of every Board of Directors
In 2006 the Remuneration Committee was made up of
meeting includes the discussion of and taking of
three independent directors, namely Messrs Bamelis
decisions with respect to the individual results of
(chairman), Sterckx and Vansteenkiste.
companies in the group, division results, consolidated
The Remuneration Committee advises the Board
results, current investments and projects, new projects
of Directors on pay policy in general and on the
and proposals for investment opportunities. The board
compensation paid to the members of the Board of
also deals with specific points on the agenda as a
Directors and the Management Committee in particular.
function of concrete matters in hand.
The share option plans also fall under its remit. The Remuneration Committee met three times in 2006. All members of the committee were present at each meeting. c) Nomination Committee On 22 March 2005 a Nomination Committee was set up in accordance with Sioen Industries’ Corporate Governance Charter. It is made up of two independent directors (Messrs Bamelis and Sterckx) and one executive director (Mr Jean-Jacques Sioen).
13
(1) D-Lance b.v.b.a., represented by Ms Parein - Sioen, no longer forms part of the Management Committee as of 1 January 2007, but continues to attend Management Committee meetings as an observer from the Board of Directors.
S I OEN I N D U S TR I E S
I
C ORPORATE I NFOR M AT I ON
Management Committee
External audit
The members of the Management Committee (as of 1
Within the Sioen Industries group, external audit is
April 20071) are:
chiefly carried out by Deloitte Bedrijfsrevisoren. This involves the auditing of both the statutory financial
MJS Consulting b.v.b.a., represented by Ms M. Sioen
statements and the consolidated annual financial
P.Company b.v.b.a., represented by Ms P. Sioen
statements of Sioen Industries n.v. and its subsidiaries.
Mr Geert Asselman
To the extent that the audits of a number of subsidiaries
Mr Erwin Van Uytvanck
are carried out by other auditing companies, Deloitte
Mr Michel Devos
makes use of their work, as stated in the Statutory
Secretary: Mr Loebrecht Lievens
Auditor’s report. During the past financial year the Statutory Auditor received EUR 65,500 from Sioen Industries in respect of its statutory auditor mandate. Additionally the Statutory Auditor and its network received EUR 8,740 for other auditing work, EUR 6,043 for fiscal consultancy services and EUR 71,680 for other assignments outside its audit mandate. The mandate of Deloitte Bedrijfsrevisoren as Statutory Auditor of Sioen Industries n.v. expires at the annual meeting of 2008. Deloitte Bedrijfsrevisoren is represented by Mr G. Verstraeten and Mr G. Wygaerts.
14
S hare option plans
preventive measures and directives designed to maintain the confidential nature of privileged information. All
Under a Share Option Scheme originally introduced in
insiders eligible for this have signed this protocol. A
1996, a total of 6,500 options were issued in 2000 of
Compliance Officer has been appointed to monitor
which 3,250 remain outstanding and exercisable at a
observance of the protocol.
price of EUR 20.335 per share until January 2008. No share options have been granted since 2000. The Board of Directors remains authorized to grant up to 158,000 options. No options have been allotted to directors until now.
O verview of the 2000 share o ption plan Date of Board decision
10/10/2000
Option price as % of market price Option price
7.5% 1.5375
Option exercise price 20.3550 Allocation
6,500
Unused Balance to be Exercised January 2005-2008
3,250 (3,250)
P rotocol to prevent insider trading To prevent privileged information being used illegally by directors, shareholders, and members of the management and staff (i.e. “insiders”), or even to prevent such an impression possibly being created, the Board of Directors of Sioen Industries n.v. has produced a protocol for the prevention of abuse of insider information (“1997 Protocol”). Further to Directive 2003/6/EU a new protocol was approved by the Board of Directors on 1 May 2005. The protocol is initially aimed at protecting the market as such, ensuring observance of the statutory provisions and maintaining the group’s reputation. In addition to a number of prohibitions concerning the trading of Sioen Industries n.v. financial instruments when insiders have privileged information that is not (yet) available to the public, it also contains a number of
15
S I OEN I N D U S TR I E S
I
C ORPORATE I NFOR M AT I ON
V Genera l Infor mation Registered office and name (Articles 1 and 2)
cladding, the printing and finishing of all fabrics; the manufacture of ready-to-wear items and outfits for ladies and gentlemen, knitwear, embroidery,
The registered office of Sioen Industries, a public limited
household and table linen, children’s clothing. The
liability company under Belgian law, is established
manufacture of safety and high visibility articles.
at Fabriekstraat 23, B-8850 Ardooie. The company is
The wholesale and retail trade in all the above-
registered (in the register of legal persons of Brugge)
mentioned items;
listed under enterprise number 441.642.780.
The investment in, subscription to, permanent takeover, placement, purchase, sale, and trading
Incorporation and publication
of shares, dividend certificates, bonds, certificates, claims, currencies and other movable securities,
Sioen Industries was incorporated under the name
issued by Belgian or foreign companies, whether or
“Sihold” by deed executed before notary-public Ludovic
not in the form of trading companies, administration
du Faux in Moeskroen on 3 September 1990, published
offices, institutions and associations either with or
in the Annexes to the Belgian Official Journal of 28
without a (semi-) public law status;
September 1990, under no.: 900928-197.
The management of investments and participations in subsidiaries, the holding of executive posts, the
Financial year ( Article 36)
giving of advice, management and other services to or in accordance with the activities carried out by
The financial year begins on 1 January and ends on 31
the company itself. These services may be provided
December of each year.
by virtue of a contractual or statutory appointment and in the capacity of external consultant or
Term ( A rticle 4)
representative of the company.
The company is established for an indefinite period.
All of this insofar as the company complies with the
O bject of the company ( Articl e 3 )
and abroad, effect all industrial, trading, financial,
statutory requirements. The company may, in Belgium movable and immovable transactions that may develop The company’s object, in Belgium and abroad, on its
or promote its business either directly or indirectly. It
own behalf and on behalf of third parties, is:
may acquire all movable or immovable goods even if these are not related directly or indirectly to the
The weaving of fibres of all kinds, the coating of fabrics and all other material, the printing
company’s object. It may, by any means, acquire
thereof, the manufacture of plastic and plasticised
enterprises or companies that are striving for the same
material, the manufacture, purchase and sale, both
or a similar or related object or that can promote its
in Belgium and abroad, of material useful for or
business or facilitate the sale of its products or services,
relating to aforesaid products and raw materials, as
and it may collaborate or merge therewith.
participating interests in all associations, businesses,
well as the manufacture of chemical products and
16
pigments;
Consultation of documents
The manufacture of pre-fabricated outer clothing in woven fabric, the manufacture of all kinds
The statutory and consolidated annual accounts of
of tailor-made clothing and embroidery; the
the company and the accompanying reports are filed
manufacture of outer clothing in knitted fabrics, and
with the National Bank of Belgium. The articles of
of household linen and interior decoration items
association and the special reports required by the
interior decoration items; the manufacture of wall
Companies Code as well as the annual and half-yearly
reports and all information published for the benefit of
through a contribution in cash with cancellation or
the shareholders, are available at the registered office
restriction of the existing shareholders’ preferential
of the company. The articles of association, the annual
subscription rights, or through contribution in kind, is
and half-yearly reports can also be downloaded from the
suspended from the date of notification to the company
website www.sioen.com.
by the Banking, Finance and Insurance Commission of a public takeover bid for the company’s shares.
H istorical development of the c apital
This authority will be reinstated immediately after the closing of such a takeover bid. The general meeting of 27 May 2005 expressly authorised the board of directors
The historical development of the capital is included
to increase the subscribed capital on one or more
under the comments on the consolidated annual
occasions, from the date of notification by the Banking,
accounts.
Finance and Insurance Commission to the company of a public takeover bid for the company’s shares, through
Authorized capital
contributions in cash with cancellation or restriction of the existing shareholders’ preferential subscription right
The board of directors is authorised during a period
or by contributions in kind, in accordance with Articles
of five years counting from the date of publication in
557 and 607 of the Companies Code. This authority was
the Annexes to the Belgian Official Journal of the deed
granted for a period of three years as from 27 May 2005
concerning the amendment of the articles of association
and is renewable.
of 30 May 2003 (BOJ of 23 June 2003) to increase the subscribed capital on one or more occasions, by a maximum amount of forty-six million euros. This renewable authority is valid for capital increases
A c q u i s i t i o n by t h e c o m p a ny o f s h a r e s i n i t s ow n c a p i t a l
in cash, in kind or by conversion of reserves. At the moment this full amount is still available.
The general meeting of the 28 of May 2004 expressly
In the framework of the authorised capital, the board of
authorised the board of directors, in accordance with
directors is authorised, in the interest of the company
the provisions of the Companies Code, to acquire or
and subject to observance of the conditions laid down
have the disposal of its own shares or profit-sharing
in Articles 535 and 592 to 599 of the Companies
bonds, if the acquisition thereof is necessary to avoid
Code, to cancel or restrict the preferential subscription
an impending serious detriment to the company. This
right that is granted to the shareholders by law. The
authorisation is valid for a period of three years from the
board of directors is authorised to restrict or cancel
date of publication of the above-mentioned resolution
the preferential subscription right in favour of one or
in the Annexes to the Belgian Official Journal (BOJ of
more particular persons, even if these persons are not
23 June 2004).
members of staff of the company or its subsidiaries.
The general meeting of the 26 May 2006 authorised
In the event of the increase of the subscribed capital,
the board of directors, in accordance with Articles
carried out within the limits of the authorised capital,
620 to 623 and 625 of the Companies Code, to obtain
the board of directors is authorised to ask for an issue
its own shares through purchase or exchange up to
premium. If the board of directors decides to do so, this
the maximum number permitted by law, and at a
issue premium should be allocated to an unavailable
price equal to the market value of the shares. This
reserve account that can only be reduced or written
authorisation (also extends to the acquisition of shares
off by resolution of the general meeting passed in the
of the company by one or more of its direct subsidiaries
manner required for the amendment of the articles of
within the meaning of the law and is valid for a period
association.
of eighteen months counting from 26 May 2006 and is renewable.
In default of an express authorisation given by the general meeting to the board of directors, the board of directors’ authority to increase the subscribed capital
17
FINANCIAL OVERVIEW 18
FI NAN CIA L OVERVI EW
Sioen industries consolidated financial statements I.
Comments on the consolidated financial statements 20
Ii. Financial statements 22 Ii.1. Consolidated balance sheet 22 Ii.2. Consolidated income statement 24 Ii.3. Consolidated cash flow statement 26 Ii.4. Consolidated statement of changes in equity 27 Iii. Notes to the consolidated financial statements 28 Iii.1. Key accounting rules 28 Iii.2. Segment information
37
Iii.3. Exchange rate
40
Iii.4. Detailed income statement
41
Iii.5. Detailed balance sheet
45
Iv. Other
68
V. Statutory auditor’s report
71
Vi. Statutory annual accounts of Sioen Industries n.v.
73
Vii. Proposal to the annual meeting
76
Definitions
77
Addresses
78
19
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
I. C omments on the consolidate d financi al state ments
technical textiles, European market leader in industrial
Services and miscellaneous goods rose in line with sales. The fastest rising costs here are energy and
protective clothing, a niche specialist in fine chemicals
related costs (gas, electricity, fuel and transport).
and a major world player in processing technical textiles
Personnel costs also rose in step with sales. Here one should bear in mind the effect of the two
Sioen Industries is the leading world producer of coated
into semi-finished products and technical end products.
acquisitions by the Chemicals group and also Sales
strongly rising demand in the Industrial Applications
In 2006 Sioen achieved net group sales of EUR 339.4 million, up 7% from EUR 316.2 million the
division. This heading also covers a number of non-
year before. A booming transport sector in 2006 with strongly rising demand for trucks and trailers
Other operating costs covers a number of generally non profit-related taxes like property tax, taxe
meant attractive growth figures for both our Coating
professionelle in France and the like. Every year
and our Industrial Applications divisions (10% and
these non profit-related taxes grow more onerous,
19.5% respectively). Apparel division sales slipped
to the extent that they are now just as important as
slightly as the division redirected its activities
corporation tax.
towards more professional markets, producing a rise
This gives the group an operating result of EUR 25.9 million in 2006 compared with 25.4
in operating cash flow.
recurring costs.
million in 2005. Gross margin-EBITDA-EBIT Despite historically high raw materials prices and increased competition, the group was able to
Operating cash flow (EBITDA) rose by 3% to EUR 44.8 million.
maintain its gross margin and to increase EBITDA at
Financial costs were approx. EUR 1 million higher than in 2005. This is due primarily to a
group level by 3%. Free cash flow (cash available
EUR 21 million increase in net financial debt
for investments) grew explosively from EUR 17.3
to EUR 147.7 million, occasioned primarily by
million in 2005 to EUR 37.6 million in 2006. This
takeovers and the relatively heavy investment
rise is even stronger in the Coating division. Price
programme in 2006.
increases for final products, a continuous drive for cost efficiency and constant R&D efforts contributed
The effective tax rate rose from 32% to 37%, due entirely to the non-recognition of latent tax assets in
to this result. Whilst sales rose by 10%, operating
respect of losses in certain subsidiaries.
cash flow increased by 15%. The Apparel division
This brings the final net profit for 2006 to EUR 12.1 million, compared with EUR 13.6 million
succeeded, in very competitive conditions, not only to maintain but even increase its gross margin. This
in 2005.
obviously had a positive impact on operating cash
et operating cash flow rose by EUR 2 million from N EUR 29.5 to 31.5 million.
flow, which rose from EUR 5.8 million in 2005 to EUR 6.1 million in 2006. In this division too, technical excellence is crucial, in particular with professional users that set very high standards. The Industrial Applications division faced a slight drop
Investments Total investment in tangible fixed assets amounted to EUR 27.5 million. The largest items here are:
in both gross margin and EBITDA. This fall is only
o The new production line at Nordifa: EUR 2.3 million
temporary, given recent price increases.
o The new production hall at EMB: EUR 2.5 million o Investment in a new ERP package: EUR 2.5 million
20
o A number of new looms: EUR 0.5 million o Air conditioning for the yarn extrusion plant: EUR 0.4 million o Initial investments in the new calendaring plant: EUR 6.1 million.
The volatility of crude oil prices and the more or less related volatility of prices of its principle raw materials. (PVC, polyester, plasticizers, etc.) With regard to the processing of heavy technical textiles, the group’s evolution closely tracks the economic cycles of the truck sector.
I n addition two acquisitions were made by the group last year, representing a net investment of EUR
The protective clothing division follows the current trend in industrial activity in Western Europe. The
23.5 million.
emphasis is here less on volume and more on the
Last year the group received EUR 1.5 million in investment grants. These are deducted from the
technical specifications of the clothing.
acquisition cost of the assets in question. Balance sheet In nominal amounts working capital rose from EUR 107.5 million at 31/12/2005 to EUR 111.8 million at 31/12/2006. Bearing in mind that sales have increased by EUR 23 million, working capital as a percentage of sales has fallen from 34% to 32.9%. Net financial debt has risen to EUR 147 million, owing to the investment programme of around EUR 47 million (investments and capital expenditure together). Risks Sioen Industries NV is a company listed on Euronext, that does not itself exercise any industrial activity. Sioen Industries holds participations in companies operating in the following sectors: - Coating of technical textiles - Designing, developing and production of protective clothing. - Processing heavy technical textiles into finished products. Sioen Industries is influenced, in particular in terms of its income, by the economic performance of these divisions. These divisions are in turn dependent on general economic trends and more specifically:
21
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
II. C ON SOLIDATE D FINANCIAL STATE MENT S The consolidated financial statements for 2006 were approved by the Board of Directors for publication on 19 March 2007.
II.1. C ON SOLIDATED BALAN CE SHEET i n thousands of euros ASSETS
2005
2006
17 716
Note Non-Current assets Intangible assets
III.5.1.
2 267
Goodwill
III.5.2.
16 548
17 935
Property, plant and equipment
III.5.4.
142 278
150 420
Long term trade receivables
III.5.5.
59
22
Other long term assets
III.5.5.
524
504
III.5.15.
7 010
6 199
168 686
192 796
Deferred tax assets
TOTAL NON-CURRENT ASSETS
Current Assets
22
Inventories
III.5.6.
78 463
84 472
Trade receivables
III.5.7.
69 416
70 414
Other receivables
III.5.8.
11 118
9 423
Other investments and deposits
III.5.8.
260
532
Cash and cash equivalents
III.5.8.
8 312
12 584
Deferred charges and accrued income
III.5.8.
1 428
1 612
TOTAL CURRENT ASSETS
168 997
179 037
TOTAL ASSETS
337 683
371 833
EQUITY & LIABILITIES
2005
2006
Share capital
46 000
46 000
Retained earnings
81 317
88 338
2 046
1 459
Minority interests
19
0
TOTAL EQUITY
129 383
135 797
117 033
Equity
Note
Hedging and translation reserves
Non-Current liabilities Interest bearing loans - payable after one year
III.5.11.
53 831
Provisions
III.5.10.
1 023
2 509
Pension obligations
III.5.9.
1 256
1 671
Deferred tax liabilities
III.5.15.
16 821
18 360
Finance leasing - payable after one year
III.5.12.
13 049
11 428
Other amounts - payable after one year
III.5.11.
33
3
86 012
151 004
TOTAL NON CURRENT LIABILITIES
Current liabilities Trade and other payables
III.5.13.
36 510
31 744
Interest bearing loans - up to one year
III.5.11.
67 290
31 162
Provisions - up to one year
III.5.10.
379
1 293
Pension obligations - up to one year
III.5.9.
65
42
Tax liabilities
III.5.13.
5 589
7 364
Finance leasing - up to one year
III.5.12.
1 142
1 270
Other amounts payable - up to one year
III.5.13.
11 313
12 157
TOTAL CURRENT LIABILITIES
122 288
85 032
TOTAL EQUITY AND LIABILITIES
337 683
371 833
23
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
II.2. C ON SOLIDATED INCOM E S TATE MENT by function I in thousands of euros
2005
% of
2006
Sales Net sales Cost of goods sold
316 237 -251 877
(1)
% of Sales
100.0%
339 389
100.0%
-79.6%
-267 436
-78.8%
Manufacturing contribution
64 360
20.4%
71 954
21.2%
Sales and marketing expenses
-15 896
-5.0%
-15 573
-4.6%
-1.8%
-7 021
-2.1%
-6.3%
-22 465
-6.6%
R&D expenses Administrative expenses
-5 554 -19 887
(1)
2 940
0.9%
304
0.1%
-505
-0.2%
-1 307 (2)
-0.4%
25 457
8.1%
25 891
7.6%
-5 470
-1.7%
-6 565
-1.9%
19 987
6.3%
19 326
5.7%
Tax
-6 399
-2.0%
-7 172
-2.1%
EAT
13 588
4.3%
12 153
3.6%
Cash flow
29 535
9.3%
31 496
9.3%
EBITDA
43 647
13.8%
44 843
13.2%
EBIT
25 457
8.1%
25 891
7.6%
Other operating result Non recurring result (2)
Operating profit Financial result
EBT
(1) in 2005: Reallocation of goods produced for R&D purposes to R&D expenses in an amount of kEUR 1,337 in 2005 to permit comparison with figures for 2006 (2) in 2006: Non-recurring items relate to restructuring expenses in France (Pennel Automotive SAS). A provision for restructuring has been taken amounting to EUR 1.3 million EUR.
24
II.2. C ONSOLIDATED I NCOM E S TATE MENT by nature I in thousands of euros
2005
% on Turnover
2006
% on Turnover
CONSOLIDATED PROFIT AND LOSS STATEMENT A. Turnover
316 237
339 389
B. Changes in stocks and wip
4 647
1.47%
4 620
1.36%
D. Other operating income
4 026
1.27%
3 339
0.98%
I. Revenue
324 910
II. Cost of sales
160 844
Gross margin
50.61%
III. Services and other goods
-50 705
IV. Remuneration, social security and pensions
-63 450
V. Depreciations VI. Amounts written down on stocks and trade debts VII. Provision liabilities & charges
347 348 (1)
50.86%
171 856
50.64%
50.72% (1)
-16.03%
-55 266
-16.28%
-20.06%
-67 640
-19.93%
-17 899
-5.66%
-17 919
-5.28%
-862
-0.27%
-230
-0.07%
572
0.18%
-804
-0.24%
-5 758
-1.82%
-6 435
-1.90%
-505
-0.16%
-1 307
-0.39%
X. OPERATING RESULT
25 457
8.05%
25 891
7.63%
XIII. FINANCIAL RESULT
-5 470
-1.73%
-6 565
-1.93%
19 987
6.32%
19 326
5.69%
-6 399
-2.02%
-7 172
-2.11%
13 588
4.30%
12 153
3.58%
-6
0.00%
0
0.00%
XX. RESULT PART OF THE GROUP
13 582
4.29%
12 153
3.58%
EBIT
25 457
8.05%
25 891
7.63%
EBITDA
43 647
13.80%
44 843
13.21%
Cash Flow
29 535
9.34%
31 496
9.28%
VIII. Other operating expenses Ix. Non recurring items
XVI. PROFIT BEFORE TAX XVII. TAXES
XVIII. PROFIT AFTER TAX XII. MINORITY INTEREST
(1) in 2005: Reallocation of goods produced for R&D purposes to R&D expenses in an amount of kEUR 1,337 in 2005 to permit comparison with figures for 2006
25
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
II.3. C ON SOLIDATED CASH FLOW STATE MENT I in t housands of euros
2005
2006
Recurring operating result Non recurring items
25 962 -505
27 198 -1 307
Depreciation Impairment Write off inventory and receivables Provision other risks and charges
17 899 862 -1 026
17 919 0 230 2 792
Changes in working capital Other changes
-16 664 -521
-2 254 -175
Cash flow from operating activities
26 007
44 402
-8 642
-6 782
17 365
37 620
343
786 -16 594 -5 562 -1 387 1 676 -27 440 382 1 565 558
Current taxes
Net cash flow from operating activities Received interests Acquired intangible and tangible assets through business combinations Acquired working capital through business combinations Goodwill resulting from business combinations Deferred tax resulting from business combinations Investments in intangible and tangible fixed assets Disposal and sale of intangible and tangible fixed assets Increase in capital grants Translation adjustments on intangible and tangible assets
Net cash flow from investing activities
-17 865
-46 016
-500
-8 396
-6 280 -4 706 20 000 -24 293 8 097 -1 066 -18 484
-7 512 -5 133 98 900 -35 698 -36 157 -1 493 -45 205
-7 781
13 068
1 966
-128
Change in cash and cash equivalents
-6 314
4 543
Net cash position at the end of previous period Net cash position at the end of current period
14 887 8 572
8 572 13 116
Net cash flow before financing activities Paid interest Disbursed dividend Increase long term interest bearing loans Decrease long term interest bearing loans Increase/(decrease) short term intrest bearing loans Increase/(decrease) finance lease obligations Other Currency result
Cash flow from financing activities Impact of cumulative translation adjustments and hedging
26
-19 571 534 830
II.4. C ON SOLIDATED S TATEM ENT OF CHANGE S IN EQUITY I in thousands of euros
2006 Capital
At the end of last financial year
46 000
Result Dividends Hedging Deferred tax Cumulative translation adjustments Change in consolidation scope Transfer to profit on cash flow hedges At the end of current financial year
Reserves
81 318
Translation
Hedging
differences
reserves
2 466
-420
Minority
19
12 153 -5 134 1 938 -673 -1 766 -19 -86 46 000
88 337
700
759
0
The company paid in 2006 Eur 5.1 Mio dividends over 2005. Proposed dividend over 2007 under condition of approval by the general shareholders meeting amounts to EUR 5.6 Mio.
2005 Capital
At the end of last financial year
46 000
Reserves
72 439
Result
13 582
Dividends
-4 707
Translation
Hedging
differences
reserves
-137
0 6 -636
Hedging Deferred tax
216
Cumulative translation adjustments
2 603
17
4
Other At the beginning of last financial year
Minority
46 000
81 318
-4 2 466
-420
19
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III. NOTE S TO THE CONSOLIDATED FINANCIAL STATE MENTS I in thousands of euros III.1. K EY ACC OUNT ING RULES SUMM ARY OF K EY ACC OU NTI N G RUL ES
- IFRIC 10 Interim Financial Reporting and Impairment;
The consolidated annual financial statements of Sioen
- IFRIC 11 IFRS 2 Group and Treasury Share Transactions;
effective for annual periods beginning on or after 1 November 2006
Industries NV (the ‘Company’) include the annual
effective for annual periods beginning on or after 1
financial statements of the Company, its subsidiaries and
March 2007
those entities which are consolidated by the proportional method (together referred to below as the ‘Group’).
- IFRIC 7 Service Concession Arrangements; effective for annual periods beginning on or after 1 January 2008
The consolidated financial statements are drawn up in conformity with the International Financial Reporting
Except for IFRS 7 and IFRS 8 which will impact the
Standards (IFRS), as accepted within the European
amount of information to be disclosed, the future
Union.
application of the above-mentioned standards and
In the current year, the Group has adopted all of the
interpretations would appear at a first estimate to have
new and revised Standards and Interpretations issued by
no material impact on the annual financial statements.
the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations
G e n e ra l p r i n c i p l e s
Committee (the IFRIC) of the IASB that are relevant to its operations and effective for annual reporting periods
The consolidated annual accounts give a general
beginning on 1January 2006, all of which have been
overview of the Group’s activities and the results
endorsed by the European Union.
obtained. They give an accurate picture of the entity’s financial position, financial performance and cash flow,
Application of new I FRS
and are drawn up on a going concern basis. The annual accounts are stated in thousands of euros,
The Group has not applied in advance the following
as the euro is the currency of the primary economic
new standards and interpretations which, on the date of
environment in which the Group is active. The annual
approval of these annual accounts, had been issued, but
financial statements of foreign partipations are converted
were not yet effective :
in accordance with the principles described in the section ‘Foreign Currencies’.
- IFRS 7 Financial Instruments: Disclosures; effective for
The consolidated financial statements are presented on
annual periods beginning on or after 1 January 2007
the basis of the historical cost method, unless otherwise
- IFRS 8 Operating Segments; effective for annual periods
stipulated in the accounting principles set out below.
beginning on or after 1 January 2009 - IFRIC 7 Applying the Restatement Approach under IAS
On the basis of the Group’s relevant economic
March 2006
environment and its transactions, the euro has been
- IFRIC 8 Scope of IFRS 2; effective for annual periods beginning on or after 1 May 2006 - IFRIC 9 Reassessment of Embedded Derivatives;
28
Foreign currencies
29; effective for annual periods beginning on or after 1
chosen as the reporting currency. Foreign subsidiaries’ financial statements are converted as follows:
effective for annual periods beginning on or after 1 June
Transactions in foreign currencies are converted at
2006
the exchange rate which applied on the date of the transaction. On each balance sheet date, cash assets and
liabilities expressed in foreign currency are converted at
Combinations of companies
the closing rate. Non-cash assets and liabilities which
If the Group takes over an entity or business activity, the
are shown at their fair value in a foreign currency are
identifiable assets, liabilities and contingent liabilities of
converted at the exchange rate which applied when their
the party which has been taken over are adopted at their
fair value was determined.
fair value.
Gains and losses arising from such conversions are
Subsidiaries’ financial statements are included in the
recorded in the income statement. However, if they
scope of consolidation from the date of acquisition until
are deferred, they are recorded as equity. Assets
control ceases.
and liabilities from the Group’s foreign activities are
The difference between the cost price and the acquiring
converted at the closing rate.
party’s stake in the net fair value of the identifiable
Income and expenses are converted at the average
assets, liabilities and contingent liabilities is recorded as
exchange rate over the period, unless exchange rates
goodwill. If this difference is negative, the surplus, after
have fluctuated greatly. The resultant exchange rate
reassessment of the fair values, is accounted for directly
differences are recorded in equity, under the heading
in the income statement.
“Conversion differences”.
If the group increases its interest in an investment in
If a foreign activity is disposed of, the cumulative amount
which it did not yet have control, the surplus or deficit
of the exchange rate differences that was recognised in
compared with the net asset, after adjustment to the fair
equity is recorded in the income statement.
value that was acquired, is processed as if it were a new
Goodwill and adjustments to the fair value arising on
acquisition according to the methodology explained in
the acquisition of a foreign entity are treated as assets
the above section. If the group increases its interest in an
and liabilities of the foreign entity and converted at the
investment in which it already had control, the greater
closing rate.
or lesser price that was paid vis-à-vis the share in the net assets that was acquired, is included directly in the
Consolidation principles
company’s own equity. All intercompany transactions, intercompany balances
Subsidiaries
and unrealised profits on intercompany transactions are
Subsidiaries are companies over which the Company
eliminated unless they relate to a permanent write-down.
exercises a decisive influence (‘control’). Control is
Minority interests are valued on the basis of their share
the power to steer an entity’s financial and operational
in the fair value of the recorded assets, liabilities and
policy in order to derive benefit from its activities. The
contingent liabilities.
consolidation of subsidiaries starts on the date on which the Group acquires control over them and stops when
Balance sheet
it loses that control. The companies in question are accounted for by the full consolidation method.
Intangible assets
Subsidiaries’ annual accounts are drawn up for the same
Intangible assets are valued at cost price. Intangible
financial year as those of the parent company and on
assets are recognised if it is likely that the Group will
the basis of uniform financial reporting principles for
receive the associated future economic benefits and if
comparable transactions and other events in similar
the asset’s cost price can be reliably determined. After
circumstances.
their initial recognition in the accounts, all intangible assets are valued at cost price, less any accumulated depreciation or impairments. Intangible assets are
29
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III. NOTE S TO THE CONSOLIDATED FINANCIAL STATE MENTS III.1. K EY ACC OUNT ING RULES depreciated on a straight-line basis over the best estimate
Development expenditure in which research results are
of their economic life.
used in a plan or design for the production of new or
The remaining economic life and the depreciation
substantially improved products and processes prior
method used are reassessed at the close of every
to commercial production or implementation is only
financial year. Any change in the economic life of an
recognised in the balance sheet if all the following
intangible asset is treated as a revaluation.
conditions are satisfied:
Internally generated intangible assets are only recognised
• the product or process is precisely defined and the
if all the following conditions are satisfied:
expenditure is individually identifiable and reliably
• an identifiable asset has been generated
• the product’s technical feasibility has been sufficiently
measurable; • it is likely that the generated asset will yield future economic benefits; and • the asset’s cost price can be reliably determined.
demonstrated; • the product or process will be commercialised or used within the company; • the assets will generate future economic benefits (e.g.
Subsequent expenditure on capitalised intangible assets
a potential market exists for the product or its internal
is only included in the balance sheet if it increases the
usefulness has been sufficiently proven);
likely future economic benefits associated with the asset concerned. All other expenditure is recorded in the
• the appropriate technical, financial and other resources are available to finalise the project.
income statement at the time it is incurred. If the above criteria are not satisfied, the development Licences, patents and similar rights
costs are taken to the income statement as they arise.
Expenditure on purchased licences, patents, trademarks
Capitalised development costs are depreciated on
and similar rights is capitalised and depreciated on
a straight-line basis over the expected duration of
a straight-line basis over the contractual term, where
the generated benefits from the start of commercial
applicable, or over the estimate economic life, which is
production or the implementation of the product or
deemed to be no more than five years.
process.
Computer software
Goodwill
Expenditure relating to the development or maintenance
Goodwill represents the additional premium paid on
of computer software is normally offset against the
the acquisition of an interest over the fair value of the
result of theperiod in which it is incurred. Only external
Group’s interest in the acquired assets and liabilities at
expenditure which is directly related to the purchase
the time of acquisition.
and implementation of purchased software is recorded
Goodwill is recorded as an asset and subjected to a
as an intangible asset and depreciated on a straight-line
impairment test at least once a year. Any impairment loss
basis over three years. Purchased ERP software and the
is immediately recorded in the income statement and is
associated implementation costs are depreciated on a
not subsequently written back.
straight-line basis over seven years.
Negative goodwill represents the amount by which the fair value of the Group’s interest in the acquired assets
30
Research and development
and liabilities at the time of acquisition exceeds the price
Research expenditure with a view to the acquisition of
paid.
new scientific or technological insights or knowledge is
On the disposal of a subsidiary, associated undertaking
included as a cost in the income statement as it arises.
or entity over which joint control is exercised, the related
goodwill is included in the calculation of the gain or loss
realisable value, it is immediately written down to the
on disposal.
realisable value.
Tangible fixed assets
The gain or loss on the sale or disposal of an asset is
Tangible fixed assets are valued at cost price less
determined as the difference between the net income
accumulated depreciation and impairments. A tangible
on disposal and the asset’s book value. This difference is
fixed asset is recognised if it is likely that the Group will
recorded in the income statement.
receive the associated future economic benefits and if the asset’s cost price can be reliably determined.
Lease agreements Financial leasing
The cost price includes all direct costs and all directly
Lease agreements which assign to the Group all the
attributable costs incurred in order to bring the asset to
main risks and benefits associated with ownership
the location and condition necessary for it to function
are regarded as financial leasing. The assets acquired
in the intended way. Interest during construction is not
under financial leasing arrangements are stated in the
capitalised.
balance sheet at their fair value at the start of the lease agreement, or, if this is lower, at the present value of the
Subsequent expenditure associated with a tangible fixed
minimum lease payments, less accumulated depreciation
asset is usually recorded in the income statement as it is
and impairments.
incurred. Such expenditure is only capitalised if it can be clearly shown to result in an increase in the expected
The discount rate used in the calculation of the present
future economic benefits from the use of the tangible
value of the minimum lease payments is the interest
fixed asset compared with the original estimate. Repair
rate implicit in the lease agreement, where this can
and maintenance costs which do not increase the likely
be determined, or otherwise the company’s marginal
future economic benefits are recorded as costs as they
borrowing rate. Initial direct costs are included in the
are incurred.
capitalised amount. Lease payments are broken down into interest charges and repayments of the principal. The
The different categories of tangible fixed assets are
interest charges are spread over the duration of the lease
depreciated by the straight-line method over their
agreement such that a constant periodic interest rate is
estimated economic life. Depreciation commences once
obtained on the outstanding balance for each period. A
the assets are ready for their intended use.
financial lease agreement results in the recording of both a depreciation amount and an interest charge in each
The estimated economic life of the main tangible fixed
period. The depreciation rules for assets acquired under
assets lies within the following ranges:
financial leasing arrangements are consistent with those for assets over which full ownership is acquired.
Buildings: 20 years Machines:
5 to 15 years
Operational leasing
Equipment:
10 years
Lease agreements in which all the main risks and benefits
Furniture:
5 years
associated with ownership reside with the lessor are
Hardware:
5 years
regarded as operational leasing. In operational leasing,
Vehicles:
5 years
the lease payments are recorded as costs and spread on a straight-line basis over the lease period. The total value
If an asset’s book value is lower than the estimated
of discounts or benefits granted by the lessor is offset
31
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III. NOTE S TO THE CONSOLIDATED FINANCIAL STATE MENTS III.1. K EY ACC OUNT ING RULES against the leasing costs and spread on a straight-line
the time of initial approval, and, if necessary, corrected
basis over the lease period.
subsequently at the time of definitive allocation of the grant. The grant is recorded in the income statement in
Property investments
proportion with the depreciation of the tangible fixed
A property investment, i.e. one which is maintained in
assets for which it was obtained.
order to generate rental income, an appreciation of value or both, is shown at fair value on the balance sheet date.
Inventories
Gains or losses arising from a change in the fair value of
Inventories are valued at the lower of cost price or
a property investment are recorded in the results for the
realisable value. The cost price includes all direct and
period in which they arise.
indirect costs incurred to bring the goods to the stage of completion they have reached on the balance sheet date.
Financial investments
The cost price is calculated using the weighted average
Investments are recorded in/ removed from the accounts
cost price method. The realisable value is the estimated
on the transaction date, i.e. the date on which an entity
sale price minus the estimated finishing costs and costs
undertakes to buy or sell the asset in question. Financial
associated with marketing, sale and distribution.
investments are valued at the fair value of the price paid, plus the transaction costs. Investments held for trading
Receivables
or available for sale are recorded at their fair value. If
Short-term receivables are stated at nominal value, less
investments are maintained for trading purposes, the
suitable provisions for any debts regarded as doubtful.
gains and losses arising from changes in the fair value
Long-term receivables are valued at amortised cost price.
are taken to the income statement for the period in question. In the case of investments which are available
Cash and cash equivalents
for sale, gains and losses arising from changes in the
Cash and short-term investments which are maintained
fair value are immediately recognised in equity until the
until the end of the period are stated at their cost price.
financial asset is sold or subject to impairment.
Cash equivalents are short-term, extremely liquid
In this case, the cumulative gain or loss which had
investments which can be converted immediately into
previously been recognised in equity is included in the
cash of a known amount, and which do not carry any
income statement for the period. Holdings which are not
material risk of change of value.
classified as available for sale, which are not listed on an active market and whose fair value cannot reliably be
Financial liabilities and equity instruments
determined using alternative valuation rules are valued
Financial liabilities and equity instruments are classified
at cost price. Financial investments which are held until
on the basis of the economic reality of the contractual
they mature are valued at their amortised cost price,
agreement. An equity instrument is a contract which
using the effective interest method. This does not apply
includes the residual right to a share in the Group’s
to short-term deposits, as these are valued at their cost
assets, after the deduction of all liabilities. Equity
price.
instruments issued by the Company are recorded to the amount of the received consideration, less the direct
Investment grants
costs of issue.
Investment grants relating to the purchase of tangible
32
fixed assets are offset against the purchase price or
Income tax
manufacturing cost of the assets in question. The
Tax expenses consist of tax due for the reporting
expected amount is recorded in the balance sheet at
period and deferred taxes. The tax due for the reporting
period is based on the taxable profit for the period.
taxes are recorded as income or expenses in the income
Taxable profit differs from the net profit in the income
statement for the period, unless the taxation arises from
statement, because it excludes certain items of income
a transaction or event that has been directly included in
or expenditure which are taxable or deductible in
equity. In this case, the deferred tax is also accounted for
subsequent years, or which will never be taxable or
in equity.
deductible. Pensions and related liabilities The current tax liability is calculated on the basis of
In accordance with laws and practices of each country,
the tax rates for which the legislative process has been
associated entities have either defined benefit schemes or
(substantially) completed by the balance sheet date.
defined contribution schemes.
Deferred taxes are taxes which are expected to be paid or recovered on the basis of differences between the
Defined contribution schemes
book value of assets or liabilities in the annual accounts
Contributions to defined contribution schemes are
and their taxable value used for the calculation of the
recorded as an expense as they fall due.
taxable profit. They are account for using the balance sheet liability method. Deferred tax liabilities are usually
Defined benefit schemes
recognised for all taxable temporary differences and
In defined benefit schemes, the amount on the balance
deferred tax receivables are recognised to the extent
sheet (the ‘net liability’) corresponds to the present value
that it is likely that a taxable profit will be available
of the gross liability, adjusted for unrecorded actuarial
against which the recoverable temporary difference can
gains and losses, after deduction of the fair value of the
be offset. Such assets and liabilities are not recorded if
scheme investments and unrecorded prior service costs.
the temporary differences arise from goodwill or from
The ‘present value of the gross liability of a defined
the initial recognition (other than in connection with a
benefit scheme’ is the present value, before deduction
business combination) of other assets and liabilities in a
of the scheme investments, of expected future payments
transaction which has no effect on the taxable profit or
required to settle the liability which results from the
the profit before tax.
employee’s service record in the current and previous periods.
Deferred tax liabilities are recognised for taxable temporary differences which relate to investments in
The discounted value of the liability arising from defined
subsidiaries, associated undertakings and enterprises
pension rights and the assigned pension costs associated
accounted for by the equity method unless the Group
with the year of service and prior service pension
can determine the time when the temporary difference
costs are calculated by accredited actuaries using the
will be resolved or if it is likely that the temporary
projected unit credit method.
difference will not be resolved in the near future. The book value of deferred tax receivable is assessed at
The discount rate corresponds to the rate of return
every balance sheet date and reduced if it is no longer
on the balance sheet date on corporate bonds with a
likely that sufficient taxable profit will be available to
high degree of creditworthiness and a remaining term
make it possible to use all or some of the benefit of the
comparable with the term of the Group’s liabilities. The
deferred tax receivable.
discount rate is adjusted annually to reflect the market
Deferred taxes are valued on the basis of the tax rates
return from high-value corporate bonds whose term is
which are expected to apply in the period in which the
consistent with the estimated term of the gross liabilities
tax recovery is realised or the liability is settled. Deferred
arising from payments after retirement.
33
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III. NOTE S TO THE CONSOLIDATED FINANCIAL STATE MENTS III.1. K EY ACC OUNT ING RULES ‘Actuarial gains and losses’ include adjustments on the
service costs are in this case likewise immediately
basis of experience (the consequences of differences
included if spreading them out on a straight-line basis
between previous actuarial assumptions and what has
would result in the recording of a gain purely as a
actually happened) and the consequences of changes to
consequence of an increase in prior service costs during
actuarial assumptions. In principle, actuarial gains and
the current financial year.
losses are not recognised at the moment they arise, but, to the extent that the cumulative amount falls outside
Other long-term personnel remuneration
a certain ‘corridor’, they are spread on a straight-line
Other long-term personnel remuneration such as long-
basis over the expected average remaining working life
service bonuses is accounted for using the ‘projected
of the employees who are members of the scheme. This
unit credit’ method. However, the accounting treatment
corridor is determined individually for each defined
differs from that of defined benefit schemes, in that
benefit scheme and has lower and upper limits of 110%
actuarial gains and losses and prior service costs are
and 90% respectively of the higher of the present value
recorded immediately.
of the gross liabilities and the fair value of the scheme investments.
Provisions Provisions are established in the balance sheet if the
‘Prior service costs’ refer to the increase in the present
Group has a legally enforceable or de facto liability on
value of the gross liability for services provided by
the balance sheet date as a result of an event in the past,
employees in previous periods and which result in the
for which it is likely that an outlay will be required of
current period from the introduction of or changes to
resources which contain economic benefits, and if this
payments after retirement or other long-term personnel
outlay can be reliably estimated. The amount recorded
remuneration. Prior service costs are taken gradually to
as a provision is the best estimate on the balance sheet
the income statement and spread on a straight-line basis
date of the outlay required to satisfy the existing liability,
over the average term until the benefit rights have been
if necessary discounted if the time value of money is
acquired.
relevant.
If benefit rights can be regarded as acquired as a result of a new scheme or changes to an existing scheme, prior
Provisions for reorganisation costs are recorded if the
service costs are immediately recorded in the income
Group has a detailed formal plan for the reorganisation
statement.
that has already been communicated to the parties concerned before the balance sheet date.
If the liability to be recorded on the balance sheet is negative, the asset entry that is included may not exceed
Interest-bearing financing
the total unrecorded cumulative actuarial net losses
Interest-bearing financing is recorded at the value of the
and prior service costs and the present value of future
income received less transaction costs incurred. It is then
repayments from the scheme or reductions in future
valued at amortised cost price using the effective interest
contributions to the scheme (the ‘asset ceiling’ principle).
rate method. Any difference between the income (after
In this case, however, the actuarial gains and losses are
deduction of transaction costs) and the redemption value
immediately taken to the income statement if deferring
(including premiums payable on redemption) is recorded
them would result in the recording of a gain purely as a
in the income statement over the period of the financing.
consequence of an actuarial loss in the current financial
34
year, or of a loss purely and simply as a consequence of an actuarial gain in the current financial year. Prior
Trading accounts payable and other payables
are recorded in the income statement. Changes in the
Non-interest-bearing trade liabilities are valued at their
fair value of derivative financial instruments which do
cost price, which represents the fair value of the amount
not qualify as hedging transactions are recorded in the
payable.
income statement when they arise. Hedge accounting is discontinued when the hedging instrument expires,
Derivative financial instruments
is sold, terminated or exercised or when the hedging
The Group uses various derivatives to hedge against
no longer satisfies the criteria for hedge accounting.
currency risks arising from its operating activities,
In this case the cumulative gain or loss on the hedging
financing and investment activities. The net risk of all
instrument which is accounted for directly in equity
Group subsidiaries is managed centrally in line with
continues to be recorded separately in equity until the
the objectives and rules established by the Group
expected future transaction takes place. If an expected
management. It is the Group’s policy to avoid engaging
future transaction is not expected to take place any
in speculative transactions or transactions with a
more, the cumulative gain or loss shown in the equity is
leverage effect and not to engage in trading in financial
transferred to the income statement for the period.
instruments under any circumstances. Income Derivative financial instruments are treated as follows:
Income is recorded if it is likely that the company
Cash flow hedging
will receive the economic benefits associated with
Changes in the fair value of derivative financial
the transaction and the amount of the income can
instruments which are ascertained to provide effective
be measured reliably. Turnover is recorded after the
hedging for future cash flows are recorded directly
deduction of turnover tax and discounts.
in equity, while the non-effective element of the gain
Income from the sale of goods is recorded when the
or loss on the hedging instrument is recorded in the
delivery and the complete transfer of risks and benefits
income statement. If the cash flow hedging of a fixed
have taken place.
commitment or a highly likely future transaction results
Interest income is recorded on a time basis that reflects
in the recognition of an asset or liability, then the
the actual return on the asset. Royalties are included on
associated profits and losses on the derivative instrument
an accrual basis in accordance with the conditions of the
which were formerly recorded in equity are now
agreement.
included in the initial valuation of the asset or liability at
Dividends are recorded when the shareholder’s right to
the time of recognition. For hedges which do not result
receive them has arisen.
in the recognition of an asset or liability, amounts which were deferred in equity are recorded in the income
Miscellaneous
statement for the period during which the hedged item affects the gain or loss.
Impairment of tangible and intangible assets Like goodwill, which is subjected to an impairment test
Fair value hedging
every year, intangible assets and tangible fixed assets
A derivative instrument is recorded as a fair value
also undergo such a test when there is an indication
hedge if the instrument hedges against the risk that
that their book value may be lower than their realisable
the fair value of the recorded assets and liabilities may
value. If an asset does not generate a cash influx which
change. Derivatives accounted for as fair value hedges
is independent of other assets, the Group estimates the
and hedged assets and liabilities are recorded at their
realisable value of the cash flow generating unit to which
fair value. The corresponding changes in the fair value
the asset belongs.
35
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III. NOTE S TO THE CONSOLIDATED FINANCIAL STATE MENTS III.1. K EY ACC OUNT ING RULES The realisable value is the highest value of the fair value
but only to the extent that the increased book value is
minus sales costs and the value to the business.
no higher than the book value that would have been recorded if no impairment loss had been recorded for
The method of the going concern value uses cash flow
the asset (or cash flow generating unit) in previous years.
forecasts based on the financial budget that is approved
However, impairment losses on goodwill are never
by the management. Cash flows after this period
written back.
are extrapolated by making use of the most justified percentage growth over the long term for the sector
Post-balance sheet events
in which the cash flow-generating unit is active. The
Post-balance sheet events which provide additional
management bases its assumptions (prices, volumes,
information about the company’s situation on the
return) on past performances and on its expectations
balance sheet date (‘adjusting events’) are included in
with regard to the development of the market. The
the annual accounts. Other post-balance sheet events
weighted average growth percentages are in conformity
are mentioned in the notes only if they may have a
with the forecasts included in the sector reports. The
significant impact.
discount rate used is the estimated weighted average equity cost of the group before taxes, and takes account
The most important assessment criteria in the
of the current market evaluations of the time value of
application of the Valuation rules
money and the risks for which the future cash flows are
In the application of the valuation rules, in certain
adapted.
cases an accounting assessment must be made. This assessment is done by making the most accurate
36
If the realisable value of an asset (or cash flow generating
assessment possible of uncertain future evolutions. The
unit) is estimated to be lower than its book value, the
management determines its assessment on the basis
asset’s (or cash flow generating unit’s) book value is
of different realistically assessed parameters, such as
reduced to its realisable value. An impairment loss is
future market expectations, sector growth rates, industry
immediately recorded in the income statement.
studies, economic realities, budgets and multi-year
If an impairment loss is subsequently written back, the
plans, expected profitability studies, etc. The most
asset’s (or cash flow generating unit’s) book value is
important elements within the group that are subject to
increased to the revised estimate of its realisable value,
this are: impairments, provisions and deferred tax items.
III.2. SE GMENT I NFOR MATION PR IMARY S EGMENT INFOR M ATION
For management purposes, the Group is organised into three major operating divisions – Coating, Apparel and Industrial Applications. These divisions are the basis on which the Group reports its primary segment information. The principal products and services of each of these divisions are described previously. For more details on these divisions reference is made to the first part of this annual report. Inter-segment sales are done at prevailing market conditions.
Segments 2006
Coating
Apparel
Industrial Eliminations applications
Net sales
212 897
75 270
83 687
External sales
183 468
75 211
80 710
Intersegment sales
29 429
60
2 976
Segment profit from operational activities
18 971
3 229
6 084
Consolidated 339 389 339 389
-32 465
0 28 285
Unallocated profit from operational activities
-2 394
Profit from operational activities
25 891
Net financial charges
-6 565
Profit before taxation
19 326
Taxes
-7 172
Profit after taxation
12 153
Segment assets
275 217
58 424
54 508
-22 746
Unallocated assets
6 430
Total consolidated assets
371 833
Segment liabilities
275 217
58 424
54 508
-22 746
Unallocated liabilities
Depreciation
365 402 6 430
Total consolidated liabilities
Other information
365 402
371 833
Coating
Apparel
Industrial applications
Head Eliminations office
Consolidated
13 949
1 499
1 691
780
0
17 919
Write downs of inventories
59
1 690
366
0
0
2 116
Write downs of receivables
-1 008
-356
-522
0
0
-1 886
605
76
123
0
0
804
32 577
6 138
7 742
-1 642
29
44 843
0
0
0
0
0
0
1 195
61
1
50
0
1 307
Investments in intangible fixed assets
28
32
2
2 712
0
2 773
Investments in tangible fixed assets
19 266
721
2 561
548
0
23 097
Additions to/(reversals) of provisions EBITDA Impairments Reorganisation costs
37
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.2. SEGMENT I NFORMAT ION PRIMARY S EGM ENT INFOR M ATI ON
Segments 2005
Coating
Apparel
Industrial Eliminations applications
Net sales
193 431
78 138
70 066
316 237
External sales
170 740
78 127
67 370
316 237
Intersegment sales
22 691
11
2 696
Segment profit from operational activities
15 356
3 456
6 743
-25 398
0 25 554
Unallocated profit from operational activities
-97
Profit from operational activities
25 457
Net financial charges
-5 470
Profit before taxation
19 987
Taxes
6 399
Profit after taxation
13 588
Group share in profit or loss
13 582
Segment assets
229 324
69 189
55 206
-20 604
Unallocated assets
337 683
Segment liabilities
229 324
69 189
55 206
-20 604
Unallocated liabilities
Depreciation
333 015 4 667
Total consolidated liabilities
Other information
333 015 4 667
Total consolidated assets
337 683
Coating
Apparel
Industrial applications
Head Eliminations office
Consolidated
13 599
1 753
1 786
740
22
17 899
Write downs of inventories
135
516
278
0
0
930
Write downs of receivables
-145
105
-28
0
0
-67
Additions to/(reversals) of provisions
-522
-30
-20
0
0
-572
28 423
5 800
8 760
517
147
43 647
419
83
0
50
0
505
Investments in intangible fixed assets
42
43
20
631
0
736
Investments in tangible fixed assets
11 395
1 081
3 390
765
0
16 632
EBITDA Reorganisation costs
38
Consolidated
2006
Gross sales
Germany
68 519
20.0%
Assets 1 376
0.4%
Cost of acquisitions 4
0.0%
France
62 657
18.3%
57 286
15.4%
4 293
16.6%
Belgium
39 801
11.6%
259 779
69.9%
20 143
77.9%
Eastern Europe
33 872
9.9%
10 866
2.9%
819
3.2%
Netherlands
31 202
9.1%
13 070
3.5%
8
0.0%
Great Britain
23 173
6.8%
1 952
0.5%
0
0.0%
Italy
14 232
4.2%
0
0.0%
0
0.0%
Scandinavia
9 637
2.8%
0
0.0%
0
0.0%
Spain
8 979
2.6%
0
0.0%
0
0.0%
USA
8 654
2.5%
3 386
0.9%
151
0.6%
Ireland
4 206
1.2%
3 127
0.9%
41
0.2%
Switzerland
4 138
1.2%
0
0.0%
0
0.0%
Austria
3 759
1.1%
0
0.0%
0
0.0%
Other
29 120
8.5%
20 992
5.6%
411
1.6%
341 949
100.0%
371 833
100.0%
25 871
100.0%
Subtotal Discounts
2 560
Net Sales
339 389
2005
Gross sales
Assets
Cost of acquisitions
France
64 331
20.2%
40 597
12.0%
5 014
27.6%
Germany
56 308
17.7%
1 950
0.6%
45
0.2%
Belgium
39 087
12.3%
230 584
68.3%
11 779
64.7%
Great Britain
27 560
8.7%
6 588
2.0%
58
0.3%
Netherlands
26 732
8.4%
13 426
4.0%
24
0.1%
Eastern Europe
25 707
8.1%
8 990
2.7%
306
1.7%
Italy
13 011
4.1%
0
0.0%
0
0.0%
Scandinavia
10 186
3.2%
0
0.0%
0
0.0%
Spain
8 357
2.6%
0
0.0%
0
0.0%
USA
7 133
2.2%
2 782
0.8%
98
0.5%
Switzerland
4 743
1.5%
0
0.0%
0
0.0%
Austria
4 090
1.3%
0
0.0%
0
0.0%
Ireland
3 811
1.2%
3 076
0.9%
38
0.2%
Other Subtotal
27 417
8.6%
29 324
9.1%
834
4.6%
318 473
100.0%
337 683
100.0%
18 197
100.0%
Discounts
2 236
Net Sales
316 237
39
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.3. EXCHAN G E RATE
Code
RATE
2005
2006
EUR
average
1.0000
1.0000
closing
1.0000
1.0000
USD GBP RMB PLN TDN UAH
40
average
1.2400
1.2632
closing
1.1797
1.3170
average
0.6836
0.6819
closing
0.6853
0.6715
average
10.1523
10.0492
closing
9.5202
10.2796
average
4.0217
3.9011
closing
3.8600
3.8310
average
1.6114
1.6742
closing
1.6112
1.7106
average
6.3199
6.3686
closing
5.9588
6.6551
III.4. DETAIL ED I NCOME STATE M ENT
2005
2006
317 567
342 190
Net sales Sales of goods Subcontracting Commissions and discounts
Net sales
2 156
1 641
-3 486
-4 442
316 237
339 389
159 088
165 329
Cost of goods sold Purchases Transport cost goods purchased Stock variation Subcontracting
1 410
1 144
-8 180
-3 440
5 206
5 669
42 199
43 439
Depreciation
14 697
14 589
Services and other goods
36 529
38 590
Personnel expenses
Amounts written off inventory and receivables
Cost of goods sold
930
251 877 (1)
2 116
267 436
Sales and marketing Subcontracting Personnel expenses Depreciation Other services and other goods Amounts written off inventory and receivables
Sales and marketing
0
4
8 257
9 725
117
303
7 590
7 428
-67
-1 886
15 896
15 573
2 876
3 272
Research and development Personnel expenses Depreciation
532
544
Other services and goods
2 147
3 206
Research and development expenses
5 554 (1)
7 021
General and administrative expenses Personnel expenses
10 127
11 245
Depreciation
2 554
2 483
Other services and goods
7 206
8 737
19 887
22 465
General overhead expenses Other operating income and expenses Gain/loss on realization fixed assets
917
54
Provision liabilities & charges
572
-804
Impairment loss Received indemnities Local taxes
0
0
155
548
-670
-910
Other
1 966
1 416
Other operating income and expenses
2 940
304
(1) in 2005: Reallocation of goods produced for R&D purposes to R&D expenses in an amount of kEUR 1,337 in 2005 to permit comparison with figures for 2006.
41
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.4. DETAIL ED I NCO ME STATE M ENT
2005
2006
Non recurring result Restructuring expenses
-505
-1 307
Non recurring result
-505
-1 307
25 457
25 891
Operating result X. OPERATING RESULT Financial result Interests received
251
562
-6 280
-7 512
Realized currency result
228
-174
Unrealized currency result
194
388
Other
136
170
-5 470
-6 565
Current tax
-8 642
-6 782
Deferred tax
2 242
-391
Taxes
-6 399
-7 172
Earnings after taxes
13 582
12 153
Interests paid
Financial result Taxes
2005
2006
19 987
19 326
Reconciliation between taxes and result before taxes Profit before taxes Tax on profit of fiscal entities against theoretical local tax rate Theoretical tax rate (1)
6 024
6 532
30,14%
33,80% 1 147
Tax impact of change in tax rate (3) 197
312
-720
-810
Deferred tax assets not recognised
1 415
1 597
Valuation allowance on previously recognised deferred tax assets
1 771
Non-deductible expenses Specific tax regimes
Usage of non-recognised deferred tax assets Regularisation of current tax on previous years
-1 393 -842
Carry back (4)
-645
Notional interest deduction Deferred taxes on undistributed reserves Sale Sirec (2) Other Tax on profit as shown in the P&L
68 -186
260
252
-1 576 -130
298
6 399
7 172
(1) is the weighted average tax rate
42
(2) in 2005 Sioen Industries sold Sirec to a reinsurance company. This resulted in the realization of a deferred tax liability. (3) tax rate in Netherlands 25.5% while last year 31.5% (4) tax paid in 2003 in Pennel can be claimed back
DIVIDENDS Dividend for the period ending 31 December 2005 of EUR 0.24 per share. Proposed dividend for the period ending 31 December 2006 of EUR 0.26 per share. The proposed dividend is subject to shareholders’ approval at the annual general meeting and is not shown as a liability in these annual accounts.
Ordinary profit per share The calculation of the ordinary and diluted profit per share is based on the following data:
2005
2006
Net profit or loss for the period
13 582
12 153
Net profit or loss from continuing activities
13 582
12 153
Weighted average number of outstanding shares
21 391 070
21 391 070
Ordinary shares
21 391 070
21 391 070
Weighted average number of shares for ordinary profit per share
21 391 070
21 391 070
Ordinary profit per share
0.63
0.57
Ordinary profit per share from continuing activities
0.63
0.57
Diluted profit per share Diluted elements Net profit or loss from continuing activities Profit or loss attributable to ordinary shareholders
13 582
12 153
13 582
12 153
Weighted average number of outstanding ordinary shares
21 391 070
21 391 070
Weighted average number of shares for diluted profit per share
21 391 070
21 391 070
Diluted profit per share
0.63
0.57
Diluted profit per share from continuing activities
0.63
0.57
Anti dilutive elements not included in the calculation Shares option plan as the options are out of the money compared to the average share price in 2005 and 2006.
43
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.5. DETAIL ED BALANCE SHEET
Closing balance
Impairment
8 418
Depreciation
Acquired via business combination
Transfers
Exchange rate differences
1 653
6
Software : acquisition
8 399
2 767
Customer portfolio : acquisition
2 568
TOTAL
12 628
2 773
15 0
0
7
0
-16
180
0
5 582
-11 14 180
10 082 11 345 0 0
1 512
Software : depreciation
7 334
Customer portfolio : depreciation
1 514
TOTAL
10 361
0
2 267
2 773
0
4 1
1 758
173
361
0
0
729
7 859
1
-6
173
1 333
0 11 860
6
-5 14 007
-1 333
0 17 716
1 653
Software : acquisition
7 693
711
-22
18
0
Customer portfolio : acquisition
2 568
TOTAL
11 889
Depreciation
0
Acquired via business combination
7
Sales
Concessions, patents, licences etc.: acquisition
0
Disposals
8 17
Development expenses : acquisition
Purchases
0 1 629
2005
Opening balance
Closing balance
2 243
Impairment
0
Exchange rate differences
0
242
-10
Transfers
0
8 150
0 29 576
0
Concessions patents licences etc.: depreciation
Intangible assets
4
-8
Concessions, patents, licences etc.: acquisition
Development expenses : depreciation
Sales
8
Disposals
Development expenses : acquisition
Purchases
2006
Opening balance
III.5.1 I NTANGIBL E FIX ED ASS ETS
8
8 399 2 568
736
0
0
0
0
-6
-22
24
0
0
0 12 628
0
0
0
Development expenses : impairment Concessions patents licences etc.: impairment Software : impairment Customer portfolio : impairment
6
TOTAL
6
Development expenses : depreciation
0
Concessions patents licences etc.: depreciation
1 465
Software : depreciation
6 902
Customer portfolio : depreciation
44
-6
0 0
0
0 0 0
-18
3
44
10
440
720
TOTAL
9 088
0
Intangible assets
2 796
736
0
0
-18
13
6
-4
11
0
1 512 0
7 334
794
1 514
1 278
0 10 361
-1 278
0
2 267
Total purchases of intangible fixed assets amount to
present value of the future cash flows expected from
EUR 2.8 million compared with EUR 0.8 million in
the continuing use of these assets and their disposal)
2005. This is mainly due to increased purchases of
is less than the carrying amount, an impairment loss
software relating to the SAP implementation.
is recognised in accordance with IAS 36 - Impairment of Assets. The recoverable amount of a CGU (Cash-
Purchases of software in 2005 consist predominantly
Generating Unit) is generally determined on the basis
of the initial expenditure on the ERP project (SAP).
of value-in-use calculations. For certain assets clearly
Also in 2006 purchases of software consist mainly of
identified, the “net selling price” in a binding sales
SAP implementation costs. As SAP was not in use,
agreement of an arm’s length transaction can however be
no depreciation was recorded in 2006. Once in use,
used to determine the recoverable amount of the asset.
purchased ERP software and associated implementation
The value-in-use method involves cash flow projections
costs will be depreciated over seven years on a straight-
based on financial budget approved by management.
line basis.
Cash flows are extrapolated using the most appropriate estimated growth rate which does not exceed the long-
Assets acquired through the acquisition of Siegwerk
term average growth rate for the business in which the
Benelux business and of Richard Colorants SA, Copidis
CGU operates.
SAS and Astra SA (together «Richard» below) are mentioned under acquisition via business combination.
Management determines these assumptions (prices,
The client portfolio of the Siegwerk Benelux business
volumes and performance yields) based on past
purchased in 2006 was valued at EUR 1.4 million and
performance and its expectations for the market
the product portfolio at EUR 5.9 million. The product
development. The weighted average growth rates used
portfolio is being depreciated over 8 years, the client
are consistent with the forecasts included in the industry
portfolio over 5 years.
reports. The discount rate used is based on the Group’s
The client portfolio of Richard was valued at EUR 4.2
estimated pre-tax weighted average cost of capital and
million and the product portfolio at EUR 2.5 million. This
reflects current market assessments of the time value of
product portfolio is being depreciated over 10 years, the
money and risks for which future cash
client portfolio over 5 years.
flows have not been adjusted and are similar to those disclosed under caption “Goodwill”.
Depreciation of intangible fixed amounts to EUR 1.3 million and is shown in the income statement by
No impairments were recorded in 2006.
function. Depreciation of the customer portfolio is included in sales and marketing expenses, depreciation of the product portfolio is included in the manufacturing contribution. No development expenses have been capitalized. Intangible assets that meet the recognition criteria of IAS 38 - Intangible Assets are recognised to the extent that future economic benefits are probable. To the extent that the recoverable amount of the intangible assets (i.e. the higher of its fair value less costs to sell and the
45
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
Goodwill
Closing balance
Acquired via business combination
Exchange rate differences
Charge to equity
Decrease
2006
Increase
Opening balance
III.5.2 GOODWILL
16 548
-2
1 388 17 935
16 548
-2
0 16 548
2005 Goodwill
Allocation to segments : Coating
15 560
Apparel
2 360
Industrial application
15
In 2006 the group purchased various assets of Siegwerk
the smallest group of cash flow-generating units, in
Benelux. These were included in the consolidated
conformity with IAS 36.
financial statements using the purchase accounting method. The resultant goodwill of EUR 0.6 million is not
The realisable value of a cash flow-generating unit is
depreciated, in line with IFRS 3.
determined on the basis of the going concern value. For calculating the going concern value, cash flow
In 2006 Richard Colorants SA, Copidis SAS and Astra
forecasts are used that are based on financial budgets
SA were purchased. The figures were included in the
and projections. These projections contain extrapolations
Group’s financial statements from 1 October 2006. The
making use of the most justified growth percentage that
purchased assets were included in the consolidated
cannot be higher than the average growth percentage
annual accounts using the purchase accounting method.
over the long term for the sector in which the cash flow-
The resultant goodwill of EUR 0.7 million is not
generating unit is active, that is, between 2% and 3%.
depreciated, in line with IFRS 3. Management bases its assumptions on past performances
46
The book value of goodwill acquired in a business
and on its expectations over the coming years. The
combination must be allocated on a reasonable and
discount rate used is calculated per segment and varies
consistent basis to each cash flow-generating unit or
between 6% and 10%.
I I I.5.3 SUBSIDI ARI ES
% holding 2006
2005
Sioen n.v.
Belgium
Ardooie
99.47%
99.47%
apparel
Veranneman Technical Textiles n.v.
Belgium
Ardooie
98.72%
98.72%
coating
European Master Batch n.v.
Belgium
Bornem
100.00%
100.00%
coating
Coatex n.v.
Belgium
Poperinge
100.00%
100.00%
industrial applications
France
Narbonne
99.83%
99.83%
apparel
Sioen France s.a.s. Confection Tunisienne de Sécurité s.a.
Tunesia
Tunis
89.25%
89.25%
apparel
Donegal Protective Clothing Ltd.
Ireland
Derrybeg
100.00%
100.00%
apparel
Sioen Coating Distribution n.v.
Belgium
Ardooie
100.00%
100.00%
coating
Siofab s.a.
Portugal
Santo Tirso
100.00%
100.00%
coating
Indonesia
Jakarta
100.00%
100.00%
apparel
Saint Frères s.a.s.
France
Flixecourt
99.97%
99.97%
coating
Sioen Fabrics s.a.
Belgium
Moeskroen
100.00%
100.00%
coating
France
Flixecourt
100.00%
100.00%
industrial applications apparel
P.T. Sungintex
Saint Frères Confection s.a.s. P.T. Sioen Indonesia
Indonesia
Jakarta
100.00%
100.00%
Sioen Tunisie s.a.
Tunesia
Tunis
99.83%
99.83%
apparel
Sioen Fibres s.a.
Belgium
Moeskroen
100.00%
100.00%
coating/apparel
TIS n.v.
Belgium
Haaltert-Kerksken
100.00%
100.00%
coating
Sioen UK Ltd.
United Kingdom
Chorley
100.00%
100.00%
apparel
Mullion Manufacturing Ltd.
United Kingdom
Scunthorpe
100.00%
100.00%
apparel
China
Shanghai
100.00%
100.00%
coating
Tunesia
Zaghouan
99.50%
99.50%
apparel
Sioen Shanghai Sioen Zaghouan s.a. Sioen Nordifa s.a.
Belgium
Luik
100.00%
100.00%
industrial applications
Inducolor s.a.
Belgium
Meslin-L’Evêque
100.00%
100.00%
coating
Sioen Coating n.v.
Belgium
Ardooie
99.47%
99.47%
coating
Pennel Automotive s.a.s.
France
Roubaix
100.00%
100.00%
coating
Roland International b.v.
The Netherlands
Tegelen
100.00%
100.00%
industrial applications
Germany
Werlte
100.00%
100.00%
industrial applications
USA
Arlington
100.00%
100.00%
industrial applications
Roland Planen GmbH Roltrans Group America Inc. Roltrans Group Polska Spzoo
Poland
Konin
100.00%
100.00%
industrial applications
United Kingdom
Bradford
100.00%
100.00%
industrial applications
Monal s.a.
Luxemburg
Luxemburg
100.00%
100.00%
industrial applications
Roltrans Group b.v.
Nederland
Tegelen
100.00%
100.00%
industrial applications
Roland-Ukraine Llc
Ukraine
Rivne
100.00%
60.00%
industrial applications
USA
Aberdeen
100.00%
100.00%
apparel
Richard s.a.s.
France
Lomme
100.00%
0.00%
coating
Colorants Pigments Distribution s.a.s.
France
Lomme
100.00%
0.00%
coating
France
Lomme
100.00%
0.00%
coating
Belgium
Ardooie
100.00%
100.00%
group
Roland Tilts UK Ltd.
Sioen USA Inc.
Astra Colorants s.a. Sioen Industries n.v.
Changes with respect to 2005: The client portfolio of Sioen UK Ltd is acquired on 30 juni 2006 by Sioen n.v. Roland International b.v. acquired in december 2006 100% of the share in Roland-Ukraine Llc The group Richard (Richard s.a.s., Copidis s.a.s. en Astra Colorants s.a.) has been acquired in October 2006
47
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
2 539
-121
Infrastructure buildings : acquisition
16 580
3 166
-46
-15
151 462
8 783
-324
-754
Furniture : acquisition
3 649
142
-18
-3
Vehicles : acquisition
3 407
693
-33
-441
Hardware : acquisition
5 335
426
-26
-2
Leasing land and buildings : acquisition
20 245
Leasing furniture and equipment: acquisition
277
156
Assets under construction : acquisition
102
6 517
TOTAL
-1
268 087 23 097
-40 -568
-1 256
Buildings : depreciation
20 363
-64
Infrastructure buildings : depreciation
10 057
-33
-15
Plant, machinery and equipment : depreciation
-61
308
0 17 633
-544
996
0 53 003
2
2 253
0 21 940
-577
4 107
0 162 721
-116
568
0
-30
22
0
3 578
-121
0
0
5 612
-874
7
0
0 19 378
-347
-3
0
0
43
1 416
1
0
0
8 036
-7
-1 440
8 255
525
-169
882
1 849 23 385
2
1 927
1 222 13 160
23 -40
Closing balance
-7 -179
Depreciation
Acquired via business combination
675
50 312
Exchange rate differences
16 718
Buildings : acquisition
Transfers
Sales
Disposals
Land : acquisition
Plant, machinery and equipment : acquisition
4 222
0 296 168
80 686
-110
-759
-1
-504
Furniture : depreciation
3 304
-11
-7
0
-99
494
184
3 865
Vehicles : depreciation
2 733
-33
-350
-30
-17
1
345
2 650
Hardware : depreciation
3 928
-3
-21
Leasing land and buildings : depreciation
4 674
Leasing furniture and equipment : depreciation Assets under construction : depreciation
64
-37
125 808
a) Land
16 718
675
b) Buildings
36 472
5 705
-70
2) Plant, Machinery and Equipment
70 776
8 783
-213
2 426
1 261
-31
15 784
156
-2
102
6 517
4) Fixed assets held under leasing and other simil 5) Assets under construction and advance payments Property, plant and equipment
0
142 278 23 097
-253
-315
-1 189
2 364 11 280 92 955
-85
0
580
4 400
-411
2
0
1 064
5 330
-85
-1
0
61
3
0
0
0
0
TOTAL
3) Furniture and Vehicules
48
Purchases
2006
Opening balance
III.5.4 TANGIBL E F IXED A SSETS
-1
-871
5 668 16 586 145 748
-1
-7
-61
308
0 17 633
0
-704
-374
440
-3 071 38 399
5
24
-73
-68
-10
-66
96
-726
3
0
1 416
1
0
-6
-569
-67
1 743 -11 280 69 765 -1 110
2 498
-1 125 14 089 0
8 036
2 587 -16 586 150 420
Exchange rate differences
Acquired via business combination 0
0 16 718
-206
946
0
0 50 312
Infrastructure buildings : acquisition
16 168
622
-1
-235
24
0
0 16 580
139 746 10 770
-972
1 005
914
0
0 151 462
-7
6
128
0
Plant, machinery and equipment : acquisition Furniture : acquisition
3 437
92
0
3 649
Vehicles : acquisition
3 727
279
-660
-35
95
0
0
3 407
Hardware : acquisition
5 043
412
-252
-25
158
0
0
5 335
19 272
516
466
-9
0
0 20 245
Leasing land and buildings : acquisition
-8
Closing balance
Transfers
168
-401
Depreciation
Sales
-126
3 559
Disposals
-138
46 414
Purchases
16 814
Buildings : acquisition
Opening balance
Land : acquisition
2005
Leasing furniture and equipment: acquisition
204
58
-9
23
0
0
277
Assets under construction : acquisition
151
324
-378
5
0
0
102
-2 431
463
2 453
0
0268 087
18 426
-206
-4
284
8 776
-1
-3
12
1 272 10 057
69 388
-885
52
745
11 387 80 686
TOTAL Buildings : depreciation Infrastructure buildings : depreciation Plant, machinery and equipment : depreciation
250 976 16 632
-8
Furniture : depreciation
2 955
-7
0
101
263
3 304
Vehicles : depreciation
2 891
-566
-17
68
357
2 733
Hardware : depreciation
3 422
-232
-27
100
665
3 928
Leasing land and buildings : depreciation
3 655
24
-3
999
4 674
22
-1
4
39
64
0
0
Leasing furniture and equipment : depreciation Assets under construction : depreciation
-8
1 862 20 363
0
TOTAL
109 535
a) Land
16 814
b) Buildings
35 380
2) Plant, Machinery and Equipment
70 358 10 770
3) Furniture and Vehicules 4) Fixed assets held under leasing and other simil 5) Assets under construction and advance payments Property, plant and equipment
0
-8
4 182
25
1 310
-138
-126
168
0 16 718
-195
-435
675
-3 134 36 472
-87
953
169
-11 387 70 776
-114
-10
112
2 940
783
15 798
574
434
14
151
324
-378
5
439
1 143
141 442 16 632
0
-1 897
0
-534
16 843125 808
-1 285
2 426
-1 037 15 784 0
102
-16 843 142 278
49
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.5.4 TANGIBL E F IXED A SSETS
Tangible fixed assets During 2006, a total of EUR 24.3 million of tangible
• E UR 3 million on looms at Veranneman and TIS • E UR 2 million on a new warehouse at EMB in Bornem
fixed assets were acquired (before deduction of investment grants).
In 2005 an investment grant of EUR 0.8 million was
The main investments in 2006 were:
received from the Walloon Region. This has been
• EUR 0.7 million in land at Moeskroen for calendering
deducted from the acquisitions. The fixed assets under
project • EUR 1.4 million in a building at Moeskroen for
leasing relate to the buildings at Ardooie and the Saint Frères Enduction building.
calendaring project • EUR 1.3 million in a building for Richard Colorants at Lomme • EUR 2.6 million in a new warehouse at EMB at
The building in Tegelen (net book value of EUR 4 million) is not used in production and therefore is not depreciated.
Bornem • EUR 1.0 million in a new showroom at Ardooie
The different categories of tangible fixed assets are
• EUR 0.4 million in air conditioning at fibres
depreciated by the straight-line method over their
production plant • EUR 1.9 million in a needle felt production line at
estimated economic life. Depreciation starts once the assets are ready for their intended use.
Nordifa • EUR 1.0 million in machinery at EMB
The estimated economic life of the main tangible fixed
• EUR 0.5 million looms at Veranneman
assets lies within the following ranges:
• EUR 4.7 million calendering machinery
Buildings: 20 years Machines:
5 to 15 years
The fixed assets under construction consist of the
Equipment:
10 years
calendering factory expected to be in use by 2008.
Furniture:
5 years
Hardware:
5 years
Vehicles:
5 years
In total EUR 1.6 million of investment grants have been received for the investments in Nordifa.
There are no mortgages secured on the tangible fixed In total, EUR 1.4 million of investment grants were
assets. Tangible fixed assets are subject to the application
recognised in deduction of depreciation during period
of IAS 36, Impairments, when there is an indication
2006.
that their book value may be lower than their realisable value. If an asset does not generate a cash influx which
During 2005, the total acquisition of tangible fixed assets
is independent of other assets, the Group estimates the
amounted to EUR 16.6 million (including investment
realisable value of the cash flow generating unit to which
grants).
the asset belongs. No impairments were recorded.
The main investments in 2005 were:
At 31 December 2006, the Group had entered into
• E UR 3.6 million in a new coating line at Saint Frères
contractual commitments for the acquisition of property,
Enduction in France • E UR 1.8 million in the further expansion of the production hall at Saint Frères Enduction
50
• E UR 2.1 million in a needle felt production line at Nordifa
plant & equipment amounting to EUR 6.4 million.
I I I.5.5 LON G-TERM TRA DE RECE IVA B LE S
Long term trade receivables The term of these trade receivables is between two and three years. These long-term receivables have been valued at their net current value.
2006 Trade debtors LT
Opening balance
Increase
Decrease
Fair value adjustment
Closing balance
59
43
-59
-22
22
59
43
-59
-22
22
Opening balance
Increase
Decrease
Fair value adjustment
Closing balance
Trade debtors LT : revaluation Trade debtors LT : impairment
Long term trade receivables
2005 Trade debtors LT
59
59
59
59
Trade debtors LT : revaluation Trade debtors LT : impairment
Long term trade receivables Other long term assets
As in previous years these other long term assets mainly consist of VAT deposits.
2006
Opening balance
Increase
Decrease
Fair value adjustment
Closing balance
524.00
41.00
-63.00
504.00
524.00
41.00
-63.00
504.00
Opening balance
Increase
Decrease
Affiliated enterprises : amounts receivable Other shares : acquisition Guarantees and deposits : acquisition Other amounts receivable long term : acquisition
Other long term assets
2005
Fair value adjustment
Closing balance
Affiliated enterprises : amounts receivable Other shares : acquisition Guarantees and deposits : acquisition
684.00
Other amounts receivable long term :
0.04
-160.00
524.00
-160.00
524.00
acquisition
Other long term assets
684.00
51
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.5.6 I NV ENTORIE S
Gross inventory 2006 Raw materials Consumables Work in progress
Closing balance 32 566 848 5 101
Finished goods
49 877
Goods in transit
3 845
Contracts in progress 92 237
Amounts written off 2006 Amounts written off raw materials
Closing balance -2 888
Amounts written off consumables Amounts written off work in progress Amounts written off finished goods
-4 876
Amounts written off goods in transit Amounts written off : contracts in progress
-7 765
Net inventory 2006 1) Raw materials 2) Consumables 3) Work in progress 4) Finished goods
Closing balance 29 677 848 5 101 48 846
5) Contracts in progress
84 472
52
Gross inventory 2005
Closing balance
Raw materials
32 241
Consumables
298
Work in progress
7 277
Finished goods
40 065
Goods in transit
3 960
Contracts in progress
83 840
Amounts written off 2005
Closing balance
Amounts written off raw materials
-2 137
Amounts written off consumables Amounts written off work in progress Amounts written off finished goods
-3 240
Amounts written off goods in transit Amounts written off : contracts in progress
-5 377
Net inventory 2005
Closing balance
1) Raw materials
30 105
2) Consumables
298
3) Work in progress
7 277
4) Finished goods
40 784
5) Contracts in progress
78 463
Gross inventories (excluding write-offs) rose EUR 8.4
Obsolescence reserves on inventories amount to
million compared with 2005. Increased activity in the
EUR 7.8 million (2005: EUR 5.4 million).
Coating segment caused an increase of EUR 7.8 million,
Write-downs of inventory for obsolescence to net
partially due to the acquisition of the Richard Colorants
realisable value included in expenses amounts to
Group (EUR 4 million). Inventory in Industrial
EUR 2.1 million in 2006 (2005: EUR 0.9 million).
Applications increased by EUR 2 million. In Apparel it
These obsolescence reserves are recorded on the basis of
fell by EUR 1.4 million, reflecting decreased activity.
a detailed ageing and rotation analysis per unit.
53
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.5.7 TRADE RECEIVABL ES
2006 Trade receivables
69 599
Trade receivabes doubtful
4 820
Amounts written off
-4 005
Total trade receivables
70 414 Outstanding
Balance turnover
Customer 1
4 594
6.17%
11 565
3.41%
Customer 2
2 162
2.91%
5 940
1.75%
Customer 3
1 666
2.24%
4 609
1.36%
Customer 4
1 631
2.19%
4 055
1.19%
1 413
1.90%
2 717
0.80%
Other
Customer 5
62 953
84.59%
310 503
91.49%
Total
74 419
100.00%
339 389
100.00%
2005 Trade receivables
69 953
Trade receivabes doubtful
5 245
Amounts written off
-5 782
Total trade receivables
69 416 Outstanding
Balance turnover
Customer 1
4 441
5.91%
10 976
4%
Customer 2
2 896
3.85%
7 331
2%
Customer 3
1 708
2.27%
7 084
2%
Customer 4
1 635
2.17%
4 567
1%
Customer 5
1 371
1.82%
4 378
1%
Other
63 146
83.97%
281 900
89%
Total
75 198
100%
316 236
100%
Trade receivables include amounts to be received
As of 1/4/2005 the Group decided to cover itself for the
from the sale of goods of EUR 74.4 million. Compared
credit risk by concluding stop loss credit insurance.
with last year, trade receivables decreased slightly despite the increase of EUR 4.5 million due to business
The average credit period on sales of goods is 70 days.
combinations. Last year trade receivables rose through
Generally no interest is charged on overdue trade
major orders in the Apparel Division, while this year in
receivables except when legal proceedings are started.
the same division sales fell by more than EUR 3 million. Before accepting any new customer, the Group uses an EUR 4 million in total has been provided for estimated
external credit scoring system to assess the potential
uncollectible amounts. A provision is recorded for
customer’s credit quality and defines credit limits by
Overdue Trade receivables between 30 days and 150
customer. Limits and scoring attributed to customers are
days and more, based on estimated irrecoverable
reviewed continuously.
amounts determined by reference to past default
54
experience.
I I I.5.8 OTHER CU RRENT ASSETS
Other current assets
2005
2006
34
26
VAT receivable
8 194
6 348
Tax prepayment
1 641
2 493
Advances
Capital grants receivable Insurance premiums receivable Other
Other receivables
109
-
99
362
1 040
195
11 117
9 42
Other current assets consist primarily of EUR 6.3 million of reclaimable VAT, pre-paid taxes of EUR 2.5 million and EUR 0.4 million of insurance premiums receivable. The entry “Other” related in 2005 mainly to amounts receivable relating to the sales of the buildings in Antwerp and in Foix.
Investments
2005
2006
Other investments and deposits
260
532
Investments
260
532
Investments relate to deposits on 3 months (but shorter than 1 year). The book value of the investment reflects the estimated market value.
Cash and cash equivalents
2005
2006
Cash at bank
7 438
12 210
At hand
874
374
Cash and cash equivalents
8 312
12 584
Deferred charges and accrued income
2005
2006
Deferred charges
1 343
1 476
Other
Deferred charges and accrued income
85
136
1 428
1 612
Deferred charges amounting to EUR 1.5 million consist primarily of pre-paid rent, insurance policies and interest charges.
55
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.5.9 PEN SION LI ABILI TI ES
The following net liabilities are recognized for post-employment and other long term benefits :
2005
2006
Post-employment benefits (pension plans)
1 321
1 578
Other long term benefits (jubilee benefits)
0
136
1 321
1 714
Total The amounts recognised in the balance sheet are as follows: Present value of funded obligations
420
Fair value of plan assets
-381
Present value of unfunded obligations
1 422
1 849
(Surplus)/deficit
1 422
1 888
-101
-303
0
-7
Net liability recognized in balance sheet
1 321
1 578
of which liabilities
1 321
1 578
119
139
60
82
Unrecognised actuarial gains/(losses) Unrecognised past service cost
The amounts recognised in profit or loss are as follows : Service cost Interest cost Past service cost recognized
-41
-4
Actuarial losses (gains) recognized
-30
-22
Curtailment (gain)/loss
Benefit expense
-3
-104
105
91
Changes in the present value of the defined benefit obligation are as follows:
Opening defined benefit obligation
1 261
1 422
Service cost
119
139
Interest cost
60
82
Past service cost Benefits paid Curtailment Actuarial losses (gains) Liabilities assumed in a business combination Currency translation changes Closing defined benefit obligation
0
-4
-75
-112
0
-104
27
75
0
773
30
-2
1 422
2 269
Changes in the fair value of plan assets are as follows: Contributions
75
112
Benefits paid
-75
-112
Assets acquired in a business combination
0
381
Closing fair value of plan assets
0
381
56
The plan assets represent investments in bonds; The expected 2007 contributions amount to kEUR 42. Principal actuarial assumptions at the balance sheet date :
2005 discount rate future salary increase normal retirement age
2006 Eurozone
Indonesia
4.0%
4.60%
10,50%
2.0% / 3.0%
2.50%
8%
60
60
55
The funded status and experience adjustments are as follows :
Defined Benefit Obligation Plan assets (Surplus)/deficit
Cost relative to IAS 19 provisions are booked under
2005
2006
1 422
2 269
0
-381
1 422
1 888
Defined benefit schemes
personnel expenses and allocated according the function
In defined benefit schemes, the amount on the balance
of the personnel involved (cost of goods sold, sales and
sheet (the ‘net liability’) corresponds to the present value
marketing expenses, R&D expenses and administrative
of the gross liability, adjusted for unrecorded actuarial
expenses). Interest component is recognised in financial
gains and losses, after deduction of the fair value of the
result.
scheme investments and unrecorded prior service costs. The discounted value of the liability associated with
PROVISIONS FOR PERSONNEL REMUNERATION
defined pension rights and the assigned pension costs associated with the year of service and prior service
In accordance with law and practice in each country,
pension costs are calculated by accredited actuaries
associated entities have either defined benefit schemes or
using the projected unit credit method.
defined contribution schemes. Defined benefit schemes mainly relate to pension
Defined contribution schemes
liabilities in France, where such schemes are required by law.
Contributions to defined contribution schemes are recorded as an expense when they are due.
57
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
-770
-43
448
1 402
2 713
-770
-43
448
Withing one year
2 213
More then one year
379
Closing balance
Provisions for other liabilities and charges
Fair value
business combination
500
Acquired via
1 023
Reversal
Increase
Provisions for environmental issues
2006
Utilisation
Opening balance
Exchange rate differences
III.5.10 PROVISI ONS
-
-
52
1 575
1 575
-
2 227
934
1 293
3 802
2 509
1 293
-
-
1 023
1 023
-
Provisions for taxation
VII. Provisions
52
2005 Provisions for taxation Provisions for environmental issues
1 242
-219
Provisions for other liabilities and charges
1 245
538
-647
-851
VII. Provisions
2 487
538
-647
-1 070
0
379
94
1 402
379 1 023
379
The provisions for environmental issues consist mainly
Provisions for other liabilities and charges consist of the
of a provision relating to the cleaning of polluted
social cost of restructurings currently being carried out
soils in Temse belonging to TIS NV and the land in
by Coating at Pennel and by Apparel in France during
Ardooie belonging to Sioen Coating NV. The risk in
2006, consisting of the termination cost of an agency
Temse originates in the period before the takeover. The
agreement by SCD NV.
risk in Ardooie was identified during the periodical environmental check-up of the site. These provisions are set up for more than one year and are discounted using the weighted average capital cost of the Group.
58
0
94
I I I.5.11 INTERE STB EAR ING L OANS
2006
Value at the end of year
Within one year
2 years
3 years
4 years
5 years
after 5 years
Bond
98 970
Bank loans
18 062
17 363
10 048
5 013
1 689
1 200
111
Finance leases
11 428
1 228
1 551
1 199
1 253
1 294
6 130
18 591
11 600
6 212
2 943
2 495
105 214
5 years
after 5 years
Other loans Total interest bearing loans long term
98 970
3 128 463
Current portion of amounts payable after one year
17 362
Credit institutions short term
13 800
Bank loans
31 162
Current portion of leasing
1 228
Leasing short term Finance leases
3
42 1 270
Total interest bearing loans short term
32 433
2005
Value at the end of year
Within one year
2 years
3 years
4 years
Bank loans
53 519
20 984
36 477
9 791
4 750
1 429
1 071
Finance leases
13 049
1 142
1 344
1 377
1 494
1 105
7 729
22 126
37 821
11 168
6 244
2 534
9 144
Other loans
344
Total interest bearing loans long term
66 912
Current portion of amounts payable after one year
20 984
Credit institutions short term
46 306
Bank loans
67 290
Current portion of leasing
1 065
Leasing short term Finance leases Total interest bearing loans short term
344
77 1 142 68 432
Financial accounts payable This note provides information about the group’s interest-
All loans have a fixed interest rate, apart from one EUR
bearing loans.
20 million variable- rate roll-over loan. This ‘bullet’ loan, taken up on 20/12/2005 with expiry date 30/06/2007, was repaid early on 14 March 2006 without additional
Long-term accounts payable, including financial
cost.
long-term leasing debts. The weighted average interest rate of long-term debts
On 14 March 2006, a EUR 100 million bond listed on
in 2006 is 4.77%, compared to 4.55% in 2005. This
Eurolist by Euronext Brussels was successfully issued,
increase is mainly due to the longer term character of the
with a ten-year term and fixed coupon interest of 4.75%.
loans in 2006 compared with 2005.
To cover the interest rate on this bond issue, an IRS
59
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
(Interest Rate Swap) was concluded on 20/12/2005. This IRS is described in the note on ‘Financial instruments’, and designated as ‘cash flow hedging’. Effective combined interest rate on the EUR 100 million bond is 4.72%.
Short-term accounts payable In 2005, short-term straight loans amount to EUR 44.6 million. They consist of EUR 36.4 million of euro loans with a weighted average interest rate of 3.24% and a dollar loan of USD 9.7 m. At 31/12/2006, the short-term straight loans were reduced to EUR 13.8 million. There was also a tax prepayment financing which expired on 10/4/2006. No securities were issued for these financial debts. Most (approx. 90%) of the Group’s financial liabilities are centrally contracted and managed.
60
I I I.5.1 2 FI NANCI AL LEA SIN G D EBTS
Obligations under financial leases 2006
Value at the end of year
Leasing and other similar obligations LT
Within one year
11 428
Current portion of leasing Leasing short term Obligations under financial leases
1 228
1 228
42
42
12 698
1 270
2 years
3 years
4 years
5 years
after 5 years
1 551
1 199
1 253
1 294
6 130
1 551
1 199
1 253
1 294
6 130
Minimum lease payments Lease payments due within one year
Present value of lease payments
0
1 270
One - Two years
2 125
1 485
Two - Three years
1 984
1 406
Three - Five years
1 740
1 228
After 5 years
3 480
7 309
Total lease payments Future financial charges Present value of lease obligations
6 683
12 698
16 067
12 753
3 314
0
Less amount due for settlement within 12 months
1 270
Amount due for settlement after 12 months
2005
11 428 Value at the end of year
Leasing and other similar obligations LT Current portion of leasing Leasing short term Obligations under financial leases
Within one year
13 049 1 065
1 065
77
77
2 years
3 years
4 years
5 years
after 5 years
1 344
1 377
1 494
1 105
7 729
14 191
Minimum lease payments
Present value of lease payments
Lease payments due within one year
1 657
1 142
One - Two years
2 188
1 543
Two - Three years
2 228
1 643
Three - Five years
3 480
2 526
After 5 years
8 423
7 336
17 975
14 191
Total lease payments Future financial charges Present value of lease obligations Less amount due for settlement within 12 months Amount due for settement after 12 months
3 784 14 191
14 191 1 142 13 049
Leasing debts relate mainly to buildings (Ardooie, Flixecourt and Moeskroen). The interest inherent in the leases is fixed for the entire lease term. The average effective interest rate contracted is approximately 5.44% p.a. (2005 5.44% p.a.).
61
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
III.5.13 OTHER ACC O UNTS PAYA B LE
TRADE ACCOUNTS PAYABLE AND OTHER DEBTS
2006 Closing balance Trade payables
33 104
Credit notes to receive
-2 010 650
Advances
TOTAL
31 744
2005 Trade payables
37 425
Credit notes to receive
-1 213
Advances
299
TOTAL
36 510
Trade and other payables include outstanding amounts for trade purchases and current charges. There is a decrease as compared to 2005.
Other debts up to one year
Current tax liabilities Social debts Other Accrued charges and deferred income
Total other debts up to one year The tax liabilities consist primarily of corporate taxes and VAT payable.
62
2005
2006
5 589
7 364
10 288
10 940
62
72
963
1 145
16 902
19 521
I I I.5.14 FI NANCI AL I N STRUM ENTS
Financial Derivatives
2005
2006
Notional Value
Fair Value
Notional Value
Fair Value
Rights
2 933
41
7 375
62
Duties
4 399
-8
11 063
-85
100 000
636
100 000
1 346
Forward sales contracts Forward sales contracts within 1 year
IRS Forward
The Group manages a portfolio of derivatives to hedge
the conditions for cash flow hedging defined in IAS39,
against risks relating to exchange rate and interest rate
and will be spread out over the term of the bond.
positions arising as a result of operating and financial activities. It is the Group’s policy to avoid engaging in
The gain realised (kEUR 1.346) was recognised in equity
speculative transactions or transactions with a leverage
and is taken into income over the life of the bond (10
effect and not to hold derivatives for trading purposes.
years).
Interest risk
Exchange rate risk
The Group’s interest risk is relatively limited, as the
It is the Group’s policy to hedge centrally against
interest rate on virtually all loans is fixed. It is the group’s
exchange risks arising from financial and operating
strategy to arrange a fixed interest rate for the long-term
activities.
portion of debts, and to keep short-term debts floating.
The risks are limited by compensating for transactions
Thanks to an optimal portfolio of long-term and short-
in the same currency, or by fixing exchange rates via
term debt financing, potential negative interest-rate
forward contracts or options.
fluctuations are minimised.
The fluctuation in the market value of these exchange
In connection with the group’s refinancing, it was
rate contracts has been included in the income statement
decided in December 2005 to enlist the support of the
and amounted to a KEUR 32 positive balance in 2005
capital market via the issue of a EUR 100 million bond
and a negative balance in 2006 of KEUR 23.
over ten years with fixed coupon interest. Because such an operation can easily take three months, and interest
Credit risk
rates at the end of December 2005 were very attractive,
In view of the relative concentration of credit risk (see
Sioen concluded a ten-year IRS starting in April 2006,
note “trade receivables), the company covers credit
the presumed starting date of the bond. As this IRS can
risk on trade receivables via a stop loss insurance with
be regarded as effective cash flow hedging as per IAS39,
an own risk exposure of kEUR 500. In addition, credit
the KEUR 636 negative market value fluctuation on
control strategies and procedures have been devised in
31/12/2005 of this IRS has been
order to monitor individual customers’ credit risk.
deducted from equity. On 02/02/2006, the fair value was up kEUR 1,346, and it was realised following the hedge strategy at the moment of issuing of the bond. This received premium satisfies
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S I OEN I N D U S TR I E S
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III.5.15 D EFERRE D TAX
2005
2006
deferred tax asset Intangible fixed assets
47
399
Tangible fixed assets
2 404
2 868
Inventories
1 765
1 656
312
253
Receivables
2005
2006
deferred tax liability 1 697 16 917
16 178
1 270
1 937
1 904
2 152
20 091
22 422
Other assets Pension liabilities
411
512
Other provisions
329
339
Other liabilities
44
59
Conversion differences Hedging reserves
74 216
458
Undistributed reserves Tax losses carried forward
15 779
10 952
Total
21 307
17 112
Non recognition of deferred tax receivable
-11 027
-6 851
Netting
-3 270
-4 062
-3 270
-4 062
Total
7 010
6 199
16 821
18 360
The value of carried-forward tax losses arranged by expiry date One year Two years Three years
2 037
Four years
1 116
Five years and later
2 037 17 557
No expiry date
45 481
16 319
Unrecognised carried forward tax losses
32 287
17 273
306
295
Unrecognised deferred tax on undistributed reserves
Deferred tax assets which do not appear to be collectable
In the Netherlands tax rate has decreased from 31.5% to
in the near future are not recognised. In this assessment
25.5% resulting to 1.1 million EUR additional tax expense
the management takes account of budgets and multi-year
as the deferred tax asset decreases.
planning. Major deferred tax asset on tax losses carryforward is relative to Roland International BV. Based upon business
64
Reconciliation of movement of deferred tax Net tax liability as per 31 December 2005
9 811
plans an asset has been recognised using estimated tax
Net tax liability as per 31 December 2006
12 161
profits over 9 years.
Difference
The company recognises deferred tax liabilities on non
Deferred tax as shown in the P&L
distributed reserves in affiliates unless there is a firm
Deferred tax effect through equity
commitment not to distribute reserves from that particular
Deferred tax acquired via business combinations
affiliate in the foreseeable future.
2 350 391 673 1 286
I I I.5.16 ACQUISI TI ONS AND DIS POS AL S OF INTERES T S
EFFECTS OF ACQUISITIONS AND SALES OF INVESTMENTS
2006 Acquisition of Group Richard Colorants Book value
Adjustments
Fair value
Non current assets
2 991
5 007
7 998
Intangible and tangible fixed assets
2 991
5 007
7 998 15 308
Current assets
15 588
-280
Inventories
4 402
-127
4 275
Debtors
6 113
-153
5 960
Other debtors
-
Cash and banks
5 073
Non current liabilities
1 168
2 238
3 406
548
209
757
Provisions Pensions Deferred tax liabilities Long term financial debt
5 073
353
353
1 676
1 676
620
Current liabilities
3 965
Creditors
3 406
620 636
4 601 3 406
Other creditors
559
636
1 195
Total net assets
13 446
1 853
15 299
Goodwill on acquisition Paid in cash
752 16 051
Acquisition of assets of Siegwerk Benelux NV Customer portfolio
1 425
Product portfolio
5 948
Machinery
1 153
Goodwill
622
Deferred tax asset
380
Paid in cash
9 528
2005 Sale Sirec SA Current assets
44
Equity
8 629
Deferred tax liabilities
3 167
Short term payables Sale price in cash Income (1)
37 10 205 1 576
(1) Given that the yield of this sales arises from the reversal of a deferred tax liability, this is included in deferred tax revenue.
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III.5.16 ACQUISI TI ONS AND D I SPOS AL S OF INTERES T S
The Richard group (Richard s.a.s., Copidis s.a.s. en Astra
- paint, ink, varnish, glues and textile coatings,
Colorants s.a.) was acquired on 27 October 2006.
- wallpaper, writing paper and laminated paper,
The acquisition cost of EUR 16.1 million was paid in
- floor coverings, PU foam, plaster,
cash. The necessary market valuations were performed
- shoe polish, sponges and gloves,
to determine the fair value of the customer portfolio and
- finger paints, wax crayons, etc.
the formulations.
In short, everything for which colours in liquid form are required.
Richard Colorants is a French company based at Lomme, near Lille. Founded in 1864, the company has
On end of September EMB bought assets of Siegwerk, a
specialized in pigment pastes since its early days. The
producer of inks and varnishes. These inks and varnishes
group consists of:
have numerous applications in the various markets
- Richard Colorants in Lomme
related to the current EMB markets:
- Copidis in Lomme
- Floor coverings (vinyl, laminates, …)
- Astra in Lyon
- Wall coverings (flexo- gravure and screen printing inks
Richard Colorants excellently complements EMBInducolor’s existing range. EMB and Inducolor produce mainly solvent-based inks, varnishes and pigment pastes, while Richard Colorants specializes in water-based paints and is France’s market leader in this field. Richard Colorants pigments are used to colour:
66
for paper and vinyl substrates) - Decorative paper (inks for gravure printing on paper and vinyl for decoration of furniture, laminates, …) - Rigid and flexible PVC panels (inks for gravure printing)
IV. OTHER
IV.1. Operating lease arrangements
2005
2006
1 030
1 172
953
985
Between one and five years
956
905
Over five years
129
Amounts recognised in income Payments due within one year
Minimal future payments
2 038
1 889
These leases are mainly relative to vehicles, small equipment and office equipment.
IV.2 EVENTS AFTER BALANCE SHEET DATE
wide and super wide format digital printers. This
The smaller factory unit in Jakarta was flooded in January
take over expresses the group’s intentions to enlarge
2007. Damage to buildings and machinery (net book
the “Chemicals” branch of Sioen Industries. Fillink
value as of 31 December 2006 of kEUR 306), inventories
distributes eco-solvent, solvent and UV-inks through a
(net book value as of 31 December 2006 of kEUR 1,046)
selected network of distributors. These quality products
and business interruption are adequately covered by
are high positioned in the market thanks to the know
insurance.
how and market intelligence of the company. Fillink’s experience with unique product formulations and
On 18 January 2007 the company Fillink SA was
wide market knowledge are real added value for Sioen
acquired by EMB. Fillink specializes in inks for
Chemicals.
IV.3. Off balance sheet items
2005
2006
Rights due to hedging of foreign currencies
2 933
7 375
Commitments due to hedging of foreign currencies
4 399
11 063
Commitments for the acquisition of intangible and tangible assets
8 516
6 447
Guarantees given as securities for debts or commitments
67
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F I NAN C I A L O V ER V I E W
IV.4. Transactions with related parties
Nature of transaction
2006
Recticel Group
Sale
1 945
Recticel Group
Purchase
264
Sale
1 524
Purchase
0
Nature of transaction
2005
Recticel Group
Sale
2 079
Recticel Group
Purchase
344
Sale
1 722
Purchase
170
INCH SVB
INCH SVB
These transactions are done on an arm’s length basis. Other transactions with related parties other than directors are not included, given the negligible amount (under EUR 70.000). With regard to directors’ remuneration, the reader is referred to section V.6.B.
IV.5. Staff
Land
2005
2006
902
930
China
16
16
Germany
18
25
292
392
Belgium
France Ireland Indonesia Netherlands Poland
68
42
38
2 016
1 900
7
6
490
539
Portugal
25
24
Tunesia
788
766
UK
34
28
USA
15
23
Grand Total
4 645
4 687
Blue Collar
3 785
3 816
White Collar
860
871
Grand Total
4 645
4 687
IV.6. Audit and non audit services provided by the statutory auditors and his network
2006 Deloitte Audit fees Sioen Industries NV
65
Other assurance services
9
Tax services
6
Non-audit related services
71
IV.7 CONTINGENT ASSETS AND LIABILITIES A number of commercial disputes are pending, albeit
The mixed soil pollution identified at the Ardooie site
with a limited value in dispute.
and recorded as a contingent liability last year has now provided against based upon the results of an
Apparel is currently faced with a quality claim in
environmental study in 2006.
France, the extent of which could reach EUR 2 million. The quality problem is, however, exclusively due to suppliers, who are sufficiently insured to cover Sioen’s possible loss.
69
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
IV.8 Remuneration of the directors and the Executive Management In 2006 the following fees were paid to the members of
• Mrs. Michèle Sioen received in 2006 as CEO,
the Board of Directors and the Executive management:
besides her remuneration as a member of the Board
• Non-executive and independent directors, as well as
of Directors, a fixed remuneration of EUR 370,000.
the members of the Executive Management in their capacity as director:
She has also received EUR 39,491 of variable remunderation for 2006. • The fixed remuneration paid to the Executive
Mr. Jean-Jacques Sioen
EUR 20,000
Management including directors in their capacity as
MJS Consulting b.v.b.a. (represented by
EUR 20,000
members of the Executive Management amounted to
Mrs. Michèle Sioen)
EUR 2,482,508. Variable remuneration of EUR 89,525
Mrs. Jacqueline Sioen-Zoete
EUR 20,000
D-Lance b.v.b.a. (represented by
EUR 20,000
Mrs. Danielle Sioen) P. Company b.v.b.a. (represented by
for 2006 was also granted. This includes contributions to pension insurance. • All sums above are gross sums and represent the entire
EUR 20,000
cost to the company.
Mrs. Pascale Sioen) Pol Bamelis n.v. (represented by
EUR 28,250
Mr. Pol Bamelis) Revam b.v.b.a. (represented by
for the acquisition of shares granted to the CEO and the EUR 29,000
Mr. Wilfried Vandepoel) Sheng n.v. (represented by
EUR 26,000
Mr. Louis-Henri Verbeke) K.E.M.P. n.v. (represented by
EUR 27,500
Mr. Luc Sterckx) Vean n.v. (represented by Mr. Luc Vansteenkiste)
70
In 2006 there were no shares, share options or other rights
EUR 21,500
other members of the Executive Management. There are no specific recruitment agreements or agreements for a golden handshake with the members of the Executive Management.
V. STATU TORY AUDI TOR’S REPORT
STATUTORY AUDITOR’S REPORT TO THE
financial statements, insofar as it relates to the amounts
SHAREHOLDERS’ MEETING ON THE CONSOLIDATED
contributed by those entities, is based upon the reports
FINANCIAL STATEMENTS FOR THE YEAR ENDED
of those other auditors.
31 DECEMBER 2006 The board of directors of the company is responsible Free translation – the original report is in Dutch
for the preparation of the consolidated financial statements. This responsibility includes among other
To the shareholders
things: designing, implementing and maintaining internal control relevant to the preparation and fair presentation
As required by law and the company’s articles of
of consolidated financial statements that are free from
association, we are pleased to report to you on the
material misstatement, whether due to fraud or error,
audit assignment which you have entrusted to us.
selecting and applying appropriate accounting policies,
This report includes our opinion on the consolidated
and making accounting estimates that are reasonable in
financial statements together with the required additional
the circumstances.
comment. Our responsibility is to express an opinion on these Unqualified audit opinion on the consolidated financial
consolidated financial statements based on our audit.
statements
We conducted our audit in accordance with legal requirements and auditing standards applicable in
We have audited the accompanying consolidated
Belgium, as issued by the “Institut des Reviseurs
financial statements of Sioen Industries NV (“the
d’Entreprises/Instituut der Bedrijfsrevisoren”. Those
company”) and its subsidiaries (jointly “the group”),
standards require that we plan and perform the audit to
prepared in accordance with International Financial
obtain reasonable assurance whether the consolidated
Reporting Standards as adopted by the European
financial statements are free from material misstatement.
Union and with the legal and regulatory requirements applicable in Belgium. Those consolidated financial
In accordance with these standards, we have performed
statements comprise the consolidated balance sheet as at
procedures to obtain audit evidence about the
31 December 2006, the consolidated income statement,
amounts and disclosures in the consolidated financial
the consolidated statement of changes in equity and
statements. The procedures selected depend on our
the consolidated cash flow statement for the year then
judgment, including the assessment of the risks of
ended, as well as the summary of significant accounting
material misstatement of the consolidated financial
policies and other explanatory notes. The consolidated
statements, whether due to fraud or error. In making
balance sheet shows total assets of 371.833 (000) EUR
those risk assessments, we have considered internal
and a consolidated profit for the year then ended of
control relevant to the group’s preparation and fair
12.153 (000) EUR.
presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
The financial statements of several significant entities
the circumstances but not for the purpose of expressing
included in the scope of consolidation which represent
an opinion on the effectiveness of the group’s internal
total assets of 69.424 (000) EUR and a total turnover of
control. We have assessed the basis of the accounting
77.094 (000) EUR have been audited by other auditors.
policies used, the reasonableness of accounting
Our opinion on the accompanying consolidated
estimates made by the company and the presentation of
71
S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
V. STATU TORY AUDI TOR’S REPORT
the consolidated financial statements, taken as a whole.
the scope of our audit opinion on the consolidated
Finally, the board of directors and responsible officers
financial statements:
of the company have replied to all our requests for
• The directors’ report on the consolidated financial
explanations and information. We believe that the audit
statements includes the information required by law
evidence we have obtained, together with the reports
and is in agreement with the consolidated financial
of other auditors on which we have relied, provides a
statements. However, we are unable to express an
reasonable basis for our opinion.
opinion on the description of the principal risks and uncertainties confronting the group, or on the
In our opinion, and based upon the reports of other
status, future evolution, or significant influence of
auditors, the consolidated financial statements give a
certain factors on its future development. We can,
true and fair view of the group’s financial position as of
nevertheless, confirm that the information given is not
31 December 2006, and of its results and its cash flows
in obvious contradiction with any information obtained
for the year then ended, in accordance with International
in the context of our appointment.
Financial Reporting Standards as adopted by the EU and with the legal and regulatory requirements applicable in Belgium.
Diegem, 15 March 2007 The Statutory Auditor
Additional comment The preparation and the assessment of the information that should be included in the directors’ report on the
DELOITTE Bedrijfsrevisoren
consolidated financial statements are the responsibility
BV o.v.v.e. CVBA
of the board of directors.
represented by
Our responsibility is to include in our report the following additional comment which does not change
72
Guy Wygaerts
Geert Verstraeten
VI. S TATUTORY ANN UAL ACCOUNTS SIOEN I NDUS TRI ES N.V.
Condensed balance sheet of Sioen Industries n.v. after appropriation of profit
December 31 (000) EUR
2006
2005
2004
2003
Fixed assets
61 459
65 910
81 976
81 990
II.
Intangible fixed assets
5 934
3 656
3 477
3 472
III.
Tangible fixed assets
1 170
1 136
681
555
IV.
Financial fixed assets
54 355
61 118
77 818
77 963
Currents assets
179 902
139 941
139 630
136 381
VII.
Amounts receivable within one year
178 807
138 611
139 207
136 205
IX.
Cash at hand and in bank
825
1 045
286
46
X.
Deferred charges and accrued income
270
285
137
130
241 361
205 851
221 606
218 371
Capital and reserves
80 814
78 034
80 052
79 660
I.
Capital
46 000
46 000
46 000
46 000
IV.
Legal reserves
3 766
3 339
3 174
2 910
V.
Profit brought forward
31 048
28 695
30 878
30 750
Creditors
160 547
127 817
141 554
138 711
VIII. Amounts payable after one year
115 765
51 613
60 284
61 828
39 588
76 100
81 107
76 784
5 194
104
163
99
241 361
205 851
221 606
218 371
Total assets
IX.
Amounts payable within one year
X.
Accrued charges and deferred income
Total liabilities
The statutory annual accounts of the parent company
statements of Sioen Industries n.v. The explanatory
Sioen Industries n.v. are shown below in condensed
paragraph is as follows:
form. In June 2007, the annual report and annual
Without qualifying the unqualified opinion expressed
accounts of Sioen Industries n.v. and the auditor’s report
above, we draw the attention to the annual report.
will be filed with the National Bank of Belgium in
Sioen Industries n.v. has per December 31, 2006, a
accordance with Articles 98-102 of the Companies Act.
total outstanding receivable of 16,1 mio EUR on the
These reports are available on request at the following
Roltrans group, a 100% subsidiary of Sioen Industries
address:
n.v. In addition, Sioen Coating Distribution n.v., a 100%
Sioen Industries n.v. – Fabriekstraat 23 – 8850 Ardooie.
subsidiary of Sioen Industries n.v., has outstanding
The statutory auditor has issued an unqualified opinion
receivables on the Roltrans group for an amount of
with explanatory paragraph on the statutory financial
19,0 mio EUR. The realisation of these amounts is
statements of Sioen Industries n.v. The explanatory
dependent of the further successful development of the
paragraph is as follows:
realised recovery plan. The accompanying financial
The statutory auditor has issued an unqualified opinion
statements do not included any less values or provisions
with explanatory paragraph on the statutory financial
relating to the above.
73
S I OEN I N D U S TR I E S
I
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VI. S TAT UTORY ANN UAL ACCOUNTS SI OEN I NDUS TR IES N.V.
Condensed income statement of Sioen Industries n.v.
December 31 (000) EUR
2006
2005
2004
2003
I.
Operating income
5 922
5 954
5 599
5 229
A. Sales
5 715
5 889
5 317
5 010
207
65
282
219
-5 075
D. Other operating income
II.
Operating charges
-7 022
-6 113
-5 886
B. Services and other goods
2 897
2 110
2 325
1 762
C. Renumeration
3 060
3 236
2 579
2 256
D. Depreciation and amounts written off
944
754
901
1 023
G. Other operating charges
121
13
81
34
III.
Operating profit/loss
-1 100
-159
-287
154
IV
Financial income
24 581
16 923
15 758
21 201
V.
Financial charges
-7 438
-6 416
-6 531
-6 012
Financial result
17 143
10 507
9 227
15 189
VI.
16 043
10 348
8 940
15 343
-7 402
-6 739
-3 596
0
8 641
3 609
5 344
15 343
-99
-293
-71
-495
8 542
3 316
5 273
14 848
Profit on ordinary activities
VII. Extraordinary result
74
IX.
Profit before tax
X.
Income taxes
XI.
Profit for the financial year
Activity of Sioen Industries
Statement of capital
The function of Sioen Industries is essentially to outline
In accordance with Articles 1 to 4 of the Act of March
the strategy of the three divisions. It also appoints the
2, 1989 concerning the disclosure of important holdings
management of the Group companies and supports the
in listed companies and regulating take-over bids, the
Group companies in the areas of personnel management,
applicable quotas were set at, one the one hand, 5
financial and treasury management, budgeting and
percent or a multiple thereof and on the other hand at
controlling, Management Information Systems and IT,
3 percent or a multiple thereof. (Article 8 of the Articles
and legal affairs.
of Association). In accordance with Article 4 of the Act of March 2, 1989, the following notifications of
Comments
shareholdings in the company were received:
The turnover of the holding company decreased by 3%
Situation at 31 March 2007
to EUR 5.7 million. Other operating income increased by EUR 0.142 million. In 2006 the operating loss amounted
Notifying party Date of notification Number of shares
to EUR 1.1 million, compared with an operating loss
Percentage of total number of shares:
in 2005 of EUR 0.159 million. Financial income rose to EUR 16 million, compared with EUR 10.3 million in
Sihold n.v.(1)
2004, as a result of higher dividend payments from the
Fabriekstraat 23, 8850 Ardooie 18 October 1996
various subsidiaries.
13.336.501
62.5%
Notification of change of percentage shareholding
All participating interests have been recorded at book value, which results in an extraordinary result for the year. The extraordinary income last year related to the capital
Sihold n.v. 12 October 2005 “Stichting Shell Pensioenfonds� 12 October 2005
12,715,010
59.4%
726,320
3.4%
Sihold n.v. 30 January 2006
12,906,212
60.3%
Total number of shares
21,391,070
100.0%
gain on the disposal of the participating interest in Sirec.
Accounting principles
This foundation is controlled by the Sioen family.
The accounting principles and translation rules applied to the statutory annual accounts of Sioen Industries in accordance with Belgian Generally Accepted Accounting Principles.
(1) Sihold n.v. is controlled by Sicorp n.v., which is controlled in turn by the Dutch foundation Stichting Administratiekantoor Midapa.
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S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
VII. PROPOSALS TO THE ANNUAL MEET ING
Proposals to the Annual Meeting of Sioen Industries n.v. of May 25, 2007
The proposed net dividend per share is calculated as follows:
The board of directors of Sioen Industries proposes to
(in EUR)
the annual meeting to approve the annual accounts at
Net dividend per share
0.1950
31 December 2006 and to consent to the appropriation
Withholding tax 25/75
0.0650
of profit.
Gross dividend per share Pay-out ratio (1)
0.2600 45.76%
The profit for the financial year ended is EUR 8,542,378, compared to a profit of EUR 3,315,436 for the financial
The proposed dividend is 8.3% higher than that of 2005.
year 2005. The profit brought forward from the previous
If this proposal is accepted, the net dividend of
financial year is EUR 28,694,595. The profit available for
EUR 0.195 per share will be made payable as from 8
appropriation is consequently EUR 37,236,973.
June, 2007 onwards at Dexia Bank, ING Bank, Fortis Bank and KBC Bank on presentation of coupon no 9.
The board of directors proposes to appropriate the profit available for appropriation of EUR 37,236,973
(1) Gross dividend in relation to the share of the Group
as follows:
in the consolidated result
(in EUR) Gross dividends for the 21.391.070 shares
5,561,678.2
Directors’ fees
200,000.00
Transfer to the legal reserves Profit to be carried forward
76
427,119 (31,048,176)
DEFINITION S
Gross margin %
(Turnover +/- stock movements finished goods - purchases raw materials -/+ stock movements raw materials)/turnover
EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization = Operating profit + amortization + provisions for liabilities and other risks + depreciation
EBIT
Earnings Before Interest and Taxes = Operating profit
EBT
Profit Before Taxation
EAT
Profit After Taxation
NOPAT
EBIT - Taxes
EVA
NOPAT - cost of capital at start of the period
ROE
Net result part of the group / equity at end of previous financial year
ROCE
NOPAT / Capital employed of the period
Cash flow
consolidated net profit + depreciation + amortization + provisions for liabilities and charges + deferred taxes
FFO
Net result + depreciations + provisions for liabilities and taxes + amortization + deferred taxes.
Net debt
Financial debt - cash deposits and cash equivalents
Free operating CF
Funds from operations - funds from investing activities
Capital
Equity + minority interests + provisions for liabilities and charges + amounts payable after one year
Working capital
Financial fixed assets + current assets (minus cash deposits and cash equivalents) - non financial debt up to one year - accrued charges and deferred income.Â
Capital employed
Working capital + tangible and intangible fixed assets + goodwill
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S I OEN I N D U S TR I E S
I
F I NAN C I A L O V ER V I E W
aDdresses COATING SIOEN COATING NV
Fabriekstraat 23 B-8850 Ardooie België
SAINT FRERES SAS
4 route de Ville BP 1F-80420 Flixecourt France
SIOEN COATING DISTRIBUTION NV
Fabriekstraat 23 B-8850 Ardooie België
SIOEN FABRICS SA
Zoning Industriel du Blanc Ballot Avenue Urbino 6B-7700 Mouscron Belgique
COATING WEAVING EUROPEAN MASTER BATCH NV – E.M.B. NV
Rijksweg 15 B-2880 Bornem België
INDUCOLOR SA
Chemin Preuscamps 12 B-7822 Ath (Meslin-L’Evêque) Belgique
SIOEN FIBRES SA - extrusion
Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique
SIOEN COATED FABRICS (SHANGHAI) TRADING CO. LTD
Room O, Floor 15, Hengji Building No 99, Huaihai Road (East) 200021 Shanghai P.R. of China
SIOFAB SA
Indústria de Revestimentos Têxteis Rua da Indústria PT-4795-074 Vila das Aves Santo Tirso Portugal Santo Tirso
TIS NV
Driehoekstraat 2A B-9451 Haaltert (Kerksken) België
VERANNEMAN TECHNICAL TEXTILES NV
Fabriekstraat 31 B-8850 Ardooie België
PENNEL AUTOMOTIVE SAS
310 Rue d’Alger F-59100 Roubaix France
RICHARD SAS
Rue lavoisier - zac novo - 59160 lomme
ASTRA COLORANTS SA
20 Avenue maréchal de lattre de tassigny - 69330 meyzieu
CONFECTION SIOEN NV
Fabriekstraat 23 B-8850 Ardooie - België
CONFECTION TUNISIENNE DE SECURITE SA – C.T.S. SA
5 Impasse n° 2 Rue 8612 – (Z.I.) La Charguia TN-2035 Tunis Tunisie
GAIRMEIDI CAOMHNAITHE DHUN NA NGALL TEORANTA LTD (Donegal Protective Clothing Ltd –Sioen Ireland) - Industrial Estate Bunbeg Co. Donegal Ireland MULLION MANUFACTURING LTD
44 North Farm Road South Park Industrial Estate Scunthorpe North Lincolnshire DN17 2AY - UK
SIOEN FRANCE-DIVISION SIP PROTECTION
Pavillon Hermès 110 avenue Gustave Eiffel ZI La Coupe F-11100 Narbonne France
P.T. SIOEN INDONESIA
Jl. Irian Raya Blok E-26 Nusantara Bonded Zone (Kawasat Berikat Nusantara) Cakung Cilincing Jakarta 14140 Indonesia
PT SUNGINTEX
Jalan Raya Narogong Km 12,5 Pangkalan IV Desa Cikiwul Kec. Bantar Gebang Bekasi Barat 17310 Indonesia
SIOEN FIBRES SA – distribution
Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique
SIOEN FRANCE SAS
Pavillon Hermès 110 avenue Gustave Eiffel ZI La Coupe F-11100 Narbonne France
SIOEN TUNISIE SA
7 Impasse N° 2 Rue 8612 – (Z.I.) La Charguia TN-2035 Tunis Tunisie
SIOEN UK Ltd
Unit 2 Windsor House Ackhurst Business Park Foxhole Road Chorley Lancashire PR7 1NY UK
SIOEN ZAGHOUAN SA
Zone Industrielle de Zaghouan TN-1100 Zaghouan Tunisie
SIOEN FRANCE DIVISION VIDAL PROTECTION
Zone Industrielle Le Passage Jean-Rostand BP167 F 81300 Graulhet
SIOEN USA Inc.
c/o Flom, French & Goodwin, L.L.C. 675 Line Road Building 4, Suite B Aberdeen, NJ 07747 USA
SIOEN NV – BALENO
Fabriekstraat 23 B-8850 Ardooie België
SIOEN DEUTSCHLAND
Am Zirkel 8 49757 Werlte Deutschland (Allemagne)
INDUSTRIAL APPLICATIONS
78
COATEX NV
Industriezone Sappenleen Sappenleenstraat 3-4 B-8970 Poperinge België
SAINT FRERES CONFECTION SAS
2 route de Ville BP 37 F-80420 Flixecourt France
SIOEN NORDIFA SA
Rue Ernest Solvay 181 B-4000 Liège Belgique
ROLAND INTERNATIONAL B.V.
Kasteellaan 33 NL-5932AE Tegelen Nederland
ROLTRANS GROUP AMERICA INC.
3212 Pinewood Drive Arlington, Texas 76010 USA 75-1994308 Delaware Corporation # 2044811
ROLAND PLANEN GMBH
Am Zirkel 8 49757 Werlte Deutschland
ROLTRANS GROUP POLSKA SP.Z.O.O.
Ul. Nadbrzezna 1 PL-62500 Konin Polska
ROLAND UKRAINE LLC
Kievskaya 64-A Rivne Ukraine
ROLAND TILTS UK Ltd
Unit 1 Usher Street Off Wakefi eld Road Bradford BD4 7DS UK
BTW BE 402.753.106
RPR 0402.753.106 Brugge
T +32 51 74 09 00
F +32 51 74 09 64
sioline@sioen.be
TVA FR 76408448850
RCS AMIENS B 408 448 850
T +33 322 51 51 45
F +33 322 51 51 49
sfe@sioen.com
BTW BE 436.241.167
RPR 0436.241.167 Brugge
T +32 51 74 09 00
F +32 51 74 09 64
sioline@sioen.be
TVA BE 458.801.684
RPM 0458.801.684 Tournai T +32 56 85 68 80
F +32 56 34 61 31
sioenfabrics@sioen.be
T +32 56 85 01 40
F +32 56 85 01 49
weaving@sioen.be
BTW BE 421.485.289
RPR 0421.485.289 Mechelen
T+32 3 890 64 00
F+32 3 899 26 03
emb@sioen.be
TVA BE 400.685.125
RPM 0400.685.125 Tournai
T+32 68 25 02 30
F+32 68 55 26 02
inducolor@sioen.be
TVA BE 463.789.464
RPM 0463.789.464 Tournai
T+32 56 48 12 70
F+32 56 48 12 85
fibres.extrusion@sioen.be
T+86 21 63 84 25 21
F+86 21 63 84 27 39
sioen@online.sh.cn
SOB O N° 4641
NIF 505.046.644
T+351 252 87 47 14
F+351 252 94 29 68
siofab@net.sapo.pt
BTW BE 405.085.064
RPR 0405.085.064 Aalst
T+32 53 85 92 20
F+32 53 85 92 56
tis@sioen.be
BTW BE 429.387.623
RPR 0429.387.623 Brugge
T+32 51 24 81 70
F+32 51 22 61 68
info@veranneman.be
TVA FR 53448273615
RCS Roubaix-Tourcoing B 448 273 615 T+33 320 76 21 10
F+33 320 76 21 12
automotive@pennel.sioen.com
T+33 320 00 18 88
F+33 320 00 18 80
sa.richard@colorants-richard. com
+ 33 478 31 58 02
F+33 478 04 02 57
contact@astra-colorants.com
BTW BE 478.652.141
RPR 0478.652.141 Brugge
T+32 51 74 08 00
F+32 51 74 09 62
customer@sioen.be
Code TVA 03030 V / A / M / 000
RC B 133171996
T+216 71 77 34 77
F+216 71 78 40 47
cts@sioen.com
VAT IE 4621355M
Company Nr. 78212
T+353 74 953 11 69
F+353 74 953 15 91
ireland@sioen.ie
VAT GB 365.1873.34
Company Nr. 1871440
T+44 1724 28 00 77
F+44 1724 28 01 46
mullion@sioen.com
TVA FR 49300774767
RCS Narbonne B 300 774 767
T+33 4 68 42 35 15
F+33 4 68 42 27 43
sip-protection@sip-protection. com
NPWP 1.068.001.5-052
T+62 21 440 33 88
F+62 21 440 14 28
indonesia@sioen.com
NPWP 1.068.012.2-407
T+62 21 825 22 22
F+62 21 825 44 44
indonesia@sioen.com
TVA BE 463.789.464
RPM 0463.789.464 Tournai
T+32 56 85 54 30
T+32 56 34 66 10
distribution@sioen.be
TVA FR 49300774767
RCS Narbonne B 300 774 767
T+33 4 68 42 35 15
F+33 4 68 42 27 43
sioen.france@sioen.com
Code TVA 614715 S / A / M / 000
RC B 19711998
T+216 71 80 75 47
F+216 71 80 92 62
sioen.tunisie@sioen.com
VAT GB 732.4071.62
Company Nr 3761142
T+44 1257 27 72 44
F+44 1257 27 72 45
sales@uk.sioen.com
Code TVA 747023 F / A / M / 000
RC B 177132000
sioen.zaghouan@sioen.com
T+216 72 68 06 60
F+216 72 68 26 60
T+33 5 63 34 52 46
F+33 5 63 34 69 99
vidal@sioen.com
T+1 732 441 12 50
F+1 732 441 12 53
cgoodwin@FFG-CPA.COM
T+32 51 74 08 00
F+32 51 74 09 63
baleno@sioen.be
T+49 59 51 99 47 0
F+49 59 51 99 47 47
info@sioen.de
BTW BE 434.140.425
RPR 0434.140.425 Ieper
T+32 57 34 61 60
F+32 57 33 35 23
coatex@sioen.be
TVA FR 44408449098
RCS Amiens 408 449 098
T+33 322 51 51 70
F+33 322 51 51 79
sfc@sioen.com
TVA BE 474.276.154
RPM 0474.276.154 Liège
T+32 4 252 21 50
F+32 4 253 04 25
nordifa@sioen.be
BTW NL003812522B01
HR Venlo 12011983
T+31 77 376 92 92
F+31 77 373 69 66
info@roland-int.org
T+1 817 607 00 80
F+1 817 607 00 88
info@roltrans.com
Ust-id.Nr.: DE 812873033
Osnabrück HRB 122296
T+49 59 51 99 55 70
F+49 59 51 99 55 71
info@roland-int.org
NIP 665-100-18-19
RHB 1210
T+ 48 632 44 39 25
F+48 632 44 39 21
info@roland-int.org
T+38 362 28 65 39
F+38 362 28 65 39
roland@rivne.com
T+44 1274 39 16 45
F+44 1274 30 51 56
info@roland-int.org
VAT GB 311746186
Company Nr 1380441
79
SIOEN Industries nv Fabriekstraat 23 8850 Ardooie - Belgium T +32 51 74 09 00 F +32 51 74 09 64 www.sioen.be JAARVERSLAG / RAPPORT ANNUEL / ANNUAL REPORT Dit jaarverslag is beschikbaar in het Nederlands, het Frans en het Engels. Ce rapport annuel est disponible en français, en néerlandais et en anglais. This annual report is available in Dutch, French and English.
Summary
ANNUAL REPORT
2006
100
YEARS OF
A Innovation
100
YEARS OF SIOEN AND TEXTILES Innovation
Expertise Expertise
Vision
Vision
Profile Our products 100 years of Sioen Innovation Letter to shareholders Mission & Strategy Expertise Expertise right down the line Group Structure Sioen worldwide Coating division Apparel division Industrial applications Vision Human resources Research & Development Quality Environment
1 2 4 6 8 10 12 14 15 16 18 24 28 30 32 33 34 35
Corporate information Letter to shareholders Report from the Board of Directors Group Structure Share Information Corporate Governance General information
1 3 5 9 10 12 16
Financial overview
19
Definitions Addresses
77 78
Only the English version of the annual report has evidential value.