Annual report 2007 Financial by Sioen Industries

Corporate information Financial overview

Growth

Innovation Strategy

People

Contents Corporate Information I. II. III. IV. V. VI.

Letter to the Shareholders Report of the Board of Directors Group Structure Share Information Corporate Governance General Information

3 5 9 10 12 16

FINANCIAL OVERVIEW I. Comments on the consolidated financial statements II. Financial statements II. 1. Consolidated Balance Sheet II. 2. Consolidated Income Statement II. 3. Cash Flow Statement II. 4. Equity Statement

20 22 22 24 26 27

III. Notes to the consolidated financial statements III. 1. Key Accounting Rules III. 2. Segment Information III. 3. Exchange Rate III. 4. Detailed Income Statement III. 5. Detailed Balance Sheet IV. Other V. Statutory auditorâ&#x20AC;&#x2122;s report VI. Statutory annual accounts of Sioen Industries NV VII. Proposal to the annual meeting Definitions Addresses

28 28 37 40 41 45 69 73 75 78 79 80

â&#x20AC;&#x153;Sioen is growing in every sense of the word. Reliability, comparability and relevance of our accounting figures are of utmost importance. Geert Asselman, CFO

2 I SI OEN INDUSTRIES I Annual Report 2007

Dear Shareholder,

If I were to summarize 2007 in a single word, it would be ‘strong’. We performed on every front, and advanced

“Strong growth, excellent results, new projects”

in every activity. In 2007 the emphasis at Sioen was on strategy,

The figures speak for themselves:

innovation, growth and people. Our action plan, objectives and challenges are set out on pages 4 and 5

• In 2007 our net sales amounted to EUR 380.3 million,

of this annual report.

up 12.1% on the year before. • Our net profit was EUR 19.2 million or an increase of 58% • Cash flow amounted to EUR 43.5 million. This is an increase of EUR 12 million compared to last year. • EBITDA and EBIT increased with respectively 36% and

2007 was in all aspects an exceptional year, in which the old records came tumbling down one after another. We achieved maximum returns in our spinning and weaving mills, we passed for the first time the six million

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Letter to shareholders

square metre mark on our extrusion line, we operated

50% to EUR 61.2 million (16% of net sales) and EUR

the direct coating lines at historically high speeds,

38.8 million (10% of net sales).

we restructured our Jakarta facility to give additional

• Sioen Industries is paying a dividend of EUR 0.45 per

cost and production efficiency, we produced record

share to its shareholders in respect of 2007 (+73%)

numbers of truck curtain and roof sets, demand for open structure fabrics was permanently high, and we

Of course we need to say more than this to do justice

developed an unequalled number of new and improved

to the past year. This annual report seeks to hold a

product formulations.

mirror to our group’s performance. You will find who we are, our history, our products, what drives us and our

We also had to surmount a number of difficulties. The

particular style of entrepreneurship.

whole year we had to cope with rising energy prices,

rising raw materials prices nor was it always easy to find

• France:

· optimization of direct coating line

suitable personnel.

• Ukraine:

· commissioning of production centre (truck roofs)

“Targeted entrepeneurship, stimulating a sense of belonging and sticking to our strategic course”

• Worldwide: · continuous investments in R&D and focus on technical products. Sioen Industries’ performance in 2007 and in previous

In every division we went forward with our improvement

years confirms our capacity to create long term value

programmes, improving production and cost efficiency

and growth. And that is what you, our shareholders, and

and fine-tuning our product formulations. We carefully

we, entrepreneurs and all our employees, are looking

examined our stock situation and optimized at every

for.

level. We successfully implemented SAP in the Industrial Applications division, with the Coating and Chemicals divisions set to follow in 2008.

“On the path to new records? In an Olympic year, can we do otherwise?” Michele Sioen We are keeping up the investment pace in 2008. This includes: • Belgium:

· new buildings for storage

· new calendering line fully operational

· doubling our open structure fabric

· additional pigment paste production

capacity production machinery

4 I SI OEN INDUSTRIES I Annual Report 2007

CEO Sioen Industries n.v.

Sioen Industries is the world market leader in technical

• OTHER OPERATING COSTS – Other operating costs

coated textiles, a market leader in industrial protective

consist primarily of a number of non profit-related taxes

clothing, a niche specialist in fine chemicals and a major

(property tax, taxe professionelle) which grow more

world player in processing technical textiles into semi-

onerous by the year.

finished goods and technical end products. • EBITDA – Operating cash flow (EBITDA) rose from EUR 44.8 • The past year can be summarized in a few words:

million in 2006 to EUR 61.2 million in 2007 (+ 36.4 %).

consistent, high quality growth. • FINANCIAL RESULT – At EUR -8.4 million, net financial • SALES - In 2007 Sioen Industries posted group sales

costs are EUR 1.8 million higher than in 2006. The

of EUR 380.3 million (of which EUR 27.1 million from

reasons lie in the net financial debt of EUR 146.0 million,

newly acquired Siegwerk, Richard Colorants and Fillink),

the continuing weakening of the pound sterling and the

compared with EUR 339.4 million the year before

constant revaluation of the Polish currency.

(+ 12.1% on an annual basis). • PROFIT – This brings the group to a pre-tax profit of EUR • GROSS MARGIN – With a combination of excellent

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Report of the Board of Directors

30.4 million, 57.4 % higher than in 2006. Net profit

production efficiency, new products and product

is EUR 19.2 million, compared with EUR 12.1 million in

compositions, new materials and price increases, the

2006 (+ 57.9 %).

group has been able to improve its profit margin. • NET CASH FLOW – Net cash flow rose by EUR 12.0 • SERVICES AND OTHER GOODS – Costs of goods and

million to EUR 43.5 million.

other services rose primarily under the influence of the activities taken over by the chemicals division in 2006.

• DIVIDEND – In 2007 Sioen paid a dividend of EUR 0.26 gross per share in respect of 2006. The Board of

• PERSONNEL COSTS – The acquisitions in the chemicals

Directors will be proposing to the Annual Meeting of

division and wage developments in Poland are the main

Shareholders that the company declare a dividend of

reasons for higher personnel costs.

EUR 0.45 (gross) per share in respect of 2007.

COATING Division

The Coating Division specializes in the integrated

• Extrusion coating

coating of technical textile, of which it masters the

In 2007 we further improved our production process

entire production process from the extrusion of the

and developed a number of new products and

yarn (spinning), to weaving the technical fabric and to

compositions like oil dams, technical ventilation pipes,

coating with various polymers. The group is the only

soil decontamination fabric and pool covers.

player in the world with full proficiency in five different coating techniques, each with its specific products and

• Calandering

applications:

In 2007 we began test production at our new plant in Moeskroen, where we can also produce pool liners

• Direct coating

as well as our traditional products for the automobile

Booming activity in the transportation sector and the

sector (films for dashboards and door panels, sun visors,

related demand for trailers made 2007 a top year. For

etc.). This line will be brought onstream as of 2008.

the direct coating product line this gave attractive growth figures in terms of both volume and sales, with

The coating division is fully vertically integrated, and the

production facilities operating at near 100% capacity.

spinning and weaving mills also ended 2007 with record figures. The spinning mill processed 16,000 tonnes of

• Online coating

polyester chips into high tenacity yarns (around 1000

A strong 2006 was followed by another record year

tonnes more than in 2006). At the weaving mills we

in 2007. To meet demand for open structure fabrics

maximized profitability.

(reinforcement nets, windbreak nets, geotextiles) we will be doubling our capacity in mid-2008 (building of

Despite historically high raw materials prices, the

new production hall started at the end of 2007). With

Coating division was again able in 2007 to significantly

the sharp rise in oil prices, our range of reinforcement

improve its operating cash flow and net result.

nets for PVC roof coverings are becoming a popular

Additional R&D efforts, new products, continuous

alternative to bitumen.

production efficiency improvements and strong markets are the main reasons for the excellent results.

• Transfer coating Determined R&D efforts enabled us to bring new technical products to market in 2007 (including car parts, self-adhesive films, etc.)

6 I SI OEN INDUSTRIES I Annual Report 2007

Thanks to its focus on more technically complex

• With its range of specific protective clothing against

products, the Apparel division has built up an

arc flames (Sioen Arc), we have concluded a number

outstanding reputation. In 2007 the division again won

of important contracts with energy suppliers.

a number of major contracts for technical products: Over the years, Sioen has acquired special technical • Our protective clothing niche product for people

know-how in both design and production. On top of

working on and around water (Mullion trade name)

this we have our own very high performance research

undertook a number of major projects, including

and development centre with the latest testing

survival suits for various customers.

equipment.

• The highly technical market for bullet and kniferesistance vests grew strongly. • In its firefighting clothing product range Sioen

Our strategic focus on technical products, combined with a very cost-efficient production apparatus, is

signed major contracts with a number of French

expressed in an operating cash flow of EUR 10.6 million

départements and with the Belgian firefighting service

(+72.5 %), whilst our operating result has more than

(under the Vidal brand).

doubled (+142.0 %).

SIOEN INDUSTRIES I An n u al Re p o r t 2007

APPAREL DIVISION

CHEMICALS DIVISIon

Given its size and importance, the chemicals activity has, since 1 January 2007, formed a fourth division within Sioen Industries.

• In 2007 we decided to close the site in Lyon (Astra). We put together a social plan for the employees and transferred the products to other group facilities. • The transfer of the customer base and production of

During the past year the chemicals division concentrated on integrating the companies taken over at the end of 2006:

the former Siegwerk went ahead spotlessly. • Under an exchange of facilities agreement, we are taking over Clariant’s paste department in France, while they are taking over our granulates department

• We have reallocated our activities between our production sites by core activity and competence.

and paying a balancing amount • In 2008 we are introducing a new ERP package and

In this way the solvent-based PVC and PU pastes are

are completing the reorganization of logistic flows

now concentrated at the Bornem site (EMB), the

within the business.

silicon pastes have been allocated to the Ath site (Inducolor), whilst Richard Colorants (Lomme, France) specializes in water-based pastes.

INDUSTRIAL APPLICATIONS DIVISIon

The industrial applications division processes coated

• Non wovens :

fabrics and PVC film into a range of industrial items.

In 2007 Sioen Nordifa developed new (unique) products

This division is organized by activity sector:

and brought a new production line into service. Goals for 2008 are geographic expansion and extending the

• Transport :

product line.

This sector produces trailer and container curtains and tarpaulins and train tarpaulins. Pressure in 2007 from

• Manufacturing :

a number of internal and external factors (rising wage

· Cutting of, among others, door panels, airbags, car

costs in Poland, revaluation of the Polish złoty against

trunk covers (we have invested here in a new laser

the euro, the introduction of a new ERP package and price competition from small competitors) prevented full

cutting machine) · CARAPAX (roof reinforcement for trailers) and

benefit being taken of group synergy and the buoyant

PROTECTOR (burglar alarm incorporated in tarpaulins)

market. The priority for 2008 is to improve production

were two innovative truck safety products we finished

and organizational efficiency.

developing in 2007. · Welding of pool foils and dike foils · Production of kadors (flexible tubes enclosed in coated textile and used to attach fabrics to profiles).

OUTLOOK

Sioen is confident that it will continue to grow consistently and in a quality manner in 2008.

8 I SI OEN INDUSTRIES I Annual Report 2007

SIO EN INDUSTRIES NV (1)

CO AT IN G 99%

100%

Sioen Coating n.v. Direct Coating Belgium

APPAR E L 99%

INDUSTRIAL APPLICATIONS

Sioen n.v. Apparel Belgium

25% 75% (2)

Saint Frères s.a.s. Direct Coating France

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%

Coatex n.v. Processing of coated fabrics and films Belgium

CHEMICALS 100% Inducolor s.a.

Paste production Belgium

90% European Master 10%(2) Batch n.v. Saint Frères Confection s.a.s. Master batch Heavy-duty manufacturing France production Belgium

Sioen Nordifa s.a. Filter production Belgium

100% Richard s.a.s. (7) (8) Paste production France

Fillink 100% Technologies n.v. (9) 100%

Sioen Fabrics s.a. Weaving/Transfer Coating/ Calandering Belgium

100%

Sioen Fibres s.a. Spinning Belgium

95%

P.T. Sioen Indonesia Apparel Indonesia

100%

Sioen Shanghai (3) Sales office China

95%

P.T. Sungintex Apparel Indonesia

100%

Siofab s.a. Transfer Coating Portugal

100%

99%

100%

Mullion Manufacturing Ltd Apparel U.K.

100%

Roland International b.v. (6) Manufacturing of truck tarpaulins

Roltrans Group America Inc. 100% USA Roland Planen GmbH Germany

100%

Sioen Fibres s.a. Central Distribution Unit Belgium

Roltrans Group Polska sp.z.o.o. 100% Poland

TIS n.v. Weaving Belgium

Sioen France s.a.s. Sales office France

Roland Ukraine Llc (7)

100%

Roland Tilts UK Ltd.

100%

100% Veranneman TT n.v. Weaving/Direct Coating Belgium

Sioen Tunisie s.a. Sales office Tunisia

Pennel Automotive s.a.s. Calendering France

99%

Sioen Zaghouan s.a. Apparel Tunisia

95%

Sioen USA Inc. (5) Sales office

(1) (2) (3) (4) (5) (6) (7) (8) (9)

100%

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Group structure

Quoted percentages have been rounded, and reflect the situation at 31 December 2007 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. The Richard group was acquired in October 2006 In 2007 Richard s.a.s. resp. merged with Copidis s.a.s. and Astra Colorants s.a. Fillink Technologies was acquired in January 2007

Share information Listing

Shareholders structure

In order to be able to continue following and ensuring

15fast growth, and in the conviction that a the company’s

Shell: 3.4%

transparent policy would further strengthen the group’s growth possibilities, the Sioen Industries share was

10the cash market, double fixing, of the introduced on

Brussels Stock Exchange, on 18 October 1996. A year later the share was listed on the semi-continuous

segment of the forward market and then, as of 11 March

Public: 36.3%

1998, 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 36,30% of the total

0 Sihold: 60.3%

number of shares are spread among the public. 60.34% are controlled via the holdingSioen company Sihold n.v. or controlled by the Sioen family, Eurostoxx50 and 3,40% are held by Shell Pension Fund.

Evolution of the share in 2007 The share was quoted at its highest price on 5 February

and profit, on the one hand, and an active communication

2007, at EUR 10.85. Since its lowest price on 20

policy, on the other, we want to arouse the investor’s

November 2007 (namely EUR 9.05), the share was quoted

interest in a pro-active manner. Market capitalisation

at EUR 9.80, or 2 % higher, on 31 December 2007. Due to

amounted to EUR 209.6 million on 31 December 2007.

the combination of steady growth of turnover, cash flow

€

Sioen Volume

250 000

200 000 10

150 000 100 000

50 000 0

10 I SIOEN INDUSTRIES I Annual Report 2007

Share Codes and Classifiation

The Sioen Industries share was included on Euronext

ISIN BE0003743573

Brussels in Compartment B (Mid-Caps).

Euronext code BE0003743573 Mnemo SIOE

Dividend policy

Type Stock - Ordinary stock - Continuous Market Euronext Brussels - Eurolist - Local shares

The Board of Directors wishes to continue striving for

Compartment B (Mid-Caps)

a pay-out ratio of more than 15% and to have the dividend increase year after year, in order thereby

ICB Sector classification :

to have the dividend closely linked to the cash flow

3000, Consumer Goods

expectations on the one hand, and on the other hand to

3700, Personal & Household Goods

reward the shareholdersâ&#x20AC;&#x2122; confidence in the company.

3760, Personal Goods

The pay out ratio for 2007 amounts to 50.2%, as

3763, Clothing & Accessories

compared to 45.6% last year. At EUR 0.45 gross (EUR 0.3375 net), the dividend is 73% higher than last

Reuters : SIOE.BR

year. The dividend is made payable at the counters of

Bloomberg : SIO.BB

Dexia Bank, ING Bank, Fortis Bank, Bank Degroof and

Datastream : B:SIO

SIOEN INDUSTRIES I An n u al Re p o r t 2007

2007: financial communication policy

KBC Bank from 9 May 2008.

Corporate Governance The Sioen family has been supported by external,

General Meeting, and can be consulted on the Sioen

independent directors since 1986. Their expertise

Industries website (www.sioen.com).

and experience contribute to the proper and effective management of the company.

Since the Corporate Governance Charter came into effect, a number of minor amendments have been made

On 22 March 2005 the Board of Directors adopted a

to it, reflecting changes to the environment, such as

Corporate Governance Charter, in accordance with the

the dematerialization of shares, or a small change in the

Belgian Corporate Governance Code. The Corporate

shareholder structure.

Governance Charter has been in force since the 2005

The board of directors Composition (situation as at 31 December 2007) The directorsâ&#x20AC;&#x2122; mandates expire at the 2008 general meeting. CHAIRMAN

Mr J.J. Sioen

MANAGING DIRECTOR

M.J.S. Consulting b.v.b.a., represented by Ms M. Sioen (1) director in various other companies

DIRECTORS

Ms J.N. Sioen-Zoete (1), director in various other companies

(1)

, chairman/director in various other companies

D-Lance b.v.b.a., 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 Louis Verbeke e.b.v.b.a., 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 Luc Sterckx (3) CEO of SPE n.v.; director in various other companies Vean n.v., Represented by Mr L. Vansteenkiste (3) managing director of Recticel n.v.; director in various other companies SECRETARY

Mr G. Asselman CFO Sioen Industries Group

STATUTORY AUDITOR (4)

Deloitte Bedrijfsrevisoren c.v.b.a. Represented by Mr D. Van Vlaenderen and Mr K. Dehoorne

(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 Auditorâ&#x20AC;&#x2122;s mandate expires at the general meeting of 2008.

12 I SIOEN INDUSTRIES I Annual Report 2007

Working committees

In accordance with the Articles of Association, the

The Sioen Industries Group has three working

Board of Directors meets regularly as a function of the

committees:

SIOEN INDUSTRIES I An n u al Re p o r t 2007

The Board of Directors and how it works

company’s needs and interests. In 2007 it met five a. Audit Committee:

times.

In 2007 the Audit Committee consisted of three The number of meetings attended by the individual

independent directors, namely Messrs Vandepoel

directors in 2007 were as follows:

(Chairman), Verbeke and Sterckx.

Mr Jean-Jacques Sioen

The Audit Committee met four times in 2007. The

Ms Michèle Sioen

number of meetings individually attended by the

Ms Jacqueline Sioen-Zoete

members of the Audit Committee in 2007 was as

Ms Danielle Sioen

follows:

Ms Pascale Sioen

Mr Pol Bamelis

Mr Wilfried Vandepoel

Mr Louis-Henri Verbeke

Mr Luc Sterckx

Mr Luc Vansteenkiste

b) Remuneration Committee In 2007 the Remuneration Committee was made up

The permanent agenda of every Board of Directors

of two independent directors, namely Messrs Bamelis

meeting includes the discussion of and taking of

(chairman) and Vansteenkiste.

decisions with respect to the individual results of

The Remuneration Committee advises the Board

companies in the group, division results, consolidated

of Directors on pay policy in general and on the

results, current investments and projects, new projects

compensation paid to the members of the Board of

and proposals for investment opportunities. The board

Directors and the Management Committee in particular.

also deals with specific points on the agenda as a

The share option plans also fall under its remit.

function of concrete matters in hand.

The Remuneration Committee met twice in 2007. 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). Given that there was no need to make any appointments in 2007, the Nomination Committee did not meet.

Management Committee

Ms Michele Sioen received in 2007, in her capacity of CEO and in addition to her directorâ&#x20AC;&#x2122;s fees, fixed

The members of the Management Committee

remuneration of EUR 419,491. She received variable

(as of 31 December 2007) are:

remuneration of EUR 125,286.

- MJS Consulting b.v.b.a., represented by Ms M. Sioen - P. Company b.v.b.a., represented by Ms P. Sioen

The compensation paid to the other members of the

- Mr Geert Asselman

Executive Management amounted in 2007 to an overall

- Mr Erwin Van Uytvanck

fixed sum of EUR 2,011.567 and a variable amount of

- Mr Michel Devos

EUR 208,658. All amounts given are gross amounts, and

Secretary: Mr Loebrecht Lievens

thus represent the full cost to the company.

Remuneration of directors and the Executive Management

In 2007 no shares, share options or other rights to acquire shares of Sioen Industries were granted to the CEO and the other members of the Executive

In 2007 the following remuneration was paid to the

Management. No specific recruitment agreements

members of the Board of Directors and the Executive

or agreements for golden handshakes exist with the

Management:

members of the Executive Management.

Non-executive and independent directors, and to members of the Executive Management in their capacity as directors: Mr Jean-Jacques Sioen

EUR 20,000

M.J.S. Consulting b.v.b.a

EUR 20,000

Ms. Jacqueline Sioen-Zoete

EUR 20,000

D-Lance b.v.b.a

EUR 20,000

P. Company b.v.b.a

EUR 20,000

Pol Bamelis n.v

EUR 22,250

Revam b.v.b.a.

EUR 29,000

Louis Verbeke e.b.v.b.a.

EUR 26,000

K.E.M.P. n.v.

EUR 26,000

Vean n.v.

EUR 21,500

14 I SIOEN INDUSTRIES I Annual Report 2007

Protocol to prevent abuse of insider information

Within the Sioen Industries group, external audit is chiefly carried out by Deloitte Bedrijfsrevisoren.

To prevent privileged information being used illegally

This involves the auditing of both the statutory financial

by directors, shareholders, and members of the

statements and the consolidated annual financial

management and staff (i.e. “insiders”), or even to

statements of Sioen Industries n.v. and its subsidiaries.

prevent such an impression possibly being created, the

To the extent that the audits of a number of subsidiaries

Board of Directors of Sioen Industries n.v. has produced

are carried out by other auditing companies, Deloitte

a protocol for the prevention of abuse of insider

makes use of their work, as stated in the Statutory

information (“1997 Protocol”).

Auditor’s report. During the past financial year the Statutory Auditor received EUR 277,200 from Sioen

Further to Directive 2003/6/EU a new protocol was

Industries in respect of its statutory auditor mandate.

approved by the Board of Directors on 1 May 2005.

Additionally the Statutory Auditor and its network

The protocol is initially aimed at protecting the market

received EUR 41,250 for other auditing work, and

as such, ensuring observance of the statutory provisions

EUR 14,505 for other assignments outside its audit

and maintaining the group’s reputation.

mandate.

In addition to a number of prohibitions concerning the

The mandate of Deloitte Bedrijfsrevisoren as Statutory

trading of Sioen Industries n.v. financial instruments

Auditor of Sioen Industries n.v. expires at the annual

when insiders have privileged information that is not

meeting of 2008. Deloitte Bedrijfsrevisoren is

(yet) available to the public, it also contains a number of

represented by Mr D. Van Vlaenderen and

preventive measures and directives designed to maintain

Mr K. Dehoorne.

the confidential nature of privileged information.

SIOEN INDUSTRIES I An n u al Re p o r t 2007

External audit

All insiders eligible for this have signed this protocol. A Compliance Officer has been appointed to monitor observance of the protocol.

General Information Registered office and name

linen and interior decoration items; the manufacture of wall cladding, the printing and finishing of all

The registered office of Sioen Industries, a public limited

fabrics; the manufacture of ready-to-wear items of

liability company under Belgian law, is established at

clothing and outfits for men and women; knitwear,

Fabriekstraat 23, B-8850 Ardooie.

embroidery, household and table linen, children’s

The company is listed in the Bruges register of legal

clothing. The manufacture of safety and high visibility

persons under enterprise number 0441.642.780.

articles. Wholesale and retail trading in all the abovementioned items;

Incorporation and publication

• The investment in, subscription to, permanent takeover, placing, purchase, selling, and trading of

Sioen Industries was incorporated under the name

shares, dividend certificates, bonds, certificates, claims,

“Sihold” by deed executed before notary-public Ludovic

currencies and other transferable securities, issued by

du Faux in Moeskroen on 3 September 1990, published

Belgian or foreign companies, whether or not in the

in the appendix to the Belgian Official Journal of

form of trading companies, administrative offices,

28 September 1990, under no. 900928-197.

institutions and associations either with or without (semi-) public status;

Financial year

• The management of investments and shareholdings in subsidiaries, the holding of directorships, the giving

The financial year begins on 1 January and ends on

of advice, management and other services to or in

31 December of each year.

accordance with the activities carried out by the company itself. These services may be provided by

Term

virtue of contractual or statutory appointment and in the capacity of external consultant or representative

The company is established for an indefinite period.

Object of the company

body of the customer. All this insofar as the company complies with the statutory requirements. The company may, in Belgium

The company’s object, in Belgium and abroad, on its

and abroad, effect all industrial, trading, financial,

own behalf and on behalf of third parties, is:

moveable property and real estate transactions that

• The weaving of fibres of all kinds, the coating of

may develop or promote its business either directly or

fabrics and all other material, the printing thereof, the

indirectly. It may, by any means, acquire all movable or

manufacture of plastic and plasticized material, the

immovable goods even if these are not related directly

manufacture, purchasing and sale, both in Belgium

or indirectly to the company’s object.

and abroad, of material useful for or relating to

It may, in any way, acquire participating interests in all

aforesaid products and raw materials, as well as the

associations, businesses, enterprises or companies that

manufacture of chemical products and pigments;

are striving for the same or a similar or related object or

• The manufacture of pre-finished outer clothing in

that can promote its business or facilitate the sale of its

woven fabric, the manufacture of all kinds of tailor-

products or services, and it may collaborate or merge

made clothing and embroidery; the manufacture of

therewith.

outer clothing in knitted fabrics, and of household

16 I SIOEN INDUSTRIES I Annual Report 2007

In the event of an increase of the subscribed capital, carried out within the limits of the authorized capital,

The statutory and consolidated annual accounts of the

the board of directors is authorized to ask for an issue

company and the accompanying reports are filed with

premium. If the board of directors decides to do so, this

the National Bank of Belgium.

issue premium should be allocated to an unavailable

The articles of association and the special reports

reserve account that can only be reduced or written

required by the Companies Code can be obtained from

off by resolution of the general meeting passed in the

the Clerk’s Office of the Commercial Court of Bruges.

manner required for the amendment of the articles of

These documents, as well as the annual and half-yearly

association.

reports and all information published for the benefit of the shareholders, can also be requested by shareholders

In the absence of express authorization given by the

at the registered office of the company. The articles of

general meeting to the board of directors, the board of

association, the annual and half-yearly reports can also

directors’ authority to increase the subscribed capital

be downloaded from the website www.sioen.com.

through a contribution in cash with cancellation or restriction of the existing shareholders’ preferential

Authorized capital

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Consultation of documents

subscription rights, or through contribution in kind, is suspended from the date of notification to the company

The board of directors is authorized, during a period

by the Banking, Finance and Insurance Commission of

of five years counting from the date of publication in

a public takeover bid for the company’s shares. This

the Annexes to the Belgian Official Journal of the deed

authority will be reinstated immediately after the closing

concerning the amendment of the articles of association

of such a takeover bid. The general meeting of 25

of 30 May 2003 (BOJ of 17 June 2003), to increase

May 2007 expressly authorized the board of directors

the subscribed capital on one or more occasions, by

to increase the subscribed capital on one or more

a maximum amount of forty-six million euros. This

occasions, from the date of notification by the Banking,

renewable authority is valid for capital increases in cash,

Finance and Insurance Commission to the company of

in kind or by conversion of reserves. At the moment this

a public takeover bid for the company’s shares, through

amount is still wholly available.

contributions in cash with cancellation or restriction of the existing shareholders’ preferential subscription right,

In the framework of the authorized capital, the board of

or by contributions in kind, in accordance with Articles

directors is authorized, in the interest of the company

557 and 607 of the Companies Code. This authority is

and subject to observance of the conditions laid down

granted for a period of three years from 25 May 2007

in Articles 535 and 592 to 599 of the Companies

and is renewable.

Code, to cancel or restrict the preferential subscription right that is granted to the shareholders by law. The board of directors is authorized to restrict or cancel the preferential subscription right in favour of one or more particular persons, even if these are not members of staff of the company or its subsidiaries.

Acquisition by the company of shares in its own capital

Overview of the 2000 share option plan Date of Board decision

The general meeting of 25 May 2007 expressly

Option price as % of market price

authorized the board of directors, in accordance with

Option price

the provisions of the Companies Code, to acquire

Option exercise price

or have disposal of its own shares or profit-sharing

Allocation

certificates, if the acquisition thereof is necessary to

Unused

avoid the threat of serious detriment to the company.

Balance to be exercised January 2005-2008

10/10/2000 7.5% 1.5375 20.3550 6.500 3.250 (3.250)

This authorization is valid for a period of three years from date of publication of the above-mentioned

Stock Option plan II

resolution in the Annexes to the Belgian Official Journal (BOJ of 15 June 2007).

In order to make remuneration dependent on the company’s performance, it was decided to introduce

The general meeting of 25 May 2007 authorized the

a new option plan. This new option plan meets all

board of directors, in accordance with Articles 620 to

the requirements of the law of 26 March 1999. The

623 and 625 of the Companies Code, to obtain its own

company has opted for an option plan based on a

shares through purchase or exchange in the maximum

basket of shares of European companies. The options

number permitted by law, and at a price equal to the

granted by Sioen Industries have as their underlying

market value of the shares. This authorization also

asset the BEVEK ING ( L) Invest EMU Equity Fund (cap)

extends to the acquisition of shares of the company by

with ISIN code LU0095527585 and are granted in the

one or more of its direct subsidiaries within the meaning

form of a call option. These call options are offered

of the law, and is valid for a period of eighteen months

free of charge to those concerned. The exercise price

counting from 25 May 2007 and is renewable.

will correspond, at the offeror’s choice, to either the closing price of the BEVEK’s shares on the day before

Share based payment plans

the offering date, or the average of the closing prices of the BEVEK’s shares for the 30 calendar days preceding

Stock option plan I

the offering date. This amount will be mentioned in the offer letter which will be sent to every beneficiary. The

Under a share option scheme originally introduced in

company covers itself by buying, at the same time, an

1996, a total of 6.500 options were issued in 2000 of

identical number of options having the same features,

which 3.250 remain outstanding and exercisable at

of the same fund and with the same exercise price.

the price of Eur 20.3355 per share until january 2008.

The option premium that Sioen Industries paid for this

The Board of Directors remains authorized to grant up

amounted to 52% of the closing price of the BEVEK on

to 158.000 options. No options have been granted to

the day before the offering.

directors under this scheme.

18 I SIOEN INDUSTRIES I Annual Report 2007

2007 Options outstanding at 1 January 2007 Options granted during the reporting period

0 3,957

Options exercised during the reporting period Options outstanding at 31 December 2007 Options exercise price 2007 Option premium paid

0 3.957 140.11 Eur 72.86 Eur

The options have a total term of 10 years from the date of offering. After a blocking period, beneficiaries have the possibility of either selling or exercising the options granted to them until the end of the exercise period.

SIOEN INDUSTRIES I An n u al Re p o r t 2007

The total number of outstanding options is as follows

I. Comments on the consolidated financial statements Sioen Industries Group

chemicals division concentrated on integrating the companies taken over at the end of 2006. These

Sioen Industries is the leading world producer of coated

acquisitions have positively affected the gross margin

technical textiles, European market leader in industrial

and operating cash flow, which rose from

protective clothing, a niche specialist in fine chemicals

EUR 4.5 million in 2006 to EUR 7.3 million in

and a major world player in processing technical textiles

2007. Gross margin and EBITDA in the industrial

into semi-finished products and technical end products.

applications division fell slightly owing to a number of temporary events like a major revaluation of the Polish

Sales • In 2007 Sioen achieved net group sales of EUR 380.4 million, up 12.1% from EUR 339.4 million the year before. On the one hand external sales

currency against the euro, the implementation of a new ERP system, and an election year in France, which traditionally means fewer government orders. • Services and other goods rose by EUR 5.1 million,

growth of EUR 27.1 million was achieved in the

moving to 15.9% of net sales compared with 16.3%

chemicals division with the acquisition of the Richard

in 2006. The biggest increases under this heading are

group and the purchase of the decorative inks activity

maintenance and repair costs, as well as transport costs,

in the final quarter of 2006. On the other hand the

which are explained mainly by the activities acquired at

boom in the transport sector brought internal sales

the end of 2006 by the chemicals division.

growth in both the coating and industrial applications

• Personnel costs rose less strongly than net sales,

divisions of 7.4% and 7.1% respectively. The strategic

taking them to 19.1% of net sales, compared with

focus on technical products combined with a very

19.9% in 2006. The rise in these costs is explained by

cost-efficient production apparatus led to a 72.5%

the acquisitions made by the chemicals division and

increase in cash flow in the apparel division and a more than doubling of its operating profit.

increased activity in the industrial applications division. • Other operating costs covers a number of generally non profit-related taxes like property tax, taxe

Gross margin-EBITDA-EBIT

professionelle in France and the like. Every year these

• Despite historically high raw materials prices and

non profit-related taxes grow more onerous, to the

increased competition, the group was able to increase its gross margin and EBITDA at group level by 1.0% and 36.5% respectively. The strongest increase was

extent that they are now almost as large as corporation tax. • This gives the group an operating profit of EUR 38.8

achieved in the coating division, where a strategy

million in 2007 compared with 25.9 million in 2006.

of price increases for end products to compensate

• Operating cash flow (EBITDA) rose by 36.4% to EUR

constantly rising raw materials prices, a constant

61.2 million.

striving for cost efficiency and effective R&D efforts

• Financial result: at EUR -8.4 million, net financial costs

again bore fruit in 2007. Whilst sales rose by 7.4%,

were EUR 1.8 million higher than in 2006. The reasons

operating cash flow in this division rose by 37.2%.

for this lie in the net financial debt of EUR 146.0 million,

The apparel division too was able to improve its gross

the continuing weakening of the pound sterling and the

margin despite very competitive conditions. This had

constant revaluation of the Polish currency.

a positive impact on operating cash flow, which rose from EUR 6.1 million in 2006 to EUR 10.6 million in 2007. In this division too, technical excellence

• The effective tax rate was 36.9%, compared with 37.1% in 2006, due entirely to the non-recognized losses incurred in certain subsidiaries

is crucial, in particular with professional users that

• This brings the final net profit for 2007 to EUR 19.2

set very high standards. During the past year the

million, compared with EUR 12.1 million in 2006.

20 I SIOEN INDUSTRIES I Annual Report 2007

EUR 31.5 to 43.5 million.

Balance sheet In nominal amounts working capital rose from EUR 115.2 million at 31/12/2006 to EUR 126.2 million at

Investments

31/12/2007. Bearing in mind that sales have increased by

• Total investment in tangible fixed assets amounted to

EUR 41.0 million, working capital need as a percentage of

EUR 21.1 million. The largest items here are:

sales reduced from 33.9% to 33.2%.

o Investment in a new Calandering plant:

Net financial debt fell from EUR 147.8 million at

EUR 5.7 million in 2007. This comes on top of

31/12/2006 to EUR 145.9 million at 31/12/2007.

EUR 6.4 million of investment in this new plant in 2006. o EUR 2.3 million: weaving looms and ovens for online-coating

Risks Sioen Industries NV is a company listed on Euronext, that does not itself exercise any industrial activity. Sioen

o EUR 0.5 million: direct coating

Industries holds participations in companies operating in

o EUR 0.7 million: laser cutting machine

the following sectors:

o EUR 0.5 million: wide-format printer o EUR 0.5 million: Weaving looms o EUR 2.7 million: investment in a new ERP package

• production and application of coatings on technical textiles

SIOEN INDUSTRIES I An n u al Re p o r t 2007

• Net operating cash flow rose by EUR 12.0 million from

• design, development and production of protective • In 2007 two customer portfolios were acquired, resulting in a net investment of EUR 2.0 million for chemicals.

clothing • processing heavy technical textiles into finished products • producing pigment pastes, varnishes and inks for industrial applications. Sioen Industries is influenced, in particular in terms of its income stream, by the economic performance of these divisions. These divisions are in turn dependent on general economic trends and more specifically: • the volatility of crude oil prices and the more or less related volatility of prices of its principle raw materials (PVC, polyester, plasticizer, etc.); • with regard to the processing of heavy technical textiles, the group’s evolution closely tracks the economic cycles of the truck sector; • the protective clothing division follows the current trend in industrial activity in Western Europe. The emphasis is here less on volume and more on the technical specifications of the clothing.

II. Consolidated financial statements II.1. C ONSOLIDATED BALANCE SHEET I in thousands euro The consolidated financial statements for 2007 were approved by the Board of Directors for publication on 12 March 2008.

Note

2006

2007

Intangible assets

III.5.1.

17 716

18 834

Goodwill

III.5.2.

17 935

17 585

Property, plant and equipment

III.5.4.

150 420

151 404

Long term trade receivables

III.5.5.

Other long term assets

III.5.5.

504

636

Deferred tax assets

III.5.15.

6 199

5 445

192 796

193 918

ASSETS

Non-Current assets

TOTAL NON-CURRENT ASSETS

Current Assets Inventories

III.5.6.

84 472

90 450

Trade receivables

III.5.7.

70 414

73 208

Other receivables

III.5.8.

9 423

11 515

Other investments and deposits

III.5.8.

532

288

Cash and cash equivalents

III.5.8.

12 584

7 479

Deferred charges and accrued income

III.5.8.

1 612

1 254

TOTAL CURRENT ASSETS

179 037

184 194

TOTAL ASSETS

371 833

378 112

22 I SIOEN INDUSTRIES I Annual Report 2007

Note

2006

2007

Equity Share capital

46 000

Retained earnings

88 338

101 761

1 459

824

135 797

148 585

Hedging and translation reserves TOTAL EQUITY

Non-Current liabilities Interest bearing loans - payable after one year

III.5.11.

117 033

107 074

Provisions

III.5.10.

2 509

2 602

Pension obligations

III.5.9.

1 671

1 366

Deferred tax liabilities

III.5.15.

18 360

18 863

Finance leasing - payable after one year

III.5.12.

11 428

10 039

Other amounts - payable after one year

III.5.11.

151 004

139 947

TOTAL NON CURRENT LIABILITIES

SIOEN INDUSTRIES I An n u al Re p o r t 2007

EQUITY & LIABILITIES

Current liabilities Trade and other payables

III.5.13.

31 744

34 191

Interest bearing loans - up to one year

III.5.11.

31 162

35 400

Provisions - up to one year

III.5.10.

1 293

2 029

Pension obligations - up to one year

III.5.9.

Tax liabilities

III.5.13.

7 364

440

Finance leasing - up to one year

III.5.12.

1 270

1 199

Other amounts payable - up to one year

III.5.13.

12 157

16 230

85 032

89 580

371 833

378 112

TOTAL CURRENT LIABILITIES TOTAL EQUITY AND LIABILITIES

II.2. C ONSOLIDATED INCOME STATEMENT by function I in thousands of euros

2006

% of

2007

% of

Sales Net sales

Sales

339 389

100.0%

380 350

100.0%

-267 436

-78.8%

-289 191

-76.0%

Manufacturing contribution

71 954

21.2%

91 159

24.0%

Sales and marketing expenses

-15 573

-4.6%

-20 460

-5.4%

-7 021

-2.1%

-7 352

-1.9%

-22 465

-6.6%

-25 737

-6.8%

Cost of sales

R&D expenses Administrative expenses

304

0.1%

2 682

Non recurring result

Other operating result

-1 307(1)

-0.4%

-1 500

Operating profit

25 891

7.6%

38 792

10.2%

Financial result

-6 565

-1.9%

-8 373

-2.2%

3 873

1.1%

3 340

0.9%

-10 438

-3.1%

-11 713

-3.1%

19 326

5.7%

30 419

8.0%

Tax

-7 172

-2.1%

-11 233

-3.0%

EAT

12 153

3.6%

19 186

5.0%

Cash flow

31 496

9.3%

43 510

11.4%

EBITDA

44 843

13.2%

61 171

16.1%

EBIT

25 891

7.6%

38 792

10.2%

Financial income Financial expenses EBT

0.7% (1)

-0.4%

(1) I n 2007, non-recurring items relate to an exceptional write down on non woven production assets (division industrial applications), amounting to EUR 1.5 million. In 2006, non-recurring items relate to restructuring expenses in France (Pennel Automotive SAS). A provision for restructuring was taken amounting to EUR 1.3 million.

24 I SIOEN INDUSTRIES I Annual Report 2007

II.2. C ONSOLIDATED INCOME STATEMENT

2006

% on

2007

sales

% on sales

CONSOLIDATED PROFIT AND LOSS STATEMENT

Turnover

339 389

380 350

Changes in stocks and wip

4 620

1.36%

5 345

1.41%

Other operating income

3 339

0.98%

5 599

1.47%

Revenue

347 348

Raw materials and consumables used

171 856

Gross margin

50.72%

391 295 50.64%

188 798

49.64%

51,77%

Services and other goods

-55 266

-16.28%

-60 355

-15.87%

Remuneration, social security and pensions

-67 640

-19.93%

-72 586

-19.08%

Depreciations

-17 919

-5.28%

-20 330

-5.35%

-230

-0.07%

-2 265

-0.60%

Amounts written down on stocks and trade debts

-804

-0.24%

215

0.06%

Other operating expenses

Provision liabilities & charges

-6 435

-1.90%

-6 884

-1.81%

Non recurring items

-1 307

-0.39%

-1 500

-0.39%

OPERATING RESULT

25 891

7.63%

38 792

10.20%

FINANCIAL RESULT

-6 565

-1.93%

-8 373

-2.20%

3 873

1,14%

3 340

0.88%

-10 438

-3,08%

-11 713

-3.08%

PROFIT BEFORE TAX

19 326

5.69%

30 419

8.00%

TAXES

-7 172

-2.11%

-11 233

-2.95%

PROFIT AFTER TAX

12 153

3.58%

19 186

5.04%

0.00%

RESULT PART OF THE GROUP

12 153

3.58%

19 186

5.04%

EBIT

25 891

7.63%

38 792

10.20%

EBITDA

44 843

13.21%

61 171

16.08%

Cash Flow

31 496

9.28%

43 510

11.44%

Financial income Finance cost

MINORITY INTEREST

SIOEN INDUSTRIES I An n u al Re p o r t 2007

BY NATURE I in thousands of euros

II.3. C ASH F LOW STATEMENT

2006

2007

Recurring operating result

27 198

40 292

Non recurring items

-1 307

-1 500

Depreciation

17 919

20 330

1 500

230

2 265

Impairment Write off inventory and receivables Provision other risks and charges

2 792

-213

-2 254

-13 235

Inventory

84 472

90 450

Long term receivables and Trade receivables

70 436

73 221

Changes in working capital Details Working Capital

Other Receivables, non-current assets, investments & deferred charges

11 536

13 689

Creditors

-31 744

-34 191

Tax liabilities & other amounts payable

-19 521

-16 670

Amounts written off Inventory and Receivables Total Working Capital Other changes Cash flow from operating activities

10 822

13 087

126 001

139 586

-175

44 402

49 438

Current taxes

-6 782

-9 289

Net cash flow from operating activities

37 620

40 149

786

162

Received Interest Acquired assets through business combinations

-21 867

-69

Investments in intangible and tangible fixed assets

-27 440

-24 695

382

607

1 565

Disposal and sale of intangible and tangible fixed assets Increase in capital grants Translation adjustments on intangible and tangible assets

558

224

-46 016

-23 771

Net cash flow before financing activities

-8 396

16 378

Paid interest

-7 512

-7 378

Disbursed dividend

-5 133

-5 762

Increase long term interest bearing loans

98 900

Decrease long term interest bearing loans

-35 698

-17 111

Increase/(decrease) short term intrest bearing loans

-36 157

11 390

Net cash flow from investing activities

-1 493

-1 455

Other

Increase/(decrease) finance lease obligations

-45

-205

Currency result

205

-860

13 068

-21 379

Cash flow from financing activities Impact of cumulative translation adjustments and hedging

-128

-636

4 543

-5 637

Net cash position at the end of previous period

8 572

13 116

Net cash position at the end of current period

13 116

7 479

Change in cash and cash equivalents

26 I SIOEN INDUSTRIES I Annual Report 2007

2007 Capital

At the end of last financial year

46 000

Reserves

88 337

Result

19 186

Dividends

-5 762

Translation differences 700

Hedging reserves

Minority

759

Hedging Deferred tax

111

Cumulative translation adjustments

-634

Change in consolidation scope Transfer to profit on cash flow hedges At the end of current financial year

-112 46 000

101 761

758

SIOEN INDUSTRIES I An n u al Re p o r t 2007

II.4. EQUITY STATEMENT

The company paid in 2007 5.7 Mio Eur dividends over 2006. Proposed dividend over 2007 under condition of approval by the general shareholders meeting amounts to 9.6 Mio EUR.

2006

At the end of last financial year

Capital

Reserves

Translation differences

Hedging reserves

Minority

46 000

81 318

2 466

-420

Result

12 153

Dividends

-5 134

Hedging

1 938

Deferred tax

-673

Cumulative translation adjustments

-1 766

Change in consolidation scope

-19

Transfer to profit on cash flow hedges At the end of current financial year

-86 46 000

88 337

700

759

III. Notes to the consolidated financial statements III.1. KEY ACCOUNTING RULES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Issued but not yet effective • IAS 1 Presentation of Financial Statements (annual

The consolidated annual financial statements of Sioen

periods beginning on or after 1 January 2009). This

Industries NV (the ‘Company’) include the annual financial

Standard replaces IAS 1 Presentation of Financial

statements of the Company, its subsidiaries and those entities which are consolidated by the proportional method

Statements (revised in 2003) as amended in 2005. • Amendment to IAS 27 Consolidated and Separate

(together referred to below as the ‘Group’).

Financial Statements (applicable for annual periods

The consolidated financial statements are drawn up in

beginning on or after 1 July 2009). This Standard

conformity with the International Financial Reporting

amends IAS 27 Consolidated and Separate Financial

Standards (IFRS), as accepted within the European Union.

Statements (revised 2003).

In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations

• Amendment to IFRS 2 – Vesting Conditions and Cancellations (applicable for annual periods beginning on or after 1 January 2009). • Amendments to IAS 32 Financial Instruments:

Committee (the IFRIC) of the IASB that are relevant to

Presentation and IAS 1 Presentation of Financial

its operations and effective for annual reporting periods

Statements – Puttable financial instruments an

beginning on 1January 2006, all of which have been

obligations arising on liquidation (applicable for annual

endorsed by the European Union.

periods beginning on or after 1 January 2009). • IFRS 3 Business Combinations (applicable to business

Became applicable for 2007

combinations for which the acquisition date is on or after the beginning of the first annual reporting period

• IFRS 7 Financial Instruments: Disclosures (applicable for accounting years beginning on or after 1 January 2007) • IAS 1 Presentation of Financial Statements - Amendment - Capital Disclosures (applicable for accounting years beginning on or after 1 January 2007) • IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies (applicable for accounting years beginning on or after 1 March 2006) • IFRIC 8 Scope of IFRS 2 (applicable for accounting years beginning on or after 1 May, 2006) • IFRIC 9 Reassessement of Embedded Derivatives (applicable for accounting years beginning on or after 1 June 2006) • IFRIC 10 Interim Financial Reporting and Impairment (applicable for accounting years beginning on or after 1 November 2006)

28 I SIOEN INDUSTRIES I Annual Report 2007

beginning on or after 1 July 2009). This Standard replaces IFRS Business Combinations as issued in 2004. • IFRS 8 Operating Segments (applicable for accounting years beginning on or after 1 January 2009)

If a foreign activity is disposed of, the cumulative amount of the exchange rate differences that was recognised in

The consolidated annual financial statements give a

equity, is recorded in the income statement.

general overview of the Group’s activities and the results

Goodwill and adjustments to the fair value arising on the

obtained. They give an accurate picture of the entity’s

acquisition of a foreign entity are treated as assets and

financial position, financial performance and cash flow,

liabilities of the foreign entity and converted at the closing

and are drawn up on a going concern basis.

rate.

The annual financial statements are stated in thousands of euros, as the euro is the currency of the primary economic

Consolidation principles

environment in which the Group is active. The annual financial statements of foreign participations are converted

Subsidiaries

in accordance with the principles described in the section

Subsidiaries are companies over which the Company

‘Foreign currencies’.

exercises a decisive influence (‘control’). Control is the

The consolidated financial statements are presented on

power to steer an entity’s financial and operational policy

the basis of the historical cost method, unless otherwise

in order to derive benefit from its activities.

stipulated in the accounting principles set out below.

The consolidation of subsidiaries starts on the date on

SIOEN INDUSTRIES I An n u al Re p o r t 2007

General principles

which the Group acquires control over them and stops Foreign currencies

when it loses that control. The companies in question are

On the basis of the Group’s relevant economic

accounted for by the full consolidation method.

environment and its transactions, the euro has been

Subsidiaries’ annual financial statements are drawn up for

chosen as the reporting currency.

the same financial year as those of the parent company

Foreign subsidiaries’ financial statements are converted as

and on the basis of uniform financial reporting principles

follows:

for comparable transactions and other events in similar

Transactions in foreign currencies are converted at the

circumstances.

exchange rate which is applicable on the date of the transaction. On each balance sheet date, cash assets and

Combinations of companies

liabilities expressed in foreign currency are converted

If the Group takes over an entity or business activity, the

at the closing rate. Non-cash assets and liabilities which

identifiable assets, liabilities and contingent liabilities of

are shown at their fair value in a foreign currency are

the party which has been taken over are adopted at their

converted at the exchange rate which is applicable when

fair value.

their fair value was determined.

Subsidiaries’ financial statements are included in the scope

Gains and losses arising from such conversions are recorded

of consolidation from the date of acquisition until control

in the income statement. However, if they are deferred, they

ceases.

are recorded as equity. Assets and liabilities from the Group’s

The difference between the cost price and the acquiring

foreign activities are 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 significantly. The resultant exchange rate

reassessment of the fair values, is accounted for directly in

differences are recorded in equity, under the heading

the income statement.

“Conversion differences”.

If the group increases its interest in an investment in which

III. Notes to the consolidated financial statements III.1. KEY ACCOUNTING RULES it did not yet have control, the surplus or deficit compared

likely future economic benefits associated with the asset

with the net asset, after adjustment to the fair value that

concerned. All other expenditure is recorded in the

was acquired, is processed as if it were a new acquisition

income statement at the time it is incurred.

according to the methodology explained in the section above. If the group increases its interest in an investment

Licences, patents and similar rights

in which it already had control, the greater or lesser price

Expenditure on purchased licences, patents, trademarks

that was paid vis-à-vis the share in the net assets that was

and similar rights is capitalised and depreciated on a

acquired, is included directly in the company’s own equity.

straight-line basis over the contractual term, where

All intercompany transactions, intercompany balances

applicable, or over the estimate economic life, which is

and unrealised profits on intercompany transactions are

deemed to be no more than five years.

eliminated unless they relate to a permanent write-down. Minority interests are valued on the basis of their share

Computer software

in the fair value of the recorded assets, liabilities and

Expenditure relating to the development or maintenance

contingent liabilities.

of computer software is normally offset against the result of the period in which it is incurred. Only external

Balance sheet

expenditure which is directly related to the purchase and implementation of purchased software is recorded

Intangible assets

as an intangible asset and depreciated on a straight-line

Intangible assets are valued at cost price. Intangible assets

basis over three years. Purchased ERP software and the

are recognised if it is likely that the Group will receive

associated implementation costs are depreciated on a

the associated future economic benefits and if the asset’s

straight-line basis over seven years.

cost price can be reliably determined. After their initial recognition in the accounts, all intangible assets are

Research and development

valued at cost price, less any accumulated depreciation

Research expenditure with a view to the acquisition of

or impairments. Intangible assets are depreciated on a

new scientific or technological insights or knowledge is

straight-line basis over the best estimate of their economic

included as a cost in the income statement as it arises.

life.

Development expenditure in which research results are

The remaining economic life and the depreciation method

used in a plan or design for the production of new or

used are reassessed at the close of every financial year.

substantially improved products and processes prior

Any change in the economic life of an intangible asset is

to commercial production or implementation is only

treated as a revaluation.

recognised in the balance sheet if all the following

Internally generated intangible assets are only recognised

conditions are satisfied:

if all the following conditions are satisfied:

• t he product or process is precisely defined and the • an identifiable asset has been generated; • i t is likely that the generated asset will yield future economic benefits; and

• the asset’s cost price can be reliably determined. Subsequent expenditure on capitalised intangible assets is only included in the balance sheet if it increases the

30 I SIOEN INDUSTRIES I Annual Report 2007

expenditure is individually identifiable and reliably measurable;

• t he product’s technical feasibility has been sufficiently demonstrated;

• t he product or process will be commercialised or used within the company;

Subsequent expenditure associated with a tangible fixed

(e.g. a potential market exists for the product or its

asset is usually recorded in the income statement as it is

internal usefulness has been sufficiently proven);

incurred. Such expenditure is only capitalised if it can

• t he appropriate technical, financial and other resources are available to finalise the project.

be clearly shown to result in an increase in the expected future economic benefits from the use of the tangible fixed asset compared with the original estimate. Repair and

If the above criteria are not satisfied, the development costs

maintenance costs which do not increase the likely future

are taken to the income statement as they arise. Capitalised

economic benefits are recorded as costs as they are incurred.

development costs are depreciated on a straight-line basis over the expected duration of the generated benefits from

The different categories of tangible fixed assets are

the start of commercial production or the implementation

depreciated by the straight-line method over their

of the product or process.

estimated economic life. Depreciation commences once the assets are ready for their intended use.

Goodwill Goodwill represents the additional premium paid on the

The estimated economic life of the main tangible fixed

acquisition of an interest over the fair value of the Group’s

assets lies within the following ranges:

SIOEN INDUSTRIES I An n u al Re p o r t 2007

• t he assets will generated future economic benefits

interest in the acquired assets and liabilities at the time of acquisition.

Buildings:

20 years

Goodwill is recorded as an asset and subjected to a

Machines:

5 to 15 years

impairment test at least once a year. Any impairment loss

Equipment:

10 years

is immediately recorded in the profit and loss account and

Furniture:

5 years

is not subsequently written back.

Hardware:

5 years

Negative goodwill represents the amount by which the

Vehicles:

5 years

fair value of the Group’s interest in the acquired assets and liabilities at the time of acquisition exceeds the price paid.

If an asset’s book value is lower than the estimated

On the disposal of a subsidiary, associated undertaking

realisable value, it is immediately written down to the

or entity over which joint control is exercised, the related

realisable value.

goodwill is included in the calculation of the gain or loss on disposal.

The gain or loss on the sale or disposal of an asset is determined as the difference between the net income

Tangible fixed assets

on disposal and the asset’s book value. This difference is

Tangible fixed assets are valued at cost price less

recorded in the income statement.

accumulated depreciation and impairments. A tangible fixed asset is recognised if it is likely that the Group will

Lease agreements

receive the associated future economic benefits and if the asset’s cost price can be reliably determined.

Financial leasing

The cost price includes all direct costs and all directly

Lease agreements which assign to the Group all the main

attributable costs incurred in order to bring the asset to

risks and benefits associated with ownership are regarded as

the location and condition necessary for it to function in

financial leasing. The assets acquired under financial leasing

the intended way.

arrangements are stated in the balance sheet at their fair

III. Notes to the consolidated financial statements III.1. KEY ACCOUNTING RULES value at the start of the lease agreement, or, if this is lower,

Financial investments are valued at the fair value of the

at the present value of the minimum lease payments, less

price paid, plus the transaction costs. Investments held

accumulated depreciation and impairments.

for trading or available for sale are recorded at their fair

The discount rate used in the calculation of the present

value. If investments are maintained for trading purposes,

value of the minimum lease payments is the interest

the gains and losses arising from changes in the fair value

rate implicit in the lease agreement, where this can

are taken to the profit and loss account for the period in

be determined, or otherwise the companyâ&#x20AC;&#x2122;s marginal

question. In the case of investments which are available for

borrowing rate. Initial direct costs are included in the

sale, gains and losses arising from changes in the fair value

capitalised amount. Lease payments are broken down into

are immediately recognised in equity until the financial

interest charges and repayments of the principal.

asset is sold or subject to impairment.

The interest charges are spread over the duration of the

In this case, the cumulative gain or loss which had

lease agreement such that a constant periodic interest rate

previously been recognised in equity is included in the

is obtained on the outstanding balance for each period.

income statement for the period. Participations which

A financial lease agreement results in the recording of both

are classified as available for sale, which are not listed on

a depreciation amount and an interest charge in each

an active market and whose fair value cannot reliably be

period. The depreciation rules for assets acquired under

determined using alternative valuation rules are valued at

financial leasing arrangements are consistent with those for

cost price. Financial investments which are held until they

assets over which full ownership is acquired.

mature are valued at their amortised cost price, using the effective interest method. This does not apply to short-term

Operational leasing

deposits, as these are valued at their cost price.

Lease agreements in which all the main risks and benefits associated with ownership reside with the lessor are regarded

Investment grants

as operational leasing. In operational leasing, the lease

Investment grants relating to the purchase of tangible fixed

payments are recorded as costs and spread on a straight-line

assets are offset against the purchase price or manufacturing

basis over the lease period. The total value of discounts or

cost of the assets in question. The expected amount is

benefits granted by the lessor is offset against the leasing costs

recorded in the balance sheet at the time of initial approval,

and spread on a straight-line basis over the lease period.

and, if necessary, corrected subsequently at the time of definitive allocation of the grant. The grant is recorded in the

Property investments

income statement in proportion with the depreciation of the

A property investment, i.e. one which is maintained in

tangible fixed 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 a

Inventories are valued at the lower of cost price or realisable

property investment are recorded in the income statement

value. The cost price includes all direct and indirect costs

for the period in which they arise.

incurred to bring the goods to the stage of completion they have reached on the balance sheet date. The cost price is

Financial investments

calculated using the weighted average cost price method.

Investments are recorded in/ removed from the accounts

The realisable value is the estimated sale price minus

on the transaction date, i.e. the date on which an entity

the estimated finishing costs and costs associated with

undertakes to buy or sell the asset in question.

marketing, sale and distribution.

32 I SIOEN INDUSTRIES I Annual Report 2007

deferred tax receivables are recognised to the extent

Short-term receivables are stated at nominal value, less

that it is likely that a taxable profit will be available

suitable provisions for any debts regarded as doubtful.

against which the recoverable temporary difference can

Long-term receivables are valued at amortised cost price.

be offset. Such assets and liabilities are not recorded if the temporary differences arise from goodwill or from

Cash and cash equivalents

the initial recognition (other than in connection with a

Cash and short-term investments which are maintained

business combination) of other assets and liabilities in a

until the end of the period are stated at their cost

transaction which has no effect on the taxable profit or

price. Cash equivalents are short-term, extremely liquid

the profit before tax.

investments which can be converted immediately into cash of a known amount, and which do not carry any

Deferred tax liabilities are recognised for taxable temporary

material risk of change of value.

differences which relate to investments in subsidiaries, associated undertakings and enterprises accounted for by

Financial liabilities and equity instruments

the equity method unless the Group can determine the time

Financial liabilities and equity instruments are classified

when the temporary difference will be resolved or if it is likely

on the basis of the economic reality of the contractual

that the temporary difference will not be resolved in the near

agreement. An equity instrument is a contract which

future.

includes the residual right to a share in the Groupâ&#x20AC;&#x2122;s assets,

The book value of deferred tax receivable is assessed at every

after the deduction of all liabilities. Equity instruments

balance sheet date and reduced if it is no longer likely that

issued by the Company are recorded to the amount of the

sufficient taxable profit will be available to make it possible to

received consideration, less the direct costs of issue.

use all or some of the benefit of the deferred tax receivable.

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Receivables

Deferred taxes are valued on the basis of the tax rates Income tax

which are expected to apply in the period in which the tax

Tax expenses consist of tax due for the reporting period

recovery is realised or the liability is settled. Deferred taxes

and deferred taxes. The tax due for the reporting period is

are recorded as income or expenses in the income statement

based on the taxable profit for the period. Taxable profit

for the period, unless the taxation arises from a transaction or

differs from the net profit in the income statement, because

event that has been directly included in equity. In this case,

it excludes certain items of income or expenditure which

the deferred tax is also accounted for in equity.

are taxable or deductible in subsequent years, or which will never be taxable or 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 accounted 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

III. Notes to the consolidated financial statements III.1. KEY ACCOUNTING RULES sheet (the ‘net liability’) corresponds to the present value

‘Past service costs’ refer to the increase in the present value

of the gross liability, adjusted for unrecorded actuarial

of the gross liability for services provided by employees

gains and losses, after deduction of the fair value of the

in previous periods and which result in the current period

scheme investments and unrecorded past service costs.

from the introduction of or changes to payments after

The ‘present value of the gross liability of a defined benefit

retirement or other long-term personnel remuneration.

scheme’ is the present value, before deduction of the

Past service costs are taken gradually to the income

scheme investments, of expected future payments required

statement and spread on a straight-line basis over the

to settle the liability which results from the employee’s

average term until the benefit rights have been acquired.

service record in the current and previous periods.

If benefit rights can be regarded as acquired as a result of a new scheme or changes to an existing scheme, prior

The discounted value of the liability arising from defined

service costs are immediately recorded in the income

pension rights and the assigned pension costs associated

statement.

with the year of service and prior service pension costs are calculated by accredited actuaries using the

If the liability to be recorded on the balance sheet is

projected unit credit method.

negative, the asset entry that is included may not exceed the total unrecorded cumulative actuarial net losses

The discount rate corresponds to the rate of return

and prior service costs and the present value of future

on the balance sheet date on corporate bonds with a

repayments from the scheme or reductions in future

high degree of creditworthiness and a remaining term

contributions to the scheme (the ‘asset ceiling’ principle).

comparable with the term of the Group’s liabilities.

In this case, however, the actuarial gains and losses are

The discount rate is adjusted annually to reflect the

immediately taken to the income statement if deferring

market return from high-value corporate bonds whose

them would result in the recording of a gain purely as a

term is consistent with the estimated term of the gross

consequence of an actuarial loss in the current financial

liabilities arising from payments after retirement.

year, or of a loss purely and simply as a consequence of an actuarial gain in the current financial year. Past service costs

‘Actuarial gains and losses’ include adjustments on the

are in this case likewise immediately included if spreading

basis of experience (the consequences of differences

them out on a straight-line basis would result in the

between previous actuarial assumptions and what has

recording of a gain purely as a consequence of an increase

actually happened) and the consequences of changes to

in past service costs during the current financial year.

actuarial assumptions. In principle, actuarial gains and losses are not recognised at the moment they arise, but,

Other long-term personnel remuneration

to the extent that the cumulative amount falls outside a

Other long-term personnel remuneration such as long-

certain ‘corridor’, they are spread on a straight-line basis

service bonuses is accounted for using the ‘projected

over the expected average remaining working life of the

unit credit’ method. However, the accounting treatment

employees who are members of the scheme.

differs from that of defined benefit schemes, in that

This corridor is determined individually for each defined

actuarial gains and losses and past service costs are

benefit scheme and has lower and upper limits of 110%

recorded immediately.

and 90% respectively of the higher of the present value of the gross liabilities and the fair value of the scheme

Provisions

investments.

Provisions are established in the balance sheet if the

34 I SIOEN INDUSTRIES I Annual Report 2007

Derivative financial instruments are treated as follows:

the balance sheet date as a result of an event in the past,

Cash flow hedging

for which it is likely that an outlay will be required of

Changes in the fair value of derivative financial

resources which contain economic benefits, and if this

instruments which are ascertained to provide effective

outlay can be reliably estimated. The amount recorded

hedging for future cash flows are recorded directly

as a provision is the best estimate on the balance sheet

in equity, while the non-effective element of the gain

date of the outlay required to satisfy the existing liability,

or loss on the hedging instrument is recorded in the

if necessary discounted if the time value of money is

profit and loss account. If the cash flow hedging of a

relevant.

fixed commitment or a highly likely future transaction results in the recognition of an asset or liability, then the

Provisions for reorganisation costs are recorded if the

associated profits and losses on the derivative instrument

Group has a detailed formal plan for the reorganisation

which were formerly recorded in equity are now

that has already been communicated to the parties

included in the initial valuation of the asset or liability

concerned before the balance sheet date.

at the time of recognition. For hedges which do not result in the recognition of non financial asset or liability,

Interest-bearing financing

amounts which were deferred in equity are recorded in

Interest-bearing financing is recorded at the value of the

the profit and loss account for the period during which

income received less transaction costs incurred. It is then

the hedged item affects the gain or loss.

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Group has a legally enforceable or de facto liability on

valued at amortised cost price using the effective interest rate method. Any difference between the income (after

Fair value hedging

deduction of transaction costs) and the redemption

A derivative instrument is recorded as a fair value

value (including premiums payable on redemption) is

hedge if the instrument hedges against the risk that

recorded in the income statement over the period of the

the fair value of the recorded assets and liabilities may

financing.

change. Derivatives accounted for as fair value hedges and hedged assets and liabilities are recorded at their

Trading accounts payable and other payables

fair value. The corresponding changes in the fair value

Non-interest-bearing trade liabilities are valued at their

are recorded in the income statement. Changes in the

cost price, which represents the fair value of the amount

fair value of derivative financial instruments which do

payable.

not qualify as hedging transactions are recorded in the income statement when they arise. Hedge accounting

Derivative financial instruments

is discontinued when the hedging instrument expires, is

The Group uses various derivatives to hedge against

sold, terminated or exercised or when the hedging no

currency risks arising from its operating activities,

longer satisfies the criteria for hedge accounting.

financing and investment activities. The net risk of all

In this case the cumulative gain or loss on the hedging

Group subsidiaries is managed centrally in line with

instrument which is accounted for directly in equity

the objectives and rules established by the Group

continues to be recorded separately in equity until the

management. It is the Groupâ&#x20AC;&#x2122;s policy to avoid engaging

expected future transaction takes place. If an expected

in speculative transactions or transactions with a

future transaction is not expected to take place any

leverage effect and not to engage in trading in financial

more, the cumulative gain or loss shown in the equity is

instruments under any circumstances.

transferred to the income statement for the period.

III. Notes to the consolidated financial statements III.1. KEY ACCOUNTING RULES Revenue

average growth percentages are in conformity with the

Revenue is recorded if it is likely that the company

forecasts included in the sector reports. The discount rate

will receive the economic benefits associated with

used is the estimated weighted average equity cost of the

the transaction and the amount of the revenue can

group before taxes, and takes account of the current market

be measured reliably. Turnover is recorded after the

evaluations of the time value of money and the risks for

deduction of turnover tax and discounts.

which the future cash flows are adapted.

Revenue from the sale of goods is recorded when the delivery and the complete transfer of risks and benefits

If the realisable value of an asset (or cash flow generating

have taken place.

unit) is estimated to be lower than its book value, the asset’s

Interest revenue is recorded on a time basis that reflects

(or cash flow generating unit’s) book value is reduced to its

the actual return on the asset. Royalties are included on

realisable value. An impairment loss is immediately recorded

an accrual basis in accordance with the conditions of the

in the income statement.

agreement.

If an impairment loss is subsequently written back, the asset’s

Dividends are recorded when the shareholder’s right to

(or cash flow generating unit’s) book value is increased to

receive them has arisen.

the revised estimate of its realisable value, but only to the extent that the increased book value is no higher than the

Miscellaneous

book value that would have been recorded if no impairment loss had been recorded for the asset (or cash flow generating

Impairment of tangible and intangible assets

unit) in previous years. However, impairment losses on

As goodwill, which is subjected to an impairment test

goodwill are never written back.

every year, intangible assets and tangible fixed assets also are subject to an evaluation when there is an indication

Post-balance sheet events

that their book value may be lower than their realisable

Post-balance sheet events which provide additional

value. If an asset does not generate a cash inflow which

information about the company’s situation on the balance

is independent of other assets, the Group estimates the

sheet date (‘adjusting events’) are included in the annual

realisable value of the cash flow generating unit to which

accounts. Other post-balance sheet events are only

the asset belongs.

mentioned in the notes if they may have a significant impact.

The realisable value is the highest value of the fair value

The most important assessment criteria in the

minus sales costs and the value to the business.

application of the Valuation rules In the application of the valuation rules, in certain cases an

The method of the going concern value uses cash flow

accounting assessment must be made. This assessment is

forecasts based on the financial budget that is approved

done by making the most accurate assessment possible of

by the management. Cash flows after this period

uncertain future evolutions. The management determines

are extrapolated by making use of the most justified

its assessment on the basis of different realistically assessed

percentage growth over the long term for the sector

parameters, such as future market expectations, sector

in which the cash flow-generating unit is active. The

growth rates, industry studies, economic realities, budgets

management bases its assumptions (prices, volumes,

and multi-year plans, expected profitability studies, etc. The

return) on past performances and on its expectations with

most important elements within the group that are subject

regard to the development of the market. The weighted

to this are: impairments, provisions and deferred tax items.

36 I SIOEN INDUSTRIES I Annual Report 2007

III.2. SEGMENT INFORMATION

For management purposes, the Group is organised into four major operating divisions – Coating, Apparel, Chemicals 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 earlier in this annual report. For more details on these divisions reference is made to the first part of this annual report. Inter-segment sales are undertaken at prevailing market conditions. The segment liabilities, including the centrally contracted financial debt, have been allocated according to the capital employed by the segment. The assets and liabilities of the head office (group) have been allocated to the segments as far as possible. Segments 2007

Coating

Apparel

Industrial applications

Chemicals

Head office

Elimina– tions -44 373

Net sales

201 230

69 929

89 661

63 878

External sales

170 241

69 924

85 995

54 165

Intersegment sales

30 989

3 666

9 713

Segment profit from operational activities

26 642

7 814

2 323

2 800

Conso– lidated 380 350 380 350

-44 373

0 39 578

Unallocated profit from operational activities

2 014

Profit from operational activities

38 792

Net financial charges

-5 463

-1 299

-1 090

-2 062

1 829

-287

Profit before taxation

-11 234

Profit after taxation

19 186 217 456

57 965

54 547

59 847

-14 349

Unallocated assets

378 112 217 456

57 965

54 547

59 847

-14 349

Unallocated liabilities

Depreciation

375 466 2 646

Total consolidated liabilities Other information

375 466 2 646

Total consolidated assets Segment liabilities

-8 372 30 419

Taxes Segment assets

378 112 Coating

Apparel

Industrial applications

Chemicals

Head office

Elimina– tions

Conso– lidated

11 521

1 211

2 105

4 556

936

20 330

Write downs of inventories

187

1 574

-190

1 604

Write downs of receivables

431

-7

157

661

Additions to/(reversals) of provisions

-259

-34

-215

38 521

10 591

4 584

7 325

-138

287

61 171

1 500

140

1 992

1 324

3 525

14 040

1 279

2 873

1 413

1 565

21 169

EBITDA Impairments Investments in intangible fixed assets Investments in tangible fixed assets

SIOEN INDUSTRIES I An n u al Re p o r t 2007

PRIMARY SEGMENT INFORMATION

III.2. SEGMENT INFORMATION PRIMARY SEGMENT INFORMATION

Segments 2006

Coating

Apparel

Industrial applications

Chemicals

Head office

Elimina– tions -79 855

Net sales

187 343

75 270

83 687

35 938

External sales

157 852

75 211

80 692

25 617

Intersegment sales

29 492

2 994

10 321

Segment profit from operational activities

15 909

3 229

6 084

3 061

Conso– lidated 339 389 339 389

-42 867

0 28 285

Unallocated profit from operational activities

-2 394

Profit from operational activities

25 891

Net financial charges

-4 850

-1 616

-1 029

-596

1 554

-29

-6 565

Profit before taxation

19 326

Taxes

-7 172

Profit after taxation Segment assets

12 153 274 296

58 825

55 225

58 634

-78 680

Unallocated assets

3 534

Total consolidated assets Segment liabilities

371 833 274 296

58 825

55 225

58 634

-78 680

Unallocated liabilities

Depreciation

368 299 3 534

Total consolidated liabilities Other information

368 299

371 833 Coating

Apparel

Industrial applications

Chemicals

Head office

Elimina– tions

Conso– lidated 17 919

12 311

1 499

1 691

1 638

780

Write downs of inventories

1 690

366

-1

2 116

Write downs of receivables

-810

-356

-522

-198

-1 886

Additions to/(reversals) of provisions

605

123

804

28 077

6 138

7 742

4 500

-1 642

44 843

1 195

1 307

2 712

2 773

14 140

721

2 561

5 123

548

23 097

EBITDA Reorganisation costs Investments in intangible fixed assets Investments in tangible fixed assets

38 I SIOEN INDUSTRIES I Annual Report 2007

III.2. SEGMENT INFORMATION

2007

Gross sales

Assets

Capital Expenditure

Germany

74 672

19.5%

240

0.1%

0.0%

France

71 304

18.6%

50 669

13.3%

1 830

7.4%

Belgium

43 287

11.3%

270 294

71.0%

20 043

81.2%

Eastern Europe

28 683

7.5%

14 352

3.8%

1 539

6.2%

Netherlands

32 585

8.5%

11 569

3.0%

0.2%

Great Britain

27 212

7.1%

5 615

1.5%

0.1%

Italy

15 862

4.1%

0.0%

9 798

2.6%

0.0%

Scandinavia Spain

11 652

3.0%

0.0%

USA

6 365

1.7%

3 212

0.8%

0.1%

Ireland

4 147

1.1%

3 498

0.9%

0.1%

Switzerland

7 239

1.9%

0.0%

Austria

4 158

1.1%

0.0%

Other

46 171

12.1%

21 221

5.6%

1 140

4.6%

383 137

100.0%

380 669

100.0%

24 676

100.0%

Subtotal Discounts

2 786

Net Sales

380 350

2006

Gross sales

Assets

Capital Expenditure

Germany

68 519

20.0%

1 376

0.4%

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%

0.0%

Great Britain

23 173

6.8%

1 952

0.5%

0.0%

Italy

14 232

4.2%

0.0%

Scandinavia

9 637

2.8%

0.0%

Spain

8 979

2.6%

0.0%

USA

8 654

2.5%

3 386

0.9%

151

0.6%

Ireland

4 206

1.2%

3 127

0.9%

0.2%

Switzerland

4 138

1.2%

0.0%

Austria

3 759

1.1%

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

SIOEN INDUSTRIES I An n u al Re p o r t 2007

SECONDARY SEGMENT INFORMATION

III.3. EXCHANGE RATES

Code EUR USD GBP RMB PLN TDN UAH

RATE

2006

2007

average

1.0000

closing

1.0000

average

1.2632

1.3794

closing

1.3170

1.4721

average

0.6819

0.6873

closing

0.6715

0.7334

average

10.0492

10.4536

closing

10.2796

10.7525

average

3.9011

3.7749

closing

3.8310

3.5935

average

1.6742

1.7557

closing

1.7106

1.7919

average

6.3686

6.9457

closing

6.6551

7.4354

40 I SIOEN INDUSTRIES I Annual Report 2007

2006

2007

342 190 1 641 -4 442 339 389

384 507 1 881 -6 038 380 350

Purchases Transport cost goods purchased

165 329 1 144

187 965 1 207

Stock variation Subcontracting Personnel expenses Depreciation Services and other goods Amounts written off inventory and receivables Cost of goods sold

-3 440 5 669 43 439 14 589 38 590 2 116 267 436

-7 905 3 945 46 165 15 252 40 957 1 604 289 191

4 9 725 303 7 428 -1 886 15 573

0 11 219 90 8 490 661 20 460

3 272 544 3 206 7 021

3 909 544 2 900 7 352

11 245 2 483 8 737 22 465

11 349 4 444 9 945 25 738

54 -804 0 548 -910 718 697 304

129 215 -234 2 025 -1 485 1 408 623 2 682

Net sales Sales of goods Subcontracting Commissions and discounts Net sales Cost of SALEs

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.4. DETAILED INCOME STATEMENT

Sales and marketing Subcontracting Personnel expenses Depreciation Other services and other goods Amounts written off inventory and receivables Sales and marketing Research and development Personnel expenses Depreciation Other services and goods Research and development expenses General and administrative expenses Personnel expenses Depreciation Other services and goods General overhead expenses Other operating income and expenses Gain/loss on realization fixed assets Provision liabilities & charges Exceptional loss Received indemnities Local taxes Other Received Rent Other operating income and expenses

III.4. DETAILED INCOME STATEMENT

2006

2007

-1 307 -1 307

-1 500 -1 500

25 891

38 792

562 -7 512 8 -4 390 -506 183 -245 -174

162 -7 378 0 -35 499 -1 275 366 -340 -785

-118 0 -123 101 -63 591 388

-521 354 -152 130 -41 -207 -436

Other Financial result

170 -6 565

65 -8 372

Taxes Current tax Deferred tax Taxes

-6 782 -391 -7 172

-9 319 -1 915 -11 234

Earning after taxes Earnings after taxes

12 153

19 186

Non recurring result Non recurring costs Non recurring result Operating result X. OPERATING RESULT Financial result Interests received Interests paid Currency income other Currency expenses other Currency income Trade Receivables Currency expenses Trade Receivables Currency income Trade Payables Currency expenses Trade Payables Realized currency result Revaluation expenses Trade Receivables Revaluation income Trade Receivables Revaluation expenses Trade Payables Revaluation income Trade Payables Fair Value hedging instruments Revaluation other Unrealized currency result

42 I SIOEN INDUSTRIES I Annual Report 2007

2006 Profit before taxes

19 326

Tax on profit of fiscal entities against theoretical local tax rate Theoretical tax rate

(1)

6 532

2007 30 419

33.80%

10 471

34.42%

Tax impact of change in tax rate

(2)

non-deductible expenses specific tax regimes deferred tax assets not recognised

1 147

5.94%

312

1.61%

-810 1 597

200

0.66%

-4.19%

-864

-2.84%

8.26%

1 137

3.74%

new valuation allowance on previously recognised deferred tax assets usage of non-recognised deferred tax assets Regularisation of current tax on previous years carry back

(3)

notional interest deduction

-1 393

1 819

5.98%

-7.21%

-1 344

-4.42%

584

1.92%

0.35%

-186

-0.96%

-645

-3.34%

-797

-2.62%

Deferred taxes on undistributed reserves

252

1.30%

-167

-0.55%

Tax on distributed profits (DBI)

295

1.53%

199

0.65%

0.02%

-3

-0.01%

7 172

37.11%

11 234

36.93%

Other Tax on profit as shown in the P&L

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Reconciliation between taxes and result before taxes

(1) is the weighted average tax rate (2) tax rate in Netherlands last year 25.5% while before 31.5 % (3) tax paid in 2003 in Pennel could be claimed back last year

DIVIDENDS The dividend for the period ending 31 December 2006 amounted to EUR 0.26 per share. The proposed dividend for the period ending 31 December 2007 is EUR 0.45 per share. The proposed dividend awaits shareholdersâ&#x20AC;&#x2122; approval at the annual general meeting and is not shown as a liability in these financial statements.

III.4. DETAILED INCOME STATEMENT

Earnings per share The calculation of the basic earnings and diluted earnings per share is based on the following data:

Net earnings for the period Net earnings from continuing activities

2006

2007

12 153

19 186

12 153

19 186

Weighted average number of outstanding shares

21 391 070

Ordinary shares

21 391 070

Weighted average number of shares for ordinary profit per share

21 391 070

Basic earnings per share

0,57

0,90

Basic earnings per share from continuing activities

0,57

0,90

2006

2007

Diluted earnings per share Diluted elements Net earnings from continuing activities

12 153

19 186

Earnings attributable to ordinary shareholders

12 153

19 186

Weighted average number of outstanding ordinary shares

21 391 070

Weighted average number of shares for diluted earnings per share

21 391 070

Diluted earnings per share

0,57

0,90

Diluted earnings per share from continuing activities

0,57

0,90

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 2006 and 2007.

44 I SIOEN INDUSTRIES I Annual Report 2007

III.5. Detailed balance sheet

2007

Opening balance Purchases

Development expenses : acquisition Concessions, patents, licences etc.: acquisition Software : acquisition Customer portfolio : acquisition TOTAL Concessions patents licences etc.: depreciation Software : depreciation Customer portfolio : depreciation TOTAL Intangible assets

7 859 2 243 11 860 17 716

2006

Opening balance Purchases

Exchange Acquired rate via business Transfers differences combination Depreciation

10 082

-15

11 345 8 150 29 576 1 758

1 519 0 1 537

-22

8 1 653 8 399 2 568 12 628 1 512

0 0

Closing balance

10 084

0 1 989 1 989 0

0 2 101

1 184 -62

14 026 10 139 34 249 3 782

0 0 0 1 989

533 1 217 3 851 -3 851

-208 -270 1 453

8 380 3 253 15 415 18 834

Exchange Acquired rate via business Transfers differences combination Depreciation

Other

Closing balance

-36 -15 -12

0 1 537

Other

-27 -9

1 184

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.1 INTANGIBLE FIXED ASSETS

-8 6 2 767 2 773

7 334 1 514 10 361 2 267

15 7

1 0 2 773

1 6

8 418

-16 0 -11 4

180 5 582 14 180

-10 0 -6 -5

173 0 173 14 007

10 082

0 242 361 729 1 333 -1 333

0 0

0 0 0

11 345 8 150 29 576 1 758 7 859 2 243 11 860 17 716

Total purchases of intangible fixed assets amount to

Customer portfolios of Fillink and Clariant, purchased in

EUR 3.5 million in 2007 compared with EUR 2.8 million

2007, were valued at respectively EUR 1.5 million and

in 2006. Purchases in 2007 mainly relate to the SAP

EUR 0.5 million and are being depreciated over 5 years.

software implementation project. On the other hand, two customer portfolios, related to Fillink Technologies

Depreciation of intangible fixed assets amounts to

NV (share deal) and Clariant France (asset deal), were

EUR 3.9 million and is shown in the income statement by

purchased by the division chemicals in 2007.

function. Depreciation of customer portfolios is included in administration expenses.

Purchases of software in 2006 mainly consisted of SAP implementation costs. As SAP was not yet in use in 2006,

No development expenses have been capitalized.

no depreciation was booked. As from 2007, the ERP software and associated implementation costs are partly

No impairments have been recorded.

implemented (Roltrans Group) and are being depreciated over seven years on a straight-line basis.

III.5. Detailed balance sheet

Opening balance

Decrease

Increase

Exchange rate differences

Acquired via business combination

Closing balance

III.5.2 GOODWILL

17 935

-508

152

17 585

2007 Goodwill 2006 Goodwill

16 548

-2

1 388

17 935

Allocation to segments Coating

10 950

Apparel

2 367

Industrial application Chemicals

15 4 253

In January 2007 Fillink Technologies SA was purchased by

The recoverable amount of a cash flow-generating unit is

the chemicals division. The purchased assets were included

determined on the basis of the going concern value. For

in the consolidated annual accounts using the purchase

calculating the going concern value, cash flow forecasts

accounting method. The goodwill of EUR 0.2 million is not

are used that are based on financial budgets for 1 year

depreciated, in line with IFRS 3.

approved by the Board of Directors, and projections. These projections contain extrapolations making use of the most

In October 2006 Richard Colorants SA, Copidis SAS and

justified growth percentage of 2% to 3% that cannot be

Astra SA were purchased, resulting in a goodwill of

higher than the average growth percentage over the long

EUR 1.4 million. In 2007 goodwill decreased by

term for the sector in which the cash flow-generating unit

EUR 0.5 million, related to the Richard group. A deferred

is active, that is, between 2% and 3%.

tax asset was recognised in 2007 (tax loss carryforward of Astra SA) from the merger with Richard SA in 2007. This

Management bases its assumptions on past performances

has been subtracted from the initial goodwill.

and on its expectations over the coming years. The discount rate used is calculated per segment and varies

The carrying amount of goodwill acquired in a business combination must be allocated on a reasonable and consistent basis to each cash flow-generating unit or the smallest group of cash flow-generating units, in conformity with IAS 36.

46 I SIOEN INDUSTRIES I Annual Report 2007

between 6% and 10%.

% holding 2007

2006

Sioen n.v.

Belgium

Ardooie

99.47%

apparel

Veranneman Technical Textiles n.v.

Belgium

Ardooie

98.72%

coating

European Master Batch n.v.

Belgium

Bornem

100.00%

chemicals

Coatex n.v.

Belgium

Poperinge

100.00%

industrial applications

Sioen France s.a.s.

France

Narbonne

99.83%

apparel

Confection Tunisienne de Sécurité s.a.

Tunesia

Tunis

89.25%

apparel

Donegal Protective Clothing Ltd.

Ireland

Derrybeg

100.00%

apparel

Sioen Coating Distribution n.v.

Belgium

Ardooie

100.00%

coating

Siofab s.a.

Portugal

Santo Tirso

100.00%

coating

P.T. Sungintex

Indonesia

Jakarta

100.00%

apparel

Saint Frères s.a.s.

France

Flixecourt

99.97%

coating

Sioen Fabrics s.a.

Belgium

Moeskroen

100.00%

coating

Saint Frères Confection s.a.s.

France

Flixecourt

100.00%

industrial applications

P.T. Sioen Indonesia

Indonesia

Jakarta

100.00%

apparel

Sioen Tunisie s.a.

Tunesia

Tunis

99.83%

apparel

Sioen Fibres s.a.

Belgium

Moeskroen

100.00%

coating/apparel

TIS n.v.

Belgium

Haaltert-Kerksken

100.00%

coating

Mullion Manufacturing Ltd.

United Kingdom

Scunthorpe

100.00%

apparel

Sioen Shanghai

China

Shanghai

100.00%

coating

Sioen Zaghouan s.a.

Tunesia

Zaghouan

99.50%

apparel

Sioen Nordifa s.a.

Belgium

Luik

100.00%

industrial applications

Inducolor s.a.

Belgium

Meslin-L’Evêque

100.00%

chemicals

Sioen Coating n.v.

Belgium

Ardooie

99.47%

coating

Pennel Automotive s.a.s.

France

Roubaix

100.00%

coating

Roland International b.v.

The Netherlands

Tegelen

100.00%

industrial applications

Roland Planen GmbH

Germany

Werlte

100.00%

industrial applications

Roltrans Group America Inc.

USA

Arlington

100.00%

industrial applications

Roltrans Group Polska Spzoo

Poland

Konin

100.00%

industrial applications

Roland Tilts UK Ltd.

United Kingdom

Bradford

100.00%

industrial applications

Monal s.a.

Luxemburg

100.00%

industrial applications

Roltrans Group b.v.

Nederland

Tegelen

100.00%

industrial applications

Roland-Ukraine Llc

Ukraine

Rivne

100.00%

industrial applications

Sioen USA Inc.

USA

Aberdeen

100.00%

apparel

Richard s.a.s.

France

Lomme

100.00%

chemicals

Fillink Technologies n.v

België

Brussel

100.00%

chemicals

Sioen Industries n.v.

België

Ardooie

100.00%

group

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.3 SUBSIDIARIES

Changes with respect to 2006: Fillink Technologies n.v. was acquired in January 2007 Richard s.a.s. merged in 2007 with Copidis s.a.s. and Astra Colorants s.a.

Land : acquisition Buildings : acquisition Infrastructure buildings : acquisition Plant, machinery and equipment : acquisition Furniture : acquisition Vehicles : acquisition Hardware : acquisition Leasing land and buildings : acquisition Leasing furniture and equipment: acquisition Assets under construction : acquisition TOTAL Land : impairment Plant, machinery and equipment : impairment TOTAL Buildings : depreciation Infrastructure buildings : depreciation Plant, machinery and equipment : depreciation Furniture : depreciation Vehicles : depreciation Hardware : depreciation Leasing land and buildings : depreciation Leasing furniture and equipment : depreciation Assets under construction : depreciation TOTAL a) Land b) Buildings 2) Plant, Machinery and Equipment 3) Furniture and Vehicules 4) Fixed assets held under leasing and other simil 5) Assets under construction and advance payments Property, plant and equipment

17 633

267

53 003

2 295

-20

21 940

1 039

-7

162 721

11 645

-229

4 222

134

-8

3 578

622

-217

5 612

403

19 378

107

8 036

4 628 21 140

Closing balance

Impairment

-312

56 272

-17

22 976

-2 042

184

-442

171 838

-102

4 247

-14

3 668

-10

-109

5 897

-33

19 482

-523

Other

-132 1 306

-302

296 168

Depreciation

Exchange rate differences

Transfers

Sales

Disposals

Purchases

2007

Opening balance

III.5.4 TANGIBLE FIXED ASSETS

23 385 13 160

-1

92 955

-119

3 865

-6

2 650

-132

-2 341

-1 472

-132

-909

17 782

-1 184

10 015

-1 184

312 219

1 500

-132

-91

2 155

1 501

14 675

-441

10 916

-76

101 461

-1 775

-200

1 500

25 322

-92

151

3 918

346

-1

2 669

4 400

-5

-91

521

4 826

5 330

-21

1 110

6 430

3 0 145 748

0 0

-283

-1 974

-132

-685

16 711

-70

159 314

17 633

267

-132

17 782

38 399

3 334

-27

1 421

-217

-3 657

-5

39 250

69 765

11 645

-110

-267

185

-1 -10 916

2 498

1 159

-91

-102

14 089

107

-13

8 036

4 628

150 420

21 140

-240

48 I SIOEN INDUSTRIES I Annual Report 2007

-1 472

-367

-1 500

68 877

-48

-1 018

2 399

-1 121

-1

13 081

-1 184

10 015

-224 -16 711

-1 114

-1 500

151 404

Buildings : depreciation Infrastructure buildings : depreciation Plant, machinery and equipment : depreciation Furniture : depreciation Vehicles : depreciation Hardware : depreciation Leasing land and buildings : depreciation Leasing furniture and equipment : depreciation Assets under construction : depreciation TOTAL a) Land b) Buildings 2) Plant, Machinery and Equipment 3) Furniture and Vehicules 4) Fixed assets held under leasing and other simil 5) Assets under construction and advance payments Property, plant and equipment

-1

16 580

3 166

-46

-15

151 462

8 783

-324

-754

3 649

142

-18

-3

3 407

693

-33

-441

5 335

426

-26

-2

20 245 277

156

102

6 517

268 087

23 097

-40

-568

-1 256

-61

308

-544

996

53 003

2 253

21 940

-577

4 107

162 721

-116

568

4 222

-30

3 578

-40

Closing balance

-7 -179

17 633

-121

5 612

-874

19 378

-347

-3

1 416

8 036

-7

-1 440

8 255

296 168

525

-169

882

1 849

23 385

1 927

1 222

13 160

-1

-504

2 364

11 280

92 955

20 363

-64

10 057

-33

-15

80 686

-110

-759

3 304

-11

-7

-99

494

184

3 865

2 733

-33

-350

-30

-17

345

2 650

3 928

-3

-21

-85

580

4 400

-411

1 064

5 330

-85

-1

5 668

16 586

145 748

4 674 64

-37

0 125 808

-253

-1 189

16 718

675

36 472

5 705

-70

70 776

8 783

-213

2 426

1 261

-31

-68

15 784

156

-2

102

6 517

142 278

23 097

-315

-1

-871

-1

-7

-61

308

17 633

-704

-374

440

-3 071

38 399

-73

1 743

-11 280

69 765

-10

-66

-1 110

2 498

-726

-1 125

14 089

1 416

8 036

-6

-569

2 587

-16 586

150 420

-67

SIOEN INDUSTRIES I An n u al Re p o r t 2007

-121

Depreciation

2 539

Acquired via business combination

675

50 312

Transfers

Sales

Disposals

Purchases

16 718

Exchange rate differences

Opening balance

2006

III.5.4 TANGIBLE FIXED ASSETS

Tangible fixed assets

The building in Tegelen is not used in production and

During 2007, tangible fixed assets were acquired in a total

therefore is not depreciated.

amount of EUR 21.1 million. The main investments in 2007 were:

The different categories of tangible fixed assets are depreciated by the straight-line method over their

• EUR 5.7 million in calandering machinery

estimated economic life. Depreciation commences once

• EUR 1.5 million in infrastructure and EUR 1.3 million

the assets are ready for their intended use.

building for calendering project • EUR 1.5 million in looms and 0.8 million in IR ovens

The estimated economic life of the main tangible fixed

• EUR 1.2 million in coating machinery

assets lies within the following ranges:

• EUR 1.1 million in machinery • EUR 0.9 million in wide format printer and welding

Buildings:

20 years

Machines:

5 to 15 years

• EUR 0.7 million in Weaving looms

Equipment:

10 years

• EUR 0.7 million in machinery and infrastructure for

Furniture:

5 years

Hardware:

5 years

Vehicles:

5 years

machine

chemicals • EUR 0.6 million in Apparel division The fixed assets under construction mainly relate to the

There are no mortgages secured on the tangible fixed

calandering factory, that is expected to come into use in

assets. Tangible fixed assets are subject to the application

March 2008.

of IAS 36, Impairments, when there is an indication that their book value may be lower than their recoverable

During 2006, the total acquisition of tangible fixed assets

amount. If an asset does not generate a cash inflow which

amounted to EUR 24.3 million (including investment grants).

is independent of other assets, the Group estimates the

In 2007, no capital grants were received compared to EUR

recoverable amount of the cash flow generating unit to

1.6 million in 2006 for the investments in Nordifa

which the asset belongs. In 2007 an impairment loss,

The main investments in 2006 were:

amounting to EUR 1.5 million was recognized on assets of the ‘Non Wovens’ cash generating unit of the Industrial

• EUR 4.7 million in calendering machinery at Moeskroen

Applications division.

• EUR 1.7 million in a building at Moeskroen for the calendering project • EUR 0.7 million in land at Moeskroen for the calendering project

At 31 December 2007, the Group had entered into contractual commitments for the acquisition of property, plant & equipment amounting to EUR 7.7

• EUR 1.9 million in a needlefelt production line at Nordifa

million, including EUR 6.3 million for a new building for

• EUR 1.3 million in a building for Richard Colorants at

Veranneman and Sioen Coating.

Lomme • EUR 2.6 million in a new warehouse at EMB in Bornem • EUR 1.0 million in machinery at EMB in Bornem • EUR 1.0 million in a new showroom at Ardooie.

50 I SIOEN INDUSTRIES I Annual Report 2007

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.

2007

Opening balance

Increase

Decrease

Fair value adjustment

Closing balance

-5

-3

Trade debtors LT Trade debtors LT : revaluation Trade debtors LT : impairment

-5

-3

Opening balance

Increase

Decrease

Fair value adjustment

Closing balance

-59

-22

Long term trade receivables

2006 Trade debtors LT Trade debtors LT : revaluation Trade debtors LT : impairment Long term trade receivables

-59

-22

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.5 LONG-TERM TRADE RECEIVABLES

The above financial assets relate to a long term trade receivable. The carrying amount approaches the fair value as per 31.12.2007. The agreed payments are discounted at a rate of 8%. Other long term assets As in previous years these other long term assets mainly consist of VAT deposits.

2007

(Other) move足 ments or adjustments

Closing balance

-10

635

-10

635

Exchange rate Decrease differences

(Other) move足 ments or adjustments

Closing balance

Opening balance

Exchange rate Decrease differences

Increase

504

151

-76

504

151

-76

Affiliated enterprises : amounts receivable Other shares : acquisition Guarantees and deposits : acquisition Other amounts receivable LT : acquisition Other long term assets

2006

Opening balance

Increase

524

-62

504

524

-62

504

Affiliated enterprises : amounts receivable Other shares : acquisition Guarantees and deposits : acquisition Other amounts receivable LT : acquisition Other long term assets

III.5.6 INVENTORIES

Gross inventory

2006

2007

Raw materials

32 566

32 350

Consumables

848

963

5 101

7 943

Finished goods

49 877

53 452

Goods in transit

3 845

4 512

92 237

99 219

Amounts written off

2006

2007

Amounts written off raw materials

-2 888

-3 374

Work in progress

Contracts in progress

Amounts written off consumables

-7

Amounts written off work in progress Amounts written off finished goods

-4 876

-5 389

-7 765

-8 770

Net inventory

2006

2007

1) Raw materials

29 677

28 975

Amounts written off goods in transit Amounts written off : contracts in progress

2) Consumables 3) Work in progress 4) Finished goods

848

956

5 101

7 943

48 846

52 575

84 472

90 450

5) Contracts in progress

Gross inventories (excluding write-offs) increased by

Obsolescence reserves on inventories amounted to EUR 8.8

EUR 7.0 million compared with 2006. Increased activity

million in 2007 compared with EUR 7.7 million in 2006.

resulted in inventory increases of EUR 3.2 million in

Write-downs of obsolete inventory to net realisable value

the coating division, EUR 1.8 million in the industrial

amounted to EUR 1.6 million in 2007 compared with EUR

applications divisions and EUR 1.2 million in the chemicals

2.1 million in 2006.

division. In the apparel division inventory decreased by EUR 0.2 million, in line with the decreased activity.

These obsolescence reserves are recorded on the basis of a detailed ageing and rotation analysis per unit.

52 I SIOEN INDUSTRIES I Annual Report 2007

2007 Trade receivables

72 928

Trade receivabes doubtful

4 597

Subtotal Trade Receivables

77 525

Amounts written off

-4 317

Total Financial instrument ‘trade receivables’

73 208 Outstanding

Balance turnover

Customer 1

5 356

6.91%

12 590

3.31%

Customer 2

2 396

3.09%

8 691

2.28%

Customer 3

1 532

1.98%

2 534

0.67%

Customer 4

1 288

1.66%

4 258

1.12%

Customer 5

1 104

1.42%

5 796

1.52%

Other

65 849

84.94%

346 482

91.10%

Total

77 525

100.00%

380 350

100.00%

Overdue Analysis

Subtotal Trade Receivables

Total Not Due

77 525

62 719

30 Days 60 Days 90 Days Overdue Overdue Overdue

6 179

1 370

1 159

120 Days Overdue

150 Days Overdue

More than 150 Days Overdue

404

5 617

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.7 TRADE RECEIVABLES

2006 Trade receivables

69 599

Trade receivabes doubtful

4 820

Amounts written off

-4 005

Total Financial instrument ‘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%

Customer 5

1 413

1.90%

2 717

0.80%

Other

62 953

84.59%

310 503

91.49%

Total

74 419

100.00%

339 389

100.00%

Trade receivables include EUR 77.5 million to be received

As of 1/4/2005 the Group decided to cover itself for credit

from the sale of goods. Compared to last year, trade

risk by concluding a stop loss credit insurance.

receivables increased by EUR 3.2 million due to increased business activity.

The average credit period on sales of goods is about 70 days. Generally no interest is charged on the overdue

Less than 10% of the total outstanding is expressed in

trade receivables except when legal procedures are

foreign currency. The main foreign currencies are the USD

started.

and GBP. Before accepting any new customer, the Group uses an A provision is accounted for the estimated uncollectible

internal credit scoring system, based on internal and

amounts of EUR 4.3 million. A provision for trade

external information, to assess the potential customerâ&#x20AC;&#x2122;s

receivables overdue between 30 days and 150 days

credit quality and defines credit limits by customer.

and more is recorded based on estimated irrecoverable

Limits and scoring attributed to customers are reviewed

amounts from the sale of goods, determined by reference

continuously.

to past default experience. This provision is recorded in â&#x20AC;&#x2DC;sales & marketing expensesâ&#x20AC;&#x2122; in the P&L by function.

54 I SIOEN INDUSTRIES I Annual Report 2007

2006

Other current assets Advances

2007

VAT receivable

6 348

9 204

Tax prepayment

2 493

1 893

362

Insurance premiums receivable Other Other receivables

195

275

9 423

11 515

Other current assets consist primarily of VAT to be reclaimed amounting to EUR 9.2 million, pre-paid taxes amounting to EUR 1.9 million and EUR 0.1 million insurance premiums to be received.

2006

Investments Other investments and deposits

2007

532

Options

288

Investments

Cash and cash equivalents Cash at bank At hand Cash and cash equivalents

532

288

2006

2007

12 210

5 970

374

12 584

6 011

The other investments relate to deposits on 3 months,

an expiry date of 10 years starting from date of issuing.

but shorter than 1 year. The book value of the investment

The beneficiaries have the choice, after a freeze period,

reflects the estimated market value. The options are held

to sell their granted options, or to execute the options

to hedge (one-on-one basis) the obligations generated by

on expiry date. The book value of the options equals the

the share option plan II as explained in section V â&#x20AC;&#x153;General

fair value per 31/12/2007 as the options were bought per

Information on share based paymentsâ&#x20AC;?. The options have

31/12/2007.

Deferred charges and accrued income

2006

2007

Deferred charges

1 476

1 145

136

110

1 612

1 255

Other Deferred charges and accrued income

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.8 OTHER CURRENT ASSETS

Deferred charges amounting to EUR 1.1 million consist primarily of pre-paid rent, insurance policies and interest charges.

III.5.9 PE NSION LIABILITIES DEFINED BENEFIT PLANS

The following net liabilities are recognized for post-employment and other long term benefits :

2006

2007

Post-employment benefits (pension plans) Other long term benefits (jubilee benefits) Total

1 578 136 1 714

1 315 142 1 457

The amounts recognised in the balance sheet are as follows: Present value of funded obligations Fair value of plan assets Present value of unfunded obligations (Surplus)/deficit Unrecognised actuarial gains/(losses) Unrecognised past service cost Net liability recognized in balance sheet of which liabilities

420 -381 1 849 1 888 -303 -7 1 578 1 578

430 -394 1 598 1 634 -313 -6 1 315 1 315

139 82 0 -4 -22 -104 91

173 114 -17 9 -151 -353 -225

1 422 139 82 -4 -112 -104 75 773 -2 2 269

2 269 173 114 9 -49 -353 -118 0 -17 2 028

0 0 0 112 -112 381

381 17 -4 0 0 0 0 0 394

The amounts recognised in profit or loss are as follows : Service cost Interest cost Expected return on plan assets Past service cost recognized Actuarial losses (gains) recognized Settlement (gain)/loss Benefit expense Changes in the present value of the defined benefit obligation are as follows: Opening defined benefit obligation Service cost Interest cost Past service cost Benefits paid Curtailment Actuarial losses (gains) Liabilities assumed in a business combination Currency translation changes Closing defined benefit obligation Changes in the fair value of plan assets are as follows: Opening fair value of plan assets Expected return Actuarial gains and (losses) Contributions Benefits paid Assets acquired in a business combination Settlement Currency translation changes Closing fair value of plan assets

56 I SIOEN INDUSTRIES I Annual Report 2007

0 381

The expected 2008 contributions amount to 91 kEUR. Principal actuarial assumptions at the balance sheet date :

2006

2007

Eurozone

Indonesia

Eurozone

Indonesia

4,60%

10,50%

5,48%

10,00%

discount rate expected rate of return future salary increase normal retirement age

4,50% 2,50%

8,00%

2,50%

8,00%

The funded status and experience adjustments are as follows :

Defined Benefit Obligation Plan assets (Surplus)/deficit Experience adjustments on benefit obligation

Costs relative to IAS 19 provisions are booked under

2006

2007

2 269

2 028

-381

-394

1 888

1 634

SIOEN INDUSTRIES I An n u al Re p o r t 2007

The plan assets represent investments in bonds;

Defined benefit schemes

personnel expenses and allocated according the function of the personnel involved (cost of goods sold, sales and

In defined benefit schemes, the amount on the balance

marketing expenses, R&D expenses and administrative

sheet (the â&#x20AC;&#x2DC;net liabilityâ&#x20AC;&#x2122;) corresponds to the present value

expenses). The interest component is recognised in the

of the gross liability, adjusted for unrecorded actuarial

financial result.

gains and losses, after deduction of the fair value of the scheme investments and unrecorded prior service costs.

PROVISIONS FOR PERSONNEL REMUNERATION The discounted value of the liability associated with In accordance with law and practice in each country,

defined pension rights and the assigned pension costs

associated entities have either defined benefit schemes or

associated with the year of service and prior service

defined contribution schemes.

pension costs are calculated by accredited actuaries using the projected unit credit method.

Defined contribution schemes Defined benefit schemes mainly relate to pension liabilities Contributions to defined contribution schemes are

in France, where such schemes are required by law.

recorded as an expense when they are due.

VII. Provisions

3 802

1 664

-625

-203

-8

Increase

2 214

1 764

450

2 416

837

1 579

4 630

2 601

2 029

Within 1 year

-8

More than 1 year

-203

Closing balance

-111 -514

Fair value

750 914

Acquired via business combination

Exchange rate differences

1 575 2 227

Utilisation

Provisions for environmental issues Provisions for other liabilities and charges

2007

Opening balance

Reversal

III.5.10 PROVISIONS

Provisions for taxation

2006 Provisions for taxation Provisions for environmental issues Provisions for other liabilities and charges VII. Provisions

1 023

500

379

2 213

-770

-43

448

1 402

2 713

-770

-43

448

1 575

2 227

934

1 293

3 802

2 509

1 293

The carrying amount of the provisions reflects the net

the site. These provisions are mainly set up for more than

present value of future liabilities discounted at 8%.

one year and are discounted using the weighted average capital cost of the Group.

The provisions for environmental issues consist mainly of a provision relating to the cleaning of polluted soils in Temse

Provisions for other liabilities and charges mainly relate

belonging to TIS NV and the land in Ardooie belonging

to social costs of ongoing restructuring processes by

to Sioen Coating NV. The risk in Temse originates in

the coating division, by the apparel division and by the

the period before the takeover. The risk in Ardooie was

chemicals division in France.

identified during the periodical environmental check-up of

58 I SIOEN INDUSTRIES I Annual Report 2007

2007

Bond Bank loans Finance leases Other loans Total interest bearing loans long term

Value at the end of year

Within one year

2 years

3 years

4 years

5 years

8 030

10 209

5 001

1 692

1 209

129

10 039

1 162

1 289

1 406

1 372

1 459

4 513

99 044

Current portion of amounts payable after one year

10 209

Credit institutions short term

25 190

Bank loans

35 400

Current portion of leasing Leasing short term Finance leases Total interest bearing loans short term 2006

99 044

3 117 117

after 5 years

3 11 371

6 290

3 098

2 581

1 588

103 671

Within one year

2 years

3 years

4 years

5 years

after 5 years

1 162 37 1 199 36 599 Value at the end of year

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

Other loans Total interest bearing loans long term Current portion of amounts payable after one year

17 362

Credit institutions short term

13 800

Bank loans

31 162

Current portion of leasing Leasing short term Finance leases Total interest bearing loans short term

98 970

3 128 463

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.11 INTERESTBEARING LOANS

3 18 591

11 600

6 212

2 943

2 495

105 214

1 228 42 1 270 32 433

Interest Bearing Loans This note provides information about the group’s interest-

Sioen has no covenants on material loan agreements,

bearing loans.

except for general terms and conditions applicable to general finance agreements in Belgium.

Long-term interest bearing loans, including financial long-term leasing debts.

Short-term interest bearing loans

The weighted average interest rate of long-term debts in

As per 31/12/2007, short-term loans amounted to

2007 was 4.76%, compared to 4.77% in 2006.

EUR 21.3 million. They consist of EUR 16.8 million of

All long-term loans have a fixed interest rate.

euro straight loans with a weighted average interest rate of 4.6% and a dollar loan of USD 5.0 million at 5.7%.

In 2006, a EUR 20 million variable-rate roll-over loan was

There is also a tax prepayment loan of EUR 3.5 million

prerepaid on 14 March 2006 without additional cost. This

which expires on 10 April 2008.

‘bullet’ loan was taken up on 20 December 2005 with an expiry date of 30 June 2007.

At 31/12/2006, short-term straight loans amounted to EUR 13.8 million.

On 14 March 2006, a EUR 100 million bond listed on Eurolist by Euronext Brussels was successfully issued, with

No securities have been issued for these financial debts.

a ten-year term and fixed coupon interest of 4.75%. To

Most (approx. 90%) of the Group’s financial liabilities are

cover the interest rate on this bond issue, an IRS (Interest

centrally contracted and managed.

Rate Swap) was concluded on 20 December 2005. This IRS is described in the note on ‘financial instruments’, and designated as ‘cash flow hedging’. The effective combined interest rate on the EUR 100 million bond is 4.72%.

60 I SIOEN INDUSTRIES I Annual Report 2007

Obligations under financial leases 2007 Leasing and other similar obligations LT Current portion of leasing Leasing short term Obligations under financial leases

Value at the end of year

Within one year

10 039 1 162 37 11 238

61 1 162 37 1 260

2 years

3 years

4 years

5 years

after 5 years

1 228

1 406

1 372

1 459

4 513

5 1 233

27 1 433

1 372

1 459

4 513

Minimum lease payments Lease payments due within one year One - Two years Two - Three years Three - Five years After 5 years Total lease payments Future financial charges Present value of lease obligations Less amount due for settlement within 12 months Amount due for settlement after 12 months Obligations under financial leases 2006 Leasing and other similar obligations LT Current portion of leasing Leasing short term Obligations under financial leases

2 1 1 3 4 14 2 10

Value at the end of year

Within one year

11 428 1 228 42 12 698

1 228 42 1 270

143 735 737 064 954 051 611 767

1 1 1 1 1 4

260 233 433 372 459 513

10 767 1 260 9 979

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

Present value of lease payments

2 1 1 3 6 16 3

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.12 FINANCIAL LEASING DEBTS

Present value of lease payments

0 125 984 740 480 683 067 314

1 1 1 1 7 12 12

270 485 406 228 309 698 753 0 1 270 11 428

Leasing debts mainly relate 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. (2006 5.44% p.a.).

III.5.13 OTHER ACCOUNTS PAYABLE

Trade accounts payable and other debts

2007 Trade payables

35 609

Credit notes to receive

-2 048

Advances

630

Total

34 191

2006 Trade payables

33 104

Credit notes to receive

-2 010

Advances

650

Total

31 744

Trade and other payables include outstanding amounts for trade purchases and current charges. Trade payables increased compared with 2006, in line with the increased activity. The trade payables are payable within a range of 30 to 60 days. The group has no major overdue positions. Foreign currencies in trade payables relate mainly to USD and represent less than 10% of the total trade payables.

Other debts up to one year Other Accounts payables (non-financial instrument)

2006

2007

Current tax liabilities

3 449

440

Social debts

9 466

10 523

Other

5 461

4 548

Accrued charges and deferred income

1 145

1 159

19 521

16 670

Total other debts up to one year

The other liabilities consist mainly of VAT payable and various other taxes.

62 I SIOEN INDUSTRIES I Annual Report 2007

2006

Financial Derivatives Notional Value

Fair Value

2007 Notional Value

Fair Value

Forward sales contracts Forward sales contracts within 1 year Rights Obligations IRS Forward

7 375

11 063

-85

2 353

-41

100 000

1 346

The Group manages a portfolio of derivatives to hedge

EUR 0.636 million negative market value fluctuation on

against risks relating to exchange rate and interest rate

31/12/2005 of this IRS was deducted from equity.

positions arising as a result of operating and financial

At 02/02/2006, the market value was up EUR 1.346

activities. It is the Group’s policy to avoid engaging in

million, and it was realised following the hedge strategy

speculative transactions or transactions with a leverage

at the moment of issuing of the bond. This received

effect and not to hold derivatives for trading purposes.

premium satisfies the conditions for cash flow hedging

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.14 FINANCIAL INSTRUMENTS

defined in IAS39, and will be spread out over the term of Interest risk

the bond.

The Group’s interest risk is relatively limited, as the interest

The realized capital gain (EUR 1.346 million) was

rate on all long-term loans is fixed. It is the group’s

recognised in equity and is being taken into income over

strategy to arrange a fixed interest rate for the long-term

the life of the bond (10year).

portion of debts, and to keep short-term debts floating. Thanks to an optimal portfolio of long-term and short-

Exchange rate risk

term debt financing, potential negative interest rate

It is the Group’s policy to hedge against exchange risks

fluctuations are minimised.

arising from financial and operating activities centrally.

As per 31/12/2007, there was EUR 21.4 million of short-

The risks are limited by compensating for transactions

term financing at floating rates with a weighted average

in the same currency (‘natural hedging’), or by fixing

of 4.73%. A 5% increase in interest rates (24 basispoints),

exchange rates via forward contracts or options.

would impact the financial result with 51 kEUR more interest costs an annual basis.

The main currencies for the Sioen Group are GBP (inflow) and USD (outflow). In 2007, the GBP net inflow represents

In connection with the group’s refinancing, it was

EUR 17 million (GBP 12.5 million) and the USD net

decided in December 2005 to enlist the support of the

outflow EUR 6.1 million (USD 9 million). As these volumes

capital market via the issue of a EUR 100 million bond

represent less than 10% of total net sales, the impact of

over ten years with fixed coupon interest. Because such

changes in these exchange rates is limited.

an operation can easily take three months, and interest rates at the end of December 2005 were very attractive,

The fluctuation in the market value of exchange rate

Sioen concluded a ten-year IRS starting in April 2006, the

contracts has been included in the profit and loss account

presumed starting date of the bond. As this IRS can be

and amounted to a EUR 41k negative balance in 2007 and

regarded as effective cash flow hedging as per IAS39, the

a EUR 23k negative balance in 2006.

III.5.14 FINANCIAL INSTRUMENTS

Credit risk In view of the relative concentration of credit risk (see note ‘trade receivables’). The company covers credit risk

Financial Instruments Interest bearing loans Fixed Rate (EUR)

on trade receivables via a stop loss insurance with an own risk exposure of EUR 500 k. In addition, credit control

Bond

strategies and procedures have been elaborated in order

borrowing costs capitalised

to monitor individual customers’ credit risk. Liquidity risk In order to guarantee liquidity and financial flexibility,

Carrying Amount

Fair value

100 000

96 885

-956

Finance Leases

11 089

11 305

Bank loans

18 355

18 203

128 488

126 393

Total

the Sioen group has credit lines available to meet current

As shown in the fair value analysis, Sioen Industries is now

and future financial needs. The Sioen group has total

in an overall favourable position concerning interest rate

credit lines available of EUR 81.5 million. Of these

conditions compared to the actual fair values of the loans.

EUR 20.5 million were used at 31/12/2007. Of this amount, EUR 16.8 million consisted of straight loans at a

Capital management

weighted average interest rate of 4.6%, and a

The equity structure of the Sioen Group is managed with

USD 5 million straight loan at 5.7%.

the main objectives of: • protecting the equity structure so as to ensure

Fair value Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,

continuous business operations resulting in continuous shareholder value, and benefits for other stakeholders; • the payment of an appropriate dividend to shareholders.

willing parties in an arm’s length transaction. In conformity with IAS 39 all derivatives are recognized at fair

The Group’s capital is formed in accordance with the risk,

value in the balance sheet.

which changes with economic developments and the risk profile of the underlying assets. The Sioen group can

Non-derivative financial liabilities

change the dividend to shareholders, issue new shares

The fair value of non-derivate financial liabilities is

or sell assets in order to maintain or change the capital

calculated based on commonly-used valuation techniques

structure.

(i.e. net present value of future principal and interest cash flows discounted at market rate). These are based on

The Board of Directors of Sioen Industries views equity

market inputs from reliable financial information providers.

together with the 10-year bond loan (cf. interest bearing

Fair values determined by reference to prices provided

loans III.5.11) as permanent capital. At 31/12/2007 equity

by reliable financial information providers are periodically

and the bond loans represented respectively 39.3% and

checked for consistency against other pricing sources.

26.2% and together 65.5% of the balance sheet total.

64 I SIOEN INDUSTRIES I Annual Report 2007

2006

2007

2006

deferred tax asset Intangible fixed assets Tangible fixed assets Inventories Receivables Other assets Pension liabilities Other provisions Other liabilities Conversion differences Hedging reserves Undistributed reserves Tax losses carried forward

399 2 868 1 656 253 512 339 59 74

2007

deferred tax liability

545 2 894 1 688 762 0 648 518 102 156

1 697 16 178

1 792 16 847

1 937 458 2 152

2 433 398 2 095

22 422

23 565

10 952

9 662

17 112

16 976

non recognition of deferred tax receivable Netting

-6 851 -4 062

-6 829 -4 702

-4 062

-4 702

Total

6 199

5 445

18 360

18 863

The value of carried-forward tax losses arranged by expiry date One year Two years Three years Four years Five years and later No expiry date

2 037 17 557 16 319

8 260 7 806 16 590

Unrecognised carried forward tax losses

17 273

20 195

306

295

Total

Unrecognised deferred tax on undistributed reserves Deferred tax assets which do not appear to be collectable

In the Netherlands the tax rate was decreased from 31.5%

in the near future are not recognized. In this assessment

to 25.5% in 2006, resulting to EUR 1.1 million additional tax

the management takes account of budgets and multi-year

expense given the decrease in the deferred tax asset.

SIOEN INDUSTRIES I An n u al Re p o r t 2007

III.5.15 DEFERRED TAX

planning. The major deferred tax asset on tax loss carryforwards is

Reconciliation of movement of deferred tax

relative to Roland International BV. Compared with 2006, a

Net tax liability as per 31 December 2006

12 161

EUR 1.8 million valuation allowance on tax losses of Roland

Net tax liability as per 31 December 2007

13 418

International BV was recognized in 2007. Based upon

Difference

1 257

deferred tax as shown in the P&L

1 915

deferred tax effect through equity

-149

deferred tax acquired via business combinations

-508

business plans an asset has been recognized using estimated tax profits over 9 years. The company recognizes deferred tax liabilities on undistributed reserves in affiliates unless there is a firm commitment not to distribute reserves from that particular affiliate in the foreseeable future.

III.5.16 A CQUISITIONS AND DISPOSALS OF INTERESTS

EFFECTS OF ACQUISITIONS AND SALES OF INVESTMENTS

2007 Divestment Granulates EMB Sale price Granulate business Sale fixed assets Liability sales related provision Stock write off

847 49 -227 -428

Receipt in Cash Non Cash items Gain realised on the transaction

896 -655 241

Acquisition Fillink Business (in â&#x20AC;&#x2DC;000 EUR) Non current assets Intangible and tangible fixed assets Current assets Inventories Debtors Other debtors Non current liabilities Long term financial debt Current liabilities Creditors Other creditors Total net assets Goodwill on acquisition Paid in cash Cash and banks acquired Net cash paid

66 I SIOEN INDUSTRIES I Annual Report 2007

Book value

Adjustments

Fair value

215 215

1 285 1 285

1 500 1 500

1 872 319 1 440 113

-319 -319 -

1 553 1 440 113

355 355

2 598 2 180 418 -865

184 84 100 -718

2 781 2 264 517 -83 152

137

206 137 69

On January 18 2007 Fillink Technologies SA was acquired

1 October 2007, in which the chips (granules) department

by EMB. Fillink specializes in inks for wide and superwide

was sold and a pigment paste-customer portfolio was

format digital printers. Fillink distributes eco-solvent,

acquired (see intangible assets), in order to align the

solvent and UV inks through a selected network of

business with its core competence. EMB recorded the

distributors. These quality products are very well

gain of EUR 0.2 million in ‘Other operating Income’ in

positioned in the market thanks to the know how and

2007.

market intelligence of the company. Fillink’s experience

The sales of this chips department represented in 2006

with unique product formulations and wide market

EUR 5.1 million and in 2007 EUR 4.7 million (January –

knowledge are real added value for the chemicals division.

October 2007).

The sales of Fillink were EUR 2.2 million in 2006 and EUR 4.0 million in 2007.

SIOEN INDUSTRIES I An n u al Re p o r t 2007

EMB (division chemicals) realized an exchange deal on

III.5.16 A CQUISITIONS AND DISPOSALS OF INTERESTS

EFFECTS OF ACQUISITIONS AND SALES OF INVESTMENTS

2006 Acquisition of Group Richard Colorants Non current assets Intangible and tangible fixed assets Current assets Inventories Debtors Other debtors Cash and banks

Book value 2 991 2 991

Adjustments 5 007 5 007

Fair value 7 998 7 998

15 588 4 402 6 113

-280 -127 -153

15 308 4 275 5 960 5 073

2 238 209 353 1 676

3 406 757 353 1 676 620

636

4 601 3 406 1 195 15 299 752 16 051

5 073

Non current liabilities Provisions Pensions Deferred tax liabilities Long term financial debt

1 168 548

Current liabilities Creditors Other creditors Total net assets Goodwill on acquisition Paid in cash

3 965 3 406 559 13 446

620

636 1 853

Acquisition of assets of Siegwerk Benelux NV Customer portfolio Product portfolio Machinery Goodwill Deferred tax asset Paid in cash

1 425 5 948 1 153 622 380 9 528

The Richard group (Richard s.a.s., Copidis s.a.s. and Astra

company has specialized in pigment pastes since its early

Colorants s.a.) was acquired on 27 October 2006.

days.

The EUR 16.1 million acquisition cost was paid in cash. The necessary market valuations have been performed

At end of September 2006, EMB bought the assets of

to determine the fair value of the customer portfolio and

Siegwerk, a producer of inks and varnishes. These inks

the formulations. Richard Colorants is a French company

and varnishes have numerous applications in the various

based at Lomme, near Lille. Founded in 1864, the

markets related to the EMB markets.

68 I SIOEN INDUSTRIES I Annual Report 2007

IV.1. Operating lease arrangements

Amounts recognised in income

2006

2007

1 172

1 150

Payments due within one year

985

1 179

Between one and five years

905

1 092

1 889

2 282

Over five years Minimal future payments

These leases relate mainly to vehicles, small equipment and office equipment. IV.2 Events after balance sheet date No significant events have happened after balance sheet

SIOEN INDUSTRIES I An n u al Re p o r t 2007

IV. Other

date.

IV.3. Off balance sheet items

2007

within 1 year

Guarantees given as securities for debts or commitments Rights due to hedging of foreign currencies related to GBP Commitments due to hedging of foreign currencies

2 353

related to GBP

2 353

Commitments for the acquisition of intangible and tangible assets

7 688

2006

2 353

within 1 year

Guarantees given as securities for debts or commitments Rights due to hedging of foreign currencies related to GBP

7 375 7 375

Commitments due to hedging of foreign currencies

11 063

related to GBP

11 063

Commitments for the acquisition of intangible and tangible assets

7 375 11 063

6 447

IV.4. Transactions with related parties

Nature of transaction

2007

Recticel Group

Sale

1 764

Recticel Group

Purchase

222

Sale

1 436

Purchase

227

INCH SVB

Nature of transaction

2006

Recticel Group

Sale

1 945

Recticel Group

Purchase

264

Sale

1 524

Purchase

INCH SVB

These transactions are done on an armâ&#x20AC;&#x2122;s length basis. Other transactions with related parties other than directors are not included, given the negligible amount (under EUR 100,000). With regard to directorsâ&#x20AC;&#x2122; remuneration, we refer to section V.6.B.

IV.5. Staff

2006

2007

930

988

China

Germany

France

392

361

Ireland

1 900

1 975

Land Belgium

Indonesia Netherlands

539

587

Portugal

Tunesia

Poland

766

752

USA

Grand Total

4 687

4 869

Blue Collar

3 816

4 125

Ukraine

White Collar Grand Total

70 I SIOEN INDUSTRIES I Annual Report 2007

871

744

4 687

4 869

2007

Deloitte

Audit fees

277

Other assurance services

Tax services

IV.7 Contingent assets and liabilities A number of commercial disputes are pending, albeit with

The industrial applications division is currently facing a

a limited value in dispute.

quality claim in France, which could reach EUR 3 million. However, the court verdict in first instance was in favour of

A contingent asset amounting to EUR 0.4 million is related

SIOEN INDUSTRIES I An n u al Re p o r t 2007

IV.6. A udit and non audit services provided by the statutory auditor and his network

Sioen Industries.

to the apparel division.

IV.8 Remuneration of the directors and the executive management In 2007 the following fees were paid to the members of

• Mrs. Michèle Sioen received in 2007 as CEO, besides her

the board of directors and the executive management:

remuneration as a member of the board of directors,

• Non-executive and independent directors, as well as the

a fixed remuneration of EUR 419,491. She received a

members of the executive management in their capacity

variable remuneration for 2007 in an amount of EUR

as director:

125,286. • The fixed remunerations 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 2,011,567 (excluding CEO). Variable remuneration

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

EUR 20,000

Mrs. Pascale Sioen) Pol Bamelis n.v. (represented by

EUR 22,250

Mr. Pol Bamelis) Revam b.v.b.a. (represented by

EUR 29,000

Mr. Wilfried Vandepoel) Louis Verbeke e.b.v.b.a. (represented

EUR 26,000 EUR 26,000

remuneration related expenses. • All sums mentioned above are gross sums and represent the entire cost to the Company. In 2007 no shares in Sioen Industries, share options or other rights for the acquisition of shares in Sioen Industries were granted to the CEO and the other members of the or golden handske agreements with the members of the executive management.

Mr. Luc Sterckx) Vean n.v. (represented by

includes contributions to pension insurance and other

executive management. There are no specific recruitment

by Mr. Louis-Henri Verbeke) K.E.M.P. n.v. (represented by

for 2007 in an amount of EUR 208,658 was granted. This

EUR 21,500

Mr. Luc Vansteenkiste

(*) The executive management consists of executive directors and members of the management committee.

72 I SIOEN INDUSTRIES I Annual Report 2007

STATUTORY AUDITOR’S REPORT TO THE SHAREHOLDERS’

opinion on the accompanying consolidated financial

MEETING ON THE CONSOLIDATED FINANCIAL

statements, insofar as it relates to the amounts contributed

STATEMENTS FOR THE YEAR ENDED

by those entities, is based upon the reports of those other

31 DECEMBER 2007

auditors.

Free translation – the original report is in Dutch

The board of directors of the company is responsible for the preparation of the consolidated financial

To the shareholders

statements. This responsibility includes among other things: designing, implementing and maintaining internal

As required by law and the company’s articles of

control relevant to the preparation and fair presentation

association, we are pleased to report to you on the

of consolidated financial statements that are free from

audit assignment which you have entrusted to us.

material misstatement, whether due to fraud or error,

This report includes our opinion on the consolidated

selecting and applying appropriate accounting policies,

financial statements together with the required additional

and making accounting estimates that are reasonable in

comment.

the circumstances.

Unqualified audit opinion on the consolidated

Our responsibility is to express an opinion on these

financial statements

consolidated financial statements based on our audit.

SIOEN INDUSTRIES I An n u al Re p o r t 2007

V. Statutory auditor’s report

We conducted our audit in accordance with legal We have audited the accompanying consolidated financial

requirements and auditing standards applicable in

statements of Sioen Industries NV (“the company”)

Belgium, as issued by the “Institut des Reviseurs

and its subsidiaries (jointly “the group”), prepared

d’Entreprises/Instituut der Bedrijfsrevisoren”. Those

in accordance with International Financial Reporting

standards require that we plan and perform the audit to

Standards as adopted by the European Union and with the

obtain reasonable assurance whether the consolidated

legal and regulatory requirements applicable in Belgium.

financial statements are free from material misstatement.

Those consolidated financial statements comprise the

In accordance with these standards, we have performed

consolidated balance sheet as at 31 December 2007,

procedures to obtain audit evidence about the amounts

the consolidated income statement, the consolidated

and disclosures in the consolidated financial statements.

statement of changes in equity and the consolidated

The procedures selected depend on our judgment,

cash flow statement for the year then ended, as well as

including the assessment of the risks of material

the summary of significant accounting policies and other

misstatement of the consolidated financial statements,

explanatory notes. The consolidated balance sheet shows

whether due to fraud or error. In making those risk

total assets of 378.112 (000) EUR and a consolidated

assessments, we have considered internal control relevant

profit (group share) for the year then ended of 19.186

to the group’s preparation and fair presentation of the

(000) EUR.

consolidated financial statements in order to design audit procedures that are appropriate in the circumstances

The financial statements of several significant entities

but not for the purpose of expressing an opinion on the

included in the scope of consolidation which represent

effectiveness of the group’s internal control. We have

total assets of 50.688 (000) EUR and a turnover of 49.330

assessed the basis of the accounting policies used, the

(000) EUR have been audited by other auditors. Our

reasonableness of accounting estimates made by

V. Statutory auditor’s report

the company and the presentation of the consolidated

•The directors’ report on the consolidated financial

financial statements, taken as a whole. Finally, the board

statements includes the information required by law

of directors and responsible officers of the company

and is in agreement with the consolidated financial

have replied to all our requests for explanations and

statements. However, we are unable to express an opinion

information. We believe that the audit evidence we have

on the description of the principal risks and uncertainties

obtained, together with the reports of other auditors on

confronting the group, or on the status, future evolution,

which we have relied, provides a reasonable basis for our

or significant influence of certain factors on its future

opinion.

development. We can, nevertheless, confirm that the information given is not in obvious contradiction with any

In our opinion, and based upon the reports of other

information obtained in the context of our appointment.

auditors, the consolidated financial statements give a true and fair view of the group’s financial position as of 31 December 2007, and of its results and its cash flows for the

Diegem, 13 March 2008

year then ended, in accordance with International Financial

The Statutory Auditor

Reporting Standards as adopted by the EU and with the legal and regulatory requirements applicable in Belgium.

DELOITTE Bedrijfsrevisoren BV o.v.v.e. CVBA

Additional comment

represented by

The preparation and the assessment of the information that should be included in the directors’ report on the consolidated financial statements are the responsibility of the board of directors. Our responsibility is to include in our report the following additional comment which does not change the scope of our audit opinion on the consolidated financial statements:

74 I SIOEN INDUSTRIES I Annual Report 2007

Dirk Van Vlaenderen

Kurt Dehoorne

VI. S tatutory annual accounts

Condensed balance sheet of Sioen Industries n.v. after appropriation of profit December 31 (000) EUR Fixed assets

2007

2006

61 584

61 459

II.

Intangible fixed assets

7 505

5 934

III.

Tangible fixed assets

1 004

1 170

IV.

Financial fixed assets

53 075

54 355

Currents assets

188 049

179 902

VII.

187 023

178 807

Amounts receivable within one year

IX.

Cash at hand and in bank

872

825

Deferred charges and accrued income

154

270

249 633

241 361

Capital and reserves

82 705

80 814

Capital

46 000

IV.

Legal reserves

Profit brought forward

Total assets

4 352

3 766

32 353

31 048

Creditors

166 929

160 547

VIII. Amounts payable after one year

106 312

115 765

54 983

39 588

5 634

5 194

249 633

241 361

IX.

Amounts payable within one year

Accrued charges and deferred income

Total liabilities

The statutory annual accounts of the parent company

Without qualifying the unqualified opinion expressed

Sioen Industries n.v. are shown below in condensed form.

above, we draw the attention to the annual report.

In June 2008, the annual report and annual accounts of

Sioen Industries NV has per December 31, 2007, a

Sioen Industries n.v. and the auditor’s report will be filed

total outstanding receivable of 12,5mio EUR on Roland

with the National Bank of Belgium in accordance with

International BV, a 100% subsidiary of Sioen Industries

Articles 98-102 of the Companies Act.

NV. In addition, Sioen Coating Distribution NV, a 100%

These reports are available on request at the following

subsidiary of Sioen Industries NV, has outstanding

address:

receivables on Roland International BV for an amount

Sioen Industries n.v. – Fabriekstraat 23 – 8850 Ardooie.

of 16,1mio EUR. The realisation of these amounts is

The statutory auditor has issued an unqualified opinion

dependent of the further successful development of the

with explanatory paragraph on the statutory financial

implemented recovery plan. The accompanying financial

statements of Sioen Industries NV. The explanatory

statements do not included any less values or provisions

paragraph is as follows:

relating to the above.

SIOEN INDUSTRIES I An n u al Re p o r t 2007

OF I SIOEN INDUSTRIES NV

VI. S tatutory annual accounts OF I SIOEN INDUSTRIES NV

Condensed income statement of Sioen Industries n.v. December 31 (000) EUR

2007

2006

Operating income

7 188

5 922

A. Sales

6 912

5 715

277

207

-8 363

-7 022

D. Other operating income II.

Operating charges B. Services and other goods

3 280

2 897

C. Renumeration

3 726

3 060

D. Depreciation and amounts written off

1 344

944

121

G. Other operating charges III.

Operating profit/loss

-1 175

-1 100

Financial income

21 736

24 581

Financial charges

-8 110

-7 438

Financial result

13 626

17 143

VI.

Profit on ordinary activities

12 452

16 043

VII.

Extraordinary result

-711

-7 402

IX.

Profit before tax

11 741

8 641

Income taxes

-25

-99

XI.

Profit for the financial year

11 716

8 542

76 I SIOEN INDUSTRIES I Annual Report 2007

Accounting principles

The function of Sioen Industries is essentially to outline

The accounting principles and translation rules applied to

the strategy of the four divisions. It also appoints the

the statutory annual accounts of Sioen Industries are in

management of the Group companies and supports the

accordance with Belgian Generally Accepted Accounting

Group companies in the areas of personnel management,

Principles.

financial and treasury management, budgeting and controlling, MIS and IT, and legal affairs.

Statement of capital In accordance with Articles 1 to 4 of the Act of March 2,

Comments

1989 concerning the disclosure of important holdings

The turnover of the holding company increased with

in listed companies and regulating take-over bids,

20.9% to EUR 6.9 million. In 2007 the operating loss

the applicable quotas were set at, on the one hand, 5

amounted to EUR 1.2 million, compared with an operating

percent or a multiple thereof and on the other hand

loss in 2006 of EUR 1.1 million. Financial Income

at 3 percent or a multiple thereof. (Article 8 of the

decreased from EUR 17.1 million in 2006 to EUR 13.6

Articles of Association). In accordance with Article 4 of

million in 2007 explained by the lower dividend payments

the Act of March 2, 1989, the following notifications of

from the subsidiaries.

shareholdings in the company were received:

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Activity of Sioen Industries

All participating interests have been recorded at book value. Extraordinary result for the year 2007 increased by EUR 6.7 million compared to 2006 due to adjusted book values of participation interests at the end of last year.

Situation at 31 March 2008

Notifying party

Date of notification

Number of shares

Percentage of total number of shares

18 October 1996

13,336,501

62.5%

Sihold n.v.

12 October 2005

12,715,010

59.4%

â&#x20AC;&#x153;Stichting Shell Pensioenfondsâ&#x20AC;?

12 October 2005

726,320

3.4%

30 January 2006

12,906,212

60.3%

21,391,070

100.0%

Sihold n.v.(1) Fabriekstraat 23, 8850 Ardooie Notification of change of percentage shareholding

Sihold n.v. Total number of shares

This foundation is controlled by the Sioen family. (1) Sihold n.v. is controlled by Sicorp n.v., which is controlled in turn by the Dutch foundation Stichting Administratiekantoor Midapa.

VII. Proposal to the annual meeting

Proposals to the Annual Meeting of Sioen Industries n.v.

The proposed net dividend per share is

of April 25, 2008

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

0.3375

December 31, 2007 and to consent to the appropriation

Withholding tax 25/75

0.1125

of profit.

Gross dividend per share

0.4500

Pay-out ratio The profit for the financial year ended is 11 716 461 EUR, compared to a profit of 8 542 378 EUR for the financial

(1)

50.17%

(1) Gross dividend in relation to the share of the Group in the consolidated result

year 2006. The profit brought forward from the previous financial year is 31 048 176 EUR. The profit available for

The proposed dividend is 73.1% higher than that of 2006.

appropriation is consequently 42 764 637 EUR.

If this proposal is accepted, the net dividend of 0,3375 EUR per share will be made payable as from May 9, 2008

The board of di42,764,637poses to appropriate the

onwards at the counters of Dexia Bank, ING Bank, Fortis

profit available for appropriation of 42,764,637

Bank, Bank Degroof and KBC Bank on presentation of

EUR as follows:

coupon n°10.

(in EUR) Gross dividends for the 21.391.070 shares Directors’ fees Transfer to the legal reserves Profit to be carried forward

9 625 982 200 000 585 823 (32 352 833)

78 I SIOEN INDUSTRIES I Annual Report 2007

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

REBIT

EBIT + non recurring costs

REBITDA

EBITDA + non recurring costs

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.

Free operating CF

Funds from operations - funds from investing activities

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&#x20AC;Ż

Capital employed

Working capital + tangible and intangible fixed assets + goodwill

SIOEN INDUSTRIES I An n u al Re p o r t 2007

Definitions

Addresses Sioen Industries n.v. Fabriekstraat 23 B-8850 Ardooie- Belgium Tel +32 51 74 09 00 - Fax: +32 51 74 09 64 E-mail: corporate@sioen.be Btw: BE 441.642.780 - RPR 0441.642.780 Brugge 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/ Calendering) 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

CHEMICALS EUROPEAN MASTER BATCH NV – E.M.B. NV / Fillink

Rijksweg 15 B-2880 Bornem België

INDUCOLOR SA

Chemin Preuscamps 12 B-7822 Ath (Meslin-L’Evêque) Belgique

RICHARD SAS

Rue lavoisier - zac novo - 59160 lomme France

ASTRA COLORANTS SA

20 Avenue maréchal de lattre de tassigny - 69330 meyzieu France

Apparel 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

NUSANTARA BONDED ZONE (KBN) MARUNDA - Jalan Pontianak Block C.2-03 Jakarta 14120 -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 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 France

SIOEN USA Inc.

c/o Flom, French & Goodwin, L.L.C. 675 Line Road Building 4, Suite B Aberdeen, NJ 07747 USA

INDUSTRIAL APPLICATIONS 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 USA

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

80 I SIOEN INDUSTRIES I Annual Report 2007

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

T+32 56 48 12 70

F+32 56 48 12 85

fibres.extrusion@sioen.be

TVA BE 463.789.464

RPM 0463.789.464 Tournai

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

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

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 44853222

F+62 21 44853444

info.marunda@sioenasia.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

Code TVA 747023 F / A / M / 000 RC B 177132000

T+216 72 68 06 60

F+216 72 68 26 60

sioen.zaghouan@sioen.com

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

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

SIOEN INDUSTRIES I An n u al Re p o r t 2007

BTW BE 402.753.106

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.