CORPORATE INFORMATION FINANCIAL OVERVIEW
-1-
CONTENT CORPORATE INFORMATION letter to the shareholders
P. 3
report of the board of directors
P. 5
group structure
P. 9
share information
P. 10
corporate governance
P. 12
general information
P. 16
FINANCIAL OVERVIEW COMMENTS on the consolidated financial statements
P. 20
financial statements
P. 22
1. consolidated balance sheet
P. 22
2. consolidated income statement
P. 24
3. cash flow statement
P. 26
4. equity statement
P. 27
notes to the consolidated financial statements
P. 28
1. key accounting rules
P. 28
2. segment information
P. 38
3. exchange rate
P. 41
4. detailed income statement
P. 42
5. detailed balance sheet
P. 46
other
P. 68
statutory auditor’s report
P. 72
statutory annual accounts of sioen industries nv
P. 74
proposals to the annual meeting
P. 77
addresses
P. 78
definitions
P. 80
-2-
LETTER TO THE SHAREHOLDERS
Dear Shareholder,
markets - to pump up sales and production. Despite this, from the middle of last year we had to begin restructuring and introducing economic unemployment.
A year of extremes Total group sales in 2008 amounted to EUR 349.4 2008 was a year of extremes, of high peaks and deep
million, compared with EUR 380.3 million in 2007 (-8%).
troughs.
EBITDA and cash flow amounted to EUR 37.7 million (10.8% of sales) and EUR 24.2 million respectively.
The year started with top months, in which we beat all
After-tax profit was EUR 3.4 million, compared with EUR
records. Our spinning mill was never as productive, the
19.2 million in 2007.
weaving mills were running at full capacity, production could not keep up with sales of coated technical
innovating the future
textiles, the chemicals department continued to grow, technical protective clothing sales were climbing …
The results and explanations by division can be found in
everything was indicating to another top year.
the Report from the Board of Directors on page 5 of the financial part of this annual report.
No one could have predicted that a year that had got off to such a good start would end in a minor key. From
We cannot emphasize enough the importance of
the second half onwards, sales slackened, margins fell.
research and development. Today everybody uses the
Stock markets tumbled right across the world. Compa-
word innovation. It has become a fashionable word, at
nies were revising their growth forecasts daily. Slow-
times a magic word. Not so at Sioen. Since founding the
down turned into recession.
company in 1960 we have lived by the motto ‘to stand still is to go backwards’. This is innovation avant la lettre.
Sioen Industries has swum through many troubled waters in the past – the fire that decimated our
Introducing new ideas, products, services and proces-
company in the early 1990s, the slowing of growth
ses- approaching things in new ways, thinking out of the
in 2002, sharp Chinese competition in recent years.
box. This is our daily bread at Sioen, at every level of our
All these situations have left us extra-well armed for
company.
the future.
In this annual report we give a number of concrete examples of our recent research and development
Measures
results (see p. 16-22). These are always to a greater or lesser extent the outcome of good teamwork between
In this poor economic climate we continue to look for
sales, R&D, production, marketing, procurement and
alternatives - new applications, new products and new
senior management.
-3-
Green
With confidence
In this annual report we would also like to introduce you
What will happen with the world economy in the
to our ‘green’ side. Ecological projects, products, plans
coming years is largely a matter of conjecture.
and developments form a red thread through the
Economists are assuming that the slowdown will, in
present report.
the most favourable of circumstances, last for 4 to 6 quarters. Sioen Industries is taking full account of these
Not because they are ‘in’, but because the environment
predictions and has already taken the necessary
and safety are close to our hearts. Our company slogan
decisions and measures.
for many years now has been ‘Protection through Innovation’. We produce products that protect human
Today we need to have confidence in our own strengths:
beings, their environment and their possessions and do
We are a flexible company, with state-of-the-art
so in an environmentally friendly way.
production equipment, unique cost-efficient vertically integrated processes, enthusiastic employees and solid
In our business statement (see p. 8) we say that “we wish
customer relations.
to develop environmentally friendly coating and processing technologies and in so doing set the
Our business statement is clear, our strategy well
standard for green safety and protective products, while
thought-through, our business slogan powerful.
creating sustainable, profitable growth.” The green ‘red thread’ in this annual report testifies that we are working hard at this.
Jean-Jacques Sioen
Michele Sioen
Chairman of the Board
CEO
of Directors
-4-
report of the board of directors The past year splits into two distinct parts. During the
Added to this are the restructing costs introduced as
first three quarters we were well on the way to beat the
an immediate response to the drop in demand in the
sales of our 2007 record year. Then, in the fourth quarter,
fourth quarter.
the industrial world was confronted with an economic p
slowdown.
EBIT: the above-mentioned facts resulted in an EBIT of EUR 16.1 million compared with EUR 38.8 million
p Sales: In 2008 the Sioen Industries group realized
in 2007.
sales of EUR 349.4 million, compared with EUR 380.3 p
million in 2007 (-8%). This drop is due entirely to the economic slowdown in the last quarter of the year.
Financial result: financial result during 2008 amounted to EUR 9.5 million compared with EUR 8.4 million in 2007. In addition to interest charges of EUR
p Gross margin: the total gross margin fell slightly
7.5 million, the group recorded EUR 1.0 million of
compared with 2007, reflecting a shift in sales mix
realised and EUR 1.0 million of unrealised exchange
and peak prices of basic raw materials and energy,
rate losses. The sharp fall in the British Pound and
despite improved production efficiency and the use
the drop of the Polish Zloty at year end are the main
of alternative materials.
factors here.
p Services and other goods: a rigorous effort to
p
Profit: group pre-tax profit for 2008 amounted to
reduce costs produced a decrease in general
EUR 6.5 million compared with EUR 30.4 million in
expenses of approximately EUR 2.2 million.
2007. Net profit for 2008 amounted to EUR 3.4 million compared with EUR 19.2 million in 2007. The
p
Other operating expenses: these consist
fact that the effective tax rate was higher than the
mainly of a number of non profit-related taxes
normal tax rate is due to the reversal of deferred tax
(property tax, taxe professionnelle, etc.), which
assets, as a result of the economic recession.
become more and more significant. p p
Recurrent EBIT (REBIT): REBIT for 2008 amoun-
Net cash flow: net cash flow for 2008 amounted to EUR 24.2 million.
ted to EUR 21.4 million compared with EUR 40.3 p Dividend: the Board of Directors will be proposing
million in 2007. This EUR 18.9 million drop is almost entirely due to the reduced sales volume.
to the General Meeting that it declares a dividend equal to 50% of the net profit for the financial year.
p
Non-recurrent costs: non-recurrent costs
The proposed dividend for the 2008 financial year
amounted to EUR 5.3 million in 2008. The majority of
amounts to EUR 0.08 per share.
these can be allocated to the start-up of a new foil production plant (pond foils, industrial foils, etc.), which was completed in the course of the fourth quarter.
-5-
coating division The coating division specialises in the integrated
Extrusion coating
coating of technical textile, of which it masters the
Oil booms, technical ventilation piping, soil remediation
entire production process from the extrusion of the
fabric and swimming pool covers form a relatively stable
technical yarns to the weaving of the technical fabric
market.
and its coating with various polymers. The group is the only player in the world with full proficiency in five
Calandering
different coating technologies, each with its own
By the end of the year the start-up phase was behind us
specific products and markets.
and we are now deciding on the final product range. The focus is primarily on industrial foils for various
Spinning and weaving
markets (pool foils, dashboard films etc.).
In the spinning mill we extrude polyester granules into yarns. In 2008 we began developing and producing
We maintained our market shares in our existing
tailor made yarns for external customers. The weaving
segments and are rapidly developing new products
mills (producing largely for internal use) followed the
with which we want to tap new markets (e.g. biogas
trend of the direct coating products. Here too we’ve
containers). On top of this, thanks to the efforts of our
developed alternatives ready to be marketed in 2009.
commercial-technical people and the R&D team, we were able to extrude new yarn types in our spinning
Direct coating
mills.
From the second half onwards, and in particular in the last quarter, the transportation market experienced a
This and the knowledge that our production apparatus
sudden and general downturn. This immediately
is up-to-date and functioning perfectly make us
affected Sioen’s sales in this market. Our market share,
optimistic for the future. For the coming years we will be
however, remained unchanged.
focusing on R&D, continuous product and process improvements, production efficiency and market
Online coating
penetration.
Last year we doubled production capacity to meet the strongly rising demand for open structure textiles (reinforcement nets, windbreak nets, geotextiles). We also grew strongly in reinforcement netting for PVC roofing.
Transfer coating With a number of new developments enabling us to win several large contracts, we looked well on the way to posting attractive growth figures. The slowing in the automobile sector in the fourth quarter meant that we recorded a slight decline on annual basis.
-6-
APPAREL DIVISION This division stands for ‘technical protective clothing’.
p All across Europe companies expressed their
Points of particular attention and certainly also the keys
appreciation of Sioen’s innovative protective
to our success in 2008 included our focus on technical
clothing, resulting in a number of new contracts.
design, attention to specific customer needs, rapid
p Well-known sports clothing brands also recognized
development of new products and additional attention
Sioen’s know-how with new contracts.
to quality. All this left its mark on the earnings figures, with a The Apparel division continued to concentrate on the
divisional operational cash flow of EUR 8.6 million and
technical design and quality of all its products. These
an EBIT of EUR 7.9 million.
efforts were rewarded with growth of more than 10%. p We won tenders with recently developed product
lines (technical protective clothing for firefighters, foresters, police forces, etc.).
CHEMICALS DIVISION Sioen Chemicals processes basic raw materials (PVC
In addition, the margins of the Chemicals division came
powders, pigments, etc.) into high quality technical
under pressure during the first 9 months of the year
semi-finished products (pigment pastes, UV inks,
from high and constantly rising raw materials prices (oil
varnishes, dispersions, flame retardant products, etc.) for
derivatives and energy).
a whole range of applications. An activity that was formerly limited to the production of raw materials for
In this division too, R&D is a decisive factor for future
internal use evolved to a separate division within the
growth. Rapid development of special to-measure
Sioen Industries group with fast-growing external sales.
products and product optimization are among our
Through a number of targeted takeovers (in 2007), the
priorities.
Chemicals division has succeeded in diversifying in In the past year we laid the foundations for the future.
various geographical and technical product markets.
We are convinced that we have the right long-term Our results were impacted in 2008 by shrinking demand
strategy, which will result in added value for our
from the textiles sector, offset, only in part, by strong
shareholders.
performance in our other markets.
-7-
industrial applications division The industrial applications Division processes coated
sudden, sharp downturn in the transportation sector,
fabrics and PVC film for heavy-duty applications. The
the group decided to undertake a radical restructuring
decline in the car and transportation industry had an
in every subsidiary of the division in order to secure the
immediate and heavy impact on this division’s results.
future.
The majority of the sales of the industrial applications
Manufacturing
division consists of laser cutting of airbags and interior
Attractive results were recorded in both the non-wovens
trim for the car industry, and the production of trailer
department and in the other industrial activities. We
tarpaulins, trailer rooftops and curtains.
invested in a new cutting machine and built a new hall to permit the even more efficient cutting and welding
Transportation
of pool foil.
This sector produces trailer, container and railway curtains and tarpaulins. Under pressure from the
outlook The current macro-economic situation makes it difficult to look ahead. We are working hard to defend our market positions and maintain rigorous cost control. We are closely following all new developments in our markets and are confident that, with our flexibility and our financial and shareholder structure, we will emerge stronger from this period.
ifrs All figures and tables given in the annual report have been prepared in accordance with the recognition and valuation principles of the International Financial Reporting Standards as accepted by the European Union.
-8-
-9-
100% Pennel Automotive s.a.s. Calandering, France
99% Veranneman TT n.v. Weaving / Direct coating Belgium
100% TIS n.v. Weaving, Belgium
100% Siofab s.a. Transfer coating, Portugal
100% Sioen Shanghai(3) Sales office, China
100% Sioen Fibres s.a. Spinning, Belgium
100% Sioen Fabrics s.a. Weaving / Transfer coating / calandering, Belgium
100% Sioen Coating Distribution n.v. Verkoopkantoor, België
100% Saint Frères s.a.s. Direct coating France
99% Sioen Coating n.v. Direct coating Belgium
COATING
99% Sioen Zaghouan s.a. Apparel, Tunisia
100% Sioen Tunisie s.a. Sales office, Tunisia
Sioen France s.a.s. Sales office, France
95% P.T. Sungintex Apparel, Indonesia
95% P.T. Sioen Indonesia Apparel, Indonesia
100% Mullion Manufacturing Ltd. Apparel, UK
Donegal Protective Clothing Ltd.(4) Apparel, Ireland
Confection Tunisienne de Sécurité s.a. Apparel, Tunisia
100% Sioen n.v. Apparel / Central distribution unit, Belgium
APPAREL
SIOEN INDUSTRIES nv
100%
5%
5%
100%
89%
Fillink Technologies n.v. Belgium
Richard s.a.s. Paste production, France
90% European Master Batch n.v. 10%(2) Paste production, Belgium
100% Inducolor s.a. Paste production, Belgium
chemicals
100%
100%
100%
100%
100%
100%
100%
(1) Quoted percentages have been rounded and reflect the situation at 31st December 2008 (2) Via Sioen Coating nv (3) The official name is Sioen Coated Fabrics Shanghai Trading Ltd. (4) The official name is Gairmeidi Caomhnaithe Dhun na nGall Teoranta. (5) Respectively via Monal s.a. and Roltrans Group b.v. (6) In 2008 Roltrans Group Polska Sp.z.o.o. changed its name into Roland International Polska Sp.z.o.o. (7) In 2008 Roland Tilts UK Ltd changed its name into Roland International Ltd
Roland Tilts UK ltd (7) UK
Roland Ukraine llc Ukraine
Roltrans International Polska sp.z.o.o.(6), Poland
Roland Planen GmbH Germany
Roltrans Group America Inc. USA
100% Roland International b.v.(5) Manufacturing of truck tarpaulins, the Netherlands
100% Sioen Nordifa s.a. Filter production, Belgium
100% Saint Frères Confection s.a.s. Heavy-duty manufacturing, France
25% Coatex n.v. 75%(2) Processing of coated fabrics and films, Belgium
INDUSTRIAL applications
group structure
share information Listing
shareholders structure
In order to be able to continue following and ensuring the company’s fast growth, and in the conviction that a
Institutional Investor: 3.40%
transparent policy would further strengthen the group’s growth possibilities, the Sioen Industries share was introduced on the cash market, double fixing, of the
Public: 36.30%
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 1998, has been quoted on the continuous segment of the Brussels forward market, which has since become
Sihold: 60.34%
Euronext Brussels. The total number of shares amounts to 21 391 070. At the moment 7 758 538 shares or 36.30% of the total number of shares are spread among the public. 60.34% are controlled via the holding company Sihold n.v. or controlled by the Sioen family, and 3.40% are held by Shell Pension Fund.
Evolution of the share in 2008 The share was quoted at its highest price on 6 May
3.52 on 31 December 2008.
2008, at EUR 9.97. Since its lowest price on 29 December
Market capitalization amounted to EUR 75.29 million on
2008 (namely EUR 3.22), the share was quoted at EUR
31 December 2008.
Sioen
E
Volume
250 000
15
200 000 10
150 000 100 000
5 50 000
02
03
04
05
- 10 -
06
07
08
0
2008: financial communication policy
share codes and classification
The Sioen Industries share was included on Euronext
ISIN BE0003743573
Brussels in Compartment C (Small-Caps).
Euronext code BE0003743573 Mnemo SIOE
Dividend policy
Type Stock - Ordinary stock - Continuous
The Board of Directors wishes to continue striving for a
Market Euronext Brussels - Euronext - Local securities
pay-out ratio of more than 15% and to have the
Compartment C (Small-Caps)
dividend increase year after year, in order thereby to have the dividend closely linked to the cash flow
ICB Sector classification:
expectations on the one hand, and on the other hand to
3000, Consumer Goods
reward the shareholders’ confidence in the company.
3700, Personal & Household Goods 3760, Personal Goods 3763, Clothing & Accessories
The pay out ratio for 2008 amounts to 50.3%, as compared to 50.2% last year. The dividend amounts to EUR 0.08 gross (EUR 0.06 net) and is made payable at
Reuters: SIOE.BR
the counters of Dexia Bank, ING Bank, Fortis Bank, Bank
Bloomberg: SIO.BB
Degroof and KBC Bank from 11 May 2009.
Datastream: B:SIO
Obligations with regard to periodical information following the transparency directive effective as of 1 January 2008 Declaration regarding the information given in this annual report 2008 The undersigned declare that: p The annual accounts, which are in line with the standards applicable for annual accounts, give a true
and fair view of the capital, the financial situation and the results of the issuer and the consolidated companies; p The annual report gives a true and fair view of the development and the results of the company and
of the position of the issuer and the consolidated companies, as well as a description of the main risks and uncertainties they are faced with.
Michele Sioen, CEO Geert Asselman, CFO
- 11 -
Corporate Governance The Sioen family has been supported by external,
can be consulted on the Sioen Industries website
independent directors since 1986. Their expertise and
(www.sioen.com).
experience contribute to the proper and effective
Since the Corporate Governance Charter came into
management of the company. On 22 March 2005 the
effect, a number of minor amendments have been made
Board of Directors adopted a Corporate Governance
to it, reflecting changes to the environment, such as the
Charter, in accordance with the Belgian Corporate
dematerialization of shares, or a small change in the
Governance Code. The Corporate Governance Charter
shareholder structure.
has been in force since the 2005 General Meeting, and
The board of directors Composition (situation as at 31 December 2008) The directors’ mandates expire at the 2011 general meeting. CHAIRMAN
Mr J.J. Sioen (1), chairman/director in various other companies
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
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
Mr L. Vandewalle (3) (5), 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 independent directors, the Board of Directors has opted for the transition criterion, foreseen by the law of 17 December 2008 that is applicable until Juli 1 2011. This in order to ensure the continuity of the Company and its management. (4) The Statutory Auditor’s mandate expires at the general meeting of 2011. (5) In replacement of Mr Sterckx.
- 12 -
The Board of Directors and how it works
transition period as foreseen in the law of 17/12/2008
In accordance with the Articles of Association, the Board
and valid until 1/07/2011, for the definition of indepen-
of Directors meets regularly as a function of the com-
dence of the members of the Audit Committee.
pany’s needs and interests. The Board of Directors met five times in 2008. The number of meetings attended by
The Audit Committee met four times in 2008. The
the individual directors in 2008 was as follows:
number of meetings individually attended by the
Mr Jean-Jacques Sioen
5
members of the Audit Committee in 2008 was as follows:
Ms Michèle Sioen
4
Mr Wilfried Vandepoel
4
Ms Jacqueline Sioen-Zoete
5
Mr Louis-Henri Verbeke
4
Ms Danielle Sioen
5
Mr Luc Sterckx
1
Ms Pascale Sioen
4
Mr Luc Vandewalle
1
Mr Pol Bamelis
5
Mr Wilfried Vandepoel
5
In conformity with article 526 bis of Companies Code, the
Mr Louis-Henri Verbeke
5
Company declares that at least one member of the Audit
Mr Luc Sterckx
1
Committee complies to the independent requirements
Mr Luc Vansteenkiste
5
and competence needs related to accounting and audit.
Mr Luc Vandewalle
4
b) Remuneration Committee In conformity with article 526 bis of Companies Code,
In 2008 the Remuneration Committee was made up of
the Company declares that at least one member of the
two independent directors, namely Messrs Bamelis
Audit Committee complies to the independent require-
(chairman) and Vansteenkiste. The Remuneration
ments and competence needs related to accounting and
Committee advises the Board of Directors on pay policy
audit.
in general and on the compensation paid to the members of the Board of Directors and the Management
The permanent agenda of every Board of Directors
Committee in particular. The share option plans also fall
meeting includes the discussion of and taking of
under its remit. In 2008 the Remuneration Committee
decisions with respect to the individual results of
met twice. All members of the committee were present
companies in the group, division results, consolidated
at each meeting.
results, current investments and projects, new projects and proposals for investment opportunities. The Board
c) Nomination Committee
also deals with specific points on the agenda as a
The Nomination Committee did not meet in 2008.
function of concrete matters in hand.
Management Committee Working committees
The members of the Management Committee (as of 31
The Sioen Industries Group has three working committees:
December 2008) are: - MJS Consulting b.v.b.a., represented by Ms M. Sioen
a) Audit Committee:
- P. Company b.v.b.a., represented by Ms P. Sioen
In 2007 the Audit Committee consisted of three inde-
- Mr Geert Asselman
pendent directors, namely Messrs Vandepoel (Chairman),
- Mr Erwin Van Uytvanck
Verbeke and Vandewalle (in replacement of Mr Sterckx).
- Mr Michel Devos
The Board of Directors chooses to make use of the
Secretary: Mr Loebrecht Lievens
- 13 -
Remuneration of directors and the Executive Management In 2008 the following fees were paid to the members of
Extract from the minutes of the Board of Directors’ meeting of 17 March 2009 Exposition
the board of directors and the executive management:
Both the company and its subsidiaries have, during the
Non-executive and independent directors, as well as the
past year, as part of various building projects, awarded
members of the executive management in their capacity
various contracts to SVB PROJECT N.V. having its
as director:
registered office at 8850 Ardooie, Fabriekstraat 23
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
Both the company and its subsidiaries may in the future
D-Lance b.v.b.a
EUR 20 000
wish to award contracts to SVB in the context of building
P. Company b.v.b.a
EUR 20 000
contracts.
Pol Bamelis n.v
EUR 22 250
Revam b.v.b.a.
EUR 29 000
Mr Jean-Jacques Sioen declared that he has an indirect
Louis Verbeke e.b.v.b.a.
EUR 26 000
conflict of interests as regards the intended transactions,
K.E.M.P. n.v.
(hereafter “SVB”).
EUR 8 667
Vean n.v.
EUR 21 500
Dhr. L. Vandewalle
EUR 26 000
seeing that he is a shareholder in SVB. It is in the company’s interest to negotiate as low a price as possible, while it is in SVB’s to arrive at as high a price
Mrs. Michèle Sioen received in 2008, as CEO, besides her
as possible.
remuneration as a member of the Board of Directors, a fixed remuneration of EUR 432 500. She received a
Deliberation and decision
variable remuneration (base calculation 2007) for an
In this context Mr Jean-Jacques Sioen abstained from the
amount of EUR 124 260. For 2008, the CEO abandons the
deliberation and decision-making with regard to the
variable part of her remuneration.
above-mentioned agenda item.
The fixed remunerations paid to the executive manage-
After deliberation the Board of Directors decided
ment*, including directors in their capacity as members of
unanimously to confirm the transactions done with SVB
the executive management, amounted to EUR 2 188 775
and to approve any future transactions with SVB.
(excluding CEO). Variable remuneration received (base calculation 2007) amounted to EUR 186 357.
Justification of asset-related consequences
For 2008, the executive management abandons the
The total price for the contacts in the framework of the
variable part of their remuneration.
various building projects amounted to EUR 220 000 in 2008 and is estimated between EUR 45 and EUR 100 per
In 2008 no shares in Sioen Industries, share options
hour in 2009, depending on the nature of the contract.
or other rights for the acquisition of shares in Sioen
This corresponds to the market price for comparable
Industries were granted to the CEO and the other
assignments in the context of building projects.
members of the executive management. There are no specific recruitment or golden handshake agreements with the members of the executive management. * The executive management consists of executive directors and members of the management committee.
- 14 -
External audit Within the Sioen Industries group, external audit is
Protocol to prevent abuse of insider information
chiefly carried out by Deloitte Bedrijfsrevisoren. This
To prevent privileged information being used illegally by
involves the auditing of both the statutory financial
directors, shareholders, and members of the manage-
statements and the consolidated annual financial
ment and staff (i.e. “insiders”), or even to prevent such an
statements of Sioen Industries n.v. and its subsidiaries.
impression possibly being created, the Board of Direc-
To the extent that the audits of a number of subsidiaries
tors of Sioen Industries n.v. has produced a protocol for
are carried out by other auditing companies, Deloitte
the prevention of abuse of insider information (“1997
makes use of their work, as stated in the Statutory
Protocol”).
Auditor’s report. During the past financial year the Statutory Auditor received EUR 282 000 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 as
received EUR 59 065 for other auditing work, and EUR
such, ensuring observance of the statutory provisions
10 000 for other assignments outside its audit mandate.
and maintaining the group’s reputation. In addition to a number of prohibitions concerning the trading of Sioen
The mandate of Deloitte Bedrijfsrevisoren as Statutory
Industries n.v. financial instruments when insiders have
Auditor of Sioen Industries n.v. expires at the annual
privileged information that is not (yet) available to the
meeting of 2011. Deloitte Bedrijfsrevisoren is represen-
public, it also contains a number of preventive measures
ted by Mr D. Van Vlaenderen and Mr K. Dehoorne.
and directives designed to maintain the confidential nature of privileged information. All insiders eligible for this have signed this protocol. A Compliance Officer has been appointed to monitor observance of the protocol.
- 15 -
General Information Registered office and name
cladding, the printing and finishing of all fabrics, the
The registered office of Sioen Industries, a public limited
manufacture of ready-to-wear items of clothing and
liability company under Belgian law, is established at
outfits for men and women, knitwear, embroidery,
Fabriekstraat 23, B-8850 Ardooie. The company is listed in
household and table linen, children’s clothing. The
the Bruges register of legal persons under enterprise
manufacture of safety and high visibility articles. Who-
number 0441.642.780.
lesale and retail trading in all the abovementioned items, • The investment in, subscription to, permanent takeover,
Incorporation and publication
placing, purchase, selling, and trading of shares, dividend
Sioen Industries was incorporated under the name
certificates, bonds, certificates, claims, currencies and
“Sihold” by deed executed before notary-public Ludovic
other transferable securities, issued by Belgian or foreign
du Faux in Moeskroen on 3 September 1990, published in
companies, whether or not in the form of trading
the appendix to the Belgian Official Journal of 28
companies, administrative offices, institutions and
September 1990, under no. 900928-197.
associations either with or without (semi-) public status, • The management of investments and shareholdings in
Financial year
subsidiaries, the holding of directorships, the giving of
The financial year begins on 1 January and ends on 31
advice, management and other services to or in accor-
December of each year.
dance with the activities carried out by the company itself. These services may be provided by virtue of
Term
contractual or statutory appointment and in the capacity
The company is established for an indefinite period.
of external consultant or representative body of the customer.
Object of the company The company’s object, in Belgium and abroad, on its own
All this insofar as the company complies with the
behalf and on behalf of third parties, is:
statutory requirements. The company may, in Belgium
• The weaving of fibres of all kinds, the coating of fabrics
and abroad, effect all industrial, trading, financial,
and all other material, the printing thereof, the manufac-
moveable property and real estate transactions that may
ture of plastic and plasticized material, the manufacture,
develop or promote its business either directly or
purchasing and sale, both in Belgium and abroad, of
indirectly. It may, by any means, acquire all movable or
material useful for or relating to aforesaid products and
immovable goods even if these are not related directly or
raw materials, as well as the manufacture of chemical
indirectly to the company’s object.
products and pigments,
It may, in any way, acquire participating interests in all
• The manufacture of pre-finished outer clothing in
associations, businesses, enterprises or companies that
woven fabric, the manufacture of all kinds of tailormade
are striving for the same or a similar or related object or
clothing and embroidery, the manufacture of outer
that can promote its business or facilitate the sale of its
clothing in knitted fabrics, and of household linen and
products or services, and it may collaborate or merge
interior decoration items, the manufacture of wall
therewith.
- 16 -
Consultation of documents
board of directors is authorized to ask for an issue
The statutory and consolidated annual accounts of the
premium. If the board of directors decides to do so, this
company and the accompanying reports are filed with
issue premium should be allocated to an unavailable
the National Bank of Belgium. The articles of association
reserve account that can only be reduced or written off
and the special reports required by the Companies Code
by resolution of the general meeting passed in the
can be obtained from the Clerk’s Office of the Commercial
manner required for the amendment of the articles of
Court of Bruges.
association.
These documents, as well as the annual and half-yearly reports and all information published for the benefit of
In the absence of express authorization given by the
the shareholders, can also be requested by shareholders
general meeting to the board of directors, the board of
at the registered office of the company. The articles of
directors’ authority to increase the subscribed capital
association, the annual and half-yearly reports can also be
through a contribution in cash with cancellation or
downloaded from the website www.sioen.com.
restriction of the existing shareholders’ preferential subscription rights, or through contribution in kind, is
Authorized capital
suspended from the date of notification to the company
The board of directors is authorized, during a period of
by the Banking, Finance and Insurance Commission of a
five years counting from the date of publication in the
public takeover bid for the company’s shares. This
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 May
of 25 April 2008 (BOJ of 28 May 2008), to increase the
2007 expressly authorized the board of directors to
subscribed capital on one or more occasions, by a
increase the subscribed capital on one or more occasi-
maximum amount of forty-six million euros. This renewa-
ons, from the date of notification by the Banking,
ble authority is valid for capital increases in cash, in kind
Finance and Insurance Commission to the company of a
or by conversion of reserves. At the moment this amount
public takeover bid for the company’s shares, through
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 and
557 and 607 of the Companies Code. This authority is
subject to observance of the conditions laid down in
granted for a period of three years from 25 May 2007 and
Articles 535 and 592 to 599 of the Companies Code, to
is renewable.
cancel or restrict the preferential subscription right that is is authorized to restrict or cancel the preferential subscrip-
Acquisition by the company of shares in its own capital
tion right in favour of one or more particular persons,
The general meeting of 25 May 2007 expressly authori-
even if these are not members of staff of the company or
zed the board of directors, in accordance with the
its subsidiaries.
provisions of the Companies Code, to acquire or have
granted to the shareholders by law. The board of directors
disposal of its own shares or profit-sharing certificates, if In the event of an increase of the subscribed capital,
the acquisition thereof is necessary to avoid the threat of
carried out within the limits of the authorized capital, the
serious detriment to the company. This authorization is
- 17 -
valid for a period of three years from date of publication
Stock option plan II
of the above-mentioned resolution in the Annexes to the
In order to make remuneration dependent on the
Belgian Official Journal (BOJ of 15 June 2007).
company’s performance, it was decided to introduce a option plan. This new option plan meets all the require-
The general meeting of 25 April 2008 authorized the
ments of the law of 26 March 1999. The company has
board of directors, in accordance with Articles 620 to 623
opted for an option plan based on a basket of shares of
and 625 of the Companies Code, to obtain its own shares
European companies. The options granted by Sioen
through purchase or exchange in the maximum number
Industries have as their underlying asset the BEVEK ING
permitted by law, and at a price equal to the market
(L) Invest EMU Equity Fund (cap) with ISIN code
value of the shares. This authorization also extends to
LU0095527585 and are granted in the form of a call
the acquisition of shares of the company by one or more
option. These call options are offered free of charge to
of its direct subsidiaries within the meaning of the law,
those concerned. The exercise price will correspond, at
and is valid for a period of eighteen months counting
the offeror’s choice, to either the closing price of the
from 25 April 2008 and is renewable.
BEVEK’s shares on the day before the offering date, or the average of the closing prices of the BEVEK’s shares for
Share based payment plans Stock option plan I
the 30 calendar days preceding the offering date. This
Under a share option scheme originally introduced in
be sent to every beneficiary. The company covers itself
1996, a total of 6 500 options were issued in 2000 of
by buying, at the same time, an identical number of
which 3 250 remain outstanding and exercisable at the
options having the same features, of the same fund and
price of EUR 20.3355 per share until January 2008.
with the same exercise price. The option premium that
The Board of Directors remains authorized to grant up to
Sioen Industries paid for this amounted to 52% of the
158 000 options. No options have been granted to
closing price of the BEVEK on the day before the offering.
amount will be mentioned in the offer letter which will
directors under this scheme.
Overview of the 2000 share option plan Date of Board decision Option price as % of market price Option price Option exercise price
10/10/2000 7.5% 1.5375 20.3550
Allocation
6.500
Unused
3.250
Balance to be exercised January 2005-2008
(3.250)
- 18 -
The total number of outstanding options is as follows
2008
Options outstanding at 1 January
3 957
0
0
3 957
-3 957
0
Options outstanding at 31 December
0
3 957
Options exercise price
0 140.11 EUR
Option premium paid
0
Options granted during the reporting period Options exercised during the reporting period
On January 14 2009, we engaged in a new stock option plan, which was provided for in 2008 for the same amount and under the same regime as last year. We refer to section III.5.8 Investments. 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.
- 19 -
2007
72.86 EUR
I. Comments on the consolidated financial statements
Sioen Industries Group Sioen Industries is the leading world producer of coated technical textiles, European market leader in industrial protective clothing, a niche specialist in fine chemicals and a major world player in processing technical textiles into semi-finished products and technical end products.
Sales In 2008 Sioen achieved net group sales of EUR 349.4 million, which results in a decrease by 8.1% compared to EUR 380.3 million the year before. The decrease is fully related to the sales drop during the last quarter of 2008. In the apparel division external sales growth of EUR 7.1 million was achieved related to ‘new’ businesses and the direct customer business. On the other hand the downswing in the trailer building business in the last quarter of 2008 reduced sales in both the coating and industrial applications divisions by 11.3% and 16.7% respectively. Next to the regression in the truck market external sales in the chemicals division decreased by 13.6% due to the sale of the granules business activity in September 2007.
p
p
Gross margin-EBITDA-EBIT p Historical high raw materials prices and a significant p
drop in the trailer business in the last quarter of 2008 resulted in a decrease in gross margin and EBITDA at group consolidated level by 2.0% and 38.4% respectively. In the coating division, the strategy of price increases for finished products could no longer compensate the constantly rising raw material prices, resulting in a gross margin decrease of 2.9% compared to 2007. Additionally, the start up costs related to a new production line and restructuring costs resulted in a decrease of the operating cash flow by 41.6% in this division. In the apparel division the gross margin decreases by 1.3% explained by the pound sterling evolution. This had a negative impact on operating cash flow, which decreased from EUR 10.6 million in 2007 to EUR 8.8 million in 2008. In this division technical excellence is crucial, in particular with professional users that set very high standards. The chemicals division continued the integration process of companies
p
p p
p
- 20 -
after implementation of a new ERP system. A significant increase of raw material prices, maintenance costs and user license fees related to the new ERP system, together with costs related to the closing of the Lyon production entity, negatively affected the gross margin and operating cash flow in 2008, which decreased from EUR 7.3 million in 2007 to EUR 1.9 million in 2008. Despite the major volume downswing, the gross margin remained at level within the industrial applications division. Next to the volume decrease, EBITDA decreased from EUR 4.6 million in 2007 to EUR 1.8 million in 2008 due to a drop of the Polish Zloty and British Pound against the euro. Services and other goods decreased by EUR 2.2 million, moving to 16.7% of net sales compared with 15.9% in 2007. The biggest decreases under this heading are transportation costs, interim costs and sales commissions. The decrease is partly offset by increased energy costs and IT-related fees (implementation of new ERP software in the chemicals division and the heavy confection subdivision) compared to 2007. Personnel costs decreased with EUR 1.6 million compared to 2007, related to increased production efficiency in 2008. Other operating costs cover a number of generally non profit-related taxes as property tax, ‘taxe professionelle’ in France and the like, which become more and more significant. This gives the group an operating profit of EUR 16.1 million in 2008 compared to EUR 38.8 million in 2007. Operating cash flow (EBITDA) decreased by 38.4% to EUR 37.7 million. Financial result: at EUR - 9.5 million, net financial costs were EUR 1.2 million higher than in 2007. This is explained by the unfavorable realized and unrealized financial result resulting from the continuous weakening of the pound sterling and the drop of the Polish Zloty at year end. Net financial debt amounts to EUR 151.6 million compared to EUR 146 million at the end of 2007. The effective tax rate was 47.8%, compared with 36.9% in 2007, due entirely to the non-recognized/
Risks
de-recognized deferred tax assets on tax losses incurred in certain subsidiaries. p The final net profit for 2008 amounts to EUR 3.4 million, compared with EUR 19.2 million in 2007. p Net operating cash flow decreased by EUR 19.3 million from EUR 43.5 to 24.1 million.
Sioen Industries NV is a company, listed on Euronext, that does not itself exercise any industrial activity. Sioen Industries holds participations in companies operating in the following sectors: p production and application of coatings on technical
Investments
textiles
p Total investments in tangible and intangible fixed
p design, development and production of protective
assets amounted to EUR 25.8 million. Main investments of 2008 are: • EUR 6.8 million: investment in new buildings and infrastructure at Veranneman and Sioen Coating NV • EUR 2.9 million: investment in infrastructure, building and machinery at Fabrics Calandering • EUR 2.6 million: investment in a new ERP package and hardware • EUR 2.2 million: machinery and infrastructure at Veranneman • EUR 1.3 million: weaving looms at TIS • EUR 0.8 million: machinery at Saint Freres Enduction • EUR 0.4 million: machinery at Sioen Coating NV
clothing p processing heavy technical textiles into finished
products p 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: p the volatility of crude oil prices and the more or less
related volatility of prices of its principle raw materials (PVC, polyester, plasticizer, etc.); p with regard to the processing of heavy technical textiles, the group’s evolution closely tracks the economic cycles of the truck sector; p 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.
Balance sheet In nominal net amounts working capital rose from EUR 126.2 million at 31/12/2007 to EUR 126.3 million at 31/12/2008. Taking into account that sales have decreased by EUR 30.9 million, working capital need as a percentage of sales increased from 33.2% to 36.1% at the end of 2008. Net financial debt increased from EUR 145.9 million at 31/12/2007 to EUR 151.6 million at 31/12/2008.
- 21 -
III.Consolidated Notes to the consolidated financial II. financial statements
III.1.consolidated KEY accounting rules sheet IN THOUSANDS OF EUROS II.1. balance III.1.1. segment information
The consolidated financial statements for 2008 were approved by the Board of Directors for publication on 17 March 2009. ASSETS
Note
2008
2007
Intangible assets
III.5.1
17 908
18 834
Goodwill
III.5.2
17 603
Property, plant and equipment
III.5.4
151 160
Non-Current assets
Interests in associates Long term trade receivables Other long term assets Deferred tax assets
17 585 151 404
2
0
III.5.5
17
14
III.5.5
1 345
636
III.5.15
3 846
5 445
TOTAL NON-CURRENT ASSETS
191 881
193 918
Current Assets Inventories
III.5.6
99 183
90 450
Trade receivables
III.5.7
56 107
73 208
Other receivables
III.5.8
8 445
11 515
Other investments and deposits
III.5.8
288
288
Cash and cash equivalents
III.5.8
14 545
7 479
Deferred charges and accrued income
III.5.8
1 292
1 254
TOTAL CURRENT ASSETS
179 860
184 194
TOTAL ASSETS
371 741
378 112
- 22 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
EQUITY & LIABILITIES
Note
2008
2007
Share capital
46 000
46 000
Retained earnings
95 541
101 761
Hedging and translation reserves
820
824
TOTAL EQUITY
142 361
148 585
Equity
Non-Current liabilities Interest bearing loans
III.5.11
102 140
107 074
Provisions
III.5.10
1 493
2 602
III.5.9
1 103
1 366
Deferred tax liabilities
III.5.15
16 410
18 863
Finance leasing
III.5.11
18 645
10 039
Other amounts payable
3
3
TOTAL NON-CURRENT LIABILITIES
139 794
139 947
Pension obligations
Current liabilities Trade and other payables
III.5.13
24 381
34 191
Interest bearing loans
III.5.11
43 361
35 400
Provisions
III.5.10
3 796
III.5.9
39
91
Current income tax liabilities
III.5.13
954
440
Social debts
III.5.13
9 573
10 523
Finance leasing
III.5.11
2 250
1 199
Other amounts payable
III.5.13
3 861
4 548
Accrued charges and deferred income
III.5.13
1 371
1 159
TOTAL CURRENT LIABILITIES
89 586
89 580
TOTAL EQUITY AND LIABILITIES
371 741
Pension obligations
- 23 -
2 029
378 112
II.2. consolidated income statement II.2.1. by function IN THOUSANDS OF EUROS
2008
Net sales Cost of sales
% of
2007
% of
Sales
Sales
349 366
100.0%
380 350
100.0%
-280 120
-80.2%
-289 191
-76.0%
69 246
19.8%
91 159
24.0%
-19 023
-5.4%
-20 460
-5.4%
-6 101
-1.7%
-7 352
-1.9%
-25 416
-7.3%
-25 737
-6.8%
Manufacturing contribution Sales and marketing expenses R&D expenses Administrative expenses Other operating result
2 646
0.7%
2 682
0.7%
Non recurring result (1)
-5 292
-1.5%
-1 500
-0.4%
Operating result
16 060
4.6%
38 792
10.2%
Financial result
-9 541
-2.7%
-8 373
-2.2%
8 514
2.4%
3 340
0.9%
-18 055
-5.2%
-11 713
-3.1%
6 519
1.9%
30 419
8.0%
-3 114
-0.9%
-11 233
-3.0%
3 406
1.0%
19 186
5.0%
EBIT
16 060
4.6%
38 792
10.2%
EBITDA
37 669
10.8%
61 171
16.1%
Cash flow
24 163
6.9%
43 510
11.4%
Financial income Financial charges Profit or loss before Taxes Taxes Profit or loss after Taxes
(1) Non-recurring items relate to impairment losses, restructuring expenses and start-up costs of new, significant investment projects until the product is ready to be sold at normal market conditions. We refer to III.4. ‘Detailed income statement’ for more detail.
- 24 -
II.2. consolidated income statement by bynature nature IN THOUSANDS EURO II.2.2. IN THOUSANDS OF EUROS
2008
Net sales
349 366
% of
2007
% of
Sales 100.0%
380 350
Sales 100.0%
Changes in stocks and wip
6 361
1.8%
5 345
1.4%
Other operating income (2)
3 918
1.1%
5 599
1.5%
Raw materials and consumables used
182 016
52.1%
188 798
49.6%
Gross margin
49.72%
51.77%
Services and other goods
-58 188
-16.7%
-60 355
-15.9%
Remuneration, social security and pensions
-71 005
-20.3%
-72 586
-19.1%
Depreciations
-20 601
-5.9%
-20 330
-5.3%
Write off inventories and receivables
-101
0.0%
-2 265
-0.6%
Other operating charges (3)
-6 380
-1.8%
-6 669
-1.8%
Non recurring result (1)
-5 292
-1.5%
-1 500
-0.4%
Operating result
16 060
4.6%
38 792
10.2%
Financial result
-9 541
-2.7%
-8 373
-2.2%
Financial income
8 514
2.4%
3 340
0.9%
Financal charges
-18 055
-5.2%
-11 713
-3.1%
6 519
1.9%
30 419
8.0%
-3 114
-0.9%
-11 233
-3.0%
3 406
1.0%
19 186
5.0%
EBIT
16 060
4.6%
38 792
10.2%
EBITDA
37 669
10.8%
61 171
16.1%
Cash flow
24 163
6.9%
43 510
11.4%
Profit or loss before taxes Taxes Profit or loss after taxes
(1) Non-recurring items relate to impairment losses, restructuring expenses and start-up costs of new, significant investment projects until the product is ready to be sold at normal market conditions. We refer to III.4. ‘Detailed income statement’ for more detail. (2) Other operating income mainly consists of received rent for buildings, transport recharges and received indemnities. In 2007 the apparel division received a significant indemnity related to flood damage in Indonesia. (3) Other operating expenses mainly consist of taxes on tangible assets, local taxes and import duties.
- 25 -
II.3. cash flow statement
2008
2007
Operating result
16 060
38 792
Depreciations
20 601
20 330
Impairment
0
1 500
Write off inventories and receivables
101
2 265
Provision other risks and charges
343
-213
Inventories
99 183
90 450
Long term and short term trade receivables
56 124
73 221
Details working capital:
Other receivables, non-current assets, investments & deferred charges
11 370
13 689
Trade and other payables
-24 381
-34 191
Tax liabilities & other amounts payable
-15 759
-16 670
Amounts written off inventories and receivables
12 655
13 087
Total working capital
139 192
139 586
Changes in working capital
-393
-13 235
Cash flow from operating activities
36 713
49 438
Current taxes
-3 965
-9 289
Net cash flow from operating activities
32 748
40 149
Received interests
328
162
Acquisitions of subsidiaries
0
-69
Investments in intangible and tangible fixed assets
-16 087
-24 695
Disposal and sale of intangible and tangible fixed assets
5 682
607
Increase in capital grants
830
0
Translation adjustments on intangible and tangible assets
750
224
Net cash flow from investing activities
-8 497
-23 771
Net cash flow before financing activities
24 251
16 378
Paid interests
-7 364
-7 378
Disbursed dividend
-9 354
-5 762
Increase long term interest bearing loans
0
0
Decrease long term interest bearing loans
-4 936
-17 111
Increase/(decrease) short term intrest bearing loans
7 963
11 390
Increase/(decrease) finance lease obligations
-1 215
-1 455
Other
-195
-205
Currency result
-2 081
-860
Cash flow from financing activities
-17 182
-21 379
Impact of cumulative translation adjustments and hedging
-3
-636
Change in cash and cash equivalents
7 066
-5 637
Net cash position at the end of previous period
7 479
13 116
Net cash position at the end of current period
14 545
7 479
- 26 -
II.4. II.4. equity equity statement statement
2008 Share capital Reserves
Translation differences
Hedging reserves
66
758
Hedging
-95
At the end of last financial year
46 000
101 761
Result
3 406
Dividends
-9 626
Deferred tax
Cumulative translation adjustments
59
32
Change in consolidation scope Transfer to profit on cash flow hedges At the end of current financial year
46 000
95 541
125
695
The company paid in 2008 9.6 Mio Eur dividends over 2007. Proposed dividend over 2008 under condition of approval by the general shareholders meeting amounts to 1.7 Mio EUR.
2007 Share capital Reserves
Translation differences
Hedging reserves
700
759
Deferred tax
111
At the end of last financial year
46 000
88 337
Result
19 186
Dividends
-5 762
Hedging Cumulative translation adjustments
-634
Change in consolidation scope Transfer to profit on cash flow hedges At the end of current financial year
46 000
- 27 -
101 761
66
-112 758
III. Notes to the consolidated financial to the consolidated financial III. Notes statements III.1. KEY accounting rules
III.1.1. summary segment information of significant accounting policies
The consolidated annual financial statements of Sioen Industries NV (the ‘Company’) include the annual financial statements of the Company, its subsidiaries and those entities which are consolidated by the proportional method (together referred to below as the ‘Group’). The consolidated financial statements are drawn up in conformity with the International Financial Reporting Standards (IFRS), as accepted within the European Union. 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 Committee (the IFRIC) of the IASB that are relevant to its operations and effective for annual reporting periods beginning on 1 January 2008, all of which were endorsed by the European Union.
p Amendment to IFRS 2 – Vesting Conditions and
p
p
p
p
Became applicable for 2008 p
p IFRIC 11 IFRS 2 Group and Treasury share Transactions
(applicable for accounting years beginning on or after 1 March 2007). p IFRIC 12 Service Concession Arrangements (applicable for accounting years beginning on or after 1 January 2008). p IFRIC 14 ‘IAS 19—The limit on a defined benefit asset, minimum funding requirements and their interaction’ (applicable for accounting years beginning on or after 1 January 2008). p Amendments to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures (amendments to be applied as from 1 July 2008 onwards).
p p
p
p p
Issued but not yet effective p IAS 1 Presentation of Financial Statements (annual
periods beginning on or after 1 January 2009). This Standard replaces IAS 1 Presentation of Financial Statements (revised in 2003) as amended in 2005. p Amendment to IAS 27 Consolidated and Separate Financial Statements (applicable for annual periods beginning on or after 1 July 2009). This Standard amends IAS 27 Consolidated and Separate Financial Statements (revised 2003).
p
p
p
- 28 -
Cancellations (applicable for annual periods beginning on or after 1 January 2009). Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements – Puttable financial instruments an obligations arising on liquidation (annual periods beginning on or after 1 January 2009). Amendments to IAS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items (annual periods beginning on or after 1 July 2009). IFRS 3 Business Combinations (applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period 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). Amendment to IAS 23 Borrowing Costs (applicable for accounting years beginning on or after 1 January 2009). Improvements to IFRS (2008) (normally applicable for accounting years beginning on or after 1 January 2009). Amendments to IFRS 1 First Time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements (normally prospective application for annual periods beginning on or after 1 January 2009). IFRS 1 First-time Adoption of International Financial Reporting Standards (applicable for accounting years beginning on or after 1 January 2009). IFRIC 13 Customer Loyalty Programmes (applicable for accounting years beginning on or after 1 July 2008). IFRIC 15 – Agreements for the construction of real estate (applicable for accounting years beginning on or after 1 January 2009). IFRIC 16 Hedges of a net investment in a foreign operation (applicable for accounting years beginning on or after 1 October 2008). IFRIC 17 Distributions of Non-cash Assets to Owners (applicable for accounting years beginning on or after 1 July 2009). IFRIC 18 Transfers of Assets from Customers (applicable for Transfers received on or after 1 July 2009).
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. III.1.1. segment General information principles
III.1.1.1 general principles The consolidated annual financial statements give a general overview of the Group’s activities and the results obtained. They give an accurate picture of the entity’s financial position, financial performance and cash flow, and are drawn up on a going concern basis. The annual financial statements are stated in thousands of euros, as the euro is the currency of the primary economic environment in which the Group is active. The annual financial statements of foreign participations are converted in accordance with the principles described in the section ‘Foreign currencies’. The consolidated financial statements are presented on the basis of the historical cost method, unless otherwise stipulated in the accounting principles set out below.
Foreign currencies On the basis of the Group’s relevant economic environment and its transactions, the euro has been chosen as the reporting currency. Foreign subsidiaries’ financial statements are converted as follows: Transactions in foreign currencies are converted at the exchange rate which is applicable on the date of the transaction. On each balance sheet date, cash assets and liabilities expressed in foreign currency are converted at the closing rate. Non-cash assets and liabilities which are shown at their fair value in a foreign currency are converted at the exchange rate which is applicable when their fair value was determined. Gains and losses arising from such conversions are recorded in the income statement. However, if they are deferred, they are recorded as equity. Assets and liabilities from the Group’s foreign activities are converted at the closing rate. Income and expenses are converted at the average exchange rate over the period, unless exchange rates have fluctuated significantly. The resultant exchange rate differences are recorded in equity, under the heading “Conversion differences”. If a foreign activity is disposed of, the cumulative amount of the exchange rate differences that was recognised in equity, is recorded in the income statement. Goodwill and adjustments to the fair value arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and converted at the closing rate.
- 29 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
III.1.1.2 consolidation principles
III.1.1.3 balance
Subsidiaries
Intangible assets
Subsidiaries are companies over which the Company exercises a decisive influence (‘control’). Control is the power to steer an entity’s financial and operational policy in order to derive benefit from its activities. The consolidation of subsidiaries starts on the date on which the Group acquires control over them and stops when it loses that control. The companies in question are accounted for by the full consolidation method. Subsidiaries’ annual financial statements are drawn up for the same financial year as those of the parent company and on the basis of uniform financial reporting principles for comparable transactions and other events in similar circumstances.
Intangible assets are valued at cost price. Intangible assets are recognised if it is likely that the Group will receive the associated future economic benefits and if the asset’s cost price can be reliably determined. After their initial recognition in the accounts, all intangible assets are valued at cost price, less any accumulated depreciation or impairments. Intangible assets are depreciated on a straight-line basis over the best estimate of their economic life. The remaining economic life and the depreciation method used are reassessed at the close of every financial year. Any change in the economic life of an intangible asset is treated as a revaluation. Internally generated intangible assets are only recognized if all the following conditions are satisfied: p an identifiable asset has been generated; p it is likely that the generated asset will yield future economic benefits; p the asset’s cost price can be reliably determined.
Combinations of companies If the Group takes over an entity or business activity, the identifiable assets, liabilities and contingent liabilities of the party which has been taken over are adopted at their fair value. Subsidiaries’ financial statements are included in the scope of consolidation from the date of acquisition until control ceases. The difference between the cost price and the acquiring party’s stake in the net fair value of the identifiable assets, liabilities and contingent liabilities is recorded as goodwill. If this difference is negative, the surplus, after reassessment of the fair values, is accounted for directly in the income statement. If the group increases its interest in an investment in which it did not yet have control, the surplus or deficit compared with the net asset, after adjustment to the fair value that was acquired, is processed as if it were a new acquisition according to the methodology explained in the section above. If the group increases its interest in an investment in which it already had control, the greater or lesser price that was paid vis-à-vis the share in the net assets that was acquired, is included directly in the company’s own equity. All intercompany transactions, intercompany balances and unrealised profits on intercompany transactions are eliminated unless they relate to a permanent writedown. Minority interests are valued on the basis of their share in the fair value of the recorded assets, liabilities and contingent liabilities.
Subsequent expenditure on capitalised intangible assets is only included in the balance sheet if it increases the likely future economic benefits associated with the asset concerned. All other expenditure is recorded in the income statement at the time it is incurred.
Licences, patents and similar rights Expenditure on purchased licences, patents, trademarks and similar rights is capitalised and depreciated on a straight-line basis over the contractual term, where applicable, or over the estimate economic life, which is deemed to be no more than five years.
Computer software Expenditure relating to the development or maintenance of computer software is normally offset against the result of the period in which it is incurred. Only external expenditure which is directly related to the purchase and implementation of purchased software is recorded as an intangible asset and depreciated on a straight-line basis over three years. Purchased ERP software and the associated implementation costs are depreciated on a straight-line basis over seven years.
- 30 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. III.1.3. segment balance information sheet
Research and development
Tangible fixed assets
Research expenditure with a view to the acquisition of new scientific or technological insights or knowledge is included as a cost in the income statement as it arises. Development expenditure in which research results are used in a plan or design for the production of new or substantially improved products and processes prior to commercial production or implementation is only recognised in the balance sheet if all the following conditions are satisfied: p the product or process is precisely defined and the expenditure is individually identifiable and reliably measurable; p the product’s technical feasibility has been sufficiently demonstrated; p the product or process will be commercialised or used within the company; p the assets will generated future economic benefits (e.g. a potential market exists for the product or its internal usefulness has been sufficiently proven); p the appropriate technical, financial and other resources are available to finalise the project.
Tangible fixed assets are valued at cost price less accumulated depreciation and impairments. A tangible fixed asset is recognised if it is likely that the Group will receive the associated future economic benefits and if the asset’s cost price can be reliably determined. The cost price includes all direct costs and all directly attributable costs incurred in order to bring the asset to the location and condition necessary for it to function in the intended way. Subsequent expenditure associated with a tangible fixed asset is usually recorded in the income statement as it is incurred. Such expenditure is only capitalised if it can 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 maintenance costs which do not increase the likely future economic benefits are recorded as costs as they are incurred. The different categories of tangible fixed assets are depreciated by the straight-line method over their estimated economic life. Depreciation commences once the assets are ready for their intended use.
If the above criteria are not satisfied, the development costs are taken to the income statement as they arise. Capitalised development costs are depreciated on a straight-line basis over the expected duration of the generated benefits from the start of commercial production or the implementation of the product or process.
The estimated economic life of the main tangible fixed assets lies within the following ranges: Buildings: 20 years Machines: 5 to 15 years Equipment: 10 years Furniture: 5 years Hardware: 5 years Vehicles: 5 years
Goodwill Goodwill represents the additional premium paid on the acquisition of an interest over the fair value of the Group’s interest in the acquired assets and liabilities at the time of acquisition. Goodwill is recorded as an asset and subjected to a impairment test at least once a year. Any impairment loss is immediately recorded in the profit and loss account and is not subsequently written back. Negative goodwill represents the amount by which the fair value of the Group’s interest in the acquired assets and liabilities at the time of acquisition exceeds the price paid. On the disposal of a subsidiary, associated undertaking or entity over which joint control is exercised, the related goodwill is included in the calculation of the gain or loss on disposal.
If an asset’s book value is lower than the estimated realisable value, it is immediately written down to the realisable value. The gain or loss on the sale or disposal of an asset is determined as the difference between the net income on disposal and the asset’s book value. This difference is recorded in the income statement. The borrowing costs that are directly attributable to the acquisition or construction of the capital assets are capitalized. Other borrowing costs are recognized as an expense in the year in which they are incurred. No borrowing costs were capitalized during 2008.
- 31 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
Lease agreements
Financial investments
Financial leasing
Investments are recorded in/ removed from the accounts on the transaction date, i.e. the date on which an entity undertakes to buy or sell the asset in question. Financial investments are valued at the fair value of the price paid, plus the transaction costs. Investments held for trading or available for sale are recorded at their fair value. If investments are maintained for trading purposes, the gains and losses arising from changes in the fair value are taken to the profit and loss account for the period in question. In the case of investments which are available for sale, gains and losses arising from changes in the fair value are immediately recognised in equity until the financial asset is sold or subject to impairment. In this case, the cumulative gain or loss which had previously been recognised in equity is included in the income statement for the period. Participations which are classified as available for sale, which are not listed on an active market and whose fair value cannot reliably be determined using alternative valuation rules are valued at cost price. Financial investments which are held until they mature are valued at their amortised cost price, using the effective interest method. This does not apply to short-term deposits, as these are valued at their cost price.
Lease agreements which assign to the Group all the main risks and benefits associated with ownership are regarded as financial leasing. The assets acquired under financial leasing arrangements are stated in the balance sheet at their fair value at the start of the lease agreement, or, if this is lower, at the present value of the minimum lease payments, less accumulated depreciation and impairments. The discount rate used in the calculation of the present value of the minimum lease payments is the interest rate implicit in the lease agreement, where this can be determined, or otherwise the company’s marginal borrowing rate. Initial direct costs are included in the capitalised amount. Lease payments are broken down into interest charges and repayments of the principal. The interest charges are spread over the duration of the lease agreement such that a constant periodic interest rate is obtained on the outstanding balance for each period. A financial lease agreement results in the recording of both a depreciation amount and an interest charge in each period. The depreciation rules for assets acquired under financial leasing arrangements are consistent with those for assets over which full ownership is acquired.
Operational leasing
Investment grants
Lease agreements in which all the main risks and benefits associated with ownership reside with the lessor are regarded as operational leasing. In operational leasing, the lease payments are recorded as costs and spread on a straight-line basis over the lease period. The total value of discounts or benefits granted by the lessor is offset against the leasing costs and spread on a straight-line basis over the lease period.
Investment grants relating to the purchase of tangible fixed assets are offset against the purchase price or manufacturing cost of the assets in question. The expected amount is recorded in the balance sheet at the time of initial approval, and, if necessary, corrected subsequently at the time of definitive allocation of the grant. The grant is recorded in the income statement in proportion with the depreciation of the tangible fixed assets for which it was obtained.
Property investments A property investment, i.e. one which is maintained in order to generate rental income, an appreciation of value or both, is shown at fair value on the balance sheet date. Gains or losses arising from a change in the fair value of a property investment are recorded in the income statement for the period in which they arise.
Inventories Inventories are valued at the lower of cost price or realizable value. The cost price includes all direct and indirect costs incurred to bring the goods to the stage of completion they have reached on the balance sheet date. The cost price is calculated using the weighted average cost price method. The realisable value is the
- 32 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
sheet liability method. Deferred tax liabilities are usually recognised for all taxable temporary differences and deferred tax receivables are recognised to the extent that it is likely that a taxable profit will be available against which the recoverable temporary difference can be offset. Such assets and liabilities are not recorded if the temporary differences arise from goodwill or from the initial recognition (other than in connection with a business combination) of other assets and liabilities in a transaction which has no effect on the taxable profit or the profit before tax.
estimated sale price minus the estimated finishing costs and costs associated with marketing, sale and distribution.
Receivables Short-term receivables are stated at nominal value, less suitable provisions for any debts regarded as doubtful. Long-term receivables are valued at amortised cost price.
Cash and cash equivalents Cash and short-term investments which are maintained until the end of the period are stated at their cost price. Cash equivalents are short-term, extremely liquid investments which can be converted immediately into cash of a known amount, and which do not carry any material risk of change of value.
Deferred tax liabilities are recognised for taxable temporary differences which relate to investments in subsidiaries, associated undertakings and enterprises accounted for by the equity method unless the Group can determine the time when the temporary difference will be resolved or if it is likely that the temporary difference will not be resolved in the near future. The book value of deferred tax receivable is assessed at every balance sheet date and reduced if it is no longer likely that sufficient taxable profit will be available to make it possible to use all or some of the benefit of the deferred tax receivable. Deferred taxes are valued on the basis of the tax rates which are expected to apply in the period in which the tax recovery is realised or the liability is settled. Deferred taxes are recorded as income or expenses in the income statement for the period, unless the taxation arises from a transaction or event that has been directly included in equity. In this case, the deferred tax is also accounted for in equity.
Financial liabilities and equity instruments Financial liabilities and equity instruments are classified on the basis of the economic reality of the contractual agreement. An equity instrument is a contract which includes the residual right to a share in the Group’s assets, after the deduction of all liabilities. Equity instruments issued by the Company are recorded to the amount of the received consideration, less the direct costs of issue.
Income tax Tax expenses consist of tax due for the reporting period and deferred taxes. The tax due for the reporting period is based on the taxable profit for the period. Taxable profit differs from the net profit in the income statement, because it excludes certain items of income or expenditure which are taxable or deductible in subsequent years, or which will never be taxable or deductible. The current tax liability is calculated on the basis of the tax rates for which the legislative process has been (substantially) completed by the balance sheet date. Deferred taxes are taxes which are expected to be paid or recovered on the basis of differences between the book value of assets or liabilities in the annual accounts and their taxable value used for the calculation of the taxable profit. They are accounted for using the balance
Pensions and related liabilities In accordance with laws and practices of each country, associated entities have either defined benefit schemes or defined contribution schemes.
Defined contribution schemes Contributions to defined contribution schemes are recorded as an expense as they fall due.
Defined benefit schemes In defined benefit schemes, the amount on the balance sheet (the ‘net liability’) corresponds to the present value of the gross liability, adjusted for unrecorded
- 33 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
actuarial gains and losses, after deduction of the fair value of the scheme investments and unrecorded past service costs. The ‘present value of the gross liability of a defined benefit scheme’ is the present value, before deduction of the scheme investments, of expected future payments required to settle the liability which results from the employee’s service record in the current and previous periods.
nel remuneration. Past service costs are taken gradually to the income statement and spread on a straight-line basis over the average term until the benefit rights have been acquired. If benefit rights can be regarded as acquired as a result of a new scheme or changes to an existing scheme, prior service costs are immediately recorded in the income statement. If the liability to be recorded on the balance sheet is negative, the asset entry that is included may not exceed the total unrecorded cumulative actuarial net losses and prior service costs and the present value of future repayments from the scheme or reductions in future contributions to the scheme (the ‘asset ceiling’ principle). In this case, however, the actuarial gains and losses are immediately taken to the income statement if deferring them would result in the recording of a gain purely as a consequence of an actuarial loss in the current financial year, or of a loss purely and simply as a consequence of an actuarial gain in the current financial year. Past service costs are in this case likewise immediately included if spreading them out on a straight-line basis would result in the recording of a gain purely as a consequence of an increase in past service costs during the current financial year.
The discounted value of the liability arising from defined pension rights and the assigned pension costs associated with the year of service and prior service pension costs are calculated by accredited actuaries using the projected unit credit method. The discount rate corresponds to the rate of return on the balance sheet date on corporate bonds with a high degree of creditworthiness and a remaining term comparable with the term of the Group’s liabilities. The discount rate is adjusted annually to reflect the market return from high-value corporate bonds whose term is consistent with the estimated term of the gross liabilities arising from payments after retirement. ‘Actuarial gains and losses’ include adjustments on the basis of experience (the consequences of differences between previous actuarial assumptions and what has actually happened) and the consequences of changes to actuarial assumptions. In principle, actuarial gains and losses are not recognised at the moment they arise, but, to the extent that the cumulative amount falls outside a certain ‘corridor’, they are spread on a straight-line basis over the expected average remaining working life of the employees who are members of the scheme. This corridor is determined individually for each defined benefit scheme and has lower and upper limits of 110% and 90% respectively of the higher of the present value of the gross liabilities and the fair value of the scheme investments.
Other long-term personnel remuneration Other long-term personnel remuneration such as longservice bonuses is accounted for using the ‘projected unit credit’ method. However, the accounting treatment differs from that of defined benefit schemes, in that actuarial gains and losses and past service costs are recorded immediately.
Provisions Provisions are established in the balance sheet if the Group has a legally enforceable or de facto liability on the balance sheet date as a result of an event in the past, for which it is likely that an outlay will be required of resources which contain economic benefits, and if this outlay can be reliably estimated. The amount recorded as a provision is the best estimate on the balance sheet date of the outlay required to satisfy the existing liability, if necessary discounted if the time value of money is relevant.
‘Past service costs’ refer to the increase in the present value of the gross liability for services provided by employees in previous periods and which result in the current period from the introduction of or changes to payments after retirement or other long-term person-
- 34 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
Provisions for reorganisation costs are recorded if the Group has a detailed formal plan for the reorganization that has already been communicated to the parties concerned before the balance sheet date.
Interest-bearing financing Interest-bearing financing is recorded at the value of the income received less transaction costs incurred. It is then valued at amortised cost price using the effective interest rate method. Any difference between the income (after deduction of transaction costs) and the redemption value (including premiums payable on redemption) is recorded in the income statement over the period of the financing.
Trading accounts payable and other payables Non-interest-bearing trade liabilities are valued at their cost price, which represents the fair value of the amount payable.
Derivative financial instruments The Group uses various derivatives to hedge against currency risks arising from its operating activities, financing and investment activities. The net risk of all Group subsidiaries is managed centrally in line with the objectives and rules established by the Group management. It is the Group’s policy to avoid engaging in speculative transactions or transactions with a leverage effect and not to engage in trading in financial instruments under any circumstances.
Derivative financial instruments are treated as follows: Cash flow hedging Changes in the fair value of derivative financial instruments which are ascertained to provide effective hedging for future cash flows are recorded directly in equity, while the non-effective element of the gain or loss on the hedging instrument is recorded in the profit and loss account. If the cash flow hedging of a fixed commitment or a highly likely future transaction results in the recognition of an asset or liability, then the associated profits and losses on the derivative instru-
ment which were formerly recorded in equity are now included in the initial valuation of the asset or liability at the time of recognition. For hedges which do not result in the recognition of non financial asset or liability, amounts which were deferred in equity are recorded in the profit and loss account for the period during which the hedged item affects the gain or loss.
Fair value hedging A derivative instrument is recorded as a fair value hedge if the instrument hedges against the risk that the fair value of the recorded assets and liabilities may change. Derivatives accounted for as fair value hedges and hedged assets and liabilities are recorded at their fair value. The corresponding changes in the fair value are recorded in the income statement. Changes in the fair value of derivative financial instruments which do not qualify as hedging transactions are recorded in the income statement when they arise. Hedge accounting is discontinued when the hedging instrument expires, is sold, terminated or exercised or when the hedging no longer satisfies the criteria for hedge accounting. In this case the cumulative gain or loss on the hedging instrument which is accounted for directly in equity continues to be recorded separately in equity until the expected future transaction takes place. If an expected future transaction is not expected to take place any more, the cumulative gain or loss shown in the equity is transferred to the income statement for the period.
Revenue Revenue is recorded if it is likely that the company will receive the economic benefits associated with the transaction and the amount of the revenue can be measured reliably. Turnover is recorded after the deduction of turnover tax and discounts. Revenue from the sale of goods is recorded when the delivery and the complete transfer of risks and benefits have taken place. Interest revenue is recorded on a time basis that reflects the actual return on the asset. Royalties are included on an accrual basis in accordance with the conditions of the agreement. Dividends are recorded when the shareholder’s right to receive them has arisen.
- 35 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
III.1.1.4 other Impairment of tangible and intangible assets
been recorded if no impairment loss had been recorded for the asset (or cash flow generating unit) in previous years. However, impairment losses on goodwill are never written back.
As goodwill, which is subjected to an impairment test every year, intangible assets and tangible fixed assets also are subject to an evaluation when there is an indication that their book value may be lower than their recoverable amount. If an asset does not generate a cash inflow which is independent of other assets, the Group estimates the realisable value of the cash flow generating unit to which the asset belongs.
Annual test for impairment In order to provide the stakeholders with in-depth knowledge as to the financial strength of the Group, we assessed the recoverable amount of assets. Actual cash flows may differ from the estimated cash flows in case key assumptions vary from the estimates.
The recoverable amount is the highest value of the fair value minus sales costs and the value to the business.
The recoverable amount of our global business has been determined based upon a value-in-use calculation. Calculations of the value in use cover a five-year period. Cash flow estimates are based on strategic plans in line with the current operational structure, which are approved by management, as well as on assumptions used in the strategic plans on the long-term development of the business environment. Estimates on future growth rates, market positions and profitability levels are the most important key assumptions. Price development of a single cost item has no material impact whereas the estimated development of total costs affects the profitability level, which is one of the key assumptions. Capital expenditure is estimated to be comprised of normal replacements.
The method of the going concern value uses cash flow forecasts based on the financial budget that is approved by the management. Cash flows after this period are extrapolated by making use of the most justified percentage growth over the long term for the sector in which the cash flow-generating unit is active. The management bases its assumptions (prices, volumes, return) on past performances and on its expectations with regard to the development of the market. The weighted average growth percentages are in conformity with the forecasts included in the sector reports. The post tax discount rate used is the estimated weighted average equity cost of the group before taxes, and takes account of the current market evaluations of the time value of money and the risks for which the future cash flows are adapted.
The terminal growth rate used in the calculations is based on the management’s assessment on long term growth. The terminal growth rate used varies from 0% to 3%.
If the recoverable amount of an asset (or cash flow generating unit) is estimated to be lower than its book value, the asset’s (or cash flow generating unit’s) book value is reduced to its recoverable amount. An impairment loss is immediately recorded in the income statement.
The discount rate applied to the cash flow is based on the Group’s weighted average cost of capital, in view of the business risks and varies between 9.1% and 9.5%.
If an impairment loss is subsequently written back, the asset’s (or cash flow generating unit’s) book value is increased to the revised estimate of its recoverable amount, but only to the extent that the increased book value is no higher than the book value that would have
Estimates on long-term growth, development of profitability level and discount rate were key assumptions used in impairment testing of cash generating units with significant carrying amounts of assets.
- 36 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. III.1.4. segment Miscellaneous information
The most important assessment criteria in the application of the Valuation rules
The amount by which the unit’s recoverable amount exceeds its carrying amount has been assessed as follows: p 0-20% exceeds moderately p 20-50% exceeds clearly p Over 50% exceeds significantly
Carrying amount in relations
to recoverable amount of cash
generating units with significant
carrying amounts of assets 2008
Coating division
exceeds significantly
Apparel division
exceeds significantly
Chemicals division
exceeds clearly
Roland subdivision
exceeds moderately
Calandering subdivision exceeds clearly
Sensitivities The Group’s impairment review is sensitive to a change in key assumptions used, most notably the discount rates and the perpetuity rates. Based on the Group’s sensitivity analysis, a reasonable possible change in a single factor will not cause impairment in any of the Group’s CGU’s. However, a significant adverse change in our key assumptions could result in an impairment in our Roland subdivision as the discounted cash flow exceeds the carrying value only by between 10% and 20%.
Post-balance sheet events Post-balance sheet events which provide additional information about the company’s situation on the balance sheet date (‘adjusting events’) are included in the annual accounts. Other post-balance sheet events are only mentioned in the notes if they may have a significant impact.
- 37 -
In the application of the valuation rules, in certain cases an accounting assessment must be made. This assessment is done by making the most accurate assessment possible of uncertain future evolutions. The management determines its assessment on the basis of different realistically assessed parameters, such as future market expectations, sector growth rates, industry studies, economic realities, budgets and multi-year plans, expected profitability studies, etc. The most important elements within the group that are subject to this are: impairments, provisions and deferred tax items.
III. Notes to the consolidated financial III.2. III.1. segment KEY accounting information rules III.1.1. segment information
PRIMARY 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 and allocated part of equity. The assets and liabilities of the head office (group) have been allocated to the segments as far as possible. 2008 Coating Apparel
Industrial Chemicals applications
Head office
Elimina- tions
Consolidated
Net sales
178 580
77 019
74 672
55 174
13
-36 093
349 366
External sales
153 242
77 013
72 193
46 903
13
349 366
Intersegment sales
25 338
6
2 479
Segment result from operational activities
11 055
7 922
-154
8 271
-36 093
-2 231
16 593
Unallocated result from operational activities
-532
Result from operational activities Financial result
-5 548
-1 346
-2 530
-1 974
1 686
171
Profit or loss before taxes Taxes
16 060 -9 541 6 519
-3 114
Profit or loss after taxes
3 406
Segment assets Unallocated assets
214 985
65 779
43 638
50 542
-12 548
362 396
9 346
Total consolidated assets
371 742
Segment liabilities
362 396
Unallocated liabilities
214 985
65 779
43 638
50 542
-12 548
9 346
Total consolidated liabilities
371 742
Other information Coating Apparel Depreciations
Industrial Chemicals applications
Elimina- tions
Consolidated
1 351
20 601 38
11 411
1 164
2 253
Write off inventories
214
-321
-104
249
Write off receivables
18
22
-177
200
63
-214
15
-20
-741
-960
EBITDA
24 318
8 640
2 004
Non recurring result
-4 475
-39
-468
Additions to/(reversals) of provisions
Impairment Investments in intangible fixed assets Investments in tangible fixed assets
20
51
20 677
783
4 421
Head office
2 055
-171
37 669
-311
824
-5 292
83 556
- 38 -
525
2 073
2 227
1 013
23 555
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
2007 Coating Apparel Industrial Chemicals applications
Head office
Elimina- tions
Consolidated
Net sales
201 230
69 929
89 661
63 878
26
-44 373
380 350
External sales
170 241
69 924
85 995
54 165
26
380 350
Intersegment sales
30 989
5
3 666
9 713
-44 373
0
Segment result from operational activities
26 642
7 814
2 323
2 800
39 578
Unallocated result from operational activities
2 014
Result from operational activities
38 792
-287
-8 372
Profit or loss before taxes
Financial result
30 419
Taxes
-11 234
Profit or loss after taxes
19 186
Segment assets
-5 463
217 456
-1 299
-1 090
57 965
54 547
-2 062
1 829
59 847
-14 349
375 466
Unallocated assets
2 646
Total consolidated assets
378 112
Segment liabilities
375 466
217 456
57 965
54 547
59 847
-14 349
Unallocated liabilities
2 646
Total consolidated liabilities
378 112
Other information Coating Apparel Industrial Chemicals applications Depreciations
Consolidated
936
20 330 1 604
1 211
Write off inventories
187
1 574
33
-190
Write off receivables
431
-7
157
80
661
-259
-34
78
-215
EBITDA
38 521
10 591
4 584
Impairments Investments in intangible fixed assets Investments in tangible fixed assets
4 556
Elimina- tions
11 521
Additions to/(reversals) of provisions
2 105
Head office
287
61 171
-1 500
7 325
-138
-1 500
31
140
38
1 992
1 324
3 525
14 040
1 279
2 873
1 413
1 565
21 169
- 39 -
SECONDARY SEGMENT INFORMATION 2008
Gross sales
Assets
Capital Expenditure
France
70 178
19.9%
46 659
12.6%
1 085
4.0%
Germany
60 740
17.3%
121
0.0%
0
0.0%
Eastern Europe
48 128
13.7%
9 925
2.7%
253
0.9%
Belgium
40 726
11.6%
274 633
73.9%
23 735
92.5%
Netherlands
29 901
8.5%
7 338
2.0%
95
0.3%
Great Britain
22 070
6.3%
2.207
0.6%
53
0.2%
Italy
12 448
3.5%
0
0.0%
0
0.0%
Scandinavia
8 943
2.5%
0
0.0%
0
0.0%
Switzerland
8 725
2.5%
0
0.0%
0
0.0%
Spain
8 684
2.5%
0
0.0%
0
0.0%
USA
6 180
1.8%
3 347
0.9%
7
0.0%
Austria
5 122
1.5%
0
0.0%
0
0.0%
Ireland
3 750
1.1%
2 357
0.6%
19
0.1%
26 404
7.5%
24 943
6.7%
533
2.0%
352 000
100.0%
371 530
100.0%
25 782
100.0%
Other Subtotal Discounts
2 635
Net Sales
349 366
2007
Gross sales
Assets
Capital Expenditure
Germany
74 672
19.5%
240
0.1%
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%
39
0.2%
Great Britain
27 212
7.1%
5 615
1.5%
20
0.1%
Italy
15 862
4.1%
0
0.0%
0
0.0%
9 798
2.6%
0
0.0%
0
0.0%
Spain
11 652
3.0%
0
0.0%
0
0.0%
USA
6 365
1.7%
3 212
0.8%
36
0.1%
Ireland
4 147
1.1%
3 498
0.9%
30
0.1%
Switzerland
7 239
1.9%
0
0.0%
0
0.0% 0.0%
Scandinavia
Austria Other Subtotal
0.0%
4 158
1.1%
0
0.0%
0
46 171
12.1%
21 221
5.6%
1 140
4.6%
383 137
100.0%
380 669
100.0%
24 676
100.0%
Discounts
2 786
Net Sales
380 350
- 40 -
III.3. exchange rates
Code
RATE
2008
2007
EUR
average
1.00000
1.0000
closing
1.00000
1.0000
USD
average
1.47491
1.3794
closing
1.39170
1.4721
GBP
average
0.80287
0.6873
closing
0.95250
0.7334
RMB
average
10.21847
10.4536
closing
9.49559
10.7525
PLN
average
3.52514
3.7749
closing
4.15350
3.5935
TDN
average
1.80650
1.7557
closing
1.83512
1.7919
UAH
average
7.90745
6.9457
closing
11.21604
7.4354
- 41 -
III. Notes to the consolidated financial III.4. III.1. DETAILEd KEY accounting INCOMErules STATEMENT III.4.1. III.1.1. by segment function information
2008
2007
354 972
384 507
NET SALES Sales of goods Subcontracting
722
1 881
-6 329
-6 038
349 366
380 350
182 088
187 965
1 452
1 207
Stock variation
-9 169
-7 905
Subcontracting
3 214
3 945
Personnel expenses
46 041
46 165
Depreciation
16 038
15 252
Services and other goods
40 385
40 957
Commissions and discounts Net sales COST OF SALES Purchases Transport cost goods purchased
Amounts written off inventory and receivables Cost of goods sold
71
1 604
280 120
289 191
SALES AND MARKETING Personnel expenses
11 122
Depreciation Other services and other goods Amounts written off inventory and receivables Sales and marketing
11 219
85
90
7 785
8 490
30
661
19 023
20 460
4 107
3 909
RESEARCH AND DEVELOPMENT Personnel expenses Depreciation
547
544
Other services and goods
1 448
2 900
Research and development expenses
6 101
7 352
10 532
11 349
3 932
4 444
GENERAL AND ADMINISTRATIVE EXPENSES Personnel expenses Depreciation Other services and goods
10 953
9 945
General overhead expenses
25 416
25 738
Gain/loss on realization fixed assets
322
129
Provision liabilities & charges
960
215
0
-234
225
2 025
-956
-1 485
1 238
1 408
OTHER OPERATING INCOME AND EXPENSES
Exceptional loss Received indemnities Local taxes Other Received Rent Other operating income and expenses
- 42 -
858
623
2 646
2 682
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. III.4.2. segment RESULTSinformation
2008
2007
NON RECURRING RESULT Impairments
0
-1 500
Restructuring expenses
-2 294
0
Start-up costs new production line
-2 998
0
Non recurring result
-5 292
-1 500
Operating result
16 060
38 792
FINANCIAL RESULT Interests received Interests paid Currency expenses other Currency income Trade Receivables Currency expenses Trade Receivables Currency income Trade Payables
104
162
-7 593
-7 378
-190
-35
1 427
499
-1 752
-1 275
741
366
Currency expenses Trade Payables
-1 268
-340
Realized currency result
-1 042
-785
-149
-521
179
354
Revaluation expenses Trade Receivables Revaluation income Trade Receivables Revaluation expenses Trade Payables
-371
-152
Revaluation income Trade Payables
335
130
Fair Value hedging instruments
-15
-41
Revaluation other
-1 215
-207
Unrealized currency result
-1 237
-436
Other
227
65
-9 541
-8 372
Current tax
3 965
-9 319
Deferred tax
-851
-1 915
3 114
-11 234
3 406
19 186
Financial result TAXES
Taxes PROFIT OR LOSS AFTER TAXES Profit or loss after taxes
- 43 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.4.2. III.1.1. taxes segment information
Reconciliation between taxes and result before taxes.
2008
Profit before taxes
6 519
30 419
Tax on profit of fiscal entities against theoretical local tax rate
2 582
39.63%
10 471
39.63%
34.42%
Theoretical tax rate (1)
2007
34.42%
Tax impact of: Change in tax rate non-deductible expenses specific tax regimes deferred tax assets not recognised
0
0.00%
0
318
4.87%
200
0.00% 0.66%
-755
-11.59%
-864
-2.84% 3.74%
722
11.08%
1 137
new valuation allowance on previously recognised deferred tax assets (2) 3 152
48.36%
1 819
5.98%
Usage of non-recognised deferred tax assets
-66
-1.01%
-1 344
-4.42%
Regularisation of current tax on previous years
480
7.37%
584
1.92%
-1 257
-19.29%
-797
-2.62%
0
0.00%
-167
-0.55%
-2 094
-32.13%
199
0.65%
-500
-7.67%
-3
-0.01%
3 114
47.79%
11 233
36.93%
carry back (3) notional interest deduction Deferred taxes on undistributed reserves Tax on undistributed profits (DBI) Other (4) Tax on profit as shown in the P&L (1) is the weighted average tax rate (2) valuation allowance on Roland Group. We refer to the deferred tax disclosure (III.5.15) (3) reserves will not be distributed to the parent company unless this could be done at a zero tax rate (III.5.15) (4) tax claim Indonesia won in 2008
- 44 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.4.3. III.1.1. III.4.4. dividenDs segment dividends information and earnings per share
Dividends The dividend for the period ending 31 December 2007 amounted to EUR 0.45 per share. The proposed dividend for the period ending 31 December 2008 is EUR 0.08 per share. The proposed dividend awaits shareholders’ approval at the annual general meeting and is not shown as a liability in these financial statements.
Earnings per share The calculation of the basic earnings and diluted earnings per share is based on the following data (amounts in EUR):
2008
2007
Net earnings for the period
3 405 529
19 185 716
Net earnings from continuing activities
3 405 529
19 185 716
Weighted average number of outstanding shares
21 391 070
21 391 070
Ordinary shares
21 391 070
21 391 070
Weighted average number of shares for ordinary profit per share
21 391 070
21 391 070
Basic earnings per share
0.16
0.90
Basic earnings per share from continuing activities
0.16
0.90
2008
2007
Net earnings from continuing activities
3 405 529
19 185 716
Earnings attributable to ordinary shareholders
3 405 529
19 185 716
Weighted average number of outstanding ordinary shares
21 391 070
21 391 070
Weighted average number of shares for diluted earnings per share
21 391 070
21 391 070
Diluted earnings per share
0.16
0.90
Diluted earnings per share from continuing activities
0.16
0.90
Diluted earnings per share Diluted elements
- 45 -
III. Notes to the consolidated financial III.5. III.1. detailed KEY accounting balance rules sheet III.5.1. III.1.1. intangible segment information fixed assets 2008 Exchange
Opening
balance Purchases
Concessions, patents, licences etc.: acquisition
10 084
Software: acquisition
14 026
Acquired
rate via business Closing
Disp. Transf. differences combination Depreciation Other balance
70
190
-45
10 299
344
15
16 538
Customer portfolio: acquisition
10 139
10 139
TOTAL acquisition
34 249
36 976
2 157
2 227
-4
-4
534
Concessions patents licences etc.: depreciation
3 782
Software: depreciation
8 380
-30 -46
-1
8
Customer portfolio: 3 253 depreciation TOTAL depreciation
15 415
-1
TOTAL IFA
18 834
-3
2 227
534
Opening
balance Purchases
910
4 753 9 297
1 835
-70
-38
3 762
-70
19 068
8
-3 762
70
17 908
rate via business
Closing
2007 Exchange
1 018
5 018
Disp. Transf. differences combination Depreciation Other balance Note
10 082
18
-15
10 084
Software: acquisition
11 345
1 519
-22 1 184
14 026
TOTAL acquisition
8 150 29 576
II.1.
Acquired
Concessions, patents, licences etc.: acquisition Customer portfolio: acquisition
Note
1 537
-36
1 989
10 139
1 989 1 184
34 249
Concessions patents licences etc.: depreciation
1 758
-15
Software: depreciation
7 859
-62
3 782
-12
533
8 380
Customer portfolio: 2 243 depreciation
1 217 -208
3 253
TOTAL depreciation
11 860
TOTAL IFA
17 716
-27
1 537
-9
1 989
2 101
3 851 -270
15 415
-3 851 1 453
18 834
II.1.
Clariant France (asset deal), were purchased by the division Chemicals in 2007. Customer portfolios of Fillink and Clariant, purchased in 2007, were valued at respectively EUR 1.5 million and EUR 0.5 million and are being depreciated over 5 years.
Total purchases of intangible fixed assets amount to EUR 2.2 million in 2008 compared with EUR 3.5 million in 2007. Purchases in 2008 mainly relate to the development and implementation of new ERP software in the Chemicals division and the subdivision Heavy Confection, part of the Industrial Applications division. Purchases in 2007 mainly relate to the ERP software implementation project. As from 2007, the ERP software and associated implementation costs were partly implemented (Roland subdivion, part of the Industrial Applications division) and are being depreciated over seven years on a straight-line basis. On the other hand, two customer portfolios, related to Fillink Technologies NV (share deal) and
Depreciation of intangible fixed assets amounts to EUR 3.8 million. Depreciation of customer portfolios is shown in cost of sales in the income statement by function. No development expenses have been capitalized. An impairment analysis has been done at the end of 2008. No impairments have been recorded. We refer to III.1.Key Accounting Rules, paragraph ‘annual test for impairment’.
- 46 -
III. Notes to the consolidated financial III.1. KEY accounting rules
Goodwill
17 585
Note
Closing balance
Acquired via business combination
Exchange rate differences
Increase
Decrease
2008
Opening balance
III.5.2. III.1.1. III.5.2. goodwill segment goodwill information
17
17 603
II.1.
7
17 585
II.1.
2007 Goodwill
17 935
-508
152
Allocation to segments Coating
10 950
Apparel
2 385
Industrial application Chemicals
15 4 253
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.
In 2008 there were no significant goodwill movements. In January 2007 Fillink Technologies SA was purchased by the chemicals division. The purchased assets were included in the consolidated annual accounts using the purchase accounting method. The goodwill of EUR 0.2 million is not depreciated, in line with IFRS 3.
An impairment analysis has been done at the end of 2008. We refer to III.1. Key Accounting Rules, paragraph ‘annual test for impairment’.
In October 2006 Richard Colorants SA, Copidis SAS and Astra SA were purchased, resulting in a goodwill of EUR 1.4 million. In 2007 goodwill decreased by EUR 0.5 million, related to the Richard group. A deferred tax asset was recognised in 2007 (tax loss carryforward of Astra SA) from the merger with Richard SA in 2007. This has been subtracted from the initial goodwill.
- 47 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.3. III.1.1. subsidiaries segment information
% holding
2008 99,00%
2007
Sioen n.v.
Belgium
Ardooie
99,47%
apparel
Veranneman Technical Textiles n.v.
Belgium
Ardooie
98,72%
98,72%
coating
European Master Batch n.v.
Belgium
Bornem
100,00%
100,00%
chemicals
Coatex n.v.
Belgium
Poperinge
100,00%
100,00%
industrial applications
Sioen France s.a.s.
France
Narbonne
99,83%
99,83%
apparel
Confection Tunisienne de Sécurité s.a. Tunesia
Tunis
89,25%
89,25%
apparel
Donegal Protective Clothing Ltd.
Ireland
Derrybeg
100,00%
100,00%
apparel
Sioen Coating Distribution n.v.
Belgium
Ardooie
100,00%
100,00%
coating
Siofab s.a.
Portugal
Santo Tirso
100,00%
100,00%
coating
P.T. Sungintex
Indonesia
Jakarta
100,00%
100,00%
apparel
Saint Frères s.a.s.
France
Flixecourt
99,97%
99,97%
coating
Sioen Fabrics s.a.
Belgium
Moeskroen
100,00%
100,00%
coating
Saint Frères Confection s.a.s.
France
Flixecourt
100,00%
100,00%
industrial applications
P.T. Sioen Indonesia
Indonesia
Jakarta
100,00%
100,00%
apparel
Sioen Tunisie s.a.
Tunesia
Tunis
99,83%
99,83%
apparel
Sioen Fibres s.a.
Belgium
Moeskroen
100,00%
100,00%
coating
TIS n.v.
Belgium
Haaltert-Kerksken 100,00%
100,00%
coating
Mullion Manufacturing Ltd.
United Kingdom Scunthorpe
100,00%
100,00%
apparel
Sioen Shanghai
China
Shanghai
100,00%
100,00%
coating
Sioen Zaghouan s.a.
Tunesia
Zaghouan
99,50%
99,50%
apparel
Sioen Nordifa s.a.
Belgium
Luik
100,00%
100,00%
industrial applications
Inducolor s.a.
Belgium
Meslin-L’Evêque 100,00%
100,00%
chemicals
Sioen Coating n.v.
Belgium
Ardooie
99,47%
99,47%
coating
Pennel Automotive s.a.s.
France
Roubaix
100,00%
100,00%
coating
Roland International b.v.
The Netherlands Tegelen
100,00%
100,00%
industrial applications
Roland Planen GmbH
Germany
Werlte
100,00%
100,00%
industrial applications
Roltrans Group America Inc.
USA
Arlington
100,00%
100,00%
industrial applications
Roland International Polska Spzoo
Poland
Konin
100,00%
100,00%
industrial applications
Roland International Ltd.
United Kingdom Shipley
100,00%
100,00%
industrial applications
Monal s.a.
Luxemburg
100,00%
100,00%
industrial applications
Roltrans Group b.v.
The Netherlands Tegelen
100,00%
100,00%
industrial applications
Roland-Ukraine Llc
Ukraine
Rivne
100,00%
100,00%
industrial applications
Richard s.a.s.
France
Lomme
100,00%
100,00%
chemicals
Fillink Technologies n.v.
Belgium
Brussel
100,00%
100,00%
chemicals
Sioen Industries n.v.
Belgium
Ardooie
100,00%
100,00%
group
Luxemburg
Changes with respect to 2007: In the context of Sioen Fibres s.a.’s transfer of its “Distribution” business to Sioen n.v. at 1 July 2008, the company capital of Sioen n.v. was increased by EUR 687,083, with the issue of 83,754 new shares. USA Inc. was wound up in April 2008. In 2008 Roltrans Group Polska Sp.z.o.o. changed its name to Roland International Polska Sp.z.o.o. In 2008 Roland Tilts UK Ltd. changed its name to Roland International Ltd.
- 48 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.4. III.1.1. III.5.4. tangible segment tangible information fixed fixed assets assets
Tangible fixed assets During 2008, the total acquisition of tangible fixed assets amounted to EUR 23.6 million (including investment grants). In 2008 capital grants received amount to EUR 0.8 million for the investments in the new production line in Moeskroen. In 2007 no capital grants were received. The main investments in 2008 were: p EUR 6.8 million: investment in new buildings and infrastructure at Veranneman and Sioen Coating NV p EUR 2.9 million: investment in infrastructure, building and machinery at Fabrics Calandering p EUR 2.6 million: investment in a new ERP package and hardware p EUR 2.2 million: machinery and infrastructure at Veranneman p EUR 1.3 million: weaving machinery at TIS p EUR 0.8 million: machinery at Saint Freres Enduction p EUR 0.4 million: machinery at Sioen Coating NV During 2007, tangible fixed assets were acquired in a total amount of EUR 21.1 million. The main investments in 2007 were: p EUR 5.7 million in calandering machinery at Moeskroen p EUR 1.5 million in infrastructure and EUR 1.3 million building at Moeskroen for calandering project p EUR 1.5 million in looms and 0.8 million in IR ovens at Veranneman p EUR 1.2 million in machinery at Saint Frères Enduction p EUR 1.1 million in machinery at Coatex p EUR 0.9 million in machinery at Roland Poland p EUR 0.7 million in machinery at TIS Weaving p EUR 0.7 million in machinery and infrastructure at EMB p EUR 0.6 million in building infrastructure at Sioen Indonesia In 2008, the fixed assets under construction relate to the finance lease (III.5.12) of buildings at Veranneman and Sioen Coating NV, that came into use in January 2009. In 2007, the fixed assets under construction mainly related to the calandering factory, that came into use in March 2008.
The buildings in Tegelen and Meyzieux are not used in production and therefore are not depreciated. The different categories of tangible fixed assets are depreciated by the straight-line method over their estimated useful life. Depreciation commences once the assets are ready for their intended use. The estimated useful life of the main tangible fixed assets lies within the following ranges: Buildings: 20 years Machines: 5 to 15 years Equipment: 10 years Furniture: 5 years Hardware: 5 years Vehicles: 5 years There are no mortgages secured on the tangible fixed assets. Tangible fixed assets are subject to the application of IAS 36, impairments, when there is an indication that their book value may be lower than their recoverable amount. If an asset does not generate a cash inflow which is independent of other assets, the Group estimates the recoverable amount of the cash flow generating unit to which the asset belongs. An impairment analysis has been done at the end of 2008. No impairments have been recorded. We refer to III.1. Key Accounting Rules, paragraph ‘annual test for impairment’. In 2007 an impairment loss, amounting to EUR 1.5 million was recognized on assets of the ‘Non Wovens’ cash generating unit of the Industrial Applications division. At 31 December 2008, the Group has entered into contractual commitments for the acquisition of property, plant & equipment amounting to EUR 3.3 million for a new building for Sioen Fibres and Coatex which will be completed at the beginning of May 2009. (IV.3)
- 49 -
III. Notes to the consolidated financial III.1. KEY accounting rules
-137
17 533
0
-562
56 198
-1 002 -1 063
-44
22 369
56 272
1 452
-503
Infrastructure buildings: acquisition
22 976
1 509
-7
171 838
7 808
-537
Furniture: acquisition
4 247
51
Vehicles: acquisition
3 668
570
-166
Hardware: acquisition
5 897
724
-6
19 482
4 628
-3 789
Other
188
17 782
Buildings: acquisition
-1 700
7 482
-33
-449
28
3 844
-228
28
-21
3 851
-39
409
46
7 032
-37
-532
-68
23 473
43
43
Assets under construction: 10 015 6 814 -39 -7 155 acquisition
6 306
Leasing land and buildings: acquisition Leasing furniture and equipment: acquisition
TOTAL acquisition
312 219 23 555 -1 627
-492 184 399
-6 758 -1 091 -1 251 325 047
Plant, machinery and equipment: impairment
1 500
1 500
TOTAL impairment
1 500
1 500
Buildings: depreciation
25 322
Infrastructure buildings: depreciation
14 675
Plant, machinery and equipment: depreciation
101 461
-2
-520
826
-237
2 304
27 809
-79 -1 325
-36
1 486
14 721
-88
-17
-446
25
119
3 599
-165
-28
406
2 724
Furniture: depreciation
3 918 2 669
-158
Hardware: depreciation
4 826
-2
Leasing land and buildings: depreciation
6 430
Leasing furniture and equipment: depreciation
-404
-1 318
Vehicles: depreciation
Note
Closing balance
Impairment
Depreciation
Transfers
-300
Land: acquisition
Plant, machinery and equipment: acquisition
Exchange rate differences
Sales
Disposals
Purchases
2008
Opening balance
III.1.1. segment information
-232
10 661 109 963
-4
376
41
545
5 781
-32
100
-33
1 302
7 766
14
11
24
Assets under construction: depreciation TOTAL depreciation
159 314
-732
-1 971
-557 188
-500
16 834 172 387
Land
17 782
-300
Buildings
39 250
2 961
-508
-4 308
-564
Plant, machinery and equipment
68 877
7 808
-17
-381
7 570
-26
-98
58
15
-1 070
2 623
-4
-632
-35
-1 313
15 725
-39 -7 155
6 306
Furniture and Vehicules
2 399
1 344
Fixed assets held under leasing and other simil
13 081
4 628
Assets under construction and advance payments
10 015
6 814
NET BOOK VALUE
151 404 23 555
-895
-4 787
- 50 -
-534
-137
17 533
-333
-3 791
36 037
-260 -10 661
72 936
-750 -16 834 151 160 II.1.
III. Notes to the consolidated financial III.1. KEY accounting rules
Land: acquisition
17 633
Buildings: acquisition
53 003
2 295
Infrastructure buildings: acquisition
21 940
1 039
-7
162 721
11 645
-229
Furniture: acquisition
4 222
134
Vehicles: acquisition
3 578
622
Hardware: acquisition
5 612
403
19 378
107
-33
14
17 782
-312
56 272
3
-17
18
22 976
-2 042
184
-442
171 838
-8
-102
4 247
-302
-14
3 668
-10
-109
5 897
30
19 482
43
43
Assets under construction: 8 036 4 628 -1 472 7 -1 184 acquisition
10 015
Leasing land and buildings: acquisition Leasing furniture and equipment: acquisition
TOTAL acquisition
296 168
21 140
-20
-217
-523 -2 341
-132
-909 -1 184
312 219
Plant, machinery and equipment: impairment
0
1 500
1 500
TOTAL impairment
0
1 500
1 500
Buildings: depreciation
23 385
Infrastructure buildings: depreciation
13 160
Plant, machinery and equipment: depreciation
92 955
Furniture: depreciation
3 865
Vehicles: depreciation
2 650
Hardware: depreciation Leasing land and buildings: depreciation Leasing furniture and equipment: depreciation
-132
-91
2 155
4
25 322
-1
14
1 501
1
14 675
-441 10 916
-76
101 461
-119
-1 775
-6 -132
-92
-200
6
4 400
-5
-91
5 330
-21
9
3
151
3 918
346
-1
2 669
521
4 826
1 110
Note
Closing balance
Impairment
Other
Depreciation
Exchange rate differences
-132 1 306
Plant, machinery and equipment: acquisition
267
Transfers
Sales
Disposals
Purchases
2007
Opening balance
III.1.1. segment information
1
6 430
11
14
Assets under construction: depreciation TOTAL depreciation
145 748
-283 -1 974
-132
267
-132
-685 16 711
-70
159 314
14
17 782
Land
17 633
Buildings
38 399
3 334
-27
2
1 421
-217 -3 657
Plant, machinery and equipment
69 765
11 645
-110
-267
185
-1 -10 916
Furniture and Vehicules
2 498
1 159
-102
-48 -1 018
1
2 399
Fixed assets held under leasing and other simil
14 089
107
-13
21 -1 121
-1
13 081
7 -1 184
10 015
Assets under construction and advance payments NET BOOK VALUE
8 036 150 420
-91
4 628 -1 472 21 140
-240
-367
- 51 -
0
-5
39 250
76
68 877
-224 -16 711 -1 114
-1 500
-1 500
151 404 II.1.
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.5. III.1.1. long segment term information receivables 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 present value. 2008 Trade debtors LT
Opening balance Increase Decrease
Fair Value adjustment
Closing balance
14
3
17
14
3
17
Note
Trade debtors LT: revaluation Trade debtors LT: impairment Long term trade receivables 2007 Trade debtors LT
Opening balance Increase Decrease
Fair Value adjustment
Closing balance
22
-5
-3
14
22
-5
-3
14
II.1.
Trade debtors LT: revaluation Trade debtors LT: impairment Long term trade receivables
II.1.
The above financial assets relate to a long term trade receivable. The carrying amount approaches the fair value as per 31 December 2008. 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 and long term receivables related to prepaid rent. Exchange (Other) move Opening rate ments or 2008 balance Increase Decrease differences adjustments
Closing balance
Note
Affiliated enterprises: amounts receivable Other shares: acquisition Guarantees and deposits:
636
383
-405
-16
-65
533
812
812
acquisition Other amounts receivable LT: acquisition Total long term assets
636
1 195
-405
-16
-65
1 345
II.1.
Exchange (Other) move Opening rate ments or 2007 balance Increase Decrease differences adjustments
Closing balance
Note
Affiliated enterprises: amounts receivable Other shares: acquisition Guarantees and deposits:
504
151
-76
-10
67
636
504
151
-76
-10
67
636
acquisition Other amounts receivable LT: acquisition Total long term assets
- 52 -
II.1.
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.6. III.1.1. III.5.6. inventories segment inventories information Gross inventory
2008
2007
Raw materials
34 937
32 351
Consumables
400
963
Work in progress
4 702
4 560
Finished goods
63 081
56 834
Goods in transit
4 398
4 512
107 518
99 220
Amounts written off raw materials
-3 173
-3 374
Amounts written off consumables
-7
-5 162
-5 389
-8 335
-8 770
Raw materials
31 764
28 977
Consumables
400
956
Work in progress
4 702
4 560
Finished goods
57 919
51 445
Goods in transit
4 398
4 512
99 183
90 450
Note
Contracts in progress
TOTAL
Amounts written off
Amounts written off work in progress Amounts written off finished goods Amounts written off goods in transit Amounts written off contracts in progress
TOTAL
Net inventory
TOTAL
Gross inventories (excluding writeoffs) increased by EUR 8.3 million compared with 2007. Increased activity resulted in an inventory increase of EUR 6.4 million in the apparel division. Increased capacity combined with the start up of a new production line increased inventory with EUR 4.9 million within the coating division. In the chemicals divison, the inventory level remained at level (EUR -0.2 million) while inventory decreased with EUR 2.8 million in the divison industrial appllications as a result of decreased activity.
II.1.
Obsolescence reserves on inventories amounted to EUR 8.3 million in 2008 compared with EUR 8.8 million in 2007. There was no significant write offs of obsolete inventory to net realisable value in 2008. These obsolescence reserves are recorded on the basis of a detailed aging and rotation analysis per unit.
- 53 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.7. III.1.1. trade segment receivables information
2008 Trade receivables
56 075
Trade receivables doubtful
4 352
Subtotal trade receivables
60 427
Impairment trade receivables doubtful
-4 320
Total Financial instrument ‘trade receivables’
56 107
Outstanding
Note
II.1.
Balance turnover
Customer 1
4 195
6.9%
10 743
3.1%
Customer 2
1 848
3.1%
3 173
0.9%
Customer 3
1 763
2.9%
3 969
1.1%
Customer 4
1 013
1.7%
3 378
1.0%
Customer 5
996
1.6%
1 505
0.4%
Other
50 611
83.8%
326 597
93.5%
Total
60 427
100.0%
349.366
100.0%
Aging (past due but not impaired) Total Not due 30 days 60 days 90 days 120 days 150 days More than overdue overdue overdue overdue overdue 150 days overdue Subtotal trade receivables
60 427
48 650
5 818
1 600
Impairment trade Opening Increase Decrease Write offs receivables doubtful balance
4 317
358
-270
- 54 -
-137
1 227
1 512
471
1 149
Exchange (Other) rate movements differences or adjustments
Closing balance
-7
59
4 320
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
2007 Trade receivables
72 928
Trade receivables doubtful
4 597
Subtotal trade receivables
77 525
Amounts written off
-4 317
Total Financial instrument ‘trade receivables’
73 208
Outstanding
Note
II.1.
Balance turnover
Customer 1
5 356
6.91%
12 590
Customer 2
2 396
3.09%
8 691
3.31% 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%
Aging (past due but not impaired) Total Not due 30 days 60 days 90 days 120 days 150 days More than overdue overdue overdue overdue overdue 150 days overdue Subtotal trade receivables
77 525
62 719
Trade receivables include EUR 60.4 million to be received from the sale of goods. Compared to last year, trade receivables decreased by EUR 17.1 million due to decreased business activity. Less than 10% of the total outstanding is expressed in a foreign currency. The main foreign currencies are the USD and GBP. An impairment is accounted for the estimated uncollectible amounts of EUR 4.3 million. An impairment for trade receivables overdue between 30 days and 150 days and more is recorded based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience. This impairment is recorded in ‘sales & marketing expenses’ in the P&L by function.
6 179
1 370
1 159
404
78
5 617
As of 1/4/2005 the Group decided to cover itself for credit risk by concluding a stop loss credit insurance. The average credit period on sales of goods is about 70 days. Generally no interest is charged on the overdue trade receivables except when legal procedures are started. Before accepting any new customer, the Group uses an internal credit scoring system, based on internal and external information, to assess the potential customer’s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed continuously.
- 55 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.8. III.1.1. other segment current information assets
2008
2007
Advances
141
49
Insurance premiums receivable
110
94
VAT receivable
3 891
9 204
Income tax
3 476
1 893
Note
Financial assets
Non-Financial assets
Capital grants receivable Other Total other receivables
827
0
0
275
8 445
11 515
II.1.
Other receivables consist primarily of VAT to be reclaimed amounting to EUR 3.9 million, pre-paid taxes amounting to EUR 3.5 million and EUR 0.8 million capital grants receivable related to investments in Moeskroen.
Investments
2008
2007
Note
Other investments and deposits Options
288
288
Investments
288
288
II.1.
The options are held to hedge (one-on-one basis) the obligations generated by the share option plan II as explained in ‘General Information on share based payment plans’. The options have an expiry date of 10 years starting from the date of issuing. The beneficiaries have the choice, after a freeze period, to sell their granted options, or to execute the options on expiry date. The book value of the options equals the fair value per 31.12.2008. The options were bought on january 14th, 2009, but a provision was set up at year-end. Cash and cash equivalents Cash at bank Overnight deposits At hand Total cash and cash equivalents
2008
2007
11 468
5 970
2 962
1 468
115
41
14 545
7 479
Note
II.1.
Overnight deposits relate to deposits on at least 3 months, but shorter than 1 year. The book value of the investment reflects the estimated market value. Deferred charges and accrued income
2008
2007
Deferred charges
1 168
1 144
124
110
1 292
1 254
Other Total deferred charges and accrued income
Note
II.1.
Deferred charges amounting to EUR 1.2 million consist primarily of pre-paid rent, insurance policies and IT maintenance contracts.
- 56 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.9. III.1.1. pension segment liabilities information III.5.9. pension liabilities DEFINED BENEFIT PLANS DEFINED BENEFIT PLANS The following net liabilities are recognized for post-employment and other long term benefits:
2008
2007
Post-employment benefits (pension plans)
1 028
1 315
Other long term benefits (jubilee benefits)
114
142
1 142
1 457
Total The amounts recognised in the balance sheet are as follows: Present value of funded obligations
180
430
-385
-394
1 256
1 598
1 051
1 634
-19
-313
-4
-6
Net liability recognized in balance sheet
1 028
1 315
of which liabilities
1 233
1 315
-205
0
Service cost
178
173
Interest cost
133
114
Expected return on plan assets
-18
-17
2
9
Actuarial losses (gains) recognized
-145
-151
Effect of curtailment or settlement
-272
-353
Benefit expense
-122
-225
Fair value of plan assets Present value of unfunded obligations (Surplus)/deficit Unrecognised actuarial gains/(losses) Unrecognised past service cost
of which assets The amounts recognised in profit or loss are as follows:
Past service cost recognized
Changes in the present value of the defined benefit obligation are as follows: Opening defined benefit obligation
2 028
2 269
Service cost
178
173
Interest cost
133
114
0
9
Past service cost Benefits paid
-466
-49
Curtailment
-272
-353
Settlement Actuarial losses (gains) Liabilities assumed in a business combination
0
0
-145
-118
0
0
-20
-17
1 436
2 028
394
381
18
17
Actuarial gains and (losses)
-27
-4
Contributions
466
0
Benefits paid
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
-466
0
Assets acquired in a business combination
0
0
Settlement
0
0
Currency translation changes
0
0
385
394
Closing fair value of plan assets
The plan assets represent investments in bonds. The expected 2009 contributions amount to 39 kEUR.
- 57 -
Note
II.1.
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
marketing expenses, R&D expenses and administrative expenses). The interest component is recognised in the financial result.
Cost relative to IAS 19 provisions are booked under personnel expenses and allocated according the function of the personnel involved (cost of goods sold, sales and Changes in the fair value of plan assets are as follows:
2008
2007
Eurozone
Indonesia
Eurozone
Indonesia
discount rate
6.28%
12.00%
5.48%
10.00%
expected rate of return
4.50%
4.50%
future salary increase
2.50%
8.00%
2.50%
8.00%
60
55
60
55
assumed retirement age The funded status and experience adjustments are as follows:
2008
2007
Defined Benefit Obligation
1 436
2 028
Plan assets
-385
-394
(Surplus)/deficit
1 051
1 634
Experience adjustments on plan assets
-27
0
Experience adjustments on benefit obligation
-40
18
PROVISIONS FOR PERSONNEL REMUNERATION In accordance with law and practice in each country, associated entities have either defined benefit schemes or defined contribution schemes.
Defined contribution schemes Contributions to defined contribution schemes are recorded as an expense when they are due.
of the gross liability, adjusted for unrecorded actuarial gains and losses, after deduction of the fair value of the scheme investments and unrecorded prior service costs. The discounted value of the liability associated with defined pension rights and the assigned pension costs associated with the year of service and prior service pension costs are calculated by accredited actuaries using the projected unit credit method.
Defined benefit schemes In defined benefit schemes, the amount on the balance sheet (the ‘net liability’) corresponds to the present value
Defined benefit schemes mainly relate to pension liabilities in France, where such schemes are required by law.
- 58 -
III. Notes to the consolidated financial III.1. KEY accounting rules
2 214
686
Provisions for other liabilities and charges
2 416
1 912
-1 730
-59
-12
2 526
Total provisions
4 630
2 598
-1 867
-59
-12
5 289
More than 1 year
Within 1 year
Provisions for environmental issues
1 034
1 728
Provisions for other liabilities and charges
459
2 068
1 493
3 796
0
0
Exchange rate differences Note
Fair value
Closing balance
750
-111
2 214
Provisions for other liabilities and charges
2 227
914
-514
-203
-8
2 416
Total provisions
3 802
1 664
-625
-203
-8
4 630
Exchange rate differences
1 575
Reversal
Provisions for environmental issues
2007
Utilisation
Increase
II.1.
Opening balance
Total provisions
Reversal
2 763
Utilisation
-137
Acquired via business combination
Closing balance
Increase
Provisions for environmental issues
2008
Fair value
Opening balance
Acquired via business combination
III.5.10. III.1.1. III.5.10. segment provisions provisions information
Provisions for taxation
More than 1 year
Within 1 year
Provisions for environmental issues
1 764
450
Provisions for other liabilities and charges
837
1579
2 601
2 029
Total provisions
0
0
Note
II.1.
periodical environmental check-up of the site. These provisions are mainly set up for more than one year and are discounted using the weighted average capital cost (8%) of the Group.
The carrying amount of the provisions reflects the net present value of future liabilities discounted at 8%. The provisions for environmental issues consist mainly of a provision relating to the cleaning of polluted soils in Temse belonging to TIS NV and the land in Ardooie belonging to Sioen Coating NV. The risk in Temse originates in the period before the takeover. The risk in Ardooie was identified during the
Provisions for other liabilities and charges mainly relate to social costs of ongoing restructuring processes by the coating division (EUR 1.5 million) and by the industrial applications division (EUR 0.5 million).
- 59 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.11. III.1.1. segment interestinformation bearing loans
2008 Note
Value at the end of year
Bond
99 121
Bank loans
2 500
4 753
1 429
1 071
18 645
2 218
2 362
2 365
Finance leases
II.1.
Within one year 2 years 3 years 4 years 5 years
Other loans
519
260
134
Total interest bearing loans long term
120 786
7 232
3 925
Current portion of amounts payable after one year
4 753
Credit institutions short term
38 607
Bank loans
after 5 years
99 044
99 044
2 218 2 250
Total interest bearing loans short term
45 611
2007 Note
Value at the end of year
Finance leases
II.1.
Other loans
10 209
5 001
1 692
1 209
129
0
10 039
1 162
1 289
1 406
1 372
1 459
4 513
3 117 117
Current portion of amounts payable after one year
10 209
Credit institutions short term
25 190
II.1.
35 400
Current portion of leasing
1 162
Leasing short term Finance leases
2 459
8 030
Total interest bearing loans long term
Bank loans
3 561
32
II.1.
Bond
125
Within one year 2 years 3 years 4 years 5 years
Current portion of leasing
Bank loans
8 887 108 008
43 361
Finance leases
2 572
99 121
2 572
II.1.
Leasing short term
2 459
after 5 years
11 371
37
II.1.
1 199
Total interest bearing loans short term
36 599
- 60 -
6 290
3 098
2 581
1 588
3 103 671
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
Short-term interest bearing loans
Long-term interest bearing loans, including financial long-term leasing debts.
As per 31/12/2008, short-term loans amounted to EUR 33.2 million. They consist of EUR 27.1 million of euro straight loans with a weighted average interest rate of 4.9% and a dollar loan of USD 8.5 million with a weighted average interest rate of 7.4%. There was also a tax prepayment loan of EUR 4.0 million which expires on 10 April 2009.
The weighted average interest rate of long-term debts in 2008 was 4.72%, compared to 4.76% in 2007. All long-term loans have a fixed interest rate. On 14 March 2006, a EUR 100 million bond listed on Eurolist by Euronext Brussels was successfully issued, with a ten-year term and fixed coupon interest of 4.75%. To cover the interest rate on this bond issue, an IRS (Interest 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%.
As per 31/12/2007, short-term loans amounted to EUR 21.3 million. They consisted of EUR 16.8 million of euro straight loans with a weighted average interest rate of 4.6% and a dollar loan of USD 5.0 million at 5.7%. There was also a tax prepayment loan of EUR 3.5 million which expires on 10 April 2008. No securities have been issued for these financial debts. Most (approx. 90%) of the Group’s financial liabilities are centrally contracted and managed.
Sioen has no covenants on material loan agreements, except for general terms and conditions applicable to general finance agreements in Belgium.
- 61 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.12. III.1.1. segment finaNce information leasing debts Obligations under finance leases 2008
Value at the end of year
Leasing and other similar obligations LT Current portion of leasing Leasing short term Obligations under finance leases
Within one year 2 years 3 years 4 years 5 years
18 645
0
2 218
2 218
32
32
20 895
2 250
after 5 years
2 362
2 365
2 459
2 572
8 887
2 362
2 365
2 459
2 572
8 887
Minimum lease payments
Present value of lease payments
Lease payments due within one year
2 781
2 250
One - Two years
2 781
2 362
Two - Three years
2 781
2 365
Three - Five years
8 196
5 031
After 5 years
7 734
8 887
24 273
20 895
Total lease payments Future financial charges
5 314
Present value of lease obligations
18 959
18 959
Less amount due for settlement within 12 months
2 301
Amount due for settlement after 12 months
18 594
Obligations under finance leases 2007
Value at the end of year
Leasing and other similar obligations LT Current portion of leasing Leasing short term Obligations under finance leases
Within one year 2 years 3 years 4 years 5 years
10 039
61
1 162
1 162
37 11 238
1 228
after 5 years
1 406
1 372
1 459
4 513
1 406
1 372
1 459
4 513
37 1 260
1 228
Minimum lease payments
Present value of lease payments
Lease payments due within one year
2 143
1 260
One - Two years
1 735
1 228
Two - Three years
1 737
1 406
Three - Five years
3 064
2 831
After 5 years
4 954
4 513
14 051
11 238
Total lease payments Future financial charges
2 611
Present value of lease obligations
10 767
10 767
Less amount due for settlement within 12 months
1 260
Amount due for settlement after 12 months
9 979
Leasing debts mainly relate to buildings (Ardooie and Moeskroen). New financial leases in 2008 relate to a sale and lease back operation for a new building in Moeskroen and buildings at Sioen Coating NV and Veranneman, which are referred to as new assets under construction (III.5.4). The interest inherent in the leases is fixed for the entire lease term. The average effective interest rate contracted is approximately 4.94% p.a. (2007 5.44% p.a.).
- 62 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.13. III.1.1. III.5.13. segment other other accounts information accounts payable payable Trade and other payables
2008
2007
Trade payables
24 941
35 609
Credit notes to receive
-1 160
-2 048
Advances Total
600
630
24 381
34 191
Note
II.1.
Trade and other payables include outstanding amounts for trade purchases and current charges. Trade payables decreased compared with 2007, in line with the decreased activity during the last quarter of 2008 compared to the last quarter of 2007. 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
2008
Current tax liabilities Social debts
2007
Note
954
440
II.1.
9 573
10 523
II.1.
Other amounts payable
3 861
4 548
II.1.
Accrued charges and deferred income
1 371
1 159
II.1.
15 759
16 670
II.1.
Total other debts up to one year
The other amounts payable consist mainly of VAT payable and various other taxes.
- 63 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.14. III.1.1. segment financial information instruments
Financial Derivatives
2008
Notional Fair Value Value
Notional Value
2007 Fair Value
Forward sales contracts Forward sales contracts within 1 year
Rights
0
0
0
0
Obligations
0
0
2 353
-41
0
0
0
0
IRS Forward
The Group manages a portfolio of derivatives to hedge against risks relating to exchange rate and interest rate positions arising as a result of operating and financial activities. It is the Group’s policy to avoid engaging in speculative transactions or transactions with a leverage effect and not to hold derivatives for trading purposes.
IAS39, and will be spread out over the term of the bond. The realized capital gain (EUR 1.346 million) was recognised in equity and is being taken into income over the life of the bond (10 years).
Exchange rate risk
Interest risk The Group’s interest risk is relatively limited, as the interest rate on all long-term loans is fixed. It is the group’s strategy to arrange a fixed interest rate for the long-term portion of debts, and to keep short-term debts floating. Thanks to an optimal portfolio of long-term and short-term debt financing, potential negative interest rate fluctuations are minimised. As per 31/12/2008, there was EUR 33.2 million of short-term financing at floating rates with a weighted average of 4.79%. A 5% increase in interest rates (24 basispoints), would impact the financial result with 91 kEUR more interest costs an annual basis. In connection with the group’s refinancing, it was decided in December 2005 to enlist the support of the capital market via the issue of a EUR 100 million bond over ten years with fixed coupon interest. Because such an operation can easily take three months, and interest rates at the end of December 2005 were very attractive, Sioen concluded a ten-year IRS starting in April 2006, the presumed starting date of the bond. As this IRS can be regarded as effective cash flow hedging as per IAS39, the EUR 0.636 million negative market value fluctuation on 31/12/2005 of this IRS was deducted from equity. At 02/02/2006, the market value was up EUR 1.346 million, and it was realised following the hedge strategy at the moment of issuing of the bond. This received premium satisfies the conditions for cash flow hedging defined in
- 64 -
It is the Group’s policy to hedge against exchange risks arising from financial and operating activities centrally. The risks are limited by compensating for transactions in the same currency (‘natural hedging’), or by fixing exchange rates via forward contracts or options. It is the Group’s policy to hedge against exchange risks arising from financial and operationg activities centrally. The risks are limited by compensating for transactions in the same currency (‘natural hedging’). Or by fixing exchange rates via forward contracts or options. The main currencies for the Group are GBP (inflow) and USD (outflow). In 2008, the GBP net inflow represents EUR 7.0 million (GBP 5.4 million) and the USD net outflow EUR 2.9 million (USD 4.4 million). As these volumes represent less than 10% of total net sales, the impact of changes in these exchange rates is limited. Sensitivity analysis Based on the Group’s sensitivity analysis, an adverse change in the GBP/EUR and USD/EUR exchange rate by 1% would decrease the Group’s realized currency result by EUR 98 thousand.
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
Credit risk In view of the relative concentration of credit risk (see note ‘trade receivables’). The company covers credit risk on trade receivables via a stop loss insurance with an own risk exposure of 500 kEUR. In addition, credit control strategies and procedures have been elaborated in order to monitor individual customers’ credit risk.
Liquidity risk In order to guarantee liquidity and financial flexibility, the Sioen group has credit lines available to it to meet current and future financial needs. The Sioen group has total credit lines available to it of EUR 69.6 million. Of these EUR 33.2 million were used at 31/12/2008. Of this amount, EUR 27.1 million consisted of straight loans at a weighted average interest rate of 4.9%, and a USD 8.5 million straight loan with a weighted average interest rate of 7.4%. Regarding the maturity analysis of the interest bearing loans, we refer to note III.5.11.
Financial risk The management determines its assessment on the basis of different realistically assessed parameters, such as future market expectations, sector growth rates, industry studies, economic realities, budgets and multi-year plans, expected profitability studies, etc. The most important elements within the group that are subject to this are: impairments, provisions and deferred tax items.
Financial Instruments Interest bearing loans Fixed Rate (EUR) Bond borrowing costs capitalised Finance Leases Bank loans
Carrying
Fair
Amount
value
100 000
96 194
-879
0
20 829
19 933
7 250
7 207
127 201
123 334
Total
As shown in the fair value analysis, Sioen Industries is now in an overall favourable position concerning interest rate conditions compared to the actual fair values of the loans.
Capital management The equity structure of the Sioen Group is managed with the main objectives of: p protecting the equity structure so as to ensure continuous business operations resulting in continuous shareholder value, and benefits for other stakeholders; p the payment of an appropriate dividend to shareholders. The Group’s capital is formed in accordance with the risk, which changes with economic developments and the risk profile of the underlying assets. The Sioen group can change the dividend to shareholders, issue new shares or sell assets in order to maintain or change the capital structure.
Fair value Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. In conformity with IAS 39 all derivatives are recognized at fair value in the balance sheet.
The Board of Directors of Sioen Industries views equity together with the 10-year bond loan (cf. interest bearing loans III.5.11) as permanent capital. At 31/12/2008 equity and the bond loans represented respectively 38.3% and 26.7% and together 65.0% of the balance sheet total.
Non-derivative financial liabilities The fair value of non-derivate financial liabilities is calculated based on commonly-used valuation techniques (i.e. net present value of future principal and interest cash flows discounted at market rate). These are based on market inputs from reliable financial information providers. Fair values determined by reference to prices provided by reliable financial information providers are periodically checked for consistency against other pricing sources.
- 65 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.15. III.1.1. segment deferred information tax
2008
deferred tax assets
Intangible fixed assets
1 118
545
1 877
1 792
Tangible fixed assets
3 178
2 894
17 881
16 847
Inventories
1 563
1 688
762
762
Receivables Other assets
2007
2008
2007
Pension liabilities
473
648
Other provisions
780
518
Other liabilities
204
102
Conversion differences
156
2 396
2 433
Hedging reserves
358
398
1
2 095
22 513
23 565
Undistributed reserves Tax losses carried forward
12 578
9 662
Total
20 658
16 976
-10 709
-6 829
-6 103
-4 702
-6 103
-4 702
3 846
5 445
16 410
18 863
Non recognition of deferred tax receivable Netting Total
Note
deferred tax liabilities
II.1.
The value of carried forward tax losses arranged by expiry date One year Two years Three years
8 260
Four years
7 806
Five years and later
2 019
7 806
No expiry date
25 160
16 590
Unrecognised carried forward tax losses
32 628
20 195
2 094
295
Unrecognised deferred tax on undistributed reserves
Deferred tax assets which do not appear to be collectable in the near future are not recognised. In this assessment management takes account of budgets and multi-year planning. Major deferred tax assets on tax losses carryforward are relative to Roland International BV and Roland Poland. In 2007, a EUR 1.8 million valuation allowance on tax losses of Roland International BV was recognized. Based upon business plans an asset was recognized using estimated tax profits over 9 years. In 2008 the tax asset has been fully derecognized considering current business result and forecast. There is no taxable result over the foreseeable future (5 years). In Roland Poland there is only a partly recognition of tax losses, mainly originating from the 2008 result). The going forward transfer pricing (cost plus basis) should allow to recover tax losses recognized.
- 66 -
8 260
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. Management consideres that reserves will not be distributed to the parent company unless this could be done at a zero tax rate. Reconciliation of movement of deferred tax Net tax liability as per 31 December 2007
13 418
Net tax liability as per 31 December 2008
12 564
Difference
-854
Deferred tax as shown in the P&L
-851
Deferred tax effect through equity
-32
Deferred tax acquired via business combinations
0
Deferred tax currency translation effect
29
III. Notes to the consolidated financial III.1. KEY accounting rules III.5.16. III.1.1. III.5.16. segment acquisitions acquisitions information and and disposals disposals ofof interests interests EFFECTS OF ACQUISITIONS AND SALES OF INVESTMENTS 2008 There were no acquisitions in 2008. 2007 Divestment Granulates EMB Sale price Granulate business
847
Sale fixed assets
49
Liability sales related provision
-227
Stock write off
-428
Receipt in Cash
896
Non Cash items
-655
Gain realised on the transaction Acquisition Fillink Business
241 Book value
Adjustments
Fair value
Non current assets
215
1 285
1 500
Intangible and tangible fixed assets
215
1 285
1 500
1 872
-319
1 553
319
-319
1 440
1 440
Other debtors
113
113
Non current liabilities
355
355
Current assets Inventories Debtors
Provision
Pensions
Deferred tax liabilities
Long term financial debt
355
355
Current liabilities
2 598
184
2 781
Creditors
2 180
84
2 264
Other creditors
418
100
517
Total net assets
-865
-718
-83
Goodwill on acquisition
152
Paid in cash
206
Cash and banks acquired
137
Net cash paid
69
137
EMB (division chemicals) realized an exchange deal on 1 October 2007, in which the chips (granules) department was sold and a pigment paste-customer portfolio was acquired (see intangible assets), in order to align the business with its core competence. EMB recorded the gain of EUR 0.2 million in ‘Other operating Income’ in 2007. The sales of this chips department represented in 2006 EUR 5.1 million and in 2007 EUR 4.7 million (January – October 2007).
On January 18 2007 Fillink Technologies SA was acquired by EMB. Fillink specializes in inks for wide and superwide format digital printers. Fillink distributes eco-solvent, solvent and UV inks through a selected network of distributors. These quality products are very well positioned in the market thanks to the know how and market intelligence of the company. Fillink’s experience with unique product formulations and wide market knowledge are real added value for the chemicals division. The sales of Fillink were EUR 2.2 million in 2006 and EUR 4.0 million in 2007.
- 67 -
III. Other Notes to the consolidated financial IV. III.1. KEY accounting rules III.1.1. segment information
IV.1. OPERATING LEASE ARRANGEMENTS
2008
2007
Amounts recognised in income
1 218
1 150
Payments due within one year
1 197
1 179
Between one and five years
1 604
1 092
Over five years Minimal future payments
62
10
2 863
2 282
These leases relate mainly to vehicles, small equipment and office equipment.
IV.2. EVENTS AFTER BALANCE SHEET DATE In the division Industrial Applications, an additional restructuring process, costs estimated at approximately EUR 0.6 million, has been initiated at the end of March. No other significant events have happened after balance sheet date.
IV.3. OFF BALANCE SHEET ITEMS
2008
Commitments due to hedging of foreign currencies
within 1 year
Note
0
0
III.5.4
3 350
3 350
III.5.4
2007
within 1 year
Commitments due to hedging of foreign currencies (related to GBP)
2 353
2 353
Commitments for the acquisition of intangible and tangible assets
7 688
7 688
Commitments for the acquisition of intangible and tangible assets
- 68 -
III. Notes to the consolidated financial VI. Statutory annual accounts III.1. KEY accounting rules III.1.1. segment information
IV.4. TRANSACTIONS WITH RELATED PARTIES
Nature of transaction
2008
Recticel Group
Sale
1 444
Recticel Group
Purchase
285
Sale
1 388
SVB
Purchase
220
Nature of transaction
2007
Recticel Group
Sale
1 764
Recticel Group
Purchase
222
Sale
1 436
Purchase
227
INCH
INCH SVB
These transactions are done on an arm’s length basis. Other transactions with related parties other than directors are not included, given the negligible amount (under EUR 100 000). With regard to directors’ remuneration, we refer to section IV.8.
IV.5. STAFF Country Belgium China Germany
2008
2007
899
988
15
16
6
11
France
291
361
Ireland
33
33
2 222
1 975
Indonesia Netherlands
27
27
338
587
Portugal
25
25
Tunesia
Poland
757
752
UK
26
32
USA
16
22
Ukraine
21
40
Grand Total
4 676
4 869
Blue Collar
3 917
4 125
White Collar
759
744
Grand Total
4 676
4 869
- 69 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
IV.6. AUDIT AND NON AUDIT SERVICES PROVIDED BY THE STATUTORY AUDITOR AND HIS NETWORK 2008
Deloitte
Audit fees
282 000
Other assurance services
59 065
Tax services
10 000
IV.7. CONTINGENT ASSETS AND LIABILITIES A number of commercial disputes are pending, albeit with a limited value in dispute. A contingent asset amounting to EUR 0.4 million is related to the apparel division. The industrial applications division is currently facing a quality claim in France, which could reach EUR 3.0 million. However, the court verdict in first instance was in favour of Sioen Industries. There is a possible exposure related to import duties in Tunesia with a theoretical maximum risk of EUR 1.7 million. Voluntary regularisation has been initiated by management. The coating division is currently facing a contingent liability which could reach EUR 0.3 million. However, the court verdict in first instance was in favour of Sioen Industries.
- 70 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
IV.8. Remuneration of the directors and the executive management In 2008 the following fees were paid to the members of the board of directors and the executive management: p Non-executive and independent directors, as well as the members of the executive management in their
capacity as director: Mr. Jean-Jacques Sioen M.J.S. Consulting b.v.b.a. Mrs. Jacqueline Sioen-Zoete D-Lance b.v.b.a. P. Company b.v.b.a. Pol Bamelis n.v. Revam b.v.b.a. Louis Verbeke e.b.v.b.a. K.E.M.P. n.v. Vean n.v. Mr. Luc Vandewalle
EUR 20 000 EUR 20 000 EUR 20 000 EUR 20 000 EUR 20 000 EUR 22 250 EUR 29 000 EUR 26 000 EUR 8 667 EUR 21 500 EUR 26 000
p Mrs. Michèle Sioen received in 2008, as CEO,
p In 2008 no shares in Sioen Industries, share options
besides her remuneration as a member of the Board of Directos, a fixed remuneration of EUR 432 500. She received a variable remuneration (base calculation 2007) for an amount of EUR 124 260. For 2008, the CEO abandons the variable part of her remuneration. p The fixed remunerations paid to the executive
or other rights for the acquisition of shares in Sioen Industries were granted to the CEO and the other members of the executive management. There are no specific recruitment or golden handshake agreements with the members of the executive management. * The executive management consists of executive directors
management*, including directors in their capacity as members of the executive management, amounted to EUR 2 188 775 (excluding CEO). Variable remuneration received (base calculation 2007) for an amount of EUR 186 357. For 2008, the executive management abandons the variable part of their remuneration.
- 71 -
and members of the management committee.
V. Statutory auditor’s report
Statutory auditor’s report to the shareholders’ meeting on the consolidated financial statements for the year ended 31 december 2008 Free translation – the original report is in Dutch
The board of directors of the company is responsible for the preparation of the consolidated financial statements. This responsibility includes among other things: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.
To the shareholders As required by law and the company’s articles of association, we are pleased to report to you on the audit assignment which you have entrusted to us. This report includes our opinion on the consolidated financial statements together with the required additional comment.
Unqualified audit opinion on the consolidated financial statements We have audited the accompanying consolidated financial statements of SIOEN INDUSTRIES NV (“the company”) and its subsidiaries (jointly “the group”), prepared in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Those consolidated financial statements comprise the consolidated balance sheet as at 31 December 2008, the consolidated income statement, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The consolidated balance sheet shows total assets of 371 741 (000) EUR and the consolidated income statement shows a consolidated profit (group share) for the year then ended of 3 406 (000) EUR. The financial statements of several significant entities included in the scope of consolidation which represent total assets of 46 679 (000) EUR and a turnover of 50 244 (000) EUR have been audited by other auditors. Our opinion on the accompanying consolidated financial statements, insofar as it relates to the amounts contributed by those entities, is based upon the reports of those other auditors.
- 72 -
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with legal requirements and auditing standards applicable in Belgium, as issued by the “Institut des Reviseurs d’Entreprises/Instituut der Bedrijfsrevisoren”. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. In accordance with these standards, we have performed procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we have considered internal control relevant to the group’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of
the group’s internal control. We have assessed the basis of the accounting policies used, the reasonableness of accounting estimates made by the company and the presentation of the consolidated financial statements, taken as a whole. Finally, the board of directors and responsible officers of the company have replied to all our requests for explanations and information. We believe that the audit evidence we have obtained, together with the reports of other auditors on which we have relied, provides a reasonable basis for our opinion. In our opinion, and based upon the reports of other auditors, the consolidated financial statements give a true and fair view of the group’s financial position as of 31 December 2008, and of its results and its cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the EU and with the legal and regulatory requirements applicable in Belgium.
the description of the principal risks and uncertainties confronting the group, or on the status, future evolution, or significant influence of certain factors on its future development. We can, nevertheless, confirm that the information given is not in obvious contradiction with any information obtained in the context of our appointment.
Kortrijk, 18 March 2009
The statutory auditor DELOITTE Bedrijfsrevisoren BV o.v.v.e. CVBA Represented by
Additional comment 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: p The directors’ report on the consolidated financial
statements includes the information required by law and is in agreement with the consolidated financial statements. However, we are unable to express an opinion on
- 73 -
Dirk Van Vlaenderen
Kurt Dehoorne
VI. Statutory annual accounts of Sioen Industries NV
The statutory annual accounts of the parent company Sioen Industries n.v. are shown below in condensed form. In June 2009, the annual report and annual accounts of Sioen Industries n.v. and the auditor’s report will be filed with the National Bank of Belgium in accordance with Articles 98-102 of the Companies Act. These reports are available on request at the following address: Sioen Industries n.v. – Fabriekstraat 23 – 8850 Ardooie.
The statutory auditor has issued an unqualified opinion. In accordance with article 523 of the Company Code, the Board of Directors has mentioned all transactions done with SVB Project NV in which Mr. Jean-Jacques Sioen, president of the Board of Directors, had a conflict of interest. We refer to the section Corporate Governance in the consolidated annual report for the related paragraphs from the minutes of the Board of Directors.
Condensed balance sheet of Sioen Industries n.v. after appropriation of profit December 31 (000) EUR
2008
2007
53 292
61 584
Intangible fixed assets
8 863
7 505
Tangible fixed assets
1 159
1 004
Financial fixed assets
43 270
53 075
Currents assets
190 169
188 049
Amounts receivable within one year
184 749
187 023
5 260
872
161
154
243 461
249 633
Capital and reserves
80 893
82 705
Capital
46 000
46 000
Fixed assets
Cash at hand and in bank Deferred charges and accrued income Total assets
Legal reserves
4 357
4 352
30 536
32 353
Creditors
162 568
166 929
Amounts payable after one year
101 657
106 312
Amounts payable within one year
59 256
54 983
1 656
5 634
243 461
249 633
Profit carried forward
Accrued charges and deferred income Total liabilities
- 74 -
III. Notes to the consolidated financial III.1. KEY accounting rules III.1.1. segment information
Condensed income statement of Sioen Industries n.v. December 31 (000) EUR
2008
2007
Operating income
7 677
7 188
Sales
7 524
6 912
153
277
Other operating income Operating charges
-9 175
-8 363
Services and other goods
3 587
3 280
Renumeration
4 041
3 726
Depreciation and amounts written off
1 530
1344
18
14
-1 498
-1 175
Financial income
26 363
21 736
Financial charges
-14 218
-8 110
Financial result
12 145
13 626
Profit or loss on ordinary activities
10 647
12 452
-10 498
-711
Profit or loss before tax
149
11 741
Income taxes
-49
-25
Profit for the financial year
100
11 716
Other operating charges Operating result
Extraordinary result
- 75 -
Activity of Sioen Industries
Accounting principles
The function of Sioen Industries is essentially to outline the strategy of the four divisions. It also appoints the management of the Group companies and supports the Group companies in the areas of personnel management, financial and treasury management, budgeting and controlling, MIS and IT, and legal affairs.
The accounting principles and translation rules applied to the statutory annual accounts of Sioen Industries are in accordance with Belgian Generally Accepted Accounting Principles.
Statement of capital
Comments The turnover of the holding company increased with 8.9% to EUR 7.5 million. In 2008 the operating loss amounted to EUR 1.5 million, compared with an operating loss in 2007 of EUR 1.1 million. Financial result decreased from EUR 13.6 million in 2007 to EUR 12.1 million in 2008 due to the less value of short term receivables related to Roland International BV, partly compensated by the higher dividend payments from the subsidiaries. All participating interests have been recorded at book value. Extraordinary result for the year 2008 decreased by EUR 9.8 million compared to 2007 due to the less value of financial assets related to Roland International BV.
In accordance with Articles 1 to 4 of the Act of March 2, 1989 concerning the disclosure of important holdings in listed companies and regulating take-over bids, the applicable quotas were set at, one the one hand, 5 percent or a multiple thereof and on the other hand at 3 percent or a multiple thereof. (Article 8 of the Articles of Association). In accordance with Article 4 of the Act of March 2, 1989, the following notifications of shareholdings in the company were received.
Overview of the shareholders Notifier Date of Number of notification shares ‘BT Pension Scheme Trustees Limited’
Percentage with regard to total number of shares
28 May 2008
726 320
3.395%
30 January 2006
12 906 212
60.33%
12 October 2005
726 320
3.395%
Total notifications
14 358 852
67.12%
Sihold NV(1) and companies/parties under the influence of the family Sioen ‘Stichting Shell Pensionfonds’
(1) Sihold N.V. is controlled by Sicorp N.V., which is controlled in turn by the Dutch foundation Stichting Administratiekantoor Midapa.
- 76 -
III. Notes to thetoconsolidated financial VII. Proposals the annual meeting III.1. KEY accounting rules III.1.1. segment information
The proposed net dividend per share is calculated as follows:
Proposals to the Annual Meeting of Sioen Industries n.v. of April 24, 2009
(in EUR)
The board of directors of Sioen Industries proposes to the annual meeting to approve the annual accounts at December 31, 2008 and to consent to the appropriation of profit.
Net dividend per share
0.0600
Withholding tax 25/75
0.0200
Gross dividend per share Pay-out ratio (1)
The profit for the financial year ended is 99 882 EUR, compared to a profit of 11 716 461 EUR for the financial year 2007. The profit brought forward from the previous financial year is 32 352 833 EUR. The profit available for appropriation is consequently 32 452 715 EUR.
Gross dividend in relation to the share of the Group in the consolidated result (1)
The board of directors proposes to appropriate the profit available for appropriation of 32.452.715 EUR as follows: (in EUR) Gross dividends for the 21 391 070 shares -1 711 285.77 Directors’ fees Transfer to the legal reserves Profit to be carried forward
0.0800 50.25%
-200 000.00 -4994.13 30 536 435.12
- 77 -
If this proposal is accepted, the net dividend of 0.0600 EUR per share will be made payable as from May 11, 2009 onwards at the counters of Dexia Bank, ING Bank, Fortis Bank, Bank Degroof and KBC Bank on presentation of coupon n°11.
addresses Sioen Industries - Fabriekstraat 23 - B-8850 Ardooie - Belgium T +32 51 74 09 00 - F +32 51 74 09 64 - 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
ASTRA COLORANTS SA
20 Avenue maréchal de lattre de tassigny - 69330 meyzieu
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 2A Y - 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
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
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
- 78 -
BTW BE 402.753.106
RPR 0402.753.106 Brugge
T +32 51 74 09 00
F +32 51 74 09 64
sioline@sioen.be
TVA FR 76408448850
RCS AMIEN S 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
TVA BE 463.789.464
RPM 0463.789.464 Tournai
T +32 56 48 12 70
F +32 56 48 12 85
fibres.extrusion@sioen.be
T +86 21 63 84 25 21
F +86 21 63 84 27 39
sioen@online.sh.cn
T +351 252 87 47 14
F +351 252 94 29 68
siofab@net.sapo.pt
SOB O N° 4641
NIF 505.046.644
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
T + 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
NPWP 1.068.001.5-052
T +33 4 68 42 35 15
F +33 4 68 42 27 43
sip-protection@sip-protection.com
T +62 21 44853222
F +62 21 44853444
info.marunda@sioenasia.com
T +62 21 825 22 22
F +62 21 825 44 44
indonesia@sioen.com
NP WP 1.068.012.2-407 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 NL 003812522 B01
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 HR B 1222 96
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
VAT GB 311746186
Company Nr 1380441
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
- 79 -
definitions
Gross margin % EBITDA EBIT REBIT REBITDA EBT EAT NOPAT EVA ROE ROCE Net cash flow FFO Free operating CF Working capital Capital employed
(Turnover +/- stock movements finished goods - purchases raw materials -/+ stock movements raw materials)/turnover Earnings Before Interest, Taxes, Depreciation and Amortization = Operating result + amortization + provisions for liabilities and other risks + depreciation Earnings Before Interest and Taxes = Operating result EBIT + non recurring result EBITDA + non recurring result Earnings Before Taxes Earnings After Taxes EBIT - Taxes NOPAT - cost of capital at start of the period Net result part of the group / equity at end of previous financial year NOPAT / Capital employed of the period Consolidated net result + depreciation + amortization + provisions for liabilities and charges + deferred taxes Net result + depreciations + provisions for liabilities and taxes + amortization + deferred taxes Funds from operations - funds from investing activities Financial fixed assets + current assets (minus cash deposits and cash equivalents) – non financial debt up to one year - accrued charges and deferred income Working capital + tangible and intangible fixed assets + goodwill
- 80 -