HALF YEAR REPORT
HALF YEAR REPORT OF THE BOARD OF DIRECTORS
p
Sales: for the first half of 2009 the group posted consoli-
p
Non-recurrent result: the non-recurrent result
dated sales of EUR 136.5 million, compared with EUR 196.2
amounted in the first half of 2009 to EUR 956 thousand.
million during the same period last year.
This consists of a (limited) recognition of an impairment and additional provisions for ongoing restructuring.
p
Gross margin: the total gross margin improved slightly compared with 2008. A small change in sales mix and a
p
p
Operating result: all this resulted in an operating
sharp fall in raw materials prices during the last quarter of
profit of EUR 3.6 million compared with 18.8 million over
2008 are the main causes.
the same period last year.
Services and other goods: targeted efforts
p
Financial result: financial result for the first half
produced here a cost saving of EUR 9.4 million in the first
of 2009 amounted to EUR -2.5 million compared with
half of 2009 compared with the same period in 2008
- 4.4 million during the same period last year. Unrealized
(EUR 20.9 million vs. EUR 30.3 million) This savings falls
foreign exchange gains and lower interest charges due to
into three parts: first there are volume-related costs which
reduced working capital are the two main causes.
evolve directly in line with sales. Second there are the general non-volume-related costs, where all non-vital
p
Profit: the profit for the first half of 2009 amounted to
expenditure has been eliminated. Finally there are the
EUR 533 thousand compared with EUR 9.5 million over the
costs of temporary labour (recorded under this heading)
same period last year.
which fell sharply. p p
Personnel costs: personnel costs during the first half
amounted to EUR 10.1 million.
of 2009 amounted to EUR 32.7 million compared with EUR 37.6 million over the same period last year. Market conditions forced the group to reduce production capacity (mainly in Belgium, France and Poland) and to use the system of economic unemployment (Belgium, Netherlands, Germany) in order to regain a balance between personnel expenditure and income (sales).
p
Net operating cash flow: for the past half year
Other operating costs: these consist mainly of a number of non-profit-related taxes (property tax, taxe professionnelle, etc.), which become more onerous from year to year.
-2-
DEVELOPMENTS BY DIVISION COATING DIVISION The Coating division specializes in the integrated coating of technical textiles, of which it masters the entire production process: extrusion of the technical yarns, weaving of the technical fabric and its coating with various polymers. The group is the only player in the world to master five different coating techniques, each with its own specific products and markets.
DIRECT COATING SPINNING AND WEAVING
The transportation market, which is the main outlet for
In the spinning mill we extrude polyester granules into tech-
direct coated products, remains very weak. Trailer and truck
nical yarns. The development and production of customized
manufacturers have seen their turnover decrease to halve.
products have enabled the company to successfully enter a
The company has been able, if only in part, to counter this
number of new markets (geotextiles, conveyor belts, etc.).
trend by focusing more on product development for niche
This strategy of differentiation and focused development
markets (e.g. biogas containers). Although these efforts
provides the foundation for future growth in various sectors.
are starting to pay off, they cannot immediately offset the decline in volume in the group’s primary markets. The other
The weaving mills, producing mainly for internal use, follow
existing markets (textile architecture, advertising banners,
the trend of the direct coated products. Again, targeted
etc.) are also suffering, although to a much lesser extent.
development and differentiation are the keys to current and
Development of a product range for various niche markets
future success (e.g. development of tea bags).
will guarantee balanced revenue distribution and future growth.
TRANSFER COATING Transfer coating is a technology consisting of applying a breathable PU protective layer (coating) onto a medium (fabric, knitwear ...). This technology (in all its variants) has a wide range of industrial applications (protective clothing, mattress covers, coating of airbags, films for the automotive market, etc.) which temper the effects of the current recession. Customer focus, rigorous cost control and small and flexible structures are other success factors in these activities.
-3-
COATING DIVISIE ONLINE COATING In this coating technology, the cloth (open structure fabric) passes directly from the loom into the coating bath. This technology is used mainly for geogrids, swimming pool covers, reinforcement nets, windbreak nets, filter reinforcement, etc. The first half of 2009 saw a sharp drop in deliveries to roofing and swimming pool liner producers, due to a decline in activity in the construction industry (industrial building) and the fall in ‘luxury’ investments like private pools. Modern and efficient machinery makes the division well-placed to take full advantage of new market developments as soon as there is the slightest economic revival.
EXTRUSION COATING In extrusion coating, we extrude granules on the line itself and lay this film on different carriers (textile, felt, paper, ...). The main applications are ventilation tubes, pond liners, transparent films for greenhouses, fabric for sewer renova-
CALENDERING
tion, etc.
Calendering is a technique used for the production of industrial films (pond liners, pool liners, etc.). The startup phase of this plant is fully behind us. The company is focusing on a number of promising markets (films for the automotive industry, technical films, etc.). Here again, we are placing emphasis on developing products with customer-specific features.
-4-
APPAREL DIVISION This division stands for ‘technical protective clothing’. Attention to customer needs, strong quality consciousness and continuing research and development, combined with technically advanced products, are the basis of the successful development of this division.
TECHNICAL PROTECTIVE CLOTHING The Apparel division operates in almost all economic sectors (industry, agriculture, services) with a full range of products tailored to the needs of different sectors in different countries. Thanks to this strategy the effects of the recession have remained relatively limited.
SPECIFIC MARKETS The choice made a few years ago to invest in developing specialized protective clothing for specific markets is bearing fruit. In these markets (fire fighters clothing, maritime survival suits, bullet-proof vests, etc.), technical requirements have absolute priority, making these markets less susceptible to economic cycles.
LEISURE CLOTHING With further development and diversification of the customer portfolio, the company was able to increase sales in these markets (ski suits, sailing gear, etc.).
-5-
CHEMICALS DIVISION Sioen Chemicals processes basic raw materials (PVC powders, pigments, etc.) into high quality technical semi-finished products (pigment pastes, UV inks, varnishes, dispersions, flame retardant products, etc.) for a whole range of applications. An activity that was formerly limited to the production of raw materials for internal use is now a separate division within the Sioen Industries group with fast-growing external sales. Thanks to a number of targeted acquisitions (in 2007), the chemicals division has successfully diversified into different geographic and product technical markets. This division too has felt the recession in the transport and automotive sector, in particular in the paste activity. This decline is tempered by its winning market share in the wallpaper market and by the stable behaviour of the paint sector.
-6-
INDUSTRIAL APPLICATIONS DIVISION This division processes coated fabrics and PVC films for heavy-duty applications. The decline in the automotive and transportation industry has had an immediate and heavy impact on this division’s results.
Indeed, the major part of the turnover of the Industrial Applications division consists of laser cutting of airbags and interior components for the automotive industry and the manufacture of tarpaulins, roofs and side curtains for trailers.
TRANSPORTATION Under this heading the group produces trailers, container and railway curtains and tarpaulins. The transportation market (trailers, trucks, etc.) has been particularly affected by the global economic downturn. Trailer and truck manufacturers have seen their turnover decrease by halve.
INDUSTRIAL ACTIVITIES In the non-wovens department and in other industrial activities, attractive results have been achieved in the given circumstances. Last year we invested in a new cutting machine and built a new production hall to make welding and cutting of pond liner even more efficient.
-7-
BALANCE SHEET AND CASH FLOW STATEMENT In nominal amounts, working capital declined from EUR 126.2 million at 31 December 2008 to EUR 110.0 million at 30 June 2009. Given the sales trend, working capital requirements, expressed as percentage of sales, increased from 36.1% to 40.3%. Net financial debt fell from EUR 151.6 million at 31 December 2008 to EUR 134.5 million at 30 June 2009.
liabilities, explain the net cash flow of EUR -2.1 million euro
MANAGEMENT STATEMENT
between 31 December 2008 and 30 June 2009. The cash
Obligations to provide periodic information under the Trans-
flow related to investing activities is rather small (EUR - 3.0
parency Directive effective from 1 January 2008
The above movements, especially the reduction in working capital and the sharp reduction in short-term financial
million compared with EUR -6.7 million over the same period last year).
The undersigned declare that:
- The half-year accounts, prepared in accordance with the
OUTLOOK
applicable standards for annual financial statements, give
In the current macro-economic conditions it is difficult to
and results of Sioen Industries and the companies
look ahead and we keep the guidance published earlier this
included in the consolidation.
year. We are continuing to work hard to defend our market
a true and fair view of the net assets, financial condition
- The half-year report gives a true and fair overview of
position and to keep costs under rigorous control. We are
the development and results of the company and the
closely following all new developments in our markets and
position of Sioen Industries and the companies included
are confident that, with our flexibility and our financial and
in the consolidation, and a description of the principal
shareholder structure, we will emerge stronger from this
risks and uncertainties that they face.
period.
Michèle Sioen, CEO Geert Asselman, CFO
The full financial report with the management statement will be available from 28 August 2009 in the ‘Investor Relations’ section of our website www.sioen.com.
-8-
INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE 6 MONTHS ENDED 30 JUNE 2009 UNAUDITED
CONTENT > Condensed consolidated statement of financial position
10
> Condensed consolidated statement of comprehensive income by function and earnings per share
12/13
> Condensed consolidated statement of comprehensive income by nature
14
> Condensed consolidated statement of changes in equity
15
> Condensed consolidated statement of cash flows
16
> Notes to the condensed consolidated financial statements
17
-9-
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION IN THOUSANDS OF EUROS
six months ended ASSETS
twelve months ended
30/06/2009
31/12/2008
unaudited
audited
Intangible assets
16 597
17 908
Goodwill
17 596
17 603
148 082
151 160
NON-CURRENT ASSETS
Property, plant and equipment Interests in associates
2
2
17
17
Other long term assets
1 237
1 345
Deferred tax assets
3 982
3 846
187 515
191 881
Inventories
91 381
99 183
Trade receivables
56 209
56 107
Other receivables
3 707
8 445
Long term trade receivables
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS
Other ďŹ nancial assets
288
288
12 471
14 545
1 430
1 292
TOTAL CURRENT ASSETS
165 486
179 860
TOTAL ASSETS
353 001
371 741
Cash and cash equivalents Deferred charges and accrued income
- 10 -
six months ended EQUITY & LIABILITIES
twelve months ended
30/06/2009
31/12/2008
unaudited
audited
Share capital
46 000
46 000
Retained earnings
94 362
95 541
517
820
0
0
140 879
142 361
101 102
102 140
Provisions
1 630
1 493
Retirement benefit obligation
1 057
1 103
Deferred tax liabilities
14 729
16 410
Obligations under finance leases
20 767
18 645
3
3
139 288
139 794
Trade and other payables
25 571
24 381
Borrowings
23 168
43 361
Provisions
3 369
3 796
CAPITAL AND RESERVES
Hedging and translation reserves Minority interests TOTAL EQUITY
NON-CURRENT LIABILITIES Borrowings
Other amounts payable TOTAL NON CURRENT LIABILITIES
CURRENT LIABILITIES
Retirement benefit obligation
39
39
Current income tax liabilities
2 365
954
Social debts
9 151
9 573
Other amounts payable
2 204
2 250
Obligations under finance leases
4 661
3 861
Accrued charges and deferred income
2 304
1 371
72 834
89 586
353 001
371 741
TOTAL CURRENT LIABILITIES TOTAL EQUITY AND LIABILITIES
- 11 -
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME BY FUNCTION | IN THOUSANDS OF EUROS
six months ended on June 30 2009
2008
unaudited
unaudited
136 518
196 174
-109 753
-150 282
Manufacturing contribution
26 766
45 892
Sales and marketing expenses
-9 061
-9 471
R&D expenses
-2 939
-3 813
-12 135
-12 218
1 954
928
Net sales Cost of sales
Administrative expenses Other income/other expenses Financial income
5 745
2 454
Financial charges
-8 214
-6 825
Non recurring result (1)
-956
-2 545
Profit (loss) before tax
1 160
14 402
-627
-4 952
Profit (loss) for the period from continuing operations
533
9 450
Profit (loss) for the period from discontinued operations
0
0
Group profit/loss
533
9 450
Group profit/loss attributable to shareholders of Sioen Industries
533
9 450
0
0
533
9 450
-360
-157
123
53
Other comprehensive income for the period (net of tax)
-238
-104
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
295
9 346
Attributable to shareholders of Sioen Industries
295
9 346
0
0
Income tax
Group profit/loss attributable to minority interests Group profit/loss Other comprehensive income for the period: Exchange differences arising on translation of foreign operations Income tax relating to components of other comprehensive income
Attributable to minority interests
(1) Non-recurring result relates 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.
- 12 -
EARNINGS PER SHARE
six months ended on June 30 Earnings (loss) per share
2009
2008
unaudited
unaudited
Basic earnings per share
0.02
0.44
From continuing operations
0.02
0.44
From discontinued operations
0.00
0.00
Diluted earnings per share
0.02
0.44
From continuing operations
0.02
0.44
From discontinued operations
0.00
0.00
in euros
- 13 -
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME BY NATURE | IN THOUSANDS OF EUROS
six months ended on June 30 2009 unaudited 136 518 -5 316 2 001
% on net sales
Raw materials & consumables used
-60 282
Gross margin
51.95%
Services and other goods Remuneration, social security and pensions Depreciations Write off inventories and receivables Other operating charges (3) Non recurring result (1)
-20 915 -32 713 -10 407 -760 -3 540 -956
15.3% 24.0% 7.6% 0.6% 2.6% 0.7%
-30 267 -37 571 -10 732 -222 -3 081 -2 545
15.4% 19.2% 5.5% 0.1% -1.6% -1.3%
3 629
2.7%
18 773
9.6%
-2 469 5 745 -8 214
-1.8% 4.2% 6.0%
-4 371 2 454 -6 825
-2.2% 1.3% 3.5%
1 160
0.8%
14 402
7.3%
-627
0.5%
-4 952
2.5%
533
0.4%
9 450
4.8%
Minority interests
0
0.0%
0
0.0%
Group profit/loss
533
0.4%
9 450
4.8%
Net sales Changes in stocks and WIP (Work in Progress) Other operating income (2)
Operating result Financial result Financial income Financial charges Profit or loss before taxes Income tax Profit or loss after taxes
% on net sales
-3.9% 1.5%
2008 unaudited 196 174 7 063 2 078
44.2%
-102 125
52.1%
51.54%
Other comprehensive income for the period: Exchange differences arising on translation of foreign operations Income tax relating to components of other comprehensive income
-360 123
-157 53
Other comprehensive income for the period (net of tax)
-238
-104
Total comprehensive income for the period
295
9 346
Attributable to shareholders of Sioen Industries Attributable to minority interests
295 0
9 346 0
EBIT
3.6% 1.1%
3 629
2.7%
18 773
9.6%
EBITDA
14 984
11.0%
29 678
15.1%
OPERATING CASH FLOW
10 069
7.4%
19 849
10.1%
(1) Non-recuring result relates 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 (2) Other operating income mainly consists of received rent for buildings, transport recharges and received indemnities (3) Other operating charges mainly consist of taxes on tangible assets, local taxes and import duties
- 14 -
Share capital
Reserves
Foreign currency translation reserve
Hedging reserve
Equity before minority interests
Minority interests
Equity
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY IN THOUSANDS OF EUROS
46 000
95 541
125
695
142 361
0
142 361
six months ended 30/06/2009 Balance at January 1 2009 Group profit/loss
533
533
0
533
0
0
0
-303
0
-303
0
-303
0
-303
-1 711
0
-1 711
Available for sale financial assets Hedging Deferred tax Currency translation adjustments
-303
Change in consolidation scope Transfer to profit on cash flow hedges
Total comprehensive income for het period
0
Payment of dividends
Balance at June 30 2009
0
-303
-1 711
46 000
94 362
-178
695
140 879
0
140 879
46 000
101 761
66
758
148 585
0
148 585
9 450
0
9 450
103
103
0
103
1
0
1
-111
-111
0
-111
-7
-6
0
-6
-9 626
0
-9 626
148 402
0
148 402
six months ended 30/06/2008 Balance at January 1 2008 Group profit/loss
9 450
Available for sale financial assets Hedging Deferred tax Currency translation adjustments
1
Change in consolidation scope Transfer to profit on cash flow hedges
Total comprehensive income for het period
0
Payment of dividends
Balance at June 30 2008
0
1
-9 626
46 000
101 585
- 15 -
67
751
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS IN THOUSANDS OF EUROS
For the six months ended June 30 2009
2008 Unaudited
Operating result Depreciations
3 629
18 773
10 407
10 732
Impairment
261
0
Write off inventories and receivables
760
222
-1 017
107
Inventories
91 381
103 522
Long term and short term trade receivables
56 226
78 880
Provision other risks and charges Details working capital:
Other receivables, non-current assets, investments & deferred charges
6 661
11 379
Trade and other payables
-25 571
-39 883
Tax liabilities & other amounts payable
-18 481
-21 712
12 746
12 543
122 961
144 729
Changes in working capital
16 231
-6 203
Cash flow from operating activities
30 271
23 631
Current taxes
-1 007
-5 457
Net cash flow from operating activities
29 264
18 174
37
44
Amounts written off inventories and receivables Total working capital
Received interests Acquisitions of subsidiaries Investments in intangible and tangible fixed assets Disposal and sale of intangible and tangible fixed assets Increase in capital grants
0
0
-3 311
-7 740
638
1 102
0
0
-374
-140
Net cash flow from investing activities
-3 010
-6 734
Translation adjustments on intangible and tangible assets
Net cash flow before financing activities
26 254
11 440
Paid interests
-3 368
-3 614
Disbursed dividend
-1 762
-9 626
Increase long term interest bearing loans Decrease long term interest bearing loans Increase/(decrease) short term intrest bearing loans Increase/(decrease) finance lease obligations
0
0
-1 039
-5 192
-20 192
7 041
-1 271
-567
Other
-157
337
Currency result
-242
-896
-28 031
-12 516
-296
-6
Change in cash and cash equivalents
-2 074
-1 082
Net cash position at the end of previous period
14 545
7 479
Net cash position at the end of current period
12 471
6 397
Cash flow from financing activities Impact of cumulative translation adjustments and hedging
- 16 -
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
REPORTING ENTITY
SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated interim financial statements
These condensed consolidated interim financial statements
of Sioen Industries NV (the ‘Company’) include the financial
have been prepared in accordance with the accounting
statements of the Company and its subsidiaries (together
policies adopted in the last annual financial statements for
referred to as the ‘Group’).
the year to 31 December 2008. The following standards and interpretations revised or newly published by the IASB were
The consolidated interim financial statements give a general
mandatory as of the beginning of financial year 2009:
overview of the Group’s activities and the results obtained. They give an accurate picture of the entity’s financial posi-
- Amendments to IAS 1: Presentation of Financial Statements
tion, financial performance and cash flow, and are drawn up
The revised Standard has introduced a number of
on a going concern basis.
terminology changes (including revised titles for the condensed financial statements) and has resulted in a
The consolidated interim financial statements are stated
number of changes in presentation and disclosure. Ac-
in thousands of euros, as the euro is the currency of the
cordingly, a consolidated statement of comprehensive
primary economic environment in which the Group is active.
income is now presented, and the statement of changes
The condensed financial statements of foreign participations
in equity is shown as a separate element of the financial
are converted in accordance with the principles described in
statements. The statement of comprehensive income
the section ‘Foreign currencies’ of the annual report 2008.
comprises the consolidated profit and loss and the other income, which corresponds to income and expenses directly recognised in equity.
STATEMENT OF COMPLIANCE WITH IFRS - IFRS 8 Operating Segments These condensed interim consolidated financial statements
The adoption of IFRS 8 has not affected the identified
are for the six months ended 30 June 2009. They have been
operating segments for the Group. Reported segment
prepared in accordance with International Accounting
results are based on internal management reporting in-
Standard (IAS) 34 Interim Financial Reporting.
formation that is regularly reviewed by the chief operating decision maker (management approach).
The condensed interim consolidated financial statements do not include all of the information required in annual finan-
- Amendments to IAS 23: Borrowing Costs
cial statements in accordance with IFRS, and should be read
The amendments to IAS 23 now requiring capitalisation
in conjunction with the consolidated financial statements of
of borrowing costs do not impact the financial position
the Group for the year ended 31 December 2008.
and financial performance since the Group already exercised the previous option of capitalising borrowing costs.
- 17 -
- IFRIC 13: Customer Loyalty Programmes
The Group’s management believes that the Group is well
- Amendments to IFRS 2: Share-based Payment
positioned in the current economic circumstances. Factors
- Amendments to IAS 32: Financial instruments: Presenta-
contributing to the Group’s strong position are:
tion - The Group does not expect to need additional borrowing The mandatory application of all other amendments to or
facilities in the next 12 months, as a result of its signifi-
improvements of standards and interpretations listed above
cant financial resources, existing facilities and strong
did not give rise to any major effects on the Group’s financial
liquidity reserves.
position and financial performance. The Group has no debt covenants to comply with. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of
- The Group’s major customers have not experienced finan-
these condensed consolidated interim financial statements.
cial difficulties. Credit quality of trade receivables as at 30 June 2009 is considered to be good.
SEASONALITY OF INTERIM OPERATIONS
Overall, the Group is in a strong position despite the current economic environment, and has sufficient capital and liquid-
The consolidated income statement of the continuing op-
ity to service its operating activities and debt.
erations used to reflect the seasonality of the coating business, as a result of which positive earnings were primarily
ASSESSMENT CRITERIA IN THE APPLICATION OF THE VALUATION RULES
generated in the first and second quarter of any one year. However, the apparel division (textile business), of which sales remain at level and positive earnings are primarily generated in the third and fourth quarter of any one year,
In the application of the valuation rules, in certain cases an
has become more significant within the Group.
accounting assessment must be made. This assessment is done by making the most accurate assessment possible of uncertain future evolutions. The management determines
SIGNIFICANT EVENTS
its assessment on the basis of different realistically assessed parameters, such as future market expectations, sector
The world economy has worsened since the last quarter of
growth rates, industry studies, economic realities, budgets
the last annual reporting period. As with all businesses, the
and multi-year plans, expected profitability studies, etc. The
Group is affected by the economic strains this is putting on
most important elements within the Group that are subject
investments. The Group’s objectives and policies for manag-
to this are: impairments, provisions and deferred tax items.
ing capital, credit risk and liquidity risk are described in its recent annual financial statements.
- 18 -
Impairment test for the six months ended June 30 2009
The adoption of IFRS 8 has not affected the identified
In order to provide the stakeholders with in-depth know-
operating segments for the Group compared to the recent
ledge as to the financial strenght of the Group, we reas-
annual financial statements. Under IFRS 8, reported seg-
sessed the recoverable amount of assets. Based on the
ment profits are based on internal management reporting
sensitivity analysis, a significant adverse change in key
information that is regularly reviewed by the chief operating
assumptions could result in an impairment loss to be rec-
decision maker (management approach), and is reconciled
ognized in the Roland subdivision as the discounted cash
to Group profit or loss on the following page. The chief op-
flow exceeded the carrying value only moderately. Develop-
erating decision maker assesses segment profit or loss using
ments during the first half of 2009 within this subdivision
a measure of operating profit. The measurement policies
were below previous estimated levels, resulting in a lower
the Group uses for segment reporting under IFRS 8 are the
recoverable amount in relation to the carrying amount of
same as those used in its financial statements, except that
the assets. Estimates based on the latest developments
certain items are not included in arriving at the operating
resulted in an impairment loss, amounting to € 0.3 million,
profit of the operating segments (some headquarter operat-
which was recognized as per 30 June 2009 on assets of the
ing results). In addition, corporate assets, which primarily
Roland subdivision, part of the industrial applications divi-
apply to the Group’s headquarters, have been allocated to
sion.
the segments as far as possible.
Key assumptions related to all other divisions of the Group,
The Group operates in four main business segments: Coat-
as described in our annual report of 2008, are still valid and
ing, Apparel, Chemicals and Industrial Applications. These
review based on the latest developments did not result in
divisions are the basis on which the Group reports its seg-
any adverse changes. There are no impairment indicators
ment information. The principal products and services of
during the first half of the year related to these divisions.
each of these divisions are described in the annual report of 2008. Inter-segment sales are undertaken at prevailing market conditions.
SEGMENT INFORMATION The Group has adopted IFRS 8 Operating Segments. In identifying its operating segments, management generally follows the Group’s service lines, which represent the main products and services provided by the Group. Each of these operating segments is managed separately as each of these service lines requires different technologies and other resources as well as marketing approaches.
- 19 -
SEGMENT REPORTING IN THOUSANDS OF EUROS
The Group’s revenue and results by operating segment for the period: Coating
Apparel
Industrial Chemicals applications
Other
Total
54 775
36 943
26 355
9 057
14
420
18 442
3
136 518
2 819
0
833
3 184
12 310
-205
755
0
4 567
197 957
65 701
42 146
48 114
0
353 918
Revenue from external customers Intersegment revenues
89 177
36 917
44 207
25 865
9
196 174
15 953
3
1 548
5 058
0
22 562
6 months ended June 30 2009 Revenue from external customers Intersegment revenues Segment operating result Total assets 6 months ended June 30 2008
Segment operating result Total assets
10 623
4 195
1 985
1 917
0
18 719
222 652
58 511
57 498
61 383
0
400 044
153 242
77 013
72 193
46 903
13
349 366 36 093
Year to December 31 2008 Revenue from external customers Intersegment revenues
25 338
6
2 479
8 271
0
Segment operating result
11 055
7 922
-154
-2 231
0
16 593
214 985
65 779
43 638
50 542
0
374 944
Total assets
Segment profit represents the profit earned by each segment without allocation of central administration costs, financial result and tax result.
Segment operating profit can be reconciled to Group profit or loss as follows: 6 months ended
6 months ended
Year to
June 30 2009
June 30 2008
December 31 2008
4 567
18 719
16 593
-938
54
-532
Group operating profit
3 629
18 773
16 060
Financial charges
-8 214
-6 825
-18 055
Financial income
5 745
2 454
8 514
1 160
14 402
6 519
Segment operating profit Reconciling items: Elimination of intersegment profits
Group profit before tax
- 20 -
EXCHANGE RATES
Currency EUR USD GBP RMB PLN TDN UAH
30/06/2009
31/12/2008
30/06/2008 1.00000
average
1.00000
1.00000
closing
1.00000
1.00000
1.00000
average
1.33792
1.47491
1.54435
closing
1.41340
1.39170
1.57640 0.77952
average
0.89000
0.80287
closing
0.85210
0.95250
0.79225
average
9.14068
10.21847
10.83036
closing
9.65447
9.49559
10.80509
average
4.53018
3.52514
3.47577
closing
4.45200
4.15350
3.35130
average
1.86211
1.80650
1.81637
closing
1.88676
1.83512
1.83329
average
10.67600
7.90745
7.54438
closing
10.82966
11.21604
7.20243
INCOME TAX IN THOUSANDS OF EUROS The Group’s consolidated effective tax rate for the period ended June 30 2009 was 54.0%, compared to 47.8% for the period ended 31 December 2008 and 34.4% for the period ended June 30 2008. Reconciliation between taxes and result before taxes:
Profit before taxes
6 months ended
6 months ended
June 30 2009
June 30 2008
1 160
Tax on profit of fiscal entities against theoretical local tax rate
508
Theoretical tax rate (1)
14 402 43.8%
43.8%
4 794
33.3%
33.3%
Tax impact of: Non-deductible expenses Specific tax regimes
176
15.1%
143
1.0%
-248
-21.4%
-543
-3.8%
1 048
90.4%
629
4.4%
0
0.0%
43
0.3%
74
6.4%
34
0.2%
Carry back
-246
-21.2%
0
0.0%
Notional interest deduction
-682
-58.8%
-394
-2.7%
Deferred tax assets not recognised Usage of non-recognised deferred tax assets Regularisation of current tax on previous years
Tax on distributed profits (DBI)
0
0.0%
246
1.7%
Other
0
-0.0%
-1
0.0%
627
54.0%
4 952
34.4%
Tax on profit as shown in the P&L
(1) is the weighted average tax rate.
- 21 -
DEBT AND EQUITY SECURITIES There were no issuances, repurchases and repayments of debt and equity securities for the six months ended June 30 2009.
DIVIDENDS The Board of Directors does not propose to pay an interim dividend for the six months ended June 30 2009.
PROPERTY, PLANT AND EQUIPMENT During the period, the Group invested for approximately EUR 6.7 milion on assets compared to EUR 7.7 million over the same period ended June 30 2008. Investments in 2009 mainly relate to buildings under leasing amounting to EUR 3.4 million, expansion of the second floor in the Indonesian production factory and the implementation of a new ERP system at 4 entities of the Group. In 2008 investments mainly related to the new production line at Fabrics Calandering, the increase the production capacity at Veranneman and the implementation of a new ERP system at 5 entities of the Group.
Assets that were sold and disposed during the period related to certain machinery and tools with a net value of EUR 0.3 million.
An impairment analysis has been done at the end of June 2009 (see ‘impairment test’ review).
The Group did not enter into any significant contractual commitments during the first half of 2009.
- 22 -
CHANGES IN INVENTORIES IN THOUSANDS OF EUROS
Gross Inventory
six months ended 30/06/2009
year ended 31/12/2008
30 369
34 937
Raw materials Consumables
362
400
3 387
4 702
Finished goods
61 968
63 081
Goods in transit
3 753
4 398
99 840
107 518
six months ended 30/06/2009
year ended 31/12/2008
-3 319
-3 173
-5 141
-5 162
-8 459
-8 335
Net inventory
six months ended 30/06/2009
year ended 31/12/2008
Raw materials
27 051
31 764
Work in progress
TOTAL Amounts written off
Amounts written off raw materials Amounts written off consumables Amounts written off work in progress Amounts written off finished goods Amounts written off goods in transit TOTAL
Consumables
362
400
3 387
4 702
Finished goods
56 828
57 919
Goods in transit
3 753
4 398
91 381
99 183
Work in progress
TOTAL
Amounts written of inventory 31/12/2008
writedown
reversal
8 335
167
-79
Amounts written of inventory 31/12/2008
writedown
reversal
8 770
305
-1 081
exchange (Other) rate movements or differences adjustments 37
6 months ended 30/06/2009
0
8 459
exchange (Other) rate movements or differences adjustments
6 months ended 30/06/2008
79
0
8 073
Gross inventories (excl. write-off ) decreased by € 7.7 million or 7.1%. Decreased activity resulted in an inventory decrease in the coating division, chemicals division and division industrial applications. In the apparel division stock increased by 4% following the slight activity increase. Obsolescence reserves on inventories amounted to € 8.5 million compared with € 8.3 million at the end of 2008. Obsolescence reserves are recorded on the basis of a detailed aging and rotation analysis per unit. There was no significant write off of obsolete inventory to net realisable value in 2009.
- 23 -
106
-141
Provisions for other liabilities and charges
2 526
717
-860
-117
6
Total provisions
5 289
823
-1 002
-117
6
0
Reversal
Exchange rate differences
Fair value
1 083
1 645
Provisions for other liabilities and charges
547
1.724
1 630
3 369
31/12/2007
Increase
Utilisation
Provisions for environmental issues
2 214
68
-66
Provisions for other liabilities and charges
2 416
545
-1 066
0
-4
Total provisions
4 630
613
-1 132
-117
6
More then one year
4 999
2 215 1 891 0
4 106
Within one year
Provisions for environmental issues
1 765
450
Provisions for other liabilities and charges
622
1 269
2 387
1 719
Total provisions
2 271
Within one year
Provisions for environmental issues
Provisions
2 728
six months ended 30/06/2009
More then one year
six months ended 30/06/2009
Utilisation
2 763
Fair value
Increase
Provisions for environmental issues
Reversal
31/12/2008
Exchange rate differences
PROVISIONS IN THOUSANDS OF EUROS
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 periodical environmental check-up of the site. Provisions for other liabilities and charges mainly relate to social costs of ongoing restructuring processes by the coating division and by the division industrial applications. A restructuring provision was recognised by the Group in its annual financial statements as at 31 December 2008 amouting to € 2.2 million. An additional restructuring provision amounting to € 0.7 million was set up during the first half of 2009 and € 0.9 million was used during that period. The estimate of the restructuring provision was reduced by € 0.1 million in the six months ended 30 June 2009 due to a positive outcome of claims.
- 24 -
BORROWINGS LONGTERM INTEREST BEARING LOANS, INCLUD ING FINANCIAL LONGTERM LEASING DEBT
SHARE CAPITAL Share capital as at June 30 2009 amounted to EUR 46 mil-
There were no other significant changes in the long term
Company in either current or the prior interim reporting
borrowings of the Company compared to those disclosed in
periods.
lion. There were no movements in the issued captial of the
the consolidated financial statements of the Group for the
FINANCIAL RISK MANAGEMENT
year ended 31 December 2008.
The Group’s financial risk management objectives and
SHORTTERM INTEREST BEARING LOANS
policies are consistent with those disclosed in the consoli-
As per 30/06/2009, short-term straight loans amounted to
dated financial statements as at and for the year ended
EUR 18.5 million. They consist of an euro loan of EUR 3.9 mil-
December 31 2008.
lion with an interest rate of 1.4% and dollar loans of $ 20.7 million with an weighted average interest rate of 2.0%. A tax
FINANCIAL INSTRUMENTS
prepayment loan expired on 10 April 2009.
The Group manages a portfolio of derivatives to hedge against risks relating to exchange rate and interest rate posi-
At 31/12/2008, short-term straight loans amounted to
tions arising as a result of operating and financial activities.
EUR 33.2 million.
It is the Group’s policy to avoid engaging in speculative transactions or transactions with a leverage effect and not to
OBLIGATIONS UNDER FINANCE LEASES
hold derivatives for trading purposes.
The commitments for the acquisition of intangible and tangible assets, as described in the annual report of 2008, were
The market value of the financial instruments are diceded
added to the balance sheet amounting to EUR 3.3 million
upon market value reports, received from financial institu-
(see ‘Property, Plant and Equipment’)
tions.
Financial Derivatives
six months ended
6 months ended
30/06/2009 Notional value
op 30/06/2008
Fair value
Notional value
Fair value
Forward sales contracts Forward sales contracts within 1 year Rights
0
0
0
0
Duties
7 400
7 678
0
0
0
0
0
0
IRS forward
- 25 -
RELATED PARTY TRANSACTIONS IN THOUSANDS OF EUROS
Nature of
six months ended
transaction
30/06/2009
Recticel Group
Sale
586
Recticel Group
Purchase
99
INCH
Sale
520
SVB
Purchase
83
Plama
Purchase
16
Nature of
six months ended
transaction
30/06/2008
Recticel Group
Sale
724
Recticel Group
Purchase
142
INCH
Sale
920
SVB
Purchase
131
Verba
Purchase
35
Plama
Purchase
27
All transactions with related parties are for commercial purposes (raw materials/finished products, contruction projects) and were carried out at arm’s length on the basis of international comparable uncontrolled price methods in accordance with IAS 24. Other transactions with related parties are not included, given the negligible amount (< EUR 10.000).
EVENTS AFTER REPORTING DATE
There were no other significant changes in the contingencies
There were no material events subsequent to the end of the
of the Company and its subsidiaries from those described
interim period.
above and those disclosed in the consolidated financial statements of the Group for the year ended December 31 2008.
CONTINGENT ASSETS AND LIABILITIES Changes in contingent liabilities or contingent assets since the end of the last annual reporting period:
- The coating division is currently facing a commercial dispute which could reach EUR 0.5 million. However, the court verdict in first instance and the appeal was in favour of Sioen Industries.
- 26 -
APPROVAL OF INTERIM FINANCIAL STATEMENTS
These condensed interim consolidated financial statements
FINANCIAL CALENDAR
have been approved for issue by the board of directors on
Friday October 30 2009: trading update, 3rd quarter 2009
August 26 2009. For further information/Financial information/ We hereby confirm, to the best of our knowledge, that the
Investor relations:
condensed consolidated interim financial statements give a
Geert Asselman, CFO
true and fair view of the financial position of the Group as at
Sioen Industries n.v.
30 June 2009, as well as of the financial performance and cash
Fabriekstraat 23, B-8850 Ardooie
flows for the said period, fully in compliance with the account-
T 051 74 09 80 / F 051 74 09 79
ing standards adopted for use in the EU for interim financial E-mail: corporate@sioen.be
statements (EU adopted IAS 34, Interim Financial Reporting);
Website: www.sioen.com Michèle Sioen
Geert Asselman
CEO
CFO
Financial servicing is provided by KBC, Fortis, ING, Dexia and Bank Degroof.
PROFILE OF SIOEN Sioen Industries is market leader in the production of coated technical textiles, a 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.
Detailed information can be found on www.sioen.com
- 27 -
SIOEN INDUSTRIES Fabriekstraat 23 • B-8850 Ardooie T +32(0)51 74 09 80 F +32(0)51 74 09 79 E corporate@sioen.be W www.sioen.com BTW BE 441.642.780 RPR 0441.642.780 Brugge
JAARVERSLAG/RAPPORT ANNUEL/ANNUAL REPORT Dit verslag is beschikbaar in het Nederlands, het Frans en het Engels. Ce rapport est disponible en français, en néerlandais et en anglais. This report is available in English, Dutch and French.
Realization: www.kliek.be - T +32 (0)51 40 43 12 - ref. 09 0542
FINANCIAL INFORMATION AND INVESTOR RELATIONS For all further information, institutional investors and financial analysts are advised to contact: Geert Asselman Chief Financial Officer
FINANCIAL CALENDAR Trading update third quarter results 2009 - Friday October 30 2009