Half-year results 2009
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HALF YEAR REPORT
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p Sales: for the fi rst half of 2009 the group posted consoli-
dated sales of EUR 136.5 million, compared with EUR 196.2
million during the same period last year.
p Gross margin: the total gross margin improved slight-
ly compared with 2008. A small change in sales mix and a
sharp fall in raw materials prices during the last quarter of
2008 are the main causes.
p Services and other goods: targeted eff orts
produced here a cost saving of EUR 9.4 million in the fi rst
half of 2009 compared with the same period in 2008
(EUR 20.9 million vs. EUR 30.3 million) This savings falls
into three parts: fi rst there are volume-related costs which
evolve directly in line with sales. Second there are the
general non-volume-related costs, where all non-vital
expenditure has been eliminated. Finally there are the
costs of temporary labour (recorded under this heading)
which fell sharply.
p Personnel costs: personnel costs during the fi rst half
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 Other operating costs: these consist mainly of a
number of non-profi t-related taxes (property tax, taxe
professionnelle, etc.), which become more onerous from
year to year.
p Non-recurrent result: the non-recurrent result
amounted in the fi rst half of 2009 to EUR 956 thousand.
This consists of a (limited) recognition of an impairment
and additional provisions for ongoing restructuring.
p Operating result: all this resulted in an operating
profi t of EUR 3.6 million compared with 18.8 million over
the same period last year.
p Financial result: fi nancial result for the fi rst half
of 2009 amounted to EUR -2.5 million compared with
- 4.4 million during the same period last year. Unrealized
foreign exchange gains and lower interest charges due to
reduced working capital are the two main causes.
p Profit: the profi t for the fi rst half of 2009 amounted to
EUR 533 thousand compared with EUR 9.5 million over the
same period last year.
p Net operating cash flow: for the past half year
amounted to EUR 10.1 million.
HALF YEAR REPORT OF THE BOARD OF DIRECTORS
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DEVELOPMENTS BY DIVISION
COATING DIVISIONThe 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 fi ve diff erent
coating techniques, each with its own specifi c products and
markets.
SPINNING AND WEAVING
In the spinning mill we extrude polyester granules into tech-
nical yarns. The development and production of customized
products have enabled the company to successfully enter a
number of new markets (geotextiles, conveyor belts, etc.).
This strategy of diff erentiation and focused development
provides the foundation for future growth in various sectors.
The weaving mills, producing mainly for internal use, follow
the trend of the direct coated products. Again, targeted
development and diff erentiation are the keys to current and
future success (e.g. development of tea bags).
DIRECT COATING
The transportation market, which is the main outlet for
direct coated products, remains very weak. Trailer and truck
manufacturers have seen their turnover decrease to halve.
The company has been able, if only in part, to counter this
trend by focusing more on product development for niche
markets (e.g. biogas containers). Although these eff orts
are starting to pay off , they cannot immediately off set the
decline in volume in the group’s primary markets. The other
existing markets (textile architecture, advertising banners,
etc.) are also suff ering, although to a much lesser extent.
Development of a product range for various niche markets
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 (fab-
ric, knitwear ...). This technology (in all its variants) has a wide
range of industrial applications (protective clothing, mattress
covers, coating of airbags, fi lms for the automotive market,
etc.) which temper the eff ects of the current recession.
Customer focus, rigorous cost control and small and fl exible
structures are other success factors in these activities.
- 4 -
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, fi lter
reinforcement, etc. The fi rst half of 2009 saw a sharp drop
in deliveries to roofi ng 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 effi cient 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 fi lm on diff erent carriers (textile, felt, paper, ...).
The main applications are ventilation tubes, pond liners,
transparent fi lms for greenhouses, fabric for sewer renova-
tion, etc.
CALENDERING
Calendering is a technique used for the production of
industrial fi lms (pond liners, pool liners, etc.). The start-
up phase of this plant is fully behind us. The company is
focusing on a number of promising markets (fi lms for the
automotive industry, technical fi lms, etc.). Here again,
we are placing emphasis on developing products with
customer-specifi c features.
COATING DIVISIE
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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 diff erent sectors in diff erent
countries. Thanks to this strategy the eff ects of the recession
have remained relatively limited.
SPECIFIC MARKETS
The choice made a few years ago to invest in developing
specialized protective clothing for specifi c markets is bearing
fruit. In these markets (fi re fi ghters 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 diversifi cation of the customer
portfolio, the company was able to increase sales in these
markets (ski suits, sailing gear, etc.).
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CHEMICALS DIVISION
Sioen Chemicals processes basic raw materials (PVC powders,
pigments, etc.) into high quality technical semi-fi nished
products (pigment pastes, UV inks, varnishes, dispersions,
fl ame 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 diversifi ed into
diff erent 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.
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INDUSTRIAL APPLICATIONS DIVISION
This division processes coated fabrics and PVC fi lms 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 aff ected 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 effi cient.
- 8 -
BALANCE SHEET AND CASH FLOW STATEMENTIn 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 fi nancial debt fell from EUR
151.6 million at 31 December 2008 to EUR 134.5 million at
30 June 2009.
The above movements, especially the reduction in work-
ing capital and the sharp reduction in short-term fi nancial
liabilities, explain the net cash fl ow of EUR -2.1 million euro
between 31 December 2008 and 30 June 2009. The cash
fl ow related to investing activities is rather small (EUR - 3.0
million compared with EUR -6.7 million over the same period
last year).
OUTLOOK In the current macro-economic conditions it is diffi cult to
look ahead and we keep the guidance published earlier this
year. We are continuing to work hard to defend our market
position and to keep costs under rigorous control. We are
closely following all new developments in our markets and
are confi dent that, with our fl exibility and our fi nancial and
shareholder structure, we will emerge stronger from this
period.
MANAGEMENT STATEMENTObligations to provide periodic information under the Trans-
parency Directive eff ective from 1 January 2008
The undersigned declare that:
- The half-year accounts, prepared in accordance with the
applicable standards for annual fi nancial statements, give
a true and fair view of the net assets, fi nancial condition
and results of Sioen Industries and the companies
included in the consolidation.
- The half-year report gives a true and fair overview of
the development and results of the company and the
position of Sioen Industries and the companies included
in the consolidation, and a description of the principal
risks and uncertainties that they face.
Michèle Sioen, CEO
Geert Asselman, CFO
The full fi nancial report with the management statement
will be available from 28 August 2009 in the ‘Investor Rela-
tions’ section of our website www.sioen.com.
- 9 -
INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE 6 MONTHS ENDED 30 JUNE 2009 UNAUDITED
CONTENT
> Condensed consolidated statement of fi nancial 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 fl ows 16
> Notes to the condensed consolidated fi nancial statements 17
- 10 -
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
IN THOUSANDS OF EUROS
ASSETS 30/06/2009 31/12/2008
unaudited audited
NON-CURRENT ASSETS
Intangible assets 16 597 17 908
Goodwill 17 596 17 603
Property, plant and equipment 148 082 151 160
Interests in associates 2 2
Long term trade receivables 17 17
Other long term assets 1 237 1 345
Deferred tax assets 3 982 3 846
TOTAL NON-CURRENT ASSETS 187 515 191 881
CURRENT ASSETS
Inventories 91 381 99 183
Trade receivables 56 209 56 107
Other receivables 3 707 8 445
Other fi nancial assets 288 288
Cash and cash equivalents 12 471 14 545
Deferred charges and accrued income 1 430 1 292
TOTAL CURRENT ASSETS 165 486 179 860
TOTAL ASSETS 353 001 371 741
six months ended twelve months ended
- 11 -
EQUITY & LIABILITIES 30/06/2009 31/12/2008
unaudited audited
CAPITAL AND RESERVES
Share capital 46 000 46 000
Retained earnings 94 362 95 541
Hedging and translation reserves 517 820
Minority interests 0 0
TOTAL EQUITY 140 879 142 361
NON-CURRENT LIABILITIES
Borrowings 101 102 102 140
Provisions 1 630 1 493
Retirement benefi t obligation 1 057 1 103
Deferred tax liabilities 14 729 16 410
Obligations under fi nance leases 20 767 18 645
Other amounts payable 3 3
TOTAL NON CURRENT LIABILITIES 139 288 139 794
CURRENT LIABILITIES
Trade and other payables 25 571 24 381
Borrowings 23 168 43 361
Provisions 3 369 3 796
Retirement benefi t 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 fi nance leases 4 661 3 861
Accrued charges and deferred income 2 304 1 371
TOTAL CURRENT LIABILITIES 72 834 89 586
TOTAL EQUITY AND LIABILITIES 353 001 371 741
six months ended twelve months ended
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
BY FUNCTION | IN THOUSANDS OF EUROS
2009 2008
unaudited unaudited
Net sales 136 518 196 174
Cost of sales -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
Administrative expenses -12 135 -12 218
Other income/other expenses 1 954 928
Financial income 5 745 2 454
Financial charges -8 214 -6 825
Non recurring result (1) -956 -2 545
Profi t (loss) before tax 1 160 14 402
Income tax -627 -4 952
Profi t (loss) for the period from continuing operations 533 9 450
Profi t (loss) for the period from discontinued operations 0 0
Group profi t/loss 533 9 450
Group profi t/loss attributable to shareholders of Sioen Industries 533 9 450
Group profi t/loss attributable to minority interests 0 0
Group profi t/loss 533 9 450
Other comprehensive income for the period:
Exchange differences arising on translation of foreign operations -360 -157
Income tax relating to components of other comprehensive income 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
Attributable to minority interests 0 0
(1) Non-recurring result relates to impairment losses, restructuring expenses and start-up costs of new, signifi cant investment projects until the product is ready to be sold at normal market conditions.
six months ended on June 30
- 13 -
EARNINGS PER SHARE
Earnings (loss) per share 2009 2008
in euros 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
six months ended on June 30
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
BY NATURE | IN THOUSANDS OF EUROS
2009 % on net 2008 % on net unaudited sales unaudited sales Net sales 136 518 196 174 Changes in stocks and WIP (Work in Progress) -5 316 -3.9% 7 063 3.6% Other operating income (2) 2 001 1.5% 2 078 1.1%
Raw materials & consumables used -60 282 44.2% -102 125 52.1%
Gross margin 51.95% 51.54% Services and other goods -20 915 15.3% -30 267 15.4% Remuneration, social security and pensions -32 713 24.0% -37 571 19.2% Depreciations -10 407 7.6% -10 732 5.5% Write off inventories and receivables -760 0.6% -222 0.1% Other operating charges (3) -3 540 2.6% -3 081 -1.6% Non recurring result (1) -956 0.7% -2 545 -1.3%
Operating result 3 629 2.7% 18 773 9.6%
Financial result -2 469 -1.8% -4 371 -2.2% Financial income 5 745 4.2% 2 454 1.3% Financial charges -8 214 6.0% -6 825 3.5%
Profi t or loss before taxes 1 160 0.8% 14 402 7.3%
Income tax -627 0.5% -4 952 2.5%
Profi t or loss after taxes 533 0.4% 9 450 4.8%
Minority interests 0 0.0% 0 0.0%
Group profi t/loss 533 0.4% 9 450 4.8%
Other comprehensive income for the period: Exchange differences arising on translation of foreign operations -360 -157 Income tax relating to components of other comprehensive income 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 Attributable to minority interests 0 0
EBIT 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, signifi cant 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
six months ended on June 30
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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
IN THOUSANDS OF EUROS
six months ended 30/06/2009
Balance at January 1 2009 46 000 95 541 125 695 142 361 0 142 361
Group profi t/loss 533 533 0 533
Available for sale fi nancial assets
Hedging
Deferred tax 0 0 0
Currency translation adjustments -303 -303 0 -303
Change in consolidation scope
Transfer to profi t on cash fl ow hedges
Total comprehensive income for het period 0 0 -303 0 -303 0 -303
Payment of dividends -1 711 -1 711 0 -1 711
Balance at June 30 2009 46 000 94 362 -178 695 140 879 0 140 879
six months ended 30/06/2008
Balance at January 1 2008 46 000 101 761 66 758 148 585 0 148 585
Group profi t/loss 9 450 9 450 0 9 450
Available for sale fi nancial assets
Hedging
Deferred tax 103 103 0 103
Currency translation adjustments 1 1 0 1
Change in consolidation scope
Transfer to profi t on cash fl ow hedges -111 -111 0 -111
Total comprehensive income for het period 0 0 1 -7 -6 0 -6
Payment of dividends -9 626 -9 626 0 -9 626
Balance at June 30 2008 46 000 101 585 67 751 148 402 0 148 402
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- 16 -
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
IN THOUSANDS OF EUROS
For the six months ended June 30
2009 2008
Unaudited
Operating result 3 629 18 773
Depreciations 10 407 10 732
Impairment 261 0
Write off inventories and receivables 760 222
Provision other risks and charges -1 017 107
Details working capital:
Inventories 91 381 103 522
Long term and short term trade receivables 56 226 78 880
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
Amounts written off inventories and receivables 12 746 12 543
Total working capital 122 961 144 729
Changes in working capital 16 231 -6 203
Cash fl ow from operating activities 30 271 23 631
Current taxes -1 007 -5 457
Net cash fl ow from operating activities 29 264 18 174
Received interests 37 44
Acquisitions of subsidiaries 0 0
Investments in intangible and tangible fi xed assets -3 311 -7 740
Disposal and sale of intangible and tangible fi xed assets 638 1 102
Increase in capital grants 0 0
Translation adjustments on intangible and tangible assets -374 -140
Net cash fl ow from investing activities -3 010 -6 734
Net cash fl ow before fi nancing activities 26 254 11 440
Paid interests -3 368 -3 614
Disbursed dividend -1 762 -9 626
Increase long term interest bearing loans 0 0
Decrease long term interest bearing loans -1 039 -5 192
Increase/(decrease) short term intrest bearing loans -20 192 7 041
Increase/(decrease) fi nance lease obligations -1 271 -567
Other -157 337
Currency result -242 -896
Cash fl ow from fi nancing activities -28 031 -12 516
Impact of cumulative translation adjustments and hedging -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
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REPORTING ENTITY
The condensed consolidated interim fi nancial statements
of Sioen Industries NV (the ‘Company’) include the fi nancial
statements of the Company and its subsidiaries (together
referred to as the ‘Group’).
The consolidated interim fi nancial statements give a general
overview of the Group’s activities and the results obtained.
They give an accurate picture of the entity’s fi nancial posi-
tion, fi nancial performance and cash fl ow, and are drawn up
on a going concern basis.
The consolidated interim fi nancial 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 condensed fi nancial statements of foreign participations
are converted in accordance with the principles described in
the section ‘Foreign currencies’ of the annual report 2008.
STATEMENT OF COMPLIANCE WITH IFRS
These condensed interim consolidated fi nancial statements
are for the six months ended 30 June 2009. They have been
prepared in accordance with International Accounting
Standard (IAS) 34 Interim Financial Reporting.
The condensed interim consolidated fi nancial statements do
not include all of the information required in annual fi nan-
cial statements in accordance with IFRS, and should be read
in conjunction with the consolidated fi nancial statements of
the Group for the year ended 31 December 2008.
SIGNIFICANT ACCOUNTING POLICIES
These condensed consolidated interim fi nancial statements
have been prepared in accordance with the accounting
policies adopted in the last annual fi nancial statements for
the year to 31 December 2008. The following standards and
interpretations revised or newly published by the IASB were
mandatory as of the beginning of fi nancial year 2009:
- Amendments to IAS 1: Presentation of Financial Statements
The revised Standard has introduced a number of
terminology changes (including revised titles for the
condensed fi nancial statements) and has resulted in a
number of changes in presentation and disclosure. Ac-
cordingly, a consolidated statement of comprehensive
income is now presented, and the statement of changes
in equity is shown as a separate element of the fi nancial
statements. The statement of comprehensive income
comprises the consolidated profi t and loss and the other
income, which corresponds to income and expenses
directly recognised in equity.
- IFRS 8 Operating Segments
The adoption of IFRS 8 has not aff ected the identifi ed
operating segments for the Group. Reported segment
results are based on internal management reporting in-
formation that is regularly reviewed by the chief operat-
ing decision maker (management approach).
- Amendments to IAS 23: Borrowing Costs
The amendments to IAS 23 now requiring capitalisation
of borrowing costs do not impact the fi nancial position
and fi nancial performance since the Group already
exercised the previous option of capitalising borrowing
costs.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- 18 -
- IFRIC 13: Customer Loyalty Programmes
- Amendments to IFRS 2: Share-based Payment
- Amendments to IAS 32: Financial instruments: Presenta-
tion
The mandatory application of all other amendments to or
improvements of standards and interpretations listed above
did not give rise to any major eff ects on the Group’s fi nancial
position and fi nancial performance.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of
these condensed consolidated interim fi nancial statements.
SEASONALITY OF INTERIM OPERATIONS
The consolidated income statement of the continuing op-
erations used to refl ect the seasonality of the coating busi-
ness, as a result of which positive earnings were primarily
generated in the fi rst 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,
has become more signifi cant within the Group.
SIGNIFICANT EVENTS
The world economy has worsened since the last quarter of
the last annual reporting period. As with all businesses, the
Group is aff ected by the economic strains this is putting on
investments. The Group’s objectives and policies for manag-
ing capital, credit risk and liquidity risk are described in its
recent annual fi nancial statements.
The Group’s management believes that the Group is well
positioned in the current economic circumstances. Factors
contributing to the Group’s strong position are:
- The Group does not expect to need additional borrowing
facilities in the next 12 months, as a result of its signifi -
cant fi nancial resources, existing facilities and strong
liquidity reserves.
The Group has no debt covenants to comply with.
- The Group’s major customers have not experienced fi nan-
cial diffi culties. Credit quality of trade receivables as at 30
June 2009 is considered to be good.
Overall, the Group is in a strong position despite the current
economic environment, and has suffi cient capital and liquid-
ity to service its operating activities and debt.
ASSESSMENT CRITERIA IN THE APPLICATION
OF THE VALUATION RULES
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 diff erent realistically assessed
parameters, such as future market expectations, sector
growth rates, industry studies, economic realities, budgets
and multi-year plans, expected profi tability studies, etc. The
most important elements within the Group that are subject
to this are: impairments, provisions and deferred tax items.
- 19 -
Impairment test for the six months ended June 30 2009
In order to provide the stakeholders with in-depth know-
ledge as to the fi nancial strenght of the Group, we reas-
sessed the recoverable amount of assets. Based on the
sensitivity analysis, a signifi cant adverse change in key
assumptions could result in an impairment loss to be rec-
ognized in the Roland subdivision as the discounted cash
fl ow exceeded the carrying value only moderately. Develop-
ments during the fi rst half of 2009 within this subdivision
were below previous estimated levels, resulting in a lower
recoverable amount in relation to the carrying amount of
the assets. Estimates based on the latest developments
resulted in an impairment loss, amounting to € 0.3 million,
which was recognized as per 30 June 2009 on assets of the
Roland subdivision, part of the industrial applications divi-
sion.
Key assumptions related to all other divisions of the Group,
as described in our annual report of 2008, are still valid and
review based on the latest developments did not result in
any adverse changes. There are no impairment indicators
during the fi rst half of the year related to these divisions.
SEGMENT INFORMATION
The Group has adopted IFRS 8 Operating Segments. In
identifying its operating segments, management gener-
ally 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 diff erent technologies and other
resources as well as marketing approaches.
The adoption of IFRS 8 has not aff ected the identifi ed
operating segments for the Group compared to the recent
annual fi nancial statements. Under IFRS 8, reported seg-
ment profi ts are based on internal management reporting
information that is regularly reviewed by the chief operating
decision maker (management approach), and is reconciled
to Group profi t or loss on the following page. The chief op-
erating decision maker assesses segment profi t or loss using
a measure of operating profi t. The measurement policies
the Group uses for segment reporting under IFRS 8 are the
same as those used in its fi nancial statements, except that
certain items are not included in arriving at the operating
profi t of the operating segments (some headquarter operat-
ing results). In addition, corporate assets, which primarily
apply to the Group’s headquarters, have been allocated to
the segments as far as possible.
The Group operates in four main business segments: Coat-
ing, Apparel, Chemicals and Industrial Applications. These
divisions are the basis on which the Group reports its seg-
ment information. The principal products and services of
each of these divisions are described in the annual report
of 2008. Inter-segment sales are undertaken at prevailing
market conditions.
- 20 -
Coating Apparel Industrial Chemicals Other Total applications
6 months ended June 30 2009
Revenue from external customers 54 775 36 943 26 355 18 442 3 136 518
Intersegment revenues 9 057 14 420 2 819 0 12 310
Segment operating result 833 3 184 -205 755 0 4 567
Total assets 197 957 65 701 42 146 48 114 0 353 918
6 months ended June 30 2008
Revenue from external customers 89 177 36 917 44 207 25 865 9 196 174
Intersegment revenues 15 953 3 1 548 5 058 0 22 562
Segment operating result 10 623 4 195 1 985 1 917 0 18 719
Total assets 222 652 58 511 57 498 61 383 0 400 044
Year to December 31 2008
Revenue from external customers 153 242 77 013 72 193 46 903 13 349 366
Intersegment revenues 25 338 6 2 479 8 271 0 36 093
Segment operating result 11 055 7 922 -154 -2 231 0 16 593
Total assets 214 985 65 779 43 638 50 542 0 374 944
SEGMENT REPORTING
IN THOUSANDS OF EUROS
6 months ended 6 months ended Year to
June 30 2009 June 30 2008 December 31 2008
Segment operating profi t 4 567 18 719 16 593
Reconciling items:
Elimination of intersegment profi ts -938 54 -532
Group operating profi t 3 629 18 773 16 060
Financial charges -8 214 -6 825 -18 055
Financial income 5 745 2 454 8 514
Group profi t before tax 1 160 14 402 6 519
Segment operating profi t can be reconciled to Group profi t or loss as follows:
The Group’s revenue and results by operating segment for the period:
Segment profi t represents the profi t earned by each segment without allocation of central administration costs, fi nancial result and tax result.
- 21 -
EXCHANGE RATES
Currency 30/06/2009 31/12/2008 30/06/2008
EUR average 1.00000 1.00000 1.00000
closing 1.00000 1.00000 1.00000
USD average 1.33792 1.47491 1.54435
closing 1.41340 1.39170 1.57640
GBP average 0.89000 0.80287 0.77952
closing 0.85210 0.95250 0.79225
RMB average 9.14068 10.21847 10.83036
closing 9.65447 9.49559 10.80509
PLN average 4.53018 3.52514 3.47577
closing 4.45200 4.15350 3.35130
TDN average 1.86211 1.80650 1.81637
closing 1.88676 1.83512 1.83329
UAH average 10.67600 7.90745 7.54438
closing 10.82966 11.21604 7.20243
INCOME TAX
IN THOUSANDS OF EUROS
6 months ended 6 months ended
June 30 2009 June 30 2008
Profi t before taxes 1 160 14 402
Tax on profi t of fi scal entities against theoretical local tax rate 508 43.8% 4 794 33.3%
Theoretical tax rate (1) 43.8% 33.3%
Tax impact of:
Non-deductible expenses 176 15.1% 143 1.0%
Specifi c tax regimes -248 -21.4% -543 -3.8%
Deferred tax assets not recognised 1 048 90.4% 629 4.4%
Usage of non-recognised deferred tax assets 0 0.0% 43 0.3%
Regularisation of current tax on previous years 74 6.4% 34 0.2%
Carry back -246 -21.2% 0 0.0%
Notional interest deduction -682 -58.8% -394 -2.7%
Tax on distributed profi ts (DBI) 0 0.0% 246 1.7%
Other 0 -0.0% -1 0.0%
Tax on profi t as shown in the P&L 627 54.0% 4 952 34.4%
The Group’s consolidated eff ective 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:
(1) is the weighted average tax rate.
- 22 -
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 fl oor 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 signifi cant contractual
commitments during the fi rst half of 2009.
- 23 -
CHANGES IN INVENTORIES
IN THOUSANDS OF EUROS
Gross Inventory six months ended year ended 30/06/2009 31/12/2008
Raw materials 30 369 34 937
Consumables 362 400
Work in progress 3 387 4 702
Finished goods 61 968 63 081
Goods in transit 3 753 4 398
TOTAL 99 840 107 518
Amounts written off six months ended year ended 30/06/2009 31/12/2008
Amounts written off raw materials -3 319 -3 173
Amounts written off consumables
Amounts written off work in progress
Amounts written off fi nished goods -5 141 -5 162
Amounts written off goods in transit
TOTAL -8 459 -8 335
Net inventory six months ended year ended 30/06/2009 31/12/2008
Raw materials 27 051 31 764
Consumables 362 400
Work in progress 3 387 4 702
Finished goods 56 828 57 919
Goods in transit 3 753 4 398
TOTAL 91 381 99 183
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 signifi cant write off of obsolete inventory to net realisable value in 2009.
Amounts exchange (Other) 6 months written of inventory rate movements or ended 31/12/2008 writedown reversal differences adjustments 30/06/2009
8 335 167 -79 37 0 8 459
Amounts exchange (Other) 6 months written of inventory rate movements or ended 31/12/2008 writedown reversal differences adjustments 30/06/2008 8 770 305 -1 081 79 0 8 073
- 24 -
PROVISIONS
IN THOUSANDS OF EUROS
More then one year Within one year Provisions for 1 083 1 645 environmental issues Provisions for other 547 1.724 liabilities and charges Provisions 1 630 3 369
More then one year Within one year Provisions for 1 765 450 environmental issues Provisions for other 622 1 269 liabilities and charges Total provisions 2 387 1 719
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 identifi ed 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 fi nancial 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 fi rst half of 2009 and € 0.9 million was used during that period. The estimate of the restructu-ring provision was reduced by € 0.1 million in the six months ended 30 June 2009 due to a positive outcome of claims.
Provisions for 2 763 106 -141 2 728 environmental issues Provisions for other 2 526 717 -860 -117 6 2 271 liabilities and charges Total provisions 5 289 823 -1 002 -117 6 0 4 999
Provisions for 2 214 68 -66 2 215 environmental issues Provisions for other 2 416 545 -1 066 0 -4 1 891 liabilities and charges Total provisions 4 630 613 -1 132 -117 6 0 4 106
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- 25 -
BORROWINGS
LONGTERM INTEREST BEARING LOANS, INCLUD
ING FINANCIAL LONGTERM LEASING DEBT
There were no other signifi cant changes in the long term
borrowings of the Company compared to those disclosed in
the consolidated fi nancial statements of the Group for the
year ended 31 December 2008.
SHORTTERM INTEREST BEARING LOANS
As per 30/06/2009, short-term straight loans amounted to
EUR 18.5 million. They consist of an euro loan of EUR 3.9 mil-
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
prepayment loan expired on 10 April 2009.
At 31/12/2008, short-term straight loans amounted to
EUR 33.2 million.
OBLIGATIONS UNDER FINANCE LEASES
The commitments for the acquisition of intangible and tan-
gible assets, as described in the annual report of 2008, were
added to the balance sheet amounting to EUR 3.3 million
(see ‘Property, Plant and Equipment’)
SHARE CAPITAL
Share capital as at June 30 2009 amounted to EUR 46 mil-
lion. There were no movements in the issued captial of the
Company in either current or the prior interim reporting
periods.
FINANCIAL RISK MANAGEMENT
The Group’s fi nancial risk management objectives and
policies are consistent with those disclosed in the consoli-
dated fi nancial statements as at and for the year ended
December 31 2008.
FINANCIAL INSTRUMENTS
The Group manages a portfolio of derivatives to hedge
against risks relating to exchange rate and interest rate posi-
tions arising as a result of operating and fi nancial activities.
It is the Group’s policy to avoid engaging in speculative
transactions or transactions with a leverage eff ect and not to
hold derivatives for trading purposes.
The market value of the fi nancial instruments are diceded
upon market value reports, received from fi nancial institu-
tions.
Financial Derivatives six months ended 6 months ended
30/06/2009 op 30/06/2008
Notional Fair Notional Fair value value value value
Forward sales contracts
Forward sales contracts within 1 year
Rights 0 0 0 0
Duties 7 400 7 678 0 0
IRS forward 0 0 0 0
- 26 -
EVENTS AFTER REPORTING DATE
There were no material events subsequent to the end of the
interim period.
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 fi rst instance and the appeal was in favour
of Sioen Industries.
There were no other signifi cant changes in the contingencies
of the Company and its subsidiaries from those described
above and those disclosed in the consolidated fi nancial state-
ments of the Group for the year ended December 31 2008.
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/fi nished 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).
- 27 -
APPROVAL OF INTERIM FINANCIAL STATEMENTS
These condensed interim consolidated fi nancial statements
have been approved for issue by the board of directors on
August 26 2009.
We hereby confi rm, to the best of our knowledge, that the
condensed consolidated interim fi nancial statements give a
true and fair view of the fi nancial position of the Group as at
30 June 2009, as well as of the fi nancial performance and cash
fl ows for the said period, fully in compliance with the account-
ing standards adopted for use in the EU for interim fi nancial
statements (EU adopted IAS 34, Interim Financial Reporting);
Michèle Sioen Geert Asselman
CEO CFO
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 fi ne chemicals and a major world
player in processing technical textiles into semi-fi nished
products and technical end products.
Detailed information can be found on www.sioen.com
FINANCIAL CALENDAR
Friday October 30 2009: trading update, 3rd quarter 2009
For further information/Financial information/
Investor relations:
Geert Asselman, CFO
Sioen Industries n.v.
Fabriekstraat 23, B-8850 Ardooie
T 051 74 09 80 / F 051 74 09 79
E-mail: corporate@sioen.be
Website: www.sioen.com
Financial servicing is provided by KBC, Fortis, ING, Dexia and
Bank Degroof.
SIOEN INDUSTRIESFabriekstraat 23 • B-8850 ArdooieT +32(0)51 74 09 80F +32(0)51 74 09 79E corporate@sioen.beW www.sioen.comBTW BE 441.642.780
RPR 0441.642.780 Brugge
JAARVERSLAG/RAPPORT ANNUEL/ANNUAL REPORTDit 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 RELATIONSFor all further information, institutionalinvestors and fi nancial analysts are advisedto contact: Geert Asselman Chief Financial Offi cer
FINANCIAL CALENDARTrading update third quarter results 2009 - Friday October 30 2009
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