Annual Report • Apr 30, 2013
Annual Report
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Consolidated sales & Annual growth rate (in million EUR)
Consolidated EBIT & EBIT margin (in million EUR)
ROE ROCE
Number of sites
Consolidated EBITDA & EBITDA margin (in million EUR)
Earnings after taxes (share of the Group) and EAT margin (in million EUR)
Net financial debt / Total equity (including non-controlling interests)
Composition of sales per business line in 2012 (before intra-Group eliminations)
| INTRODUCTION |
|---|
| Profile |
| Highlights for 2012 and the start of 2013 |
| Letter from the Chairman of the Board of Directors and the CEO |
| Report by the Board of Directors * |
| THE RECTICEL GROUP – STRATEGY AND ACTIVITIES |
| Group strategy |
| Activities |
| Insulation |
| Bedding |
| Flexible Foams |
| Automotive |
| RESEARCH AND DEVELOPMENT |
| HUMAN RESOURCES & production plants |
| CORPORATE GOVERNANCE * |
| LEXICON |
| FINANCIAL REPORT * |
| Key figures |
* These chapters form an essential part of the Report of the Board of Directors and contain the information required by the Belgian Commercial Code regarding consolidated accounts.
| First quarter 2013 trading update | 07 May 2013 (before opening of the stock exchange) |
|---|---|
| Annual General Meeting | 28 May 2013 (at 10:00 AM CET) |
| Ex-coupon date | 31 May 2013 |
| Record date | 04 June 2013 |
| Dividend payment date | 05 June 2013 |
| First half-year 2013 results | 30 August 2013 (before opening of the stock exchange) |
| Third quarter trading update 2013 | 31 October 2013 (before opening of the stock exchange) |
In 2012 Recticel decided to radically change its communication policy with respect to the publication of its annual report. To optimise the information flow and more specifically in order to provide the most updated information, Recticel has made a substantial investment in a new corporate website. Recticel considers that it is better to inform and to communicate with all stakeholders on the basis of frequently updated information. For this purpose the regular issuance of press releases and the continuous updating of the corporate website are the appropriate tools. Recticel also believes that some information in the annual reports is very quickly outdated and/or that it becomes rapidly obsolete or irrelevant.
Therefore, the reader who is looking for some particular updated information on products, processes, markets, shares, etc…. is invited to regularly consult the Recticel corporate website. Some sections of information which in the past were incorporated in the annual report have now intentionally been left out to avoid either duplication of information and/or to reduce the possibility of conflicting data between the website (dynamic nature) and the content of the annual report (static nature).
This document contains specific quantitative and/or qualitative forwardlooking statements and expectations regarding results and the financial state of affairs of the Recticel Group. Such futuristic statements are not a guarantee for future achievements considering the future holds several risks and uncertainties that relate to future events and developments. The reader is reminded to take sufficient care with the interpretation of these future expectations because the actual results and events may be influenced in the future by one or more factors, both external and internal. As a result, the actual results and performances may possibly deviate considerably from the predicted expectations, objectives and possible statements. The most important and most relevant risk and uncertainty factors are described in more detail in the Chapter "Asset and risk management" of the financial section of this Annual Report. Recticel is not committed in any manner possible to updating possible changes and developments in these risk factors, nor to releasing the possible impact on the prospects, either immediately or with some delay.
Under the motto The passion for comfort Recticel, as a polyurethane manufacturer, seeks to make an essential difference in the daily life of everyone.
The Group concentrates on four selected application areas: Insulation, Bedding, Flexible Foams and Automotive. Although the Group primarily produces semifinished products (Flexible Foams and Automotive), it also manufactures finished goods and durable goods for end users in several divisions (Bedding and Insulation).
Mattresses and slat bases are marketed in the Bedding division under well-known brand names (such as Beka®, Lattoflex®, Literie Bultex®, Schlaraffia®, Sembella®, Superba®, Swissflex®, …). The Insulation division provides finished high quality thermal insulation products that can be used immediately in building projects and renovations. These insulation products are marketed under well-known brand names (Eurowall®, Powerroof®, Powerdeck® en Powerwall®).
In addition, Recticel emphasizes on innovation and technological progress. The different products produced by the Group are therefore used increasingly in new and existing applications.
As a market leader in most of its activities, Recticel currently employs a total of 7 842 employees on a consolidated basis (including pro rata joint ventures) in 103 sites, spread over 28 countries. The Group's global presence is focused mainly in Europe, but it also has several activities in the United States and in Asia. In 2012 the Group realized a turnover of EUR 1 320 million.
Recticel aims to achieve added value and a steady and profitable growth for its clients and shareholders in a sustainable and balanced manner.
Recticel (NYSE EuronextTM: REC.BE – Reuters: RECTt.BR – Bloomberg: REC.BB) is listed on the NYSE EuronextTM stock exchange in Brussels.
Acoustic insulation
The Soundcoat Company Inc, the specialized US acoustic insulation subsidiary of Recticel, wins the acoustic insulation contract for all 60 lifts of the new Twin Towers in New York.
Recticel opens its new Interiors production unit in Beijing (China) where it will produce Colo-Fast® instrument panel skins for the Mercedes E Class for the Chinese market.
Recticel b.v. (The Netherlands) announces its intention to streamline its flexible foam operations in the Netherlands by closing its comfort foam converting unit in Bladel. This unit was definitively closed by mid-2012.
Eurofoam, the 50/50 joint venture between Recticel and the Austrian group Greiner, announces its decision to streamline its flexible foam operations in Germany by closing its loss-making comfort foam production and converting unit in Bexbach. This unit was definitively closed by end June 2012. After the closing of the Bexbach site, Eurofoam remains active in Germany through a network of four foam producing and converting sites.
At the 2012 International Furniture Fair in Cologne (Germany), Schlaraffia®, Beka® and Lattoflex® presented several innovative mattresses with a newly patented high-quality foam technology, Geltex®. This new foam type perfectly combines comfort characteristics such as optimal body pressure distribution, body support and efficient air permeability or ventilation. With this innovative concept, the Group confirms its European leadership in the higher market segment of the bedding sector.
Insulation
Recticel Insulation receives an exceptional award at Batibouw, the leading fair for the construction and renovation sector in Belgium. The jury of the Batibouw Communication Awards has awarded Recticel Insulation with the exceptional prize: the Communication Award 'hors concours'. All jury members were unanimous in their judgement and praised Recticel Insulation's communication efforts before, during and after the Batibouw fair. Recticel Insulation already won the precious Batibouw Communication Award twice, in 2008 and in 2011.
The Soundcoat Company Inc, the specialized US acoustic insulation subsidiary of Recticel, is certified by the Boeing Company for the delivery of acoustic insulation material for airplane fuselage. This certification is a major breakthrough and offers promising perspectives for acoustic insulation applications in the air plane sector.
Polygrow Green Roof is successfully introduced on 5 promising markets for green roof applications.
Recticel closes its unit for the production of Colo-Fast® skins for instrument and door panels as no follow-up programs were allocated to the Unterriexingen (Germany) site.
Recticel Automotive participates at the 14th Annual BAIKA-congress "Zulieferer Innovativ" in Ingolstadt (Germany). This event offered Recticel Automotive the opportunity to promote its latest innovations in supporting the sustainability ambitions of the car manufacturers. Colo-Sense Lite® and CompoLite® are the main eye catchers of what Recticel has to offer. Both products contribute positively on the weight saving challenges towards the automotive green objectives.
Recticel is nominated for the production of skin for the instrument panel of the Volvo S60 model for the Chinese market. These skins will be manufactured at the Ningbo plant (China) on the basis of the patented Colo-Fast® Spray technology. Between 2013 and 2018, approximately 205,000 Volvo cars will be equipped with these unique polyurethane skins.
Recticel Limited (UK) announced that it will rationalise its Flexible Foams converting activities in the United Kingdom by closing its "Gwalia" comfort foam converting factory located in Ebbw Vale (Gwent). The closure became effective end 2012.
September 2012 Bedding
Recticel appoints Mr Philipp Burgtorf (°1965, German) as new General Manager Bedding. He becomes also a member of the Management Committee. Before joining Recticel, Mr Philipp Burgtorf built up an extensive experience in several consultancy and general management positions at OC&C Strategy Consultants in Düsseldorf (a McKinsey-spin-off ), Nike Europe and W.L. Gore & Associates GmbH.
As a member of Passiefhuis-Platform vzw, Recticel Insulation participates at the Passive House '12 fair in Brussels (Belgium). At this occasion Recticel Insulation emphasized its dedication to the Massive Passive building concept. This concept focuses on sustainability, energy efficiency and zero-energy buildings.
Minister of the Government of the Brussels-Capital Region, Evelyne Huytebroeck, visits the Recticel Insulation stand at the Passive House fair.
October 2012
Recticel made a first, though still limited, step into the distribution of sleep systems by launching the ZNOOOZ® sleep comfort store concept. The ZNOOOZ® bed store concept has been developed by Recticel and will be gradually deployed in close cooperation with selected independent sleep specialist distribution partners in Belgium and the Grand Duchy of Luxembourg. A first ZNOOOZ® bed store has in the meantime been opened in Uccle (Belgium). The ZNOOOZ® store will exclusively focus on the distribution of top quality sleep systems in which the patented Recticel technology Geltex® Inside is incorporated. The aim is to open some 30 to 40 ZNOOOZ® stores in Belgium. (www.znoooz.be)
Recticel is nominated for the production of skin for the instrument panel of the Volkswagen Golf A Plus model for the Chinese market. These skins will be manufactured at the Ningbo plant (China) on the basis of the patented Colo-Sense Lite® Spray technology. Between 2014 and 2021, approximately 929,000 VW Golf A Plus cars will be equipped with these unique polyurethane skins.
Recticel participates at the world's largest internationally leading medical trade fair Medica in Düsseldorf. Following the slogan "Be part of the NO.1!" Foam for Care was one of them! There was a large interest from people all over the world in the new concepts Recticel showed at the Medica Fair.
Apart from the normal range of pressure care mattresses, wheelchair cushions and positioning cushions Recticel was delighted to show also some significant polyurethane based innovations, such as
Recticel closes its US unit for the production of Colo-Fast® skins for instrument and door panels as no follow-up programs were allocated to the Clarkston site.
Recticel appoints Mr Jean-Pierre De Kesel (°1954, Belgian) as Chief Sustainability Officer. Mr Jean-Pierre De Kesel, formerly Deputy General Manager Bedding, remains a Member of the Management Committee.
Recticel is nominated for the production of dashboard, the glove box and door panel skins of the new Volvo XC90 for the European market. These skins will be manufactured at the Mlada Boleslav plant (Czech Republic) on the basis of the patented Colo-Sense Lite® Spray technology. Between 2016 and 2023, approximately 606,000 Volvo cars will be equipped with these unique polyurethane skins.
Recticel shuts down its office in Athens (Greece).
Recticel appoints Mr Dirk Verbruggen (°1969, Belgian) as General Counsel & General Secretary in replacement of Mr Philippe Jous who will retire after a successful career of 32 years at Recticel. Mr Dirk Verbruggen becomes a Member of the Management Committee.
Recticel Automobilsysteme GmbH, a fully owned subsidiary of the Recticel Group, announces its intention to restructure its production operations in Rheinbreitbach (Germany). This restructuring plan is expected to reduce employment at the Rheinbreitbach plant over the period 2014-2015 about 150 jobs on a total of 178. The restructuring is the unavoidable result of the fact that the Automotive Interiors division had not been nominated for the production of interior components for the new Mercedes C-class.
Mr Stefan Hünermann (°1967, German) joins Proseat as Chief Operating Officer to become the next Chief Executive Officer of Proseat.
Recticel's International Development Centre inaugurates its new Research & Development premises in Wetteren (Belgium). With the new state-of-the-art labs and offices, Recticel clearly strengthens its commitment to research and develop new innovative solutions and products in polyurethane.
Westnofa AS, the leading flexible foams manufacturer in Norway and a subsidiary of Recticel, divests its moulded foam operations in Åndalsnes. Westnofa AS agreed to sell its polyurethane moulding operations to Sandella Fabrikken AS.
Recticel officially inaugurates its new state-of-the-art production plant in Bourges in the Centre of France, which will produce thermal insulation panels for the building sector. With this EUR 23 million investment Recticel will serve the growing demand for high performance thermal insulation materials in France.
Recticel Limited (UK) announces its intention to streamline its Flexible Foams converting activities in the United Kingdom, resulting in the potential closure of its foam converting factory in Nelson (Lancashire) before the end of Q3/2013. The activities of this site are under consideration for integration into the conversion capacities at the converting unit in Alfreton (Midlands).
The CNC, the Spanish National Competition Commission, announces that it has imposed fines on ten companies in the Spanish market, including Recticel Iberica SL, and the national sector association, for forming a cartel on the market for the manufacture of flexible polyurethane foam for the comfort industry. Recticel Iberica SL, however, has been exempted from payment under the CNC's leniency program.
Left: Mr. Olivier Chapelle Chief Executive Officer
Right: Mr. Etienne Davignon Chairman of the Board of Directors
Brussels, April 24nd 2013
Dear Employee, Dear Shareholder, Dear Reader,
2012 has been a volatile and challenging year. Throughout the year, we have witnessed serious issues related to some of the Eurozone economies, which have weighed on the consumer confidence and on the overall macroeconomic development of the region. The business of Recticel, which is entirely geared towards slow moving consumer goods and investment goods, most of it in Europe, has not been spared by the declining consumer confidence. In these adverse circumstances, affecting our turnover (-4,3%), we are satisfied that Recticel could resist and generate earnings after taxes of EUR 17.6 million (+0.8%).
The execution of the 2015 strategic plan, in order to prepare ourselves for the future, has remained the focus of the company throughout the year with significant progress in most of its dimensions.
Recticel has indeed been facing a continuously deteriorating business environment in Europe throughout 2012 resulting in volume and sales reductions which increased quarter after quarter. Out of our four business segments, Automotive and Bedding have been most impacted by the declining consumer confidence which led to significant purchase postponements. We have observed for the first time in many years activity stagnation in our Insulation business during the second half of 2012, due to the important slowdown in the European construction markets. In parallel, costs of raw materials have continued to rise on the back of resilient worldwide demand and high oil prices, and have reached new record annual average prices. Thanks to cost reduction and restructuring measures initiated in 2011, and to new action plans launched in 2012, including commercial actions, we have been in a position to neutralize the impact of the sales regression on the results of our Group, and to post a slight profit increase.
During 2012, the execution of our strategic plan 2015 has remained our guideline: prioritisation of resource allocation to the highest value creation segments and projects, expansion outside Europe, simplification and rationalization of the company structure and industrial footprint, and last but not least, innovation initiatives.
We have indeed prioritised and concentrated more than 50% of our investment effort on the Insulation division, and on its key 2012 project: the construction of a new facility in Bourges, France. The new plant has started up as expected during the last quarter of the year, and has been inaugurated in the presence of our customers, employees, suppliers and of French officials in February 2013. We have also invested in the modernization of some important Flexible Foams facilities in the Netherlands, in France, in Turkey and in China.
Expansion outside Europe has been pursued. In India, we have started up a new foam converting plant close to Mumbai, and in China, at the request of our customer Daimler, we have opened a plant in the Beijing region to produce the dashboard skins for the Mercedes E-Class.
We have intensified our rationalization efforts in 2012, to adapt as quickly as possible our industrial footprint to the market needs, and to optimize our geographical coverage. To that extent, we have closed redundant Flexible Foams facilities in the United Kingdom, in the Netherlands, in Germany and we have shut our sales office in Athens. In Automotive Interiors, we have closed our plants in Unterriexingen, Germany and in Clarkston, USA. In Bedding, we have adjusted the cost structure in Austria and Germany.
Innovation has remained at the heart of our activities last year, which has seen some very important new product introductions on our markets. In Insulation, we have introduced our new polyurethane ETICS (External Thermal Insulation Composites System) in the United Kingdom, which will enable us to address the important renovation market. This solution will be rolled out in 2013 in all countries where we are present. In Bedding, we have introduced the new Geltex® foam, which is probably the most important foam innovation in this segment since the introduction of Bultex®, 25 years ago. Our new mattress product ranges, based upon Geltex®, are now available in all the countries where we operate. In Automotive Interiors, we have launched Colo-Sense Lite® for dashboard skins and door panels, which is a new dual-layer solution based upon our Colo-Fast® technology, and which is now cost competitive with PVC based solutions, while being 25% lighter. Significant new contracts involving Colo-Sense Lite® have been won since with Volvo, VW and Daimler. And in Flexible Foams, we have continued our successful developments in Acoustic Insulation, where we have been honoured by the Boeing certification for the acoustic insulation of the new B787 fuselage, and by the nomination for the acoustic insulation of all 60 lifts in the new World Trade center in New York city.
Our employees are the cornerstone of our development and success. In 2012, we have brought many new talents in the Company, and have made some significant changes in our Management Committee: we have appointed a new General Manager in our Bedding business, with the mission to redefine our Bedding strategy and organisation, we have created the Chief Sustainability Officer position, in order to put all dimensions of sustainability at the heart of our decisions and we have appointed a new General Counsel & Company Secretary.
In parallel, our Flexible Foams business has been deeply re-organised around its core markets and its new strategy, and our Purchasing activities throughout the Group have been rigorously processed and centralized.
Finally, we have launched the Recticel University, with the objective to structure the training of our key people, and to reinforce the necessary skills identified to enable the execution of our strategy.
After a few months in the new year, it is obvious that 2013 will not be any easier from a macro-economic standpoint. European markets have shrunk in the first quarter, volatility is high and lack of visibility persists. In that context, Recticel will remain concentrated on the execution of its 2015 strategy, and will focus on what it controls: innovation, international expansion, rationalization and strict respect of our resource allocation processes. Thanks to the improving positioning of Recticel, in its markets and to its stable financing arrangements, the Management Committee and the Board of Directors are convinced that the Group can seize with confidence the opportunities that lay ahead.
We want to thank our employees for their contributions in 2012, and our shareholders for their interest and continued support.
Olivier Chapelle Etienne Davignon Chief Executive Officer Chairman of the Board of Directors Lexicon
Note: All comparisons are made with 2011, unless mentioned otherwise. The figures mentioned are audited.
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | FY 2011 | FY 2012 | Δ FY | |
| Sales | 678.4 | 639.3 | -5.8% | 1 378.1 | 1 319.5 | -4.3% |
| Gross profit | 105.0 | 97.9 | -6.7% | 211.3 | 211.0 | -0.2% |
| as % of sales | 15.5% | 15.3% | 15.3% | 16.0% | ||
| REBITDA (1) | 41.1 | 42.2 | 2.6% | 88.6 | 90.7 | 2.3% |
| as % of sales | 6.1% | 6.6% | 6.4% | 6.9% | ||
| EBITDA (2) | 41.7 | 37.0 | -11.2% | 88.8 | 81.1 | -8.6% |
| as % of sales | 6.1% | 5.8% | 6.4% | 6.1% | ||
| REBIT (1) | 20.8 | 22.0 | 5.7% | 47.1 | 50.8 | 7.8% |
| as % of sales | 3.1% | 3.4% | 3.4% | 3.9% | ||
| EBIT | 16.2 | 15.8 | -2.9% | 42.0 | 39.7 | -5.5% |
| as % of sales | 2.4% | 2.5% | 3.0% | 3.0% | ||
| Result of the period (share of the Group) | 5.1 | 5.6 | 8.8% | 17.4 | 17.6 | 0.8% |
| Result of the period (share of the Group) - base (per share. in EUR) | 0.18 | 0.19 | 8.8% | 0.60 | 0.61 | 0.8% |
| Gross dividend per share (in EUR) (6) | - | - | 0.28 | 0.29 | 3.6% | |
| Total Equity | 248.8 | 260.6 | 4.8% | 248.8 | 260.6 | 4.8% |
| Net financial debt (5) | 149.6 | 172.6 | 15.4% | 149.6 | 172.6 | 15.4% |
| Gearing ratio | 60% | 66% | 60% | 66% | ||
| Average capital employed (3) | 404.5 | 416.2 | 2.9% | 408.9 | 410.1 | 0.3% |
| ROCE = Return on capital employed (4) | 8.0% | 7.6% | 10.3% | 9.7% | ||
| ROE = Return on equity (4) | 4.1% | 4.3% | 7.1% | 6.9% |
(1) REBITDA = EBITDA before non-recurring elements; REBIT = EBIT before nonrecurring elements.
Non-recurring elements comprise operating income, expenses or provisions that are related to restructuring programs, impairments on assets, capital gains or losses on divestments and on the liquidation of affiliated companies, and other events or transactions that are clearly distinct from the ordinary activities of the Group.
(2) EBITDA = EBIT + depreciation, amortisation and impairment on assets.
(3) Capital Employed = net intangible assets + goodwill + net property, plant & equipment + working capital. Working capital = current assets (without cash deposits) - non-financial current liabilities.
(4) Half-yearly average = [Capital employed at the end of the previous period + Capital employed at the end of the current period] / 2. For Return on Equity (ROE), the same based on Equity (share of the Group).
The annual averages are calculated as the mean of the half-yearly figures. (5) Net financial debt = Interest-bearing borrowings – Cash and cash equivalents – Available for sale investments + Net marked-to-market value position of hedging derivative instruments. The interest-bearing borrowings do not include the drawn amounts (2012: EUR 45.0 million versus EUR 45.5 million in 2011) under non-recourse factoring/forfeiting programs.
(6) Proposed dividend over 2012.
Lexicon
The weakening sales trend observed in Q1/2012 (-2.4%), in Q2/2012 (-3.2%) and in Q3/2012 (-6.0%) has extended in Q4/2012 (-5.5%), mirroring the weak European economic environment on which the Group relies for 95% of its activity and the softer demand in most end-use markets.
Sales decreased in Automotive (-10.8%) and Bedding (-5.3%), while Flexible Foams and Insulation remained overall stable.
Before exchange rate differences (accounting for +0.9%) and net changes in the scope of consolidation (+0.03%) sales contracted by 5.2%.
Changes in the scope of consolidation in 2012 related to the following elements:
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | FY2011 | FY2012 | Δ FY | |
| 294.0 | 284.7 | -3.1% | Flexible Foams | 596.2 | 588.3 | -1.3% |
| 150.6 | 142.9 | -5.1% | Bedding | 292.2 | 276.5 | -5.3% |
| 114.4 | 111.2 | -2.8% | Insulation | 223.1 | 220.7 | -1.1% |
| 149.7 | 128.4 | -14.3% | Automotive | 324.8 | 289.7 | -10.8% |
| (30.3) | (27.9) | -7.8% | Eliminations | (58.1) | (55.7) | -4.1% |
| 678.4 | 639.3 | -5.8% | TOTAL | 1 378.1 | 1 319.5 | -4.3% |
| 3Q/2011 | 3Q/2012 | Δ 3Q | 4Q/2011 | 4Q/2012 | Δ 4Q | |
| 147.3 | 140.1 | -4.9% | Flexible Foams | 146.6 | 144.6 | -1.4% |
| 76.8 | 68.2 | -11.2% | Bedding | 73.8 | 74.8 | 1.3% |
| 54.8 | 58.5 | 6.8% | Insulation | 59.7 | 52.7 | -11.7% |
| 74.3 | 62.8 | -15.4% | Automotive | 75.4 | 65.5 | -13.1% |
| (16.6) | (13.3) | -20.0% | Eliminations | (13.7) | (14.6) | 7.0% |
| 336.6 | 316.4 | -6.0% | TOTAL | 341.8 | 322.9 | -5.5% |
The Group substantially compensated the contribution lost due to the lower sales volumes through the implementation of structural productivity and efficiency improvement measures throughout the entire supply chain. In addition the raw material cost increases were passed on into the selling prices, while the average market price of raw materials reached a new all-time record over the year 2012.
Furthermore, considering the changes in the Belgian legislation with regard to early retirement rights and the Group's confirmed policy to maintain employability of its senior workforce, the Group reversed EUR 7.0 million of accumulated provisions for early retirement rights. This reversal is included in the reported REBITDA.
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | FY2011 | FY2012 | Δ FY | |
| 10.1 | 12.7 | 26.1% | Flexible Foams | 23.6 | 29.9 | 26.9% |
| 9.2 | 10.0 | 8.6% | Bedding | 16.9 | 14.6 | -13.6% |
| 21.3 | 17.5 | -17.7% | Insulation | 39.5 | 36.3 | -8.0% |
| 8.9 | 8.3 | -7.1% | Automotive | 25.3 | 24.1 | -4.5% |
| (8.4) | (6.4) | -24.5% | Corporate | (16.6) | (14.4) | -13.6% |
| 41.1 | 42.2 | 2.6% | TOTAL | 88.6 | 90.7 | 2.3% |
In summary:
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | FY2011 | FY2012 | Δ FY | |
| 3.7 | 5.8 | 56.5% | Flexible Foams | 10.4 | 16.4 | 58.2% |
| 6.5 | 7.2 | 11.8% | Bedding | 11.2 | 9.1 | -18.6% |
| 19.4 | 15.5 | -20.0% | Insulation | 35.8 | 32.3 | -9.8% |
| 0.0 | 0.3 | 770.6% | Automotive | 7.0 | 8.1 | 16.1% |
| (8.8) | (6.8) | -22.4% | Corporate | (17.3) | (15.1) | -12.3% |
| 20.8 | 22.0 | 5.7% | TOTAL | 47.1 | 50.8 | 7.8% |
Lexicon
As planned, the execution of the Group's rationalisation plan, which is one dimension of its strategy, resulted in substantial restructuring charges and impairments. This, in addition to legal and advisory fees resulted in non-recurring charges of EUR -11.1 million (2011: EUR –5.1 million) in total.
Over the course of 2012, 7 redundant sites were closed or disposed of in the UK, the Netherlands, Germany, Greece and the USA, bringing the net number of sites down to 103 from 107 in 2011 taking account of the opening of three new sites: the new Automotive site in Beijing (China), a Flexible Foams converting unit in Mumbai (India), and the Insulation plant in Bourges (France). The implemented measures contribute to a continued simplification and rationalisation of the Group structures, and to lower fixed costs.
For 2012 the non-recurring result related mainly to:
| in million EUR | ||||
|---|---|---|---|---|
| 2011 | 1H/2012 | 2H/2012 | 2012 | |
| Restructuring charges and provisions | (0.6) | (3.7) | (2.4) | (6.1) |
| Loss on liquidation or disposal of financial assets | (0.2) | 0.0 | (0.8) | (0.8) |
| Gain on liquidation or disposal of financial assets | 0.1 | 0.0 | 0.0 | 0.0 |
| Fair value gain on investment property | 2.8 | 0.0 | 0.8 | 0.8 |
| Other (i.e. Legal and advisory fees) | (1.9) | (0.7) | (2.8) | (3.5) |
| Total impact on EBITDA | 0.2 | (4.4) | (5.1) | (9.5) |
| Impairments | (5.3) | (0.5) | (1.1) | (1.6) |
| Total impact on EBIT | (5.1) | (4.9) | (6.2) | (11.1) |
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | FY2011 | FY2012 | Δ FY | |
| 8.7 | 9.5 | 9.5% | Flexible Foams | 22.6 | 24.3 | 7.2% |
| 9.2 | 8.8 | -4.1% | Bedding | 16.6 | 12.8 | -23.1% |
| 21.3 | 17.3 | -18.6% | Insulation | 39.5 | 36.1 | -8.4% |
| 8.7 | 8.2 | -5.5% | Automotive | 24.4 | 22.5 | -7.7% |
| (6.1) | (6.8) | 10.9% | Corporate | (14.3) | (14.5) | 1.6% |
| 41.7 | 37.0 | -11.2% | TOTAL | 88.8 | 81.1 | -8.6% |
All segments contributed positively to the EBIT result of 2012.
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | FY2011 | FY2012 | Δ FY | |
| 0.4 | 2.1 | 472.1% | Flexible Foams | 7.5 | 9.8 | 30.4% |
| 6.5 | 6.1 | -6.2% | Bedding | 10.9 | 7.3 | -33.3% |
| 19.4 | 15.3 | -21.0% | Insulation | 35.8 | 32.1 | -10.3% |
| (3.5) | (0.4) | -87.3% | Automotive | 2.8 | 5.9 | 113.5% |
| (6.5) | (7.2) | 11.6% | Corporate | (15.0) | (15.3) | 2.4% |
| 16.2 | 15.8 | -2.9% | TOTAL | 42.0 | 39.7 | -5.5% |
The net interest charges (EUR –11.9 million) decreased by EUR 1.4 million compared to 2011 (EUR –13.3 million). This decrease is primarily attributable to lower funding rates and to a lower average interestbearing debt level throughout the year. The increase in net debt at year-end is mainly induced by the investment in the new Insulation plant in France (EUR 23 million).
'Other net financial income and expenses' (EUR –2.5 million, compared to EUR –3.4 million in 2011) comprise interest capitalisation costs under provisions for pension liabilities (EUR –1.7 million versus EUR -2.1 million in 2011) and exchange rate differences (EUR –0.5 million versus EUR -0.8 million in 2011).
– Current income tax charges (EUR –3.2 million, compared to EUR –1.6 million in 2011) are mainly incurred by subsidiaries in Eastern Europe, Austria and China;
– The deferred tax result of EUR –4.6 million compares to a deferred tax result of EUR -6.4 million in 2011.
Result of the period (share of the Group): from EUR 17.4 million to EUR 17.6 million (+0.8%)
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | 2011 | 2012 | Δ FY | |
| Sales | 294.0 | 284.7 | -3.1% | 596.2 | 588.3 | -1.3% |
| REBITDA | 10.1 | 12.7 | 26.1% | 23.6 | 29.9 | 26.9% |
| as % of sales | 3.4% | 4.5% | 4.0% | 5.1% | ||
| EBITDA | 8.7 | 9.5 | 9.5% | 22.6 | 24.3 | 7.2% |
| as % of sales | 3.0% | 3.3% | 3.8% | 4.1% | ||
| REBIT | 3.7 | 5.8 | 56.5% | 10.4 | 16.4 | 58.2% |
| as % of sales | 1.3% | 2.0% | 1.7% | 2.8% | ||
| EBIT | 0.4 | 2.1 | 472.1% | 7.5 | 9.8 | 30.4% |
| as % of sales | 0.1% | 0.7% | 1.3% | 1.7% |
Sales in Flexible Foams decreased by 1.3% from EUR 596.2 million to EUR 588.3 million.
The Comfort sub-segment reported stable sales (EUR 363.1 million; -0.7%) despite deteriorating demand. Demand has been soft in Southern Europe throughout the year, while the overall sales level stabilized in a very competitive market in the other countries. In the second half of the year, signs of a slowdown became tangible in Central & Eastern European countries.
The Technical Foams sub-segment (EUR 203.0 million, -2.2%) suffered from the lower demand from the various industrial and automotive markets, especially in Belgium, France and Spain. On the contrary, sales levels improved strongly in the USA and in emerging markets such as China, Turkey and India.
In the Composite Foams sub-segment (EUR 22.1 million, -3.0%) sales decreased as a result of lower trim volumes linked to improved efficiency, and lower bonded foam sales volumes.
Despite slightly lower overall sales (-1.3%), and significant non-recurring charges, EBITDA improved by 7.2% to EUR 24.3 million. This positive evolution is primarily explained by a combination of (i) the effect of rationalisation and efficiency improvement measures, (ii) an improved mix, (iii) the impact of streamlining commercial actions, and the pass-through of raw material price increases
Net non-recurring elements amounted to EUR –5.7 million (compared to EUR -0.98 million in 2011) and relate mainly to restructuring charges in Eurofoam Germany and in the United Kingdom, as well as to additional legal fees with respect to the on-going EU investigation (EUR –1.3 million).
The Group implemented in 2012 the closure of its production sites in Bladel (The Netherlands) and in Gwent Vale (United Kingdom), and discontinued its activities in Greece. The joint venture company Eurofoam closed its production site in Bexbach (Germany). These measures reduced complexity and further rationalized the industrial footprint of the Flexible Foams' activities.
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | 2011 | 2012 | Δ FY | |
| Sales | 150.6 | 142.9 | -5.1% | 292.2 | 276.5 | -5.3% |
| REBITDA | 9.2 | 10.0 | 8.6% | 16.9 | 14.6 | -13.6% |
| as % of sales | 6.1% | 7.0% | 5.8% | 5.3% | ||
| EBITDA | 9.2 | 8.8 | -4.1% | 16.6 | 12.8 | -23.1% |
| as % of sales | 6.1% | 6.2% | 5.7% | 4.6% | ||
| REBIT | 6.5 | 7.2 | 11.8% | 11.2 | 9.1 | -18.6% |
| as % of sales | 4.3% | 5.1% | 3.8% | 3.3% | ||
| EBIT | 6.5 | 6.1 | -6.2% | 10.9 | 7.3 | -33.3% |
| as % of sales | 4.3% | 4.2% | 3.7% | 2.6% |
Sales in Bedding decreased by 5.3% from EUR 292.2 to EUR 276.5 million, impacted by reduced consumer confidence leading to a delay in the purchase of slow moving consumer goods. In that environment, and in line with the market, sales of branded products suffered more than non-branded or private label products.
Sales of the 'Brand' sub-segment (EUR 149.8 million; -6.2%) decreased in all countries, except in Poland. However, the successful market introduction of the innovative Geltex® technology in 2H/2012 has positively impacted volumes.
Sales evolution in the 'Private label' sub-segment (EUR 126.0 million; -4.4%) was mixed. Higher sales in Switzerland and Scandinavia were compensated by significantly lower sales in Austria and to a lesser extent in Poland. Germany and Benelux remained stable.
Changes brought in the management of the division during 2012, including the appointment of a new General Manager Bedding, have immediately been translated in the Q4/2012 performance.
EBITDA decreased by 23.1% to EUR 12.8 million.
The EBITDA decreased as a result of lower demand and higher non-recurring charges. The EBITDA of 2011 included a capital gain of EUR 1.3 million realised upon the sale of a building. Nonetheless, the second half of 2012 showed a marked improvement versus the first half.
Restructuring measures undertaken in Austria and Germany and legal fees relating to the on-going Bundeskartellamt investigation generated non-recurring charges of EUR -1.8 million (2011: EUR -0.3 million).
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | 2011 | 2012 | Δ FY | |
| Sales | 114.4 | 111.2 | -2.8% | 223.1 | 220.7 | -1.1% |
| REBITDA | 21.3 | 17.5 | -17.7% | 39.5 | 36.3 | -8.0% |
| as % of sales | 18.6% | 15.7% | 17.7% | 16.5% | ||
| EBITDA | 21.3 | 17.3 | -18.6% | 39.5 | 36.1 | -8.4% |
| as % of sales | 18.6% | 15.6% | 17.7% | 16.4% | ||
| REBIT | 19.4 | 15.5 | -20.0% | 35.8 | 32.3 | -9.8% |
| as % of sales | 17.0% | 14.0% | 16.1% | 14.6% | ||
| EBIT | 19.4 | 15.3 | -21.0% | 35.8 | 32.1 | -10.3% |
| as % of sales | 17.0% | 13.8% | 16.1% | 14.6% |
Sales in Insulation decreased by 1.1% from EUR 223.1 million to EUR 220.7 million.
The Building Insulation sub-segment, which accounts for more than 90% of the segment sales, stabilised its turnover at EUR 205.3 million (-0.7%). After a good performance during the first nine months of the year, Q4/2012 ended 10.5% below last year, as a result of softer construction markets, and an unfavourable comparison basis with Q4/2011 which had been very strong as a result of accelerated ordering from customers following Recticel's price increase announcement for January 2012. Throughout the year, the overall activity level has been impacted by soft residential construction and renovation markets in Europe, with the exception of Germany. More specifically, the Dutch market has collapsed, while UK has been soft during the whole year. France and Belgium started to suffer in H2/2012.
Despite a difficult European construction market, structural demand for high performing polyurethane building insulation products is expected to continue to grow on the long term as a result of stricter insulation standards and regulations, higher energy prices and ever growing awareness of the need for more and better insulation.
The Industrial Insulation sub-segment (EUR 15.3 million; -5.4%) remained below expectations; particularly the fourth quarter was weak.
As a result of almost stable sales, increased price competition induced by a tough market environment, and the incremental fixed costs linked to the successful start-up of the new plant in Bourges (France), EBITDA declined by 8.4%.
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2011 | 2H/2012 | Δ 2H | 2011 | 2012 | Δ FY | |
| Sales | 149.7 | 128.4 | -14.3% | 324.8 | 289.7 | -10.8% |
| REBITDA | 8.9 | 8.3 | -7.1% | 25.3 | 24.1 | -4.5% |
| as % of sales | 6.0% | 6.5% | 7.8% | 8.3% | ||
| EBITDA | 8.7 | 8.2 | -5.5% | 24.4 | 22.5 | -7.7% |
| as % of sales | 5.8% | 6.4% | 7.5% | 7.8% | ||
| REBIT | 0.0 | 0.3 | 770.6% | 7.0 | 8.1 | 16.1% |
| as % of sales | 0.0% | 0.2% | 2.2% | 2.8% | ||
| EBIT | (3.5) | (0.4) | -87.3% | 2.8 | 5.9 | 113.5% |
| as % of sales | -2.3% | -0.3% | 0.8% | 2.0% |
Sales in Automotive decreased by 10.8% from EUR 324.8 million to EUR 289.7 million, due to a substantially reduced car production in Europe, leading to unprecedented restructuring actions by OEM's.
Sales in Interiors decreased by 14.6% to EUR 140.1 million. This drop was expected as some programs, mainly in the USA, were phasing-out. The Interiors subsegment resisted better than the market, because it is positioned on the premium car segment which was more resilient thanks to the Asian and German demand. However, the first signs of weakening volumes have been noticed from the 2nd quarter in Asia and 4rd quarter in Germany.
Sales in Seating (i.e. Proseat, the 51/49 joint venture between Recticel and Woodbridge) decreased by 6.2% to EUR 137.8 million, performing slightly better than the general automotive market in Europe, which dropped by more than 7.5%.
Sales in 'Exteriors' decreased by 14.3% to EUR 11.7 million. Since the sale of the compounding activities to BASF in 2008, sales are limited to compounds produced for the account of BASF under a toll agreement.
Driven by lower sales, EBITDA decreased by 7.7% to EUR 22.5 million, including net non-recurring elements of EUR –1.6 million (2011: EUR –0.9 million). These relate mainly to cost adaptation measures in the Interiors operations and the shutdown of the Interiors factories in Unterriexingen (Germany) and Clarkston (USA).
On 31 December 2012, net financial debt amounted to EUR 172.6 million (excluding the drawn amounts under off-balance factoring/forfeiting programs: EUR 45.0 million) compared to respectively EUR 149.6 million and EUR 45.5 million on 31 December 2011. The higher net financial debt level is resulting from the EUR 23 million financing of the new Insulation plant in France.
This results in a 'net debt to equity' ratio of 66%, compared to 60% at the end of 2011.
The Group reconfirms its corporate objective to further reduce the gearing ratio below 50%.
The revised standard IAS 19R – Employee Benefits – will be applicable as from 2013, with a restatement of the 2012 net pension liabilities.
The "corridor" method, which allowed to defer the recognition of the expenses over multiple accounting periods, will no longer be used. This accounting change will have an estimated impact before taxes on the consolidated equity of EUR -23.5 million as per 01.01.2013.
After the closing of the accounts, irregularities have been discovered in an affiliate of the Group, that occurred during the period 2001-2010. Though the investigation is not fully completed, it can already be confirmed that the impact of these irregularities was limited to an amount of about EUR 3.6 million over the full period 2001-2010 at the level of the revenues, representing less then 0.02% of the Recticel Group revenues over the same period. The Group will take the necessary measures to regularise this situation in 2013.
The Board of Directors will propose to the Annual General Meeting of 28 May 2013 the payment of a gross dividend of EUR 0.29 per share (2011: EUR 0.28).
Given the uncertainty in the growth forecasts for the economies in which Recticel is active, the Board of Directors is not in a position to assess growth potential for 2013.
The Group maintains its focus on the execution of the strategic plan 2010-2015, which includes (i) a strict prioritization of the allocation of its resources to its portfolio of business, (ii) a continuous effort to streamline operations and reduce complexity, (iii) geographical diversification to reduce dependency on Europe and (iv) the introduction of new innovative solutions.
The Annual General Meeting decides on the appropriation of the amounts available for distribution on the basis of a proposal from the Board of Directors.
When drawing up its proposal, the Board of Directors tries to achieve the right balance between ensuring a stable dividend for shareholders and maintaining sufficient investment and self-financing opportunities to secure the company's longer-term growth.
The Board of Directors decided to present the following appropriation of the results to the General Meeting:
| in EUR | |
|---|---|
| Profit for the period | 10 637 260.88 |
| + Profit brought forward from previous year | 66 982 738.02 |
| Result to be appropriated | 77 619 998.90 |
| - Gross dividend | (8 390 122.24) |
| Profit to be carried forward | 69 229 876.66 |
Subject to approval by the General Meeting of 28 May 2013 of the profit appropriation, a dividend of EUR 0.29 gross will be paid per ordinary share, or EUR 0.2175 net (-25% withholding tax). This dividend will be payable from 05 June 2013 at the counters of the KBC bank.
The payment for the registered shares will take place via bank transfer on the shareholders' bank account.
| DIVIDEND KEY DATA | ||
|---|---|---|
| Gross dividend per share | EUR 0.29 | |
| Ex-coupon date | 31 MAY 2013 | |
| Record date | 04 JUNE 2013 | |
| Dividend payment date | 05 JUNE 2013 | |
Recticel is one of the top-three worldwide polyurethane foam manufacturers and provides products and solutions to customers all over of the world, although 94% of its business is currently located in Europe
The following strategy provides Recticel with a clear process to define its development plan and to prioritise its resource allocation to the various business segments.
The core competence of Recticel is the transformation of the polyurethane chemistries into rigid foams, flexible foams and elastomers to meet existing and emerging client needs for solutions. Polyurethane transformation, although not its sole technology, remains Recticel's main answer to these market needs for the following reasons:
The analysis of the business portfolio of Recticel is based on:
The detailed analysis of the specific market attractiveness and company's competitiveness of each segment can be found in the individual business line sections (Chapter Activities).
Recticel strives for growth via innovation and new product introductions, and allocates its financial and human resources on segments with the highest value creation potential. In addition, it seeks growth opportunities outside of Europe, while optimising its capacity utilisation and reducing its overall complexity:
| Insulation: | Primary focus on Europe and growth through innovation, new products and modular solutions introduction, supported by capacity expansion and acquisitions. |
|---|---|
| Bedding: | Organic growth based upon strong product innovation and an optimised Brand/Private Label strategy. |
| Flexible Foams: | Rationalisation & modernisation of the industrial footprint combined with selective growth initiatives based on new products and geographical expansion in the Technical Foams segment. |
| Automotive: | Tight investment control and stabilisation of the two business segments supported by innovative product introductions and continuous footprint and capacity utilisation optimisation. |
On that basis, Recticel pursues the following medium term objectives:
Recticel manufactures and transforms polyurethane for a huge variety of ultimate comfort applications. The Group is organised around four business lines.
The Insulation business line concentrates on the production and commercialisation of sustainable thermal insulation material in rigid closed cell polyurethane - (PU or PUR) and polyisocyanurate foam (PIR) and it contains two divisions: building insulation and industrial insulation.
| in million EUR | |||
|---|---|---|---|
| Key Figures | 2010 | 2011 | 2012 |
| Sales (1) | 187.4 | 223.1 | 220.7 |
| Growth rate of sales (%) | 12.6% | 19.0% | -1.1% |
| REBITDA | 35.5 | 39.5 | 36.3 |
| REBITDA margin (as % of sales) | 18.9% | 17.7% | 16.5% |
| EBITDA | 35.5 | 39.5 | 36.1 |
| EBITDA margin (as % of sales) | 18.9% | 17.7% | 16.4% |
| REBIT | 32.1 | 35.8 | 32.3 |
| REBIT margin (as % of sales) | 17.2% | 16.1% | 14.6% |
| EBIT | 32.1 | 35.8 | 32.1 |
| EBIT margin (as % of sales) | 17.2% | 16.1% | 14.6% |
| Investments in intangible assets (exclusive of goodwill) and property, plant and equipment |
6.7 | 9.0 | 25.9 |
| Investments as % of sales | 3.6% | 4.1% | 11.7% |
(1) before eliminations of intra Group transactions
The Bedding business line focuses on the development, production and the commercialisation of fully finished mattresses, slats and bed bases. This business line does as a consequence have a distinct business-to-consumer character. Here the Group principally wishes to stand out by means of a strong brand policy.
| in million EUR | |||
|---|---|---|---|
| Key Figures | 2010 | 2011 | 2012 |
| Sales (1) | 293.3 | 292.2 | 276.5 |
| Growth rate of sales (%) | -6.2% | -0.4% | -5.3% |
| REBITDA | 20.3 | 16.9 | 14.6 |
| REBITDA margin (as % of sales) | 6.9% | 5.8% | 5.3% |
| EBITDA | 17.3 | 16.6 | 12.8 |
| EBITDA margin (as % of sales) | 5.9% | 5.7% | 4.6% |
| REBIT | 14.6 | 11.2 | 9.1 |
| REBIT margin (as % of sales) | 5.0% | 3.8% | 3.3% |
| EBIT | 11.5 | 10.9 | 7.3 |
| EBIT margin (as % of sales) | 3.9% | 3.7% | 2.6% |
| Investments in intangible assets (exclusive of goodwill) and property, plant and equipment |
4.0 | 2.0 | 3.8 |
| Investments as % of sales | 1.4% | 0.7% | 1.4% |
(1) before eliminations of intra Group transactions
Bedding sales 2012:
Brands versus Non-brands
Flexible Foams business activities focus mainly on the production, transformation and commercialization of predominantly semi-finished products in flexible polyurethane foam. Historically, this business line has been the largest within the Group and it consisted of three sections: Comfort, Technical Foams and Composite Foams. The characteristic properties of the foam types, the uniqueness of the production process and/or the typical application options of the foam primarily determine this classification.
− Recticel benefits from strong R&D capabilities, enabling positioning in new niches.
| in million EUR | |||
|---|---|---|---|
| Key Figures | 2010 | 2011 | 2012 |
| Sales (1) | 602.7 | 596.2 | 588.3 |
| Growth rate of sales (%) | 5.6% | -1.1% | -1.3% |
| REBITDA | 30.6 | 23.6 | 29.9 |
| REBITDA margin (as % of sales) | 5.1% | 4.0% | 5.1% |
| EBITDA | 22.2 | 22.6 | 24.3 |
| EBITDA margin (as % of sales) | 3.7% | 3.8% | 4.1% |
| REBIT | 15.7 | 10.4 | 16.4 |
| REBIT marge (as % of sales) | 2.6% | 1.7% | 2.8% |
| EBIT | 1.2 | 7.5 | 9.8 |
| EBIT margin (as % of sales) | 0.2% | 1.3% | 1.7% |
| Investments in intangible (excluding goodwill) and tangible fixed assets |
10.3 | 12.1 | 10.9 |
| Investments as % of sales | 1.7% | 2.0% | 1.8% |
(1) before eliminations of intra Group transactions
Trends Sales Flexible Foams
The Automotive business line includes the following two activities:
| in million EUR | |||
|---|---|---|---|
| Key Figures | 2010 | 2011 | 2012 |
| Sales (1) | 324.9 | 324.8 | 289.7 |
| Growth rate in sales (%) | 12.2% | 0.0% | -10.8% |
| REBITDA | 33.7 | 25.3 | 24.1 |
| REBITDA margin (as % sales) | 10.4% | 7.8% | 8.3% |
| EBITDA | 26.9 | 24.4 | 22.5 |
| EBITDA margin (as % of sales) | 8.3% | 7.5% | 7.8% |
| REBIT | 13.0 | 7.0 | 8.1 |
| REBIT margin (as % of sales) | 4.0% | 2.2% | 2.8% |
| EBIT | 1.6 | 2.8 | 5.9 |
| EBIT margin (as % of sales) | 0.5% | 0.8% | 2.0% |
| Investments in intangible assets (exclusive of goodwill) and property, plant and equipment |
11.2 | 7.0 | 6.4 |
| Investments as % of sales | 3.5% | 2.2% | 2.2% |
(1) before eliminations of intra Group transactions
Research and development are at the heart of Recticel's customer-focused innovation strategy. Knowledge, technology expertise and continuous improvement of our processes and products have therefore always been the basis of many of our innovations.
Led by the IDC -Recticel's International Development Centre-, located in Wetteren (Belgium), the Group focuses on global technology research and product innovation. The organization explores emerging product needs in order to drive applied research and the incubation of promising projects while focusing on the business value impact and future potential.
In this context the question or the inspiration could sometimes come directly from the end markets. In other cases our researchers and developers start from the knowledge and insights of others research projects on which they explore the (still) hidden facets of polyurethane. New R&D contribution to the Recticel products' is in many cases based on the co-innovation with customers, partners, and other third parties. In these cases, activities span from large-scale collaborative research projects with academic and industrial partners to specific innovation projects with individual dedicated customers. The best-validated results and technologies are further developed into prototypes and potential business opportunities within each business line. Projects which are not business line specific or that focus on the identification, the selection and the development of new promising markets and product or technological applications are managed within the Corporate Innovation Program.
The International Development Centre employs some 115 people, most of them being researchers, chemical engineers and specialized laboratory technicians.
Recticel's strong long-term commitment to research and development is also reflected in the R&D expenditures' budget. In 2012, Recticel spent some EUR 14.1 million on research & development, which represents 1.1% of the total annual sales. These figures remain in line with the average historical figures of the last years.
Early February 2013 Recticel opened new state-of-the-art research and test labs on the site in Wetteren. With this new investment, Recticel clearly strengthened its commitment to research and develop new innovative solutions and products in polyurethane.
The upgrading of the R&D and testing facilities is a major first step, as others will follow, in order to keep and expand Recticel's technological know-how and leadership in the world of polyurethane. With this new long-term investment Recticel expresses its clear commitment to stay at the forefront of technological innovation. The new labs and offices have been integrated in an existing building at the Wetteren production site, whereby the new laboratory environment is fully in line with all environmental and safety requirements.
End 2012 the International Development Centre also announced its intention to reshape its organizational context for the future. The change aims at creating a flexible project organization exploiting at maximum its synergies, its resources and its know-how in a large variety of technologies which has been built over decades. A more stringent portfolio approach will ensure to drive projects in a market pull mode targeting valuable markets for the Group.
15 20 Trend in composition of annual budget for Research & Development "If we want to prepare ourselves for the future, it is imperative to create the right environment for creativity, innovation and initiative. The old buildings were definitely no longer appropriate for this purpose. Now that I see the result, I'm convinced that new great ideas will emerge from our labs", said Olivier Chapelle, Chief Executive Officer of Recticel, at the commemorative opening ceremony.
Trend in composition of annual budget for Research & Development
Trend in annual gross budget for R&D
Recticel is conscious that success depends to a large extent on the quality, the dedication and the enthusiasm of all its work force. To realise its corporate objectives, Recticel therefore not only wants to attract and maintain the best people, but it also tries to support them in their development within the company. To realise this ambitious plan, Recticel launched various human resources' initiatives and implemented different new HR supporting programs over the last years. All these efforts aim at improving the individual employability, the effectiveness, the personal performance and the professional development of each employee. In addition, these initiatives also allow a better articulation and alignment of the expectations, behaviours, competences, needs and values of the whole organization. All this is taken at heart with the purpose to eventually deliver best-in-class results and to meet Recticel's global corporate objectives.
In 2012 particular emphasis was given on the identification of personal training and development needs. The Group founded the Recticel University which will become a cornerstone in the roll-out of the Group's diverse but focused training programs.
Frequency index - industrial accidents
| 31 Dec 2011 | 31 Dec 2012 | |||
|---|---|---|---|---|
| Germany | 1 472 | 18.0% | 1 322 | 16.9% |
| Belgium | 1 229 | 15.0% | 1 208 | 15.4% |
| Poland | 825 | 10.1% | 832 | 10.6% |
| Czech Republic | 757 | 9.2% | 736 | 9.4% |
| United Kingdom | 682 | 8.3% | 683 | 8.7% |
| France | 668 | 8.2% | 656 | 8.4% |
| The Netherlands | 389 | 4.8% | 327 | 4.2% |
| Spain | 279 | 3.4% | 274 | 3.5% |
| People's Republic of China | 166 | 2.0% | 249 | 3.2% |
| Austria | 262 | 3.2% | 230 | 2.9% |
| Sweden | 203 | 2.5% | 196 | 2.5% |
| Romania | 202 | 2.5% | 188 | 2.4% |
| USA | 255 | 3.1% | 174 | 2.2% |
| Switzerland | 179 | 2.2% | 165 | 2.1% |
| Hungary | 131 | 1.6% | 131 | 1.7% |
| Finland | 103 | 1.3% | 101 | 1.3% |
| Turkey | 85 | 1.0% | 83 | 1.1% |
| Estonia | 81 | 1.0% | 75 | 1.0% |
| Norway | 70 | 0.9% | 65 | 0.8% |
| Italy | 61 | 0.7% | 65 | 0.8% |
| Bulgaria | 21 | 0.3% | 21 | 0.3% |
| India | 17 | 0.2% | 20 | 0.3% |
| Slovakia | 11 | 0.1% | 12 | 0.1% |
| Lithuania | 12 | 0.1% | 10 | 0.1% |
| Ukraine | 10 | 0.1% | 10 | 0.1% |
| Serbia | 8 | 0.1% | 8 | 0.1% |
| Russia | 6 | 0.1% | 5 | 0.1% |
| Greece | 4 | 0.0% | 0 | 0.0% |
| Morocco | 1 | 0.0% | 1 | 0.0% |
| TOTAL | 8 186 | 100% | 7 842 | 100% |
| 31 Dec 2011 | 31 Dec 2012 | |||
|---|---|---|---|---|
| Western-Europe | 5 601 | 68.4% | 5 291 | 67.5% |
| Eastern-Europe | 2 046 | 25.0% | 2 010 | 25.6% |
| Rest of the world | 540 | 6.6% | 542 | 6.9% |
| TOTAL | 8 186 | 100% | 7 842 | 100% |
Full-time and part-time personnel, except for temporary personnel and disabled persons, including the proportional personnel count of joint ventures that are managed at least 50% by Recticel.
The number of staff was reduced by 344 in 2012 as a result of the implementation of various reorganisation plans. Most jobs (on pro rata basis for joint ventures) were lost in the Flexible Foams (154 people), Automotive (118 people) and Bedding (77 people) activities, as well as, in various supporting services.
The above table lists the principal production units of the Recticel Group (including joint venture companies). Besides these sites, the Group has 50 other conversion units or sales offices in Europe, the United States and Asia. End 2012, the Group had in total 103 production units. Recticel is active in 28 countries.
| Country | Insulati on |
Beddi ng |
Flexible Foams(1) | Automotive |
|---|---|---|---|---|
| AUSTRIA | Timelkam | Kremsmünster Linz |
||
| BELGIUM | Turnhout Wevelgem |
Geraardsbergen Hulshout |
Wetteren | |
| CZECH REPUBLIC | Mladá Boleslav Most |
|||
| ESTONIA | Tallinn | |||
| FINLAND | Kouvola | |||
| FRANCE | Bourges | Langeac Louviers Trilport |
Trilport | |
| GERMANY | Hassfurt Jöhstadt Wattenscheid |
Burkhardtsdorf Ebersbach |
Espelkamp Rheinbreitbach Rüsselsheim Schönebeck Wackersdorf Mörfelden |
|
| HUNGARY | Sajóbábony | |||
| INDIA | Taloja, New Bombay | |||
| ITALY | Gorla Minore | |||
| NORWAY | Åndalsnes | |||
| PEOPLE'S REPUBLIC OF CHINA |
Shanghai | Beijing Ningbo Shengyang City |
||
| POLAND | Łódz | Zgierz | Bielsko Biala | |
| ROMANIA | Miercurea Sibiului | Sibiú | ||
| SPAIN | Catarroja Ciudad Rodrigo La Eliana |
Santpedor | ||
| SWEDEN | Gislaved | |||
| SWITZERLAND | Büron Flüh |
|||
| THE NETHERLANDS | Kesteren | |||
| TURKEY | Istanbul | |||
| UNITED KINGDOM | Glossop Stoke-on-Trent |
Alfreton | Manchester | |
| U.S.A. | Deer Park, NY Irvine, CA |
Auburn Hills, MI Tuscaloosa, Al |
(1) For Flexible Foams, only the major foams plants are listed.
Recticel publishes its Corporate Governance Charter on its web site (www.recticel.com) in accordance with the requirements of the Belgian Corporate Governance Code 2009. Any interested party can download the Charter there, or request a copy from the company's registered office. The Charter contains a detailed description of the governance structure and the company's governance policy.
Recticel uses the Belgian Governance Code of 2009 as reference code, which can be found on the website of the Corporate Governance Committee (www.corporategovernancecommittee.be).
Recticel complies with all recommendations contained in the reference code, except with the following provisions:
– principle 5.2. /4. of the Belgian Corporate Governance Code 2009 which provides that at least the majority of the members of the Audit committee must be independent. Recticel's Board of Directors contends however that Mr. Davignon and Mr. Vandepoel have proven a de facto independence stature, though they no longer meet the legal independence requirements, only due to their term as director exceeding twelve years.
This chapter contains information regarding corporate governance in general and, the application of the Code during the last financial year in particular.
In accordance with the Belgian Companies Code, the Board of Directors is authorized to undertake all necessary actions to achieve the company's objective, except those that only the general meeting is authorized to perform by law. The authority granted to the Board of Directors was not further limited in the articles of association.
The terms of reference of the Board of Directors are described in more detail in Recticel's Corporate Governance Charter.
Every entity exists to create value for the stakeholders and this forms the basis of risk management for every company. The challenge that faces the Board of Directors and executive management is in determining how much uncertainty they wish to accept in their strive for creating value. The value is maximized if the administration is successful in creating an optimal balance between growth and turnover on the one hand and the connected risks on the other.
Identifying and quantifying the risks and setting up and maintaining an efficient control mechanism is the responsibility of Recticel Group's Board of Directors and executive management.
The framework for internal control and risk management applied by the Recticel Group is based on the COSO (Committee of Sponsoring Organisations of the Treadway Commission) model and is in line with the requirements imposed by the Belgian Corporate Governance Code, taking into account the Recticel Group's size and specific needs.
Since mid-2010 the Board of Directors and the executive management have reviewed the framework for internal control and risk management and an amended Compliance programme is currently systematically implemented.
The basis is formed by the revised Code of Conduct, applicable on all Recticel directors, corporate officers and employees, and published on Recticel's website (www.recticel.com).
Important matters like ethics, safety, health and environment, quality, conflicts of interest, anti-trust, fraud and others are being dealt with.
Corporate policies have been elaborated to cover these principles that are further explained in the Business Control Guide, which provides more concrete and detailed guidelines, for instance guidelines on the level of Tax management, Treasury management, Accounting policies, Investments, Purchases, Mergers and Takeovers, and such. The internal financial reporting and control occurs based on the Group Accounting Manual, Group Accounting Methodology and Cost Accounting Methodology.
This Business Control Guide includes the general delegation of deciding powers and responsibilities for specific areas of competence.
The Board of Directors and executive management regularly reviews the most important risks that the Recticel Group is exposed to and submits a list of priorities. A general description of the risks can be found in the financial part of this annual report under chapter VIII.
One of the objectives of the internal control and risk management system is also to ensure a timely, complete and accurate communication. To this end the Business Control Guide and all other guidelines contain the necessary regulations on roles and responsibilities. Also, the necessary attention is given to ensuring the security and confidentiality of the data exchange, if and when necessary.
The Recticel Group has also revised its internal reporting system in the event of violation of internal or external laws and regulations. Indeed, a Group Policy for the Reporting of Misconduct and the Protection of Whistle-blowers has been activated to enable anyone to report on behaviour that may represent a violation of the applicable Code of Conduct, the Group Corporate Policies or any other laws and regulations.
Finally, the Audit committee, amongst other, has the task of informing and advising the Board of Directors regarding the annual follow up of the systems of internal control and risk management.
The Internal Audit Department works based on an Internal Audit Charter and has the primary function of delivering objectives opinions about the internal control in place in the Recticel Group. The Internal Audit aims at providing the reasonable assurance that the strategic, operational, compliance and reporting objectives of the Recticel Group can be realized in the most efficient way. To this end they seek to ensure the following objectives:
The external audit of Recticel SA/NV's company and consolidated annual accounts has been entrusted to the limited liability cooperative company "DELOITTE Bedrijfsrevisoren", represented by Messrs. William Blomme and/or Kurt Dehoorne.
The Auditor conducts its audits in accordance with the standards of the Belgian Institute of Company Auditors and delivers a report, which confirms if the company's annual accounts and the consolidated financial statements of the company reflect a true and fair view of the assets, financial condition and results of the company. The Audit committee investigates and discusses these bi-annual reports in the presence of the Auditor, and afterwards also with the Board of Directors.
The Auditor's remuneration on the audit of Recticel NV's company and consolidated account and the consolidated financial statements intended in article 134, §1 of the Companies Code, amounts to EUR 273,000 for 2012. Apart from this remuneration the Auditor also invoiced EUR 37,000 for additional audits and EUR 754,834 for tax, legal and other consulting assignments. The details of these compensations are included in the explanatory notes on VOL 5.15 in the statutory annual account.
The global amount of the Auditor's remunerations at Group level amounts to EUR 873,000.
The global amount of the Auditor's remunerations for additional non-audit services to the Recticel Group amounts to EUR 1,142,327. It shall be noticed that the limit intended in article 133 of the Belgian Companies Code on consolidated level has been exceeded, but this was however for the total amount pre-approved by the Audit Committee, in conformity with the Belgian Companies Code.
Details on these compensations are included in the explanatory notes in the financial part of the Consolidated Annual report.
The Auditor's mandate was renewed in 2010 and will end after the upcoming Ordinary General meeting of this year 2013.
The Board of Directors will propose at the Ordinary General Meeting of 28 May 2013 to renew the Auditor's mandate for a term of three years up to the Ordinary General Meeting to be held in 2016.
Recticel's Board of Directors currently consists of thirteen members. There are twelve non-executive directors, four of which are independent. Olivier Chapelle BVBA, Chief Executive Officer, is the executive director.
The Chief Executive Officer represents the management and two directors represent the reference shareholders.
With reference to the Law of 28 July 2011 setting the obligation to have, by 1 January 2017, at least 1/3 of the members of the Board of the opposite gender, the Board is committed to comply with this obligation in due time.
The Board has taken this future obligation already into account when deciding to nominate in 2012 Mrs Marion Debruyne and Mrs Ingrid Merckx, and will continue to do so when deciding on proposals for replacement of directors in future years
The following table provides an overview of the members of Recticel's Board of Directors during the financial year 2012 to date.
| NAME | FUNC TION |
TYPE | YEAR OF BIRTH |
START OF MANDATE |
END OF MANDATE |
PRIMARY FUNC TION OUTSIDE OF REC TICEL |
MEM BERSHIP COMM ITTEE |
|---|---|---|---|---|---|---|---|
| Etienne DAVIGNON | Chairman | Non-executive | 1932 | 1992 | 2016 | Brussels Airlines Chairman |
AC |
| Olivier CHAPELLE (1) | Managing Director | Executive | 1964 | 2009 | 2016 | MC | |
| Luc VANSTEENKISTE (2) | Vice Chairman | Non-executive | 1947 | 1991 | 2016 | Sioen Industries NV Chairman |
|
| Guy PAQUOT | Vice Chairman | Non-executive | 1941 | 1985 | 2016 | Entreprises et Chemins de Fer en Chine SA Compagnie du Bois Sauvage SA Chairman and Managing Director |
|
| André BERGEN (3) | Director | Independent | 1950 | 2011 | 2013 | Cofinimmo Chairman |
RC AC |
| François BLONDEL (4) | Director | Non-executive | 20-Dec-2012 | 2015 | |||
| Marion DEBRUYNE | Director | Independent | 1972 | 29-May-2012 | 2016 | Vlerick Leuven Gent Management School Partner and Associate Professor |
RC |
| Pierre Alain DE SMEDT | Director | Independent | 1944 | 2011 | 2015 | VBO-FEB Chairman |
RC |
| Vincent DOUMIER | Director | Non-executive | 1955 | 2007 | 19-Dec-2012 | ||
| Ingrid MERCKX | Director | Independent | 1966 | 29-May-2012 | 2016 | Agfa Graphics Chief Operating Officer |
|
| Wilfried VANDEPOEL (5) | Director | Non-executive | 1945 | 1999 | 2013 | Lessius Corporate Finance NV Managing Director |
AC |
| Patrick VAN CRAEN | Director | Non-executive | 1953 | 2012 | 2016 | CLE (CFE Group) Managing Director |
|
| Tonny VAN DOORSLAER | Director | Non-executive | 1951 | 2004 | 2013 | Spector Photo Group NV Executive Chairman |
AC |
| Louis H. VERBEKE (6) | Director | Non-executive | 1947 | 1998 | 29-May-2012 | Vlerick Leuven Gent Management School Chairman |
|
| Luc WILLAME (7) | Director | Independent | 1940 | 2008 | 29-May-2012 | ||
| Jacqueline ZOETE | Director | Non-executive | 1942 | 2010 | 2016 | Sioen Industries NV Director |
(1) in his capacity as General Manager of Olivier Chapelle SPRL/BVBA.
(2) in his capacity as Managing Director of Vean NV.
(3) in his capacity as General Manager of André Bergen Comm. V.
(4) in his capacity as Permanent Representative of Compagnie du Bois Sauvage Services SA.
(5) as of 29 May 2012, in his capacity as General Manager of Revam BVBA
(6) in his capacity as General Manager of Louis Verbeke BVBA
(7) in his capacity as Managing Director of Sogelam SA.
AC = Audit Committee
MC = Management Committee
RC = Remunaration & Nomination Committee
Etienne Davignon Chairman
Olivier Chapelle Chief Executive Officer
Guy Paquot Vice-Chairman
Luc Vansteenkiste Vice-Chairman
André Bergen Director
François BLONDEL Director
Marion DEBRUYNE Director
Pierre Alain De Smedt Director
Ingrid MERCKX Director
Wilfried Vandepoel Director
Patrick VAN CRAEN Director
Tonny Van Doorslaer Director
Jacqueline Zoete Director
As proposed by the Board of Directors and based upon the recommendation made by the Remuneration and Nomination committee, the following has been decided during the Ordinary General Meeting dated 29 May 2012:
– Election as non-executive director of Mrs. Ingrid MERCKX for a period of four years expiring at the end of the General Meeting in 2016.
Mrs. Marion DEBRUYNE and Mrs. Ingrid MERCKX were moreover elected as independent directors, in the sense of article 524 §2 and 526bis §2 of the Companies Code. They both meet all the criteria indicated in article 526 ter of the Companies Code as well as the independence criteria of the Code on Corporate Governance 2009.
It shall also be noted that a resolution was passed by the Board of Directors on 20 December 2012 acting the resignation as Director of Mr Vincent DOUMIER, effective as of 19 December 2012, and his replacement by "COMPAGNIE DU BOIS SAUVAGE SERVICES SA", represented by Mr. François BLONDEL, permanent representative, with effect as from 20 December 2012.
After the Ordinary General Meeting to be held on 28 May 2013, the following mandates will come to an end, being:
Taking the above into consideration and based upon the recommendation of the Remuneration and Nomination Committee, the Board of Directors will propose the following at the Ordinary General Meeting of 28 May 2013:
Renewal of the term of office of ANDRE BERGEN Comm. V., represented by Mr. André BERGEN, as independent director, for a further period of four years expiring at the end of the Ordinary General Meeting in 2017.
Renewal of the term of office of REVAM BVBA, represented by Mr. Wilfried VANDEPOEL, as nonexecutive director, for a further period of four years expiring at the end of the Ordinary General Meeting in 2017.
The Board of Directors also proposes to confirm Mr. Patrick VAN CRAEN as independent director, in the sense of article 524 §2 and 526bis §2 of the Companies Code, until the maturity of his current mandate. He meets all the criteria indicated in article 526 ter of the Companies Code. He also meets the independence criteria of the Code on Corporate Governance 2009.
The Board of Directors will also propose at the Ordinary General Meeting to approve the renewal of the mandate of the Company's statutory auditor, DELOITTE Bedrijfsrevisoren BVCVBA, which will hence be represented by Mr. William BLOMME for a further period of three years ending at the Ordinary General Meeting in 2016.
The Board of Directors gathered a total of seven times in 2012. One meeting handled mainly the 2012 budget and two meetings handled the establishment of the annual accounts as per 31 December 2011 and the mid-year accounts as per 30 June 2012.
Each meeting also addressed the state of affairs per business line and the most important current acquisition and/or divestment files. Other subjects (human resources, external communication, litigations and legal issues, delegations of authority and such) are discussed as and when necessary.
The written decision procedure was not applied in 2012.
Mr. Dirk VERBRUGGEN, General Counsel and General Secretary, acts as Secretary of the Board of Directors.
The individual attendance rate of the directors at the meetings in 2012 was:
| NAME | att endance rate 2012 |
|---|---|
| Etienne DAVIGNON | 7/7 |
| Guy PAQUOT | 5/7 |
| Luc VANSTEENKISTE | 7/7 |
| Olivier CHAPELLE | 7/7 |
| André BERGEN | 6/7 |
| François BLONDEL (1) | 1/1 |
| Marion DEBRUYNE (2) | 3/3 |
| Pierre Alain DE SMEDT | 4/7 |
| Vincent DOUMIER (3) | 6/7 |
| Ingrid MERCKX (4) | 3/3 |
| Wilfried VANDEPOEL | 7/7 |
| Patrick VAN CRAEN (5) | 3/3 |
| Tonny VAN DOORSLAER | 6/7 |
| Louis VERBEKE (6) | 4/4 |
| Luc WILLAME (7) | 4/4 |
| Jacqueline ZOETE | 3/7 |
| (1) Start of mandate on 20/12/2012 |
(2) Start of mandate on 29/05/2012
(3) End of mandate on 19/12/2012
(4) Start of mandate on 29/05/2012 (5) Start of mandate on 29/05/2012
(6) End of mandate on 29/05/2012
(7) End of mandate on 29/05/2012
The Board of Directors organises a self-assessment of its functioning on a regular basis. Such self-assessment starts through a questionnaire to be remitted to and completed by each individual director. The results of the questionnaire are then be discussed and further analysed during a subsequent meeting of the Board of Directors.
In accordance with company law, the audit committee governs the financial reporting process, the effectiveness of the internal control and risk management systems of the company, the internal audit, the statutory control of the annual accounts and the consolidated accounts, and the Auditor's independence. The Audit committee's terms of reference are included in the Corporate Governance Charter.
The Audit committee consists of four members. All members are non-executive directors and one member, the Chairman, is an independent director in the sense of the Belgian Companies Code.
Mr. Dirk VERBRUGGEN, General Counsel and General Secretary, acts as Secretary of the Audit committee.
The composition of the Audit committee complies with the stipulations of Recticel NV's articles of association and the relevant provisions of the Belgian Companies Code, but does not comply with principle 5.2. /4. of the Belgian Corporate Governance Code 2009 which provides that at least the majority of the members of the Audit committee must be independent. Recticel's Board of Directors contends however that Mr. Davignon and Mr. Vandepoel have proven a de facto independence stature, though they no longer meet the legal independence requirements, only due to their term as director exceeding twelve years.
In accordance with article 526bis of the Companies Code, Recticel NV declares that the Chairman of the Audit committee, Mr. André BERGEN, meets the independence requirements and that he possesses the requisite expertise in accounting and auditing.
The following table contains the members of the Audit committee during the financial year 2012 to date.
| NAME | FUNC TION |
ATTENDANCE RATE IN 2012 |
|---|---|---|
| André BERGEN | Chairman | 7/7 |
| Etienne DAVIGNON | Member | 6/7 |
| Vincent DOUMIER (1) | Member | 7/7 |
| Wilfried VANDEPOEL | Member | 7/7 |
| Tonny VAN DOORSLAER | Member | 6/7 |
(1) Resigned 19 December 2012.
The Audit committee convened seven times in 2012. Four meetings were devoted primarily to the audit of the annual accounts per 31 December 2011 and the interim accounts per 30 June 2012. All meetings also focus on the internal audit program, risk management, compliance, taxation and IFRS related accounting questions.
The Audit Committee conducts each year an informal selfassessment of its functioning during one of its meetings and reserves the necessary time to discuss and analyse the same.
The Remuneration and Nomination Committee makes proposals to the Board of Directors regarding the remuneration policy and the individual remuneration of directors and members of the Management committee and will in future prepare and explain the remuneration report at the Ordinary General Meeting. They also make the necessary proposals regarding the evaluation and reappointment of directors as well as the appointment and induction of new directors. The terms of reference of the Remuneration and Nomination Committee are included in Recticel's Corporate Governance Charter.
The Remuneration and Nomination Committee consists of three members, all non-executive and independent directors.
Mr. Dirk VERBRUGGEN, General Counsel and General Secretary, fulfils the role of secretary of the Remuneration and Nomination Committee.
The composition of the Remuneration and Nomination committee meets the new requirements with respect to the Companies Code, as well as the requirements of the Belgian Corporate Governance Code.
The committee is composed as follows:
| NAME | FUNC TION |
ATTENDANCE RATE IN 2012 |
|---|---|---|
| André BERGEN (1) | Chairman | 3/4 |
| Luc WILLAME (2) | Chairman | 2/2 |
| Pierre Alain DE SMEDT | Member | 2/4 |
| Marion DEBRUYNE (3) | Member | 2/2 |
| Louis VERBEKE (4) | Member | 2/2 |
(1) Chairman since 29 May 2012
(2) End of mandate on 29 May 2012
(3) Member since 29 May 2012
(4) End of mandate on 29 May 2012
In accordance with article 526quater of the Companies Code, Recticel declares that the Remuneration and Nomination committee possesses the necessary expertise in the area of remuneration policy.
The Remuneration and Nomination committee convened four times in 2012.
Two meetings dealt with the fixed and variable remuneration of the executive management as well as with the election and re-election of directors, as well as with the Stock Option Plan – 2012 Edition. Other meetings concerned a.o. the election of the new Group Manager Bedding and of the new General Counsel and General Secretary.
The set-up and functioning of the Remuneration and Nomination Committee was thoroughly reviewed at the end of 2010 following the introduction of the Law dated 6 April 2010 amending the Belgian Companies Code and introducing an article 526quater, whereby the setting-up of a Remuneration and Nomination Committee has become mandatory.
Consequently, the Remuneration and Nomination Committee conducts each year an informal self-assessment of its functioning during one of its meetings and reserves the necessary time to discuss and analyse the same.
The Board of Directors has entrusted the day-to-day management of the company to its Managing Director and Chief Executive Officer, "OLIVIER CHAPELLE" SPRL/ BVBA, located in 1180 Brussels, Avenue de la Sapinière 28, represented by its General Manager and permanent representative, Mr. Olivier CHAPELLE.
Standing from left to right: Jan De Moor, Dirk Verbruggen, François Petit, Rik De Vos, Bart Wallaeys, Jean-Pierre Mellen, Paul Werbrouck, Marc Clockaerts, Sitting from left to right: Philipp Burgtorf, Olivier Chapelle, Betty Bogaert, Jean-Pierre De Kesel
The Chief Executive Officer is assisted by the Management committee, of which the members (for the period 2012 to present) are indicated in the following list:
| NAME | FUNC TION |
|---|---|
| Olivier CHAPELLE (1) | Chief Executive Officer |
| Betty BOGAERT | Group ICT & Business Support Manager |
| Philipp BURGTORF (2) | Group General Manager Bedding |
| Marc CLOCKAERTS (3) | Group General Manager Automotive |
| Jean-Pierre DE KESEL (4) | Chief Sustainability Officer |
| Jan DE MOOR (5) | Group Human Resources & Corporate Communication Manager |
| Caroline DESCHAUMES (6) | Group General Manager Bedding |
| Rik DE VOS | Group General Manager Flexible Foams |
| Philippe JOUS (7) | General Secretary & Corporate General Counsel |
| Jean-Pierre MELLEN (8) | Chief Financial Officer |
| François PETIT | Chief Procurement Officer |
| Dirk VERBRUGGEN (9) | General Secretary & General Counsel |
| Bart WALLAEYS | Group Manager Research and Development |
| Paul WERBROUCK | Group General Manager Insulation |
(1) in his capacity as General Manager and permanent representative of Olivier
Chapelle SPRL/BVBA. (2) since 03 September 2012.
(3) in his capacity as General Manager and permanent representative of Emsee BVBA. (4) until 31 October 2012 as Deputy General Manager Bedding. Since 01 November
2012 as Chief Sustainability Officer. (5) in his capacity as General Manager and permanent representative of Cape-3 BVBA. (6) until 24 April 2012.
(7) until 31 December 2012 in his capacity as General Manager and permanent repre-
sentative of Caamous SCA/Comm.VA. (8) in his capacity as General Manager and permanent representative of De Ster BVBA. (9) since 01 January 2013.
The Management committee has an advisory role on behalf of the Chief Executive Officer and is not an executive committee in the sense of article 524bis of the Belgian Companies Code.
The Recticel Group's Remuneration policy can be found in the Corporate Governance Charter on the Recticel web site (www.recticel.com).
The Group Remuneration Policy was not amended during the year 2012.
The Board of Directors of the Group has determined the remuneration of the Management Committee (hereafter the "Senior Management" or the "Senior Managers") on recommendation of the Remuneration and Nomination Committee.
In order to assist the Committee in its analysis of the competitive environment in Belgium and Europe, as well as other factors that are necessary for the evaluation of remuneration matters by the committee, the committee can call on the services of internationally acknowledged remuneration consultants.
As such, a compensation benchmarking exercise of the Management Committee members was organised in the second half of 2011 together with Towers Watson.
In line with the recommendation of the Remuneration and Nomination Committee, the Board has reaffirmed the general principles of the Group Remuneration Policy for the year 2012 and for the two years thereafter.
The company's directors are rewarded for their services with a fixed remuneration for the year, as well as a fixed attendance fee per attended meeting. The remuneration is determined by the Board of Directors upon proposal of the Remuneration and Nomination Committee and presented for approval to the General Meeting for the current year. The Chairman of the Board receives a remuneration of 200% of the remuneration specified for other members of the Board.
The General Meeting also decides on the additional remuneration for Board Committee members. The Chairman of the Committees receives a remuneration of 150% of the remuneration specified for other members of the Committee. The level as well as the structure of the remuneration of the directors is reviewed on an annual basis. For 2013, no changes are proposed.
Non-executive directors of the Company receive no remuneration, bonus, or equity-linked, or other incentives from the Company and/or its affiliates except as remuneration for their services as Director to the Company and/or its affiliates, and with the exception of VEAN NV, represented by Mr. Luc Vansteenkiste, as explained hereafter. The company will not grant credit, nor maintain credit, nor award credit in the form of a personal loan, nor extend an existing credit, to any member of the Board of Directors.
The remuneration of the Senior Management is calculated to:
The level as well as the structure of the remuneration of the Senior Management is reviewed annually by the Remuneration and Nomination Committee, which consequently presents a proposal to the Board of Directors for approval.
The remuneration package for Senior Management combines three integrated elements, which together form the "total direct remuneration". These integrated elements are the basic compensation, the annual incentive bonus and the long-term incentives. The company will not grant credit, nor maintain credit, nor award credit in the form of a personal loan, nor extend an existing credit, to any member of the Senior Management.
When determining the remuneration levels for Senior Management, along with the internal factors, the remuneration of executives in multinational companies of similar size and/or similar activities with headquarters in Belgium and neighbouring countries are taken into account. It is the intention to establish remuneration levels that, in general, lie on or around the average market level, for as far as the results of the company allow this.
The CEO receives a bonus remuneration based on his performance over the calendar year. The evaluation criteria are based on financial targets linked to certain key performance indicators ("KPI's") in relation to the annual budget and debt level at Group level, as well as nonfinancial targets linked to the development of the company for the future (for example structure, commercial practices, new products and/or markets, M&A, human resources, compliance, etc.). The Remuneration Committee makes the evaluation in a private session and discusses the evaluation with the CEO before presenting a proposal to the Board for approval.
The Group General Managers (and Deputy General Manager) at the head of the four different business lines likewise receive a bonus remuneration based on their performance during the calendar year. The evaluation criteria are based on financial targets linked to certain KPI's in relation to the annual budget, both at Group level, as at the level of their respective business lines. Financial targets account for 60% of the bonus. Non-financial targets account for 40% linked to the development of the business line for the future (for example structure, commercial practices, new products and/or markets, M&A, human resources, compliance, etc.).
For the support functions within the Management Committee (CFO, General Counsel, Procurement, ICT, HR and R&D), financial targets account for 45% and relate to the Group results, the department budget and/or specific projects. Non-financial targets account for 55% linked to the development of the department for the future (for example structure, new products, M&A, human resources, compliance, etc.).
The CEO performs the evaluation of the other members of the Management Committee, and discusses the results of the evaluation with the Remuneration Committee.
With regard to article 520ter of the Companies Code, relating to the need to defer variable remuneration payments over a three year period in case certain thresholds are passed, the Board of Directors had proposed to the 2012 General Shareholder meeting to approve a deviation from the said rule in line with the possibility offered by the legislation, as this principle was only applicable to the Managing Director and CEO, Olivier Chapelle SPRL/BVBA, as all other members of the Management Committee remained below the 25% threshold.
The 2012 General Shareholders' meeting approved this proposal for the year 2012.
The Remuneration Committee and the Board of Directors reviewed again the various possibilities that the legislation offers for its application and finally decided that it would remain in the best interest of the company to keep the variable remuneration payment structure at the same level for all Management Committee members. As the target variable remuneration bonus pay-out for the Managing Director and CEO surpasses the 25% maximum threshold, the Board will hence propose to the 2013 General Shareholders' meeting to approve, as for last year, the said deviation from the principle of a deferral over three years, and hence to allow the full payment of the variable remuneration within one year.
It shall be finally noted that there exists no right of recovery in case the variable remuneration would have been granted based on incorrect financial data.
| NAME | DIREC TOR'S FEES 2012 |
ATTENDENCE FEES BOARD 2012 |
AUDIT COMM ITTEE 2012 |
REMUNER ATION AND NOM INATION COMM ITTEE 2012 |
REMUNER ATION FOR SPECIAL ASSIGNMEN TS |
TOTAL (GRO SS) |
|---|---|---|---|---|---|---|
| DAVIGNON Etienne | 18 000.00 | 23 100.00 | 15 000.00 | - | - | 56 100.00 |
| OLIVIER CHAPELLE BVBA | 9 000.00 | 11 550.00 | - | - | - | 20 550.00 |
| PAQUOT Guy | 9 000.00 | 9 900.00 | - | - | - | 18 900.00 |
| VEAN NV | 5 241.76 | 4 950.00 | - | - | - | 10 191.76 |
| ANDRÉ BERGEN Comm V | 9 000.00 | 9 900.00 | 26 250.00 | 2 500.00 | - | 47 650.00 |
| COMPAGNIE DU BOIS SAUVAGE SERVICES SA |
293.48 | - | - | - | - | 293.48 |
| DE SMEDT Pierre-Alain | 9 000.00 | 8 250.00 | - | 3 750.00 | - | 21 000.00 |
| DEBRUYNE Marion | 5 315.93 | 4 950.00 | - | 2 500.00 | - | 12 765.93 |
| DOUMIER Vincent | 8 706.52 | 9 900.00 | 17 500.00 | - | - | 36 106.52 |
| LOUIS VERBEKE BVBA | 3 684.07 | 6 600.00 | - | 2 500.00 | - | 12 784.07 |
| MERCKX Ingrid | 5 315.93 | 4 950.00 | - | - | - | 10 265.93 |
| REVAM BVBA | 5 315.93 | 4 950.00 | 10 000.00 | - | - | 20 265.93 |
| SOGELAM NV | 3 684.07 | 6 600.00 | - | 2 500.00 | - | 12 784.07 |
| VANDEPOEL Wilfried | 3 684.07 | 6 600.00 | 7 500.00 | - | - | 17 784.07 |
| VAN CRAEN Patrick | 5 315.93 | 4 950.00 | - | - | - | 10 265.93 |
| VAN DOORSLAER Tonny | 9 000.00 | 11 550.00 | 15 000.00 | - | - | 35 550.00 |
| ZOETE Jacqueline | 9 000.00 | 6 600.00 | - | - | - | 15 600.00 |
Since 2006 directors have received a remuneration of EUR 1,650 per attended meeting, and the Chairman has received double this amount. The members of the Audit Committee received EUR 2,500 per attended meeting and the Chairman EUR 3,750. The members of the Remuneration and Nomination Committee are entitled to EUR 2,500 per year; the Chairman EUR 3,750.
For 2012, a fixed annual consideration was approved and granted for an amount of EUR 9,000 for a director and EUR 18,000 for the Chairman of the Board. For 2013, the proposal to be presented to the General Shareholders' meeting will remain at the same level.
The remuneration of the executive director (Olivier Chapelle SPRL/BVBA) as included in the above overview is taken into account for its total compensation package on the basis of its management services agreement.
From April 2010 through May 2012, Vean NV was not remunerated for its mandate of director but received a remuneration based on its management services agreement. In the said period, Vean NV received a fixed compensation of EUR 66,666.67 per month or EUR 333,333.35 for the year 2012. Effective 1 June 2012, the management services agreement came to an end. Consequently, the mandate of director of Vean NV is now remunerated, in line with the director fee structure as mentioned here above.
| TOTAL COST FOR THE COM PANY |
OLIVIER CHAPELLE SPRL REPRESENTED BY OLIVIER CHAPELLE |
OF THE MANAGEMEN | OTHER MEM BERS T COMM ITTEE |
TOTAL | ||
|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| Number of persons | 1 | 1 | 12 | 12 | 13 | 13 |
| Basic salary | 486 000 | 442 000 | 2 795 429 | 2 842 930 | 3 281 429 | 3 284 930 |
| Variable remuneration | 280 000 | 280 000 | 796 284 | 614 857 | 1 076 284 | 894 857 |
| Subtotal | 766 000 | 722 000 | 3 591 713 | 3 457 787 | 4 357 713 | 4 179 787 |
| Pensions | 0 | 0 | 139 840 | 101 125 | 139 840 | 101 125 |
| Other benefits | 88 453 | 95 654 | 242 288 | 214 924 | 330 741 | 310 578 |
| Total | 854 453 | 817 654 | 3 973 840 | 3 773 836 | 4 828 293 | 4 591 490 |
Remarks:
The table above is established in line with the new guidance provided by the Belgian Corporate Governance Committee, meaning that for members with employee status, the gross salary is taken, without the employer social contributions, and for members utilising a management company, total remuneration fees invoiced for the year.
Members of the Management Committee with an employee status also have a company vehicle (including fuel) and company mobile phone at their disposal. The costs thereof have been included in the above amount of "other benefits". Members of the Management Committee operating through a management company receive no such benefits, though certain costs may be invoiced separately, in which case they are also taken into account in the above overview.
With regard to group insurance and pension arrangements, a distinction needs to be made between members being employees, and members operating through a management company. The latter receive no group insurance or pension arrangements.
Members of the Management Committee with an employee status employed before 2001 are included in the Recticel Group Defined Benefit Plan. Members hired externally since 2001 are included in the Recticel Group Defined Contribution Plan. The service costs relating thereto have been included in the above overview.
In line with the Corporate Governance Code, the Board of Directors requested the Ordinary General Meeting of May 2012 for approval and obtained said approval for the issue of a stock option plan of maximum up to 480,000 warrants for the senior managers of the Group.
The 2012 plan involved a total of 419,500 warrants for a total of 54 managers. The exercise price was set at the average share price of the previous 30 days, i.e. EUR 4.79 and the exercise period will run from 1 January 2016 up to 19 December 2018. The total cost taken into account by the Company for this 2012 serie amounts to EUR 0.572 per warrant or EUR 239,954 in total, spread over four years (year of issuance and three year vesting period).
The following members of the Management Committee received the following warrants for the 2012 series:
| Name | Total number of warrants |
Total theoretical value of warrants at iss uance (*) |
|---|---|---|
| Olivier Chapelle | 30 000 | 17 160 |
| Betty Bogaert | 9 900 | 5 663 |
| Philipp Burgtorf | 9 900 | 5 663 |
| Marc Clockaerts | 9 900 | 5 663 |
| Jean-Pierre De Kesel | 9 900 | 5 663 |
| Jan De Moor | 9 900 | 5 663 |
| Rik De Vos | 9 900 | 5 663 |
| Philippe Jous | 9 900 | 5 663 |
| Jean-Pierre Mellen | 9 900 | 5 663 |
| François Petit | 9 900 | 5 663 |
| Dirk Verbruggen | 9 900 | 5 663 |
| Bart Wallaeys | 9 900 | 5 663 |
| Paul Werbrouck | 9 900 | 5 663 |
(*) The theoretical value is calculated by using a Black & Scholes formula, and taken into account certain hypotheses regarding dividend yield, interest rate and volatility.
During the year 2012, no stock options or warrants, shares or other rights to acquire shares were allocated to the members of the Board of Directors.
During 2012, no warrants were exercised by any member of the Management Committee.
Most agreements with the members of the Management Committee contain no specific end of contract regulation. Consequently common law is decisive. Some members do have such regulation in proportion to their seniority. Below an overview of the dismissal period and severance pay for each member of the Management Committee.
| Name | Dismissa l period/ severance pay |
Comments |
|---|---|---|
| Olivier Chapelle | 12 months | |
| Betty Bogaert | 12 months | Legal minimum - Formule Claeys shall apply |
| Philipp Burgtorf | 12 months | |
| Marc Clockaerts | 18 months | 12 months as from 2015 |
| Jean-Pierre De Kesel | 18 months | Legal minimum - Formule Claeys shall apply |
| Jan De Moor | 18 months | |
| Rik De Vos | 12 months | |
| Jean-Pierre Mellen | 15 months | |
| François Petit | 12 months | |
| Dirk Verbruggen | 12 months | |
| Bart Wallaeys | 15 months | Legal minimum - Formule Claeys shall apply |
| Paul Werbrouck | 21 months | Legal minimum - Formule Claeys shall apply |
For the year 2012, the following new or renewed hirings took place regarding members of the Management Committee:
As from 1 January 2013, Mr. Dirk Verbruggen has replaced Mr. Philippe JOUS, who retired as General Counsel and General Secretary. His employment agreement provides for a termination period of 12 months.
Transactions and other contractual ties between the Company and affiliated companies and members of the Board of Directors or members of the Management committee
Chapter VII.1. of the Recticel Corporate Governance Charter describes Recticel NV's policy on related party transactions that are not governed by the legal conflict of interest scheme.
Commercial transactions, which are mainly the result of a joint product development, occur between the Sioen Group and the Recticel Group.
More specifically, Recticel Group companies booked purchases worth EUR 1,252,125 and sales worth EUR 193,924 with companies of the Sioen Group during the year 2012.
During 2012, no conflicts of interests arose between a director and the Company as referred to in Articles 523 and 524 of the Belgian Companies Code, except in the context of the Stock Option Plan, 2012 Edition as issued in December 2012, when Mr. Olivier CHAPELLE had a conflict of interest. The above-mentioned articles were applied. Reference is made here to the statutory annual report, which contains an extract from the minutes of the Board of Directors held on 20 December 2012.
No other applications occurred in this regard.
The company policy regarding the prevention of insider trading and market manipulation is further explained in chapter VII.2 of Recticel's Corporate Governance Charter.
These measures include the implementation of restrictions on the execution of transactions (« closed periods ») applicable since 2006.
Mr. Dirk VERBRUGGEN was appointed as Compliance Officer, responsible for monitoring the observance of these regulations.
Recticel SA/NV was controlled by a group of shareholders that were bound by a shareholder agreement dated 22 August 2007. This shareholder agreement ran for a period of three years. Since August 2010, the shareholder group tacitly continued the said arrangements. Those arrangements were finally terminated on 6 November 2012.
Here follows the overview of the shareholders who, under the statutes of the law, have addressed a notification to the company and to the FSMA:
| Name | Number of sha res |
% |
|---|---|---|
| Shareholders group around Compagnie du Bois Sauvage NV, including Entreprises et Chemins de Fer en Chine SA and Mr G. Paquot |
8 673 650 | 29.98% |
| Capfi Delen Asset Management NV |
905 201 | 3.13% |
| Public | 19 352 605 | 66.89% |
| TOTAL | 28 931 456 | 100.00% |
The capital structure, with the number of shares, strips, convertible bonds and warrants of the company can be found in the chapter "Information on the Share" on the Recticel website (www.recticel.com).
There are no legal or statutory limitations on transfer of securities. There are no securities with special control rights. There is no mechanism for the control of any employee share scheme. There are no legal or statutory restrictions on the exercise of voting rights, for as far as the shareholder is legally represented at the Ordinary General Meeting, and his/her voting rights have not been suspended for any reason.
In accordance with the powers granted at the extraordinary general meeting on 17 June 2011, and incorporated in article 6 of the Statute, the Board of Directors have certain powers to issue new shares, convertible bonds, bonds or subscription rights, with or without preferential rights, and offering these to shareholders or other persons, with restriction of the preferential right, under the Companies Code. In this way capital can be increased up to an amount equal to the current subscribed capital, EUR 72,328,640, in all possible ways. The authorization is valid for a period of three years, and if appropriate, proposals for renewal are made. It may even be exercised after receipt of the notice given by FSMA that a notice of public takeover was submitted.
Under article 15 of the articles of association, the Company is entitled to acquire or dispose of shares in the Company, without a decision by the general meeting, if this acquisition is necessary in order to avoid an imminent and serious harm to the company under article 620 or 622 of the Belgian Companies Code.
There are no agreements between the Company and its directors or employees that would provide for compensations after a public takeover bid, the directors resigning or departing without any valid reason, or the employment of the employees being terminated.
The following agreements, whereby the company is party, contain the clauses that take effect, undergo changes or end, in the event of a change of control over Recticel SA/NV:
These clauses were specifically approved by Recticel's General Shareholder Meeting.
| Blowing agent | Carbon dioxide is produced from the reaction of isocyanate and water. This gas functions as blowing agent in the production of flexible foam. |
|---|---|
| Catalyst | Accelerates the reaction process and ensures the balance in the polymerization and the blowing. Catalysts determine the foaming speed of the process. |
| Dodecahedron | A regular dodecahedron or a spatial figure with 12 pentagonal faces, 20 end points and 30 edges. This is one of the five regular polyhedra in three dimensions. |
| Colo-Fast® | Aliphatic polyurethane that is distinguished by its colour fastness (light-stable). |
| Colo-Sense® | Variation of Colo-Fast®. |
| Frequency rate of industrial accidents |
Time cost of industrial accidents per million working hours. |
| IDC | Is short for International Development Centre, the department for international research and development of the Recticel Group. |
| Isocyanate | Highly reactive substance that easily combines with other substances (such as alcohols). The structure of these alcohols determines the hardness of the PU-foam. |
| Lambda | Expression of the thermal conductivity of thermal insulation. |
| MDI | Is short for Methylene diphenyl diisocyanate. |
| PIR | Abbreviation for polyisocyanurate. |
| Polyisocyanurate | Is an improved version of polyurethane. PIR-foam has an improved dimensional stability, excellent mechanical properties such as compressive strain and is a much stronger fire retardant. PIR is mainly used as thermal insulation. |
| Polyol | Synonym for PU polyalcohol, which is acquired from propylene oxide. |
| Polyurethane | Represents an important group of products within the large family of polymers or plastics. Polyurethane is a generic term for a wide range of foam types. |
| PU or PUR | Polyurethane. |
| REACH | Is a system for Registration, Evaluation and Authorization of Chemical substances that are produced or imported in the European Union. This regulation came into force on 01 June 2007. |
| Stabilizers | Provides the homogeneous structure and the stabilization of the cellular network up to the complete rise of the foam in the reaction process. |
| Severity index of accidents | Number of calendar days lost per thousand working hours. |
| TDI | Toluene diphenyl diisocyanate. |
| Appropriated capital | Net intangible fixed assets + goodwill + tangible fixed assets + working capital. Average = [Appropriated capital at the end of last year + Appropriated capital at the end of the last period] / 2. |
|---|---|
| Appropriated capital, Average |
Half yearly: average appropriated capital at the beginning and at the end of the period. Average = [Appropriated capital at the end of last year + Appropriated capital at the end of the last period] / 2. For the full year: average of the half yearly averages. |
| Associated companies | Entities in which Recticel has a significant influence and that are processed using the equity-method. |
| CGU | Is short for Cash Generating Unit or cash flow generating unit. |
| Earnings per share, base | Net result for the period (Group share) / Average outstanding shares over the period. |
| Earnings per share, diluted | Net result for the period (Group share) / [Average number of outstanding shares over the period – own shares + (number of possible new shares that have to be issued within the framework of the existing outstanding stock option plans x dilution effect of the stock option plans)]. |
| EBIT | Operating results + profit or loss from equities. |
| EBITDA | EBIT + depreciation and additional impairments/increases on assets. |
| Equity capital | Total equity, including minority interests. |
| Gearing ratio | Net financial debt / Total equity (including shares of external parties). |
| Investments | Capitalized investments in tangible and intangible assets. |
| Joint ventures | Entities that are controlled jointly and that are consolidated proportionately. |
| Market capitalization | Closing price x total number of outstanding shares. |
| Net financial debt | Interest bearing financial debts at more than one year + interest bearing financial debts within maximum one year – cash and cash equivalents - Available for sale investments + Net marked-to-market value position of hedging derivative instruments. |
| Non-recurring elements | Non-recurring elements include operating revenues, expenses and provisions that pertain to restructuring programmes, impairments on assets, gain or loss on divestments and on liquidations of affiliated companies, as well as other events or transactions that clearly deviate from the normal activities of the Group. |
| Recurring EBIT(DA) or REBIT(DA) |
EBIT(DA) for non-recurring elements. |
| Return on Capital Employed |
EBIT / average appropriated capital. |
| Return on Equity (ROE) | Net result for the period (share of the Group) / Average total equity over the period (the Group's share). |
| ROCE | Represents Return on Capital Employed. |
| Subsidiaries | Fully consolidated entities under Recticel control. |
| Working capital | Inventories + trade receivables + other receivables + recoverable taxes - trade payables - payable taxes - other commitments. |
| VVPR | Is short for Reduced Tax / Précompte Réduit. |
| VVPR-strip | Gives the holder the right to collect a dividend with a reduced withholding tax of 15% (instead of 25%). |
Table of contents
| I. | Consolidated income statementa | 73 | |
|---|---|---|---|
| I.1. | Consolidated income statement | 73 | |
| I.2. | Consolidated statement of comprehensive income | 73 | |
| I.3. | Earnings per share | 73 | |
| I.4. | Consolidated balance sheet | 74 | |
| I.5. | Consolidated cash flow statement | 75 | |
| I.6. | Statement of changes in shareholders' equity | 76 | |
| II. N | otes to the consolidated financial statements for the year ending 31 December 2012a | 78 | |
| II.1. | Summary of significant accounting policies | 78 | |
| II.2. | Changes in scope of consolidation | 89 | |
| II.3. | Business and geographical segments | 89 | |
| II.4. | Income statement | 93 | |
| II.5. | Balance sheet | 100 | |
| II.6. | Miscellaneous | 131 | |
| III. | Recticel s.a./n.v. – general information | 138 | |
| IV. | Recticel s.a./n.v. – condensed statutory accounts | 139 | |
| V. | Declaration by responsible officersa | 141 | |
| VI. | Auditors' report on the consolidated financial statements for the year | ||
| ending 31 December 2012a | 142 | ||
| VII. | Comparable overview of the consolidated financial statements (2003-2012) | 144 | |
| VIII. | Asset & risk managementa | 146 |
These sections are an integral part of the Report by the Board of Directors, and comprise the information as required by the Belgian Company Code for the annual consolidated financial statements.
The consolidated financial statements have been authorised for issue by the Board of Directors on 28 February 2013.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | NOTES* | 2012 | 2011 |
| Sales | II.3. | 1 319 488 | 1 378 122 |
| Distribution costs | (65 838) | (65 182) | |
| Cost of sales | (1 042 700) | (1 101 628) | |
| Gross profit | 210 950 | 211 312 | |
| General and administrative expenses | (83 711) | (85 059) | |
| Sales and marketing expenses | II.2. | (74 792) | (73 836) |
| Research and development expenses | (14 899) | (14 820) | |
| Impairments | (1 555) | (5 260) | |
| Other operating revenues(1) | 15 270 | 17 430 | |
| Other operating expenses(2) | (12 237) | (9 067) | |
| Other operating result(1)+(2) | II.4.1. | 3 033 | 8 363 |
| Income from associates | 711 | 1 741 | |
| Income from investments | II.4.3. | 0 | (406) |
| EBIT | II.4.2. | 39 737 | 42 035 |
| Interest income | 402 | 376 | |
| Interest expenses | (12 291) | (13 646) | |
| Other financial income | 15 146 | 18 224 | |
| Other financial expenses | (17 596) | (21 638) | |
| Financial result | II.4.4. | (14 339) | (16 684) |
| Result of the period before taxes | 25 398 | 25 351 | |
| Income taxes | II.4.5. | (7 834) | (7 933) |
| Result of the period after taxes | 17 564 | 17 418 | |
| of which non-controlling interests | 0 | 0 | |
| of which share of the Group | 17 564 | 17 418 | |
* The accompanying notes are an integral part of this income statement.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2012 | 2011 |
| Result of the period after taxes | 17 564 | 17 418 |
| Hedging reserves | (1 355) | (1 396) |
| Foreign currency translation differences | 2 930 | (2 502) |
| Foreign currency translation differences recycled in the income statement | (46) | 551 |
| Deferred taxes on interest hedging reserves | 463 | 470 |
| Other comprehensive income net of tax | 1 992 | (2 877) |
| Total comprehensive income of the period including recycled foreign currency translation reserves | 19 556 | 14 541 |
| Total comprehensive income of the period | 19 556 | 14 541 |
| of which share of the Group | 19 556 | 14 541 |
| of which non-controlling interests | 0 | 0 |
| in EUR | |||
|---|---|---|---|
| Group Recticel | Notes * |
2012 | 2011 |
| Basic earnings per share | II.4.7. | 0.61 | 0.60 |
| Diluted earnings per share | II.4.8. | 0.55 | 0.55 |
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | Notes * |
2012 | 2011 |
| Intangible assets | II.5.1. | 13 031 | 12 580 |
| Goodwill | II.5.2. | 35 003 | 34 688 |
| Property, plant & equipment | II.5.3.& II.5.4. | 270 904 | 255 347 |
| Investment property | II.5.5. | 4 452 | 3 331 |
| Interests in associates | II.5.7. | 13 784 | 12 957 |
| Other financial investments | II.5.8. | 240 | 3 399 |
| Available for sale investments | II.5.9. | 122 | 121 |
| Non-current receivables | II.5.10. | 7 664 | 8 305 |
| Deferred tax | II.4.5. | 45 520 | 50 290 |
| Non-current assets | 390 720 | 381 018 | |
| Inventories and contracts in progress | II.5.11. & II.5.12. | 116 607 | 116 002 |
| Trade receivables | II.5.13. | 114 540 | 132 910 |
| Other receivables | II.5.13. | 48 123 | 39 567 |
| Income tax receivables | II.4.5. | 4 345 | 3 847 |
| Other investments | 45 | 205 | |
| Cash and cash equivalents | II.5.14. | 27 008 | 54 575 |
| Current assets | 310 668 | 347 106 | |
| Total assets | 701 388 | 728 124 |
* The accompanying notes are an integral part of this balance sheet.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | Notes * |
2012 | 2011 |
| Capital | II.5.15. | 72 329 | 72 329 |
| Share premium | II.5.16. | 107 013 | 107 013 |
| Share capital | 179 342 | 179 342 | |
| Retained earnings | 95 010 | 85 191 | |
| Hedging and translation reserves | (13 728) | (15 739) | |
| Equity - share of the Group | 260 624 | 248 794 | |
| Non-controlling interests | 0 | 0 | |
| Total equity | 260 624 | 248 794 | |
| Pensions and similar obligations | II.5.17. | 28 048 | 35 289 |
| Provisions | II.5.18. | 9 798 | 12 964 |
| Deferred tax | II.4.5. | 8 554 | 9 134 |
| Bonds and notes | II.5.19. | 45 023 | 44 546 |
| Financial leases | II.5.21. | 20 850 | 11 024 |
| Bank loans | II.5.19. | 74 595 | 79 534 |
| Other loans | II.5.19. | 2 039 | 2 111 |
| Interest-bearing borrowings | II.5.19. | 142 507 | 137 215 |
| Other amounts payable | II.5.20. | 501 | 353 |
| Non-current liabilities | 189 408 | 194 955 | |
| Pensions and similar obligations | II.5.17. | 1 529 | 3 126 |
| Provisions | II.5.18. | 1 523 | 6 328 |
| Interest-bearing borrowings | II.5.19. | 57 840 | 67 680 |
| Trade payables | II.5.23. | 104 980 | 119 274 |
| Income tax payables | II.4.5. | 2 281 | 3 974 |
| Other amounts payable | II.5.23. | 83 203 | 83 993 |
| Current liabilities | 251 356 | 284 375 | |
| Total liabilities | 701 388 | 728 124 |
* The accompanying notes are an integral part of this balance sheet.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | Notes * |
2012 | 2011 |
| EARNINGS BEFORE INTEREST AND TAXES (EBIT) | II.1. | 39 737 | 42 035 |
| Amortisation of intangible assets | II.5.1. | 3 551 | 3 695 |
| Depreciation of tangible assets | II.5.3. | 35 098 | 36 760 |
| Amortisation of deferred long term and upfront payment | II.4.2. | 1 199 | 1 049 |
| Impairment losses on intangible assets | II.5.1. | 0 | 41 |
| impairment losses on tangible assets | II.5.3. | 1 555 | 4 680 |
| Impairment goodwill | II.5.2. | 0 | 539 |
| Write-offs on assets | 1 017 | 54 | |
| Changes in provisions | (18 807) | (21 829) | |
| Fair value gains | (800) | (4 093) | |
| (Gains) / Losses on disposals of assets | (859) | (1 254) | |
| Income from associates | II.4.2. | (711) | (1 740) |
| GROSS OPERATING CASH FLOW | 60 981 | 59 937 | |
| Inventories | 1 327 | (2 103) | |
| Trade receivables | 8 126 | 5 440 | |
| Other receivables | 2 467 | 21 098 | |
| Trade payable | (26 616) | (28 641) | |
| Other payable | 348 | (3 624) | |
| Changes in working capital | (14 349) | (7 830) | |
| Income taxes paid | (5 403) | (6 385) | |
| NET CASH FLOW FROM OPERATING ACTIVITIES | 41 229 | 45 722 | |
| Interests received | 474 | 354 | |
| Dividends received | 1 194 | 1 991 | |
| New investments and subscriptions to capital increases | 0 | (4 239) | |
| (Increase) / Decrease of loans and receivables | (817) | 2 329 | |
| Investments in intangible assets | II.5.1. | (3 982) | (1 030) |
| Investments in property, plant and equipment | II.5.2. | (38 312) | (23 729) |
| Acquisitions of subsidiaries | II.5.8. | (760) | 408 |
| Investments in associates | 0 | (142) | |
| Disposals of intangible assets | II.5.1. | 117 | 55 |
| Disposals of property, plant and equipment | II.5.2. | 1 831 | 4 941 |
| Disposals of investment property | II.5.2. | 0 | 726 |
| Disposals in subsidiaries | II.5.8. | 0 | 1 809 |
| Disposals in associates | II.5.8. | 0 | 3 699 |
| Disposals of investments available for sale | 0 | 69 | |
| (Acquisition)/Disposal of other current financial assets | (15) | (24) | |
| NET CASH FLOW FROM INVESTMENT ACTIVITIES | (40 269) | (12 783) | |
| Interests paid | (11 979) | (11 196) | |
| NET FREE CASH FLOW | (11 019) | 21 743 | |
| Dividends paid | (8 745) | (7 707) | |
| Increase of financial liabilities | 39 952 | 58 146 | |
| (Decrease) of financial liabilities | (47 326) | (72 093) | |
| CASH FLOW FROM FINANCING ACTIVITIES | (28 098) | (32 850) | |
| Effect of exchange rate changes | (1 387) | (24) | |
| Effect of changes in scope of consolidation and of foreign currency translation reserves recycled | 959 | 572 | |
| CHANGES IN CASH AND CASH EQUIVALENTS | (27 567) | 637 | |
| Net cash position opening balance | 54 575 | 53 938 | |
| Net cash position closing balance | 27 008 | 54 575 | |
| CHANGES IN CASH POSITION | (27 567) | 637 |
* The accompanying notes are an integral part of this cash flow statement.
The gross operating cash flow before working capital movements increased by EUR 1.0 million to EUR 61.0 million, or +1.7% compared to last year. The variance is primarily the result of (i) EUR 2.3 million lower EBIT (EUR 39.7 million versus EUR 42.0 million in 2011), (ii) EUR 4.4 million lower depreciation, impairments and writeoffs on assets (EUR 42.4 million versus EUR 46.8 million in 2011), (iii) EUR 3.0 million lower movements in provisions (EUR 18.8 million versus EUR 21.8 million in 2011), (iv) EUR 3.7 million lower corrections for fair value gains and gains upon disposal transactions and (v) EUR 1.0 million lower contribution of the income from associates (EUR 0.7 million versus EUR 1.7 million in 2011).
The net cash flow from operating activities fell by EUR 4.5 million to EUR 41.2 million, or –9.8% compared to last year, despite a slightly higher gross operating cash flow before working capital movements. This negative variance is the result of an increased working capital need (EUR –14.3 million versus EUR –7.8 million in 2011).
The changes in working capital of EUR –14.3 million (2011: EUR -7.8 million) have mainly been impacted by a lower reduction in trade payables (EUR –26.6 million versus EUR -28.6 million in 2011) and a further reduction in trade receivables (EUR 8.1 million versus EUR 5.4 million in 2011). The 'other' receivables, which are linked to the various factoring/forfaiting programs in place, were reduced by EUR 2.5 million versus EUR 21.1 million in the previous year.
The net cash flow from investment activities amounted to EUR –40.3 million versus EUR –12.8 million in 2011. The increase in investment in property, plant & equipment (EUR 43.1 million versus EUR 24.5 million in 2011) is mainly the result of the investment in the new Insulation plant in Bourges (France) (EUR 23 million), combined with less disposals of fixed assets (EUR 1.9 million versus EUR 11.3 million).
The net operational free cash flow resulting from (i) the net cash from operating activities (EUR +41.2 million) (ii) the net cash flow from investment activities (EUR –40.3 million) and (iii) the interests paid (EUR –12.0 million), amounts to EUR -11.0 million, compared to EUR +21.7 million in 2011.
The cash flow from financing activities amounts to EUR –28.1 million versus EUR –32.9 million in 2011. Interests paid (EUR –12.0 million versus EUR –11.2 million in 2011) and dividends paid (EUR -8.7 million versus EUR –7.7 million in 2011) were slightly higher. Gross financial debt was further reduced by a net amount of EUR 7.4 million in 2012. This gross debt reduction, in combination with the above cash flow items, exchange rate changes and changes in the scope of consolidation, resulted in a decrease of the 'cash and cash equivalents' position for EUR -27.6 million.
| in thousand EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | CAPITAL | SHARE PREMIUM |
IFRS 2 OTHER CAPITAL RESERVES |
RETAINED EARNINGS |
TRANSLATION DIFFERENCES RESERVES |
HEDGING RESERVES |
EQUITY BEFORE NON CONTROLLING INTERESTS |
NON CONTROLLING INTERESTS |
TOTAL EQUITY |
| At the end of the preceding period | 72 329 | 107 013 | 2 207 | 82 984 | (8 914) | (6 825) | 248 794 | 0 | 248 794 |
| Dividends | 0 | 0 | 0 | (8 101) | 0 | 0 | (8 101) | 0 | (8 101) |
| Stock options (IFRS 2) | 0 | 0 | 355 | 0 | 0 | 0 | 355 | 0 | 355 |
| Shareholders' movements | 0 | 0 | 355 | (8 101) | 0 | 0 | (7 746) | 0 | (7 746) |
| Result for the period (1) | 0 | 0 | 0 | 17 564 | 0 | 0 | 17 564 | 0 | 17 564 |
| Gains (losses) on cash flow hedge (1) | 0 | 0 | 0 | 0 | 0 | (1 355) | (1 355) | 0 | (1 355) |
| Deferred taxes | 0 | 0 | 0 | 0 | 0 | 463 | 463 | 0 | 463 |
| Translation differences (2) | 0 | 0 | 0 | 0 | 2 930 | 0 | 2 930 | 0 | 2 930 |
| Foreign currency translation reserves recycled in income statement |
0 | 0 | 0 | 0 | 0 | (46) | (46) | 0 | (46) |
| Other comprehensive income (2) | 0 | 0 | 0 | 0 | 2 930 | (938) | 1 992 | 0 | 1 992 |
| 'Comprehensive income'(1)+(2) | 0 | 0 | 0 | 17 564 | 2 930 | (938) | 19 556 | 0 | 19 556 |
| Change in scope | 0 | 0 | 0 | 0 | 20 | 0 | 20 | 0 | 20 |
| At the end of the period | 72 329 | 107 013 | 2 562 | 92 447 | (5 964) | (7 763) | 260 624 | 0 | 260 624 |
(1) hedging interest reserves: EUR -1 355K (2) hedging net investment: EUR -46K
| in thousand EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | CAPITAL | SHARE PREMIUM |
IFRS 2 OTHER CAPITAL RESERVES |
RETAINED EARNINGS |
TRANSLATION DIFFERENCES RESERVES |
HEDGING RESERVES |
EQUITY BEFORE NON CONTROLLING INTERESTS |
NON CONTROLLING INTERESTS |
TOTAL EQUITY |
| At the end of the preceding period | 72 329 | 107 013 | 1 801 | 73 378 | (6 954) | (5 899) | 241 668 | 0 | 241 668 |
| Dividends | 0 | 0 | 0 | (7 812) | 0 | 0 | (7 812) | 0 | (7 812) |
| Stock options (IFRS 2) | 0 | 0 | 406 | 0 | 0 | 0 | 406 | 0 | 406 |
| Shareholders' movements | 0 | 0 | 406 | (7 812) | 0 | 0 | (7 406) | 0 | (7 406) |
| Result for the period (1) | 0 | 0 | 0 | 17 418 | 0 | 0 | 17 418 | 0 | 17 418 |
| Gains (losses) on cash flow hedge (1) | 0 | 0 | 0 | 0 | 0 | (1 384) | (1 384) | 0 | (1 384) |
| Deferred taxes | 0 | 0 | 0 | 0 | 0 | 470 | 470 | 0 | 470 |
| Translation differences (2) | 0 | 0 | 0 | 0 | (2 503) | (12) | (2 515) | 0 | (2 515) |
| Foreign currency translation reserves recycled in income statement |
0 | 0 | 0 | 0 | 551 | 0 | 551 | 0 | 551 |
| Other comprehensive income (2) | 0 | 0 | 0 | 0 | (1 952) | (926) | (2 878) | 0 | (2 878) |
| 'Comprehensive income'(1)+(2) | 0 | 0 | 0 | 17 418 | (1 952) | (926) | 14 540 | 0 | 14 540 |
| Change in scope | 0 | 0 | 0 | 0 | (8) | 0 | (8) | 0 | (8) |
| At the end of the period | 72 329 | 107 013 | 2 207 | 82 984 | (8 914) | (6 825) | 248 794 | 0 | 248 794 |
(1) hedging interest reserves: EUR -1,384K
(2) hedging net investment: EUR -12K
Recticel SA/NV (the ''Company'') is a limited company domiciled in Belgium. The Company's consolidated financial statements include the financial statements of the Company, its subsidiaries, interests in jointly controlled entities consolidated under the proportionate method and the Group's interest in associates accounted for under the equity method (together referred to as ''the Group'').
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by 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 2011, all of which were endorsed by the European Union.
The same accounting policies, presentation and methods of computation are followed as those which were applied in the preparation of the group's financial statements for the year ended 31 December 2011.
Following Standards and Interpretations that became applicable for 2012 had no material effect on the financial statements:
– Amendments to IFRS 7 Financial Instruments: Disclosures – Transfers of Financial Assets (applicable for annual periods beginning on or after 1 July 2011)
The Group has elected not to adopt in 2012 any standards or interpretations in advance of their effective application dates:
Removal of Fixed Dates for First-time Adopters (applicable for annual periods beginning on or after 1 January 2013)
Except for IFRS 11– Joint Arrangements and IAS 19 – Employee Benefits, the Group does not expect that the above-mentioned standards and interpretations would have a material impact on the consolidated financial statements of Recticel. Application of IFRS 11 will require to present joint ventures on the basis of the equity method. Reference is made to note II.6.7. for the contribution of the joint ventures in the consolidated accounts of Recticel as of 31 December 2012 and as of 31 December 2011.
The amended standard IAS19 -Employee Benefits- will be applicable as from 2013, with a restatement of the 2012 net pension liabilities.
The "corridor" method, which allowed to defer the recognition of the expenses over multiple accounting periods, will no longer be used. This accounting change will have an estimated impact before taxes on the consolidated equity of EUR -23.5 million as per 01.01.2013.
The IASB issued a new standard on Joint Arrangements in May 2011 which is effective for years commencing 01 January 2013. This standard has, however, been endorsed by the European Financial Reporting Advisory Group (EFRAG) to be applied as from 01 January 2014.
The principle set out in IFRS 11 is that when a party has the rights to the assets and the obligations for the liabilities of a joint arrangement, then the joint arrangement is considered to be a "joint operation" and those assets and liabilities should be recognized by the parties to the joint arrangement. Where the parties to the arrangement have an interest to the net assets, then the arrangement will be classified as a joint venture and subject to equity method accounting under IAS 28 (2011).
Considering this new standard, the joint ventures actually integrated by the proportional consolidation method will be assimilated as joint arrangements with an interest to the net assets, and therefore the net equity method will be applied for the joint ventures as from 01 January 2014.
The financial statements are presented in thousand euro (EUR) (unless specified otherwise), which is the currency of the primary economic environment in which the Group operates. The financial statements of foreign operations are translated in accordance with the policies set out below under 'Foreign Currencies'.
The financial statements have been prepared on the historical cost basis, except as disclosed in the accounting policies below. Investments in equity instruments which are not quoted in an active market and whose fair value cannot be reliably measured by alternative valuation methods are carried at cost.
Transactions in currencies other than EUR are accounted for at the exchange rates prevailing at the date of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are translated at closing rate. Non-monetary assets and liabilities carried at fair value and denominated in foreign currencies are translated at the exchange rates prevailing at the date the fair value was determined. Gains and losses resulting from such translations are recognised in the financial result of the income statement, except when deferred in equity.
For purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at closing rate. Income and expenses are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Resulting exchange differences are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate). On disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a jointly controlled entity that includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), exchange differences accumulated in equity are recognised in the income statement.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or jointly controlled entities that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
Consolidated financial statements include subsidiaries, interests in jointly controlled entities through proportional consolidation, and associates accounted for under the equity method.
Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances.
All intra-group transactions, balances, income and expenses are eliminated in consolidation.
Subsidiaries are entities that are controlled directly or indirectly. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Consolidation of subsidiaries starts from the date Recticel controls the entity until the date such control ceases.
Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
However, when the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.
Entities over which Recticel contractually agrees to share control with other venturer(s) are jointly controlled entities. Such agreement ensures that strategic, financial and operating decisions require the unanimous consent of all the venturers.
The Group reports its interests in jointly controlled entities using proportionate consolidation, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The Group's share of the assets, liabilities, income and expenses of jointly controlled entities is combined with the equivalent items in the consolidated financial statements on a line-by-line basis.
Any goodwill arising on the acquisition of the Group's interest in a jointly controlled entity is accounted for in accordance with the Group's accounting policy for goodwill arising in a business combination (see below under Business Combinations).
When a group entity transacts with its jointly controlled entity, profits and losses resulting from the transactions with the jointly controlled entity are recognised in the Group' consolidated financial statements only to the extent of interests in the jointly controlled entity that are not related to the Group.
The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, an investment in an associate is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate. When the Group's share of losses of an associate exceeds the Group's interest in that associate (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.
Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognised at the date of acquisition is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.
The requirements of IAS 39 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of fair value and fair value less costs to sell) with its carrying amount, Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.
Upon disposal of an associate that results in the Group losing significant influence over that associate, any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with IAS 39. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when it loses significant influence over that associate.
Acquisitions of businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred.
When Recticel acquires an entity or business, the identifiable assets and liabilities of the acquiree are recognised at their fair value at acquisition date, except for:
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Where such a difference is negative, the excess is, after a reassessment of the values, recognised as income immediately as a bargain purchase gain.
Non-controlling interests (minority shareholders) that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis.
If Recticel increases its interest in an entity or business over which it did not yet exercise control (in principle increasing its interest up to and including 50% to 51% or more) (a business combination achieved in stages), the Group's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (maximum one year after acquisition date), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
Goodwill arising on an acquisition of a business is carried at cost less accumulated impairment losses, if any, and is presented separately in the consolidated statement of financial position.
Goodwill is reviewed for impairment at least annually. Any impairment loss is recognised immediately in the income statement and is not subsequently reversed.
On disposal of a subsidiary, associate or jointly controlled entity, the related goodwill is included in the determination of the profit or loss on disposal.
An item of property, plant and equipment is recognised if it is probable that associated future economic benefits will flow to the Group and if its cost can be measured reliably. After initial recognition, all items of property, plant and equipment are stated at cost, less accumulated depreciation and impairment losses, except for land which is not depreciated. Cost includes all direct costs and all expenditure incurred to bring the asset to its working condition and location for its intended use.
Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Subsequent expenditure related to an item of property, plant and equipment is expensed as incurred.
Depreciation is provided over the estimated useful lives of the various classes of property, plant and equipment using the straight-line method. Depreciation starts when the assets are ready for their intended use. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
The estimated useful lives of the most significant items of property, plant and equipment are within the following ranges:
| Land improvements | : 25 years |
|---|---|
| O ffices |
: 25 to 40 years |
| Industrial buildings | : 25 years |
| P lants |
: 10 to 15 years |
| Machinery | |
| Heavy | : 11 to 15 years |
| Medium | : 8 to 10 years |
| Light | : 5 to 7 years |
| P re-operating costs |
: 5 years maximum |
| Equipment | : 5 to 10 years |
| Furniture | : 5 to 10 years |
| Hardware | : 3 to 10 years |
| Vehicle fleet | |
| Cars | : 4 years |
| Trucks | : 7 years |
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.
Leases are classified as financial leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under financial leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease.
The corresponding liability to the lessor is included in the balance sheet as a financial lease obligation. Lease payments are apportioned between financial charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Assets held under financial leases are depreciated over their expected useful lives on the same basis as owned assets, except if the lease does not transfer ownership of the asset, in which case the leased asset is depreciated over the shorter of its useful live and the lease term.
Leases under which substantially all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Rents under operating leases are charged to income on a straight-line basis over the lease term. Benefits received or to be received as an incentive to enter into an operating lease are also recognised on a straight-line basis over the lease term.
Except for goodwill and intangible assets with an indefinite useful life which are tested for impairment at least annually, other tangible and intangible fixed assets are reviewed for impairment when there is an indication that their carrying amount will not be recoverable through use or sale. If an asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cashgenerating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell or value in use and the carrying amount. In assessing the fair value or value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in previous years. However, impairment losses on goodwill are never reversed.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.
When applying the valuation rules, there is a need in specific cases to make an accounting assessment. This assessment is carried out by making the most precise estimate possible of likely future trends. The management draws up its assessment on the basis of various realistically estimated parameters, such as future market expectations, sector growth rates, industry studies, economic realities, budgets and multi-annual plans, expected profitability studies, etc. The most important elements subject to this within the Recticel Group are: impairments, provisions and deferred tax items. For these items reference is made to the annexes II.4.5., II.5.1., II.5.3. and II.5.18.
Investment property, which is property held to earn rentals and/or for capital appreciation, is stated at its fair value at the balance sheet date. Gains or losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise.
Investments are recognised or derecognised on the trade date which is the date the Group undertakes to purchase or sell the asset. Financial investments are initially measured at the fair value of the consideration given, including transaction costs.
Investments held for trading or available for sale are subsequently carried at their fair value. Where securities are held for trading purposes, gains and losses arising from changes in fair value are included in net profit or loss for the period.
For investments available for sale, gains and losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is deemed to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period.
Equity participations classified as 'available for sale', which are not quoted on an active market and for which the fair value cannot be measured reliably by alternative valuation methods, are measured at cost.
Financial investments which are 'held to maturity' are carried at amortised cost, using the effective interest rate method, except for short-term deposits, which are carried at cost.
The impairment loss of a financial asset measured at amortised cost is equal to the difference between the carrying amount and the estimated future cash flows, discounted at the initial effective rate. The impairment of an available-for-sale financial asset is calculated with reference to its current fair value.
An impairment test is performed, on an individual basis, for each material financial asset. Other assets are tested as groups of financial assets with similar credit risk characteristics.
Impairment losses are recognised in profit and loss. With respect to available-for- sale assets, in the event of an impairment loss, the cumulative negative changes in fair value previously recognised in equity are transferred to profit and loss.
The impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment was recognised.
For financial assets measured at amortised cost and available-forsale financial assets, the reversal is recognised in profit and loss. For available-for-sale financial assets which represent equity instruments, the reversal is recognised directly in equity. Impairment losses relating to assets recognised at cost cannot be reversed.
The Group derecognises a financial asset only when the contractual rights to the cash flows from the assets expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for the amounts it may have to pay.
If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On the entire derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity, is recognised in profit and loss.
On the partial derecognition of a financial asset other than its entirety (e.g. when the Group retains an option to repurchase part of a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer.
The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss.
A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method.
Net realisable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale.
Short-term receivables are recognised at their nominal value, as reduced by appropriate allowances for estimated irrecoverable amounts.
Interest-bearing borrowings and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all its liabilities.
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issuance costs.
The components of compound instruments (convertible notes) issued by the Company are classified separately as debt component and equity component in accordance with the substance of the contractual arrangements and the definitions of the debt portion and an equity portion of such instrument.
At the time the a conversion option will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company's own equity instruments, such compound instrument is re-qualified as an equity instrument.
At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar nonconvertible instruments. This amount is recorded as a liability on an amortised costs basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date.
The value of the conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects and is not subsequently remeasured.
In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case the balance recognised in equity will be transferred to financial liability.
When the conversion option remains unexercised at the maturity date of the convertible note, the balance recognised in equity will be transferred to financial liability. No gain or loss is recognised in profit or loss upon conversion or expiration of the conversion option.
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognised directly in equity. Transaction costs relating to the liability component are including in the carrying amount of the liability component and are amortised over the lives of the convertible notes using the effective interest method.
Interest-bearing borrowings are classified at fair value through profit and loss ("FVTPL") if they are held for trading. Interestbearing borrowings at FVTPL are stated at fair value with any resultant gains or losses recognised in profit and loss. A financial liability is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as FVTPL unless they are designated and effective as hedges.
In accordance with the laws and practices of each country, the affiliated companies of the Group operate ''defined benefit'' and/or ''defined contribution retirement benefit plans''.
Payments to defined contribution plans are charged as expenses as they fall due.
Regarding the ''defined benefit plans'', the amount recognised in the balance sheet is the present value of the ''defined benefit obligations'' adjusted for the unrecognised actuarial gains and losses, less the fair value of any plan assets and any past service cost not yet recognised.
If the amount to be recognised in the balance sheet is negative, the asset does not exceed the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.
In the income statement, current and past service costs, actuarial gains and losses are charged in ''other operating income & expenses'', while interest cost and expected return on plan assets are booked in ''other financial income & expenses''.
The present value of the ''defined benefit obligation'' and the related current and past service costs are calculated by qualified actuaries using the ''projected unit credit method''.
The discount rate is based on the prevailing yields of high quality corporate bonds (i.e. AA corporate bonds) that have maturity dates approximating to the terms of the benefit obligations. The discount rate is rounded to the closest 25 bp.
The actuarial gains and losses, resulting from differences between previous actuarial assumptions and actual experience, as well as changes in actuarial assumptions, are determined separately for each ''defined benefit plan'' and recognised according to the following principle: the actuarial gains and losses exceeding a corridor of 10% of the higher of the fair value of plan assets and the present value of the ''defined benefit obligations'' are recognised in the income statement over the average remaining service lives of the plan participants involved.
Past service costs, which arise from plan amendments, are recognised as an expense over the average period until the benefits become vested.
As of year-end 2012 the schemes "unemployment allowance with company supplement" in Belgium have been reclassified from post-employment benefits to termination benefits. Due to a change in its policy towards early retirement, Recticel no longer considers to have a constructive obligation to provide those benefits.
The amended standard IAS19 -Employee Benefits- will be applicable as from 2013, with a restatement of the 2012 net pension liabilities.
The "corridor" method, which allowed to defer the recognition of the expenses over multiple accounting periods, will no longer be used. This accounting change will have an estimated impact before taxes on the consolidated equity of EUR -23.5 million as per 01.01.2013.
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of a Black & Scholes model. Further details on how the fair value of equity-settled share-based transactions has been determined can be found in the notes.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.
The above policy is applied to all equity-settled share-based payments that were granted after 7 November 2002 that vested after 1 January 2005. No amount has been recognised in the financial statements in respect of the other equity-settled sharedbased payments.
Provisions are recognised in the balance sheet when the Group has a present obligation (legal or constructive) resulting from a past event and which is expected to result in a future outflow of resources which can be reliably estimated.
Provisions for warranty costs are recognised at the date of sale of the relevant products based on the best estimate of the expenditure required to settle the Group's liability.
Provisions for restructuring costs are recognised when the Group has a detailed formal plan for restructuring that has been communicated to affected parties before the balance sheet date.
Interest-bearing borrowings are recorded at the proceeds received, net of transaction costs incurred.
Borrowings are subsequently stated at amortised cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value (including premiums payable on settlement or redemption) is recognised in the income statement over the period of the borrowing.
Trade payables which are not interest-bearing are stated at cost, being the fair value of the consideration to be paid.
Derivative financial instruments are accounted for as follows:
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly in equity and the ineffective portion is recognised immediately in the income statement. If the cash flow hedge of a firm commitment or a forecasted transaction results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of an asset or a liability, amounts deferred in equity are recognised in the income statement in the same period in which the hedged item affects net profit or loss.
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated in the foreign currency reserve. The gain or loss to the ineffective portion is recognised immediately in profit and loss.
A derivative instrument is recognised as fair value hedge when it hedges the exposure to variation of the fair value of the recognised assets or liabilities. Derivatives classified as a fair value hedge and the hedged assets or liabilities are carried at fair value. The corresponding changes of the fair value are recognised in the income statement.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to net profit or loss for the period.
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Revenue from the sale of goods is recognised when the goods are delivered and titles have passed, at which time all the following conditions are satisfied:
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts throughout the expected life of the financial asset to that asset's net carrying amount.
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date.
This is normally measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion.
Variations in contract work, claims and incentive payments are recognised when it is probable that these will be accepted by the customer and the amounts can be measured reliably.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.
Government grants relating to staff training costs are recognised as income over the periods required to match them with the related costs and are deducted from the related expense.
Government grants relating to property, plant & equipment are treated by deducting the received grants from the carrying amount of the related assets. These grants are recognised as income over the useful life of the depreciable assets.
The tax expense represents the sum of the current tax expense and deferred tax expense.
The current tax expense is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expenditure that are taxable or deductible in other years and it further excludes items that will never become taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit. It is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and when it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at least at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Drawing up the annual accounts in accordance with IFRS requires management to make the necessary estimates and assessments. The management bases its estimates on past experience and other reasonable assessment criteria. These are reviewed periodically and the effects of such reviews are taken into account in the annual accounts of the period concerned. Future events which may have a financial impact on the Group are also included in this.
The estimated results of such possible future events may consequently diverge from the actual impact on results. Assessments and estimates were made, inter alia, regarding:
It is not excluded that future revisions of such estimates and assessments could trigger an adjustment in the value of the assets and liabilities in future financial years.
An impairment examination is carried out with regard to the goodwill, intangible assets and property, plant and equipment. Such an examination is carried out annually, or more frequently if there are indications that these items should be subject to impairment (see notes II.5.1., II.5.2. and II.5.3.).
The book value of the assets retained for impairment examination represents about 38.5% of the total goodwill, 27.2% of the total property, plant and equipment and 25.9% of the total intangible assets. The examined assets relate to the Flexible Foams' activities in the United Kingdom, in Spain and in Germany, as well as to the Automotive operations of the Group.
The most relevant results of these examinations are listed below:
| Book value in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS | AUTOMOTIVE | Total | |||
| United Kingdom | Spain | Other | Interiors | Seating Proseat | ||
| Goodwill | 4 491 | 0 | 0 | 0 | 8 977 | 13 468 |
| Other intangible assets | 250 | 41 | 75 | 1 419 | 1 588 | 3 373 |
| Property, plant & equipment | 5 668 | 8 105 | 9 952 | 33 669 | 16 418 | 73 812 |
| Total | 10 409 | 8 146 | 10 027 | 35 088 | 26 983 | 90 653 |
| Impairments | 0 | 0 | (952) | (603) | 0 | (1 555) |
| Net book value | 10 409 | 8 146 | 9 075 | 34 485 | 26 983 | 89 098 |
Footnote: The working capital is not included in the analysis.
For the impairment examination of the balance sheet items included in the table above, certain assumptions were made. The recoverable amount of the total "cash-generating unit" ("CGU") is determined on the basis of the fair value or value in use model.
On the basis of this examination and considering the business decisions taken, i.e. closure of certain plants (Automotive and Flexible Foams), it was decided to account for impairments for a total amount of EUR 1.6 million (see table above).
When determining its expected future cash flows, the Group takes into account prudent, though realistic, assumptions regarding the evolution of its markets, its sales, the raw materials prices, the impact of past restructurings and the gross margins, which all are based on (i) the past experiences of the management and/or (ii) which are in line with trustworthy external information sources. It can however not be excluded that a future reassessment of assumptions and/or market analysis induced by future developments in the economic environment might lead to the recognition of additional impairments.
For the discounting of the future cash flows, an overall Groupbased discount rate of 8% is used for all CGUs. This discount rate is based on a weighted average cost of capital based on the current market expectations of the time value of money and risks for which future cash flows must be adjusted.
II.1.5.1.1.1. Key assumptions
For the CGU "Flexible Foams – United Kingdom" the fair value model projections are based on budgets and financial plans covering a four-year period. After this 4-year period, a perpetuity value is taken into account without growth rate. 2012 was a difficult year due to industrial difficulties and the rise of raw material prices which could not be fully passed on in the selling prices. A major restructuring plan has been initiated in 2011 and is planned for execution over a 4-year period until 2014. The closing of the "Carobel" plant in 2H/2011 was the first phase and the closing of the "Gwalia" plant in 2H/2012 was the second phase. Management expects operations to recover after the reorganisation as a result of improvement of the industrial performance and better gross margins.
For the CGU "Flexible Foams – Spain", the value in use model projections are based on budgets and financial plans covering a four-year period. After this 4-year period, a perpetuity value is taken into account without growth rate. Slimming down the workforce and a reduction in the number of plants are intended to return Spain to profitability by 2014. The value in use is dependent on the successful implementation of the business plan. The future cash flows consequently take account of the 2013- 2016 business plan and a perpetuity value based on an expected operating cash flow in 2016 without growth rate.
Under the heading "Flexible Foams - Other", a major restructuring has been achieved in Bexbach (Eurofoam Germany) and lead to the recognition of an impairment amounting to EUR -0.5 million related mainly to idle equipment. Furthermore an impairment of EUR -0.5 million has been recognized on an industrial building located in Legutiano (Spain).
The discount rate used amounts to 8% and is based on a weighted average cost of capital (WACC) based on the current market expectations of the time value of money and risks for which future cash flows must be adjusted. On this basis, the fair value of the CGU "Flexible Foams – United Kingdom" amounts to 1.9 times the net asset book value and the value in use of the CGU "Flexible Foams – Spain" amounts to 2.1 times the net asset book value.
A sensitivity analysis is performed to measure the impact of a changing WACC rate on the outcome of the impairment tests.
Another sensitivity analysis is performed to measure the impact of a changing gross margin on the outcome of the impairment tests.
Consequently, for 2012
For the CGU "Interiors", the value in use model projections are based on the budgets and financial plans for the duration of each project/model, in combination with an overview of the entire capacity utilisation. Strongly impacted by the economic crisis in 2009, which affected the Automotive - Interiors activities, the profitability level improved significantly in 2011 and 2012 as a result of the reorganisation and other efficiency programs. Project assets are depreciated over the project life time. As such, at the end of the project production life time, there will be no residual book value of specific project related assets.
The CGU "Interiors" also uses a project approach, as a result of which impairments are booked on property, plant and equipment and intangible assets if:
This approach has led to an impairment in 2012 of EUR -0.6 million.
"Proseat" is considered as a single CGU. Based on the recurrent business model of this activity, the perpetuity method has been used to determine the residual value.
Budgets 2013 have been adapted to the most recent information available in terms of programs and volumes. A plan for the period 2014-2018 has been established according to available information on future programs and the profitability of current programs. The plan for 2018 is used as the basis for the perpetuity calculation with a growth rate of 1%. The chemical raw material prices have been adjusted in all years according to the actual prices and the expectations of management.
The discount rate used amounts to 8% and is based on a weighted average cost of capital based on the current market expectations of the time value of money and the risks for which future cash flows must be adjusted. At this level of discount rate, the value in use of the CGU "Proseat" amounts to 1.8 times the net asset book value.
With regard to the CGU "Interiors", an increase in the discount rate to 9% would not give rise to additional impairment.
With regard to the CGU "Proseat", an increase in the discount rate to 9% would give a value in use of the CGU "Proseat" amounting to 1.6 times the book value. Excluding the growth rate of 1% in the perpetuity analysis, and with a discount rate of 8% the value in use of the CGU "Proseat" would still amount to 1.6 times the book value of the long term assets. In a second sensitivity analysis where the cash flows, discounted at 8%, are reduced to 90% of the original forecast and plan, the value in use of the CGU "Proseat" would still amount to 1.6 times the book value of the long term assets.
With regard to the CGU "Interiors", an increase in the discount rate to 9% would not give rise to additional impairment.
With regard to the CGU "Proseat", an increase in the discount rate to 9% would give a value in use of the CGU "Proseat" amounting to 1.6 times the book value. Excluding the growth rate of 1% in the perpetuity analysis, and with a discount rate of 8% the value in use of the CGU "Proseat" would still amount to 1.7 times the book value of the long term assets.
Provisions regarding defined benefit plans are recognised in the balance sheet in accordance with the valuation rules (IAS 19). The amount recognised in the balance sheet is based on actuarial calculations, the result of which is determined by a number of assumptions, as described in note II.5.17. These actuarial assumptions are reviewed regularly and adapted where necessary.
Considering the changes in the Belgian legislation with regard to early retirement rights and the Group's confirmed policy to maintain employability of its senior workforce, the Group reversed EUR 7.0 million of accumulated provisions for early retirement rights. This reversal is included in the reported REBITDA.
The amended standard IAS19 –Employee Benefits– will be applicable as from 2013, with a restatement of the 2012 net pension liabilities.
The "corridor" method, which allowed to defer the recognition of the expenses over multiple accounting periods, will no longer be used. This accounting change will have an estimated impact before taxes on the consolidated equity of EUR -23.5 million as per 01.01.2013.
Deferred tax assets are recognised for the unused tax losses carried forward and unused tax credits, to the extent that it is expected that future taxable profits will be available against which these unused tax losses carried forward and unused tax credits can be offset. For this purpose, the management bases its opinion on factors such as long-term tax planning strategy and opportunities (see note II.4.5.).
The IASB issued a new standard on Joint Arrangements in May 2011 which is effective for years commencing 01 January 2013. This standard has, however, been endorsed by the European Financial Reporting Advisory Group (EFRAG) to be applied as from 01 January 2014.
The principle set out in IFRS 11 is that when a party has the rights to the assets and the obligations for the liabilities of a joint arrangement, then the joint arrangement is considered to be a "joint operation" and those assets and liabilities should be recognized by the parties to the joint arrangement. Where the parties to the arrangement have an interest to the net assets, then the arrangement will be classified as a joint venture and subject to equity method accounting under IAS 28 (2011).
Considering this new standard, the joint ventures presently integrated by the proportional consolidation method will be assimilated to joint arrangements with an interest to the net assets, and therefore the net equity method will be applied for these joint ventures as from 01 January 2014.
The impact of this accounting change on the consolidated financial statements of 2012 would be as follows:
| in thousand EUR | ||
|---|---|---|
| 2012 | ||
| Group Recticel | As currently reported |
When applying the equity method to its joint ventures |
| Sales | 1 319 488 | 1 035 050 |
| Gross Profit | 210 950 | 170 719 |
| Income from associates and joint ventures | 711 | 5 969 |
| EBIT | 39 737 | 35 964 |
| Result of the period before taxes | 25 398 | 24 807 |
| Result of the period after taxes | 17 564 | 17 564 |
| Non-current assets | 390 720 | 386 111 |
| Current assets | 310 668 | 248 196 |
| of which Cash & cash equivalents | 27 008 | 18 533 |
| Non-current liabilities | 189 408 | 159 937 |
| of which Financial liabilities | 142 507 | 120 460 |
| Current liabilities | 251 356 | 213 746 |
| of which Financial liabilities | 57 840 | 36 423 |
| Net cash flow from operating activities | 41 229 | 20 925 |
| Net cash flow from investing activities | (40 269) | (21 965) |
| Net cash flow from financing activities | (28 098) | (27 960) |
Management does not expect that the application of IFRS 10 will have a material impact on the statement of financial position and income statement at initial application of that standard.
Changes in the scope of consolidation in 2012 related to the following elements:
In order to compare the 2012 figures with those of 2011, it is also necessary to take account of the following changes in 2011:
– As from 1 July 2011 Recticel GuKoTech GmbH has been sold.
Consolidated sales decreased by EUR 58.6 million (-4.3%) to EUR 1,319.5 million.
With the same scope of consolidation and at unchanged exchange rates, sales would have contracted by -5.2% (EUR -71.3 million). The changes in the scope of consolidation resulted in a net increase of sales by EUR 0.3 million (+0.03%). Exchange differences had a positive impact of EUR 12.4 million (+0.89%).
The Group has adopted IFRS 8 with effect from 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of the internal reporting structure of the Group that allows a regular performance review by the chief operating decision maker and an adequate allocation of resources to each segment. The identification of the Group's reportable segments has not changed following the adoption of IFRS 8. The information reported to the Group's chief operating decision maker for the purposes of resource allocation and performance assessment per segment is more specifically focussed on Sales, EBITDA, EBIT, Capital Employed and Operational Cash Flow per segment. The principal market segments for these goods are the four operating segments: Flexible Foams, Bedding, Insulation, Automotive, and Corporate. For more details on these segments, reference is made to the first part of this annual report. Information regarding the Group's reportable segments is presented below. Inter-segment sales are made at prevailing market conditions.
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS |
BEDDING AUTOMOTIVE(2) | INSULATION ELIMINATIONS CONSOLIDATED | |||
| SALES | ||||||
| External sales | 533 832 | 275 809 | 289 242 | 220 605 | 1 319 488 | |
| Inter-segment sales | 54 429 | 737 | 462 | 80 | (55 708) | 0 |
| Total sales | 588 261 | 276 546 | 289 704 | 220 685 | (55 708) | 1 319 488 |
| EARNINGS BEFORE INTEREST AND TAXES (EBIT) | ||||||
| Segment result | 9 763 | 7 285 | 5 881 | 32 136 | 0 | 55 065 |
| Unallocated corporate expenses (1) | (15 328) | |||||
| EBIT | 9 763 | 7 285 | 5 881 | 32 136 | 0 | 39 737 |
| Financial result | (14 339) | |||||
| Result for the period before taxes | 25 398 | |||||
| Income taxes | (7 834) | |||||
| Result for the period after taxes | 17 564 | |||||
| of which non-controlling interests | 0 | |||||
| of which share of the Group | 17 564 |
(1) Includes mainly headquarters' costs (EUR 12.2 million (2011: EUR 12.0 million)) and R&D expenses (Corporate Programme) (EUR 3.0 million (2011: EUR 3.0 million)).
(2) EBIT in Automotive comprises a EUR 1.8 million settlement for infringment of an Interiors patent in the USA since 2010.
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS | BEDDING | AUTOMOTIVE | INSULATION | CORPORATE | CONSOLIDATED |
| Depreciation and amortisation | 13 541 | 5 509 | 16 019 | 3 992 | 788 | 39 849 |
| Impairment losses recognised in profit and loss | 953 | 0 | 602 | 0 | 0 | 1 555 |
| EBITDA | 24 256 | 12 794 | 22 502 | 36 128 | (14 539) | 81 141 |
| Capital expenditure | 10 823 | 3 792 | 6 345 | 25 850 | 5 292 | 52 102 |
In 2012, impairments were recognised mainly in respect to a number of tangible assets in the Czech Republic (Automotive – Interiors), Germany (Flexible Foams) and in Spain (Flexible Foams).
The Board of Directors examined and evaluated the carrying values of (i) the intangible assets, (ii) the goodwill and (iii) the tangible assets, as well as the assumptions used for the impairment examinations (see section II.1.5.), and concluded that for 2012, apart from the cases mentioned, there was no need for additional impairments.
However, this judgment may be revised in future periods, should indications arise that future cash flow generation could be negatively influenced by new developments.
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS | BEDDING | AUTOMOTIVE | INSULATION | ELIMINATION | CONSOLIDATED |
| ASSETS | ||||||
| Segment assets | 307 097 | 102 034 | 143 206 | 122 190 | (112 453) | 562 074 |
| Investment in associates | 13 802 | 0 | 0 | 0 | 0 | 13 802 |
| Unallocated assets | 125 512 | |||||
| Total consolidated assets | 701 388 | |||||
| LIABILITIES | ||||||
| Segment liabilities | 130 792 | 47 014 | 58 506 | 49 419 | (112 452) | 173 279 |
| Unallocated liabilities | 267 485 | |||||
| Total consolidated liabilities (excluding equity) |
440 764 |
The unallocated assets which amount to EUR 125.5 million include mainly the following items:
– Financial receivables for EUR 22.1 million
– Current tax receivables for EUR 4.3 million
The unallocated liabilities which amount to EUR 267.5 million (equity excluded) include mainly the following items:
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS | BEDDING | AUTOMOTIVE | INSULATION | ELIMINATIONS | CONSOLIDATED |
| SALES | ||||||
| External sales | 539 187 | 291 569 | 324 324 | 223 042 | 1 378 122 | |
| Inter-segment sales | 56 974 | 582 | 480 | 34 | (58 070) | 0 |
| Total sales | 596 161 | 292 151 | 324 804 | 223 076 | (58 070) | 1 378 122 |
| EARNINGS BEFORE INTEREST AND TAXES (EBIT) | ||||||
| Segment result | 7 488 | 10 917 | 2 755 | 35 840 | 0 | 57 000 |
| Unallocated corporate expenses (1) | (14 965) | |||||
| EBIT | 7 488 | 10 917 | 2 755 | 35 840 | 0 | 42 035 |
| Financial result | (16 684) | |||||
| Result for the period before taxes | 25 351 | |||||
| Income taxes | (7 933) | |||||
| Result for the period after taxes | 17 418 | |||||
| of which non-controlling interests | 0 | |||||
| of which share of the Group | 17 418 |
(1) Includes mainly headquarters' costs (EUR 12,0 million (2010: EUR 14.5 million)) and R&D expenses (Corporate Programme) (EUR 3,0 million (2010: EUR 3.3 million)).
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS |
BEDDING | AUTOMOTIVE | INSULATION | CORPORATE | CONSOLIDATED |
| Depreciation and amortisation | 13 228 | 5 725 | 18 269 | 3 594 | 688 | 41 504 |
| Impairment losses recognised in profit and loss | 1 906 | 0 | 3 354 | 0 | 0 | 5 260 |
| EBITDA | 22 622 | 16 642 | 24 378 | 39 434 | (14 277) | 88 799 |
| Capital expenditure | 12 068 | 1 963 | 6 988 | 9 041 | 3 281 | 33 340 |
In 2011, impairments were recognised mainly in respect to a number of tangible assets in the Czech Republic (Automotive – Interiors) and Turkey (Flexible Foams).
The Board of Directors examined and evaluated the carrying values of (i) the intangible assets, (ii) the goodwill and (iii) the tangible assets, as well as the assumptions used for the impairment examinations(see section II.1.5.), and concluded that for 2011, apart from the cases mentioned, there was no need for additional impairments.
However, this judgment may be revised in future periods, should indications arise that future cash flow generation could be negatively influenced by new developments.
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS | BEDDING | AUTOMOTIVE | INSULATION | ELIMINATION | CONSOLIDATED |
| ASSETS | ||||||
| Segment assets | 320 578 | 100 984 | 170 360 | 102 133 | (119 500) | 574 555 |
| Investment in associates | 13 436 | 0 | 0 | (479) | 0 | 12 957 |
| Unallocated assets | 140 612 | |||||
| Total consolidated assets | 728 124 | |||||
| LIABILITIES | ||||||
| Segment liabilities | 135 982 | 51 003 | 73 529 | 47 519 | (119 500) | 188 533 |
| Unallocated liabilities | 290 797 | |||||
| Total consolidated liabilities (excluding equity) |
479 330 |
The unallocated assets which amount to EUR 140.6 million include mainly the following items:
Cash& cash equivalent for EUR 54.6 million.
The unallocated liabilities which amount to EUR 290.8 million (equity excluded) include mainly the following items:
– Interest-bearing borrowings and bonds and notes for EUR 204.8 million
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS | BEDDING | AUTOMOTIVE | INSULATION | NOT ALLOCATED | CONSOLIDATED |
| 2012 | ||||||
| Impairment | (952) | 0 | (603) | 0 | 0 | (1 555) |
| Restructuring charges | (3 414) | (1 247) | (1 631) | 0 | 236 | (6 056) |
| Loss on liquidation or disposal of financial assets | (751) | 0 | 0 | 0 | 0 | (751) |
| Gain on disposal of financial assets | 0 | 0 | 0 | 0 | 0 | 0 |
| Fair value gain on investment property | 0 | 0 | 0 | 0 | 800 | 800 |
| Other | (1 525) | (569) | (8) | (190) | (1 217) | (3 509) |
| TOTAL | (6 642) | (1 816) | (2 242) | (190) | (181) | (11 071) |
| 2011 | ||||||
| Impairment | (1 906) | 0 | (3 354) | 0 | 0 | (5 260) |
| Restructuring charges | (233) | 344 | (221) | 0 | (492) | (602) |
| Loss on liquidation or disposal of financial assets | (115) | 0 | (38) | 0 | 0 | (153) |
| Gain on disposal of financial assets | 50 | 0 | 0 | 0 | 0 | 50 |
| Fair value gain on investment property | 0 | 0 | 0 | 0 | 2 800 | 2 800 |
| Other | (683) | (605) | (631) | 0 | 0 | (1 919) |
| TOTAL | (2 886) | (261) | (4 244) | 0 | 2 308 | (5 083) |
The Group's operations are mainly located in the European Union.
The following table provides an analysis of the Group's sales and fixed assets by geographical market.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2012 | 2011 |
| Belgium | 142 587 | 160 372 |
| France | 152 246 | 151 903 |
| Germany | 294 203 | 312 247 |
| Other EU countries | 573 914 | 594 031 |
| European Union | 1 162 950 | 1 218 553 |
| Other | 156 638 | 159 569 |
| Total | 1 319 588 | 1 378 122 |
Reliance on major customers: The Group has no major customers that represent more than 10% of total external revenues. The top-10 customers of the Group represents 18.7% of total sales.
| in thousand EUR | |||||
|---|---|---|---|---|---|
| Group Recticel | ACQUISITIONS, INCLUDING OWN PRODUCTION | ||||
| 31 Dec 2012 | 31 Dec 2011 | 2012 | 2011 | ||
| Belgium | 75 324 | 70 814 | 10 702 | 10 779 | |
| Germany | 43 219 | 49 174 | 4 316 | 6 144 | |
| Other EU countries | 154 860 | 138 510 | 34 657 | 15 143 | |
| European Union | 273 403 | 258 498 | 49 675 | 32 066 | |
| Other | 14 986 | 12 760 | 2 427 | 1 274 | |
| Total | 288 389 | 271 258 | 52 102 | 33 340 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2012 | 2011 |
| Other operating revenues | 15 270 | 17 430 |
| Other operating expenses | (12 237) | (9 067) |
| TOTAL | 3 033 | 8 363 |
| Restructuring costs | (6 915) | (1 849) |
| Gain (Loss) on disposal of intangible and tangible assets | 1 013 | 2 390 |
| Gain (Loss) on disposal of financial assets | 173 | (93) |
| Fair value gains | 800 | 4 094 |
| Other | 7 962 | 3 820 |
| TOTAL | 3 033 | 8 363 |
During 2012, restructurings were carried out in various locations or declarations of intent were made to do so in a number of plants. Net restructuring charges were composed of (i) new provisions for reorganisation and onerous contracts (EUR 2.6 million), (ii) the reversal of previously existing provisions for reorganisation and onerous contracts (EUR 0.7 million) and (iii) the recognition of direct restructuring costs (EUR 5.0 million). Restructuring charges mainly related to the Flexible Foams activities in Germany (Eurofoam), the United Kingdom, Greece and The Netherlands; marginally compensated by a reversal of excess provisions in Spain. In Automotive - Interiors new provisions for restructurings were mainly recognised in Germany and Belgium, partially compensated by a reversal of excess provisions in the USA. In Bedding new provisions for restructurings were mainly recognised in Germany, Austria and Finland, marginally compensated by a reversal of excess provisions in Switzerland.
During 2011, restructurings were carried out in various locations or declarations of intent were made to do so in a number of plants. Net restructuring charges were composed of (i) new provisions for reorganisation and onerous contracts (EUR 3.0 million), (ii) the reversal of previously existing provisions for reorganisation and onerous contracts (EUR 2.9 million) and (iii) the use in cash of existing provisions for reorganisation and onerous contracts (EUR 17.3 million). Restructuring charges mainly related to the Flexible Foams activities in Spain and Belgium (use of 2010 provisions for reorganisation), compensated by new restructuring charges in Finland, The Netherlands and the United Kingdom. In Automotive new provisions for restructurings were mainly recognised in: (i) Seating (Proseat): in France, Germany and Spain, and (ii) Interiors: in the USA and Germany, compensated by a reversal of excess provisions in Belgium.
In 2012 this item related to a capital gain on the sale of: (i) land in Poland (Bedding) (EUR 0.5 million), (ii) an industrial building in The Netherlands (EUR 0.3 million) and (iii) various other equipment, furniture and vehicles in different countries (EUR 0.2 million).
In 2011 this item related to a capital gain on the sale of: (i) an office building in Switzerland (Bedding) (EUR 1.3 million), (ii) an industrial building in The Netherlands (EUR 0.7 million), (iii) land in Belgium (EUR 0.2 million) and land in Poland (EUR 0.2 million).
In 2012 this item relates mainly to capital gain on the disposal of the Italian subsidiary A.R.T.E. srl (Flexible Foams).
In 2011 this item relates mainly to (i) the remaining cost of liquidation of LeBed SAS and (ii) a loss on the disposal of Epeda Werke GmbH to Cofel (Bedding – France).
The 2012 fair value gains relate to the fair value adjustment on investment property in Belgium (EUR 0.8 million).
The 2011 fair value gains relate to the fair value adjustment on investment property in Belgium (EUR 2.8 million) and to a realised gain on a financial investment in Luxembourg (EUR 1.3 million).
"Other" in 2012 comprised mainly:
(xii) additional legal fees (EUR -1.9 million) in relation with the ongoing EU investigation (Flexible Foams) and the Bundeskartellambt investigation in Germany (Bedding)
(xiii) advisory fees regarding strategic plan (EUR -1.2 million)
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | 2012 | 2011 | ||
| Sales | 1 319 488 | 100% | 1 378 122 | 100% |
| Purchases and changes in inventories | (690 478) | -52.3% | (741 353) | -53.8% |
| Other goods and services | (247 326) | -18.7% | (243 465) | -17.7% |
| Labour costs | (319 868) | -24.2% | (333 505) | -24.2% |
| Amortisation and depreciation on non-current assets | (38 650) | -2.9% | (40 455) | -2.9% |
| Impairments on non-current assets | (1 555) | -0.1% | (5 260) | -0.4% |
| Amounts written off on inventories and receivables | (1 017) | -0.1% | 328 | 0.0% |
| Other depreciation | (1 199) | -0.1% | (1 049) | -0.1% |
| Provisions | (2 388) | -0.2% | 1 239 | 0.1% |
| Revenue from (Loss on) investment operations | 0 | 0.0% | 23 | 0.0% |
| Fair value adjustement on investment properties | 800 | 0.1% | 2 800 | 0.2% |
| Realised gain on financial investment | 0 | 0.0% | 1 293 | 0.1% |
| Other revenues and expenses | 21 219 | 1.6% | 21 982 | 1.6% |
| Income from associates | 711 | 0.1% | 1 741 | 0.1% |
| Result from investments available for sale | 0 | 0.0% | (406) | 0.0% |
| EBIT | 39 737 | 3.0% | 42 035 | 3.1% |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2012 | 2011 |
| (Impairment)/Write-back impairment on investments available for sale | 0 | (406) |
| Dividends received | 0 | 0 |
| Total | 0 | (406) |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2012 | 2011 |
| Interest charges on bonds & notes | (2 499) | (2 433) |
| Interest on financial lease | (691) | (868) |
| Interest on long-term bank loans | (3 409) | (4 458) |
| Interest on short-term bank loans & overdraft | (2 121) | (1 928) |
| Interest on other long-term loans | (112) | (115) |
| Interest on other short-term loans | (229) | (271) |
| Net interest charges on Interest Rate Swaps | (2 307) | (2 757) |
| Net interest charges on foreign currency swaps | (376) | (472) |
| Total borrowing cost | (11 744) | (13 302) |
| Interest income from bank deposits | 158 | 170 |
| Interest income from financial receivables | 190 | 207 |
| Interest income from financial receivables and cash | 348 | 377 |
| Interest charges on other debts | (519) | (443) |
| Interest income from other financial receivables | 26 | 106 |
| Total other interest income & charges | (493) | (337) |
| Total interest income (charges) | (11 889) | (13 262) |
| Exchange rate differences | (495) | (799) |
| Premium on CAP/Floor contracts | (112) | (85) |
| Premium on put/call options | 0 | (250) |
| Result on derivative instruments | (112) | (335) |
| Interest actualisation and expected return on provisions for employee benefits | (1 769) | (2 111) |
| Interest actualisation for other provisions | (7) | (187) |
| Other financial result | (67) | 10 |
| Financial result | (14 339) | (16 684) |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2012 | 2011 |
| Recognised in the income statement | ||
| Current tax: | ||
| Domestic | (6) | (5) |
| Foreign | (3 237) | (1 567) |
| Total current tax | (3 243) | (1 572) |
| Tax effect on deferred tax adjustments related to previous years | 764 | (2 123) |
| Movements of temporary differences | (1 523) | (7 718) |
| Utilisation of previous years' losses | (7 311) | (5 646) |
| Deferred tax on current year's losses and prior losses not recognised in the past | 3 479 | 9 126 |
| Total deferred tax | (4 591) | (6 361) |
| Grand total | (7 834) | (7 933) |
| Group Recticel | 2012 | 2011 |
| Reconciliation of effective tax rate | ||
| Profit / (loss) before taxes | 25 398 | 25 352 |
| Minus income from associates | (711) | (1 741) |
| Result before tax and income from associates | 24 687 | 23 611 | ||
|---|---|---|---|---|
| Tax at domestic income tax rate of 33.99% | (8 391) | 33.99% | (8 025) | 33.99% |
| Tax effect of non-deductible expenses: | ||||
| Non-deductible amortisation of goodwill and intangibles | 25 | 0.10% | 0 | 0.00% |
| Expenses not deductible for tax purposes | (10 184) | -41.25% | (4 517) | -19.13% |
| Other | (222) | -0.90% | (238) | -1.01% |
| Tax effect of tax-exempt revenues: | ||||
| Non-taxable financial and other income | 5 479 | 22.19% | 12 315 | 52.16% |
| Other | 172 | 0.70% | 641 | 2.71% |
| Deferred tax effect resulting from a change in tax rates | (336) | -1.36% | (885) | -3.75% |
| Tax effect of current and deferred tax adjustments related to prior years | 706 | 2.86% | (2 123) | -8.99% |
| Effect of different tax rates of subsidiaries operating in other jurisdictions | 731 | 2.96% | 505 | 2.14% |
| Tax effect of notional interest deduction | 3 773 | 15.28% | 4 296 | 18.19% |
| Valuation allowance on deferred tax assets and tax assets not recognised | 413 | 1.67% | (9 902) | -41.94% |
| Tax expense and effective tax rate for the year | (7 834) | -31.73% | (7 933) | -33.60% |
| Group Recticel | 2012 | 2011 |
|---|---|---|
| Deferred tax income (expense) recognised directly in equity | ||
| Impact of movements in exchange rates | (61) | 21 |
| On effective portion of changes in fair value of cash flow hedges | 463 | 470 |
| Total | 402 | 491 |
| in thousand EUR | ||||
|---|---|---|---|---|
| 31 Dec 2012 | 31 Dec 2011 | |||
| Group Recticel | DEFERRED TAX ASSETS |
DEFERRED TAX LIABILITIES | DEFERRED TAX ASSETS |
DEFERRED TAX LIABILITIES |
| Recognised deferred tax assets and liabilities | ||||
| Intangible assets | 9 487 | (2 040) | 7 751 | (2 598) |
| Property, plant & equipment | 25 590 | (27 460) | 24 337 | (25 781) |
| Investments | 263 | (600) | 263 | (455) |
| Inventories | 238 | (21) | 572 | (29) |
| Receivables | 3 166 | (1 409) | 1 411 | (2 411) |
| Cash flow hedges (equity) | 2 781 | 0 | 2 320 | 0 |
| Fair value on trading and economic hedge | 5 | 0 | 23 | 0 |
| Other current assets | 1 100 | (145) | 1 208 | (156) |
| Pension provisions | 4 193 | (762) | 4 319 | (626) |
| Other provisions | 6 780 | (3 828) | 7 584 | (5 766) |
| Other liabilities | 5 469 | (4 381) | 2 515 | (3 636) |
| Notional interest deduction | 12 894 | 0 | 12 877 | 0 |
| Tax loss carry-forwards/ Tax credits | 172 527 | 0 | 184 979 | 0 |
| Total | 244 496 | (40 645) | 250 160 | (41 458) |
| Valuation allowance (1) | (166 885) | 0 | (167 547) | 0 |
| Set-off (2) | (32 090) | 32 090 | (32 323) | 32 323 |
| Total (as provided on the balance sheet) | 45 520 | (8 554) | 50 290 | (9 134) |
(1) The variation of EUR 0.7 million (EUR 166.9 million minus 167.5 million) is mainly explained by a valuation allowance of EUR 0.3 million, by an effect on tax rate changes of EUR -0.7 million and an
exchange impact of EUR -0.3 million. (2) According to IAS 12 (Income Taxes), deferred tax assets and deferred tax liabilities should, under certain conditions, be offset if they relate to income taxes levied by the same taxation authority.
| in thousand EUR | ||
|---|---|---|
| 2012 | 2011 | |
| One year | 2 891 | 350 |
| Two years | 3 293 | 2 820 |
| Three years | 1 971 | 4 074 |
| Four years | 7 231 | 6 531 |
| Five years and thereafter | 268 031 | 259 193 |
| Without time limit | 331 573 | 387 485 |
| Total | 614 992 | 660 453 |
Deferred tax assets not recognised by the Group apply to the following elements as at 31 Dec 2012:
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | TOTAL POTENTIAL DEFERRED TAX ASSETS |
RECOGNISED DEFERRED TAX ASSETS |
UNRECOGNISED DEFERRED TAX ASSETS |
GROSS AMOUNT OF UNRECOGNISED TAX LOSSES |
| Tax losses carried forward (*) | 172 527 | 54 408 | 118 119 | 406 133 |
| Notional interest deductions (*) | 12 894 | 33 | 12 861 | 37 837 |
| Property, plant and equipment | 25 590 | 5 424 | 20 166 | 63 720 |
| Pension provisions | 4 193 | 1 006 | 3 187 | 10 619 |
| Other provisions | 6 780 | 3 627 | 3 153 | 9 262 |
| Other temporary differences | 22 511 | 13 112 | 9 398 | 36 539 |
| Total | 244 496 | 77 611 | 166 885 | 564 111 |
(*) As of 31/12/2012, deferred tax assets and notional interests deductions of EUR 54.4 million (2011: EUR 61.1 million) are recognized out of EUR 615.0 million (2011: EUR 660.5 million) tax losses carryforward. These tax assets represent taxable gains realisable in the foreseeable future.
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | TOTAL POTENTIAL DEFERRED TAX ASSETS |
RECOGNISED DEFERRED TAX ASSETS |
UNRECOGNISED DEFERRED TAX ASSETS |
GROSS AMOUNT OF UNRECOGNISED TAX LOSSES |
| Tax losses carried forward (*) | 184 979 | 61 028 | 123 951 | 428 408 |
| Notional interest deductions (*) | 12 877 | 34 | 12 843 | 37 784 |
| Property, plant and equipment | 24 337 | 5 701 | 18 635 | 57 994 |
| Pension provisions | 4 319 | 1 179 | 3 140 | 10 344 |
| Other provisions | 7 584 | 4 338 | 3 246 | 9 642 |
| Other temporary differences | 16 064 | 10 332 | 5 732 | 21 644 |
| Total | 250 160 | 82 613 | 167 547 | 565 817 |
(*) As of 31/12/2011, deferred tax assets and notional interests deductions of EUR 61.1 million (2010: EUR 68.1 million) are recognized out of EUR 660.5 million (2010: EUR 651.3 million) tax losses carryforward. These tax assets represent taxable gains realisable in the foreseeable future.
Amounts recognised as distributions to equity holders in the period.
Dividend for the period ending 31 December 2011 of EUR 0.28 (2010: EUR 0.27) per share.
Proposed dividend for the period ending 31 December 2012 of EUR 0.29 per share, or in total for all shares outstanding EUR 8,390,122.20 (2011: EUR 8,100,807.68)
The proposed dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
The calculation of the basic and diluted earnings per share is based on the following data:
| Group Recticel | 2012 | 2011 |
|---|---|---|
| Net profit (loss) for the period (in thousand EUR) | 17 564 | 17 418 |
| Net profit (loss) from continuing operations | 17 564 | 17 418 |
| Net profit (loss) from discontinuing operations | 0 | 0 |
| Weighted average shares outstanding | ||
| Ordinary shares on 01 January | 28 931 456 | 28 931 456 |
| Ordinary shares on 31 December | 28 931 456 | 28 931 456 |
| Weighted average ordinary shares outstanding | 28 931 456 | 28 931 456 |
| in EUR | |
|---|---|
| 2012 | 2011 |
| 0.61 | 0.60 |
| 0.61 | 0.60 |
| 0.00 | 0.00 |
| in thousand EUR | ||
|---|---|---|
| Diluted earnings per share computation: | 2012 | 2011 |
| Dilutive elements | ||
| Net profit (loss) from continuing operations | 17 564 | 17 418 |
| Convertible bond (2) | 1 227 | 1 198 |
| Profit (loss) attributable to ordinary equity holders of the parent entity including assumed conversions | 18 791 | 18 616 |
| Weighted average ordinary shares outstanding | 28 931 456 | 28 931 456 |
| Stock option plans - warrants (1) | 470 395 | 461 643 |
| Convertible bond (2) | 4 588 986 | 4 375 951 |
| Weighted average shares for diluted earnings per share | 33 990 837 | 33 769 050 |
| in EUR | ||
|---|---|---|
| Group Recticel | 2012 | 2011 |
| Diluted earnings per share | 0,55 | 0,55 |
| Diluted earnings per share from continuing operations | 0.55 | 0.55 |
| Diluted earnings per share from discontinuing operations | 0.00 | 0.00 |
| 2012 | 2011 | |
|---|---|---|
| Anti-dilutive elements | ||
| Impact on net profit from continuing operations | ||
| Convertible bond (2) | 0 | 0 |
| Impact on weighted average ordinary shares outstanding | ||
| Stock option plan - warrants - "out-of-the-money" (1) | 465 859 | 465 757 |
| Convertible bond (2) | 0 | 0 |
(1) For 2012, four warrant plans were in-the-money; i.e. the plan of 2008, the plan of 2009, the plan of December 2011 and the plan of December 2012. They have been taken into account for the calculation of the diluted earnings per share. The remaining warrant plans are out-of-the-money and disclosed as anti-dilutive. For 2011, three warrant plans were in-the-money; i.e. the plan of 2008, the plan 2009 and the plan of December 2011, which were taken into account for the calculation of the diluted earnings per share. The remaining warrant plans were out-of-the-money and
disclosed as anti-dilutive. (2) For 2011 and 2012, the potential additional shares as a result of a conversion of the convertible bonds are dilutive and are therefore included in the calculation of the diluted earnings per share (assuming full conversion).
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | DEVELOPMENT COSTS |
TRADEMARKS, PATENTS & LICENCES |
CLIENT PORTFOLIO GOODWILL |
OTHER INTANGIBLE ASSETS |
ASSETS UNDER CONSTRUCTION AND ADVANCE PAYMENTS |
TOTAL | |
| At the end of the preceding year | |||||||
| Gross book value | 19 334 | 41 791 | 13 068 | 768 | 3 984 | 78 945 | |
| Accumulated amortisation | (18 398) | (29 791) | (10 526) | (452) | 0 | (59 167) | |
| Accumulated impairment | (41) | (6 310) | 0 | 0 | (847) | (7 198) | |
| Net book value | 895 | 5 690 | 2 542 | 316 | 3 137 | 12 580 | |
| Movements during the year: | |||||||
| Changes in scope of consolidation | 0 | 4 | 0 | 0 | 0 | 4 | |
| Acquisitions | 56 | 821 | 16 | 0 | 87 | 980 (1) | |
| Own production | 196 | 42 | 0 | 0 | 2 621 | 2 859 (1) | |
| Impairments | 0 | 0 | 0 | 0 | 0 | 0 | |
| Expensed amortisation | (544) | (2 159) | (781) | (67) | 0 | (3 551) | |
| Sales and scrapped | 0 | (28) | 0 | 0 | 0 | (28) (2) | |
| Transfers from one heading to another | 132 | 612 | 0 | 0 | (665) | 79 | |
| Exchange rate differences | 18 | 40 | 38 | 9 | 3 | 108 | |
| At year-end | 753 | 5 022 | 1 815 | 258 | 5 183 | 13 031 | |
| Gross book value | 14 156 | 42 988 | 12 510 | 698 | 6 032 | 76 384 | |
| Accumulated amortisation | (13 403) | (31 632) | (10 695) | (440) | 0 | (56 170) | |
| Accumulated impairment | 0 | (6 334) | 0 | 0 | (849) | (7 183) | |
| Net book value | 753 | 5 022 | 1 815 | 258 | 5 183 | 13 031 | |
| Useful life (in years) | 3-5 | 3-10 | 5-10 | 5 maximum | n.a. | ||
| Acquisitions | Disposals | ||||||
| Cash-out on acquisitions intangible assets | (3 982) | Cash-in from disposals intangible assets | 117 | ||||
| Acquisitions included in working capital | 143 | Disposals included in working capital | (89) | ||||
| Total acquisitions intangible assets (1) | (3 839) | Total disposals intangible assets (2) |
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | DEVELOPMENT COSTS |
TRADEMARKS, PATENTS & LICENCES |
CLIENT PORTFOLIO GOODWILL |
OTHER INTANGIBLE ASSETS |
ASSETS UNDER CONSTRUCTION AND ADVANCE PAYMENTS |
TOTAL |
| At the end of the preceding year | ||||||
| Gross book value | 20 558 | 40 368 | 13 209 | 708 | 4 158 | 79 001 |
| Accumulated amortisation | (19 320) | (28 800) | (9 996) | (384) | (58 500) | |
| Accumulated impairment | 0 | (6 345) | 0 | 0 | (849) | (7 194) |
| Net book value | 1 238 | 5 223 | 3 213 | 324 | 3 309 | 13 307 |
| Movements during the year: | ||||||
| Changes in scope of consolidation | 0 | 4 | 0 | 0 | 0 | 4 |
| Acquisitions | 0 | 239 | 42 | 0 | 733 | 1 014 (1) |
| Own production | 0 | 47 | 0 | 0 | 1 855 | 1 902 (1) |
| Impairments | (43) | 2 | 0 | 0 | 0 | (41) |
| Expensed amortisation | (516) | (2 351) | (755) | (73) | 0 | (3 695) |
| Sales and scrapped | 0 | 0 | 0 | 0 | (38) | (38) (2) |
| Transfers from one heading to another | 235 | 2 513 | 0 | 64 | (2 723) | 89 |
| Exchange rate differences | (19) | 13 | 42 | 1 | 1 | 38 |
| At year-end | 895 | 5 690 | 2 542 | 316 | 3 137 | 12 580 |
| Gross book value | 19 334 | 41 791 | 13 068 | 768 | 3 984 | 78 945 |
| Accumulated amortisation | (18 398) | (29 791) | (10 526) | (452) | 0 | (59 167) |
| Accumulated impairment | (41) | (6 310) | 0 | 0 | (847) | (7 198) |
| Net book value | 895 | 5 690 | 2 542 | 316 | 3 137 | 12 580 |
| Useful life (in years) | 3-5 | 3-10 | 5-10 | 5 maximum | n.a. | |
| Acquisitions | Disposals | |||||
| Cash-out on acquisitions intangible assets | (1 030) | Cash-in from disposals intangible assets | 55 | |||
| Acquisitions included in working capital | (1 886) | Disposals included in working capital | (17) |
Total acquisitions intangible assets (1) (2 916) Total disposals intangible assets (2) 38
Intangible assets that meet the recognition criteria of IAS 38 - Intangible Assets are recognised to the extent that future economic benefits are probable.
To the extent that the recoverable amount of the intangible assets (i.e. the higher of its fair value less costs to sell and the present value of the future cash flows expected from the continuing use of these assets and their disposal) is less than the carrying amount, an impairment loss is recognised in accordance with IAS 36 - Impairment of Assets.
The intangible assets are subject to an impairment examination each year or more frequently if there are indications that these items should be subject to impairment. Regarding the main assumptions and findings and the sensitivity analyses, we refer to section II.1.5 Critical accounting assessments and principal sources of uncertainty.
In 2012, the total acquisition of intangible assets and own production of intangible assets amounted to EUR 3.8 million, compared to EUR 2.9 million the year before. The investments in intangible assets in 2012 mainly related to "Assets under construction and advance payments" for new developments and licence costs related to the roll-out of the SAP IT platform (EUR 2.7 million) and capitalised development costs for Automotive-Interiors projects (EUR 0.6 million).
In December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a new joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal, Recticel SA/NV and/or its affiliates have pledged their main trademarks and patents in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEc 12 | 31 DEc 11 |
| At the end of the preceding year | ||
| Gross book value | 49 443 | 49 882 |
| Accumulated impairments | (14 755) | (15 517) |
| Net book value | 34 688 | 34 365 |
| Movements during the year | ||
| Acquisitions or entering the consolidation scope | 0 | 539 |
| Impairments * | 0 | (539) |
| Exchange rate differences | 315 | 323 |
| At year-end | 35 003 | 34 688 |
| Gross book value | 49 691 | 49 443 |
| Accumulated impairments | (14 688) | (14 755) |
| Net book value | 35 003 | 34 688 |
| * See note II.1.5.1. Impairments on goodwill, intangible assets and property, plant and equipment. |
The breakdown of the goodwill per business line is as follows:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2012 | 2011 |
| Eurofoam | 498 | 482 |
| Germany | 807 | 808 |
| The Netherlands | 253 | 253 |
| Scandinavia | 6 050 | 5 922 |
| United Kingdom | 4 491 | 4 388 |
| Flexible Foams | 12 099 | 11 853 |
| Germany | 2 761 | 2 761 |
| Switzerland | 6 329 | 6 284 |
| Belgium | 845 | 845 |
| Austria | 941 | 941 |
| Bedding | 10 876 | 10 831 |
| Kingspan Tarec Industrial Insulation | 414 | 413 |
| Belgium | 1 619 | 1 619 |
| United Kingdom | 1 017 | 994 |
| Insulation | 3 050 | 3 026 |
| Proseat | 8 978 | 8 978 |
| Automotive | 8 978 | 8 978 |
| Total goodwill | 35 003 | 34 688 |
The carrying amount of goodwill acquired in business combination must be allocated on a reasonable and consistent basis to each CGU or smallest group of cash-generating units in accordance with IAS 36.
The goodwill is subject to an impairment examination each year or more frequently if there are indications that these items should be subject to impairment. Regarding the main assumptions and findings and the sensitivity analyses, we refer to section II.1.5 Critical accounting assessments and principal sources of uncertainty.
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | LAND AND BUILDINGS |
PLANT, MACHINERY & EQUIPMENT |
FURNITURE AND VEHICLES |
LEASES AND SIMILAR RIGHTS |
OTHER TANGIBLE ASSETS |
ASSETS UNDER CONSTRUCTION |
TOTAL |
| At the end of the preceding year | |||||||
| Gross value | 201 237 | 632 866 | 31 837 | 27 346 | 7 151 | 13 942 | 914 379 |
| Accumulated depreciation | (111 453) | (477 999) | (27 112) | (12 881) | (2 901) | 163 | (632 183) |
| Accumulated impairments | (866) | (25 214) | (92) | (313) | 0 | (364) | (26 849) |
| Net book value at opening | 88 918 | 129 653 | 4 633 | 14 152 | 4 250 | 13 741 | 255 347 |
| Movements during the year | |||||||
| Changes in scope of consolidation | 0 | 1 632 | 81 | 0 | 0 | 50 | 1 763 |
| Acquisitions, including own production | 1 350 | 5 023 | 2 723 | 13 346 | 218 | 25 609 | 48 269 (1) |
| Impairments | (5) | (1 027) | (1) | 0 | (484) | (39) | (1 556) |
| Expensed depreciation | (5 966) | (25 325) | (2 033) | (1 606) | (168) | 0 | (35 098) |
| Sales and scrapped | (445) | (122) | (238) | 0 | (94) | (29) | (928) (2) |
| Transfers from one heading to another | 1 491 | 11 088 | 141 | (79) | 92 | (12 125) | 608 |
| Exchange rate differences | 765 | 1 639 | 27 | 12 | 9 | 47 | 2 499 |
| At year-end | 86 108 | 122 561 | 5 333 | 25 825 | 3 823 | 27 254 | 270 904 |
| Gross value | 202 904 | 598 468 | 31 851 | 40 328 | 6 565 | 27 864 | 907 980 |
| Accumulated depreciation | (116 048) | (457 235) | (26 460) | (14 248) | (2 258) | (34) | (616 283) |
| Accumulated impairments | (748) | (18 672) | (58) | (255) | (484) | (576) | (20 793) |
| Net book value at year-end | 86 108 | 122 561 | 5 333 | 25 825 | 3 823 | 27 254 | 270 904 |
| Acquisitions | Disposals | ||||||
| Cash-out on acquisitions tangible assets | (38 364) | Cash-in from disposals tangible assets | 1 831 |
|---|---|---|---|
| Acquisitions shown in working capital | (9 905) | Disposals shown in working capital | (903) |
| Total acquisitions tangible assets (1) | (48 269) | Total disposals tangible assets (2) | 928 |
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | LAND AND BUILDINGS |
PLANT, MACHINERY & EQUIPMENT |
FURNITURE AND VEHICLES | LEASES AND SIMILAR RIGHTS |
OTHER TANGIBLE ASSETS | ASSETS UNDER CONSTRUCTION |
TOTAL |
| At the end of the preceding year | |||||||
| Gross value | 209 241 | 623 730 | 33 822 | 27 560 | 3 611 | 21 239 | 919 203 |
| Accumulated depreciation | (113 085) | (457 807) | (30 273) | (11 375) | (2 980) | 72 | (615 448) |
| Accumulated impairments | (3 019) | (29 049) | (65) | (371) | (5) | (267) | (32 776) |
| Net book value at opening | 93 137 | 136 874 | 3 484 | 15 814 | 626 | 21 044 | 270 979 |
| Movements during the year | |||||||
| Changes in scope of consolidation | 3 | 87 | 34 | 26 | 10 | 5 | 165 |
| Acquisitions, including own production | 1 481 | 8 932 | 2 057 | 82 | 38 | 17 834 | 30 424 (1) |
| Impairments | (11) | (4 375) | (58) | 0 | 0 | (236) | (4 680) |
| Expensed depreciation | (6 005) | (27 466) | (1 552) | (1 605) | (132) | 0 | (36 760) |
| Sales and scrapped | (1 023) | (1 096) | (25) | (3) | 0 | (123) | (2 270) (2) |
| Transfers from one heading to another | 2 189 | 17 654 | 736 | (140) | 3 711 | (24 693) | (543) |
| Exchange rate differences | (853) | (957) | (43) | (22) | (3) | (90) | (1 968) |
| At year-end | 88 918 | 129 653 | 4 633 | 14 152 | 4 250 | 13 741 | 255 347 |
| Gross value | 201 237 | 632 866 | 31 837 | 27 346 | 7 151 | 13 942 | 914 379 |
| Accumulated depreciation | (111 453) | (477 999) | (27 112) | (12 881) | (2 901) | 163 | (632 183) |
| Accumulated impairments | (866) | (25 214) | (92) | (313) | 0 | (364) | (26 849) |
| Net book value at year-end | 88 918 | 129 653 | 4 633 | 14 152 | 4 250 | 13 741 | 255 347 |
| Acquisitions | Disposals | ||
|---|---|---|---|
| Cash-out on acquisitions tangible assets | (23 729) | Cash-in from disposals tangible assets | 4 941 |
| Acquisitions shown in working capital | (6 695) | Disposals shown in working capital | (2 671) |
| Total acquisitions tangible assets (1) | (30 424) | Total disposals tangible assets (2) | 2 270 |
Total acquisition of tangible assets amounted to EUR 48.3 million, compared to EUR 30.4 million last year.
At 31 December 2012, the Group had entered into contractual commitments for the acquisition of property, plant & equipment amounting to EUR 5.8 million.
At 31 December 2011, the Group had entered into contractual commitments for the acquisition of property, plant & equipment amounting to EUR 6.8 million.
For the measurement of tangible assets the principles relating to impairment of assets (IAS 36) and to useful life of significant components of assets (IAS 16) apply. Fair value (market value) is used as deemed cost (IFRS 1) for certain assets such as land and buildings.
The reassessment of the useful life of certain components of assets is based upon an industrial survey confirmed by economic reality and the experience of peers reporting under IFRS.
In accordance with IAS 20 - Accounting for government grants and disclosure of government assistance, investment grants, previously included in equity according to Belgian GAAP, are deducted from the carrying amount of the related assets.
The tangible assets are subject to an impairment examination each year or more frequently if there are indications that these items should be subject to impairment. Regarding the main assumptions and findings and the sensitivity analyses, we refer to section II.1.5 Critical accounting assessments and principal sources of uncertainty.
As a result of this examination, impairments were booked in 2012 for an amount of EUR -1.6 million (in 2011: EUR –4.7 million), which consists of EUR -0.6 million in Automotive (in 2011: EUR –3.4 million) and EUR -1.0 million in Flexible Foams (in 2011: EUR –1.3 million).
As already stated under Intangible Assets, in December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a new joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal, Recticel SA/NV and/or its affiliates have pledged their production sites in Belgium, Germany, France, the Netherlands and Sweden in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEc 2012 | 31 DEc 2011 |
| Land and buildings - At cost | 38 888 | 25 374 |
| Land and buildings - Accumulated depreciation | (13 343) | (11 520) |
| Land and buildings - Impairments | (256) | (313) |
| Total land and buildings | 25 289 | 13 541 |
| Plant, machinery & equipment - At cost | 943 | 1 528 |
| Plant, machinery & equipment - Accumulated depreciation | (685) | (1 059) |
| Plant, machinery & equipment - Impairments | 0 | 0 |
| Total plant, machinery & equipment | 258 | 469 |
| Furniture and vehicles - At cost | 497 | 444 |
| Furniture and vehicles - Accumulated depreciation | (219) | (302) |
| Furniture and vehicles - Impairments | 0 | 0 |
| Total furniture and vehicles | 278 | 142 |
| Total assets under financial lease | 25 825 | 14 152 |
| Fixed assets held under financial lease - Gross | 40 328 | 27 346 |
| Fixed assets held under financial lease - Depreciation | (14 247) | (12 881) |
| Fixed assets held under financial lease - Impairments | (256) | (313) |
| Fixed assets held under financial lease | 25 825 | 14 152 |
The increase is primarily explained by the new Insulation plant in Bourges (France) (EUR 13.0 million).
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 Dec 2012 | 31 DEc 2011 |
| At the end of the preceding year | ||
| Gross book value | 3 429 | 1 017 |
| Accumulated impairments | (98) | (121) |
| Net book value | 3 331 | 896 |
| Movements during the year | ||
| Disposals or leaving the consolidation scope | 0 | (365) |
| Transfer from one heading to another | 321 | 0 |
| Fair value gain | 800 | 2 800 |
| At year-end | 4 452 | 3 331 |
| Gross book value | 4 551 | 3 429 |
| Accumulated impairments | (99) | (98) |
| Net book value | 4 452 | 3 331 |
This section relates primarily to 31.36 hectares of industrial and agricultural land in Balen and Lommel (Belgium) and an industrial land of 2.4 hectares in Wetteren (Belgium).Of the industrial lands in Balen/Lommel, 7.35 hectares is subject to a long term lease (up to 2039) to Ajinomoto Omnichem SA/NV.
5.58 Hectares of industrial land accommodates the permanent deposit, resulting from the clean-up of the entire site, executed over the years 2001-2006, and also private roads, etc.
About 17.78 hectares of industrial land in Balen and 0.63 hectares of agricultural land in Lommel remain available for sale.
Based upon a valuation report updated at the end of 2011, the value of these lands available for sale has been appraised to market value, which lead to an increase in fair value of EUR 2.8 million in 2011.
In 2012, the above-mentioned 2.4 hectares of industrial land in Wetteren (Belgium), booked under the heading Tangible assets – Land (EUR 0.3 million), was reclassified under the heading Investment Property. Based upon a valuation report updated at the end of 2012, the value of this land available for sale has been appraised to market value, leading to an increase in fair value of EUR 0.8 million.
Unless otherwise indicated, the percentage shareholdings shown below are identical to the percentage voting rights.
| % shareholding in | |||
|---|---|---|---|
| 2012 | 2011 | ||
| Austria | |||
| Sembella GmbH | Aderstrasse 35 - 4850 Timelkam | 100.00 | 100.00 |
| Belgium | |||
| s.c. sous forme de s.a. Balim b.v. onder vorm van n.v. | Olympiadenlaan 2 - 1140 Evere | 100.00 | 100.00 |
| s.a. Finapal n.v. | Olympiadenlaan 2 - 1140 Evere | 100.00 | 100.00 |
| s.a. Intergroup Coordination Services n.v. | Olympiadenlaan 2 - 1140 Evere | 100.00 | 100.00 |
| s.a. Recticel Management Services n.v. | Damstraat 2 - 9230 Wetteren | 100.00 | 100.00 |
| s.a. Recticel International Services n.v. | Olympiadenlaan 2 - 1140 Evere | 100.00 | 100.00 |
| China | |||
| Ningbo Recticel Automotive Parts Co. Ltd. | No. 525, Changxing Road, (C Area of Pioneer Park) Jiangbei District, Ningbo Municipality | 100.00 | 100.00 |
| Recticel Foams (Shanghai) Co Ltd | No. 525, Kang Yi Road - Kangyiao Industrial Zone, 201315 Shanghai | 100.00 | 100.00 |
| Shenyang Recticel Automotive Parts Co Ltd | No 12, Hangtian Road, 110043 Shenyang | 100.00 (a) | 100 (NC) |
| Czech Republic | |||
| RAI Most s.r.o. | Moskevska 3055 - Most | 100.00 | 100.00 |
| Recticel Czech Automotive s.r.o. | Chuderice-Osada 144 - 418,25 Bilina | 100.00 | 100.00 |
| Recticel Interiors CZ s.r.o. | Plazy, 115 - PSC 293 01 Mlada Boleslav | 100.00 | 100.00 |
| Estonia | |||
| Recticel ou | Pune Tee 22 - 12015 Tallin | 100.00 | 100.00 |
| Finland | |||
| Recticel oy | Nevantie 2, 45100 Kouvola | 100.00 | 100.00 |
| France | |||
| Recticel s.a.s. | 7, rue du Fossé blanc, bâtiment C2 - 92622 Gennevilliers | 100.00 | 100.00 |
| Recticel Insulation s.a.s. | 7, rue du Fossé blanc, bâtiment C2 - 92622 Gennevilliers | 100.00 (b) | - |
| Germany | |||
| Recticel Automobilsysteme GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 |
| Recticel Beteiligungsmanagement GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 |
| Recticel Dämmsysteme Gmbh | Hagenauer Strasse 42 – 65203 Wiesbaden | 100.00 | 100.00 |
| Recticel Deutschland Beteiligungs GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 |
| Recticel Grundstücksverwaltung GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 |
| Recticel Handel GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 |
| Recticel Schlafkomfort GmbH | Schlaraffiastrasse 1-10 - 44867 Bochum 6 - Wattenscheid | 100.00 | 100.00 |
| Recticel Verwaltung Gmbh & Co. KG | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 |
| Greece | |||
| 100.00 (c)(NC) | 100.00 (d) | ||
| Teknofoam Hellas | Kosma Etolou Street, 13 - Neo Iraklio - Attica | ||
| Luxembourg | |||
| Recticel RE s.a. | 23, Avenue Monterey, L-2163 Luxembourg | 100.00 | 100.00 |
| Recticel Luxembourg s.a. | 23, Avenue Monterey, L-2163 Luxembourg | 100.00 | 100.00 |
| Rec 2 RE s.a. | 23, Avenue Monterey, L-2163 Luxembourg | 100.00 | 100.00 |
| India | |||
| Recticel India Private Limited | 407, Kapadia Chambers, 599 JSS Road, Princess Street, Marine Lines (East), 400002 Mumbai Maharashtra | 100.00 (a) | 100 (NC) |
(a) Consolidated since 01 January 2012
(b) New establishment
(c) Out of scope of consolidation as from 31 December 2012
(d) Until 30 June 2011 consolidated following the proportional method
(e) Disposal of A.R.T.E. Srl to Orsa Foam s.p.a.
(EM) Consolidated using the equity method (GM) Consolidated using the global method (NC) Non-consolidated
| % shareholding in | |||||
|---|---|---|---|---|---|
| 2012 | 2011 | ||||
| Morroco | |||||
| Recticel Mousse Maghreb SARL | 31 Avenue Prince Héritier, Tanger | 100.00 | 100.00 | ||
| The Netherlands | |||||
| Akoestikon Geluidsisolatie B.V. | Fahrenheitbaan, 4c - 3439 MD Nieuwegein | 100.00 | 100.00 | ||
| Enipur Holding BV | Spoorstraat 69 - 4041 CL Kesteren | 100.00 100.00 (GM) (d) | |||
| Recticel B.V. | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 | ||
| Recticel Holding Noord B.V. | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 | ||
| Recticel International B.V. | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 | ||
| Rectigro BV | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 | ||
| Norway | |||||
| Westnofa Industrier AS | Øysand - 7224 Mehus | 100.00 | 100.00 | ||
| Poland | |||||
| Recticel Komfort Snu Sp. z o.o. | Ul. Graniczna 60, 93-428 Lodz | 100.00 | 100.00 | ||
| Recticel Izolacje Sp. z o.o. | ul. Lwowska, 19 - PL 00660 Warschau | 100.00 | 100.00 (GM) | ||
| Romania | |||||
| Recticel Bedding Romania s.r.l. | Miercurea Sibiului, DN1, FN, ground floor room 2 3933 Sibiu County | 100.00 | 100.00 | ||
| Sweden | |||||
| Recticel AB | Södra Storgatan 50 b.p. 507 - 33228 Gislaved | 100.00 | 100.00 | ||
| Spain | |||||
| Ingeneria De Poliuretano Flexible s.l. | Txiriboteca, 10 A 48330 Lemona (Vizcaya) | 100.00 | 100.00 | ||
| Recticel Iberica s.l. | Carretera B-142km. 2,2 - 08213 Polinya | 100.00 | 100.00 | ||
| Transformados Ebaki s.l. | Pol.Ind. Txako, 3 - Pta. principal trasera 48480 Arrigorriaga (Vizcaya) | 100.00 | 100.00 | ||
| Switzerland | |||||
| Recticel Bedding (Schweiz) AG | Bettenweg 12 Postfach 65 - 6233 Büron - Luzern | 100.00 | 100.00 | ||
| Turkey | |||||
| Recfoam Poliuretan sünger sanayi ve ticaret limited sirkati | Esentrepe mylangarz Cad., 40 34870 Istanbul | 100.00 | 100.00 | ||
| Teknofoam Izolasyon Sanayi ve Ticaret a.s. | Esentepe Milangaz caddesi 40 Kartal, Istanbul | 100.00 | 100.00 (d) | ||
| United Kingdom | |||||
| Carobel Foam Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 | ||
| Declon Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 | ||
| Gradient Insulations (UK) Limited | 1 George Street, Wolverhampton WV2 4DG, UK | 100.00 | 100.00 | ||
| Recticel (UK) Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 | ||
| Recticel Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 | ||
| Rochingham Babycrafts Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 | ||
| Tarec International Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 | ||
| UK Insulation Supplies Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 | ||
| United States of America | |||||
| Recticel Interiors North America Llc. | 5600 Bow Point Drive - MI 48346-3155 Clarkston | 100.00 | 100.00 | ||
| Recticel Urepp North America Inc. | Metro North Technology Park - Atlantic Boulevard 1653 - MI 48326 Auburn Hills | 100.00 | 100.00 | ||
| The Soundcoat Company Inc. | Burt Drive 1 PO Box 25990 - NY 11729 Deer Park County of Suffolk | 100.00 | 100.00 |
(a) Consolidated since 01 January 2012
(b) New establishment
(c) Out of scope of consolidation as from 31 December 2012
(d) Until 30 June 2011 consolidated following the proportional method
(e) Disposal of A.R.T.E. Srl to Orsa Foam s.p.a.
(EM) Consolidated using the equity method (GM) Consolidated using the global method (NC) Non-consolidated
| % shareholding in | |||
|---|---|---|---|
| 2012 | 2011 | ||
| Austria | |||
| Eurofoam GmbH | Greinerstrasse 70 - 4550 Kremsmünster | 50.00 | 50.00 |
| Belgium | |||
| s.a. Kingspan Tarec Industrial Insulation n.v. | Olympiadenlaan, 2 - 1140 Evere | 50.00 | 50.00 |
| s.a. Proseat n.v. | Olympiadenlaan 2 - 1140 Evere | 51.00 | 51.00 |
| Czech | |||
| Proseat Mlada Boleslav s.r.o. | Plazy, 115 - PSC 293 01 Mlada Boleslav | 51.00 | 51.00 |
| France | |||
| Proseat s.a.s. | Avenue de Verdun, 71, 77470 Trilport | 51.00 | 51.00 |
| Germany | |||
| Eurofoam Deutschland GmbH Schaumstoffe | Hagenauer Strasse 42 – 65203 Wiesbaden | 50.00 | 50.00 |
| KFM-Schaumstoff GmbH | Rosenauer Strasse, 28 - 96487 Dörfles-Esbach | 50.00 | 50.00 |
| Proseat Gmbh & Co. KG | Hessenring 32 - 64546 Mörfelden-Walldorf | 51.00 | 51.00 |
| Proseat Verwaltung Gmbh | Hessenring 32 - 64546 Mörfelden-Walldorf | 51.00 | 51.00 |
| Hungary | |||
| Eurofoam Hungary Kft. | Miskolc 16 - 3792 Sajobabony | 50.00 | 50.00 |
| The Netherlands | |||
| Eurofoam B.V. | Spoorstraat 69 - 4041 CL Kesteren | 50.00 | 50.00 |
| Poland | |||
| Eurofoam Polska Sp. z o.o. | ul Szczawinska 42 - 95-100 Zgierz | 50.00 | 50.00 |
| Proseat Spolka. z o.o. | ul Miedzyrzecka, 16 - 43-382, Bielsko-Biala | 51.00 | 51.00 |
| Romania | |||
| Eurofoam s.r.l. | Str. Garii nr. 13 Selimbar 2428 - O.P.8 C.P. 802 - Jud. Sibiu | 50.00 | 50.00 |
| Spain | |||
| Proseat Foam Manufacturing SLU | Carretera Navarcles s/n, Poligono Industrial Santa Ana II - Santpedor (08251 Barcelona) | 51.00 | 51.00 |
| United Kingdom | |||
| Kingspan Tarec Industrial Insulation Ltd. | Charlestown Works, Charlestown - SK13 8LE Glossop (Derbyshire) | 50.00 | 50.00 |
| Proseat LLP | Unit A, Stakehill Industrial Estate, Manchester, Lancashire | 51.00 | 51.00 |
| % shareholding in | |||
|---|---|---|---|
| 2012 | 2011 | ||
| Bulgaria | |||
| Eurofoam-BG o.o.d. | Raiko Aleksiev Street 40, block n° 215-3 Izgrev district, Sofia | 50.00 | 49.76 |
| Czech Republic | |||
| B.P.P. spol s.r.o. | ul. Hájecká 11 – 61800 Brno | 25.68 | 25.68 |
| Eurofoam Bohemia s.r.o. | Osada 144, Chuderice - 418 25 Bilina | 50.00 | 50.00 |
| 40.00 | 40.00 | ||
| Eurofoam TP spol.s.r.o. | ul. Hájecká 11 – 61800 Brno | 25.50 | 25.50 |
| Sinfo Eurofoam Industry |
Souhradi 84 - 391 43 Mlada Vozice ul. Hájecká 11 – 61800 Brno |
50.00 | 50.00 |
| Italy | |||
| ARTE srl | Largo Augusto 3 20122 Milano | 33.00 (e) | 50.00 |
| Orsa Foam s.p.a. | Via A. Colombo, 60 21055 Gorla Minore (VA) | 33.00 | 33.00 |
| Lithuania | |||
| UAB Litfoam | Radziunu Village, Alytus Region | 30.00 | 30.00 |
| Poland | |||
| Caria Sp. z o.o. | ul Jagiellonska 48 - 34 - 130 Kalwaria Zebrzydowska | 25.50 | 25.50 |
| Eurofoam Gdansk Sp. z o.o. | ul. Przyrodników 23 - 80-298 Gdansk | 50.00 | 50.00 |
| Eurofoam Poznan Sp. z o.o. | ul. Gnieznienska 4 Janikowo K/Poznan - 62-006 Kobylnica | 50.00 | 50.00 |
| PPHIU Kerko Sp. z o.o. | Nr. 366 - 36-073 Strazow | 25.86 | 25.86 |
| Romania | |||
| Flexi-Mob Trading s.r.l. | Interioara Street, 3 Pol. II, Inc. Federalcoop, Nr. 1, Constanta | 25.00 | 25.00 |
| Russian Federation | 50.00 | 50.00 (EM) | |
| Eurofoam Kaliningrad | Kaliningrad District, Guierwo Region , 238352 Uszakowo | ||
| Slovak Republic | |||
| Poly | Dolné Rudiny 1 - SK-01001 Zilina | 50.00 | 50.00 |
| Serbia | |||
| Eurofoam Sunder d.o.o. | Vojvodanska Str. 127 - 21242 Budisava | 50.00 | 50.00 |
| Ukraine | 47.50 | 47.50 | |
| Porolon Limited | Grodoocka 357 - 290040 - Lviv |
(a) Consolidated since 01 January 2012
(b) New establishment
(c) Out of scope of consolidation as from 31 December 2012
(d) Until 30 June 2011 consolidated following the proportional method
(e) Disposal of A.R.T.E. Srl to Orsa Foam s.p.a.
(EM) Consolidated using the equity method (GM) Consolidated using the global method (NC) Non-consolidated
Some subsidiaries more than 50% controlled are not consolidated because they are (still) insignificant. As soon as they have reached a sufficient size, however, they will be included in the scope of consolidation.
| % shareholding in | |||
|---|---|---|---|
| 2012 | 2011 | ||
| China | |||
| Recticel Shanghai Ltd | No. 518, Fute North Road, Waigaoqiao Free Trade Zone - 200131 Shanghai | 100.00 | 100.00 |
| Shenyang Recticel Automotive Parts Co Ltd | No. 12, Hangtian Road, 110043 Shenyang | 100.00 (a) (GM) | 100.00 |
| France | |||
| Lebed s.a.s. | Zone d'activité de l'Allmend - Boîte postale 34 - 68290 Maseveaux | 100.00 | 100.00 |
| Promousse s.a.s. | Rue des Canonniers 48, 59000 Lille - en liquidation | 100.00 | 100.00 |
| Greece | |||
| Teknofoam Hellas | Kosma Etolou Street, 13 - Neo Iraklio - Attica | 100.00 (c) | 100 (GM) |
| India | |||
| Recticel India Private Limited | 407, Kapadia Chambers, 599 JSS Road, Princess Street, Marine Lines (East) 400002 Mumbai Maharashtra | 100 (a) (GM) | 100.00 |
| Japan | |||
| Inorec Japan KK | Imaika-Cho 1-36, Anjo-Shi | 50.00 | 50.00 |
| Luxembourg | |||
| Recfin S.A. | 412F, route d'Esch, L-2086 Luxembourg | 100.00 | 100.00 |
| Romania | |||
| BIOFLEX s.r.l. | Str. Depozitelor NR 58 - 3900 Satu Mare | - | 50.00 |
| Eurofoam s.r.l. Baia Mare | Str. Margeanulin, 5 - 4800 BAIA MARE | 50.00 | 50.00 |
| Russian Federation Proseat LLC, in liquidation |
Domodedovskoye shosse 1/1, Podolsky district, Moskow Region, 142116 Selkhoztekhnica | 51.00 | 51.00 |
| Sweden | |||
| Nordflex A.B. | Box 507 - 33200 Gislaved | 100.00 | 100.00 |
| Switzerland | |||
| Prefoam AG, in liquidation | c/o KPMG Private Steinengraben, 5 - 4003 Basel | 50.00 | 50.00 |
(a) Consolidated since 01 January 2012
(b) New establishment
(c) Out of scope of consolidation as from 31 December 2012
(d) Until 30 June 2011 consolidated following the proportional method (e) Disposal of A.R.T.E. Srl to Orsa Foam s.p.a.
A list of the significant investments in associates is included in note II.5.6.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEc 2012 | 31 DEc 2011 |
| At the end of the preceding period | 12 957 | 15 451 |
| Movements during the year | ||
| Changes in the scope of consolidation | 173 | (3 055) |
| Transfer from one heading to another | 485 | 0 |
| Exchange rate differences | 139 | (424) |
| Group's share in the result of the period | 711 | 1 741 |
| Dividends distributed | (681) | (898) |
| Capital increases | 0 | 142 |
| At the end of the period | 13 784 | 12 957 |
The movements in the scope of consolidation in 2012 related mainly to:
− the disposal of the investment in A.R.T.E. srl (Flexible Foams) (EUR 0.2 million), with a result on disposal for the same amount.
− the transfer from one heading to another (EUR 0.5 million) following the reclassification to a provision for financial risk on the liquidation of an associated company.
The following key figures for the associates are shown on a 100% basis:
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| 31 DEc 2012 | |||||||
| Group Recticel | ORSAFOAM S.P.A. | FLEXIMOB | LITFOAM UAB | EUROFOAM SÜNDERI | EUROFOAM M-BG O.O.D. |
POLY | BPP SPOL S.R.O. |
| Total assets | 82 372 | 299 | 697 | 1 338 | 1 403 | 1 269 | 2 405 |
| Non current liabilities | 6 253 | 0 | 0 | 1 215 | 1 294 | 3 | 0 |
| Current liabilities | 44 712 | 213 | 677 | 130 | 308 | 974 | 788 |
| Total liabilities | 50 965 | 213 | 677 | 1 346 | 1 602 | 977 | 788 |
| Net equity | 31 407 | 86 | 20 | (8) | (199) | 292 | 1 617 |
| Revenues | 75 889 | 505 | 1 970 | 1 844 | 2 897 | 2 230 | 3 860 |
| Profit or (loss) of the period | 84 | 7 | (26) | (83) | (162) | (9) | 343 |
| EUROFOAM TP SPOL S.R.O. | EUROFOAM BOHEMIA S.R.O. | EUROFOAM INDUSTRY S.R.O. | SINFO | POROLON LTD | CARIA SP.Z.O.O. | EUROFOAM GDANSK SP.Z.O.O. |
|
|---|---|---|---|---|---|---|---|
| Total assets | 1 135 | 2 595 | 915 | 1 524 | 491 | 1 106 | 1 673 |
| Non current liabilities | 0 | 0 | 0 | 28 | 0 | 0 | 295 |
| Current liabilities | 353 | 1 565 | 440 | 623 | 91 | 749 | 609 |
| Total liabilities | 353 | 1 565 | 440 | 651 | 91 | 749 | 904 |
| Net equity | 782 | 1 030 | 475 | 873 | 400 | 357 | 769 |
| Revenues | 2 699 | 4 823 | 2 224 | 3 343 | 3 132 | 3 258 | 4 328 |
| Profit or (loss) of the period | 474 | 30 | 341 | 178 | 254 | (20) | (25) |
| EUROFOAM POZNAN | KERKO SP.Z.O.O. | EUROFOAM KALININGRAD | TOTAL | ||
|---|---|---|---|---|---|
| Total assets | 4 005 | 696 | 259 | 104 182 | |
| Non current liabilities | 0 | 0 | 6 | 9 093 | |
| Current liabilities | 2 932 | 439 | 89 | 55 693 | |
| Total liabilities | 2 932 | 439 | 94 | 64 786 | |
| Net equity | 1 074 | 257 | 165 | 39 396 | |
| Revenues | 7 164 | 2 353 | 897 | 123 416 | |
| Profit or (loss) of the period | 172 | 19 | 65 | 1 642 |
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| 31 DEc 2011 | |||||||
| Group Recticel | ORSAFOAM S.P.A. | A.R.T.E. SRL | FLEXIMOB | LITFOAM UAB | EUROFOAM SÜNDERI |
EUROFOAM M-BG O.O.D. |
POLY |
| Total assets | 74 706 | 4 004 | 303 | 724 | 1 385 | 1 481 | 1 256 |
| Non current liabilities | 1 931 | 0 | 0 | 0 | 0 | 791 | 0 |
| Current liabilities | 41 113 | 4 522 | 222 | 678 | 1 305 | 727 | 957 |
| Total liabilities | 43 044 | 4 522 | 222 | 678 | 1 305 | 1 518 | 957 |
| Net equity | 31 662 | (518) | 81 | 46 | 80 | (37) | 299 |
| Revenues | 72 524 | 1 792 | 497 | 2 169 | 1 811 | 3 201 | 2 266 |
| Profit or (loss) of the period | 2 255 | (617) | 16 | 7 | 30 | (124) | 10 |
| BPP SPOL S.R.O. | EUROFOAM TP SPOL S.R.O. |
EUROFOAM BOHEMIA S.R.O. |
EUROFOAM INDUSTRY S.R.O. |
SINFO | POROLON LTD | CARIA SP.Z.O.O. | |
|---|---|---|---|---|---|---|---|
| Total assets | 2 497 | 919 | 2 736 | 740 | 1 451 | 483 | 1 031 |
| Non current liabilities | 0 | 4 | 39 | 0 | 25 | 0 | 129 |
| Current liabilities | 626 | 75 | 1 722 | 390 | 587 | 245 | 559 |
| Total liabilities | 626 | 79 | 1 762 | 390 | 611 | 245 | 687 |
| Net equity | 1 871 | 841 | 975 | 350 | 840 | 238 | 344 |
| Revenues | 3 313 | 2 894 | 4 201 | 2 450 | 3 075 | 2 655 | 3 083 |
| Profit or (loss) of the period | 775 | 668 | 102 | 270 | 162 | 97 | (65) |
| EUROFOAM GDANSK SP.Z.O.O. |
EUROFOAM POZNAN | KERKO SP.Z.O.O. | EUROFOAM KALININGRAD | JP FOAM MANUFACT- URING SP.Z.O.O. |
JP FOAM MANUFACT URING S.R.O. |
TOTAL | |
|---|---|---|---|---|---|---|---|
| Total assets | 1 640 | 3 340 | 714 | 311 | 20 448 | 11 158 | 131 328 |
| Non current liabilities | 144 | 1 369 | 0 | 29 | 605 | 0 | 5 064 |
| Current liabilities | 771 | 1 088 | 496 | 83 | 9 165 | 4 170 | 69 501 |
| Total liabilities | 915 | 2 456 | 496 | 112 | 9 770 | 4 170 | 74 565 |
| Net equity | 725 | 884 | 218 | 199 | 10 677 | 6 988 | 56 763 |
| Revenues | 3 789 | 6 116 | 2 066 | 1 082 | 16 341 | 19 002 | 154 326 |
| Profit or (loss) of the period | (4) | 46 | (18) | 104 | 1 412 | 946 | 6 075 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Net value at the end of the preceding year | 3 399 | 1 151 |
| Movements during the year | ||
| Changes in scope of consolidation | (3 233) | (247) |
| Capital increases (reimbursements) | 0 | 3 392 (1) |
| Disposals | 0 | (309) (2) |
| Write-offs | 0 | (59) |
| Write-backs on disposal transactions | 0 | 82 |
| Transfer to available for sale investments | 0 | (502) |
| Exchange rate differences | 74 | (109) |
| Net value at year-end | 240 | 3 399 |
| Gross Value | 1 326 | 4 484 |
| Accumulated amounts written-off | (1 086) | (1 085) |
| Accumulated impairments | 0 | 0 |
| Net book value at year-end | 240 | 3 399 |
| Cash-out for acquisitions of financial investments | 0 | (3 831) |
| Total acquisitions of financial investments and related capital movements (1) | 0 | 18 700 |
| Acquisitions shown in working capital | 0 | (22 531) |
| Cash-in from disposals of financial investments | 0 | 5 508 |
| Total disposals of financial investments (2) | 0 | 309 |
| Working capital movements relating to disposals | 0 | (5 199) |
This heading includes all non-consolidated investments. These investments are non-listed companies. The fair value equals to the cumulative historical cost, corrected for durable impairment losses.
The changes in scope of consolidation over 2012 relate to the consolidation of Recticel India Private Limited (Flexible Foams) and of Shenyang Recticel Automotive Parts Co Ltd (People's Republic of China) (Automotive – Interiors).
II.5.9. Available for sale investments
In 2011 capital increases related to (i) Recticel India Private Ltd (Flexible Foams), (ii) Shenyang Recticel Automotive Parts Co Ltd (People's Republic of China) (Automotive – Interiors) and Bioflex s.r.l. (Romania) (Flexible Foams).
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Gross value | 635 | 189 |
| Accumulated amounts impaired | (514) | (103) |
| Net book value at the end of the preceding period | 121 | 86 |
| Movements during the period | ||
| Disposals | 0 | (69) |
| Impairment | 0 | (406) |
| Transfer from other financial investments | 0 | 502 |
| Exchange rate differences | 1 | 8 |
| Net book value at the end of the period | 122 | 121 |
| Gross value | 639 | 635 |
| Accumulated amounts written-off | (517) | (514) |
| Net book value at the end of the period | 122 | 121 |
| in thousand EUR | |||||
|---|---|---|---|---|---|
| Group Recticel | Loans | Cash advances & deposits |
Trade receivables |
Other receivables |
Total |
| Gross value at the end of the preceding year | 8 627 | 2 448 | 69 | 2 519 | 13 663 |
| Movements during the year: | |||||
| Change of scope of consolidation | 0 | 110 | 0 | 0 | 110 |
| New loans | 510 | 6 | 14 | 338 | 868 |
| Reimbursement | (42) | (152) | 0 | (1 165) | (1 359) |
| Relinquishment by the creditor | (921) | 0 | 0 | 0 | (921) |
| Transfer to short term | (3) | 0 | 0 | 0 | (3) |
| Translation differences | 91 | (10) | 0 | (515) | (434) |
| Gross value at end of the period | 8 262 | 2 402 | 83 | 1 177 | 11 924 |
| Amounts written-off at the end of the preceding year | (4 842) | 0 | 0 | (516) | (5 358) |
| Movements during the year: | |||||
| Write-back/(Write-off) | 621 | 0 | 0 | 0 | 621 |
| Translation differences | (39) | 0 | 0 | 516 | 477 |
| Amounts written-off at the end of the period | (4 260) | 0 | 0 | 0 | (4 260) |
| Net book value at year end | 4 002 | 2 402 | 83 | 1 177 | 7 664 |
The carrying amounts of these non-current receivables approximate the fair value because the interest rate is a variable rate in line with market conditions.
The maximum exposure to credit risk equals to the carrying amounts of these assets as recognized on the balance sheet.
| in thousand EUR | |||||
|---|---|---|---|---|---|
| Group Recticel | Loans | Cash advances & deposits |
Trade receivables |
Other receivables |
Total |
| Gross value at the end of the preceding year | 8 464 | 4 951 | 132 | 1 039 | 14 586 |
| Movements during the year: | |||||
| Change of scope of consolidation | 0 | 9 | 0 | 0 | 9 |
| New loans | 156 | 15 | 0 | 886 | 1 057 |
| Actualisation | 0 | 0 | 0 | 8 | 8 |
| Reimbursement | (177) | (1 609) | (58) | (47) | (1 891) |
| Transfer to short term | (2) | (931) | (5) | 118 | (820) |
| Translation differences | 334 | 13 | 0 | 515 | 862 |
| Other | (148) | 0 | 0 | 0 | (148) |
| Gross value at end of the period | 8 627 | 2 448 | 69 | 2 519 | 13 663 |
| Amounts written-off at the end of the preceding year | (3 835) | (681) | 0 | 0 | (4 516) |
| Movements during the year: | |||||
| Write-off | (621) | 0 | 0 | (135) | (756) |
| Transfer to short term | 0 | 681 | 0 | 0 | 681 |
| Translation differences | (386) | 0 | 0 | (381) | (767) |
| Amounts written-off at the end of the period | (4 842) | 0 | 0 | (516) | (5 358) |
| Net book value at year end | 3 785 | 2 448 | 69 | 2 003 | 8 305 |
'Cash advances and deposits' is a significant item under 'Non-current receivables', consisting of the following:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Rent | 687 | 723 |
| Supplies (water, electricity, telecom, waste treatment, ) | 173 | 103 |
| Value added tax | 23 | 26 |
| Containers, storages & furnitures | 0 | 75 |
| Early retirements | 1 486 | 1 485 |
| Other | 33 | 36 |
| Total | 2 402 | 2 448 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Raw materials & supplies - Gross | 65 984 | 65 701 |
| Raw materials & supplies - Amounts written off | (4 108) | (4 106) |
| Raw materials & supplies | 61 876 | 61 595 |
| Work in progress - Gross | 16 254 | 16 158 |
| Work in progress - Amounts written off | (234) | (293) |
| Work in progress | 16 020 | 15 865 |
| Finished goods - Gross | 33 674 | 32 839 |
| Finished goods - Amounts written off | (1 609) | (2 076) |
| Finished goods | 32 065 | 30 763 |
| Traded goods - Gross | 3 494 | 4 151 |
| Traded goods - Amounts written off | (505) | (297) |
| Traded goods | 2 989 | 3 854 |
| Down payments - Gross | 324 | 145 |
| Down payments - Amounts written off | 0 | 0 |
| Down payments | 324 | 145 |
| Contracts in progress - Gross | 3 462 | 3 916 |
| Contracts in progress - Amounts written off | (129) | (136) |
| Contracts in progress | 3 333 | 3 780 |
| Total inventories | 116 607 | 116 002 |
| Amounts written-off on inventories during the period | 370 | (85) |
As already mentioned under Intangible and Tangible Assets, in December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a new joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal, Recticel SA/NV and/or its affiliates have granted a floating charge mandate in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Contract revenues recognised over the period | 6 680 | 1 472 |
| Contract costs incurred plus recognised profits less recognised losses to date | 1 920 | 3 539 |
| Advance payments received | 0 | 936 |
In the automotive activity, Recticel (i) developed a polyurethanebased technology for the manufacturing of interior trim components and (ii) produces moulded seat cushions in polyurethane for the car industry. For optimum implementation of these two applications, based on the specifications given by its customers, Recticel ensures the manufacturing of the moulds with its own suppliers during the pre-operating phase, before starting production of components. At the end of this subcontracting process, the moulds are sold to the customer.
Considered as a long-term contract, the recognition of the costs and revenues of the 'moulds' activity is reflected in the accounts by reference to the stage of completion. Under the so-called 'percentage of completion' method, contract revenue is matched with the contract costs incurred in reaching the stage of completion.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Trade receivables | ||
| Trade receivables | 124 010 | 142 516 |
| Write-off on doubtful trade receivables | (9 470) | (9 606) |
| Total trade receivables | 114 540 | 132 910 |
| Other receivables (1) | 25 993 | 29 470 |
| Other derivatives | 665 | 408 |
| Loans carried at amortised cost | 21 465 | 9 689 |
| Total financial assets (2) | 22 130 | 10 097 |
| Subtotal (1)+(2) | 48 123 | 39 567 |
| Total loans and receivables | 162 663 | 172 477 |
Trade receivables at the balance sheet date 2012 comprise amounts receivable from the sale of goods and services for EUR 114.5 million (2011: EUR 132.9 million).
This net amount of EUR 114.5 million consists of:
(i) gross trade receivables amounting to EUR 173.0 million (2011: EUR 181.3 million), after deduction of the following:
(ii) EUR 15.4 million in bills of exchange and invoices still to be drawn (2011: EUR 16.1 million).
Trade receivables at the balance sheet date 2011 comprise amounts receivable from the sale of goods and services for EUR 132.9 million (2010: EUR 141.8 million).
This net amount of EUR 132.9 million consists of:
(i) gross trade receivables amounting to EUR 181.3 million (2010: EUR 187.2 million), after deduction of the following:
(ii) EUR 16.1 million in bills of exchange and invoices still to be drawn (2010: EUR 22.4 million).
In 2012, other receivables amounting to EUR 26.0 million relate essentially to (i) VAT receivable (EUR 5.8 million), (ii) advances paid to third parties for operating costs spread over several financial years (EUR 11.8 million), (iii) prepayments, tax credits and subsidies, and contractual commitments with co-contractors (EUR 8.4 million).
In 2011, other receivables amounting to EUR 29.5 million relate essentially to (i) VAT receivable (EUR 9.0 million), (ii) advances paid to third parties for operating costs spread over several financial years (EUR 10.1 million), (iii) receivables towards joint ventures (Kingspan Tarec Industrial Insulation and Proseat) and (iv) contractual commitments with co-contractors (EUR 10.4 million).
In 2012, other financial assets (EUR 22.1 million) mainly consist of financial receivables on affiliated companies which are not consolidated (EUR 4.1 million), a receivable of EUR 17.3 million (2011: EUR 7.0 million) relating to the balance not drawn under nonrecourse factoring programmes in Belgium and Germany, which includes a part related to the continuing involvement, as well as EUR 0.7 million relating to the revaluation of interest rate and exchange rate hedging instruments.
In 2011, other financial assets (EUR 10.1 million) mainly consist of financial receivables on affiliated companies which are not consolidated (EUR 3.4 million), a receivable of EUR 7.0 million (2010: EUR 35.2 million) relating to the balance not drawn down under non-recourse factoring programmes in Belgium and Germany, as well as EUR 0.5 million relating to the revaluation of interest rate and exchange rate hedging instruments.
As already mentioned above, in December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal and the agreement relating to the subordinated loans, Recticel SA/NV and/or its subsidiaries have granted a floating charge mandate in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
The Group's principal current financial assets are cash & cash equivalents, trade and other receivables, and investments, which represent the Group's maximum exposure to credit risk in relation to financial assets.
The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and their assessment of the current economic environment.
The risk profile of the trade receivables portfolio is segmented by business line and based on the conditions of sale observed on the market. At the same time, it is confined by the agreed limits of the general conditions of sale and the specifically agreed conditions. The latter also depend on the degree of industrial and commercial integration of the customer, as well as on the level of market competitiveness.
The trade receivables portfolio in Flexible Foams, Bedding and Insulation consist of a large number of customers distributed among various markets, for which the credit risk is assessed on an on-going basis via the commercial and financial conditions granted to customers. In addition, the credit risks on trade receivables, with the exception of Automotive, are mostly covered by credit insurance policies which the Group manages centrally and harmonises. The credit risk management is also bolstered by the implementation of SAP software modules (FSCM) and best practice processes regarding the collection of receivables.
In Automotive, the credit risks are reasonably concentrated and appeal is made to the solvency ratios allocated by independent rating agencies.
The average credit periods taken on sales vary from 45 to 90 days, depending on the business line and the country of operations.
With a view to confining credit risks, non-recourse factoring, forfaiting and discounting programmes were established for a total amount of EUR 104.1 million (of which EUR 45.0 million were actually used at 31 December 2012).
The average uncovered outstandings from due receivables vary according to business line between 1% and 4.5% of total sales. The Group considers that there is no particular risk of non-recovery, although it is necessary to remain vigilant.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| 30 days | 9 846 | 10 659 |
| 60 days | 8 168 | 6 649 |
| 90 days | 945 | 956 |
| 120 days | 686 | 668 |
| 150 days | 1 265 | 481 |
| 180 days and more | 1 573 | 618 |
| Total overdue | 22 483 | 20 031 |
| Undue receivables | 92 057 | 112 879 |
| Total trade receivables | 114 540 | 132 910 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| At the end of the preceding period | (9 606) | (10 983) |
| Additions | (2 372) | (1 337) |
| Write back | 976 | 2 516 |
| Non-recouvrable amounts | 1 180 | 37 |
| Reclassification | 0 | 92 |
| Exchange differences | (32) | 90 |
| Changes in the scope of consolidation | 384 | (21) |
| Total | (9 470) | (9 606) |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| 30 days | 1 160 | 333 |
| 60 days | 82 | 390 |
| 90 days | 34 | 0 |
| 120 days | 110 | 0 |
| 150 days | 87 | 0 |
| 180 days and more | 387 | 15 |
| Total overdue | 1 860 | 738 |
| Undue other receivables | 24 133 | 28 732 |
| Total other receivables | 25 993 | 29 470 |
Cash and cash equivalents includes cash held by the Group and short-term bank deposits with an original maturity of three months and less. The carrying amount of these assets approximates to their fair value.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Short-term bank deposits - equal to or less than 3 months | 7 628 | 8 700 |
| Cash at bank & in hand | 19 380 | 45 875 |
| Total cash and cash equivalents | 27 008 | 54 575 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Issued shares | ||
| 28 931 456 ordinary shares without nominal value | 72 329 | 72 329 |
| Fully paid-up shares | ||
| 28 931 456 shares without nominal value | 72 329 | 72 329 |
| in thousand EUR | |
|---|---|
| Group Recticel | |
| Balance at 31 December 2011 | 107 013 |
| Premium arising on issue of equity during 2012 | 0 |
| Expenses of issue of equity shares during 2012 | 0 |
| Balance at 31 December 2012 | 107 013 |
Several Recticel companies operate defined benefit and/ or defined contribution plans. The main defined benefit plans, which typically provide retirement benefits related to remuneration and period of service, are located in Belgium, France, Germany and the UK.
The funded plans' assets are invested in mixed portfolios of shares and bonds or insurance contracts.
The plan assets do not include direct investments in Recticel shares, Recticel bonds or any property used by Recticel companies.
In order to meet the shortfall in funding of the UK pension scheme, Recticel has agreed to pay a total amount of GBP 12 million as recovery contributions during the period 1 January 2012 to 31 December 2023.
Movements in the net liabilities of the current period:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Net liability at 1 January | 33 892 | 33 731 |
| Expense recognised in the income statement | (2 718) | 4 495 |
| Uses for contributions paid | (5 549) | (4 406) |
| Transfers between accounts | (3 595) | 0 |
| Changes in scope | 0 | 0 |
| Exchange rate differences | 117 | 72 |
| Net liability at 31 December | 22 147 | 33 892 |
| in thousand EUR | |
|---|---|
| 31 DEC 2012 | 31 DEC 2011 |
| 2 285 | 2 091 |
| 4 043 | 4 389 |
| (2 448) | (2 493) |
| 128 | 7 |
| (7 319) | 73 |
| 593 | 428 |
| (2 718) | 4 495 |
* For 2012, due to the reclassification of the schemes "unemployment allowance with company supplement" in Belgium, a curtailment gain of EUR 6.991 KEUR was recognized and the benefit obligations with respect to existing beneficiaries were transferred to provisions for termination benefits.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Defined benefit obligations - funded plans | 85 305 | 74 665 |
| Fair value of plan assets | (50 043) | (44 641) |
| Deficit for funded plans (surplus) | 35 262 | 30 024 |
| Defined benefit obligations - unfunded plans | 9 093 | 15 748 |
| Funded status | 44 355 | 45 772 |
| Unrecognised past service gain (cost) | (769) | (829) |
| Unrecognised actuarial (losses) gains | (21 439) | (11 051) |
| Net liabilities at balance sheet date | 22 147 | 33 892 |
| Short-term | 2 937 | 3 529 |
| Long-term | 19 210 | 30 363 |
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
|---|---|---|
| Discount rate | 3,68% | 4,50% |
| Expected rate of return on plan assets | 5,65% | 5,74% |
| Future pension increases | 2,00% | 2,00% |
| Expected rate of salary increases | 3,00% | 2,99% |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Real value of plan assets (1 January) | 44 641 | 44 214 |
| Expected return on plan assets | 2 448 | 2 493 |
| Employer contributions | 5 549 | 4 406 |
| Benefits paid (direct & indirect) | (3 989) | (4 943) |
| Actuarial gains (losses) on plan assets | 943 | (2 048) |
| Settlement gains / (losses) | 0 | (53) |
| Exchange rate differences | 451 | 572 |
| Real value of plan assets (31 December) | 50 043 | 44 641 |
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
|---|---|---|
| Shares | 26.1% | 31.6% |
| Bonds | 9.8% | 6.6% |
| Insurance contracts | 57.1% | 56.4% |
| Cash | 2.2% | 0.0% |
| Other | 4.8% | 5.4% |
The expected rate of return takes into account the asset allocation.
The actual return on plan assets in the current period was as follows:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Actual return on plan assets | 3 391 | 445 |
Variations in the liabilities for defined benefit plans:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Defined Benefit Obligation (1 January) | 90 413 | 86 137 |
| Current service costs | 2 285 | 2 091 |
| Interest cost | 4 043 | 4 389 |
| Benefits paid (direct & indirect) | (3 989) | (4 943) |
| Actuarial (gains) losses on liabilities | 8 222 | 1 337 |
| Past service cost | 32 | 666 |
| Curtailment (gains) losses | (3 490) | (182) |
| Settlement (gains)/losses | (177) | 182 |
| Transfers between accounts | (3 595) | 0 |
| Exchange rate differences | 654 | 736 |
| Defined Benefit Obligation (31 December) | 94 398 | 90 413 |
Experience adjustments:
| in thousand EUR | |||||
|---|---|---|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 | 31 DEC 2010 | 31 DEC 2009 | 31 DEC 2008 |
| Defined benefit obligations - all plans | 94 398 | 90 413 | 86 137 | 78 656 | 78 779 |
| Fair value of plan assets | (50 043) | (44 641) | (44 214) | (36 724) | (31 764) |
| Funded status | 44 355 | 45 772 | 41 923 | 41 932 | 47 015 |
| Experience adjustments to defined benefit obligations | (88) | (1 229) | 1 778 | (1 205) | (2 909) |
| Experience adjustments to plan assets | 943 | (2 048) | 951 | 1 530 | (9 462) |
| The expected contributions for 2013 amount to: 4 996 |
Contributions paid by the Entity to defined contribution plans:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Contributions paid | 5 360 | 4 915 |
Defined contribution plans in Belgium and Switzerland are subject to a minimum guaranteed return. Nevertheless, these plans are lodged under the defined contribution plans. For the Belgian plans, the guaranteed return is provided by external insurance companies. For the Swiss plans, the value of the fund investments (EUR 20.7 million at 31 December 2012) is well in excess of the guaranted amounts .
| in thousand EUR | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | EMPLOYEE BENEFITS |
TAX LITIGATION | OTHER LITI- GATION | DEFECTIVE PRODUCTS |
ENVIRON- MENTAL RISKS |
REORGANI- SATION | PROVISI- ONS FOR ONEROUS CONTRACTS |
OTHER RISKS | FINANCIAL RISKS ON DISPOSAL SUBSIDIA- RIES |
TOTAL |
| At the end of the preceding year | 38 415 | 0 | 189 | 1 996 | 6 178 | 7 937 | 2 265 | 727 | 0 | 57 707 |
| Movements during the year | ||||||||||
| Expected returns on assets | (2 448) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2 448) |
| Actualisation | 4 217 | 0 | 0 | 0 | 0 | 0 | 0 | 7 | 0 | 4 224 |
| Increases | 4 204 | 0 | 3 | 219 | 300 | 2 605 | 29 | 169 | 399 | 7 928 |
| Utilisations | (6 930) | 0 | (52) | (39) | (442) | (8 699) | (1 515) | (64) | 0 | (17 741) |
| Write-backs | (8 014) | 0 | (5) | (602) | (30) | (505) | (151) | (44) | 0 | (9 351) |
| Transfer from one heading to another | (8) | 0 | 0 | 16 | 0 | 55 | (55) | (71) | 479 | 416 |
| Exchange rate differences | 141 | 0 | 0 | 6 | 0 | 7 | 7 | 2 | 0 | 163 |
| At year-end | 29 577 | 0 | 135 | 1 596 | 6 006 | 1 400 | 580 | 726 | 878 | 40 898 |
| Non-current provisions (more than one year) | 28 048 | 0 | 127 | 1 544 | 5 756 | 277 | 580 | 636 | 878 | 37 846 |
| Current provisions (less than one year) | 1 529 | 0 | 8 | 52 | 250 | 1 123 | 0 | 90 | 0 | 3 052 |
| Total | 29 577 | 0 | 135 | 1 596 | 6 006 | 1 400 | 580 | 726 | 878 | 40 898 |
| in thousand EUR | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | EMPLOYEE BENEFITS |
TAX LITIGATION |
OTHER LITIGATION |
DEFECTIVE PRODUCTS |
ENVIRON MENTAL RISKS |
REORGANI SATION |
PROVISI ONS FOR ONEROUS CONTRACTS |
OTHER RISKS | FINANCIAL RISKS ON DISPOSAL SUBSIDIA RIES |
TOTAL |
| At the end of the preceding year | 38 835 | 141 | 370 | 3 248 | 6 653 | 22 790 | 4 459 | 971 | 300 | 77 767 |
| Movements during the year | ||||||||||
| Expected returns on assets | (2 493) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2 493) |
| Actualisation | 4 604 | 180 | 7 | 0 | 4 791 | |||||
| Increases | 4 070 | 0 | 0 | 353 | 1 | 2 966 | 0 | 184 | 0 | 7 574 |
| Utilisations | (5 888) | 0 | (125) | (181) | (476) | (15 557) | (1 779) | 0 | (300) | (24 306) |
| Write-backs | (759) | (136) | (57) | (1 358) | 0 | (2 308) | (591) | (429) | 0 | (5 638) |
| Exchange rate differences | 46 | (5) | 1 | (66) | 0 | 46 | (4) | (6) | 0 | 12 |
| At year-end | 38 415 | 0 | 189 | 1 996 | 6 178 | 7 937 | 2 265 | 727 | 0 | 57 707 |
| Non-current provisions (more than one year) | 35 289 | 0 | 169 | 1 949 | 5 888 | 2 067 | 2 164 | 727 | 0 | 48 253 |
| Current provisions (less than one year) | 3 126 | 0 | 20 | 47 | 290 | 5 870 | 101 | 0 | 0 | 9 454 |
| Total | 38 415 | 0 | 189 | 1 996 | 6 178 | 7 937 | 2 265 | 727 | 0 | 57 707 |
The provisions for defective products are mainly related to warranties granted for products in the bedding division. The provisions are generally calculated on the basis of 1% of yearly turnover, which corresponds to the management's best estimate of the risk under 12-month warranties. When historical data are unavailable, the level of the provisions is compared to the yearly effective rate of liabilities, and if necessary, the amount of provision is adjusted.
Provisions for environmental risks cover primarily (i) the identified risk at the Tertre site (see section II.6.11.1.) and (ii) pollution risks in Belgium and the Netherlands.
Provisions for reorganisation relate to the outstanding balance of expected expenses for (i) the previously announced and additional restructuring plans in Belgium, Germany and the United Kingdom; and (ii) onerous contracts in Germany, Spain and the USA.
Provisions for financial risks relate mainly to (i) provision for risks on the disposal of A.R.T.E. srl (Flexible Foams) (EUR 0.3 million) and (ii) the reclassification from risks associates (EUR 0.5 million) (see II.5.7. Interests in associates).
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| NON-CURRENT LIABILITIES USED | CURRENT LIABILITIES USED | |||||
| Group Recticel | NOTES | 31 DEC 2012 | 31 DEC 2011 | 31 DEC 2012 | 31 DEC 2011 | |
| Secured | ||||||
| Financial leases | 20 850 | 11 024 | 3 291 | 2 161 | ||
| Bank loans | 73 546 | 75 176 | 0 | 0 | ||
| Bank loans - factoring with recourse | 0 | 0 | 0 | 0 | ||
| Discounted bills of exchange | 0 | 0 | 406 | 0 | ||
| Total secured | 94 396 | 86 200 | 3 697 | 2 161 | ||
| Unsecured | ||||||
| Bonds & notes | 45 023 | 44 546 | 0 | 14 500 | ||
| Non-current bank loans with current portion | 1 049 | 4 358 | 498 | 840 | ||
| Other loans | 2 039 | 2 111 | 352 | 268 | ||
| Current bank loans | 0 | 0 | 23 478 | 15 924 | ||
| Bank loans - forfeiting | 0 | 0 | 1 219 | 46 | ||
| Bank overdraft | 0 | 0 | 17 077 | 11 204 | ||
| Other financial liabilities | II.5.19.2. | 0 | 0 | 11 519 | 22 737 | |
| Total unsecured | 48 111 | 51 015 | 54 143 | 65 519 | ||
| Total liabilities carried at amortised cost | 142 507 | 137 215 | 57 840 | 67 680 |
| in thousand EUR | |||||
|---|---|---|---|---|---|
| NON-CURRENT LIABILITIES UNUSED | CURRENT LIABILITIES UNUSED | ||||
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 | 31 DEC 2012 | 31 DEC 2011 | |
| Secured | |||||
| Bank loans | 100 000 | 100 000 | 0 | 0 | |
| Bank loans - factoring with recourse | 0 | 0 | 0 | 0 | |
| Discounted bills of exchange | 0 | 0 | 300 | 900 | |
| Total secured | 100 000 | 100 000 | 300 | 900 | |
| Unsecured | |||||
| Bank loans | 0 | 0 | 45 000 | 47 400 | |
| Total unsecured | 0 | 0 | 45 000 | 47 400 | |
| Total liabilities carried at amortised cost | 100 000 | 100 000 | 45 300 | 48 300 |
At the end of 2012, the gross interest-bearing borrowings of the Group amounted to EUR 200.3 million, compared to EUR 204.9 million at the end of 2011, i.e. a reduction of EUR 4.6 million. This, in spite of the financing of a new Insulation plant in France and substantial cash outlays for restructuring costs, was achieved thanks to strict management of capital expenditure and working capital. The non-recourse factoring/forfaiting programs are at the same level (EUR 45 million) compared to 2011.
At the end of 2012, the weighted average lifetime of debts payable after one year was 4.31 years. The bonds and financial leases are at fixed interest rate.
Besides the drawn amounts under the 'club deal' facility (EUR 75.0 million), the Group also had access at 31 December 2012 to EUR 73.1 million long term loan commitments of which EUR 4.0 million are maturing within one year. On top of this, the Group has also at its disposal EUR 100 million under the 'club deal' facility and EUR 95.4 million undrawn short term credit lines.
The fair market value of floating rate borrowings is close to the nominal value. The interest cost for these variable interest rate borrowings ranges from 0.71% to 2.11% p.a. in EUR and to 1.06% p.a. in CHF.
At balance sheet date the total borrowings were directly or synthetically (through currency swaps) denominated for 73.1% in EUR, 9.5% in GBP, 4.7% in CHF, 3.9% in SEK, 1.1% in CZK, 2.1% in USD, 1.9% in PLN and 3.7% in various other currencies.
The majority of the Group's financial debt is centrally contracted and managed through Recticel International Services N.V./S.A., which acts as the Group's internal bank.
In July 2011, the Eurofoam joint venture concluded a new 5 years EUR 40 million private placement at a fixed interest rate of 4.02%. At year-end, this liability amounted to EUR 20 million on the balance sheet. The net present value as of 31 December 2012 is EUR 22.8 million.
The borrowings under the 'club deal' are subject to bank covenants based on an adjusted leverage ratio, an adjusted interest cover and a minimum equity requirement. At end-2012, Recticel complied with all its bank covenants. On the basis of the available budget and the business plan, management expects to be in a position to meet the bank covenants in the coming year.
As stated in the club deal, the maximum dividend authorised for distribution amounts to the highest of (i) 50% of the consolidated net income of the Group for the previous financial year and (ii) EUR 8.0 million.
Reference to II.5.22. Liquidity risk:
The convertible bond loan was issued in July 2007, for a nominal amount of EUR 57.5 million, of which the Group bought back EUR 11.2 million during 2008, EUR 17.3 million in 2009 and EUR 1.4 million in 2011. Out of the remaining outstanding balance of EUR 27.7 million, EUR 25.0 million is recorded under financial debt. The remaining balance is entered in a specific capital account. This loan had a 10-year term at issuance, with a put option for investors in 2014. The coupon amounts to 5.0% and is payable annually.
This bond is convertible into shares. The initial conversion price was set at EUR 14.34 per share. This conversion price is subject to adjustments in function of the dividend payments. The current conversion price (at 31 December 2012) is fixed at EUR 12.53. The bonds are convertible until 16 July 2017 into ordinary shares at the current conversion price at that time.
Unless the loan is redeemed, converted or cancelled earlier, the bonds will be redeemed in cash on 23 July 2017 at par, together with the interest due and not yet paid. At year-end, this liability amounted to EUR 25.0 million on the balance sheet. The net present value as of 31 December 2012 is EUR 30.5 million. The latter is obtained by discounting the related cash flows of the bond at the relevant market interest rates.
The increase in this item is explained by the leasing entered into to finance the new Insulation plant in France. As this EUR 13 million lease is at floating rate, the net present value is very similar to its nominal value. There is one other major lease at fixed rate for EUR 9.6 million on the balance sheet, with a net present value as of 31 December 2012 amounting to EUR 11.0 million.
On 09 December 2011, Recticel concluded a new five-year club deal with 7 European banks for a multi-currency loan of EUR 175 million. This new loan was used to refinance the outstanding amounts under the club deal of 2008, due in February 2013 but reimbursed anticipatively in order to secure long term funding in view of difficult market circumstances.
Interest rate swaps are the only instruments designated in cash flow hedge relationship.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Interest rate swaps | 8 192 | 6 874 |
| Premium for derivative instruments | 0 | 1 |
| Interest charges on foreign currency swaps | 29 | 75 |
| Trading/economic hedge | 260 | 1 687 |
| Derivatives at fair value | 8 481 | 8 637 |
| Other financial debt | 1 637 | 12 732 |
| Interest accruals | 1 401 | 1 368 |
| Total | 11 519 | 22 737 |
| in thousand EUR | |||||
|---|---|---|---|---|---|
| NON-CURRENT LIABILITIES | CURRENT LIABILITIES | ||||
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 | 31 DEC 2012 | 31 DEC 2011 | |
| Trade payables | 0 | 64 | 0 | 0 | |
| Advances received on contracts in progress | 144 | 0 | 6 | 6 | |
| Customers' deposits | 162 | 162 | 0 | 0 | |
| Other amounts payable | 195 | 127 | 20 | 55 | |
| Total other debts payable | 501 | 353 | 26 | 61 |
| in thousand EUR | ||||
|---|---|---|---|---|
| MINIMUM LEASE PAYMENTS |
PRESENT VALUE OF MINIMUM LEASE PAYMENTS |
MINIMUM LEASE PAYMENTS |
PRESENT VALUE OF MINIMUM LEASE PAYMENTS |
|
| Group Recticel | 31 DEC 2012 | 31 DEC 2012 | 31 DEC 2011 | 31 DEC 2011 |
| Lease payments due within one year | 3 912 | 3 291 | 2 938 | 2 161 |
| Between one and five years | 16 068 | 13 006 | 10 392 | 8 662 |
| Over five years | 8 752 | 7 844 | 2 445 | 2 362 |
| Total lease payments | 28 732 | 24 141 | 15 775 | 13 185 |
| Future financial charges | (4 591) | - | (2 590) | - |
| Present value of lease obligations | 24 141 | 24 141 | 13 185 | 13 185 |
| Less amounts due for settlement within 12 months | - | (3 291) | - | (2 161) |
| Amounts due for settlement after 12 months | - | 20 850 | - | 11 024 |
The financial leases were contracted by the operating affiliates to finance buildings and equipment amounting to EUR 28.7 million, with a funding cost ranging from 1.9% p.a. to 9.5% p.a.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note II.1.3. to the financial statements.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | NOTES | 31 DEC 2012 | 31 DEC 2011 |
| Financial assets | |||
| Fair value through profit or loss account ("FVTPL") | |||
| Premium for derivatives instruments | 9 | 67 | |
| Trading/Economic hedge (FX forward) | 665 | 408 | |
| Financial assets at fair value through profit & loss account (b) | II.5.13. | 674 | 475 |
| Non-current trade receivables (a) | II.5.10. | 83 | 69 |
| Current trade receivables | II.5.13. | 114 540 | 132 910 |
| Trade receivables (A) | 114 623 | 132 979 | |
| Other non-current receivables (a) | II.5.10. | 1 177 | 2 003 |
| Cash advances & deposits (a) | II.5.10. | 2 402 | 2 448 |
| Other receivables (b) | II.5.13. | 25 993 | 29 471 |
| Other receivables (B) | 29 572 | 33 922 | |
| Loans to affiliates | II.5.10. | 1 349 | 1 143 |
| Other loans | II.5.10. | 2 653 | 2 642 |
| Non current loans (a) | 4 002 | 3 785 | |
| Financial receivables (b) | II.5.13. | 21 456 | 9 621 |
| Loans (C) | 25 458 | 13 406 | |
| Cash and cash equivalents (D) | I.4. & II.5.14. | 27 008 | 54 575 |
| Total loans & receivables (A+B+C+D) | 196 661 | 234 882 | |
| Other investments (available for sale investments) | 167 | 326 | |
| Non-current receivables (sum of (a)) | I.4. & II.5.10. | 7 664 | 8 305 |
| Other receivables (sum of (b)) | I.4. & II.5.13. | 48 123 | 39 567 |
| Financial liabilities | |||
| Interest rate swaps designed as cash flow hedge relationship | 8 192 | 6 874 | |
| Interest charges on foreign currency swaps | 29 | 75 | |
| Trading/Economic hedge (FX forward) | 260 | 1 687 | |
| Financial liability at fair value through profit & loss account (E) | II.5.19. | 289 | 1 762 |
| Non current financial liabilities at amortised cost | I.4. & II.5.19. | 142 507 | 137 215 |
| Current financial liabilities at amortised cost (F) | II.5.19. | 49 359 | 59 044 |
| Current financial liabilities (E+F) | I.4. & II.5.19. | 57 840 | 67 680 |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | QUOTED PRICES (UNADJUSTED) IN ACTIVE MARKETS |
OBSERVABLE MARKET INPUTS (OTHER THAN QUOTED PRICES IN ACTIVE MARKETS) |
INPUTS NOT BASED ON OBSERVABLE MARKET DATA |
TOTAL |
| Trading/economic hedge - FX forward | 0 | 665 | 0 | 665 |
| Total hedging assets | 0 | 665 | 0 | 665 |
| Short term investments - gross | 0 | 45 | 0 | 45 |
| Total trading investments | 0 | 45 | 0 | 45 |
| 0 | ||||
| Interest rate swaps | 0 | 8 192 | 0 | 8 192 |
| Interest from foreign currency swaps | 0 | 29 | 0 | 29 |
| Trading/economic hedge - FX forward | 0 | 260 | 0 | 260 |
| Total hedging liabilities | 0 | 8 481 | 0 | 8 481 |
The Group is managing a portfolio of derivative financial instruments to hedge foreign exchange and interest rate exposures resulting from operational and financial activities. It is the Group's policy not to engage in speculative or leveraged transactions or to hold or issue derivative financial instruments for trading purposes.
Recticel is hedging the interest rate risk linked to its interest-bearing borrowings on a global basis. The main hedging instruments used to convert floating rate debt into fixed rate debt are Interest Rate Swaps (IRS) or Interest Rate Caps (CAPs). The amount of fixed rate arrangements in relation to total financial debt is reviewed on an on-going basis by the Finance Committee and adjusted as and when deemed appropriate. In this, the Finance Committee aims at maintaining an appropriate balance between fixed and floating rate arrangements based on a philosophy of sound spreading of interest rate risks.
In an interest rate swap ("IRS") agreement, the Group undertakes to pay or receive the difference between the amounts of interest at fixed and floating rates on a nominal amount. This type of agreement enables the Group to fix the rate on a portion of its floating rate debt in order to be protected against the risk of higher interest charges on a loan at floating interest rates.
The market value of the portfolio of interest rate swaps on the balance sheet date is the discounted value of the future cash flows from the contract, using the interest rate curves at that date.
The current portfolio of IRS covers a portion of such borrowings until February 2013 for EUR 75 million. The forward starting portion of the IRS portfolio will cover it from February 2013 until February 2018 (EUR 57 million). The total IRS portfolio (EUR 132 million) qualifies for hedge accounting under the rules of IAS 39.
The weighted average life of the forward-starting IRS portfolio is 5.0 years.
The Group also concluded interest rate "Cap" options in EUR to hedge its interest rate risk. An interest rate "Cap" is a derivative by which the buyer of the option receives payments at the end of each period in which the reference interest rate exceeds the agreed strike price. It allows to benefit from lower short term interest rates while being hedged in case short term interest rates would rise.
In 2012 all the 'Cap' options matured.
On 31 December 2012, the fair value of the interest rate swaps was estimated at EUR –8.2 million. The revaluation of the IRS portfolio impacts, directly the Group equity (and not the P&L) since these instruments are benefiting from a hedge accounting treatment based on periodic effectiveness testing and the fact that those hedges perfectly match characteristics of underlying debt.
The convertible bond loan (EUR 25.0 million, portion booked under financial debt), the private placement with the joint venture Eurofoam (EUR20.0 million) and the financial leases (EUR 28.7 million) were issued at a fixed rate; most other bank debt is contracted at floating rate. A current portfolio of derivative products provides a global hedge for a total of EUR 75.0 million at balance sheet date, meaning that total fixed-rate arrangements represent 55% of the total debt.
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | MARKET VALUE AT 31 DEC 2012 |
RECOGNISED IN THE INCOME STATEMENT OF 2012 |
RECOGNISED IN THE INCOME STATEMENT OF PREVIOUS YEARS |
| Overview of CAP contracts | ||||
| Bought "CAP" options | 0 | 0 | 54 | (54) |
| Bought forward starting "CAP" options | 0 | 0 | 0 | 0 |
| Total CAP contracts | 0 | 0 | 54 | (54) |
| Overview of IRS contracts | 0 | 0 | 0 | 0 |
| Total IRS contracts | 0 | 0 | 0 | 0 |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | MARKET VALUE AT 31 DEC 2012 |
RECOGNISED IN EQUITY OF 2012 |
RECOGNISED IN THE EQUITY OF PREVIOUS YEARS |
| Overview of IRS contracts | ||||
| Interest Rate Swaps (IRS) in EUR | 75 000 | (492) | 2 004 | (2 496) |
| Forward-starting IRS in EUR | 57 000 | (7 700) | (3 359) | (4 341) |
| Total IRS contracts | 132 000 | (8 192) | (1 355) | (6 837) |
| in thousand EUR | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | OUTSTANDING IRS PORTFOLIO AS OF 31 DEC 2012 | |||||||||||
| START | MATURITY | RATE | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | ||||
| 23/12/08 | 28/02/13 | 4.32% | 35 000 | 0 | 0 | 0 | 0 | 0 | ||||
| 23/12/08 | 28/02/13 | 4.31% | 15 000 | 0 | 0 | 0 | 0 | 0 | ||||
| 23/12/11 | 22/02/13 | 3.41% | 12 500 | 0 | 0 | 0 | 0 | 0 | ||||
| 23/12/11 | 22/02/13 | 3.47% | 12 500 | 0 | 0 | 0 | 0 | 0 | ||||
| 22/02/13 | 22/02/18 | 1.07% | 0 | 7 000 | 7 000 | 7 000 | 7 000 | 7 000 | ||||
| 22/02/13 | 22/02/18 | 3.96% | 0 | 25 000 | 25 000 | 25 000 | 25 000 | 25 000 | ||||
| 22/02/13 | 22/02/18 | 3.80% | 0 | 12 500 | 12 500 | 12 500 | 12 500 | 12 500 | ||||
| 22/02/13 | 22/02/18 | 3.64% | 0 | 12 500 | 12 500 | 12 500 | 12 500 | 12 500 | ||||
| Average rate | 3.50% | 75 000 | 57 000 | 57 000 | 57 000 | 57 000 | 57 000 |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | MARKET VALUE AT 31 DEC 2011 |
RECOGNISED IN THE INCOME STATEMENT OF 2011 |
RECOGNISED IN THE INCOME STATEMENT OF PREVIOUS YEARS |
| Overview of CAP contracts | ||||
| Bought "CAP" options | 40 000 | (54) | (54) | (103) |
| Bought forward starting "CAP" options | 0 | 0 | 0 | 38 |
| Total CAP contracts | 40 000 | (54) | (54) | (65) |
| Overview of IRS contracts | 0 | 0 | 0 | 0 |
| Total IRS contracts | 0 | 0 | 0 | 0 |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | MARKET VALUE AT 31 DEC 2011 |
RECOGNISED IN EQUITY OF 2011 |
RECOGNISED IN THE EQUITY OF PREVIOUS YEARS |
| Overview of IRS contracts | ||||
| Interest Rate Swaps (IRS) in EUR | 75 000 | (2 496) | (1 196) | (1 300) |
| Forward-starting IRS in EUR | 50 000 | (4 341) | (188) | (4 153) |
| Total IRS contracts | 125 000 | (6 837) | (1 384) | (5 453) |
The Group's interest rate risk exposure derives from the fact that it finances at both fixed and variable interest rates. The Group manages the risk centrally through an appropriate structure of loans at fixed and variable interest rates and through interest rate swaps (IRS) and interest cap contracts (caps). The interest rate hedges are evaluated regularly to bring them in line with the Group's view of the trend in interest rates on the financial markets, with the aim of stabilising the interest rate burden throughout the various economic cycles.
If the interest rates yield curve had risen by 100 basis points, with all other parameters unchanged, the Group's profit in 2012 would not have been impacted by the change in 'marked-tomarket' value of the derivatives. However the reserves in equity would have increased by EUR 3.1 million as a result of the change of 'marked-to-market' value of the interest rate swaps concluded to hedge the debts (compared to EUR 3.5 million in 2011).
Conversely, if the interest rates yield curve would have fallen by 100 basis points, with all other parameters unchanged, the reserves in equity would have decreased by EUR 2.8 million as a result of the fall in the 'marked-to-market' value of the interest rate swaps concluded to hedge the debts (compared to EUR 3.5 million in 2011).
The sensitivity to 'marked-to-market' value of the interest rate derivatives decreased in 2012 compared to 2011, due to the effect of a change of a reduced nominal amount of the total portfolio (EUR 75 million maturing on 22/02/2013).
Profit and loss impact
If the interest rates yield curve had risen by 100 basis points, with all other parameters unchanged, the Group's profit in 2012 would have decrease by EUR 1.1 million (debt with floating rate without hedge), compared to EUR 0.9 million in 2011.
Conversely, if the interest rates yield curve would have fallen by 100 basis points, with all other parameters unchanged, the Group's profit in 2012 would have increased by EUR 1.1 million, compared to 0.9 million in 2011.
It is the Group's policy to hedge foreign exchange exposures resulting from financial and operational activities via Recticel International Services SA/NV (RIS), which acts as internal bank of the Group. This is mainly implemented through forward exchange contracts.
In general, the Group concludes forward exchange contracts to cover foreign exchange risks on incoming and outgoing payments in foreign currency. The Group also concludes forward exchange contracts and option contracts to cover exchange risks associated with planned sales and purchases of the year, at a percentage which varies according to the predictability of the payment flows.
At balance sheet date, forward exchange contracts were outstanding for a notional value of EUR 39.0 million and with a total fair value of EUR 0.26 million. The currency swap contracts, maturing under 12 months, have a notional value of EUR 60.2 million, corresponding to a total fair value of EUR 0.15 million. At balance sheet date, no currency option contracts were outstanding. Recticel does not apply hedge accounting treatment to FX contracts as they are all less than 1 year.
Foreign exchange risks relating to a net investment in foreign currency are also hedged selectively. At balance sheet date, there was one hedge of this type to lower the net investments in CHF for an amount of CHF 8 million. In so far as these investments and hedge are long term, the revaluation of these investments and the hedge thereof is undertaken via an equity account and not via the income statement.
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | MARKET VALUE AT 31 DEC 2012 |
RECOGNISED IN THE INCOME STATEMENT OF 2012 |
RECOGNISED IN THE INCOME STATEMENT OF PREVIOUS YEARS |
| Forward purchasing contracts less than 6 months | 21 249 | 281 | 807 | (526) |
| Forward purchasing contracts more than 6 months | 10 865 | 24 | 58 | (34) |
| Forward sale contracts less than 6 months | 5 780 | (37) | 224 | (261) |
| Forward sale contracts more than 6 months | 1 120 | (10) | 182 | (172) |
| Total forward exchange contracts | 39 014 | 258 | 1 271 | (993) |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | MARKET VALUE AT 31 DEC 2012 |
RECOGNISED IN THE INCOME STATEMENT OF 2012 |
RECOGNISED IN THE INCOME STATEMENT OF PREVIOUS YEARS |
| Sales / Purchases | 40 587 | 106 | 488 | (382) |
| Purchases / Sales | 19 632 | 45 | 19 | 26 |
| Total currency swap contracts | 60 219 | 151 | 507 | (356) |
The Group deals mainly in 5 currencies outside the euro zone: USD, CZK, SEK, GBP and CHF.
The following table details the sensitivity of the Group to a positive or negative variation, compared to the annual variation in the pairs of currencies during the previous financial year.
The sensitivity analysis covers only the financial amounts in foreign currency which are recognised in the balance sheet and which are due and past due, and determines their variations at the conversion rates based on the following assumptions: USD and GBP 10%; CZK, CHF and SEK 5%.
The sensitivity analysis covers both external and internal loans of the Group where the currency of the operations differs from the local currency of the borrower and lender. A positive amount in the table below indicates an increase in the gain if the EUR strengthens by the given historical annual average. An equal counterpart loss will be measured if the EUR weakens by the same percentage.
The sensitivity of the Group to exchange rate variations decreased in 2012 compared to 2011, due to smaller positions, except in USD due to the growing USD payables linked to the new business in China.
| in thousand EUR | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | EUR/USD | EUR/CHF | EUR/GBP | EUR/CZK | EUR/SEK | |||||
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| Historical average variation | 10% | 10% | 5% | 5% | 10% | 10% | 5% | 5% | 5% | 5% |
| Profit or (loss) recognized in the P&L account | 1 417 | 205 | 20 | 50 | 416 | 2 284 | 108 | 889 | 146 | 34 |
| Profit or (loss) recognized in equity | 0 | 0 | 331 | 331 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total net exposure | 9 572 | 2 058 | 6 221 | 7 627 | 4 163 | 22 841 | 2 154 | 17 779 | 2 914 | 688 |
Despite the crisis on the financial markets since the summer of 2007, the liquidity risk of the Group remains well under control.
The financing sources are well diversified and the bulk of the debt is irrevocable and long-term. This debt includes the EUR 57.5 million convertible bond loan concluded in July 2007 and expiring in July 2017 (with a put option in 2014) (of which EUR 11.2 million was bought back in 2008, EUR 17.3 million in 2009 and EUR 1.4 million in 2011). It also includes the 5-year club deal concluded on 09 December 2011 for an amount of EUR 175 million. In addition, the Group still holds EUR 51.8 million in other long-term debt.
In addition to these long-term loans, the Group has a diversified range of short-term financing sources, including non-recourse factoring and forfaiting programmes.
The diversified financing structure and the availability of committed unused credit facilities for EUR 199.1 million (2011: EUR 183.6 million) guarantee the necessary liquidity to ensure the future activities and to meet the short- and medium-term financial commitments.
The club deal is subject to bank covenants based on an adjusted leverage ratio, an adjusted interest cover and a minimum equity requirement. At the end of 2012, Recticel complied with all its bank covenants. On the basis of the 2013 budget, the management expects to be in a position in the coming year to meet its bank covenants.
As stated in the club deal, the maximum dividend authorised for distribution amounts to the highest of (i) 50% of the consolidated net income of the Group for the previous financial year and (ii) EUR 8.0 million.
The private placement facility contracted by the Eurofoam group as well as the convertible bond issued by Recticel are not subject to any financial covenants.
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | NOTES | MATURING WITHIN ONE YEAR |
MATURING BETWEEN 1 AND 5 YEARS |
MATURING AFTER 5 YEARS |
TOTAL LONG TERM |
FUTURE FINANCIAL CHARGES |
PRESENT VALUE OF THE MINIMUM PAYMENTS |
| Bonds and notes | 2 203 | 52 410 | 0 | 54 613 | (9 590) | 45 023 | |
| Financial leases | 3 912 | 16 068 | 8 753 | 28 733 | (4 593) | 24 140 | |
| Bank loans | 2 813 | 81 000 | 0 | 83 813 | (8 719) | 75 094 | |
| Other loans | 352 | 1 420 | 1 731 | 3 503 | (1 112) | 2 391 | |
| Total Financial liabilities - long term | *II.5.19.1. | 9 280 | 150 898 | 10 484 | 170 662 | (24 014) | 146 648* |
| Bank loans | 23 478 | ||||||
| Bank loans - forfeiting | 1 219 | ||||||
| Discounted bills of exchange | 406 | ||||||
| Bank overdraft | 17 077 | ||||||
| Other financial debt | 269 | ||||||
| Current accounts & cash pooling | 1 368 | ||||||
| Accrued liabilities - financial short term | 393 | ||||||
| Deferred income - financial short term | 1 | ||||||
| Total Financial liabilities - short term (a) | 44 211 | ||||||
| Interest rate swaps | 492 | 0 | 7 700 | 7 700 | 0 | 7 700 | |
| Interest from FX swaps | 29 | 0 | 0 | ||||
| Trading/economic hedge | 260 | 0 | 0 | ||||
| Derivative instruments at fair value (b) | 781 | 0 | 7 700 | 7 700 | 0 | 7 700 | |
| Grand total financial liabilities due within one year | 54 272 | ||||||
| Non-current financial liabilities | I.4. | 142 507 | |||||
| Current portion of non-current financial liabilities (b) | 4 141 | ||||||
| Total | 146 648 | ||||||
| Total financial liabilities - short term (a) | 44 211 | ||||||
| Derivative instruments at fair value (b) | 8 481 | ||||||
| Current portion of non-current financial liabilities (c) | 4 141 | ||||||
| Interest accruals on non-current financial liabilities | 1 007 | ||||||
| Total current financial liabilities | I.4. | 57 840 |
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | NOTES | MATURING WITHIN ONE YEAR |
MATURING BETWEEN 1 AND 5 YEARS |
MATURING AFTER 5 YEARS |
TOTAL LONG- TERM |
FUTURE FINANCIAL CHARGES |
PRESENT VALUE OF THE MINIMUM PAYMENTS |
| Bonds and notes | 17 337 | 28 812 | 25 238 | 71 387 | (12 341) | 59 046 | |
| Financial leases | 2 938 | 10 392 | 2 445 | 15 775 | (2 590) | 13 185 | |
| Bank loans | 3 499 | 89 637 | 0 | 93 136 | (12 762) | 80 374 | |
| Other loans | 234 | 920 | 1 854 | 3 008 | (629) | 2 379 | |
| Total Financial liabilities - long term | *II.5.19.1. | 24 008 | 129 761 | 29 537 | 183 306 | (28 322) | 154 984* |
| Bank loans | 15 924 | ||||||
| Bank loans - forfeiting | 46 | ||||||
| Bank overdraft | 11 204 | ||||||
| Other financial debt | 10 708 | ||||||
| Current accounts & cash pooling | 2 024 | ||||||
| Accrued liabilities - financial short term | 264 | ||||||
| Deferred income - financial short term | 1 | ||||||
| Total Financial liabilities - short term (a) | 40 171 | ||||||
| Interest rate swaps | 0 | 2 496 | 4 378 | 6 874 | 0 | 6 874 | |
| Premium for derivative instruments | 1 | ||||||
| Interest from FX swaps | 75 | ||||||
| Trading/economic hedge | 1 687 | ||||||
| Derivative instruments at fair value (b) | 1 763 | 2 496 | 4 378 | 6 874 | 0 | 6 874 | |
| Grand total financial liabilities due within one year | 65 942 | ||||||
| Non-current financial liabilities | I.4. | 137 215 | |||||
| Current portion of non-current financial liabilities (b) | 17 769 | ||||||
| Total | 154 984 | ||||||
| Total financial liabilities - short term (a) | 40 171 | ||||||
| Derivative instruments at fair value (b) | 8 637 | ||||||
| Current portion of non-current financial liabilities (c) | 17 769 | ||||||
| Interest accruals on non-current financial liabilities | 1 103 | ||||||
| Total current financial liabilities | I.4. | 67 680 |
Trade and other payables principally comprise amounts outstanding for trade purchases and on-going costs. The Group accepted shorter payment terms under the contracts offering substantial cash discounts. Consequently, the level of trade payables decreased compared to the previous year.
The item "Other payables" relates principally to the reversal of various operational accruals.
During 2012 there were no material business combinations, nor disposals.
The Group manages its capital structure via the optimisation of interest-bearing borrowings and equity so that the companies of the Group could operate according to the principle of continuity and while optimizing the return to shareholders.
The capital structure of the Group includes the financial debts, cash and cash equivalents and equity (minority interests included).
Existing financing agreements are subject to a number of financial covenants which were at the end of the year.
At the end of 2012, the net financial debt amounted to EUR 172.6 million (end 2011: EUR 149.6 million), mainly explained by the financing of the new Insulation plant in Bourges (France). The level of debt represents 66% of equity (2011: 60%). The Group aims for gradual improvement in the level of debt in the coming years.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Payments due within one year | (25 631) | (26 523) |
| Between one and five years | (60 343) | (56 069) |
| Over five years | (37 477) | (25 821) |
| Minimal future payments | (123 451) | (108 413) |
Operating lease payments represent rentals payable by the Group for certain of its industrial and/or office properties and for certain production, logistic and /or administrative equipment.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| Operating lease - land and buildings | (26 170) | (21 411) |
| Operating lease - plant, machinery and equipment |
(3 179) | (3 029) |
| Operating lease - furniture | (308) | (1 787) |
| Operating lease - vehicules | (4 954) | (7 831) |
| Total | (34 611) | (34 058) |
The above table only comprises the recognized lease payments of the financial period.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 |
31 DEC 2011 |
| Guarantees given or irrevocably promised by Recticel SA/NV as security for debts and commitments of companies |
63 347 | 63 805 |
These guarantees include mainly parental corporate guarantees and letters of comfort for commitments contracted by subsidiaries with banks (EUR 37.0 million), lessors (EUR 16.2 million), suppliers (EUR 1.4 million), governmental institutions (EUR 6.7 million) and other third parties (EUR 2.0 million).
As already mentioned above, in December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal and the agreement relating to the subordinated loans, Recticel SA/NV and/or its subsidiaries have granted a floating charge mandate in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
Since 1993, the Recticel Group has implemented a Group Stock Option Plan for its leading managers. All issued stock options up to and including 2000 have in the meantime been exercised, forfeited or they have expired.
| Overview of the outstanding stock options per 31 December 2012 | ||||||||
|---|---|---|---|---|---|---|---|---|
| ISSUE | NUMBER OF WARRANTS ISSUED |
NUMBER OF WARRANT NOT YET EXERCISED |
EXERCISE PRICE (IN EUR) | EXERCISE PERIOD | ||||
| 2006 | 306 000 | 306 000 | 9.65 | 01/Jan/10 - 21/Dec/17 | ||||
| May 2007 | 48 000 | 48 000 | 10.47 | 01/Jan/11 - 01/May/18 | ||||
| Dec 2007 | 390 000 | 390 000 | 9.78 | 01/Jan/11 - 02/Dec/18 | ||||
| Dec 2008 | 540 000 | 540 000 | 4.29 | 01/Jan/12 - 23/Dec/14 | ||||
| Dec 2009 | 584 000 | 584 000 | 5.05 | 01/Jan/13 - 21/Dec/15 | ||||
| May 2011 | 354 500 | 354 500 | 7.69 | 01/Jan/15 - 29/May/17 | ||||
| Dec 2011 | 438 000 | 438 000 | 4.03 | 01/Jan/15 - 21/Dec/17 | ||||
| Dec 2012 | 326 800 | 326 800 | 4.95 | 01/Jan/16 - 20/Dec/18 | ||||
| Total | 2 987 300 | 2 987 300 |
The expense recognised for the year for the share-based payments amounts to EUR 0.356 million (2011: EUR 0.405 million).
A more general overview showing the trend during 2012 is given below.
| In units | 2012 | 2011 |
|---|---|---|
| Options - end of period | 3 080 000 | 2 660 500 |
| Weighted average exercise price (in EUR) | 6.24 | 6.40 |
| Outstanding at the beginning of the period | 2 660 500 | 1 968 000 |
| Granted during the period | 326 800 | 792 500 |
| Expired during the period (1) | 0 | 100 000 |
| Exercised during the period | 0 | 0 |
| Outstanding at the end of the period | 2 987 300 | 2 660 500 |
| Total exercisable at the end of the period | 1 284 000 | 744 000 |
| Total 'in-the-money' at the end of the period | 1 888 805 | 978 000 |
| Total exercisable and 'in-the-money' at the end of the period | 540 000 | 0 |
(1) For 2011: 100,000 options issued in 2002 with an exercice price of EUR 9.50.
The options outstanding at 31 December 2012 had a weighted average exercise price of EUR 6.24, and a weighted average remaining contractual life of 4.21 years.
The Group follows the transitional provisions prescribed by IFRS 2 (i.e. equity instruments granted after 7 November 2002 and not yet vested on 1 January 2008).
In 2012 no stock options were exercised, and one new warrant plan was issued.
To date, the Group has not issued share appreciation rights to any of its managers or employees, nor has it implemented any share purchase plan.
The theoretical value of the warrants at issuance is calculated by applying the Black & Scholes formula, and taking into account certain hypotheses regarding dividend payment (last dividend compared to share price), interest rate (Euribor 5 years) and volatility (stock market data on the Recticel share).
End January 2013, Recticel Automobilsysteme GmbH, a fully owned subsidiary of the Recticel Group, announced its intention to restructure its production operations in Rheinbreitbach (Germany). This restructuring plan aims to reduce at the Rheinbreitbach plant over the period 2014-2015 by about 150 jobs on a total of 178. The related restructuring costs will be charged to the results of the first half year of 2013.
Early March 2013, the CNC, the Spanish National Competition Commission, announced that it has imposed fines on ten companies in the Spanish market, including Recticel Iberica SL, and the national sector association for forming a cartel on the market for the manufacture of flexible polyurethane foam for the comfort industry. Recticel Iberica SL has been exempted from payment under the CNC's leniency program.
Mid-March 2013 Recticel has mandated an independent institution to buy back up to 326,800 of its own shares, in order to cover the stock option plan of 2012 in favour of the management.
In April 2013, Recticel Limited (UK) announced its intention to streamline its Flexible Foams converting activities in the United Kingdom, resulting in the potential closure of its foam converting factory in Nelson (Lancashire) before the end of Q3/2013. The activities of this site are under consideration for integration into the conversion capacities at the converting unit in Alfreton (Midlands). All 95 employees at the site have been put under risk of redundancy. During the consultation period, the Group is committed to search together with employee representatives for the most appropriate social support measures, including mobility to other Recticel UK Flexible Foams' plants. The Flexible Foams' activity employs 485 people in the United Kingdom. The costs will be charged to the first half year of 2013.
After the closing of the accounts, irregularities have been discovered in an affiliate of the Group, that occurred during the period 2001-2010. Though the investigation is not fully completed, it can already be confirmed that the impact of these irregularities was limited to an amount of about EUR 3.6 million over the full period 2001-2010 at the level of the revenues, representing less then 0.02% of the Recticel Group revenues over the same period. The Group will take the necessary measures to regularise this situation in 2013.
Transactions between Recticel SA/NV and its subsidiaries, which are related parties, have been eliminated in the consolidation and are not disclosed in this note. Transactions with other related parties are disclosed below, and concern primarily commercial transactions done at prevailing market conditions. The tables below include only transactions considered to be material, i.e. exceeding a total of EUR 1 million.
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | NON-CURRENT RECEIVABLES |
TRADE RECEIVABLES | OTHER CURRENT RECEIVABLES | FINANCIAL LIABILITIES |
TRADE PAYABLES | REVENUES | PURCHASES |
| A.R.T.E. srl | 0 | 0 | 1 683 | 0 | 0 | 0 | 0 |
| Caria sp zoo | 0 | 110 | 0 | 0 | 0 | 1 000 | 0 |
| Eurofoam Bohemia sro | 0 | 696 | 0 | 0 | 29 | 1 103 | (944) |
| Eurofoam Deutschland Schaumstoffe GmbH | 0 | 630 | 0 | 0 | 614 | 8 842 | (8 613) |
| Eurofoam Gdansk | 0 | 126 | 147 | 0 | 0 | 1 554 | 0 |
| Eurofoam GmbH | 0 | 218 | 0 | 0 | 64 | 1 008 | (944) |
| Eurofoam Industry | 0 | 275 | 0 | 0 | 0 | 1 206 | 0 |
| Eurofoam Polska | 0 | 76 | 0 | 0 | 327 | 804 | (2 115) |
| Eurofoam Poznan | 552 | 396 | 393 | 0 | 0 | 2 352 | 0 |
| Eurofoam Sunderi | 532 | 35 | 0 | 0 | 0 | 655 | 0 |
| Eurofoam TP | 0 | 75 | 0 | 0 | 0 | 706 | 0 |
| Group Greiner | 0 | 347 | 0 | 0 | 148 | 4 000 | (1 704) |
| Group Kingspan | 0 | 0 | 0 | 444 | 0 | 0 | 0 |
| Group Woodbridge | 0 | 287 | 0 | 0 | 395 | 0 | (17 348) |
| Porolon Limited | 0 | 53 | 0 | 0 | 0 | 1 017 | 0 |
| Proseat SAS | 0 | 108 | 0 | 0 | 0 | 2 045 | 0 |
| Proseat Manufacturing SLU | 0 | 453 | 0 | 0 | 0 | 5 871 | 0 |
| Proseat sro | 0 | 421 | 0 | 0 | 0 | 7 656 | 0 |
| TOTAL | 1 084 | 4 306 | 2 223 | 444 | 1 577 | 39 819 | (31 668) |
| CLASSIFICATION | IN THOUSAND EUR |
|---|---|
| Sales | 194 |
| Purchases | 1 252 |
The remuneration of the members of the Board of Directors and of the Management Committee is included in this note. For more information, reference is made to the remuneration report in the section 'Corporate Governance' of this annual report.
| in EUR | ||||||
|---|---|---|---|---|---|---|
| NAME | DIRECTOR'S FEES 2012 |
ATTENDENCE FEES BOARD 2012 |
AUDIT COMMITTEE 2012 |
REMUNERATION AND NOMINATION COMMITTEE 2012 |
REMUNERATION FOR SPECIAL ASSIGNMENTS |
TOTAL (GROSS) |
| DAVIGNON Etienne |
18 000.00 | 23 100.00 | 15 000.00 | - | - | 56 100.00 |
| OLIVIER CHAPELLE BVBA | 9 000.00 | 11 550.00 | - | - | - | 20 550.00 |
| PAQUOT Guy | 9 000.00 | 9 900.00 | - | - | - | 18 900.00 |
| VEAN NV | 5 241.76 | 4 950.00 | - | - | - | 10 191.76 |
| ANDRÉ BERGEN Comm V | 9 000.00 | 9 900.00 | 26 250.00 | 2 500.00 | - | 47 650.00 |
| COMPAGNIE DU BOIS SAUVAGE SERVICES SA | 293.48 | - | - | - | - | 293.48 |
| DE SMEDT Pierre-Alain | 9 000.00 | 8 250.00 | - | 3 750.00 | - | 21 000.00 |
| DEBRUYNE Marion | 5 315.93 | 4 950.00 | - | 2 500.00 | - | 12 765.93 |
| DOUMIER Vincent | 8 706.52 | 9 900.00 | 17 500.00 | - | - | 36 106.52 |
| LOUIS VERBEKE BVBA | 3 684.07 | 6 600.00 | 2 500.00 | - | 12 784.07 | |
| MERCKX Ingrid | 5 315.93 | 4 950.00 | - | - | - | 10 265.93 |
| REVAM BVBA | 5 315.93 | 4 950.00 | 10 000.00 | - | - | 20 265.93 |
| SOGELAM NV | 3 684.07 | 6 600.00 | - | 2 500.00 | - | 12 784.07 |
| VANDEPOEL Wilfried | 3 684.07 | 6 600.00 | 7 500.00 | - | - | 17 784.07 |
| VAN CRAEN Patrick | 5 315.93 | 4 950.00 | - | - | - | 10 265.93 |
| VAN DOORSLAER Tonny | 9 000.00 | 11 550.00 | 15 000.00 | - | - | 35 550.00 |
| ZOETE Jacqueline | 9 000.00 | 6 600.00 | - | - | - | 15 600.00 |
From April 2010 through May 2012, Vean NV was not remunerated for its mandate of director but received a remuneration based on its management services agreement. In the said period, Vean NV received a fixed compensation of EUR 66,666.67 per month or EUR 333,333.35 for the year 2012. Effective 1 June 2012, the management services agreement came to an end. Consequently, the mandate of director of Vean NV is now remunerated, in line with the director fee structure as mentioned here above.
| in EUR | ||||||
|---|---|---|---|---|---|---|
| TOTAL COST FOR THE COMPANY | OLIVIER CHAPELLE SPRL REPRESENTED BY OLIVIER CHAPELLE |
OTHER MEMBERS OF THE MANAGEMENT COMMITTEE |
TOTAL | |||
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| Number of persons | 1 | 1 | 12 | 12 | 13 | 13 |
| Basic salary | 486 000 | 442 000 | 2 795 429 | 2 842 930 | 3 281 429 | 3 284 930 |
| Variable remuneration | 280 000 | 280 000 | 796 284 | 614 857 | 1 076 284 | 894 857 |
| Subtotal | 766 000 | 722 000 | 3 591 713 | 3 457 787 | 4 357 713 | 4 179 787 |
| Pensions | 0 | 0 | 139 840 | 101 125 | 139 840 | 101 125 |
| Other benefits | 88 453 | 95 654 | 242 288 | 214 924 | 330 741 | 310 578 |
| Total | 854 453 | 817 654 | 3 973 840 | 3 773 836 | 4 828 293 | 4 591 490 |
The share of joint venture companies in the consolidated financial statements is as follows:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
| ASSETS | ||
| Intangible assets | 1 884 | 2 191 |
| Goodwill | 9 890 | 9 876 |
| Plant, property & equipment | 51 724 | 50 713 |
| Other financial investments | 4 | 4 |
| Available for sale investments | 10 | 10 |
| Non-current receivables | 1 682 | 1 494 |
| Deferred tax | 198 | 300 |
| Non-current assets | 65 392 | 64 588 |
| Inventories and contracts in progress | 25 579 | 24 544 |
| Trade receivables | 38 567 | 43 063 |
| Other current receivables | 6 684 | 5 673 |
| Income tax receivables | 609 | 791 |
| Cash and cash equivalents | 8 476 | 7 224 |
| Current assets | 79 915 | 81 295 |
| TOTAL ASSETS | 145 307 | 145 883 |
| LIABILITIES | ||
| Hedging and translation reserves | (9 356) | (10 563) |
| Consolidated reserves | 65 967 | 70 972 |
| Equity, minority interests included | 56 611 | 60 409 |
| Pensions and similar obligations | 5 978 | 6 016 |
| Provisions | 358 | 648 |
| Deferred tax | 1 289 | 2 507 |
| Interest-bearings borrowings | 40 577 | 44 300 |
| Non-current liabilities | 48 202 | 53 471 |
| Pensions and similar obligations | 125 | 163 |
| Provisions | 268 | 404 |
| Interest-bearings borrowings | 14 916 | 7 327 |
| Trade payables | 19 943 | 19 075 |
| Income tax payables | 210 | 141 |
| Other amounts payable | 5 032 | 4 893 |
| Current liabilities | 40 494 | 32 003 |
| TOTAL LIABILITIES | 145 307 | 145 883 |
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 |
|---|---|---|
| INCOME STATEMENT | ||
| Sales | 312 256 | 317 291 |
| Distribution costs | (11 345) | (10 891) |
| Cost of sales | (244 568) | (250 390) |
| Gross profit | 56 343 | 56 010 |
| General and administrative expenses | (15 703) | (14 499) |
| Sales and marketing expenses | (8 674) | (8 588) |
| Research and development expenses | (1 665) | (2 306) |
| Other operating revenues and expenses | (21 270) | (19 636) |
| EBIT | 9 031 | 10 981 |
| Interest income | 140 | 117 |
| Interest expenses | (2 708) | (2 919) |
| Other financial income and expenses | (615) | (1 362) |
| Financial result | (3 183) | (4 164) |
| Result of the period before taxes | 5 848 | 6 817 |
| Income taxes | (591) | (1 979) |
| Result of the period after taxes | 5 257 | 4 838 |
| in EUR | |||||
|---|---|---|---|---|---|
| CLOSING RATE | AVERAGE RATE | ||||
| Group Recticel | 2012 | 2011 | 2012 | 2011 | |
| Bulgarian Lev | BGN | 0.511300 | 0.511300 | 0.511300 | 0.511300 |
| Swiss Franc | CHF | 0.828363 | 0.822639 | 0.829686 | 0.811290 |
| Yuan Renminbi | CNY | 0.121644 | 0.122567 | 0.123377 | 0.111161 |
| Czech Crown | CZK | 0.039760 | 0.038779 | 0.039763 | 0.040667 |
| Pound Sterling | GBP | 1.225340 | 1.197175 | 1.233242 | 1.152227 |
| Forint | HUF | 0.003421 | 0.003179 | 0.003457 | 0.003579 |
| Indian Rupee | INR | 0.013782 | 0.014553 | 0.014578 | 0.015412 |
| Yen | JPY | 0.008802 | 0.009980 | 0.009757 | 0.009012 |
| Lithuanian Litas | LTL | 0.289620 | 0.289620 | 0.289620 | 0.289620 |
| Moroccan Dirham | MAD | 0.089574 | 0.089870 | 0.089919 | 0.088695 |
| Moldova Lei | MDL | 0.062546 | 0.065584 | 0.063827 | 0.061256 |
| Norwegian Krone | NOK | 0.136086 | 0.128966 | 0.133778 | 0.128314 |
| Zloty | PLN | 0.245459 | 0.224316 | 0.238964 | 0.242682 |
| Romanian Leu (new) | RON | 0.224997 | 0.231305 | 0.224250 | 0.235900 |
| Serbian Dinar | RSD | 0.008904 | 0.009337 | 0.008806 | 0.009794 |
| Russian Rouble | RUB | 0.024796 | 0.023943 | 0.025046 | 0.024459 |
| Swedish Krona | SEK | 0.116523 | 0.112208 | 0.114889 | 0.110744 |
| Turkish Lira (new) | TRY | 0.424610 | 0.409299 | 0.432238 | 0.427750 |
| Ukrainian Hryvnia | UAH | 0.094161 | 0.095745 | 0.095667 | 0.089597 |
| US Dollar | USD | 0.757920 | 0.772857 | 0.778338 | 0.718414 |
| in units | ||||||
|---|---|---|---|---|---|---|
| 2012 | 2011 | |||||
| Group Recticel | FULLY CONSOLIDATED | PROPORTIONALLY CONSOLIDATED | TOTAL | FULLY CONSOLIDATED | PROPORTIONALLY CONSOLIDATED | TOTAL |
| Management Committee | 12 | 0 | 12 | 12 | 0 | 12 |
| Employees | 1 853 | 518 | 2 371 | 1 880 | 596 | 2 476 |
| Workers | 4 079 | 1 592 | 5 671 | 4 689 | 1 528 | 6 217 |
| Average number of people employed | 5 944 | 2 110 | 8 054 | 6 581 | 2 124 | 8 705 |
| Average number of people employed in Belgium | 1 113 | 87 | 1 200 | 1 238 | 82 | 1 320 |
| Remuneration and social charges (in thousand EUR) |
(253 827) | (66 041) | (319 868) | (267 578) | (65 927) | (333 505) |
Overview of the audit fees and additional services performed for the Group by the auditors and companies related to the auditor for the year ending 31 December 2012.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | DELOITTE | OTHERS |
| Audit fees | 873 | 503 |
| Other legal missions | 2 | 28 |
| Tax services | 563 | 19 |
| Other services rendered related to other assurance reporting | 577 | 86 |
| Total fees in 2012 | 2 015 | 636 |
In the above overview the fees of the joint venture companies are included at 100%.
In 1986, Recticel sold its 'fertiliser' division, which included the Tertre site activities, to Kemira, since taken over by Yara. As part of the deal, Recticel contracted to put an old settling pond (the "Valcke pond") into compliance with environmental regulations. It has not yet been possible to fulfil this obligation because of the inseparable link with the environmental situation of the whole Tertre site, and so a provision has been created to cover the containment costs. In order to protect its rights, Yara issued a writ of summons against Recticel pursuant to this obligation in July 2003. A settlement agreement was negotiated and executed by the parties in the course of 2011, putting a final end to the litigation.
Under the settlement agreement, Yara and Recticel commit to jointly work out a remediation plan covering four polluted spots on the Tertre site, among which the Valcke pond and a dumping site belonging to Finapal, and to share all the costs related thereto.
The parties submitted the plan to the Walloon Authorities for approval in July 2012; it was further revised and resubmitted in December 2012.
On July 27 and 28, 2010, officials from the European Commission and various national antitrust authorities conducted unannounced inspections at Recticel's offices in Brussels, Wetteren, and Alfreton, as well as the office of Eurofoam in Kremsmünster, Austria. The purpose of these inspections was to collect information relating to allegedly unlawful conduct believed to have taken place in the European polyurethane foam sector.
Investigations were also carried out in the United States as part of a coordinated investigation. It is to be noted that the Recticel Group has had no foaming activities in the United States since December 1991, and has not been visited or contacted by the antitrust regulators there. The Group's activities in the United States are limited to specialized foam converting (acoustical applications) and Automotive Interiors. Recticel has had no indication that these business areas are a focus of the competition investigations.
Recticel decided at the time to cooperate with the European Commission. The Commission has in the meantime authorized Recticel to communicate the fact that this cooperation is done in the framework of the Leniency Program, as set forth in the "Commission notice on immunity from fines and reduction of fines in cartel cases", published in the Official Journal C 298, 8.12.2006, p.17.
A request for information was addressed by the Commission to the Company at the end of December 2011, to which answers were given in due time. Further questions were asked in the course and after the close of the first semester of 2012, regarding Recticel's Flexible Foams business, to which answers were provided.
At this time, Recticel has not received any formal objections from the European Commission.
The Group's potential exposure is summarized as follows:
At EU level, the Commission has given Recticel no formal indications regarding its findings, it is nevertheless progressing with its investigation. At this stage, the Group is not in a position to predict what the position of the Commission in relation with the case will be, and hence currently is unable to assess its possible financial consequences.
At the national levels, as a rule, national authorities will not take up a case which is treated by the Commission. Recticel is aware that the national authorities in Spain and Portugal opened investigations into the polyurethane foam sector in February 2011. Recticel has received a request for information from the Spanish authority, but Recticel premises in Spain were not visited by the authority. On March, 6th, 2013, the CNC, the Spanish National Competition Commission, announced that it has imposed fines on ten companies in the Spanish market, including Recticel Iberica SL, and the national sector association, for forming a cartel on the market for the manufacture of flexible polyurethane foam for the comfort industry. Recticel Iberica SL has been exempted from payment under the CNC's leniency program.
On August 4th 2011, the German Federal Cartel Office started an investigation covering the sector of mattress and slat base manufacturers in Germany. Recticel's German bedding affiliate, Recticel Schlafkomfort GmbH, in Bochum was included in the investigation.
The representatives of the Federal Cartel Office requested certain information, which was provided to them. Recticel Schlafkomfort GmbH is cooperating with the Federal Cartel Office investigation.
To this date, Recticel Schlafkomfort GmbH has not received any further request for information, nor any formal objections from the Federal Cartel Office.
At this stage, the Group is not in a position to predict what the position of the Federal Cartel Office in relation with the case will be, and hence currently is unable to assess its possible financial consequences.
Recticel Automobilsysteme GmbH and Recticel Interiors North America Inc., affiliates of Recticel, filed suit on October 12, 2010 against Automotive Components Holdings, LLC ("ACH"), for alleged infringement of a Recticel patent, covering a proprietary two-tones spray technology (the "Patent").
The alleged infringement was taking place for the production of the Ford D 258 Taurus instrument panels and doors.
ACH, its successor Faurecia Interior Systems Saline, LLC and its parent Ford Motor Company eventually reached an out-of-court settlement with the Recticel Group companies, under which the latter received monetary compensation in the amount of USD 2,350,000 in January 2013 and agreed to grant Ford Motor Company a non-exclusive sublicense under the Patent, for the completion of the current D258 Taurus program. All existing legal proceedings in relation with the case are dismissed. This compensation has been recognized in the income statement of 2012.
Address: Avenue des Olympiades, 2 B-1140 Brussels (Evere)
Established: on 19 June 1896 for thirty years, later extended for an unlimited duration.
Object: (article 3 of the Coordinated Articles) The object of the company is the development, production, conversion, trading, buying, selling and transportation, on its own account or on behalf of third parties, of all plastics, polymers, polyurethanes and other synthetic components, of natural substances, metal products, chemical or other products used by private individuals or by industry, commerce and transport, especially for furniture, bedding, insulation, the construction industry, the automotive sector, chemicals, petrochemicals, as well as products belonging to or necessary for their production or which may result or be derived from this process.
It may achieve its object in whole or in part, directly or indirectly, via subsidiaries, joint ventures, participations in other companies, partnerships or associations.
In order to achieve this object, it can carry out all actions in the industrial, property, financial or commercial field which are associated with its object directly or indirectly, in whole or in part, or which would be of a nature to promote, develop or facilitate its operation or its trade or that of the companies, partnerships or associations in which it has a participation or an interest; it can in particular develop, transfer, acquire, rent, hire out and exploit all movable and immovable goods and all intellectual property.
Legal form: naamloze vernnootschap / société anonyme (limited company)
Company number: 405 666 668
Subscribed capital: EUR 72 328 640
Type and number of shares: at 31 December 2012 there was only one type of shares, namely ordinary shares (28,931,456)
Portion of the subscribed capital still to be paid up: 0 shares/EUR 0.
Nature of the shares not fully paid up: none.
Percentage fully paid up: 100%. The shares are all fully paid up.
The accounts were prepared in accordance with requirements specified by the Royal Decree of 8 October 1976 on the annual accounts of trading companies, amended by the Royal Decree of 6 November 1987.
These annual accounts comprise the balance sheet, the income statement and the notes prescribed by law. They are presented hereafter in condensed form.
In accordance with Belgian law, the management report, the annual accounts of Recticel SA/NV and the report of the Statutory Auditor will be filed with the Belgian National Bank.
They are available on request from:
Recticel SA/NV Corporate Communications Avenue des Olympiades, 2 B-1140 Brussels (Evere)
Tel.: +32 (0)2 775 18 11 Fax: +32 (0)2 775 19 90 E-mail: [email protected]
The notes to the annual accounts are related to the financial situation of the company as shown in the balance sheet. The results are also commented on in the preceding annual report.
The Statutory Auditor has delivered an unqualified opinion with an emphasis of matter paragraph on the statutory annual accounts of Recticel SA/NV.
The statutory annual accounts of Recticel SA/NV, as well as the statutory report by the Board of Directors, is freely available on the company's web site www.recticel.com.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 | |
| ASSETS | |||
| FIXED ASSETS | 666 973 | 658 962 | |
| I. | Formation expenses | 0 | 0 |
| II. | Intangible assets | 22 967 | 13 709 |
| III. | Tangible assets | 56 909 | 55 493 |
| IV. | Financial assets | 587 097 | 589 760 |
| CURRENT ASSETS | 98 009 | 96 682 | |
| V. | Amounts receivable after one year | 12 703 | 11 721 |
| VI. | Inventories and contracts in progress | 27 288 | 26 068 |
| VII. Amounts receivable within one year | 55 349 | 56 684 | |
| VIII. Cash deposits | 0 | 0 | |
| IX. Cash |
599 | 320 | |
| X. | Deferred charges and accrued income | 2 069 | 1 889 |
| TOTAL ASSETS | 764 982 | 755 645 | |
| LIABILITIES | |||
| I. Capital |
72 329 | 72 329 | |
| II. | Share premium account | 107 013 | 107 013 |
| III. | Revaluation surplus | 2 551 | 2 551 |
| IV. Reserves |
9 138 | 9 138 | |
| V. P | rofits (losses) brought forward | 69 519 | 66 983 |
| VI. | Investment grants | 97 | 134 |
| VII. A. Provisions for liabilities and charges | 9 861 | 17 798 | |
| B. Deferred taxes | 0 | 0 | |
| VIII. Amounts payable after one year | 69 541 | 71 165 | |
| IX. | Amounts payable within one year | 420 103 | 401 726 |
| X. | Accrued charges and deferred income | 4 830 | 6 808 |
| TOTAL LIABILITIES | 764 982 | 755 645 |
|---|---|---|
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | 31 DEC 2012 | 31 DEC 2011 | |
| PROFIT AND LOSS ACCOUNT | |||
| I. | Operating revenues | 375 062 | 395 953 |
| II. O | perating charges | (340 464) | (367 734) |
| III. | Operating profit (loss) | 34 599 | 28 219 |
| IV. | Financial income | 3 442 | 19 994 |
| V. | Financial charges | (25 277) | (21 110) |
| VI. Current result before tax | 12 763 | 27 103 | |
| VII. | Extraordinary income | 4 493 | 54 003 |
| VIII. Extraordinary charges | (6 619) | (69 068) | |
| IX. Profit (loss) for the year before taxes | 10 637 | 12 038 | |
| X. | Income taxes | 0 | 0 |
| XI. Profit (loss) for the year after taxes | 10 637 | 12 038 | |
| XII. | Transfer to untaxed reserves | 0 | 0 |
| XIII. Profit (loss) for the period available for appropriation | 10 637 | 12 038 |
The statutory annual accounts of Recticel SA/NV as well as the statutory report by the Board of Directors, is freely available on the company's web site www.recticel.com.
The Annual General Meeting decides on the appropriation of the amounts available for distribution on the basis of a proposal from the Board of Directors.
When drawing up its proposal, the Board of Directors takes into account the right balance between ensuring a stable dividend for shareholders and maintaining sufficient investment and selffinancing opportunities to secure the company's longer-term growth.
The Board of Directors decided to present the following appropriation of the results to the General Meeting:
| in EUR | ||
|---|---|---|
| Group Recticel | ||
| Profit for the financial year | 10 637 260.88 | |
| Profit brought forward from previous year | + | 66 982 738.02 |
| Results to be appropriated | = | 77 619 998.90 |
| Gross dividend (1) | - | 8 390 122.24 |
| Profit to be carried forward | = | 69 229 876.66 |
(1) Gross dividend per share of EUR 0.29, resulting in a net dividend after tax of EUR 0.2175 per ordinary share.
Mr Etienne Davignon (Chairman of the Board of Directors), Mr Olivier Chapelle (Chief Executive Officer) and Mr Jean-Pierre Mellen (Chief Financial Officer), declare that:
| in thousand EUR | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | 31 DEC 2012 31 DEC 2011 31 DEC 2010 31 DEC 2009 31 DEC 2008 31 DEC 2007 31 DEC 2006 31 DEC 2005 31 DEC 2004 31 DEC 2003 | |||||||||
| ASSETS | ||||||||||
| Intangible assets | 13 031 | 12 580 | 13 307 | 14 301 | 20 104 | 19 779 | 18 838 | 21 039 | 25 069 | 23 881 |
| Goodwill | 35 003 | 34 688 | 34 365 | 33 311 | 39 164 | 37 555 | 43 616 | 43 626 | 42 307 | 42 197 |
| Property, plant & equipment | 270 904 | 255 347 | 270 979 | 286 789 | 336 560 | 349 381 | 342 262 | 381 136 | 408 294 | 373 716 |
| Investment property | 4 452 | 3 331 | 896 | 896 | 896 | 896 | 896 | 11 466 | 10 894 | 10 227 |
| Interest in associates | 13 784 | 12 957 | 15 451 | 15 697 | 13 626 | 11 078 | 9 175 | 6 749 | 4 804 | 4 193 |
| Other financial investments | 240 | 3 399 | 1 151 | 1 999 | 11 446 | 2 565 | 3 335 | 3 300 | 3 433 | 2 806 |
| Available for sale investments | 122 | 121 | 86 | 85 | 197 | 77 | 357 | 356 | 3 038 | 5 698 |
| Non-current receivables | 7 664 | 8 305 | 10 070 | 9 605 | 5 005 | 5 024 | 5 164 | 11 586 | 3 674 | 3 913 |
| Deferred tax | 45 520 | 50 290 | 55 739 | 43 365 | 52 020 | 56 367 | 67 158 | 64 714 | 63 302 | 59 306 |
| Non-current assets | 390 720 | 381 018 | 402 044 | 406 048 | 479 018 | 482 722 | 490 801 | 543 972 | 564 815 | 525 937 |
| Inventories and contracts in progress | 116 607 | 116 002 | 113 671 | 105 827 | 120 035 | 127 852 | 129 913 | 118 916 | 120 138 | 108 538 |
| Trade receivables | 114 540 | 132 910 | 141 783 | 142 104 | 170 117 | 175 496 | 183 963 | 179 282 | 192 253 | 188 915 |
| Other receivables | 48 123 | 39 567 | 62 285 | 58 016 | 60 095 | 61 825 | 88 333 | 77 558 | 79 884 | 44 982 |
| Income tax receivables | 4 345 | 3 847 | 3 552 | 4 367 | 1 130 | 1 315 | 1 032 | 661 | 855 | 2 165 |
| Available for sale investments | 45 | 205 | 181 | 156 | 293 | 411 | 531 | 483 | 595 | 863 |
| Cash and cash equivalents | 27 008 | 54 575 | 53 938 | 41 388 | 68 151 | 41 049 | 24 723 | 25 626 | 26 468 | 24 096 |
| Current assets | 310 668 | 347 106 | 375 410 | 351 858 | 419 821 | 407 948 | 428 495 | 402 526 | 420 193 | 369 559 |
| Total assets | 701 388 | 728 124 | 777 454 | 757 906 | 898 839 | 890 670 | 919 296 | 946 498 | 985 008 | 895 496 |
| in thousand EUR | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | 31 DEC 2012 31 DEC 2011 31 DEC 2010 31 DEC 2009 31 DEC 2008 31 DEC 2007 31 DEC 2006 | 31 DEC 2005 31 DEC 2004 31 DEC 2003 | ||||||||
| LIABILITIES | ||||||||||
| Capital | 72 329 | 72 329 | 72 329 | 72 329 | 72 329 | 72 329 | 71 572 | 70 833 | 70 833 | 70 833 |
| Share premium | 107 013 | 107 013 | 107 013 | 107 013 | 107 013 | 107 013 | 104 929 | 103 437 | 103 437 | 103 437 |
| Share capital | 179 342 | 179 342 | 179 342 | 179 342 | 179 342 | 179 342 | 176 501 | 174 270 | 174 270 | 174 270 |
| Retained earnings | 95 010 | 85 191 | 75 179 | 67 582 | 51 222 | 47 453 | 25 492 | 47 429 | 80 739 | 81 795 |
| Hedging and translation reserves | (13 728) | (15 739) | (12 853) | (21 395) | (19 951) | (10 964) | (11 793) | (10 292) | (11 223) | (14 467) |
| Equity before non-controlling interests | 260 624 | 248 794 | 241 668 | 225 529 | 210 613 | 215 831 | 190 200 | 211 407 | 243 786 | 241 598 |
| Non-controlling interests | 0 | 0 | 0 | 429 | 23 090 | 32 491 | 38 203 | 39 828 | 37 565 | 30 066 |
| Total equity | 260 624 | 248 794 | 241 668 | 225 958 | 233 703 | 248 322 | 228 403 | 251 235 | 281 351 | 271 664 |
| Pensions and similar obligations | 28 048 | 35 289 | 34 988 | 37 209 | 40 155 | 45 235 | 48 365 | 45 218 | 40 459 | 38 322 |
| Provisions | 9 798 | 12 964 | 24 452 | 23 008 | 17 893 | 17 681 | 21 957 | 14 540 | 12 298 | 17 965 |
| Deferred tax | 8 554 | 9 134 | 8 800 | 8 187 | 9 429 | 9 549 | 7 408 | 6 792 | 4 934 | 5 742 |
| Subordinated loans | 0 | 0 | 0 | 0 | 89 014 | 97 495 | 49 614 | 49 464 | 49 327 | 35 |
| Bonds and notes | 45 023 | 44 546 | 39 780 | 39 368 | 14 500 | 15 040 | 14 869 | 14 500 | 0 | 0 |
| Financial leases | 20 850 | 11 024 | 13 285 | 15 986 | 19 346 | 21 214 | 23 424 | 29 913 | 12 674 | 14 571 |
| Bank loans | 74 595 | 79 534 | 111 977 | 128 200 | 140 161 | 22 085 | 137 601 | 177 547 | 230 988 | 231 364 |
| Other loans | 2 039 | 2 111 | 2 082 | 2 201 | 5 123 | 5 794 | 2 214 | 2 302 | 2 540 | 2 690 |
| Interest-bearing borrowings | 142 507 | 137 215 | 167 124 | 185 755 | 268 144 | 161 628 | 227 722 | 273 726 | 295 529 | 248 660 |
| Other amounts payable | 501 | 353 | 510 | 359 | 1 782 | 462 | 3 938 | 1 159 | 984 | 7 694 |
| Non-current liabilities | 189 408 | 194 955 | 235 874 | 254 518 | 337 403 | 234 555 | 309 390 | 341 435 | 354 204 | 318 383 |
| Pensions and similar obligations | 1 529 | 3 126 | 3 846 | 3 893 | 4 674 | 4 083 | 4 529 | 4 073 | 6 362 | 6 804 |
| Provisions | 1 523 | 6 328 | 14 480 | 8 312 | 8 516 | 5 443 | 5 202 | 3 833 | 7 798 | 7 733 |
| Interest-bearing borrowings | 57 840 | 67 680 | 45 691 | 47 740 | 68 872 | 150 765 | 99 474 | 69 878 | 66 276 | 83 041 |
| Trade payables | 104 980 | 119 274 | 141 887 | 114 208 | 146 993 | 160 443 | 173 134 | 179 611 | 166 900 | 125 397 |
| Income tax payables | 2 281 | 3 974 | 7 542 | 4 712 | 3 389 | 9 659 | 5 212 | 1 063 | 947 | 1 316 |
| Other amounts payable | 83 203 | 83 993 | 86 466 | 98 565 | 95 289 | 77 400 | 93 952 | 95 370 | 101 170 | 81 158 |
| Current liabilities | 251 356 | 284 375 | 299 912 | 277 430 | 327 733 | 407 793 | 381 503 | 353 828 | 349 453 | 305 449 |
| Total liabilities | 701 388 | 728 124 | 777 454 | 757 906 | 898 839 | 890 670 | 919 296 | 946 498 | 985 008 | 895 496 |
| in thousand EUR | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 |
| INCOME STATEMENT | ||||||||||
| Sales | 1 319 488 | 1 378 122 | 1 348 430 | 1 276 662 | 1 555 450 | 1 611 788 | 1 474 422 | 1 391 558 | 1 276 319 | 1 180 773 |
| Distribution costs | (65 838) | (65 182) | (64 768) | (62 061) | (74 528) | (76 777) | (68 668) | (63 782) | (63 442) | (58 986) |
| Cost of sales | (1 042 700) (1 101 628) (1 066 780) | (982 511) (1 260 090) (1 279 997) (1 170 165) (1 140 184) (1 002 560) | (927 416) | |||||||
| Gross profit | 210 950 | 211 312 | 216 882 | 232 090 | 220 832 | 255 014 | 235 589 | 187 592 | 210 317 | 194 371 |
| General and administrative expenses | (83 711) | (85 059) | (80 367) | (82 166) | (90 587) | (88 537) | (88 826) | (89 722) | (85 121) | (76 883) |
| Sales and marketing expenses | (74 792) | (73 836) | (74 331) | (81 040) | (88 077) | (89 454) | (87 070) | (75 845) | (75 084) | (73 809) |
| Research and development expenses | (14 899) | (14 820) | (15 794) | (13 941) | (17 006) | (17 936) | (18 224) | (16 362) | (18 055) | (17 750) |
| Impairments | (1 555) | (5 260) | (10 800) | (10 362) | (12 280) | (1 400) | (32 042) | (11 912) | - | - |
| Other operating revenues (expenses) | 3 033 | 8 363 | (10 075) | 31 | 26 367 | 5 561 | 5 537 | 15 893 | (799) | (13 475) |
| Income from associates | 711 | 1 741 | 935 | 1 608 | 1 899 | (24) | 1 013 | 1 538 | 611 | 623 |
| Income from investments | 0 | (406) | 1 164 | 7 | 265 | 2 013 | 312 | (2 291) | 684 | 502 |
| EBIT | 39 737 | 42 035 | 27 614 | 46 227 | 41 413 | 65 237 | 16 289 | 8 891 | 32 553 | 13 579 |
| Interest income and expenses | (11 889) | (13 270) | (11 770) | (16 919) | (24 414) | (25 181) | (25 441) | (25 199) | (19 351) | (13 976) |
| Other financial income and expenses | (2 450) | (3 414) | (5 325) | 3 125 | (2 022) | (3 566) | 479 | (2 735) | (2 180) | (3 964) |
| Financial result | (14 339) | (16 684) | (17 095) | (13 794) | (26 436) | (28 747) | (24 962) | (27 934) | (21 531) | (17 940) |
| Result of the period before taxes | 25 398 | 25 351 | 10 519 | 32 433 | 14 977 | 36 490 | (8 673) | (19 043) | 11 022 | (4 361) |
| Income taxes | (7 834) | (7 933) | 4 108 | (12 396) | (10 378) | (14 325) | (10 380) | (6 244) | 196 | (2 753) |
| Result of the period after taxes | 17 564 | 17 418 | 14 627 | 20 037 | 4 599 | 22 165 | (19 053) | (25 287) | 11 218 | (7 114) |
| Share of minority interests | 0 | 0 | (188) | 703 | 6 949 | (626) | (2 179) | (2 587) | (5 851) | (2 943) |
| Share of the Group | 17 564 | 17 418 | 14 439 | 20 740 | 11 548 | 21 539 | (21 232) | (27 874) | 5 367 | (10 057) |
Assisted in its work by the Audit Committee, the Board of Directors determines the Group's risk management policy, taking the significance of the general corporate risks that it is prepared to accept into account.
Business and management imply dealing with external and internal uncertainties. These uncertainties imply that decisions intrinsically involving potential risks are constantly being taken at all levels. For this reason, and also because a company must be able to achieve its objectives, it is important to outline, assess, quantify and grade corporate risks as precisely as possible. An appropriate, adapted risk management system that can also draw on efficient monitoring mechanisms and best practices must avoid any adverse effects of potential risks on the company and its value or at least control or minimise those effects.
In 2008, the Management Committee drew up a list of the main corporate risks faced by the Recticel Group within the framework of its activities.
In 2010, it was decided to review this list in order then to define the processes to be implemented to control and limit the risks thus identified.
To this end, a specialist external consultant was hired to assist the Management Committee and steer the risk assessment and definition work.
The assessment work was eventually completed in 2011 and the Recticel Group's new list of corporate risks was drawn up by the Management Committee and then approved by the Board of Directors.
This resulted in a current list of 16 major risks for which specific working groups have been created so that, initially, an appropriate, specific action plan can be drawn up for each identified risk, followed by the implementation and monitoring thereof.
However, it should be pointed out that this selection is in no way an exhaustive list of all the risks identified during the assessment process. It is a matter, above all, of prioritising the processing of certain risks, yet without overlooking or sidelining all other risks that also remain subject to on-going supervision and control.
Furthermore, risks can always arise that the company has not yet been able to define in full and which, for the time being, are regarded as having a minor influence but which could subsequently impact on the company's results. The Group's risk management systems attempt to identify internal and external risks in time. The impact of some of these risks is absorbed and limited by the provisions of Recticel's General Terms and Conditions (of Trade), or GTC, available on the Group's website (www.recticel.com).
This list of major risks will also be thoroughly revised as of 2013 based on a clearly defined methodology.
The items dealt with below are the most relevant risk factors for the Recticel Group, as defined during the assessment process described above.
As a manufacturer and converter of polyurethane, the Group is sensitive to fluctuations in the prices of chemical raw materials. Essentially, these are polyols and isocyanates (TDI and MDI). Although these base materials are petroleum derivatives, their price evolution differs considerably from that of petroleum products on the global market. One of the main reasons for this difference is that polyols and isocyanates are clearly farther along the petroleum conversion value chain. Excess volatility of raw materials prices or their scarcity or shortage may have a negative effect on Recticel's results and financial situation.
Chemical raw materials represent, on average, nearly 40% of the cost price. For certain Flexible Foam and Insulation applications, this share may be even higher.
These raw materials are purchased on the open market. It is not possible to hedge against changes in raw materials prices.
The purchase of chemical raw materials is centralised and the relevant central department negotiates the supply contracts.
Failure to comply with the various laws and regulations governing the Group's activities is likely to have a negative impact on these activities and invoke its liability.
These activities are particularly subject to various environmental laws and regulations that are likely to expose the Group to major compliance costs or legal proceedings.
Furthermore, the Group may incur other major costs following the non-fulfilment of its contractual obligations or also in cases where the negotiated contractual provisions in place prove to be insufficient, or even inadequate.
The reputation of the Recticel Group and its capacity as the supplier of reliable and ethical products could be tarnished during events or accidents that are totally beyond its control or also as a result of its own acts. This can also apply if there is a wave of public mistrust of chemical products and their inherent danger that could affect the chemical industry as a whole and Recticel in particular, as well as in the case of poor or unfortunate communication.
There is a risk to the Recticel Group's annual sales and market share not only due to newcomers that are clearly competing with Recticel, but also as regards the current competition, which can at any time launch brand-new or revolutionary products on the market, challenging Recticel's competitive position.
This relates to any risk of interruption to manufacturing or distribution activities following an incident, accident or any other unexpected event at one or more plants.
An overly large concentration of activities on certain clients, certain technologies, and even on certain markets or geographic sectors is regarded as a significant risk that could have adverse consequences or conflict with the development of the Group's activities or the achievement of strategic objectives.
The danger lies in an incorrect or inadequate evaluation of a planned investment or otherwise compared with its strategic alignment and financial return, as well as the level of risk associated with it.
This evaluation is currently made on the basis of Group investment guidelines and their assessment.
Due to the nature of its activities, the Recticel Group is exposed to environmental risks. The Group uses potentially hazardous products (chemicals and the like) as part of its development activities and manufacturing processes. Pollution can never be ruled out. The Group prevents pollution by adopting appropriate industrial policies. Scenarios precisely outlining the modus operandi for tackling this type of crisis and managing the consequences thereof have been circulated throughout the organisation.
It goes without saying that the handling of these same products constitutes a health risk for staff, customers and any other visitor, particularly in the event of failure to comply with the safety rules issued by Recticel.
Recticel produces and sells both semi-finished and finished consumer durable goods (bedding and insulation). In both cases, the Group is exposed to any complaints relating to product liability. Recticel tries to offset or limit these risks by means of product guarantees provided for in the conditions of sale and through the application of a strict quality control system. To protect itself from the adverse effects of product liability, the Group has effected general and product-specific insurance policies.
As regards efficiency, the risk lies in maintaining or improving activities in terms of equipment and technologies at production plants and in controlling and streamlining costs and competitiveness for internal departments.
As regards capacity, it is a question of meeting our customers' needs while also optimally spreading our various entities' overheads and controlling unit costs and margins.
Any omission or error in the selection, measurement and reporting of financial and non-financial performance indicators may have adverse effects on the execution and monitoring of the Group's strategic plans.
For the Group, it is a matter of adapting its human resources to the needs associated with its strategic plan. To this end, appropriate Performance Management, Succession Plans and Leadership Styles should be implemented to achieve objectives.
Firstly, this concerns the risk associated with compliance with the tax laws and provisions in force in the different countries in which the Recticel Group has a presence and operates.
Secondly, it is a question of correctly and precisely planning the tax consequences associated with the fluctuation in earnings before interest and taxes (EBIT) and the structural or contractual reorganisation of the Group's activities.
Recticel owns numerous patents and has a number of patents pending for multiple products and software systems. The Group is also the holder of numerous trademarks in several countries. Recticel relies on a combination of patent and trademark rights, copyright and laws on brand names and industrial secrets, confidentiality procedures, trade secrets, contractual provisions and licence agreements to define and protect ownership.
On the other hand, the Group uses its best endeavours, inter alia, via a technological monitoring system, to scrupulously comply with third-party intellectual rights. Although Recticel is convinced that its products do not infringe third-party intellectual rights, the fact that future actions may be brought for such infringements cannot be ruled out.
Today, most of Recticel's operations and methods are conducted and monitored by central information processing systems. The risk is defined as the breakdown in or unreliability of these systems.
Although the Group does its utmost to identify and manage the potential risks in the same way (albeit adapted to the nature of the risk), this is not always possible and cannot always be imposed. In the case of joint ventures and associated companies, as well as medium and long-term cooperation, there may be divergent views vis-à-vis the other partner, so that treatment similar to that adopted by the Group may be limited, or even made impossible. The varying approaches towards these risks may have consequences that differ from those that the Group would have incurred or agreed to incur.
Operational and industrial risks are usually covered by centrally managed insurance contracts. The conditions governing these contracts are reviewed on a regular basis. Recticel owns two reinsurance subsidiaries, whose principal task consists of reinsuring the Group's own risk associated with the excesses that are payable by the Group under external insurance policies.
The risks and uncertainties for which provisions have been raised in accordance with IFRS rules are explained under the heading II.5.18. of the financial section of the annual report. More precisely, these are provisions for litigation, product guarantees, environmental risks and reorganisation charges.
Recticel's Internal Audit Department is involved in implementing control procedures in the broadest sense and ensures that they are complied with. It also plays a major role in the permanent monitoring of corporate risks and contributes to the basic considerations regarding these risks in the Group.
| in million EUR | |||||
|---|---|---|---|---|---|
| Group Recticel | 2008 | 2009 | 2010 | 2011 | 2012 |
| Consolidated income statement | |||||
| Sales | 1 555,5 | 1 276,7 | 1 348,4 | 1 378,1 | 1 319,5 |
| Gross profit | 220,8 | 232,1 | 216,9 | 211,3 | 211,0 |
| REBITDA | 86,8 | 106,9 | 104,0 | 88,6 | 90,7 |
| EBITDA REBIT |
108,8 31,7 |
102,3 61,2 |
83,5 58,9 |
88,8 47,1 |
81,1 50,8 |
| EBIT | 41,4 | 46,2 | 27,6 | 42,0 | 39,7 |
| Financial result | (26,4) | (13,8) | (17,1) | (16,7) | (14,3) |
| Result of the period before taxes | 15,0 | 32,4 | 10,5 | 25,3 | 25,4 |
| Income taxes | (10,4) | (12,4) | 4,1 | (7,9) | (7,8) |
| Result of the period after taxes | 4,6 | 20,0 | 14,6 | 17,4 | 17,6 |
| of which Result of the period after taxes (share of the Group) | 11,5 | 20,7 | 14,4 | 17,4 | 17,6 |
| Profitability ratios | |||||
| Gross profit / Sales | 14,2% | 18,2% | 16,1% | 15,3% | 16,0% |
| REBITDA / Sales | 5,6% | 8,4% | 7,7% | 6,4% | 6,9% |
| EBITDA / Sales | 7,0% | 8,0% | 6,2% | 6,4% | 6,1% |
| REBIT / Sales | 2,0% | 4,8% | 4,4% | 3,4% | 3,9% |
| EBIT / Sales | 2,7% | 3,6% | 2,0% | 3,0% | 3,0% |
| Result of the period after taxes (share of the Group) / Sales | 0,7% | 1,6% | 1,1% | 1,3% | 1,3% |
| ROE = Result of the period after taxes (share of the Group) / Total equity (Group share) |
5,4% | 9,4% | 6,3% | 7,1% | 6,9% |
| ROCE = Return on (average) capital employed | 7,5% | 10,1% | 6,4% | 10,3% | 9,7% |
| Annual growth rates | |||||
| Sales | -3,5% | -17,9% | 5,6% | 2,2% | -4,3% |
| REBITDA | -29,7% | 23,1% | -2,7% | -14,8% | 2,3% |
| EBITDA | -10,8% | -6,0% | -18,3% | 6,3% | -8,6% |
| REBIT | -53,3% | 93,1% | -3,7% | -20,0% | 7,8% |
| EBIT | -36,5% | 11,6% | -40,3% | 52,2% | -5,5% |
| Result of the period after taxes (share of the Group) | -46,4% | 79,6% | -30,4% | 20,7% | 0,8% |
| in million EUR | |||||
| Consolidated balance sheet | |||||
| Non-current assets | 479,0 | 406,0 | 402,0 | 381,0 | 390,7 |
| Current assets | 419,8 | 351,9 | 375,4 | 347,1 | 310,7 |
| TOTAL ASSETS | 898,8 | 757,9 | 777,5 | 728,1 | 701,4 |
| Total Equity Non-current liabilities |
233,7 337,4 |
226,0 254,5 |
241,7 235,9 |
248,8 195,0 |
260,6 189,4 |
| Current liabilities | 327,7 | 277,4 | 299,9 | 284,4 | 251,4 |
| TOTAL LIABILITIES | 898,8 | 757,9 | 777,5 | 728,1 | 701,4 |
| Net working capital | 105,7 | 92,8 | 85,4 | 85,1 | 93,2 |
| Market capitalisation (December 31st) | 118,0 | 145,5 | 229,4 | 131,9 | 152,5 |
| Non-controlling interests | 23,1 | 0,4 | 0,0 | 0,0 | 0,0 |
| Net financial debt | 261,1 | 189,7 | 157,6 | 149,6 | 172,6 |
| ENTERPRISE VALUE | 402,2 | 335,7 | 387,0 | 281,5 | 325,1 |
| Average capital employed | 514,5 | 458,9 | 422,5 | 408,9 | 410,1 |
| Financial structure ratios | |||||
| Net financial debt / Total equity (including non-controlling interests) | 112% | 84% | 112% | 84% | 66% |
| Total equity (including non-controlling interests) / Total assets | 26% | 30% | 26% | 30% | 37% |
| Current ratio | 1,3 | 1,3 | 1,3 | 1,3 | 1,2 |
| Valuation ratios | |||||
| Price / Earnings (Market capitalisation (Dec 31st) / Result of the period (Group share)) |
10,2 | 7,0 | 15,9 | 7,6 | 8,7 |
| Enterprise value / EBITDA | 3,7 | 3,3 | 4,6 | 3,2 | 4,0 |
| Price / Book value (=Market capitalisation/Book value (share of the Group)) |
0,56 | 0,65 | 0,95 | 0,53 | 0,59 |
| in million EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | 2008 | 2009 | 2010 | 2011 | 2012 | |||
| Consolidated sales per business line | ||||||||
| Flexible Foams | 645,6 | 570,6 | 602,7 | 596,2 | 588,3 | |||
| Bedding | 349,5 | 312,6 | 293,3 | 292,2 | 276,5 | |||
| Insulation | 156,4 | 166,5 | 187,4 | 223,1 | 220,7 | |||
| Automotive | 474,2 | 289,4 | 324,9 | 324,8 | 289,7 | |||
| Eliminations | (70,3) | (62,4) | (59,9) | (58,1) | (55,7) | |||
| Total sales | 1 555,5 | 1 276,7 | 1 348,4 | 1 378,1 | 1 319,5 | |||
| in million EUR | ||||||||
| EBITDA per business line | ||||||||
| Flexible Foams | 31,2 | 45,1 | 22,2 | 22,6 | 24,3 | |||
| as % of sales | 4,8% | 7,9% | 3,7% | 3,8% | 4,1% | |||
| Bedding | 16,9 | 41,1 | 17,3 | 16,6 | 12,8 | |||
| as % of sales | 4,8% | 13,1% | 5,9% | 5,7% | 4,6% | |||
| Insulation | 27,3 | 40,3 | 35,5 | 39,5 | 36,1 | |||
| as % of sales | 17,4% | 24,2% | 18,9% | 17,7% | 16,4% | |||
| Automotive | 50,1 | (6,9) | 26,9 | 24,4 | 22,5 | |||
| as % of sales | 10,6% | -2,4% | 8,3% | 7,5% | 7,8% | |||
| Corporate | (16,7) | (17,3) | (18,3) | (14,3) | (14,5) | |||
| Total EBITDA | 108,8 | 102,3 | 83,5 | 88,8 | 81,1 | |||
| as % of sales | 7,0% | 8,0% | 6,2% | 6,4% | 6,1% | |||
| in million EUR | ||||||||
| EBIT per business line | ||||||||
| Flexible Foams | 14,5 | 25,8 | 1,2 | 7,5 | 9,8 | |||
| as % of sales | 2,2% | 4,5% | 0,2% | 1,3% | 1,7% | |||
| Bedding | 9,1 | 33,8 | 11,5 | 10,9 | 7,3 | |||
| as % of sales | 2,6% | 10,8% | 3,9% | 3,7% | 2,6% | |||
| Insulation | 24,5 | 37,2 | 32,1 | 35,8 | 32,1 | |||
| as % of sales | 15,7% | 22,3% | 17,2% | 16,1% | 14,6% | |||
| Automotive | 9,7 | (32,2) | 1,6 | 2,8 | 5,9 | |||
| as % of sales | 2,0% | -11,1% | 0,5% | 0,8% | 2,0% | |||
| Corporate | (16,4) | (18,3) | (18,8) | (15,0) | (15,3) | |||
| Total EBIT | 41,4 | 46,2 | 27,6 | 42,0 | 39,7 | |||
| as % of sales | 2,7% | 3,6% | 2,0% | 3,0% | 3,0% | |||
| in million EUR | ||||||||
| Investments versus Depreciation Investments in intangible and tangible fixed assets |
48,7 | 24,1 | 35,2 | 33,4 | 52,3 | |||
| Depreciation (excluding amortisation on goodwill, including impairment) | 67,4 | 56,1 | 55,9 | 46,2 | 41,4 | |||
| Investments / Sales | 3,1% | 1,9% | 2,6% | 2,4% | 4,0% | |||
| Key figures per share | ||||||||
| Number of shares (31 December) | 28 931 456 | 28 931 456 | 28 931 456 | 28 931 456 | 28 931 456 | |||
| Weighted average number of shares outstanding (before dilution) | 28 931 456 | 28 931 456 | 28 931 456 | 28 931 456 | 28 931 456 | |||
| Weighted average number of shares outstanding (after dilution) | 29 172 611 | 28 931 456 | 29 329 026 | 33 769 050 | 33 990 837 | |||
| in EUR | ||||||||
| REBITDA | 3,00 | 3,69 | 3,60 | 3,06 | 3,13 | |||
| EBITDA | 3,76 | 3,54 | 2,89 | 3,07 | 2,80 | |||
| REBIT | 1,10 | 2,11 | 2,04 | 1,63 | 1,76 | |||
| EBIT | 1,43 | 1,60 | 0,95 | 1,45 | 1,37 | |||
| Result of the period (share of the Group) - Basic (1) | 0,40 | 0,72 | 0,50 | 0,60 | 0,61 | |||
| Result of the period (share of the Group) - Diluted | 0,40 | 0,72 | 0,49 | 0,55 | 0,55 | |||
| Gross dividend | 0,17 | 0,25 | 0,27 | 0,28 | 0,29 | |||
| Pay-out ratio | 43% | 35% | 54% | 46% | 48% | |||
| Net book value (Group share) | 7,28 | 7,80 | 8,35 | 8,60 | 9,01 | |||
| Price / Earnings ratio (2) | 10,2 | 7,0 | 15,9 | 7,6 | 8,7 | |||
| (1) calculated on the basis of the weigthed average number of shares outstanding (before dilution effect) |
(2) based on the share price of 31 December. Earnings = Result of the period (share of the Group) per share |
| in EUR | |||||
|---|---|---|---|---|---|
| Share prices (in EUR) | |||||
| on 31 December | 4,08 | 5,03 | 7,93 | 4,56 | 5,27 |
| lowest of the year | 4,08 | 1,95 | 5,04 | 3,78 | 4,26 |
| highest of the year | 9,96 | 6,00 | 8,64 | 8,20 | 6,25 |
| average daily volume traded (units) | 23 530 | 31 981 | 68 246 | 36 840 | 19 748 |
Olympiadenlaan 2 B - 1140 Brussels T. +32 (0)2 775 18 11 F. +32 (0)2 775 19 90
Michel De Smedt T. + 32 (0)2 775 18 09 F. + 32 (0)2 775 19 91 [email protected]
Dit verslag is beschikbaar in het Nederlands, het Frans en het Engels. Ce rapport est disponible en français, néerlandais et anglais. This report is available in English, French and Dutch.
You can also download this Annual Report on www.recticel.com
Concept & Prepress: Lemon - Carlos Pavez General Coordination: Michel De Smedt
Thanks to all colleagues who contributed to the realisation of this Annual Report.
www.recticel.com
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