Sonae SGPS

Quarterly Report • Nov 16, 2017

SONAE INDÚSTRIA, SGPS, SA

Registered Office: Lugar do Espido, Via Norte, Maia, Portugal Registered at the Commercial Registry of Maia Registry and Tax Identification No. 506 035 034 Share Capital: € 253 319 797.26 Publicly Traded Company

ACTIVITY REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

JANUARY – 6(37(0%(52017

ACCORDING TO THE INTERNATIONAL ACCOUNTING STANDARD 34 – INTERIM FINANCIAL REPORT

ACTIVITY REPORT

MESSAGE FROM THE CHAIRMAN

In 3Q17 Sonae Indústria delivered its fifth consecutive quarter of positive Net Results with both our fully owned businesses and Sonae Arauco delivering positive contributions to our results.

Consolidated Recurrent EBITDA margin was 17.7%, similar to that achieved in the previous quarter and driven by the performance of our North American business. Including our 50% shareholding in Sonae Arauco, our Proportional Recurrent EBITDA margin reached 14.1% during 3Q17. However, our results in the quarter were negatively affected by higher chemical costs compared to last year. This increase in chemical costs has not been fully absorbed by the market nor by improvements in production efficiency or product sales mix.

Our Balance Sheet continued to strengthen during this quarter with Net Debt decreasing by 3M€ and Shareholders' Funds benefiting once more from the generation of positive results.

In the beginning of 4Q17, we concluded the investment in a new edging line for our Components business in Portugal. The new line should be fully operational before the end of 2017. This investment will allow us to significantly improve our productivity and competitiveness in this business and will enable us to provide better quality products and service to both existing and new customers.

Regrettably, I also have to report that Sonae Arauco's two panel plants in Portugal were materially damaged as a consequence of the severe forest fires in mid October. Although it is estimated that it should take four months for those plants to be fully working again, some operations will be restarted gradually, including the melamine lines at Oliveira do Hospital, and we are attending to our customers' needs by sourcing boardsfrom other plants. Notwithstanding these fires, there will be no disruption to the execution of our investment in a new continuous press at our Mangualde plant.

I would like to thank our employees at Oliveira do Hospital and Mangualde for their dedication and commitment to the company under extreme circumstances. Without their unbelievable courage and decisive actions, damages would have been much more extensive.

Paulo Azevedo Chairman Sonae Indústria

1.Sonae Indústria Results

1.1. Proportional Results (unaudited, pro forma)

SUMMARY OF 9M17 RESULTS (See also Explanatory Notes at the end of the document)

Due to the fact that one of Sonae Indústria's main assets (its 50% shareholding in Sonae Arauco) is accounted by the Equity method since 1 June 2016, we are presenting in section 1.1. unaudited pro forma Proportional Indicators, to help improve the understanding of size of the business, valuation and financial leverage of Sonae Indústria. These Proportional Indicators consider the full results of the wholly owned businesses and the proportional consolidation of the 50% contribution from Sonae Arauco.

FINANCIAL INDICATORS (unaudited and pro forma )	9M16	9M17
Proportional Turnover	490	486
Proportional Rec. EBITDA	74	70
Proportional Rec. EBITDA margin	15.0%	14.3%
Proportional LTM Turnover	649	642
Proportional LTM Rec. EBITDA	89	87
Proportional LTM Rec. EBITDA margin	13.7%	13.5%
LEVERAGE
Proportional Net Debt	325	311
Proportional Leverage (Net Debt / LTM Rec. EBITDA)	3.6 x	3.6 x
LOAN TO VALUE
Net Debt of Sonae Indústria	217	210
Asset Value	524	497
LTV (Net Debt of Sonae Indústria / Asset Value)	41%	42%

For the first nine months of the year, Net Debt to Recurrent EBITDA (proportional) stood at 3.6x, in line with the value booked for September 2016. Despite the reduction in Net Debt, Loan to Value is up by 0.8 p.p. vs. 9M16.

Canada 17.0%

Other European countries

United States 15.9%

Germany 22.1%

South Africa 5.8%

1.2. Consolidated Results

SUMMARY OF 9M17 RESULTS (See Explanatory Notes at the end of the document)

Consolidated Turnover for the first nine months of the year reached 178.8 million euros, a reduction of 2.1% vs. 9M16 (-3.9 million euros) driven by lower sales to the Nordic markets by our Laminates & Components business and lower sales volumes to the Canadian market by our North American business which more than offset the increase in average selling prices in that market when compared to last year and the appreciation of the Canadian dollar vs. the EUR during 2017. On a quarterly basis, consolidated turnover stood at 57.0 million euros, representing a decrease of 5.1 million euros vs. same period of last year which was marked by very strong sales volumes in our North American business, with the average selling prices in this region kept stable y.o.y..

Variable costs per cubic meter increased in 9M17 and in 3Q17 when compared to the same periods of the previous year, mainly driven by the higher input costs of chemicals. However when compared with 2Q17, variable costs per cubic meter have decreased due essentially to the lower chemicals costs in this quarter.

Recurrent EBITDA for the first nine months of the year reached 30.8 million euros, a reduction of 1.0 million euros (-3.1%) vs. 9M16 with an underlying Recurrent EBITDA margin of 17.2%, down by 0.2 p.p. vs. 9M16, driven by a lower contribution from the North American business, negatively affected by the higher chemical costs and lower production volumes. Recurrent EBITDA for 3Q17 stood at 10.1 million euros, a decrease of 2.9 million euros when compared to 3Q16 and generating a Recurrent EBITDA margin of 17.7%, down by 3.3 p.p. vs. last year. This result was driven mainly by our North American business that during 3Q16 achieved a record Recurrent EBITDA level and during which chemical costs were significantly lower than in 3Q17.

The evolution of consolidated EBITDA for the first nine months of the year is similar to the one registered in Recurrent EBITDA and thus mostly explained by the performance of our North American business.

SONAE INDÚSTRIA ACTIVITY REPORT - 9 MONTHS 2017

CONSOLIDATED INCOME STATEMENT

Million euros
	9M16	9M17	9M17 /	3Q16	2Q17	3Q17	3Q17 /	3Q17 /
	Unaudited	Unaudited	9M16	Unaudited	Unaudited	Unaudited	3Q16	2Q17
Turnover	182.6	178.8	(2.1%)	62.1	62.3	57.0	(8.2%)	(8.5%)
Other operational income	4.6	3.9	(15.8%)	1.0	1.7	1.1	1.4%	(39.0%)
EBITDA	31.9	30.6	(3.8%)	12.7	10.9	10.0	(21.3%)	(8.7%)
Non recurrent items	0.0	(0.2)	-	(0.3)	(0.1)	(0.1)	70.0%	17.4%
Recurrent EBITDA	31.8	30.8	(3.1%)	13.0	11.0	10.1	(22.4%)	(8.8%)
Recurrent EBITDA Margin %	17.4%	17.2%	-0.2 pp	20.9%	17.7%	17.7%	-3.3 pp	-0.1 pp
Depreciation and amortisation	(8.9)	(9.3)	(4.5%)	(3.0)	(3.1)	(3.1)	(0.7%)	(0.5%)
Provisions and impairment Losses	0.4	(0.1)	(121.7%)	0.1	0.0	0.0	(98.1%)	-
Operational profit (EBIT)	23.3	21.3	(8.6%)	9.8	7.9	6.9	(29.2%)	(12.2%)
Net financial charges	(13.3)	(8.7)	34.6%	(3.5)	(3.4)	(2.6)	26.6%	22.8%
o.w. Net interest charges	(10.6)	(6.1)	42.2%	(2.5)	(2.0)	(2.0)	19.6%	2.4%
o.w. Net exchange differences	(0.1)	(0.6)	-	(0.2)	(0.6)	0.2	-	124.2%
o.w. Net financial discounts	(1.3)	(1.3)	(0.3%)	(0.5)	(0.5)	(0.4)	8.9%	10.3%
Gains and losses in Joint-Ventures	6.3	13.7	118.4%	3.1	5.1	4.4	43.6%	(13.0%)
Profit before taxes (EBT)	16.3	26.3	61.2%	9.3	9.6	8.7	(6.1%)	(9.0%)
Taxes	(6.8)	(5.4)	21.2%	(3.1)	(1.9)	(1.9)	39.9%	4.0%
o.w. Current tax	(7.5)	(6.1)	18.5%	(3.1)	(2.3)	(2.2)	31.4%	6.0%
o.w. Deferred tax	0.7	0.7	8.8%	0.0	0.3	0.3	-	(17.1%)
Profit/(loss) from continued operations	9.5	20.9	120.6%	6.2	7.6	6.9	10.8%	(10.2%)
Profit/(loss) from discontinued operations	(30.7)	0.0	100.0%	0.0	0.0	0.0	-	-
Consolidated net profit/(loss) for the period	(21.3)	20.9	-	6.2	7.6	6.9	10.8%	(10.2%)
Losses (income) attrib. to non-contro. interests	0.0	0.0	-	0.0	0.0	0.0	-	-
Net profit/(loss) attrib. to Equity Holders	(21.3)	20.9	-	6.2	7.6	6.9	10.8%	(10.2%)

Total fixed costs for the first nine months of the year represented 15.8% of turnover, an increase of 0.2 p.p. when compared to 9M16 due to the reduction of Turnover as Fixed Costs are lower than in the same period of last year.

Total headcount for Sonae Indústria, at the end of September 2017, was 483 FTE's excluding Sonae Arauco, which compares with 484 FTE's at the end of June and 480 FTE's in September 2016.

Depreciation and amortization charges during 9M17 were 9.3 million euros, which represents an increase of 4.5% when compared to 9M16, explained by the higher depreciation charges in our North American operation, which in 9M17 take into account for the full period the investment in the new melamine surfacing line completed in 2Q16. For the quarter, the depreciations charges reached 3.1 million euros, in line with the values booked for 3Q16 and 2Q17.

Provisions and impairment lossesfor the 9M17 represent a charge of 0.1 million euros, circa 0.5 million euros higher vs. 9M16 when a gain of 0.4 million was registered due to the release of provisions for the legacy restructuring process in France.

Net financial charges during 9M17 were 8.7 million Euros, circa 4.6 million euros lower vs. 9M16. This is essentially explained by a decrease of 4.5 million euros in Net Interest Charges resulting from the reduction of net debt and the cost of debt and also by the fact that 9M16 figures included the recognition of previously deferred upfront financing costs of 1.9 million Euros as a result of the early repayment of loans carried out within the setting up of the Sonae Arauco partnership. Compared with the previous quarter net financial charges decreased by 0.8M, which is mostly justified by the one off effect for foreign exchange differences, and derivatives booked in 2Q17.

Gains and losses in Joint-Ventures, amounted to 13.7 million euros, corresponding to 50% of the consolidated net profit of Sonae Arauco for the first nine months of the year. On a quarterly basis, Gains and Losses in Joint-

Ventures reached 4.4 million euros, up by 1.3 million euros when compared to 3Q16, positively impacted by an energy tax refund in Germany booked in the quarter, and down by 0.7 million euros when compared to 2Q17 impacted by the seasonal maintenance shutdowns that take place during summer period at the Sonae Arauco Northern hemisphere plants.

Current tax charges were 6.1 million euros for the first nine months of the year, a decrease of 1.4 million euros when compared to 9M16, mainly driven by lower tax charges in Canada. On a quarterly basis, current tax charges improved 1.0 million euros and 0.1 million euros when compared to 3Q16 and 2Q17, respectively, mostly due to lower tax charges in Canada.

Net results for 9M17 were positive 20.9 million euros, an improvement of 42.2 million euros when compared to same period of last year. It should be noted that, as then reported, the results of Discontinued Operations in 2Q16 included a one off accounting charge of 36.6 million euros related with accounting effects from the loss of control of Sonae Arauco. For the quarter, the net result reached 6.9 million euros, an improvement of 0.7 million euros vs. 3Q16.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Million euros
	2016	1H17	9M17
		Unaudited	Unaudited
Non current assets	352.8	347.7	352.4
Tangible assets	148.1	140.3	142.5
Investments in joint ventures	195.9	198.6	201.3
Deferred tax asset	1.4	1.4	1.4
Other non current assets	7.4	7.4	7.2
Current assets	44.7	51.2	45.7
Inventories	18.1	16.1	17.2
Trade debtors	15.2	18.9	19.0
Cash and cash equivalents	4.8	3.1	2.8
Other current assets	6.6	13.1	6.7
Non-current assets classified as available for sale	1.5	1.5	1.5
Total assets	399.0	400.5	399.7
Shareholders' Funds	110.3	120.3	125.9
Equity Holders	110.3	120.3	125.9
Non-controlling interests	0.0	0.0	0.0
Liabilities	288.7	280.2	273.8
Interest bearing debt	218.3	215.9	212.8
Non current	216.0	204.6	204.0
Current	2.3	11.3	8.7
Trade creditors	23.1	25.0	22.0
Other liabilities	47.3	39.3	39.0
Liabilities directly associated with non-current assets classified as
available for sale	0.0	0.0	0.0
Total Shareholders'Funds and liabilities	399.0	400.5	399.7
Net debt	213.5	212.8	209.9
Working Capital	10.3	10.0	14.2

Investments in Joint-Ventures (50% of Sonae Arauco) reached 201.3 million euros, which is circa 2.7 million euros higher than the book value of this investment at the end of 1H17 mostly due to the positive results of Sonae Arauco although affected by a negative impact in Sonae Arauco revaluation reserves of circa 1.7 million euros vs. 1H17 due to the unfavorable exchange rate evolution of the South African Rand in the quarter.

Consolidated Working Capital reached 14.2 million euros, an increase of 4.2 million euros when compared to June 2017, due to a decrease in trade creditors balances, combined with an increase in inventories, in both cases in our North American operation.

Net Debt stood at 209.9 million euros, at the end of September 2017, which represents a decrease of 2.9 million euros when compared to the end of 1H17, benefiting from the dividend received from Sonae Arauco. When compared to the end of 2016, Net Debt also decreased, in this case by 3.6 million euros.

Total Shareholders' Funds continued to strengthen and, at the end of September 2017, amounted to 125.9 million euros, which represents an increase of 5.6 million euros when compared to June 2017, mostly due to the positive net results of the quarter and due to the impacts of movements in the Canadian Dollar and South

SONAE INDÚSTRIA ACTIVITY REPORT - 9 MONTHS 2017

African Rand exchange rates. It should also be highlighted that, when compared to year end 2016, total Shareholders' Funds increased by 15.6 million euros.

Additions to Gross Tangible Fixed Assets reached 8.0 million euros during the first nine months of the year, 3.0 million euros higher vs. 9M16, on a like for like basis. The figure for 9M17 includes not only the investments executed in our North American plant but also the investment in the new edging line for our Components plant in Portugal due to be completed in 4Q17.

2.Subsequent Events

On 15 October, severe forest fires affected significantly two industrial units of Sonae Arauco in Portugal: Oliveira do Hospital and Mangualde. As a result, both plants remain stopped. Subject to the completion of the full evaluation of the damages and recovery plan, it is estimated that it will take approximately 4 months for both plants to be fully operational again. Within this period, operations will be restarted gradually with some activities starting earlier including the melamine lines at Oliveira do Hospital.

Sonae Arauco has insurance coverage in respect of both industrial plants and is working with the insurance companies to assess and prepare the claims for property damage and the resulting business interruption.

16 November 2017

The Board of Directors

Paulo Azevedo

Carlos Moreira da Silva

Albrecht Ehlers

SONAE INDÚSTRIA ACTIVITY REPORT - 9 MONTHS 2017

José Romão de Sousa

Javier Vega

Christopher Lawrie

Louis Brassard

EXPLANATORY NOTES:

The completion of the 50/50 partnership with Arauco in the end of May 2016 has led to a number of material accounting changes in Sonae Indústria's financial statements and on the financial information reported by Sonae Indústria as summarized below.

1. Income Statement (P&L) and Statement of Financial Position (Balance Sheet)

The P&L shows all the companies included in the consolidation perimeter of Sonae Arauco classified as Discontinued Operations from January until May 2016 and accounted by the Equity Method as of the 1 June 2016.

As from June 2016, the balance sheet represents the position of Sonae Indústria under the current perimeter with the 50% shareholding in Sonae Arauco equity accounted.

2. Unaudited Pro forma Proportional Indicators

In order to provide a more comprehensive view of Sonae Indústria underlying business, pro forma Proportional Indicators are also presented.

Proportional Indicators consider the full contribution of the wholly owned businesses and the proportional consolidation of the 50% contribution from Sonae Arauco.

Proportional Indicators are pro forma because they consider the changes in the consolidation perimeter that occurred in 2016 reported to the 1st of January 2015 and the proportional consolidation of Sonae Arauco companies since then not since 31 of May 2016 when the partnership was setup.

GLOSSARY OF TERMS

Asset Value	Asset Value is calculated as follows: [6.8 x LTM Recurrent EBITDA of fully consolidated business (100%)] + [market value of inactive sites real estate properties owned 100% by Sonae Indústria, according to external valuations] + [50% x (6.8 x LTM Recurrent EBITDA of Sonae Arauco – Sonae Arauco Net Debt)]
CAPEX	Investment in Tangible Fixed Assets
EBITDA	Earnings Before Interests and Taxes + Depreciations and Amortizations + (Provisions and impairment losses - Impairment losses in trade receivables + Reversion of impairment losses in trade receivables)
FTEs	Full Time Equivalent; the equivalent of one person working full time, according to the working schedule of each country where Sonae Indústria has operations
Fixed Costs	Overheads + Personnel costs (internal and external); management accounts concept
Gross Debt	Bank loans + Debentures + Obligations under finance leases + other loans + Loans from related parties
Headcount	Total number of internal FTEs, excluding trainees
Loan to Value	Net Debt of Sonae Indústria / Asset value
LTM	Last Twelve Months
Net Debt	Gross Debt - Cash and cash equivalents
Proportional: Turnover, Recurrent EBITDA (unaudited, pro forma)	Proportional Turnover and Proportional Recurrent EBITDA consider, in what regards to Turnover and Recurrent EBITDA, the full contribution of the wholly owned businesses and the proportional consolidation of the 50% contribution from Sonae Arauco.
Proportional Leverage (unaudited, pro forma)	Proportional Net Debt / Proportional LTM Recurrent EBITDA
Proportional Net Debt (unaudited, pro forma)	Proportional Net Debt considers the full contribution of the Net Debt of the wholly owned businesses and the proportional consolidation of the 50% contribution from Sonae Arauco.
Recurrent EBITDA	EBITDA excluding non-recurrent operational income / costs
Recurrent EBITDA margin	Recurrent EBITDA / Turnover
Working Capital	Inventories + Trade Debtors – Trade Creditors

Consolidated Financial Statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 SEPTEMBER 2017 AND 31 DECEMBER 2016

(Amounts expressed in Euros)

ASSETS	Notes	30.09.2017	31.12.2016
		Unaudited
NON-CURRENT ASSETS: Tangible fixed assets	6	142 526 475	148 065 694
Goodwill		347 082	347 082
Intangible assets		200 021	270 689
Investment properties		6 063 769	6 251 947
Investment in joint ventures	4, 5	201 327 814	195 908 535
Investment available for sale	5	131 754	130 821
Deferred tax asset		1 387 908	1 364 497
Other non-current assets		442 298	442 298
Total non-current assets		352 427 121	352 781 563
CURRENT ASSETS:
Inventories		17 196 012	18 138 293
Trade debtors Other current debtors		19 033 294 189 823	15 193 129 303 310
Current tax asset		1 794 665	1 090 204
Other taxes and contributions		2 006 158	3 246 215
Other current assets		2 695 880	1 951 835
Cash and cash equivalents	7	2 818 704	4 795 077
Total current assets		45 734 536	44 718 063
Non-current assets held for sale		1 535 588	1 535 588
TOTAL ASSETS		399 697 245	399 035 214
SHAREHOLDERS`FUNDS AND LIABILITIES
SHAREHOLDERS`FUNDS:
Share capital	8.1	253 319 797	812 107 574
Legal reserve	8.2		3 131 757
Other reserves and accumulated earnings		- 176 906 720	- 759 319 894
Accumulated other comprehensive income	9	49 481 310	54 418 718
Total shareholders' funds attributabble to equity holders of Sonae Indústria		125 894 387	110 338 155
TOTAL SHAREHOLDERS`FUNDS		125 894 387	110 338 155
LIABILITIES:
NON-CURRENT LIABILITIES:
Bank loans - net of current portion	10	203 105 913	214 868 703
Finance lease creditors - net of current portion	10	913 855	1 132 741
Post-retirement liabilities		1 110 071	1 110 071
Other non-current liabilities		4 254 606	3 554 341
Deferred tax liability		19 391 674	20 754 938
Provisions		1 933 644	1 933 644
Total non-current liabilities		230 709 763	243 354 438
CURRENT LIABILITIES:
Current portion of non-current bank loans	10	5 068 075	390 967
Current bank loans	10	3 250 000	1 500 000
Current portion of non-current finance lease creditors	10	417 167	417 272
Trade creditors		22 019 676	23 050 212
Current tax liability Other taxes and contributions		29 373 583 316	2 422 190 699 465
Other current liabilities	11	11 725 488	16 862 515
Total current liabilities		43 093 095	45 342 621
TOTAL SHAREHOLDERS' FUNDS AND LIABILITIES		399 697 245	399 035 214

The notes are an integral part of the consolidated financial statements

The Board of Directors

CONSOLIDATED INCOME STATEMENT

FOR THE PERIODS ENDED 30 SEPTEMBER 2017 AND 30 SEPTEMBER 2016

(Amounts expressed in Euros)

	Notes	30.09.2017 Unaudited	3rd. Quarter 2017 Unaudited	30.09.2016 Unaudited	3rd. Quarter 2016 Unaudited
Sales	16	177 885 972	56 699 455	181 635 279	61 786 770
Services rendered	16	909 072	298 140	1 010 101	291 063
Other income and gains	14, 16	3 859 776	1 058 582	4 585 491	1 044 395
Cost of sales	16	94 200 884	30 857 925	95 482 967	32 425 784
(Increase) / decrease in production	16	- 79 023	- 1 792 850	490 377	- 888 732
External supplies and services	16	36 947 139	12 086 576	36 547 660	11 961 541
Staff expenses	16	17 938 657	5 920 157	19 090 728	6 086 603
Depreciation and amortisation		9 298 527	3 070 865	8 896 524	3 048 091
Provisions and impairment losses (increase / reduction)	16	84 640	- 2 242	- 390 066	- 121 141
Other expenses and losses	15, 16	2 933 090	1 000 192	3 767 200	847 948
Operating profit / (loss)		21 330 906	6 915 554	23 345 481	9 762 134
Financial expenses	17	9 823 536	3 061 663	17 692 104	3 875 884
Financial income	17	1 127 665	474 209	4 398 465	348 364
Gains and losses in associated companies
Gains and losses in joint ventures	4, 5	13 651 576	4 395 350	6 250 495	3 060 215
Net profit/(loss) from continuing operations, before taxation		26 286 611	8 723 450	16 302 337	9 294 829
Taxation	18	5 377 625	1 868 437	6 822 300	3 109 350
Consolidated net profit / (loss) from continuing operations, afer taxation		20 908 986	6 855 013	9 480 037	6 185 479
Profit / (loss) from discontinued operations, after taxation	13			- 30 746 562
Consolidated net profit / (loss) for the period		20 908 986	6 855 013	- 21 266 525	6 185 479
Attributable to: Equity Holders of Sonae Industria
Continuing operations Discontinuing operations		20 908 986	6 855 013	9 480 037 - 30 746 562	6 185 479
Equity Holders of Sonae Industria		20 908 986	6 855 013	- 21 266 525	6 185 479
Profit/(Loss) per share Fom continuing operations:
Basic		0.4605	0.151	0.0008	0.0005
Diluted		0.4605	0.151	0.0008	0.0005
From discontinued operations:
Basic				- 0.0027
Diluted				- 0.0027

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIODS ENDED 30 SEPTEMBER 2017 AND 30 SEPTEMBER 2016

(Amounts expressed in Euros)

	Notes	30.09.2017 Unaudited	3rd Quarter 2017 Unaudited	30.09.2016 Unaudited	3rd Quarter 2016 Unaudited
Net consolidated profit / (loss) for the period (a)		20 908 986	6 855 013	- 21 266 525	6 185 479
Other consolidated comprehensive income
Items that may be subsequently transferred to profit or loss Change in currency translation reserve Change in fair value of available-for-sale financial assets Group share of other comprehensive income of joint ventures		- 2 379 443 - 2 557 965	289 962 - 1 692 671	1 617 979 8 508 2 566 322	- 1 402 544 1 277 382
Other consolidated comprehensive income for the period, net of tax (b)	9	- 4 937 408	- 1 402 709	4 192 809	- 125 162
Total consolidated comprehensive income for the period (a) + (b)		15 971 578	5 452 304	- 17 073 716	6 060 317
Total consolidated comprehensive income attributable to: Equity holders of Sonae Industria		15 971 578 15 971 578	5 452 304 5 452 304	- 17 073 716 - 17 073 716	6 060 317 6 060 317
Other comprehensive income reclassified to profit or loss in the period				- 36 592 671

The notes are an integral part of the consolidated financial statements

The board of directors

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS` FUNDS AT 30 SEPTEMBER 2017 AND 30 SEPTEMBER 2016

(Amounts expressed in Euros)

	Share capital	Legal reserve	Other Reserves and accumulated earnings	Accumulated other comprehensive income	Total shareholders` funds attributable to the equity holders of Sonae Indústria	Non controlling interests	Total shareholders' funds
Notes	8.1	8.2		9
Balance as at 1 January 2017	812 107 574	3 131 757	- 759 319 894	54 418 718	110 338 155		110 338 155
Total consolidated comprehensive income for the period Net consolidated profit/(loss) for the period Other consolidated comprehensive income for the period			20 908 986	-4 937 408	20 908 986 - 4 937 408		20 908 986 - 4 937 408
Total			20 908 986	-4 937 408	15 971 578		15 971 578
Share capital reduction Others	-558 787 777	- 3 131 757	561 919 534 - 415 346		- 415 346		- 415 346
Balance as at 30 September 2017 (unaudited)	253 319 797		-176 906 720	49 481 310	125 894 387		125 894 387

	Share capital	Legal reserve	Other Reserves and accumulated earnings	Accumulated other comprehensive income	Total shareholders` funds attributable to the equity holders of Sonae Indústria	Non controlling interests	Total shareholders' funds
Notes	8.1	8.2		9
Balance as at 1 January 2016	812 107 574	3 131 757	-801 248 687	43 785 859	57 776 503	- 106 611	57 669 892
Total consolidated comprehensive income for the period Net consolidated profit/(loss) for the period Other consolidated comprehensive income for the period			-21 266 525	4 192 809	- 21 266 525 4 192 809		- 21 266 525 4 192 809
Total			-21 266 525	4 192 809	-17 073 716		-17 073 716
Medium term incentive plan Change in method Transferred to Net consolidated profit/(loss) for the period Others			- 159 827 35 060 569 -4 240 651	-35 060 569 36 592 671 1 863 032	- 159 827 36 592 671 - 2 377 619	106 611	- 159 827 36 592 671 - 2 271 008
Balance as at 30 September 2016 (unaudited)	812 107 574	3 131 757	-791 855 121	51 373 802	74 758 012		74 758 012

The notes are an integral part of the consolidated financial statements

The board of directors

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIODS ENDED 30 SEPTEMBER 2017 AND 30 SEPTEMBER 2016

(Amounts expressed in Euros)

	Notes	30.09.2017	30.09.2016
		Unaudited	Unaudited
OPERATING ACTIVITIES
Receipts from trade debtors		171 295 478	484 429 029
Payments to trade creditors		130 759 488	390 052 975
Payments to staff		19 839 815	71 899 016
Net cash flow from operations		20 696 175	22 477 038
Payment / (receipt) of corporate income tax		9 523 002	4 432 737
Other receipts / (payments) relating to operating activities		1 167 334	- 66 760
Net cash flow from operating activities (1)		12 340 507	17 977 541
INVESTMENT ACTIVITIES
Cash receipts arising from:
Investments			214
Tangible fixed assets and intangible assets		129 117	2 163 155
Investment subventions		29 703
Dividends		5 661 957
		5 820 777	2 163 369
Cash Payments arising from:
Investments Tangible fixed assets and intangible assets		2 429	216 334
Investment properties		8 784 904	13 312 585
		8 787 333	131 191 13 660 110
Net cash used in investment activities (2)		- 2 966 556	- 11 496 741
FINANCING ACTIVITIES
Cash receipts arising from:
Interest and similar income		408 491	385 391
Loans obtained		576 947 485	972 108 562
Increase in share capital (SONAE ARAUCO, SA)			137 500 000
		577 355 976	1 109 993 953
Cash Payments arising from:
Interest and similar charges		7 003 074	22 754 566
Loans obtained		581 320 095	1 097 373 806
Finance leases - repayment of principal		216 392	3 133 006
		588 539 561	1 123 261 378
Net cash used in financing activities (3)		- 11 183 585	- 13 267 425
Net increase in cash and cash equivalents (4) = (1) + (2) + (3)		- 1 809 634	- 6 786 625
Effect of foreign exchange rate		166 739	176 742
Cash and cash equivalents at the beginning of the period	7	4 795 077	15 808 205
Cash and cash equivalents of excluded companies, at 31.05.2016			4 939 961
Cash and cash equivalents at the end of the period	7	2 818 704	3 904 877

The notes are an integral part of the consolidated financial statements

The board of directors

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2017 (Amounts expressed in euros)

1. INTRODUCTION

SONAE INDÚSTRIA, SGPS, SA has its head-office at Lugar do Espido, Via Norte, 4471- 909 Maia, Portugal.

The shares of the company are listed on Euronext Lisbon.

Consolidated financial statements for the period ended 30 September 2017 and 30 September 2016 were not subject to a limited revision carried out by the company's statutory external auditor.

2. ACCOUNTING POLICIES

This set of consolidated financial statement has been prepared on the basis of the accounting policies that were disclosed on the notes to the consolidated financial statements for fiscal year 2016.

2.1. Basis of Preparation

These consolidated financial statements were prepared in accordance with the International Accounting Standard 34 – Interim Financial Reporting. As such, they do not include all the information which should be included in annual consolidated financial statements and should therefore be read in connection with the financial statements for fiscal year 2016.

2.2. Changes to accounting standards

These consolidated financial statements were prepared on the basis of International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and with Interpretations issued by the IFRS Interpretations Committee (IFRS IC), effective from 1 January 2017 and endorsed by the European Union.

2.2.1. At 30 September 2017, the following standards and interpretations had been issued by IASB and had been endorsed by the European Union, but had not been applied as they only become effective on later periods:

IFRS 9 (new), Financial instruments (effective for annual periods beginning on or after 1 January 2018). IFRS 9 replaces the guidance in IAS 39, regarding: (i) the classification and measurement of financial assets and liabilities; (ii) the recognition of credit impairment (through the expected credit losses model); and (iii) the hedge accounting requirements and recognition;

IFRS 15 (new), Revenue from contracts with customers (effective for annual periods beginning on or after 1 January 2018). This new standard applies only to contracts with customers to provide goods or services and requires an entity to recognise revenue when the contractual obligation to deliver the goods or services is satisfied and by the amount that reflects the consideration the entity is expected to be entitled to, following a five step approach.

The Company does not estimate any significant effect to arise from the application of these standards.

2.2.2. At 30 September 2017, the following standards, effective 1 January 2017 or later, had been issued by IASB but still had not been endorsed by the European Union:

IAS 7 (amendment), Statement of Cash Flows – Disclosure initiative (effective for annual periods beginning on or after 1 January 2017). This amendment is still subject to endorsement by the European Union. This amendment introduces an additional disclosure about the changes in liabilities arising from financing activities,

disaggregated between cash changes and non-cash changes and how it reconciles with the reported cash flows from financing activities, in the Cash Flow Statement;

IAS 12 (amendment), Income taxes – Recognition of deferred tax assets for unrealised losses (effective for annual periods beginning on or after 1 January 2017). This amendment is still subject to endorsement by the European Union. This amendment clarifies how to account for deferred tax assets related to assets measured at fair value, how to estimate future taxable profits when temporary deductible differences exist and how to assess recoverability of deferred tax assets when restrictions exist in the tax law;

IAS 40 (amendment), Transfers of Investment property (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by the European Union. This amendment clarifies when assets are transferred to, or from investment properties, the evidence of the change in use is required. A change of management intention in isolation is not enough to support a transfer;

IFRS 2 (amendment), Classification and measurement of share-based payment transactions (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by the European Union. This amendment clarifies the measurement basis for cash-settled, share-based payments and the accounting for modifications to a share-based payment plan that change the classification an award from cash-settled to equity-settled. It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equity-settled, where an employer is obliged to withhold an amount for the employee's tax obligation associated with a share-based payment and pay that amount to the tax authority;

IFRS 4 (amendment), Insurance contracts (Applying IFRS 4 with IFRS 9) transactions (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by the European Union. This amendment allows companies that issue insurance contracts the option to recognise in Other Comprehensive Income, rather than Profit or Loss the volatility that could rise when IFRS 9 is applied before the new insurance contract standard is issued. Additionally, it is given an optional temporary exemption from applying IFRS 9 until 2021, to the companies whose activities are predominantly connected with insurance, not being applicable at consolidated level;

IFRS 15 (amendment) Revenue from contracts with customers (effective for annual periods beginning on or after 1 January 2018). This amendment is still subject to endorsement by European Union. This amendment refers to additional guidance for determining the performance obligations in a contract, the timing of revenue recognition from a license of intellectual property, the review of the indicators for principal versus agent classification, and to new practical expedients to simplify transition;

IFRS 16 (new), Leases (effective for annual periods beginning on or after 1 January 2019). This standard is still subject to endorsement by European Union. This standard sets out a single treatment of leases for the lessee, which consists in recognising leased assets as tangible fixed assets. As for the lessor, distinct treatment criteria for operational and finance leases set out IAS 17 are kept;

IFRS 17 (new), Insurance contracts (effective for annual periods beginning 1 January 2021). This standard will revoke IFRS 4 – Insurance contracts and applies to all entities issuing insurance contracts, reinsurance contracts and investment contracts with discretionary participation characteristics. IFRS 17 is based on the current measurement of technical liabilities at each reporting date. The current measurement can be based on a complete "building block approach" or "premium allocation approach". The recognition of the technical margin is different depending on whether it is positive or negative. IFRS 17 is of retrospective application;

Annual Improvement 2014 - 2016, (generally effective for annual periods beginning on or after 1 January 2017). These improvements are still subject to endorsement by European Union. The 2014-2016 annual improvements impacts: IFRS 1, IFRS 12 and IAS 28;

IFRIC 22 (new), Foreign currency transactions and advance consideration (effective for annual periods beginning on or after 1 January 2018). This interpretation is still subject to endorsement by the European Union. An Interpretation to IAS 21 'The effects of changes in foreign exchange rates' it refers to the determination of the "date of transaction" when an entity either pays or receives consideration in advance for foreign currency denominated contracts". The date of transaction determines the exchange rate used to translate the foreign currency transactions;

IFRIC 23 (new), Uncertainty over Income Tax Treatments (effective for annual periods beginning 1 January 2019). ). This interpretation is still subject to endorsement by the European Union. This is an interpretation of IAS 12 - Income tax referring to the measurement and recognition requirements to be applied when there is uncertainty as to the acceptance of an income tax treatment by the tax authorities. In the event of uncertainty as to the position of the tax authority on a specific transaction, the entity shall make its best estimate and record the income tax assets or liabilities under IAS 12 rather than IAS 37 - Provisions, contingent liabilities and contingent assets, based on the expected value or the most probable value. The application of IFRIC 23 may be retrospective or retrospective modified.

The Company does not estimate any significant effect to arise from the application of these standards.

2.3. Translation of financial statements of foreign companies

Exchange rates used for translating into euros the financial statements of subsidiaries whose functional currency is not the euro are listed below:

		30.09.2017 31.12.2016				30.09.2016
	Closing rate	Average rate	Closing rate	Average rate		Average rate
Great Britain Pound	0.8818	0.8724	0.8562	0.7763	0.8610	0.7763
South African Rand	15.9439	14.6735	14.4571	17.2325	15.5231	17.2325
Canadian Dollar	1.4687	1.4526	1.4188	1.4647	1.4690	1.4737
American Dollar	1.1806	1.1113	1.0541	1.1061	1.1161	1.1159
Source: Bloomberg

Source: Bloomberg

3. COMPANIES INCLUDED IN CONSOLIDATION PERIMETER

Group companies included in the consolidated financial statements, their head offices and percentage of capital held by the Group as at 30 September 2017, 31 December 2016 and 30 September 2016 are as follows:

			PERCENTAGE OF CAPITAL HELD
COM PANY	HEAD OFFICE	30.09.2017		31.12.2016		30.09.2016		TERM S FOR INCLUSION
		Direct	Total	Direct	Total	Direct	Total
1) Agloma Imobiliária y Servicios, SL	M adrid (Spain)	-	-	-	-	100.00% 100.00%		a)
Frases e Frações - Imobiliária e Serviços, SA	M aia (Portugal)	100.00% 100.00%		100.00% 100.00%		100.00% 100.00%		a)
Glunz UK Holdings, Ltd.	Liverpool (United Kingdom)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
Glunz UkA GmbH	M eppen (Germany)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
Isoroy, SAS	La Garenne Colombes (France)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
M aiequipa - Gestão Florestal, SA	M aia (Portugal)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
M egantic B.V.	Amsterdam (The Netherlands)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
M ovelpartes - Comp. para a Indústria do M obiliário, SA	Paredes (Portugal)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
Novodecor (Pty) Ltd	Woodmead (South Africa)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
Parcelas e Narrativas - Imobiliária, SA	M aia (Portugal)		100.00% 100.00%		100.00% 100.00%	100.00% 100.00%		a)
Poliface North America	Lac M égantic (Canada)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
2) Sonae Indústria - M anagement Services, S. A.	M aia (Portugal)	100.00% 100.00%		100.00% 100.00%		-	-	a)
Sonae Indústria - Soc. Gestora de Participações Sociais, SA	M aia (Portugal)	Parent	Parent	Parent	Parent	Parent	Parent	Parent
Sonae Indústria de Revestimentos, SA	M aia (Portugal)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
Spanboard Products Ltd	Belfast (United Kingdom)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
Tafisa Canadá Inc	Lac M égantic (Canada)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)
Tafisa France S.A.S.	La Garenne Colombes (France)		100.00% 100.00%		100.00% 100.00%		100.00% 100.00%	a)

a) Majority of voting rights;

1) Company sold December 2016

2) Company incorporated October 2016

4. JOINT VENTURES

Joint ventures, their head offices, percentage of share capital held on 30 September 2017, 31 December 2016 and 30 September 2016 are as follows:

			PERCENTAGE OF CAPITAL HELD
COM PANY		HEAD OFFICE	30.09.2017		31.12.2016		30.09.2016
			Direct	Total	Direct	Total	Direct	Total
	Sonae Arauco, SA	Madrid (Spain)	50.00%	50.00%	50.00%	50.00%	50.00%	50.00%
	Agepan Eiweiler M anagement, GmbH	Eiweiler (Germany)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Agloma Imobiliaria y Servicios, S. L.	Madrid (Spain)	100.00%	50.00%	100.00%	50.00%	-	- a)
	Agloma Investimentos, SGPS, S. A.	Maia (Portugal)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Aserraderos de Cuellar, S.A.	Madrid (Spain)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	1) Sonae Arauco Beeskow GmbH	Meppen (Germany)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Ecociclo, Energia e Ambiente, S. A.	Maia (Portugal)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Euroresinas - Indústrias Quimicas, S.A.	Maia (Portugal)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	GHP Glunz Holzwerkstoffproduktions GmbH	Meppen (Germany)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	2) Sonae Arauco Deutschland AG	Meppen (Germany)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Glunz Service GmbH	Meppen (Germany)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Impaper Europe GmbH	Meppen (Germany)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Imoplamac – Gestão de Imóveis, S. A.	Maia (Portugal)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Laminate Park GmbH & Co. KG	Eiweiler (Germany)	50.00%	25.00%	50.00%	25.00%	50.00%	25.00% b)
	OSB Deustchland	Meppen (Germany)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Racionalización y M anufacturas Florestales, S.A.	Madrid (Spain)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Sociedade de Iniciativa e Aproveit. Florestais – Energias, S.A.	Mangualde (Portugal)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Somit – Imobiliária, S.A.	Mangualde (Portugal)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Sonae Arauco France	La Garenne-Colombes (France)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	3) Sonae Arauco Portugal, SA	Mangualde (Portugal)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	4) Sonae Arauco South Africa (Pty) Ltd	Woodmead (South Africa)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	5) Sonae Arauco Netherlands B. V.	Woerden (The Netherlands)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	6) Sonae Arauco (UK), Ltd.	Liverpool (United Kingdom)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	7) Sonae Arauco Espana - Soluciones de M adera, S. L.	Madrid (Spain)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Tafiber. Tableros de Fibras Ibéricas, S.L.	Madrid (Spain)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	8) Tafisa U.K, Ltd.	Liverpool (United Kingdom)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Taiber, Tableros Aglomerados Ibéricos, S.L.	Madrid (Spain)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	9) Sonae Arauco Suisse SA	Tavannes (Switzerland)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Tecnologias del M edio Ambiente, S.A.	Barcelona (Spain)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)
	Tecmasa. Reciclados de Andalucia, S. L.	Madrid (Spain)	50.00%	25.00%	50.00%	25.00%	50.00%	25.00% b)
	Tool, GmbH	Meppen (Germany)	100.00%	50.00%	100.00%	50.00%	100.00%	50.00% a)

a) Company included in the consolidation perimeter of Sonae Arauco, S. A.;

b) Company whose investment is measured using equity method in the consolidated financial statement of Sonae Arauco, S. A..

1) Formerly denominated as BHW Beeskow Holzwerkstoffe GmbH

• 2) Formerly denominated as Glunz AG
• 3) Formerly denominated as Sonae Indústria – Prod. e Comerc. Derivados M adeira, S. A.
• 4) Formerly denominated as Sonae Novobord (Pty) Ltd
• 5) Formerly denominated as Sonae Tafibra International, B. V.
• 6) Formerly denominated as Sonae Industria (UK) Ltd.
• 7) Formerly denominated as Tableros Tradema, S.L.
• 8) Company liquidated June 2017

9) Formerly denominated as Tafibra Suisse SA

On 31 May 2016, the then subsidiary Tafleros de Fibras, S. A. (currently Sonae Arauco, S. A.) carried out a share capital increase, which was fully subscribed and paid by Arauco

Group. As a consequence, Sonae Arauco S. A. and its subsidiaries identified as a) were excluded from consolidation as they were classified as joint ventures on that date. From that date, these companies have been recognized on the consolidated financial statements of Sonae Indústria, SGPS, S. A. using the equity method. Net profit/(loss) of these companies for the five-month period ended 31 May 2016 were stated under Profit / (loss) of discontinued operations, after taxation, on the Consolidated Income Statement.

Net assets and net profit/loss for these jointly-controlled companies, whose share was recognized on these consolidated financial statements using equity method, are detailed as follows:

	Sonae Arauco - Consolidated
	30.09.2017	31.12.2016
Non-current assets	502 474 738	516 229 548
Current assets (without cash and cash equivalents)	202 335 776	181 815 850
Cash and cash equivalents	14 747 103	29 903 996
Non-current financial liabilities	205 431 069	204 590 512
Other non-current liabilities	87 116 072	95 963 697
Current financial liabilities	11 319 582	21 836 327
Other current liabilities	175 622 000	176 328 520

	Sonae Arauco - Consolidated
	30.09.2017	30.09.2016
Operating revenues	642 830 532	272 632 530
Operating expenses (without depreciation and amortization)	565 589 992	252 580 028
Depreciation and amortization	31 772 340	15 476 147
Interest expense	6 285 456	3 446 339
Taxation	5 029 061	913 202
Net profit/(loss) from continuing operations	27 303 153	12 065 000
Adjustments to the Group's accounting policies		435 991
Group's share on net profit/(loss)	13 651 576	6 250 496
Group's share on other comprehensive Income	- 2 557 965	2 566 322

The results and the other comprehensive income presented above for the comparative period refer to the period beginning 1 June 2016 as this was the date the equity method was applied for measuring the investment in Sonae Arauco, S. A..

5. INVESTMENTS

At 30 September 2017 and 31 December 2016, details of Investments, on the Consolidated Statement of Financial position, are as follows:

	30.09.2017	31.12.2016
	Non current	Non current
Investment in joint ventures
Opening balance	195 908 535	5 695 259
Effect of change in perimeter		-5 695 259
Effect of equity method	11 081 236	195 908 535
Dividends	5 661 957
Closing balance	201 327 814	195 908 535
	30.09.2017	31.12.2016
	Non current	Non current
Available-for-sale investment
Opening balance	134 810	1 171 674
Acquisition	2 429	5 042
Disposal	1 496
Effect of change in perimeter		-1 050 414
Change in fair value		8 508
Closing balance	135 743	134 810
Accumulated impairment losses	3 989	3 989
Net available-for-sale investment	131 754	130 821

6. TANGIBLE FIXED ASSETS

At 30 September 2017 and 31 December 2016, movements in tangible assets, accumulated depreciation and impairment losses were as follows:

					30.09.2017				31.12.2016
	Land and Buildings	Plant and Machinery	Vehicles	Tools	Fixtures and Fittings	Other Tangible Fixed Assets	Tangible Fixed Assets under construction	Total tangible fixed assets	Total tangible fixed assets
Gross cost:
Opening balance		91 307 802 272 235 761	2 612 591	143 635	3 621 704	218 223	3 971 483	374 111 199	2 099 701 349
Changes in consolidation perimeter									-1 696 876 697
Capital expenditure							7 866 140	7 866 140	13 468 828
Disposals		1 474 549	129 773	47 399	68 011			1 719 732	62 978 274
Transfers and reclassifications	149 864	1 450 121	186 732		60 582		- 1 877 331	- 30 032	- 1 613 391
Exchange rate effect	- 2 258 318	- 8 516 847	- 77 837		- 68 025	- 172	- 169 870	- 11 091 069	22 409 384
Closing balance		89 199 348 263 694 486	2 591 713	96 236	3 546 250	218 051	9 790 422	369 136 506	374 111 199
Accumulated depreciation and impairment losses Opening balance Changes in consolidation perimeter		33 296 782 186 752 575	2 251 161	141 110	3 397 687	206 190		226 045 505	1 470 921 621 -1 231 154 300
Depreciations for the period Impairment losses for the period - through profit or loss	1 679 501	7 115 615	79 577	631	65 425	2 565		8 943 314	31 252 522 4 028 485
Disposals Transfers and reclassifications		1 422 248	128 788	47 304	63 550			1 661 890	61 981 258 - 7 874
Exchange rate effect	- 837 516	- 5 753 950	- 64 718		- 60 651	- 63		- 6 716 898	12 986 309
Closing balance		34 138 767 186 691 992	2 137 232	94 437	3 338 911	208 692		226 610 031	226 045 505
Carrying amount	55 060 581	77 002 494	454 481	1 799	207 339	9 359	9 790 422	142 526 475	148 065 694

At the closing date of these consolidated financial statements, mortgaged net tangible fixed assets amounted to EUR 125 688 523 (EUR 133 392 714 at 31 December 2016), as collateral for loans amounting to EUR 42 606 275 (EUR 39 578 123 at 31 December 2016).

7. CASH AND CASH EQUIVALENTS

At 30 September 2017 and 31 December 2016, detail of Cash and Cash Equivalents, on the Consolidated Statement of Financial Position, was as follows:

	30.09.2017	31.12.2016
Cash at Hand	6 488	6 536
Bank Deposits and Other Treasury Applications	2 812 216	4 788 541
Cash and Cash Equivalents on the Consolidated Statement of Financial Position	2 818 704	4 795 077
Cash and Cash Equivalents on the Statement of Cash Flows	2 818 704	4 795 077

8. SHAREHOLERS' FUNDS

8.1. SHARE CAPITAL

In May 2017, the Company reduced its share capital from EUR 812 107 574.17 to EUR 253 319 797.26 to cover accumulated losses, without change of the existing number of shares.

In July 2017, the Company carried out a reverse stock split of 11 350 757 250 shares that represent its share capital after the cancellation of 167 shares which were donated by its shareholder Migracom, S.A.. This reverse stock split operation was effective 31 July 2017 and used a ratio of 1:250 shares, in accordance which every 250 shares with ISIN code PTS3P0AM0017 were replaced by one new share with ISIN code PTS3P0AM0025. As a consequence, at 30 September 2017, the Company's share capital was represented by 45 403 029 ordinary and nominative shares, without nominal value.

8.2. LEGAL RESERVE

In the period ended 30 September 2017, the Company fully used its legal reserve, which amounted to EUR 3 131 757, to cover accumulated losses.

9. OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income on the Consolidated Statement of Financial Position, is detailed as follows:

	Accumulated other comprehensive income Atributable to the parent's shareholders
		Available-for Currency sale financial assets		Remeasurements on defined benefit plans	Quota-parte do Outro Rendimento Integral dos Empreendimentos Conjuntos		Income tax related to
	translation		Revaluation Reserve		Que ulteriormente poderá ser transferido para resultado	Que ulteriormente não poderá ser transferido para resultado	components of other comprehensive income	Total
Balance as at 1 January 2017	11 114 057		6 367 184	- 192 092	4 468 623	33 694 328	1 033 382	54 418 718
Other consolidated comprehensive income for the period	-2 379 443				-2 557 965			-4 937 408
Balance as at 30 September 2017 (unaudited)	8 734 614		6 367 184	- 192 092	1 910 658	33 694 328	1 033 382	49 481 310

	Accumulated other comprehensive income Atributable to the parent's shareholders
		Available-for	Remeasurements		Quota-parte do Outro Rendimento Integral dos Empreendimentos Conjuntos		Income tax related to
	Currency translation	sale financial assets	Revaluation Reserve	on defined benefit plans	Que ulteriormente poderá ser transferido para resultado	Que ulteriormente não poderá ser transferido para resultado	components of other comprehensive income	Total
Balance as at 1 January 2016	- 31 461 322	96 733	106 260 850	- 6 260 935		1 388 833	26 238 300	43 785 859
Other consolidated comprehensive income for the period Change in method Tranferred to Net consolidated profit/(loss) for the period Others	1 617 979 36 592 671 1 706 713	8 508 - 105 241	- 99 895 009 1 343	6 218 070 - 87	2 566 322 52 621	33 619 135	- 25 049 855 - 155 063	4 192 809 -35 060 569 36 592 671 1 863 032
Balance as at 30 September 2016 (unaudited)	8 456 041		6 367 184	- 42 952	2 618 943	35 007 968	1 033 382	51 373 802

10. LOANS

As at 30 September 2017 and 31 December 2016, Sonae Indústria had the following outstanding loans:

	30.09.2017					31.12.2016
		Amortised cost Nominal value		Amortised cost			Nominal value
	Current	Non current	Current	Non current	Current	Non current	Current	Non current
Bank loans Obligations under finance leases	8 318 075 417 167	203 105 913 913 855	8 318 075 417 167	204 595 085 913 855	1 890 967 417 272	214 868 703 1 132 741	1 890 967 417 272	216 670 580 1 132 741
Gross debt	8 735 242	204 019 768	8 735 242	205 508 940	2 308 239	216 001 444	2 308 239	217 803 321

At 30 September 2017, loans can be detailed as follows:

10.1. Bank Loans

Company(ies)	Loan	Contract date	Maturity (with reference to 30.09.2017)	Currency	Outstanding principal at 30.09.2017 (EUR)	Outstanding principal at 31.12.2016 (EUR)
Tafisa Canada Inc.	Bank loan (Revolving )	July 2011	to be repaid from March 2017 to May 2021	CAD	38 606 275	34 678 123
Sonae Indústria, SGPS, S.A.	Commercial paper programme	June 2013	June 2018 Note: programme without subscription guarantee	EUR	3 250 000	1 500 000
Sonae Indústria, SGPS, S.A.	Commercial paper programme	July 2014	to be repaid from July 2018 to January 2020	EUR	7 500 000
Sonae Indústria, SGPS, S.A.	Commercial paper programme	May 2016	to be repaid from May 2019 to May 2021	EUR	140 000 000	175 000 000
Sonae Indústria, SGPS, S.A.	Commercial paper programme	July 2016	to be repaid from January 2018 to July 2019	EUR	4 000 000	4 900 000
Sonae Indústria, SGPS, S.A.	Commercial paper programme	July 2016	to be repaid from July 2017 to July 2018	EUR	1 000 000	1 250 000
Sonae Indústria, SGPS, S.A.	Commercial paper programme	December 2016	to be repaid from June 2018 to December 2019	EUR	13 100 000
Sonae - Indústria de Revestimentos, S. A.	Bank loans	September 2017	to be repaid from March 2019 to September 2022	EUR	4 000 000
Others				EUR	1 456 885	1 233 424
Total				EUR	212 913 160	218 561 547

All these loans are subject to variable interest rates.

Figures detailed on the previous table correspond to the nominal value of bank loans disclosed on this note.

At 30 September 2017, in addition to mortgaged tangible fixed assets referred to on note 6, there were other assets amounting to EUR 30 456 915 (EUR 27 014 465 at 31 December 2016) which were pledged as collateral for the Group's liabilities. These assets consisted mostly of inventories and accounts receivable.

11. OTHER CURRENT LIABILITIES

At 30 September 2017 and 31 December 2016, Other current liabilities on the Consolidated Statement of Financial Position were composed of:

	30.09.2017	31.12.2016
Derivatives	3 269	431 254
Tangible fixed assets suppliers	1 472 261	2 511 973
Other creditors	473 971	1 161 966
Financial instruments	1 949 501	4 105 193
Other creditors	487 486	292 949
Accrued expenses:
Insurances	54 192
Personnel expenses	4 061 379	6 687 970
Accrued financial expenses	982 595	635 463
Rebates	2 724 445	3 506 541
External supplies and services	323 455	553 128
Other accrued expenses	832 349	763 925
Deferred income:
Investment subventions	155 150	168 412
Other deferred income	154 936	148 934
Liabilities out of scope of IFRS 7	9 775 987	12 757 322
Total	11 725 488	16 862 515

12. RELATED PARTIES

Balances and flows with related parties are summarized as follows:

Balances	Accounts receivable		Accounts payable
	30.09.2017	31.12.2016	30.09.2017	31.12.2016
Other subsidiaries of the parent company	124 813	137 543	295 278	2 320 894
Joint ventures	819 839	598 675	1 843 959	2 145 323

Transactions	Income		Expenditure
	30.09.2017	30.09.2016	30.09.2017	30.09.2016
Other subsidiaries of the parent company	50 309	37 415	660 913	824 395
Joint ventures	3 142 183	17 685 502	12 723 014	22 671 682

13. DISCONTINUED OPERATIONS

Profit / (loss) from discontinued operations, after taxation, on the Consolidated Income Statement for the period ended 30 September 2016 includes the results for the five-month period ended 31 May 2016 (note 4) of the companies that were classified as joint ventures thereon and can be detailed as follows:

30.09.2016

Sales	339 858 763
Services rendered	830 586
Other income and gains	6 660 223
Cost of sales	167 993 678
(Increase) / decrease in production	- 2 711 434
External supplies and services	84 495 943
Staff expenses	51 864 328
Depreciation and amortisation	20 069 407
Provisions and impairment losses (increase / reduction)	- 748 574
Other expenses and losses	39 799 364
Operating profit / (loss)	- 13 413 140
Net finance profit / (loss)	- 13 888 033
Gains and losses in associated companies	222 216
Gains and losses in joint ventures	74 869
Gains and losses in investments	- 13 670
Net profit/(loss) from discontined operations, before taxation	- 27 017 758
Taxation	3 728 804
Consolidated net profit / (loss) from discontinued operations,
after taxation	- 30 746 562

Cash flows of discontinued operations, which were included line by line on the Consolidated Statement of Cash Flows for the period ended 30 September 2016, are as follows:

	30.09.2016
Operating activities Investment activities	- 10 966 645 4 809 572
Financing activities	178 279 233

14. OTHER INCOME AND GAINS

Details of Other income and gains on the Consolidated Income Statement for the periods ended 30 September 2017 and 30 September 2016 are as follows:

	30.09.2017	30.09.2016
Gains on disp. and write off of invest. prop., tang. and intang. assets	124 969	894 159
Supplementary revenue	1 613 617	1 487 459
Investment subventions	117 292	121 782
Tax received	6 172	24 844
Positive exchange gains	1 599 964	1 739 931
Adjustment to fair value of financial instruments at fair value through profit or loss	215 472	239 585
Others	182 290	77 731
	3 859 776	4 585 491

15. OTHER EXPENSES AND LOSSES

Details of Other expenses and losses on the Consolidated Income Statement for the periods ended 30 September 2017 and 30 September 2016 are as follows:

	30.09.2017	30.09.2016
Taxes	1 037 124	1 030 860
Losses on disp. and write off of invest. prop., tang. and intang. assets	53 691	279 217
Negative exchange gains	1 437 906	1 347 538
Adjustment to fair value of financial instruments at fair value through profit or loss	232 985	814 146
Others	171 384	295 439
	2 933 090	3 767 200

16. RECURRING AND NON-RECURRING ITEMS

Recurring operating items on the Consolidated Income Statement are detailed as follows:

	30.09.2017	30.09.2016
	Recurring	Recurring
Sales	177 884 502	181 635 279
Services rendered	909 072	1 010 101
Other income and gains	3 661 218	3 685 847
Cost of sales	94 200 884	95 482 491
(Increase) / decrease in production	- 79 023	490 377
External supplies and services	36 623 912	36 278 215
Staff expenses	17 937 706	18 748 238
Impairment losses in trade debtors (increase/reduction)	84 640	- 1 491
Other expenses and losses	2 850 430	3 504 516
Recurring operating profit/(loss) before amortization, depreciation, provisions and impairment losses (except trade debtors)	30 836 243	31 828 881
Non-Recurring operating profit/(loss) before amortization, depreciation, provisions and impairment losses (except trade debtors)	- 206 810	24 550
Total operating profit/(loss) before amortization, depreciation, provisions and impairment losses (except trade debtors)	30 629 433	31 853 431

17. FINANCIAL RESULTS

Financial results for the periods ended 30 September 2017 and 30 September 2016 were as follows:

	30.09.2017	30.09.2016
Financial expenses:
Interest expenses
related to bank loans and overdrafts	6 083 988	7 963 441
related to non convertible bonds		5 315 242
related to finance leases	57 363	65 202
related to loans from related parties		106 683
others	12 558	151 426
	6 153 909	13 601 994
Losses in currency translation
related to loans	675 735	329 786
related to cash and cash equivalents	481 143	1 066 940
	1 156 878	1 396 726
Cash discounts granted	1 367 124	1 378 929
Other finance losses	1 145 625	1 314 455
	9 823 536	17 692 104
	30.09.2017	30.09.2016
Financial income:
Interest income
related to bank loans	14 757	16 075
related to loans to related parties	1 968	2 964 350
	16 725	2 980 425
Gains in currency translation
related to loans	145 920	286 995
related to cash and cash equivalents	440 881	990 539
	586 801	1 277 534
Cash discounts obtained	54 057	69 878
Other finance gains	470 082	70 628
	1 127 665	4 398 465
Finance profit / (loss)	- 8 695 871	- 13 293 639

18. TAXES

Corporate income tax accounted for in the periods ended 30 September 2017 and 30 September 2016 is detailed as follows:

	30.09.2017	30.09.2016
Current tax Deferred tax	6 098 173 - 720 548	7 484 716 - 662 416
	5 377 625	6 822 300

19. SEGMENT INFORMATION

The main activity of the Group is the production and commercialization of wood based panels and derivative products through industrial plants and/or commercial facilities located in Portugal, Canada and South Africa.

The system of internal report focus on type of business, which is the main segmentation criterion. Secondary activities are materially irrelevant as far as segmental report is concerned and the Group decided to present one only segment.

20. SUBSEQUENT EVENTS

In October 2017, the industrial units of Oliveira do Hospital and Mangualde, both owned by Sonae Arauco, a company in which Sonae Indústria SGPS, SA has a 50% shareholding, were affected by wildfires that have caused material damage to the woodyards, exposed equipment within the woodyards and to the electrical and cabling systems of both plants. As a result, the two plants are stopped since then.

At the date of issue of these consolidated financial statements, it is not possible to quantify the related effects in Sonae Indústria accounts. These effects will need to take into consideration that Sonae Arauco has insurance coverage in respect of both industrial plants and will present claims for property damage and losses related with business interruption.

In October 2017, a wholly owned subsidiary of Sonae Arauco, a 50% owned company of Sonae Indústria, sold shares representing 90% of the share capital and voting rights of "Sociedade de Iniciativa e Aproveitamentos Florestais - Energia, SA" (SIAF-Energia), for an amount of approximately nine hundred thousand euros (plus available cash). The seller and the buyer of those shares have a put option and a call option, respectively, over the shares representing the remaining 10% of share capital of SIAF-Energia.

The effects of this transaction in Sonae Indústria consolidated accounts are not expected to be significant.

21. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements were approved by the Board of Directors and authorized for issuance 16 November 2017.