Sonae SGPS

Interim / Quarterly Report • Nov 26, 2009

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: € 700 000 000 Publicly Traded Company

ACTIVITY REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

JANUARY – SEPTEMBER 2009

ACCORDING TO THE INTERNATIONAL ACCOUNTING STANDARD 34 – INTERIM FINANCIAL REPORT

Highlights of Financial Performance in 9M09:

• The sale of Tafisa Brazil in August 2009 generated a capital gain in the consolidated results for 9M09 of 56 million Euros.
• Comparing 3Q09 with 2Q09:
• o Sales volumes excluding Brazil increased by 2%;
• o Recurrent EBITDA, excluding Brazil, increased from 2% to 4% of Turnover, despite the negative seasonal effect in this quarter;
• o Net Debt decreased by 126 million Euros, driven by the sale of Tafisa Brasil.
• The refinancing program for debt maturing in 4Q09 has already been successfully completed.

								(euro millions)
	2008	3Q'08	2Q'09	3Q'09	3Q'09 / 3Q'08	3Q'09 / 2Q'09		9M'08 9M'09	% chg 09/08
Turnover	1.769	431	325	301	(30%)	(7%)	1.396	971	(30%)
EBITDA	139	17	9	64	275%	586%	143	78	(46%)
Recurrent EBITDA	100	19	13	12	(40%)	(8%)	98	30	(69%)
Recurrent EBITDA Margin %	5,7%	4,5%	3,9%	3,8%			7,1%	3,1%
Net Profit/(Loss) attributable to Shareholders of Sonae Industria	(108)	(33)	(34)	18	156%	155%	(27)	(56)	(108%)
Net Debt	890	904	896	770			904	770	(15%)

Message from Carlos Bianchi de Aguiar, CEO

"In line with our strategy of strengthening our balance sheet, we sold Tafisa Brasil and have continued to sell non-core assets such as the combined cycle cogeneration plant located in Maia, Portugal, for 7 million Euros. The sale of our shares in Tafisa Brasil at a price of 116 million Euros, represented an EV/LTM EBITDA multiple of 7.8x, enabling us to decrease Net Debt by approximately 130 million Euros and to increase Shareholders' Funds by 68 million Euros. This sales opportunity was created by the consolidation process already underway in Brazil.

In all the geographies where we operate, the business environment remains difficult. Nevertheless, and despite normal seasonality effects, our sales volumes, excluding Brazil, increased by 2% when compared with 2Q09. Prices have been under pressure, but it seems that markets in terms of price are now recovering, led by higher volumes.

During this quarter, we have continued the restructuring processes in order to adapt our supply to market demand and to decrease our fixed cost base. We reached an agreement with the workers' representatives to close the Kaisersesch plant in Germany and stopped production in October. Additionally, we are now entering into negotiations with the works council to close our plant in Duisburg (which has not started production this year). These decisions are painful but necessary to strengthen the company and insure a healthy future. Measures to reduce fixed costs already have resulted in a like-for-like saving of 35 million Euros in 9M09, when compared to the same period last year. This trend will continue over the next quarter, since the measures we most recently implemented will continue to impact our cost base.

Cash flow management continues to be a primary focus for us and we have been able to reduce working capital by a further 23 million Euros during 3Q09 (excluding the effect of the 25 million Euros reduction resulting from the sale of Tafisa Brasil).

In October, we raised 60 million Euros of new debt to refinance the necessary part of the 80 million Euros bonds that would have matured in that month.

I believe, we are coming out of this crisis as a stronger and more focused Group. I am counting on a special effort from all our employees to continue to work hard, to drive us forward in these extremely tough times. Finally, once again, I would like to thank our shareholders and customers for their support and continuing confidence in our Group."

Geographical Review of Operations Iberia

Spain is still experiencing an economic slowdown and new housing permits have declined by 62%¹ (YoY Jan - August). Due to this economic environment, we continue to face tough market conditions and our sales volumes from Iberian plants decreased by 20% in 9M09 when compared to the same period of last year.

Iberia Turnover & Recurrent EBITDA Margin €Mn

During 3Q09, when compared to 2Q09, and despite the negative seasonal effect of the summer holiday period, we have been able to almost maintain our sales volumes from Iberian plants and even increase our EBITDA margin. This effect is a result of the good performance achieved in July and September, which in terms of volumes sold, were the strongest months seen so far in 2009.

Variable and fixed costs have been maintained at a low level which has positively impacted our recurrent EBITDA margin.

Iberian turnover in 9M09 decreased by 29% compared to 9M08, but our recurrent EBITDA margin only declined to 10.4%, just 1 p.p. below the corresponding value for 9M08. This is a result of the cost saving measures that we have been implementing in this region.

Central Europe (Germany, France and the UK)

Central Europe has also been affected by a low level of activity in the construction and furniture industry which has restricted demand for wood based panels.

¹ Source: Ministerio de Fomento, October 2009

In Germany, demand for wood based panel products is still weak when compared with the existing capacity. In order to reduce structural overcapacity, we are adapting ourselves to market demand, closing out two least efficient lines with an annual production capacity of 720.000m3 PB.

During 3Q09, our operational performance in Germany has been negatively affected by the seasonality, but volumes sold have recovered in September. Market prices are still weak but we expect an upward trend in the coming months, led by recovering volumes.

In France, demand from the construction and furniture segments is still depressed: housing permits have declined by 15%² (YoY Jan - Set) and our volumes sold in 9M09 decreased by 38%, when compared to 9M08. This volume decrease combined with market price pressure led to a Turnover decrease in 9M09 of 45% (when compared to 9M08).

At the end of June, as already announced, we closed our St. Dizier and Châtellerault plants in order to reduce the structural excess capacity in the market and to decrease our fixed costs. This restructuring plan has positively impacted recurrent EBITDA and will bring further cost savings in the coming months.

In the UK, levels of demand are still low in most sectors, but there are already some signs of market improvement: house prices have been rising and mortgage lending has been increasing. In addition, our September sales were the highest since May 2008. As a result, despite the seasonality in August, we were able to maintain our Turnover and Recurrent EBITDA levels when compared to 2Q09.

Our UK strategy, focused on selling value-added products, has proved successful.

In Central Europe, when comparing 9M08 to 9M09, turnover decreased by 33% to 524 million Euros and recurrent EBITDA fell to a negative 27 million Euros.

² Source: Service économie statistiques et prospective (Ministère de l'Écologie, de l'Energie, du Développement durable et de l'Aménagement du territoire), September 2009

Rest of the World (Brazil, Canada and South Africa)

On August 26, we sold Tafisa Brasil, SA to a company owned by Celulosa Arauco Y Constitución, SA of Chile. This decision was in line with our strategy of strengthening our balance sheet and was facilitated by a consolidation process already underway in this market. The share capital of Tafisa Brasil was sold for 116 million Euros plus Net Debt and Retained Contingencies, totalling 43 million Euros. The total Enterprise Value of the transaction was 159 million Euros which implies an EV/LTM EBITDA multiple of 7.8x³ and a decline of Net Debt by approximately 130 million Euros. The impact on Shareholder's Funds amounted to approximately 68 million Euros, including a capital gain of close to 56 million Euros.

In order to allow for a correct comparison, we have disclosed in the chart below the RoW figures both with and without the impact of the Brazilian operations.

Our performance in Canada and South Africa reflects a combination of mixed market trends and specific impacts which make direct comparisons difficult.

In North America, US Housing starts declined by 43%, YoY 9M09, according to RISI, while Canadian Housing starts decreased by 31%, YoY 9M09, according to CMHC⁴ . As a consequence, many plants are suffering from weak demand, resulting in low capacity utilization rates.

Despite the tough market situation, we continue to consolidate our customer and market position. During 9M09, we increased our market share of shipments from Canada to 35% compared with 27% in 9M08.

³ For consistency purposes the ICMS non-current liability of 60 million Euros is included in the calculation of the multiple

⁴ Canada Mortgage and Housing Corporation

In South Africa, the macroeconomic environment has been stable and there was a positive effect from seasonality during 3Q09. As a result, our volumes sold increased by 35% when compared to 2Q09, which led to an increase in Turnover.

On the cost side, as expected, chemicals prices have continued at very low levels, helping our EBITDA margin.

Turnover in the Rest of the World amounted to 212 million Euros in 9M09, 24% below the same period in 2008, but recurrent EBITDA as a percentage of turnover increased to 15%. Excluding Brazilian operations, the recurrent EBITDA margin increased from 7% in 9M08 to 13% in 9M09.

Financial Review of 9M09

€ Mn

In the chart below, consolidated figures are shown both with and without the impact of Brazilian operations to facilitate comparisons.

Consolidated Turnover & Recurrent EBITDA Margin

Consolidated Turnover in 9M09 amounted to 971 million Euros, a decrease of 30%, when compared to 9M08. Consolidated Recurrent EBITDA was 30 million Euros, representing a margin on Turnover of 3%. If Brazil is excluded, the EBITDA margin increased from 2% in 2Q09 to 4% in 3Q09.

								(euro millions)
	2008	3Q'08	2Q'09	3Q'09	3Q'09 / 3Q'09 / 3Q'08	2Q'09		9M'08 9M'09	%chg 09/08
Turnover	1.769	431	325	301	(30%)	(7%)	1.396	971	(30%)
Other Operational Income	114	13	14	78	511%	465%	90	103	15%
EBITDA	139	17	9	64	275%	586%	143	78	(46%)
Recurrent EBITDA	100	19	13	12	(40%)	(8%)	98	30	(69%)
Recurrent EBITDA Margin %	5,7%	4,5%	3,9%	3,8%			7,1%	3,1%
Depreciation and amortisation	(123)	(31)	(32)	(31)	0%	3%	(91)	(94)	(3%)
Provisions and Impairment Losses	(56)	(2)	(3)	(15)		(832%) (365%)	(17)	(22)	(30%)
Operational Profit	(23)	(12)	(19)	34	383%	277%	46	(10)	(123%)
Net Financial Charges	(78)	(19)	(14)	(13)	29%	3%	(57)	(42)	26%
o.w. Net Interest Charges	(48)	(12)	(8)	(6)	46%	21%	(36)	(24)	32%
o.w. Net Financial Discounts	(17)	(4)	(3)	(3)	23%	9%	(13)	(9)	27%
Profit before taxes (EBT)	(101)	(31)	(33)	21	167%	162%	(12)	(53)	(358%)
Taxes	(3)	(2)	(1)	(2)		18% (135%)	(10)	(3)	66%
o.w. Current Tax	(3)	(2)	(1)	(0)	91%	87%	(5)	(2)	66%
Net Profit/(Loss) attributable to Shareholders of Sonae Industria	(108)	(33)	(34)	18	156%	155%	(27)	(56)	(108%)

Consolidated Total EBITDA in 9M09 amounted to 78 million Euros. Non-recurrent items amount to approximately 48 million Euros, including a capital gain of 56 million Euros as a result of the sale of Tafisa Brasil. Other non-recurrent items are mainly related to restructuring costs.

3Q09 accounts include 11 million Euros of provisions, in relation to the closure of Kaisersesch.

Our financial costs for 9M09 have fallen when compared to the same period last year, benefiting from the lower indexing interest rates.

9M09 consolidated Net Profit/(Loss) Attributable to Sonae Indústria Shareholders amounted to a negative 56 million Euros, down from negative 27 million Euros in 9M08.

		(euro millions)
	2008	1H'09	9M'09
Non Current Assets	1.386	1.413	1.250
Tangible Assets	1.203	1.224	1.098
Goodwill	104	107	92
Deferred Tax	54	57	36
Other Non Current Assets	26	25	24
Current Assets	532	440	404
Inventories	193	159	138
Trade Debtors	200	211	186
Cash & Investments	66	27	41
Other Current Assets	74	43	40
Total Assets	1.918	1.853	1.653
Shareholders' Funds	397	339	373
Minority Interests	3	2	3
Shareholders' Funds + Minority Interests	400	342	376
Interest Bearing Debt	956	922	810
Short term	189	188	126
L-M term	767	734	684
Trade Creditors	166	148	145
Other Liabilities	396	440	322
Total Liabilities	1.518	1.511	1.277
Total Liabilities, Shareholders' Funds and
Minority Interests	1.918	1.853	1.653

In 9M09, additions to Fixed Assets totalled 24 million Euros, mostly driven by essential investments in maintenance, Health & Safety and Environmental improvements.

Working Capital decreased by 48 million Euros during 3Q09 (of which 25 million was due to the sale of Tafisa Brasil).

In October, we raised 60 million Euros of new Debt to refinance all debt maturing in 4Q09.

As already reported, our debt has no consolidated financial ratio covenants.

Looking Forward

We expect a slow recovery to continue in the wood based panels industry over the coming quarters supported by volume and price increases.

Variable costs should increase in 4Q09, due to methanol and seasonal wood price increases.

Fixed costs should continue to decline as a result of the restructuring measures already implemented.

Cash flow management will remain a priority, with continuing efforts to minimise our working capital, and we will be extremely selective in making investments.

We will continue to focus our company on strengthening its competitiveness, efficiency and balance sheet.

The Board of Directors Maia, 5th November 2009

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AT 30 SEPTEMBER 2009 AND 31 DECEMBER 2008

(Amounts expressed in Euros)

ASSETS	30.09.2009	31.12.2008
NON CURRENT ASSETS:
Tangible assets	1 097 943 916	1 202 504 678
Goodwill	92 015 595	103 811 638
Intangible assets	10 891 589	12 490 658
Investment properties	8 009 483	8 114 976
Associated undertakings and non consolidated undertakings	2 892 005	3 075 688
Investment available for sale	294 763	389 763
Deferred tax asset	36 155 240	53 985 797
Other non current assets	1 447 696	1 751 010
Total non current assets	1 249 650 287	1 386 124 208
CURRENT ASSETS:
Inventories	137 554 941	192 882 429
Trade debtors	185 632 199	199 825 603
Other current debtors	11 128 292	15 418 674
State and other public entities	16 217 276	30 835 909
Other current assets	12 308 725	27 529 412
Cash and cash equivalents	40 770 477	65 750 257
Total current assets	403 611 910	532 242 284
TOTAL ASSETS	1 653 262 197	1 918 366 492
SHAREHOLDERS`FUNDS AND LIABILITIES
SHAREHOLDERS`FUNDS:
Share capital	700 000 000	700 000 000
Legal reserve	2 737 181	2 399 639
Other reserves and accumulated earnings	- 310 348 733	- 252 218 789
Accumulated other comprehensive income	- 19 253 002	- 53 080 536
Total	373 135 446	397 100 314
Non-controlling interests TOTAL SHAREHOLDERS`FUNDS	2 905 304 376 040 750	3 072 691 400 173 005
LIABILITIES:
NON CURRENT LIABILITIES:
Long term bank loans - net of short-term portion	240 951 500	268 056 483
Non convertible debentures	302 828 157	302 147 961
Long term Finance Lease Creditors - net of short-term portion	45 249 576	47 949 761
Other loans	94 966 328	148 419 100
Pensions liabilities	25 490 335	25 244 259
Other non current liabilities	70 114 573	118 741 078
Deferred tax liabilities	58 121 086	69 902 362
Provisions	22 935 588	37 498 938
Total non current liabilities	860 657 143	1 017 959 942
CURRENT LIABILITIES:
Short term portion of long term bank loans	33 403 664	31 507 509
Short term bank loans	9 289 063	74 070 252
Short term portion of long term non convertible debentures	80 000 000	80 000 000
Short term portion of Finance Lease Creditors	3 406 180	3 535 578
Other loans	302 748	301 760
Trade creditors	144 725 024	165 920 462
Taxes and Other Contributions Payable	19 297 945	16 307 234
Other current liabilities	103 959 732	116 981 282
Provisions	22 179 948	11 609 467
Total current liabilities	416 564 304	500 233 545
TOTAL EQUITY AND LIABILITIES	1 653 262 197	1 918 366 492

The notes are an integral part of the consolidated financial statements

CONSOLIDATED INCOME STATEMENTS

FOR THE PERIODS ENDED AT 30 SEPTEMBER 2009 AND 2008

(Amounts expressed in Euros)

	30.09.2009	3rd Quarter 09	30.09.2008	3rd Quarter 09
	Unaudited	Unaudited	Unaudited	Unaudited
Operating revenues Sales	967 724 855	299 545 090	1 389 720 015	429 064 594
Services rendered	3 584 735	998 247	5 943 699	1 765 061
Other operating revenues	103 139 016	78 029 689	89 787 497	12 763 644
Total operating revenues	1 074 448 606	378 573 026	1 485 451 211	443 593 299
Operating costs
Cost of sales	465 772 886	142 448 165	727 255 555	225 701 128
(Increase) / decrease in production	19 539 520	3 587 831	10 925 344	13 966 223
External supplies and services	280 584 459	88 842 978	368 117 575	113 490 918
Staff expenses	194 349 010	60 403 895	210 652 223	66 429 924
Depreciation and amortisation	93 863 127	30 893 053	91 420 555	30 972 984
Provisions and impairment losses	21 714 983	15 411 670	16 667 965	1 654 360
Other operating costs	9 005 553	2 659 789	14 788 428	3 496 848
Total operating costs	1 084 829 538	344 247 381	1 439 827 645	455 712 385
Operational profit / (loss)	- 10 380 932	34 325 645	45 623 566	- 12 119 086
Financial profits	56 607 784	14 074 140	64 939 540	18 875 226
Financial costs	99 050 356	27 570 282	122 145 297	37 925 718
Gains and losses in associated companies	- 88 928
Gains and losses in investments	98 700		57 796	36 821
Current profit / (loss)	- 52 813 732	20 829 503	- 11 524 395	- 31 132 757
Taxation	3 308 719	1 983 023	9 663 027	2 406 989
Consolidated net profit / (loss) afer taxation	- 56 122 451	18 846 480	- 21 187 422	- 33 539 746
Profit / (loss) after taxation from descontinued operations	-	-	-	-
Consolidated net profit / (loss) for the period	- 56 122 451	18 846 480	- 21 187 422	- 33 539 746
Attributable to:
Equity holders of Sonae Industria	- 55 577 688	18 451 150	- 26 668 379	- 33 107 937
Non-controlling interests	- 544 763	395 330	5 480 957	- 431 809
Profit/(Loss) per share
Excluding discontinued operations:
Basic	- 0.3970	0.1318	- 0.1905	- 0.2365
Diluted	- 0.3970	0.1318	- 0.1905	- 0.2365
From discontinued operations:
Basic	-	-	-	-
Diluted	-	-	-	-

The notes are an integral part of the consolidated financial statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE PERIODS ENDED 30 SEPTEMBER 2009 AND 2008

(Amounts expressed in Euros)

	30 .09 .20 09	30 .09 .20 08
Ne rof it / ( los s) for th eri od (a ) t p e p	- 5 6 1 22 45 1	- 2 1 1 87 42 2
Ot he he ive in r c om pre ns co me
Ch in lat ion tra an ge cu rre ncy ns re se rve	34 84 9 3 63	- 1 5 3 82 23 8
Ch in fa ir v alu f c h f low he dg e d eri tive an ge e o as va s Inc rel ati of oth reh siv e i e t to ts om ax ng co mp on en er co mp en nco me	73 - 7 57 5	2 89 39 1
Ot he he ive in fo r th eri od et of tax ( b) r c om pre ns co me e p , n	34 09 1 6 28	- 1 5 0 92 84 7
To tal reh siv e i e f the rio d ( a) + ( b) co mp en nc om or pe	- 2 2 0 30 82 3	- 3 6 2 80 26 9
To tal reh siv e i trib ble at uta to co mp en nco me :
Eq uity ho lde of So e I nd ria ust rs na	- 2 1 7 50 15 4	- 4 1 4 12 90 5
No tro llin inte ts n-c on g res	- 2 80 66 9	5 132 63 6
	- 2 2 0 30 82 3	- 3 6 2 80 26 9

The notes are an integral part of the consolidated financial statements

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS` FUNDS AT 30 SEPTEMBER 2009 AND 2008

(Amounts expressed in Euros)

Accumulated other comprehensive income

	Not es	Sha api tal re c	al res Leg erv e	Oth er R ese rve s and ula ted ac cum ear nin gs	Cur cy tran ren slat ion	Cas h flo w hed ge der ivat ives	Sub l tota	Tot al s har eho lde rs` fun ds attr ibu tab le t o the uity ho lde f eq rs o Son úst Ind ria ae	No ont roll ing n c inte ts res	Tot al s rs' fun har eho lde ds
Bal t 1 Jan y 2 008 anc e a s a uar Incr e / (De ) in sh pita l eas cre ase are ca Tra nsfe rs		700 00 0 0 00	1 3 40 138	- 10 5 5 40 522	- 80 5 7 01	95 24 4	- 71 0 4 57	595 08 9 1 59	33 742 41 7	62 8 8 31 576
Dis trib ute d d ivid end s				- 39 20 0 0 00				- 39 20 0 0 00		- 39 20 0 0 00
(Ac qui sitio n) / Dis al o f ow har pos n s es Acq uisi tion / (d ispo sal) of sub sidi arie s Fun din f ac ulat ed loss g o cum es riat ion ious ar's ofit			1 0 59 501	-1 0 59 501					- 36 49 2 5 29	- 36 49 2 5 29
App of p / (lo ss) t pr rop rev ye ne Tot al c hen sive inc om pre om e Oth ers				-26 66 8 3 79 73 8 5 20	-15 03 3 9 17	28 9 3 91	-14 74 4 5 26	- 41 41 2 9 05 738 52 0	5 1 32 636 2 1 50 229	- 36 28 0 2 69 2 8 88 749
Se Bal t 30 pte mb er 2 008 anc e a s a		700 00 0 0 00	2 3 99 639	-17 1 72 9 8 82	-15 83 9 6 18	38 4 6 35	-15 45 4 9 83	515 21 4 7 74	4 5 32 753	51 9 7 47 527

Accumulated other comprehensive income

	Not es	Sha api tal re c	al res Leg erv e	Oth er R ese rve s and ula ted ac cum ear nin gs	Cur cy tran ren slat ion	Cas h flo w hed ge der ivat ives	Sub l tota	rs` Tot al s har eho lde fun ibu ds attr tab le t o the uity ho lde f eq rs o Son Ind úst ria ae	ing No ont roll n c inte ts res	Tot al s rs' fun har eho lde ds
Bal Jan t 1 y 2 009 anc e a s a uar Acq uisi tion / (D ispo sal) of sub sidi arie s		700 00 0 0 00	2 3 99 639	- 25 2 2 18 789 - 31 1 4 18	-52 01 5 4 66	-1 0 65 070	-53 08 0 5 36	397 10 0 3 14 - 3 11 4 18	3 0 72 691 - 2 96 705	40 0 1 73 005 - 6 08 123
/ (lo ss) App riat ion of p ious ar's t pr ofit rop rev ye ne Tot al c hen sive inc om pre om e			337 54 2	- 33 7 5 42 -55 57 7 6 88	34 585 26 9	- 75 7 7 35	33 827 53 4	- 21 75 0 1 54	- 2 80 669	- 22 03 0 8 23
Oth ers Bal t 30 Se mb er 2 009 pte anc e a s a		700 00 0 0 00	2 7 37 181	-1 9 03 296 -31 0 3 48 733	-17 43 0 1 97	-1 8 22 805	-19 25 3 0 02	- 1 903 29 6 373 13 5 4 46	40 9 9 87 2 9 05 304	- 1 493 30 9 376 04 0 7 50

The notes are an integral part of the consolidated financial statements

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIODS ENDED AT 30 SEPTEMBER 2009 AND 2008

(Amounts expressed in Euros)

OPERATING ACTIVITIES	Notes	30.09.2009	30.09.2008
Net cash flow from operating activities (1)		56 824 476	37 480 051
INVESTMENT ACTIVITIES
Cash receipts arising from:
Investments		110 008 606	6 305 639
Tangible and intangible assets		2 100 817	7 686 274
Investment subventions			2 915 850
Others		98 700
		112 208 123	16 907 763
Cash Payments arising from:
Investments		537 745	191 844
Tangible and intangible assets		28 419 467	93 066 870
		28 957 212	93 258 714
Net cash used in investment activities (2)		83 250 911	- 76 350 951
FINANCING ACTIVITIES
Cash receipts arising from:
Loans obtained		1 854 447 730	2 403 258 625
Interest and similar charges		1 150 801	5 231 153
Others			57 481 609
		1 855 598 531	2 465 971 387
Cash Payments arising from:
Loans obtained		1 940 424 979	2 285 447 404
Interest and similar charges		35 402 250	42 944 942
Dividends			39 101 660
Finance leases - repayment of principal		2 094 667	2 154 328
Others		3 179 613
		1 981 101 509	2 369 648 334
Net cash used in financing activities (3)		- 125 502 978	96 323 053
Net increase in cash and cash equivalents (4) = (1) + (2) + (3)		14 572 409	57 452 153
Effect of foreign exchange rate		- 1 529 284	4 251 761
Cash and cash equivalents at the beginning of the period	9	17 388 776	49 154 756
Cash and cash equivalents at the end of the period	9	33 490 469	102 355 148

The notes are an integral part of the consolidated financial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2009 (Amounts expressed in euros)

1. INTRODUCTION

SONAE INDÚSTRIA, SGPS, SA has its head-office at Lugar do Espido, Via Norte, Apartado 1096, 4470-909 Maia, Portugal.

The shares of the company are listed on Euronext Lisbon.

2. ACCOUNTING POLICIES

The present set of consolidated financial statement has been prepared on the basis of the accounting policies that were disclosed in the notes to the consolidated financial statements of year 2008.

2.1. Basis of Preparation

These consolidated financial statements were prepared in accordance with the International Accounting Standard 34 – Interim Financial Reporting, as changed by IAS 1 – Presentation of Financial Statements, as amended in 2007, and by IFRS 8 – Operating Segments. As such, they do not include all the information which ought to be included in annual consolidated financial statements and therefore should be read in connection with the financial statements of year 2008.

2.2. Translation of financial statements of foreign companies

Exchange rates used on translation of foreign group, jointly controlled and associated companies are listed below:

	30.09.2009		31.12.2008		30.09.2008
	Closing	Average	Closing	Average	Closing	Average
	rate	rate	rate	rate	rate	rate
Great Britain Pound	0.9093	0.8855	0.9525	0.7943	0.7903	0.7816
Brazilian Real	2.6482	2.8843	3.2436	2.6555	2.7525	2.5585
South African Rand	10.8980	11.8203	13.0668	11.9933	11.8273	11.6809
Canadian Dollar	1.5709	1.5925	1.6998	1.5574	1.4961	1.5471
American Dollar	1.4643	1.3637	1.3917	1.4631	1.4303	1.5197
Swiss Franc	1.5078	1.5103	1.4850	1.5862	1.5774	1.6079
Polish Zloty	4.2296	4.3708	4.1535	3.5002	3.3967	3.4236

Source: Bloomberg

3. GROUP COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

During the period the following changes have occurred in the consolidation perimeter:

• Liquidation of Euro Decorative Boards, Ltd, formerly included in consolidation through the fully consolidation method, on 27 January 2009;
• Incorporation of Beeskow Holzwerkstoffe GmbH though partial demerger of GHP GmbH's assets, on 11 May 2009;
• Sale of all shares held in Tafisa Brasil, SA, on 26 August 2009;
• Merger of Somit Imobiliária, SA into Sonae Indústria Produção e Comercialização de Produtos Derivados de Madeira, SA, on 31 July 2009;
• Sale of all shares held in Ecociclo II Energias, SA, on 16 September 2009.

4. EFFECT OF CHANGES IN THE CONSOLIDATION PERIMETER

The information regarding the subsidiaries set out in note 3., which ceased to be controlled by the company during the period, may be summarized as follows:

			Tafisa Brasil	Ecociclo II	Total
	Non current assets
	Tangible assets Deferred tax asset Others	Total	102 890 645 19 784 150 1 155 761 123 830 556	6 604 689 6 604 689	109 495 334 19 784 150 1 155 761 130 435 245
Current assets
	Inventories Trade debtors Cash and cash equivalents Others	Total	14 718 089 22 904 663 843 371 2 692 970 41 159 093	1 397 436 847 438 244	14 718 089 22 904 663 844 768 3 129 817 41 597 337
Total assets			164 989 649	7 042 933	172 032 582
	Non current liabilities		Tafisa Brasil	Ecociclo II	Total
	Loans		273 214		273 214
	Deferred tax liability Provisions Others	Total	19 061 216 21 394 013 59 689 012 100 417 455		19 061 216 21 394 013 59 689 012 100 417 455
Current liabilities
	Loans Trade creditors Others	Total	18 186 727 12 248 154 9 701 337 40 136 218	12 902 7 543 758 7 556 660	18 186 727 12 261 056 17 245 095 47 692 878
Total liabilities			140 553 673	7 556 660	148 110 333
	Total consideration received		115 834 032	155 889	115 989 921
	Of which Cash and cash equivalents		110 765 866	155 889	110 921 755

5. TANGIBLE AND INTANGIBLE ASSETS

During the periods ended 30 September 2009 and 31 December 2008, movements in tangible and intangible assets, accumulated depreciation and impairment losses were as follows:

30.09.2009	31.12.2008
2 624 864 686	2 683 286 688
- 194 477 754	- 7 803 613
22 127 654	109 114 008
27 877 805	18 059 709
5 097 264	198 644
78 780 100	- 141 871 332
2 508 514 145	2 624 864 686
1 422 360 008	1 340 465 340
- 84 486 889	- 5 170 822
90 995 659	150 085 946
27 007 268	10 953 347
30 035 430	- 51 578 302
- 21 326 711	- 488 807
1 410 570 229	1 422 360 008
1 097 943 916	1 202 504 678

During the periods ended 30 September 2009 and 31 December 2008 no interest paid or any other financial charges were capitalized, in accordance with conditions defined in note 2.9 to consolidated financial statements of year 2008.

Imobilizações Incorpóreas
	30.09.2009	31.12.2008
Gross cost:
Opening balance	22 257 745	18 499 178
Capital expenditure	319 075	5 597 990
Disposals	1 086 427	1 068 180
Exchange rate effect	322 919	- 562 449
Others	2 415 613	- 208 794
Closing balance	24 228 925	22 257 745
Accumulated amortisation and impairment losses
Opening balance	9 767 087	7 663 030
Charge for the period	3 514 508	3 147 724
Disposals	68 980	1 068 186
Exchange rate effect	124 721	- 72 543
Others		97 062
Closing balance	13 337 336	9 767 087
Carrying amount	10 891 589	12 490 658

Charges to impairment losses are detailed in note 14.

6. GOODWILL

During the periods ended 30 September 2009 and 31 December 2008, movements in goodwill and accumulated impairment losses were as follows:

	Goodwill
	30.09.2009	31.12.2008
Gross value:
Opening balance	103 811 638	100 086 856
New companies
Increases		11 571 386
Decreases	15 742 470	3 076 276
Transfers and write-offs	231 039
Currency translation	3 715 388	-4 770 328
Closing balance	92 015 595	103 811 638

Decreases in the period relate to goodwill assigned to the subsidiary Tafisa Brasil, SA.

7. DEFERRED TAXES

At 30 September 2009 and 31 December 2008 deferred tax asset and liability were detailed according to underlying temporary differences as follows:

		Deferred tax assets
	30.09.2009	31.12.2008	30.09.2009	31.12.2008
Harmonisation adjusments			55 180 027	59 897 966
Provisions not allowed for tax purposes	1 306 198	3 377 394	85 260
Impairment of Assets	1 918 164	2 588 089
Derecognized intangible assets		600
Derecognized tangible assets	126 976	186 174
Derecognized deferred costs	122 716	177 647
Valuation of hedging derivatives	130 476	108 820
Revaluation of tangible assets			2 855 799	3 044 798
Tax losses carried forward	32 550 710	47 547 072
Others				6 959 598
	36 155 240	53 985 797	58 121 086	69 902 362

Changes to deferred tax asset and liability include 4 532 224 euros and 8 185 717 euros of exchange rate effect, respectively.

8. OTHER CURRENT ASSETS

At 30 September 2009 and 31 December 2008, details of Other current assets on the Consolidated Balance Sheet were as follows:

			30.09.2009			31.12.2008
		Gross Value	Impairment	Net Value	Gross Value	Impairment	Net Value
Derivatives instruments		2 372 959		2 372 959	16 521 457		16 521 457
Financial Instruments		2 372 959		2 372 959	16 521 457		16 521 457
Accrued revenue		1 380 129		1 380 129	5 441 863		5 441 863
Deferred Costs Others		8 555 637		8 555 637	5 535 277 30 815		5 535 277 30 815
Assets out of scope of IFRS 7		9 935 766		9 935 766	11 007 955		11 007 955
	Total	12 308 725		12 308 725	27 529 412		27 529 412

9. CASH AND CASH EQUIVALENTS

At 30 September 2009 and 31 December 2008, the detail of Cash and Cash Equivalents was as follows:

	30.09.2009	31.12.2008
Cash at hand	67 890	98 186
Bank deposits	15 910 400	8 040 212
Treasury applications	24 792 187	57 611 859
Cash and cash equivalents on the balance sheet	40 770 477	65 750 257
Bank overdrafts	7 280 008	48 361 481
Cash and cash equivalents on the statement of cash flows	33 490 469	17 388 776

10. LOANS

As at 30 September 2009 and 31 December 2008 Sonae Indústria had the following outstanding loans:

	30.09.2009
	Amortised cost		Nominal value
	Current	Non current	Current	Non current
Bank loans Debentures	42 692 727 80 000 000	240 951 500 302 828 157	42 692 727 80 000 000	240 951 500 305 000 000
Obligations under finance leases Other loans	3 406 180 302 748	45 249 576 94 966 328	3 406 180 302 748	45 249 576 94 966 328
Gross debt	126 401 655	683 995 561	126 401 655	686 167 404
Investment Cash and cash equivalent in balance sheet	40 770 477		40 770 477
Net debt	85 631 178	683 995 561	85 631 178	686 167 404
Total net debt	769 626 739		771 798 582

	31.12.2008
	Amortised cost		Nominal value		Fair value
	Current	Non current	Current	Non current	adjustment
Bank loans	105 577 761	268 056 483	105 577 761	268 056 483	970 201
Debentures Obligations under finance leases	80 000 000 3 535 578	302 147 961 47 949 761	80 000 000 3 535 578	305 000 000 47 949 761	-1 242 400
Other loans Gross debt	301 760 189 415 099	148 419 100 766 573 305	301 760 189 415 099	148 419 100 769 425 344	- 272 199
Investment
Cash and cash equivalent in balance sheet	65 750 257		65 750 257
Net debt	123 664 842	766 573 305	123 664 842	769 425 344	- 272 199
Total net debt	890 238 147		893 090 186

The main changes occurred in bank loans were as follows:

a) In the first quarter of 2009 Sonae Indústria SGPS, SA contracted a loan with a Portuguese financial institution for 20 000 000 euros. The loan pays interest at market rate and principal will be repaid from 2009 to 2015;

b) On 15 June 2009 the last instalment of the loan contracted by Sonae UK with European Investment Bank, with an original amount of GBP 35 000 000, was paid.

The amount of bank loans at 30 September 2009, stated in the table above, was impacted by the effects set out in note 4.

11. FINANCIAL DERIVATIVES

At 30 September 2009 and 31 December 2008, the fair value of derivative instruments are stated as follows:

	(note 8)	Other current assets	Other current liabilities			Other non current liabilities
	30.09.09	31.12.08	30.09.09	31.12.08	30.09.09	31.12.08
Derivatives at fair value through profit or loss	2 372 959	16 305 348	3 581 055	6 244 352		9 230
Derivatives at fair value through reserves		216 109	2 167 743	1 168 770
	2 372 959	16 521 457	5 748 798	7 413 122		9 230

12. OTHER NON CURRENT LIABILITIES

At 30 September 2009 and 31 December 2008, details of Other non current liabilities were as follows:

	30.09.2009	31.12.2008
Derivative instruments		9 230
Goup companies	72 604	72 604
Other creditors	434 401	434 401
Financial instruments	507 005	516 235
State and other public entities Other creditors	69 607 568	44 122 456 74 102 387
Liabilities out of scope of IFRS 7	69 607 568	118 224 843
Total	70 114 573	118 741 078

13. OTHER CURRENT LIABILITIES

At 30 September 2009 and 31 December 2008, Other current liabilities were composed of:

	30.09.2009	31.12.2008
Group companies	34 946	34 910
Derivatives	5 748 798	7 413 122
Trade debtors advances		643 804
Fixed assets suppliers	3 619 307	8 776 582
Other creditors	3 119 329	2 693 380
Financial instruments	12 522 380	19 561 798
Other creditors	6 329 680	7 842 207
Accrued expenses:
Insurances	206 294	55 226
Personnel costs	24 583 408	23 753 319
Accrued financial expenses	3 257 093	9 137 782
Rappel discounts (annual quantity discounts)	23 838 272	28 919 892
External supplies and services	8 361 089	11 939 042
Other accrued expenses	17 981 592	9 815 327
Deferred income:
Investment subventions	5 963 836	5 891 717
Other deferred income	916 088	64 973
Liabilities out of scope of IFRS 7	91 437 352	97 419 485
Total	103 959 732	116 981 283

14. PROVISIONS AND ACCUMULATED IMPAIRMENT LOSSES

Movements occurred in provisions and accumulated impairment losses during the period ended 30 September 2009 were as follows:

				30.09.2009
	Opening	Exchange	Changes to			Other	Closing
Description	balance	rate effect	perimeter	Increase	Utilizations	changes	balance
Accumulated impairment losses on tangible assets (Note 5)	57 587 280	407 243		748 454	5 043 437	- 20 419 598	33 279 942
Accumulated impairment losses on intangible assets (Note 5)	19 242						19 242
Accumulated impairment losses on other non-current assets	10 931 182						10 931 182
Accumulated impairment losses on trade debtors	16 742 196	365 515	- 168 842	5 971 477	2 972 935	- 2 445 154	17 492 257
Accumulated impairment losses on other debtors	19 629						19 629
Provisions	49 108 405	3 998 210	- 21 394 013	14 995 053	16 604 757	15 012 638	45 115 536
Sub-total	134 407 934	4 770 968	- 21 562 855	21 714 984	24 621 129	- 7 852 114	106 857 788
Accumulated impairment losses on investments	37 005 998	3 053				- 3 050	37 006 001
Accumulated impairment losses on inventories	17 098 955	451 825	- 1 677 647	7 067 287	7 637 160	- 651 323	14 651 937
Total	188 512 887	5 225 846	- 23 240 502	28 782 271	32 258 289	- 8 506 487	158 515 726

Increases and decreases in provisions and impairment losses are stated in the Consolidated Income Statement as follows:

	30.09.2009
	Losses	Gains
Cost of sales	3 458 877	3 332 008
Other operating revenues		24 621 128
(Increase) / decrease in production	3 608 410	4 305 153
Provisions and impairment losses	21 714 984
Total	28 782 271	32 258 289

During the period Sonae Indústria tested for impairment the cash generating units currently under restructuring in France and South Africa. These tests included the restructuring decisions that were taken in 2009, therefore changing the assumptions used on the tests performed by the end of 2008. Consequently, the impairment losses recognized in 2008 were partly reversed. The reversion is stated on column Other changes.

In addition, as the provisions of IAS 37 were fulfilled, a restructuring provision was created and stated on column Other changes.

15. OTHER OPERATING REVENUES

Details of Other operating revenues on the Consolidated Income Statement for the periods ended 30 September 2009 and 2008 are as follows:

	30.09.2009	30.09.2008
Gains on disposals of non current investments Gains on disposals of tangible and intangible assets	56 897 262 1 352 234	4 221 164 45 963 795
Supplementary Revenue	5 364 190	5 567 501
Investment subventions	5 136 128	5 066 968
Tax received	4 392 089	3 946 624
Reversion of impairment losses	8 016 372	1 434 881
Gains on provisions	16 604 757	8 018 129
Others	5 375 984	15 568 435
	103 139 016	89 787 497

As regards the period ended 30 September 2008, the captions Gains on disposal of tangible and intangible assets and Others include about 41 million euros and about 3 million euros, respectively, related to the accident occurred on line II of our plant in Lac Megantic, Canada.

The caption Gains on disposals of non current investments includes about 56 million euros of gains related to the disposal of the subsidiary Tafisa Brasil, SA.

16. FINANCIAL RESULTS

Financial results for the periods ended 30 September 2009 and 2008 were as follows:

	30.09.2009	30.09.2008
Financial expenses:
Interest expenses
related to bank loans and overdrafts	5 333 584	8 603 177
related to non convertible debentures	7 225 392	16 095 045
related to finance leases	3 750 012	3 986 653
related to hedged loans (hedge derivatives)	3 915 851	5 010 026
others	4 890 251	7 709 004
	25 115 090	41 403 905
Losses in currency translation
related to customers	942 967	771 344
related to suppliers	1 387 478	2 069 491
related to loans	13 310 969	27 104 539
others	349 970	1 361 946
	15 991 384	31 307 320
Cash discounts granted	10 712 427	15 138 495
Adjustment to fair value of financial instruments at fair value through profit or loss	38 617 079	26 678 221
Losses on valuation of hedging derivative instruments	1 219 485
Fair value of inefficient component of hedge derivatives
Other finance losses	7 394 891	7 617 356
	99 050 356	122 145 297

Financial revenues:
Interest income related to bank loans	32 580	197 973
related to loans to related parties	241 514	443 804
Others	473 406	5 149 688
	747 500	5 791 465
Gains in currency translation
related to customers	760 883	857 279
related to suppliers	774 860	1 903 304
related to loans	26 964 617	16 353 902
others	884 554	291 561
	29 384 914	19 406 046
Cash discounts obtained	1 458 766	2 456 654
Adjustment to fair value of financial instruments at fair value through profit or loss	24 463 955	37 220 441
Gains in valuation of hedging derivative instruments	356 004
Other finance gains	196 645	64 934
	56 607 784	64 939 540
Finance profit / (loss)	- 42 442 572	- 57 205 757

17. TAXES

Corporate income tax accounted for in the periods ended 30 September 2009 and 2008 is detailed as follows:

	30.09.2009	30.09.2008
Current tax Deferred tax	1 635 864 1 672 855	4 845 714 4 817 313
	3 308 719	9 663 027

18. SEGMENT INFORMATION

The main activity of the Group is the production of wood based panels and derivative products through industrial plants and commercial facilities located in Portugal, Spain, France, Germany, United Kingdom, Switzerland, The Netherlands, Canada, Brazil and South Africa.

In the notes to the consolidated financial statements of the period ended 31 December 2008, Sonae Indústria disclosed the following geographic segments in accordance with IAS 14.

• Portugal;
• Spain;
• France;
• United Kingdom;
• Germany;
• Rest of Europe;
• Brazil;
• Canada;
• South Africa.

For 2009 financial year and interim reporting periods, IFRS 8 is replacing IAS 14. Under this new standard, segments to be disclosed are the ones included in the internal reporting system of financial information to the chief operating decision maker, namely:

• Iberian Peninsula;
• France;
• Germany;
• United Kingdom;
• Canada;
• Brazil;
• South Africa.

Non reportable segments are included under Other segments.

	Turnover				Operating
Segments	External		Intragroup		Result
	30.09.2009	30.09.2008	30.09.2009	30.09.2008	30.09.2009	30.09.2008
Iberian Peninsula	227 662 284	327 468 364	5 309 279	8 934 053	- 51 434	19 324 192
France	85 927 354	147 624 857	29 501 585	68 000 296	- 57 520 409	- 17 264 009
Germany	267 790 767	386 552 534	86 791 469	115 097 089	- 38 155 842	- 20 659 087
United Kingdom	48 581 133	71 505 686			- 5 456 644	- 122 782
Canada	84 226 781	84 847 753			- 719 189	36 261 626
Brazil	70 893 585	125 953 853			6 922 697	26 920 538
South Africa	58 240 918	68 696 050			3 662 175	5 395 817
All other segments	115 052 369	167 056 442	47 622 456	74 059 469	- 6 859 355	- 1 112 895
Total segments	958 375 190	1 379 705 537	169 224 789	266 090 907	- 98 178 001	48 743 400
Adjustments
Reversion of impairment losses					27 376 043
Gains or losses on disposal of financial undertakings					57 163 450	- 3 858 289
Adjustment to depreciation					2 482 295	937 629
Unrecognized impairment losses						- 2 000 000
Companies excluded from the consolidation perimeter					1 387 849	1 409 652
Others					- 612 567	391 173
					- 10 380 932	45 623 566

19. Contingencies

In March 2009, Glunz AG, GHP Gmbh and other wood based panel producers in Germany were subject to inspections carried out by the German Competition Authority. The investigations are at a fact-finding stage only and no formal allegations have been made against our Companies or any of their employees. According to the information available at this date, the Directors consider that any eventual liability related to such proceedings is deemed to be remote."

20. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements were approved by the Board of Directors and authorised for issuance on 5 November 2009.