Chargeurs — Earnings Release 2012

Jan 21, 2013

2012 Financial Information

In 2012, Chargeurs continued to implement its strategic plan and to strengthen its balance sheet. In a severely recessionary environment, particularly in Europe, Chargeurs' businesses made the necessary adjustments. Focused on high value-added products, the Group is confident of its ability to improve its earnings performance with the return to growth.

Revenue

	Fourth quarter		Full year
(in €m)	2012	2011	2012	2011
Chargeurs Protective Films	43.7	40.8	181.4	179.7
Chargeurs Interlining	43.8	42.8	179.0	187.4
Chargeurs Wool	29.2	44.9	164.3	185.0
TOTAL	116.7	128.5	524.7	552.3

• Fourth quarter revenue was down by 9.2%. With volumes stable overall compared with the year earlier period, the decline reflected the 7.4% negative impact of reductions in the scope of consolidation at Chargeurs Wool, a 3.5% negative price effect and a 1.9% positive currency effect.
• o Chargeurs Protective Films' volumes rose 7%, confirming the recovery that began in the summer.
• o Chargeurs Interlining reported volumes up 10%, marking a reversal of the trend observed in prior quarters.
• o Chargeurs Wool experienced a 16.5% fall in volumes and was also penalized by the €9.5 million negative effect of applying the equity method to account for previously fully consolidated businesses in Uruguay, from October 1, and in Argentina, from December.
• Consolidated revenue for the year was down 5%, in line with forecasts. The 9.2% negative volume effect and the 1.7% negative impact of changes in the scope of consolidation were partly offset by a 3.6% positive currency effect and a 2.4% positive price effect.
• o Chargeurs Protective Films' volumes held up well over the year, supported by strong sales in the second half.
• o Chargeurs Interlining reported annual sales volume down 5.8%. In response, various measures were deployed in 2012 including streamlining sales organizations in Europe, North Africa and Asia, and rationalizing production facilities in France and China.
• o Chargeurs Wool's volumes were cut by 20%. Responding to the sharp contraction in the wool market and scarcer bank financing, combing capacity in China was reduced by over a third, the fixed cost structure in Australia was radically slimmed down and

Chargeurs sold half of its wool businesses in Uruguay and Argentina, in the latter case by setting up a partnership with an Argentine entrepreneur.

Chargeurs' latest estimates of its 2012 consolidated results are as follows, based on the preliminary, unaudited financial statements:

Consolidated Income Statement

The Group will report a net loss for the year, estimated at approximately €16 million.

The €26 million unfavorable swing compared with 2011 reflects a €17 million decline in operating profit – breaking down as €9 million due to lower volumes, €5 million due to the negative price effect and €3 million corresponding to non-recurring items –, a €4 million loss from discontinued operations and the previously announced roughly €5 million reduction in deferred tax assets.

Financial position

Throughout 2012, Chargeurs gave priority to rapidly paying down debt. As a result, net debt at December 31, 2012 should amount to just €32.6 million versus €80.6 million at end-2011, representing an improvement of more than 60%. Of the total €48 million decrease, €4 million concerned Chargeurs Protective Films, €12 million Chargeurs Interlining and €32 million Chargeurs Wool. This will lead to a sharp improvement in gearing, to an estimated 18% at December 31, 2012 from 42% at the previous year-end.

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January 21, 2013

Next announcement: 2012 Annual Results: March 15, 2013

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