Chargeurs — Interim / Quarterly Report 2014

Aug 29, 2014

Paris, August 29, 2014

Increased Revenue and Sharply Higher Profit

The Board of Directors of Chargeurs met on August 28, 2014 under the chairmanship of Eduardo Malone to approve the consolidated financial statements for the six months ended June 30, 2014.

CONSOLIDATED FINANCIAL STATEMENTS (in € millions)	First Half 2014	First Half 2013 restated IFRS 5 [1]	First Half 2013 (reported)
Revenue	243.9	239.4	240.0
Recurring operating profit	12.0	7.7	7.2
Operating profit	11.8	9.5	9.0
Attributable net profit	6.4	3.2	3.2

[1] IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations

[2] Operating profit before non-recurring items (see Note 2.1 to the interim consolidated financial statements)

Increased revenue

Revenue increased by 1.9% in first-half 2014 compared with the year-earlier period, lifted by a strong 5.9% rise in business volume and despite a 3.2% negative currency effect.

Sharply higher operating profit

Growth in delivered volumes, as part of the Group's strategy to build sales of high value-added products, helped to drive a significant 55.8% increase in recurring operating profit to €12.0 million.

Net profit reflected the full impact of this dynamic operating performance, with the €6.4 million increase for the period representing double the €3.2 million gain reported in first-half 2013.

ANALYSIS BY BUSINESS SEGMENT

Chargeurs Protective Films: a very good performance
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(in € millions)	First Half 2014	First Half 2013
Revenue	103.5	96.0
Recurring operating profit	8.9	5.0
Operating profit	8.8	5.1

Chargeurs Protective Films continued to enjoy innovation-led growth. Revenue for the period was up 7.8%, reflecting a sharp rise in delivered volumes. Thanks to the strategic focus on high technicalcontent products, around one third of revenue is now generated by products that are less than five years old.

Recurring operating profit for first-half 2014 amounted to €8.9 million, representing a significant increase compared with €5.0 million for the same period of 2013.

Chargeurs Interlining: a significant currency effect

(in € millions)	First Half 2014	First Half 2013 restated IFRS 5 [1]	First Half 2013 (reported)
Revenue	84.1	88.9	89.5
Recurring operating profit	2.9	2.0	1.5
Operating profit	2.8	(*) 3.7	(*) 3.2

Including €1.7million in non-recurring items, consisting mainly of the gain on the sale of real estate (*)

In a generally unfavorable market, the 5.4% decline in Chargeurs Interlining's revenue to €84.1 million was mainly due to the €5.7 million negative currency effect attributable for the most part to the fall in the Argentine peso. Excluding the currency effect, revenue held firm in a mature and highly competitive market.

Chargeurs Interlining reported recurring operating profit of €2.9 million for the period, versus a restated profit of €2.0 million in first-half 2013.

Chargeurs Wool: improved recurring operating profit

(in € millions)	First Half 2014	First Half 2013
Revenue	56,3	54,5
Recurring operating profit	1,5	1,4
Operating profit	1,5	1,4

Chargeurs Wool reported revenue of €56.3 million in first-half 2014, up 3.3% on the year-earlier period. Increased volumes offset the effects of lower raw wool prices and unfavorable exchange rates. Recurring operating profit rose by 7.1% to €1.5 million from €1.4 million in first-half 2013, illustrating Chargeurs Wool's successful transformation into a service business.

A STRONGER FINANCIAL POSITION

The Group continued to strengthen its financial position during the first half of 2014.

Equity at June 30, 2014 amounted to €165.5 million (excluding minority interests) versus €157.9 million at December 31, 2013.

As announced, Chargeurs Interlining repaid the medium term credit facilities provided for under the debt restructuring agreement several months ahead of the due date, thereby extinguishing all of the Group's debt restructuring liabilities.

During first-half 2014, taking into account the quality of its earnings performance and the significant amount of cash generated by operations, Chargeurs Protective Films decided to purchase leased plant machinery for €12.6 million, in order to improve its strategic control over industrial assets and its operational competitiveness.

At June 30, 2014, the Group had a net cash position of €0.2 million, compared with a net cash position of €3.2 million at December 31, 2013 and net debt of €16.7 million at June 30, 2013.

Lastly, of the 415,083 convertible bonds issued in April 2010 with a total face value of €22.8 million, 226,294 bonds were outstanding at June 30, 2014.

OUTLOOK

With its restored financial headroom, its strategic focus on high value-added products and its solid operating performance in first-half 2014, Chargeurs confirms its objective of sustainably generating recurring operating profit of at least €20 million a year as from the end of 2015.

Based on first-half results and the latest economic indicators, the Group expects its 2014 performance to be close to:

(in € millions)	2014 Estimated	2013 Actual
Revenue	470	466.5
Recurring operating profit	19	14.4

Next announcement: Financial Information – Third Quarter 2014 – November 14, 2014

Chargeurs

112, avenue Kléber - 75116 Paris Communications Department - Phone: (01) 47 04 13 48 Email: contact@chargeurs.fr – www.chargeurs.fr

About Chargeurs

Chargeurs is a global manufacturing and services group with leading positions in three niche markets: temporary surface protection, technical textiles and combed wool.

It has 1,600 employees based in 31 countries on five continents, who serve a diversified customer base spanning more than 45 countries.

In 2013, consolidated revenue totaled €466.5 million, of which 93% was generated outside France.