Quarterly Report • Aug 27, 2009
Quarterly Report
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| 3/ CONDENSED FINANCIAL STATEMENTS | 15 |
|---|---|
| Consolidated income statement | 15 |
| Consolidated statement of comprehensive income | 15 |
| Consolidated statement of financial position | 16 |
| Consolidated statement of cash flows | 17 |
| Consolidated statement of changes in equity | 19 |
| Notes to the financial statements | 20 |
| 1/ Accounting principles and policies | 20 |
| 2/ Notes to the consolidated income statement | 23 |
| 3/ Notes to the consolidated statement of financial position | 29 |
| 4/ Reconciliation of the net financial debt | 41 |
| 5/ Information by operating segments | 43 |
6/ Other information 47
Gérard Buffière, Chief Executive Officer
I certify that to the best of my knowledge the condensed financial statements for the past six months have been prepared in accordance with the applicable set of accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the reporting entity and the companies included in the scope of consolidation, and that the enclosed half-year activity report includes a fair review of the material events that occurred in the first six months of the financial year, their impact on the first-half financial statements, an account of the main related-party transactions as well as a description of the principal risks and the principal uncertainties for the remaining six months of the year.
Paris, August 27, 2009
Gérard Buffière Chief Executive Officer
During the 1st half 2009, the markets served by the Group in Europe and North America have not posted any upturn since their collapse in the 4th quarter of 2008. Only some emerging markets recovered slightly in the 2nd quarter 2009.
Output decreases remain substantial, especially in industrial equipment-related markets. Steel production in Europe and North America fell approximately - 45% in the 1st half 2009 compared with the same period in 2008, but with a very slight improvement at the very end of the period.
In the construction sector in France, single-family housing starts were down - 23%(e) in the 1st half 2009. The upturn observed in housing sales in recent months was not enough to offset the ongoing decrease. New housing starts in the United-States are leveling out, but at an unprecedented low level.
Global production of printing and writing paper slumped heavily in mature economies, with further paper mill closures in Europe and North America in response to slack demand.
Only some consumer-related markets such as filtration showed more resilience.
Over the 1st half of 2009, the plans implemented led to:
These measures allowed to limit the decrease of current operating income at - 54.4% (- 57.2% at comparable Group structure and exchange rates), as a result of an heavily negative impact of volumes, decreasing - 29.2%.
| (€ millions) | 1st half 2009 | 1st half 2008(4) | % current change |
|---|---|---|---|
| Consolidated Results | |||
| Sales | 1,374.0 | 1,774.1 | - 22.6% |
| Current operating income(1) | 110.0 | 241.5 | - 54.4% |
| Operating margin | 8.0% | 13.6% | |
| Net income from current operations, Group share(2) | 46.7 | 159.8 | - 70.8% |
| Net income, Group share | 11.7 | 144.4 | n.s. |
| Financing | |||
| Current operating cash flow | 172.6 | 256.4 | - 32.7% |
| Booked capital expenditure | (56.9) | (114.1) | - 50.2% |
| Net financial debt | 1,148.2 | 1,616.1 | - 29.0% |
| Data per share | |||
| Net income from current operations, Group share(2)(3)(4) | €0.68 | €2.37 | - 71.3% |
(1) Operating income before other operating revenue and expenses, but including the share in income of associates.
(2) Group share of net income, before other operating revenue and expenses, net.
(3) The weighted average number of outstanding shares was 68,688,790 in 1st half 2009 vs. 67,496,827 in 1st half 2008 (reprocessed following the rights issue completed as on June 2, 2009).
(4) First-half 2008 results were restated following the two presentation changes applied as of January 1st, 2009, details of which are given in Note 2 - Chapter 3 - Consolidated Results.
(e) Estimated.
| Sales (€ millions) |
Change in sales (% vs. previous year) |
Comparable change in sales(5) (% vs. previous year) |
Of which volume effect |
Of which price/mix effect |
|
|---|---|---|---|---|---|
| 1st quarter 2009 (6) | 694.3 | - 21.3% | - 23.8% | - 28.2% | + 4.4% |
| 2nd quarter 2009(6) | 679.7 | - 23.8% | - 26.0% | - 30.2% | + 4.2% |
| 1st half 2009 | 1,374.0 | - 22.6% | - 24.9% | - 29.2% | + 4.3% |
Sales for the 1st half of 2009 totaled €1,374.0 million (- 22.6% compared with 1st half 2008).
This change takes into account:
The decrease in sales volumes (- 29.2%) is intensified by the ongoing inventory reduction in many value chains to which the Group's products contribute.
| (€ millions) | 2009 | 2008 | % Change | % Comparable change(5) | |
|---|---|---|---|---|---|
| 1st quarter | 44.4 | 116.9 | - 62.0% | - 66.2% | |
| Operating margin | 6.4% | 13.3% | |||
| 2nd quarter | 65.6 | 124.6 | - 47.3% | - 48.8% | |
| Operating margin | 9.6% | 13.9% | |||
| 1st half | 110.0 | 241.5 | - 54.4% | - 57.2% | |
| Operating margin | 8.0% | 13.6% |
Affected by lower volumes (- €231.0 million), current operating income totaled €110.0 millions for the 1st half of 2009 (- 54.4%, i.e. - 57.2% at comparable Group structure and exchange rates).
This - €131.5 million decrease compared to 1st half 2008 takes into account:
The inflation in variable costs is offset by improved price/mix component whereas the savings plans carried out since the 4th quarter of 2008 led to a - 13% decrease in fixed costs: the savings achieved totaled €85.6 million for the first six months of 2009.
(5) At comparable Group structure and exchange rates.
(6) Quarterly figures: non-audited.
(7) Acquisitions completed in 2008: Astron China (China, February 2008), Svenska Silika Verken AB (Sweden, April 2008), Kings Mountain Minerals, Inc. (USA, October 2008) and Suzorite Mining, Inc. (Canada, October 2008), deconsolidation of Xinlong
(China, January 2009) and divestments completed in 2009, mainly Planchers Fabre (France, May 2009). (8) Operating income before other operating revenue and expenses.
(9) First-half 2008 results were restated following the two presentation changes applied as of January 1st, 2009, details of which are given in Note 2 - Chapter 3 - Consolidated Results.
These savings are resulting from the effects of the following measures:
These savings are partly directly related to the temporary slowdown in output rates intended to reduce inventory rapidly, particularly in the 2nd quarter.
The Group's operating margin worked out at 8.0% (13.6% in 1st half 2008).
Net income from current operations totaled €46.7 million (- 70.8% vs. 1st half 2008). This decrease reflects the change in current operating income and takes the following items into account:
Other operating revenue and expenses, net of tax amounted to - €35.0 million.
Gross amount before tax (- €46.6 million) is broken down into:
After allowing for other operating revenue and expenses, net of tax, net income totaled €11.7 million.
| (€ millions) | 1st half 2009 | 1st half 2008 |
|---|---|---|
| EBITDA | 204.1 | 322.2 |
| Current operating cash flow | 172.6 | 256.4 |
| Change in operating working capital | 93.4 | (83.0) |
| Paid capital expenditure | (79.0) | (141.6) |
| Current free operating cash flow * | 187.7 | 40.3 |
| Financial expense (net of tax) | (32.0) | (15.0) |
| Other working capital items | 27.0 | (38.3) |
| Current free cash flow | 182.7 | (13.0) |
| * Including subsidies, book value of assets divested and other. | 0.7 | 8.5 |
Inventory was reduced by €129.4 million. After allowing for the decrease in payables resulting from lower production levels, operating working capital improved by €93.4 million. It represented 27.5% of sales (25.9% as on June 30, 2008).
Booked capital expenditure decreased by more than 50% compared with the 1st half of 2008. Capital expenditure represents 63% of depreciation expense(10) (vs. 120% in the 1st half of 2008).
Current free operating cash flow(11) , totaled €187.7 million, as compared to €40.3 million generated in the 1st half of 2008.
| (€ millions) | June30, 2009 | December 31, 2008 | June 30, 2008 |
|---|---|---|---|
| Net debt | 1,148.2 | 1,566.1 | 1,616.1 |
| Shareholders' equity | 1,808.1 | 1,546.3 | 1,585.6 |
| EBITDA | 204.1 | 573.4 | 322.2 |
| Net debt/shareholders' equity | 63.5% | 101.3% | 101.9% |
| Net debt/EBITDA | 2.5x | 2.7x | 2.5x |
Consolidated net financial debt decreased sharply to €1,148.2 million, compared with €1,566.1 million as on December 31, 2008 and €1,616.1 million as on June 30, 2008.
It benefited from the following factors:
As on June 30, 2009, Imerys' financial resources totaled more than €2.3 billion (of which €1 billion in available resources), with no significant repayments scheduled before the end of the year 2012. The Group's financial flexibility enables it to seize strategic development opportunities when they arise.
As decided, Imerys paid out dividends, on July 7, 2009, amounting €62.8 million, i.e. 23.5% of net income from current operations for the financial year ending December 31, 2008.
As part of the Group's cost and financial structure optimization measures, a deconsolidating factoring contract was signed on July 23, 2009, for an amount of trade receivables estimated at €90 million. As the risks and benefits related to the trade receivables are transferred to the factoring bank, the receivables will be deconsolidated when the contract is implemented in the 3rd quarter of 2009.
The 2nd quarter showed no improvement in the economic situation created by the unprecedented crisis the global economy is going through. Imerys aggressively continued the drastic reduction of costs and made generating free cash flow a priority. Consolidated results for the 1st half of 2009 reflect this.
The Group does not to date see tangible signs of a lasting upturn and great uncertainty hangs over activity levels for the coming quarters. Fixed cost and overhead reduction programs are being maintained, while cash flows generation remains the priority.
Continuation of these actions enable the Group to maintain the goal announced on April 29, 2009 to achieve an operating margin close to 10% by the start of 2010.
(10) Booked capital expenditure divided by fixed asset depreciation expense.
(11) Current operating cash flow minus paid capital expenditure and changes in operating working capital.
(27% of consolidated sales)
| (€ millions) | 1st half 2009 | 1st half 2008(12) | Current change | Comparable change(13) |
|---|---|---|---|---|
| Sales | 383.2 | 595.5 | - 35.7% | - 38.2% |
| Current operating income(14) | 13.8 | 75.6 | - 81.7% | - 87.2% |
| Operating margin | 3.6% | 12.7% | ||
| Booked capital expenditure | 25.0 | 34.7 | - 28.1% | |
| As % of depreciation expense | 94% | 114% |
Minerals for Refractories, Fused Minerals and Graphite markets in all geographic zones remain affected by the sharp drop in industrial equipment and automotive production recorded since the middle of the 4th quarter 2008. This trend is intensified by massive inventory reductions across the entire downstream customer chain. However, in Europe and North America, steel production in May and June was marginally higher than in previous months, while Chinese and Indian markets improved slightly compared with the 1st half of 2008. In abrasives and graphite, levels of demand remain significantly lower than in 2008 but improved in May and June compared with the previous months. The Ceramics market is still affected by the crisis, particularly in the construction sector in developed countries.
Since the end of 2008, output has been cut sharply in all the business group (by more than 50% in some activities) and industrial facilities are adapting to demand. Measures that combine part-time working and working time reductions have been implemented in France, in the United Kingdom and in Switzerland whereas substantial workforce reductions took place in particular in the United States, in Austria, in China and in South Africa. Significant decrease occurred in mining campaign and periodical stoppage or definitive closure were implemented in production lines.
Imerys Technologie Limoges, a research centre dedicated to uprange and specialty minerals for ceramics, was opened (Haute-Vienne, France). With 35 researchers from 5 nationalities, the centre brings together Imerys' innovation efforts in this area to create and develop the products of the future.
Minerals for Refractories enhanced their portfolio of mineral reserves during the 1st half through the acquisition of high quality assets in the United States. This capital expenditure represents a large share of the amount committed by the business group during the period.
Sales, at €383.2 million for the 1st half of 2009, were down - 35.7%. Analysis of the variance in sales shows:
Current operating income, at €13.8 million for the 1st half of 2009, decreased by - €61.8 million from the 1st half of 2008. It takes into account a Group structure effect of - €0.6 million and a favorable foreign exchange effect of + €4.7 million. Excluding those items, the business group's operating performance decreased by - €65.9 million.
The impact of the decrease in sales volumes was only partly offset by the results of the energetic actions taken to reduce fixed production costs and overheads and a positive price/mix trend.
(12) First-half 2008 results were restated following the two presentation changes applied as of January 1st, 2009, details of which are given in Note 2 - Chapter 3 - Consolidated Results.
(13) At comparable Group structure and exchange rates.
(14) Operating income before other operating revenue and expenses.
(15) Astron China (China, February 2008) and divestment of Iberpasta (Spain, January 2009).
| (€ millions) | 1st half 2009 | 1st half 2008(16)(17) | Current change | Comparable change(18) | |
|---|---|---|---|---|---|
| Sales | 246.3 | 291.4 | - 15.5% | - 21.5% | |
| Current operating income(19) | 9.1 | 28.9 | - 68.5% | - 68.3% | |
| Operating margin | 3.7% | 9.9% | |||
| Booked capital expenditure | 4.7 | 24.6 | - 80.9% | ||
| As % of depreciation expense | 25% | 154% |
During the 1st half of 2009, Performance Minerals markets (paint, plastics, adhesives, etc.) in Europe and North America were particularly affected by the slump in construction-related sectors. Minerals for Filtration markets held out better, but were also impacted by the inventory reduction trend among distributors and the Group's customers.
The cost reduction measures planned since the beginning of the year have been implemented. In addition, mining programs have been interrupted, and production units have been idled for extended periods. The combination of Performance Minerals and Filtration Minerals by geographic zone was completed, leading to structural savings.
Sales amounting €246.3 million for the 1st half of 2009 posted a - 15.5% decrease. This change takes into account:
Current operating income totaled €9.1 million, a - €19.8 million decrease. It includes + €0.5 million in structure effect, offsetting an unfavorable exchange rate impact of - €0.6 million. At comparable structure and exchange rates, the decrease amounted to - €19.7 million, with the fall in sales volumes only partly offset by cost savings and improvement in the price/mix component.
| (€ millions) | 1st half 2009 | 1st half 2008(16)(17) | Current change | Comparable change(18) | |
|---|---|---|---|---|---|
| Sales | 309.5 | 365.5 | - 15.3% | - 19.6% | |
| Current operating income(19) | 15.0 | 34.5 | - 56.5% | - 67.3% | |
| Operating margin | 4.9% | 9.4% | |||
| Booked capital expenditure | 11.6 | 33.9 | - 65.7% | ||
| As % of depreciation expense | 45% | 128% |
(16) First-half 2008 results were restated following the two presentation changes applied as of January 1st, 2009, details of which are given in Note 2 - Chapter 3 - Consolidated Results.
(17) Certain activities in Asia and South America were transferred from Pigments for Paper to Performance & Filtration Minerals.
(18) At comparable Group structure and exchange rates.
(19) Operating income, before other operating revenue and expenses.
(20) Acquisitions of Kings Mountain Minerals, Inc. (USA, October 2008) and Suzorite Mining, Inc. (Canada, October 2008); deconsolidation of Xinlong (China, January 2009).
Global production of printing and writing paper decreased - 14.5% in the 1st half of 2009. It reflects the slump in paper demand resulting from lower advertising spending and inventory reductions. Many extended production stoppages weighed on North American and European markets, with lower production in Asia-Pacific (- 5%) entirely due to a slack Japanese market.
To address the new market environment, the ground calcium carbonate plant in Salisbury (United Kingdom) was shut. Implementation of the plan to reduce kaolin production capacities significantly at the Sandersville (United States) plant began in the 1st half. Temporary measures were taken at most units in Europe, North America and Brazil.
Sales, at €309.5 million for the 1st half of 2009, were down - 15.3%. This change takes into account foreign exchange impact for + €15.8 million.
Current operating income totaled €15.0 million in the 1st half of 2009, a - €19.5 million decrease. This result includes + €3.8 million in foreign exchange impact, stemming from the US dollar's strength against the euro (conversion impact) and the Brazilian real (transaction impact). At comparable structure and exchange rates, the business group's operating performance decreased by - €23.3 million. An allowance for doubtful accounts was booked following the bankruptcy of a major American customer. This provision has an approximately - 2% impact on the business group's margin for the 2nd quarter.
| (€ millions) | 1st half 2009 | 1st half 2008(21) | Current change | Comparable change(22) | |
|---|---|---|---|---|---|
| Sales | 443.4 | 543.1 | - 18.4% | - 17.5% | |
| Current operating income(23) | 84.3 | 125.2 | - 32.7% | - 31.9% | |
| Operating margin | 19.0% | 23.1% | |||
| Booked capital expenditure | 14.6 | 20.4 | - 28.1% | ||
| As % of depreciation expense | 81% | 98% |
In Building Materials in France, single-family housing starts decreased by - 23%(e)(24) in the 1st half of 2009. Despite a resilient renovation sector, the clay products market posted an approximately - 16% decrease in volumes for roofing items and - 21% for bricks compared with the 1st half of 2008.
Monolithic Refractory markets related to liquid metal production remained very difficult throughout the 1st half, except in India. Many production stoppages took place in steelmaking, while other outlets (cement, glass, incineration, petrochemicals, etc.) held out better. The end of major original-fit projects weighed increasingly on volumes.
In Building Materials in France, capacity adjustments continued during the 1st half of the year, with most production lines idled. A roof tiles line was shut down definitively at Pargny sur Saulx (Marne) and the modernization program at the Wardrecques (Nord) plant was successfully completed. The Bessens plant (Tarn-et-Garonne) was closed early in the year and its production divided between other sites. Optimization of the La Boissière du Doré (Loire-Atlantique) bricks plant is nearing completion. Slate mining is now concentrated on a single site (Grands Carreaux in Trélazé - Maine et Loire).
(e) Estimated.
(21) First-half 2008 results were restated following the two presentation changes applied as of January 1st, 2009, details of which are given in Note 2 - Chapter 3 - Consolidated Results.
(22) At comparable Group structure and exchange rates.
(23) Operating income, before other operating revenue and expenses.
(24) Sources: French Ministry of Ecology, Energy, Sustainable Development and Planning & Development for January and February 2009, and Imerys estimates for March-June 2009 as no official statistics available.
The prestressed concrete and reinforced concrete joist and beam manufacturing and marketing activity, Planchers Fabre, was sold out, in late May 2009, to the Lesage group, the joint French leader in the sector. With an industrial site in Pibrac (Haute-Garonne), Planchers Fabre achieved close to €20 million sales in 2008.
In Monolithic Refractories, production capacities were reduced in all geographic zones except India, where business remained firm in the 1st half. Efforts also focused on the reduction of sales, administration and logistic costs.
At €443.4 million, the business group's sales (down - 18.4% in 1st half 2009 vs. the same period in 2008) take into account:
Current operating income, at €84.3 million, decreased - €40.9 million from the 1st half of 2008. Reprocessed to allow for structure (- €0.3 million) and exchange rates (- €0.7 million), the business group's operating performance was down - €39.9 million.
(25) Acquisition of Svenska Silika Verken AB (Sweden, April 2008); divestment of Planchers Fabre (France, May 2009).
The present Chapter 2 - First-Half Activity Report 2009 draws on detailed information from the following chapters of the present First-Half Financial Report 2009:
Management considers that assessment of main risks and uncertainties for the last six months of the year 2009 is unchanged with respect to the description provided in chapter 4, section 1 of the 2008 Annual Report.
| (€ millions) | Notes | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|---|
| Revenue | 5 | 1,374.0 | 1,774.1 | 3,449.2 |
| Current revenue and expenses | (1,264.0) | (1,532.6) | (3,034.6) | |
| Raw materials and consumables used | 6 | (530.5) | (653.2) | (1,268.5) |
| External expenses | 7 | (322.6) | (440.1) | (890.7) |
| Staff expenses | 8 | (296.0) | (336.6) | (651.5) |
| Taxes and duties | (24.1) | (27.1) | (53.0) | |
| Amortization, depreciation and impairment losses | (90.5) | (95.0) | (193.2) | |
| Other current revenue and expenses | (1.2) | 14.5 | 11.9 | |
| Share in net income of associates | 0.9 | 4.9 | 10.4 | |
| Current operating income | 110.0 | 241.5 | 414.6 | |
| Other operating revenue and expenses | 9 | (46.6) | (22.8) | (114.9) |
| Income on assets disposals | 11.1 | - | 0.1 | |
| Impairment losses, restructuring and litigation | (57.7) | (22.8) | (115.0) | |
| Operating income | 63.4 | 218.7 | 299.7 | |
| Net financial debt expense | (35.4) | (28.0) | (57.0) | |
| Income from securities | 11 | 0.9 | 1.9 | 4.1 |
| Gross financial debt expense | 11 | (36.3) | (29.9) | (61.1) |
| Other financial revenue and expenses | (9.5) | 7.4 | 9.9 | |
| Other financial revenue | 11 | 58.1 | 142.5 | 282.9 |
| Other financial expenses | 11 | (67.6) | (135.1) | (273.0) |
| Financial income (loss) | (44.9) | (20.6) | (47.1) | |
| Income taxes | 12 | (7.1) | (52.8) | (88.9) |
| Net income | 11.4 | 145.3 | 163.7 | |
| Net income, Group share | 13 | 11.7 | 144.4 | 161.3 |
| Net income, minority interests | (0.3) | 0.9 | 2.4 | |
| Net income, Group share | 13 | 11.7 | 144.4 | 161.3 |
| Net income from current operations, Group share | 13 | 46.7 | 159.8 | 267.1 |
| Other net operating revenue and expenses, Group share | 9 | (35.0) | (15.4) | (105.8) |
| Earnings per share (in €) | ||||
| Net basic earnings per share from current operations | 14 | 0.68 | 2.37 | 3.96 |
| Net basic earnings per share | 14 | 0.17 | 2.14 | 2.39 |
| Diluted net earnings per share | 14 | 0.17 | 2.14 | 2.39 |
| Average exchange rate euro/USD | 1.3326 | 1.5304 | 1.4708 |
| (€ millions) | Notes | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|---|
| Net income | 11.4 | 145.3 | 163.7 | |
| Cash flow hedges | 40.0 | 8.1 | (71.5) | |
| Recognition in equity | 23.3 | 39.4 | 7.7 | (73.6) |
| Reclassification in profit or loss | 23.3 | 0.6 | 0.4 | 2.1 |
| Translation reserve | 27.9 | (105.9) | (106.7) | |
| Recognition in equity | 28.4 | (105.9) | (106.7) | |
| Reclassification in profit or loss | (0.5) | - | - | |
| Others | - | (0.6) | (0.6) | |
| Income taxes | 12 | (4.4) | 12.9 | 20.9 |
| Other comprehensive income | 63.5 | (85.5) | (157.9) | |
| Total comprehensive income | 74.9 | 59.8 | 5.8 | |
| Total comprehensive income, Group share | 74.5 | 60.7 | 4.9 | |
| Total comprehensive income, minority interests | 0.4 | (0.9) | 0.9 |
| (€ millions) | Notes | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|---|
| Non-current assets | 2,817.2 | 2,788.8 | 2,839.9 | |
| Goodwill | 15 | 907.1 | 934.7 | 899.4 |
| Intangible assets | 16 | 45.5 | 48.1 | 45.0 |
| Mining assets | 17 | 396.9 | 377.9 | 395.6 |
| Property, plant and equipment | 17 | 1,269.2 | 1,257.3 | 1,314.0 |
| Investments in associates | 54.6 | 47.3 | 50.0 | |
| Available-for-sale financial assets | 20 | 7.0 | 6.5 | 7.1 |
| Other financial assets | 20 | 15.1 | 14.0 | 13.8 |
| Other receivables | 20 | 43.1 | 47.0 | 40.4 |
| Derivative financial assets | 23.3 | 18.3 | 4.6 | 18.7 |
| Deferred tax assets | 24 | 60.4 | 51.4 | 55.9 |
| Current assets | 1,297.7 | 1,533.7 | 1,508.0 | |
| Inventories | 19 | 489.4 | 530.4 | 611.0 |
| Trade receivables | 20 | 490.4 | 676.1 | 523.3 |
| Other receivables | 20 | 125.3 | 151.8 | 154.2 |
| Derivative financial assets | 23.3 | 4.5 | 13.5 | 1.1 |
| Marketable securities and other financial assets | 4.4 | 6.5 | 4.4 | |
| Cash and cash equivalents | 23.2 | 183.7 | 155.4 | 214.0 |
| Consolidated assets | 4,114.9 | 4,322.5 | 4,347.9 | |
| Equity, Group share | 1,789.4 | 1,566.6 | 1,526.4 | |
| Capital | 21 | 150.7 | 126.3 | 125.6 |
| Premiums | 339.2 | 132.6 | 115.8 | |
| Reserves | 1,287.8 | 1,163.3 | 1,123.7 | |
| Net income, Group share | 11.7 | 144.4 | 161.3 | |
| Minority interests | 18.7 | 19.0 | 19.9 | |
| Shareholders' equity | 1,808.1 | 1,585.6 | 1,546.3 | |
| Non-current liabilities | 1,438.1 | 1,401.3 | 1,449.8 | |
| Provisions for employee benefits | 134.7 | 153.6 | 133.2 | |
| Other provisions | 22 | 163.0 | 153.8 | 153.7 |
| Loans and financial debts | 23.1 | 1,042.8 | 997.0 | 1,054.7 |
| Other debts | 23.1 | 10.0 | 15.6 | 13.6 |
| Derivative financial liabilities | 23.3 | 19.7 | 25.1 | 19.2 |
| Deferred tax liabilities | 24 | 67.9 | 56.2 | 75.4 |
| Current liabilities | 868.7 | 1,335.6 | 1,351.8 | |
| Other provisions | 22 | 26.0 | 15.8 | 20.8 |
| Trade payables | 264.2 | 323.8 | 337.9 | |
| Income taxes payable | 24.7 | 17.9 | 13.4 | |
| Other debts | 23.1 | 249.5 | 215.0 | 199.7 |
| Derivative financial liabilities | 23.3 | 11.5 | 2.4 | 49.8 |
| Loans and financial debts | 23.1 | 289.3 | 662.2 | 727.3 |
| Bank overdrafts | 23.2 | 3.5 | 98.5 | 2.9 |
| Consolidated equity and liabilities | 4,114.9 | 4,322.5 | 4,347.9 | |
| Net financial debt | 23.2 | 1,148.2 | 1,616.1 | 1,566.1 |
| Closing exchange rate euro/USD | 1.4134 | 1.5764 | 1.3917 |
| (€ millions) | Notes | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|---|
| Cash flow from operating activities | 221.2 | 88.8 | 365.2 | |
| Cash flow generated by current operations | Appendix 1 | 285.0 | 211.3 | 580.5 |
| Interests paid | (51.2) | (34.8) | (46.6) | |
| Income taxes on current operating income and financial income (loss) | 5.4 | (64.9) | (127.1) | |
| Dividends received from available-for-sale financial assets | 0.3 | 0.2 | 0.2 | |
| Cash flow generated by other operating revenue and expenses | Appendix 2 | (18.3) | (23.0) | (41.8) |
| Cash flow from investing activities | (66.7) | (242.5) | (366.1) | |
| Acquisitions of property, plant and equipment and intangible assets | (79.0) | (141.4) | (247.9) | |
| Acquisitions of investments in consolidated entities after deduction of cash acquired | 15 | (9.9) | (114.6) | (142.6) |
| Acquisitions of available-for-sale financial assets | - | - | - | |
| Disposals of property, plant and equipment and intangible assets | 7.8 | 14.3 | 20.9 | |
| Disposals of investments in consolidated entities after deduction of cash disposed of | 14.3 | - | 0.9 | |
| Disposals of available-for-sale financial assets | (0.1) | 0.1 | 0.3 | |
| Net change in financial assets | (0.2) | (2.2) | (0.6) | |
| Paid-in interests | 0.4 | 1.3 | 2.9 | |
| Cash flow from financing activities | (185.1) | 144.7 | 145.8 | |
| Capital increases | 248.5 | 0.9 | 0.9 | |
| Capital decreases | - | - | (17.4) | |
| Disposals (acquisitions) of treasury shares | - | (18.7) | 11.5 | |
| Dividends paid to shareholders | - | (119.0) | (119.0) | |
| Dividends paid to minority interests | (0.7) | (0.5) | (0.7) | |
| Loan issues | 8.9 | 337.8 | 490.8 | |
| Loan repayments | (332.0) | (13.4) | (15.2) | |
| Net change in other debts | (109.8) | (42.4) | (205.1) | |
| Change in cash and cash equivalents | (30.6) | (9.0) | 144.9 | |
| Opening cash and cash equivalents | 211.2 | 70.8 | 70.8 | |
| Change in cash and cash equivalents | (30.6) | (9.0) | 144.9 | |
| Impact of changes due to changes in perimeter | (2.4) | - | - | |
| Impact of changes due to exchange rate fluctuations | 2.0 | (4.7) | (4.4) | |
| Impact of changes in accounting policies | - | (0.2) | (0.1) | |
| Closing cash and cash equivalents | 180.2 | 56.9 | 211.2 | |
| Cash and cash equivalents | 183.7 | 155.4 | 214.0 | |
| Bank overdrafts | (3.5) | (98.5) | (2.8) |
| (€ millions) | Notes | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|---|
| Net income | 11.4 | 145.3 | 163.7 | |
| Adjustments | 182.6 | 183.3 | 408.0 | |
| Income taxes | 12 | 7.1 | 52.8 | 88.9 |
| Share in net income of associates | (0.9) | (4.9) | (10.4) | |
| Dividends received from associates | 3.7 | 1.8 | 4.2 | |
| Impairment losses on goodwill | 9 & 15 | - | - | 48.9 |
| Other operating revenue and expenses excluding impairment losses on goodwill | 9 | 46.6 | 22.8 | 66.0 |
| Net operating amortization and depreciation | 89.9 | 94.1 | 191.5 | |
| Net operating impairment losses on assets | 7.0 | 4.4 | 7.5 | |
| Net operating provisions | (0.8) | (13.3) | (29.7) | |
| Dividends receivable from available-for-sale financial assets | (0.2) | (0.2) | (0.3) | |
| Net interests of revenue and expenses | 38.1 | 27.8 | 56.5 | |
| Revaluation gains and losses | (0.8) | 3.8 | (5.7) | |
| Income from current disposals of property, plant and equipment and intangible assets | (7.1) | (5.8) | (9.4) | |
| Change in the working capital requirement | 91.0 | (117.3) | 8.8 | |
| Inventories | 129.4 | (22.7) | (94.6) | |
| Trade accounts receivable, advances and down payments received | 41.2 | (39.9) | 105.1 | |
| Trade accounts payable, advances and down payments paid | (77.2) | (20.4) | 21.8 | |
| Other receivables and debts | (2.4) | (34.3) | (23.5) | |
| Cash flow generated by current operations | 285.0 | 211.3 | 580.5 |
| (€ millions) | Notes | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|---|
| Other operating revenue and expenses | (46.6) | (22.8) | (114.9) | |
| Adjustments | 28.3 | (0.2) | 73.1 | |
| Impairment losses on goodwill | 9 & 15 | - | - | 48.9 |
| Other net operating amortization and depreciation | 9 | 18.7 | 1.6 | 16.2 |
| Other net operating provisions | 9 | 16.1 | (8.4) | (5.7) |
| Income from non-recurring disposals of property, plant and equipment and intangible assets | 9 | 0.1 | - | - |
| Income from disposals of consolidated investments and available-for-sale financial assets | 9 | (11.2) | - | (0.1) |
| Income taxes paid on other operating revenue and expenses | 4.6 | 6.6 | 13.8 | |
| Cash flow generated by other operating revenue and expenses | (18.3) | (23.0) | (41.8) |
| Group share | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Reserves | Net | ||||||||||
| Treasury | Cash flow |
Translation | Other | income, Group |
Minority | ||||||
| (€ millions) | Capital Premiums | shares | hedges | reserve | reserves | Subtotal | share Subtotal interests | Total | |||
| Equity as of January 1, 2008 | 126.3 | 131.6 | (11.3) | 3.9 | (164.7) | 1,269.7 | 1,097.6 | 284.2 | 1,639.7 | 23.9 | 1,663.6 |
| Total comprehensive income | - | - | - | 8.7 | (91.8) | (0.6) | (83.7) | 144.4 | 60.7 | (0.9) | 59.8 |
| Transactions with shareholders Allocation of 2007 net income |
- - |
0.9 - |
(18.7) - |
- - |
- - |
168.2 284.2 |
149.5 284.2 |
(284.2) (284.2) |
(133.8) - |
(4.0) - |
(137.8) |
| Dividend (€1.90 per share) | - | - | - | - | - | (119.0) | (119.0) | - | (119.0) | (0.5) | (119.5) |
| Capital increases | - | 0.9 | - | - | - | - | - | - | 0.9 | - | 0.9 |
| Capital decreases | - | - | - | - | - | - | - | - | - | - | - |
| Transactions on treasury shares | - | - | (18.7) | - | - | - | (18.7) | - | (18.7) | - | (18.7) |
| Share-based payment | - | - | - | - | - | 3.0 | 3.0 | - | 3.0 | - | 3.0 |
| Transactions with minority interests | - | - | - | - | - | - | - | - | - | (3.5) | (3.5) |
| Equity as of June 30, 2008 | 126.3 | 132.5 | (30.0) | 12.6 | (256.5) | 1,437.3 | 1,163.4 | 144.4 | 1,566.6 | 19.0 | 1,585.6 |
| Total comprehensive income | - | - | - | (79.3) | 6.6 | - | (72.7) | 16.9 | (55.8) | 1.8 | (54.0) |
| Transactions with shareholders | (0.7) | (16.7) | 30.0 | - | - | 3.0 | 33.0 | - | 15.6 | (0.9) | 14.7 |
| Dividend | - | - | - | - | - | - | - | - | - | (0.2) | (0.2) |
| Capital decreases | (0.7) | (16.7) | - | - | - | - | - | - | (17.4) | - | (17.4) |
| Transactions on treasury shares | - | - | 30.0 | - | - | - | 30.0 | - | 30.0 | - | 30.0 |
| Share-based payment | - | - | - | - | - | 3.0 | 3.0 | - | 3.0 | - | 3.0 |
| Transactions with minority interests | - | - | - | - | - | - | - | - | - | (0.7) | (0.7) |
| Equity as of December 31, 2008 | 125.6 | 115.8 | - | (66.7) | (249.9) | 1,440.3 | 1,123.7 | 161.3 | 1,526.4 | 19.9 | 1,546.3 |
| Total comprehensive income | - | - | - | 39.8 | 23.0 | - | 62.8 | 11.7 | 74.5 | 0.4 | 74.9 |
| Transactions with shareholders | 25.1 | 223.4 | - | - | - | 101.3 | 101.3 | (161.3) | 188.5 | (1.6) | 186.9 |
| Allocation of 2008 net income | - | - | - | - | - | 161.3 | 161.3 | (161.3) | - | - | - |
| Dividend (€1.00 per share) | - | - | - | - | - | (62.8) | (62.8) | - | (62.8) | (0.7) | (63.5) |
| Capital increases | 25.1 | 223.4 | - | - | - | - | - | - | 248.5 | - | 248.5 |
| Capital decreases | - | - | - | - | - | - | - | - | - | - | - |
| Transactions on treasury shares | - | - | - | - | - | - | - | - | - | - | - |
| Share-based payment | - | - | - | - | - | 2.8 | 2.8 | - | 2.8 | - | 2.8 |
| Transactions with minority interests | - | - | - | - | - | - | - | - | - | (0.9) | (0.9) |
| Equity as of June 30, 2009 | 150.7 | 339.2 | - | (26.9) | (226.9) | 1,541.6 | 1,287.8 | 11.7 | 1,789.4 | 18.7 | 1,808.1 |
The June 30, 2009 1st half financial statements are intended to provide an update on the complete set of annual financial statements as of December 31, 2008 compliant with IFRSs adopted within the European Union. They are established in a condensed form in compliance with IAS 34 (interim financial information) of this referential and do not include all disclosures for a complete set of financial statements as published for the annual closing. They shall thus be reviewed in relation with the Group annual financial statements published as of December 31, 2008. IFRSs adopted within the European Union correspond to the texts as approved by the IASB (International Accounting Standards Board) except the carve out of the paragraphs addressing macro hedging in standard IAS 39 on financial instruments and the texts effective at the end of the period and not adopted within the European Union (Note 3). Imerys is not performing any macro hedging transaction. However, Imerys is concerned by the amendment to standard IFRS 7. This text, intended to complete the disclosures on financial instruments, is applicable as of January 1, 2009 in the agenda of the IASB. However, as this text is not adopted within the European Union as of June 30, 2009, it represents for Imerys the sole source of divergence between the IFRS standards adopted within the European Union and the full IFRS referential.
The Group is not applying any text by anticipation as of June 30, 2009, neither with respect to the agenda of the IASB, nor with respect to the agenda of the European Union.
The following texts, adopted within the European Union as of December 31, 2009, are applied upon their effective dates.
Amendment to IFRS 2, Share-Based Payment: Vesting Conditions and Cancellations. This amendment applicable as of January 1, 2009 clarifies the vesting conditions of the rights by an explicit limitation to the conditions of service and conditions of performance. It also clarifies that all cancellations follow an identical treatment, irrespective of whether the decision was originally taken by the entity or another party. This amendment has no impact on the amount of share-based payments included in the row "Salaries" disclosed in Note 8.
IAS 1 Revised, Presentation of Financial Statements. This amendment applicable as of January 1, 2009 splits the former statement of changes in equity into two separate statements reporting equity transactions with shareholders on the one hand (statement of changes in equity) and items of income and expense directly recognized in equity on the other hand (statement of comprehensive income).
IAS 23 Revised, Borrowing Costs. This amendment applicable as of January 1, 2009 requires the incorporation of the borrowing costs directly attributable to the acquisition, construction or production of assets prepared over a substantial period of time. This amendment has no significant impact on the measurement of the Group's industrial investment projects in progress.
Improvements to IFRSs. This continuous project provides a series of necessary amendments to the existing texts.
Besides, the following texts do not concern the transactions, events or conditions existing within the Group: Amendments to IFRS 1 and IAS 27: Cost of an Investment in a Subsidiary, Jointly-Controlled Entity or Associate; Amendments to IAS 32 and IAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation; and IFRIC 13, Customer Loyalty Programmes.
In order to improve the presentation of its financial statements, the Group performs in 2009 the two changes hereafter.
Financial components of the net expense of defined employee benefit plans. The majority of the main issuers listed at the Paris stock exchange presents the unwinding expense of obligations and the expected return on assets in financial income (loss). The financial components of the net expense of defined employee benefit plans, formerly presented in current operating income, are recognized in financial income (loss) from January 1, 2009. Comparative information has been restated. In the income statement, the financial component classified in financial income (loss) amounts to - €3.4 million as of June 30, 2009 (- €0.4 million as of June 30, 2008 and - €1.0 million as of December 31, 2008) of which - €22.6 million for the unwinding expense of obligations (- €26.0 million as of June 30, 2008 and - €51.9 million as of December 31, 2008) and €19.2 million for the expected return on assets (€25.6 million as of June 30, 2008 and €50.9 million as of December 31, 2008).
Share in net income of associates. Formerly presented after the income taxes, the share in net income of associates is recognized in current operating income from January 1, 2009. Since these associates have an operating activity, Imerys considers that the new classification provides a more relevant and fair view of the result of its operating activity. Comparative information has been restated. In the income statement, the share in net income classified in current operating income as of June 30, 2009 amounts to €0.9 million (€4.9 million as of June 30, 2008 and €10.4 million as of December 31, 2008). In the statement of cash flows, the dividends received from associates reclassified in cash flow generated by current operations amount to €3.7 million as of June 30, 2009 (€1.8 million as of June 30, 2008 and €4.2 million as of December 31, 2008).
The following texts are effective within the IFRS referential at the end of the period but their adoption process within the European Union is in progress at that date. They may thus not be applied at the end of the period and represent in this respect a source of divergence between the full IFRS referential and the IFRS standards adopted within the European Union.
Amendments to IFRS 7, Improving Disclosures about Financial Instruments. This amendment applicable as of January 1, 2009 will complete the disclosures on financial instruments. This amendment will have no impact on the recognition and measurment of financial instruments.
Besides, the following amendments do not concern the transactions, events or conditions existing within the Group: Amendment to IAS 39: Reclassification of Financial Assets - Effective Date and Transition; Amendments to IFRIC 9 and IAS 39, Embedded Derivatives; and IFRIC 15, Agreements for the Construction of Real Estate.
The texts hereafter will be effective after the end of the period but their adoption process within the European Union is complete at that date. Although earlier application is permitted, the Group did not elect to apply these by anticipation in 2009.
IFRS 3 Revised, Business Combinations. This revision applicable as of January 1, 2010 will place control at the centre of the new treatment. Thus, any formerly held interest will be reameasured at fair value against the profit or loss when control is obtained. Goodwill will be recognized at that date. The revised standard will then leave the option, for each acquisition, to recognize goodwill as an asset corresponding to either the interest of the Group only (current method), or the Group and minority interests (full goodwill). Acquisition fees, currently included in the cost of business combinations (note 15) will be immediately recognized as expenses. Symmetrically to the date when control is obtained, the loss of control will trigger the derecognition of assets and liabilities and the remeasurement at fair value of the residual interest against the profit or loss.
Amendment to IAS 27, Consolidated and Separate Financial Statements. This amendment applicable as of January 1, 2010 draws the consequences of revised IFRS 3 on the standard addressing consolidation rules. Thus, as control is at the centre of the new treatment, the changes in interest with no impact on control will be recognized in equity without any impact on goodwill.
IFRIC 16, Hedges of a Net Investment in a Foreign Operation. This interpretation applicable as of January 1, 2010 mainly confirms that the currency risk eligible to hedge accounting appears between the functional currency (and not the presentation currency) of a holding entity and the functional currency of a foreign operation and that the instruments intended to hedge that risk may be held by one or several entities within the Group. This interpretation has no impact on the recognition of the hedges of the net investments in the foreign operations of the Group.
Besides, the following interpretation does not concern the transactions, events or conditions existing within the Group: IFRIC 12, Service Concession Arrangements.
The texts hereafter will be effective within the IFRS referential after the end of the period and their adoption process within the European Union is in progress at that date.
Amendment to IFRS 2, Group Cash-settled Share-based Payment Transactions. This amendment mainly clarifies that IFRS 2 applies within a Group in the situations where an entity is beneficiary of the goods or services rendered and the sharebased payment transaction is settled by another Group entity. The Group is not anticipating any impact related to the application of this amendment.
Amendment to IAS 39: Eligible Hedged Items. This amendment applicable as of January 1, 2010 specifies the principles of hedge accounting of standard IAS 39 on financial instruments in two situations: one-sided risk in a hedged item and inflation in a hedged financial item. The Group is currently investigating the impact of this interpretation.
Improvements to IFRSs. This continuous project provides a series of necessary amendments to the existing texts.
Besides, the texts hereafter do not concern the transactions, events or conditions existing within the Group: Revised IFRS 1, First Time Adoption of IFRS; IFRIC 17, Distributions of Non-cash Assets to Owners; and IFRIC 18, Transfers of Assets from Customers.
Interim operations are globally not subject to seasonality or cyclicality.
No significant change occurred in the scope of consolidation of the Pigments for Paper since the business group built a production unit of ground calcium carbonate (GCC) in Niigata (Japan) within a partnership (60.0% Imerys) with the paper producer Hokuetsu over the 2nd half of 2007. The Performance & Filtration Minerals did not perform any acquisition since the 2nd half of 2008 where the business group had strengthened its range of minerals with the acquisition of Kings Mountain Minerals in the United States and Suzorite Mining in Canada, companies specialized in the extraction and transformation of mica. In the Materials & Monolithics business group, Planchers Fabre, an operation of the Clay Roof Tiles & Bricks France activity specialized in concrete beams, is disposed of over the 1st half of 2009, while the last inflow in the scope of consolidation of the business group dates back to the 1st half of 2008, where the business group had acquired Svenska Silikaverken A.B, a Swedish producer of monolithic refractory products. The Minerals for Ceramics, Refractories, Abrasives & Foundry did not perform any significant integration since that of Astron China, a major producer of zircon-based products, acquired over the 1st half of 2008.
| Foreign | 2009 | 2008 | |||||
|---|---|---|---|---|---|---|---|
| (€) | currencies | June 30 | Average | June 30 | Average | December 31 | Average |
| Argentina | ARS | 5.3564 | 4.8482 | 4.7673 | 4.8010 | 4.8065 | 4.6411 |
| Australia | AUD | 1.7359 | 1.8785 | 1.6371 | 1.6546 | 2.0274 | 1.7416 |
| Brazil | BRL | 2.7573 | 2.9145 | 2.5095 | 2.5944 | 3.2524 | 2.6726 |
| Canada | CAD | 1.6275 | 1.6056 | 1.5942 | 1.5401 | 1.6998 | 1.5594 |
| China | CNY | 9.6545 | 9.1055 | 10.8051 | 10.7989 | 9.4956 | 10.2236 |
| Denmark | DKK | 7.4470 | 7.4493 | 7.4579 | 7.4567 | 7.4506 | 7.4560 |
| United States | USD | 1.4134 | 1.3326 | 1.5764 | 1.5304 | 1.3917 | 1.4708 |
| Great Britain | GBP | 0.8521 | 0.8940 | 0.7923 | 0.7752 | 0.9525 | 0.7963 |
| Hungary | HUF (100) | 2.7155 | 2.9007 | 2.3543 | 2.5358 | 2.6670 | 2.5151 |
| Japan | JPY (100) | 1.3551 | 1.2732 | 1.6644 | 1.6062 | 1.2614 | 1.5245 |
| New Zealand | NZD | 2.1656 | 2.3533 | 2.0632 | 1.9553 | 2.4191 | 2.0770 |
| South Africa | ZAR | 10.8853 | 12.2490 | 12.3426 | 11.7263 | 13.0667 | 12.0590 |
| Czech Republic | CZK | 25.8820 | 27.1377 | 23.8930 | 25.1913 | 26.8750 | 24.9463 |
| Sweden | SEK | 10.8125 | 10.8617 | 9.4703 | 9.3753 | 10.8700 | 9.6152 |
| Switzerland | CHF | 1.5265 | 1.5058 | 1.6056 | 1.6065 | 1.4850 | 1.5874 |
| Thailand | THB | 48.1400 | 46.6619 | 52.7380 | 48.4803 | 48.2850 | 48.4753 |
The half-year consolidated financial statements as of June 30, 2009 were closed by the Board of Directors on July 29, 2009. As part of the optimization measures of costs and financial structure, a factoring derecognition contract relating to an estimated amount of €90.0 million receivables has been signed as of July 23, 2009 to be implemented over the 3rd quarter of 2009. Furthermore, as of July 24, 2009, Imerys has filed its new Euro Medium Term Note program (EMTN) with the Commission de Surveillance du Secteur Financier for a total amount of €1.0 billion (Note 23.4).
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Sales of goods Rendering of services |
1,214.7 159.3 |
1,583.1 191.0 |
3,043.2 406.0 |
| Total | 1,374.0 | 1,774.1 | 3,449.2 |
Revenue amounts to €1,374.0 million over the 1st half of 2009 (€1,774.1 million over the 1st half of 2008 and €3,449.2 million in 2008), i.e. a decrease of - 22.5% (+ 4.10% over the 1st half of 2008 and + 1.40% in 2008), including a positive effect of + €37.6 million due to foreign currency changes (- €86.5 million over the 1st half of 2008 and - €108.3 million in 2008). At comparable structure and foreign currency rates, it decreases by - 24.9% (+ 4.20% over the 1st half of 2008 and + 0.70% in 2008).
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Raw materials | (146.9) | (277.1) | (596.2) |
| Energy | (140.8) | (200.2) | (392.3) |
| Chemicals | (25.5) | (35.6) | (72.9) |
| Other raw materials | (55.8) | (91.3) | (168.1) |
| Merchandises | (35.2) | (75.7) | (141.1) |
| Change in inventories | (129.5) | 22.7 | 94.5 |
| Property, plant and equipment produced by the entity | 3.2 | 4.0 | 7.6 |
| Total | (530.5) | (653.2) | (1,268.5) |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Freight | (143.4) | (208.3) | (414.5) |
| Operating leases | (24.2) | (22.1) | (45.7) |
| Subcontracting | (43.2) | (52.3) | (106.4) |
| Maintenance and repair | (28.1) | (44.3) | (91.7) |
| Fees | (19.8) | (19.9) | (46.5) |
| Other external expenses | (63.9) | (93.2) | (185.9) |
| Total | (322.6) | (440.1) | (890.7) |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Salaries | (221.8) | (256.8) | (496.2) |
| Social contributions | (46.7) | (53.4) | (105.1) |
| Net change in defined benefit plans | 6.4 | 8.6 | 27.1 |
| Contributions to defined benefit plans | (13.6) | (14.2) | (37.0) |
| Contributions to defined contribution plans | (8.2) | (8.6) | (17.5) |
| Other employee benefits | (3.1) | (3.2) | (6.3) |
| Profit-sharing | (9.0) | (9.0) | (16.5) |
| Total | (296.0) | (336.6) | (651.5) |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Income on disposals of consolidated investments | 11.2 | - | 0.1 |
| Income on non-recurring asset disposals | (0.1) | - | - |
| Restructuring expenses paid | (22.9) | (29.6) | (55.6) |
| Impairment losses on restructuring | (18.7) | (1.6) | (16.3) |
| Change in provisions for restructuring and litigation | (16.1) | 8.4 | 5.8 |
| Impairment losses on goodwill | - | - | (48.9) |
| Other operating revenue and expenses - gross | (46.6) | (22.8) | (114.9) |
| Revenue | 25.3 | 18.2 | 56.3 |
| Expenses | (71.9) | (41.0) | (171.2) |
| Income taxes | 11.6 | 7.4 | 9.1 |
| Other operating revenue and expenses - net, Group share | (35.0) | (15.4) | (105.8) |
The other operating revenue and expenses of the 1st half of 2009 mainly comprise a result of €11,7 million corresponding to the disposal in May 2009 of Planchers Fabre, an operation of the Clay Roof Tiles & Bricks France activity specialized in concrete beams, sold to the Lesage Group. Furthermore, all Group entities undertake many restructuring actions to face the severe fall in their activities in a very depressed economic context. Thus, a cash outflow of €22.9 million is recognized in settlement of termination benefits and sites closure costs whilst €18.7 million of impairment losses are recognized on the assets concerned by the slowdown of the activity. At last, €16.1 million are recognized in relation to social and litigation provisions. The main restructurings undertaken over the 1st half of 2009 relate to the Abrasives activity for - €12.7 million and to the Paper North America activity for - €12.4 million, before income taxes.
The other operating revenue and expenses of the 1st half of 2008 mainly corresponded to the settlement of litigation opposing the Group to one of its suppliers for - €4.1 million after income taxes and to the continuation of restructurings, in US kaolin activities in particular, for - €11.3 million after income taxes. The other operating revenue and expenses in 2008 amounted to - €105.8 million after income taxes, of which - €40.6 million in cash and - €65.2 million with no cash impact. Among the other operating revenue and expenses of 2008, - €59.9 million after income taxes had been recognized in the Performance & Filtration Minerals business group, - €48.9 million of which corresponded to the impairment of the goodwill of the Performance Minerals North America activity and - €9.8 million to the finalization of the restructuring of the Filtration activity in North America. The - €32.7 million recognized in 2008 in the other operating revenue and expenses of the Pigments for Paper business group had been mainly employed in the restructuring of its kaolins and carbonates activities, mainly in North America and Latin America.
Financial instruments result from contracts whose execution symmetrically creates a financial asset of one party to the contract and a financial liability or an equity instrument of the other party. As financial instruments correspond to a large number of different contracts, these are classified in categories by standard IAS 39 on financial instruments. Among these, the following categories exist at Imerys: Available for sale financial assets; Financial assets and liabilities at fair value through profit or loss; Loans and receivables; and Financial liabilities at amortized cost. Hedge derivatives are disclosed in a separate column. They belong by nature to the scope of standard IAS 39, but the hedge accounting treatment determines their recognition in a way such that it is not possible to include these in one of the above categories.
The table hereafter discloses the items of income, expenses, gains and losses before income taxes recognized in profit or loss and equity by categories of financial instruments. The balances of rows "Other financial revenue" and "Other financial expenses" mainly comprise exchange rate gains and losses related to the hedge of exchange rate risk. An analysis of the net total of these two rows is disclosed in Note 11.
| IAS 39 financial assets and liabilities | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| At fair value | Hedge | Non | |||||||
| through profit or loss | derivatives | IAS 39 | |||||||
| Available- | Non | Non hedge |
Loans and |
At amortized |
Fair value |
Cash flow |
assets and |
||
| (€ millions) | for-sale | derivative | derivatives | receivables | cost | hedge hedge liabilities | Total | ||
| Operating income | (0.2) | - | - | 3,479.8 | (2,351.9) | - (13.2) | - | - | |
| Revenue | - | - | - | 3,449.2 | - | - | - | - | 3,449.2 |
| Raw materials and consumables used | - | - | - | - | (1,369.4) | - (10.9) | 111.8 (1,268.5) | ||
| External expenses | - | - | - | - | (890.7) | - | - | - | (890.7) |
| Taxes and duties | - | - | - | - | (53.0) | - | - | - | (53.0) |
| Other operational revenue and expenses | - | - | - | 30.6 | (38.8) | (2.3) | 22.4 | 11.9 | |
| Income on asset disposals | (0.2) | - | - | - | - | - | - | 0.3 | 0.1 |
| Financial income (loss) | 0.2 | 4.1 | (0.9) | 4.5 | (68.1) | 8.2 | 9.7 | - | - |
| Income from securities | - | 4.1 | - | - | - | - | - | - | 4.1 |
| Gross financial debt expense | - | - | - | - | (74.6) | 7.0 | 6.5 | - | (61.1) |
| Other financial revenue | 0.3 | - | (2.9) | 4.7 | 184.2 | 38.4 | 7.2 | 51.0 | 282.9 |
| Other financial expenses | (0.1) | - | 2.0 | (0.2) | (177.7) | (37.2) | (4.0) | (55.8) | (273.0) |
| Profit or loss | - | 4.1 | (0.9) | 3,484.3 | (2,420.0) | 8.2 | (3.5) | - | - |
| Equity | - | - | - | - | - | - | (71.5) | - | - |
| Recognition in equity | - | - | - | - | - | - (73.6) | - | (73.6) | |
| Reclassification in profit or loss | - | - | - | - | - | - | 2.1 | - | 2.1 |
| Net profit (loss) as of December 31, 2008 | - | 4.1 | (0.9) | 3,484.3 | (2,420.0) | 8.2 (75.0) | - | - | |
| of which impairment losses in profit or loss | (0.1) | - | - | (10.1) | - | - | - | (6.8) | (17.0) |
| of which reversals of impairment losses in profit or loss | - | - | - | 4.5 | - | - | - | 6.1 | 10.6 |
| Operating income | - | - | 0.6 | 1,790.9 | (1,171.0) | - | 5.0 | - | - |
| Revenue | - | - | - | 1,774.1 | - | - | - | - | 1,774.1 |
| Raw materials and consumables used | - | - | - | - | (686.3) | - | 5.9 | 27.2 | (653.2) |
| External expenses | - | - | - | - | (440.1) | - | - | - | (440.1) |
| Taxes and duties | - | - | - | - | (27.1) | - | - | - | (27.1) |
| Other operational revenue and expenses | - | - | 0.6 | 16.8 | (17.5) | - | (0.9) | 15.5 | 14.5 |
| Income on asset disposals | - | - - | - | - | - | - | - | - | - |
| Financial income (loss) | 0.3 | 1.9 | (3.1) | 1.5 | (31.3) | 6.9 | 4.9 | - | - |
| Income from securities | - | 1.9 | - | - | - | - | - | - | 1.9 |
| Gross financial debt expense | - | - | - | - | (38.5) | 5.8 | 2.8 | - | (29.9) |
| Other financial revenue | 0.3 | - | 2.7 | 1.5 | 91.6 | 14.9 | 5.5 | 26.0 | 142.5 |
| Other financial expenses | - | - | (5.8) | - | (84.4) | (13.8) | (3.4) | (27.7) | (135.1) |
| Profit or loss | 0.3 | 1.9 | (2.5) | 1,792.4 | (1,202.3) | 6.9 | 9.9 | - | - |
| Equity | - | - | - | - | - | - | 8.1 | - | - |
| Recognition in equity | - | - | - | - | - | - | 7.7 | - | 7.7 |
| Reclassification in profit or loss | - | - | - | - | - | - | 0.4 | - | 0.4 |
| Net profit (loss) as of June 30, 2008 | 0.3 | 1.9 | (2.5) | 1,792.4 | (1,202.3) | 6.9 | 18.0 | - | - |
| of which impairment losses in profit or loss | - | - | - | (6.5) | - | - | - | (2.6) | (9.1) |
| of which reversals of impairment losses in profit or loss | - | - | - | 2.8 | - | - | - | 2.5 | 5.3 |
| Operating income | (1.0) | (0.1) | 1,382.5 | (778.4) | - | 4.3 | - | - | |
| Revenue | - | - | - | 1,374.0 | - | - | - | - | 1,374.0 |
| Raw materials and consumables used | - | - | - | - | (409.5) | - | 0.5 | (121.5) | (530.5) |
| External expenses | - | - | - | - | (322.6) | - | - | - | (322.6) |
| Taxes and duties | - | - | - | - | (24.1) | - | - | - | (24.1) |
| Other operational revenue and expenses | - | - | (0.1) | 8.5 | (22.2) | - | 3.8 | 8.8 | (1.2) |
| Income on asset disposals | (1.0) | - | - | - | - | - | - | 12.1 | 11.1 |
| Financial income (loss) | 0.3 | 0.9 | (0.2) | 1.1 | (40.8) | (0.5) | (0.9) | (4.8) | |
| Income from securities | - | 0.9 | - | - | - | - | - | - | 0.9 |
| Gross financial debt expense | - | - | - | - | (34.0) | (1.3) | (1.0) | - | (36.3) |
| Other financial revenue | 0.3 | - | 0.4 | 1.2 | 24.7 | 10.8 | 1.3 | 19.4 | 58.1 |
| Other financial expenses | - | - | (0.6) | (0.1) | (31.5) | (10.0) | (1.2) | (24.2) | (67.6) |
| Profit or loss | (0.7) | 0.9 | (0.3) | 1,383.6 | (819.2) | (0.5) | 3.4 | (4.8) | - |
| Equity | - | - | - | - | - | - | 40.0 | - | - |
| Recognition in equity | - | - | - | - | - | - | 39.4 | - | - |
| Reclassification in profit or loss | - | - | - | - | - | - | 0.6 | - | - |
| Net profit (loss) as of June 30, 2009 | (0.7) | 0.9 | (0.3) | 1,383.6 | (819.2) | (0.5) | 43.4 | (4.8) | - |
| of which impairment losses in profit or loss | - | - | - | (11.2) | - | - | - | (4.1) | - |
| of which reversals of impairment losses in profit or loss | 0.1 | - | - | 3.4 | - | - | - | 5.4 | - |
| IAS 39 financial assets and liabilities | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| At fair value | Hedge | Non | |||||||
| through profit or loss Non |
Loans | At | derivatives Fair Cash |
IAS 39 assets |
|||||
| Available- | Non | hedge | and amortized | value | flow | and | |||
| (€ millions) | for-sale derivative derivatives receivables | cost hedge hedge liabilities | Total | ||||||
| Net financial debt expense | - | 4.1 | - | - | (74.6) | 7.0 | 6.5 | - | (57.0) |
| Income from securities | - | 4.1 | - | - | - | - | - | - | 4.1 |
| Gross financial debt expense | - | - | - | - | (74.6) | 7.0 | 6.5 | - | (61.1) |
| Other financial revenue and expenses | 0.2 | - | (0.9) | 4.5 | 6.5 | 1.2 | 3.2 | (4.8) | 9.9 |
| Dividends | 0.2 | - | - | - | - | - | - | - | 0.2 |
| Net exchange rate differences | - | - | 0.9 | - | 10.9 | - | - | (0.4) | 11.4 |
| Expense and revenue on derivative instruments | - | - | (1.8) | - | - | 1.2 | 0.2 | - | (0.4) |
| Unwinding of other provisions | - | - | - | - | - | - | - | (3.6) | (3.6) |
| Other financial revenue and expenses | - | - | - | 4.5 | (4.4) | - | 3.0 | (0.8) | 2.3 |
| Financial income (loss) as of December 31, 2008 | 0.2 | 4.1 | (0.9) | 4.5 | (68.1) | 8.2 | 9.7 | (4.8) | (47.1) |
| Revenue | 0.3 | 4.1 | (2.9) | 4.7 | 184.2 | 38.4 | 7.2 | 51.0 | 287.0 |
| Expenses | (0.1) | - | 2.0 | (0.2) | (252.3) (30.2) | 2.5 | (55.8) (334.1) | ||
| Net financial debt expense | - | 1.9 | - | - | (38.5) | 5.8 | 2.8 | - | (28.0) |
| Income from securities | - | 1.9 | - | - | - | - | - | - | 1.9 |
| Gross financial debt expense | - | - | - | - | (38.5) | 5.8 | 2.8 | - | (29.9) |
| Other financial revenue and expenses | 0.3 | - | (3.1) | 1.5 | 7.2 | 1.1 | 2.1 | (1.7) | 7.4 |
| Dividends | 0.2 | - | - | - | - | - | - | - | 0.2 |
| Net exchange rate differences | - | - | - | - | 7.7 | - | - | - | 7.7 |
| Expense and revenue on derivative instruments | - | - | (3.1) | - | - | 1.1 | 0.4 | - | (1.6) |
| Unwinding of other provisions | - | - | - | - | - | - | - | (1.3) | (1.3) |
| Other financial revenue and expenses | 0.1 | - | - | 1.5 | (0.5) | - | 1.7 | (0.4) | 2.4 |
| Financial income (loss) as of June 30, 2008 | 0.3 | 1.9 | (3.1) | 1.5 | (31.3) | 6.9 | 4.9 | (1.7) | (20.6) |
| Revenue | 0.3 | 1.9 | 2.7 | 1.5 | 91.6 | 14.9 | 5.5 | 26.1 | 144.5 |
| Expenses | - | - | (5.8) | - | (122.9) | (8.0) (0.6) | (27.8) (165.1) | ||
| Net financial debt expense | - | 0.9 | - | - | (34.0) | (1.3) (1.0) | - | (35.4) | |
| Income from securities | - | 0.9 | - | - | - | - | - | - | 0.9 |
| Gross financial debt expense | - | - | - | - | (34.0) | (1.3) (1.0) | - | (36.3) | |
| Other financial revenue and expenses | 0.3 | - | (0.2) | 1.2 | (6.9) | 0.8 | 0.1 | (4.8) | (9.5) |
| Dividends | 0.2 | - | - | - | - | - | - | - | 0.2 |
| Net exchange rate differences | - | - | - | - | (4.1) | - | - | 0.2 | (3.9) |
| Expense and revenue on derivative instruments | - | - | (0.2) | - | - | 0.8 (2.0) | - | (1.4) | |
| Unwinding of provisions | - | - | - | - | - | - | - | (1.6) | (1.6) |
| Other financial revenue and expenses | 0.1 | - | - | 1.2 | (2.8) | - | 2.1 | (3.4) | (2.8) |
| Financial income (loss) as of June 30, 2009 | 0.3 | 0.9 | (0.2) | 1.2 | (40.9) | (0.5) (0.9) | (4.8) | (44.9) | |
| Revenue | 0.3 | 0.9 | 0.4 | 1.2 | 24.6 | 10.8 | 1.3 | 19.5 | 59.0 |
| Expenses | - | - | (0.6) | - | (65.5) (11.3) (2.2) | (24.3) (103.9) |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Income taxes payable | (20.2) | (45.1) | (64.4) |
| Income taxes payable for the period | (20.0) | (44.7) | (68.3) |
| Income taxes payable - Prior period adjustments | (0.2) | (0.4) | 3.9 |
| Deferred taxes | 13.1 | (7.7) | (24.5) |
| Deferred taxes due to changes in temporary differences | 13.0 | (7.7) | (24.6) |
| Deferred taxes due to changes in income tax rates | 0.2 | - | 0.1 |
| Total | (7.1) | (52.8) | (88.9) |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Income taxes on current operating income | (18.7) | (60.2) | (98.0) |
| Current operating income taxes payable | (25.1) | (51.8) | (78.2) |
| Current operating deferred taxes | 6.4 | (8.4) | (19.8) |
| Income taxes on other operating revenue and expenses | 11.6 | 7.4 | 9.1 |
| Income taxes payable on other operating revenue and expenses | 4.9 | 6.7 | 13.8 |
| Deferred taxes on other operating revenue and expenses | 6.7 | 0.7 | (4.7) |
| Total | (7.1) | (52.8) | (88.9) |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Cash flow hedges | (0.2) | 0.6 | 0.9 |
| Recognition in equity | - | 0.6 | 0.2 |
| Reclassification in profit or loss | (0.2) | - | 0.7 |
| Translation reserve | (4.2) | 12.3 | 20.0 |
| Recognition in equity | (4.2) | 12.3 | 20.0 |
| Reclassification in profit or loss | - | - | - |
| Total | (4.4) | 12.9 | 20.9 |
The cash flow generated by income taxes comprises the down payments paid to the State and the reimbursements received. As of June 30, 2009, this cash flow is a net inflow of €10.0 million (net outflow of €58.3 million over the 1st half of 2008; net outflow of €113.3 million in 2008).
| June 30, 2009 | June 30, 2008 | 2008 | |
|---|---|---|---|
| Legal tax rate in France (including surtax and contribution) | 34.4% | 34.4% | 34.4% |
| Impact of national rate differences | (2.0)% | (2.5)% | (2.9)% |
| Impact of permanent differences and tax incentives | (8.1)% | (5.2)% | (5.2)% |
| Impact of unrecognized tax losses utilized | (2.4)% | (1.1)% | (1.2)% |
| Other income taxes at different rates and bases | |||
| and impact of rate changes on deferred taxes | 5.2% | 0.9% | 1.2% |
| Other (tax credits, tax losses created and unrecognized, | |||
| tax reassessments and tax provisions, prior period adjustments) | 1.6% | 0.8% | 0.4% |
| Effective tax rate on current operating and financial income (loss) (1) | 28.7% | 27.3% | 26.7% |
(1) Income taxes on current operating income (€18.7 million) divided by the sum of the current operating income (+ €110.0 million) and financial income (loss) (- €44.9 million).
| June 30, 2009 June 30, 2008 | 2008 | ||
|---|---|---|---|
| Legal tax rate in France (including surtax and contribution) | 34.4% | 34.4% | 34.4% |
| Impact of national rate differences | (0.7)% | (2.7)% | (3.8)% |
| Impact of permanent differences and tax incentives | (29.4)% | (5.6)% | 0.1% |
| Impact of unrecognized tax losses utilized | (8.7)% | (1.3)% | (1.8)% |
| Other income taxes at different rates and bases | |||
| and impact of rate changes on deferred taxes | 14.7% | 1.0% | 1.6% |
| Other (tax credits, tax losses created and unrecognized, | |||
| tax reassessments and tax provisions, prior period adjustments) | 27.9% | 0.9% | 4.7% |
| Effective tax rate on operating and financial income (loss) | 38.2% | 26.7% | 35.2% |
As of June 30, 2009, the values of the reconciling items expressed in percentages are greater than those of comparative periods as a result of the decrease in the bases over the 1st half of 2009. In 2008, the row "Other" in the above table included for 2.3% the impact of a portion of the effect of the strong devaluation of the Brazilian Real over the 4th quarter of the period on the income tax expense of the Brazilian entity RCC and for 1.9% the impact on the deferred taxes of the English entity IML of the suppression in 2008 in Great Britain of the deductibility of the depreciation of industrial buildings.
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Current operating income | 110.0 | 241.5 | 414.6 |
| Financial income (loss) | (44.9) | (20.6) | (47.1) |
| Income taxes on current operating income (Note 12) | (18.7) | (60.2) | (98.0) |
| Minority interests | 0.3 | (0.9) | (2.4) |
| Net income from current operations, Group share | 46.7 | 159.8 | 267.1 |
| Effective tax rate on current operating income | (28.7%) | (27.3%) | (26.7%) |
| Net income of discontinued operations or held for sale | - | - | - |
| Other operating revenue and expenses - net (Note 9) | (35.0) | (15.4) | (105.8) |
| Net income, Group share | 11.7 | 144.4 | 161.3 |
No significant transaction has changed the number of ordinary shares and potential ordinary shares between the end of the period and the authorization of issue of the financial statements by the Board of Directors.
| (€ millions) | June 30, 2009 June 30, 2008 | 2008 | |
|---|---|---|---|
| Numerator | |||
| Net income from current operations attributable to ordinary equity holders used for the calculation of the diluted earnings per share Net income from current operations, Group share |
46.9 46.7 |
160.5 159.8 |
267.6 267.1 |
| Impact of financial income (loss) on share options | 0.2 | 0.7 | 0.5 |
| Net income attributable to ordinary equity holders used | |||
| for the calculation of the diluted earnings per share Net income, Group share |
11.9 11.7 |
145.1 144.4 |
161.8 161.3 |
| Impact of financial income (loss) on share options | 0.2 | 0.7 | 0.5 |
| Denominator | |||
| Weighted average number of shares used for the calculation of the basic earnings per share (1) Impact of share option conversion Weighted average number of shares used for the calculation of the diluted earnings per share |
68,688,790 172,276 68,861,066 |
370,183 | 67,496,827 67,486,365 234,589 67,867,010 67,720,954 |
| Basic earnings per share, Group share (in €) | |||
| Net basic earnings per share from current operations | 0.68 | 2.37 | 3.96 |
| Net basic earnings per share | 0.17 | 2.14 | 2.39 |
| Diluted net earnings per share from current operations | 0.68 | 2.36 | 3.95 |
| Diluted net earnings per share | 0.17 | 2.14 | 2.39 |
(1) Adjusted following the capital increase of June 2, 2009.
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Opening carrying amount | 899.4 | 860.7 | 860.7 |
| Gross amount | 951.3 | 860.9 | 860.9 |
| Impairment losses | (51.9) | (0.2) | (0.2) |
| Acquisitions | 6.2 | 108.7 | 111.4 |
| Disposals | - | - | - |
| Adjustments and reclassifications | (6.3) | (0.4) | (0.1) |
| Impairment losses | - | - | (48.9) |
| Foreign exchange differences | 7.8 | (34.3) | (23.7) |
| Closing carrying amount | 907.1 | 934.7 | 899.4 |
| Gross amount | 971.5 | 934.9 | 951.3 |
| Impairment losses | (64.4) | (0.2) | (51.9) |
The goodwill recognized upon acquisitions mainly represents development prospects of the acquired entities within the Group. Impairment losses of goodwill are disclosed in Note 18.
Astron China (Astron). On February 5, 2008, Imerys acquired 100.0% of the voting rights of the Chinese company Astron. Active in a wide range of zircon-based products, Astron owns several plants and distribution centers in China. As of June 30, 2009, definitive goodwill amounts to €91.2 million and takes into consideration the fair value measurement of property, plant and equipment and inventories.
Others. The purchase accounting of the entities Svenska Silikaverken AB (100.0% of voting rights acquired on April 30, 2008) was finalized. Goodwill determined for Suzorite Minerals (100.0% of voting rights acquired on October 10, 2008) and Kings Mountain Minerals (100.0% of voting rights acquired on October 10, 2008) is provisional as of June 30, 2009.
| Astron | Others | Total | |||
|---|---|---|---|---|---|
| (€ millions) | Carrying amounts before the acquisition |
Final fair values at the acquisition date |
Carrying amounts before the acquisition |
Fair values at the acquisition date |
Fair values at the acquisition date |
| Assets - non-current Intangible assets Property, plant and equipment Other receivables Deferred tax assets |
12.2 0.1 12.0 - 0.1 |
13.7 0.1 13.0 - 0.6 |
31.4 4.5 26.8 - 0.1 |
22.4 4.2 18.1 - 0.1 |
36.1 4.3 31.1 - 0.7 |
| Assets - current Inventories Trade receivables Other receivables Marketable securities and other financial assets Cash and cash equivalents |
54.6 20.1 16.8 13.5 - 4.2 |
53.3 18.8 16.8 13.5 - 4.2 |
14.5 8.2 4.2 1.8 - 0.3 |
13.9 7.6 4.2 1.8 - 0.3 |
67.2 26.4 21.0 15.3 - 4.5 |
| Total assets | 66.8 | 67.0 | 45.9 | 36.3 | 103.3 |
| Minority interests | - | - | - | - | - |
| Liabilities - non-current Provisions for employee benefits Other provisions Loans and financial debts Other debts Deferred tax liabilities |
0.7 - 0.2 - - 0.5 |
0.7 - 0.2 - - 0.5 |
1.2 - 0.9 0.1 0.2 - |
1.0 - 0.9 0.1 0.2 (0.2) |
1.7 - 1.1 0.1 0.2 0.3 |
| Liabilities - current Trade payables Income taxes payable Other debts Loans and financial debts |
44.5 11.6 - 20.0 12.9 |
44.5 11.6 - 20.0 12.9 |
6.3 1.9 0.1 3.2 1.1 |
6.3 1.9 0.1 3.2 1.1 |
50.8 13.5 0.1 23.2 14.0 |
| Total liabilities | 45.2 | 45.2 | 7.5 | 7.3 | 52.5 |
| Fair value of the acquired equity Revaluation of previously acquired interests Goodwill |
21.6 - 91.0 |
21.8 - 91.2 |
38.4 - (0.7) |
29.0 - 7.8 |
50.8 - 99.0 |
| Cost of business combinations of which acquisition fees |
112.6 1.1 |
113.0 1.1 |
37.7 1.1 |
36.8 1.1 |
149.8 2.2 |
The fair values of assets, liabilities and contingent liabilities of the entities acquired in 2008 and 2009 are analyzed as follows:
The following table details the "Acquisitions" row of the first table of Note 15.
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Goodwill of business combinations of the period Adjustment of the cost of business combinations of prior periods Goodwill on increases in shares of interest of the period |
0.5 5.7 - |
91.1 13.3 4.3 |
93.1 13.1 5.2 |
| Goodwill - Acquisitions | 6.2 | 108.7 | 111.4 |
The net cash flow related to the acquisitions of the period can be broken down as follows:
| (€ millions) | Other incoming entities of the period |
Increases in shares of interest and purchase price adjustments |
Acquisition cost of entities consolidated over the period |
Total |
|---|---|---|---|---|
| Cash paid | (10.0) | - | - | (10.0) |
| Cost of business combinations | (10.6) | - | - | (10.6) |
| Payables related to business combinations of the period | 0.6 | - | - | 0.6 |
| Cash from acquired entities | 0.1 | - | - | 0.1 |
| Acquisition cost of investments consolidated | ||||
| in 2009 after deduction of cash acquired | (9.9) | - | - | (9.9) |
| Trademarks, patents and |
Mining and use |
||||
|---|---|---|---|---|---|
| (€ millions) | Software | licences | rights | Other | Total |
| Carrying amount as of January 1, 2008 | 14.2 | 5.2 | 16.1 | 13.8 | 49.3 |
| Gross amount | 50.0 | 12.7 | 16.4 | 26.7 | 105.8 |
| Amortization | (35.8) | (7.5) | (0.3) | (12.9) | (56.5) |
| Acquisitions | 0.9 | 0.3 | 0.3 | 2.6 | 4.1 |
| Acquisitions resulting from business combinations | 0.1 | 0.1 | - | 1.6 | 1.8 |
| Disposals | - | (0.1) | (0.1) | (0.3) | (0.5) |
| Net increases in amortization | (5.9) | (0.4) | (0.1) | (1.3) | (7.7) |
| Impairment losses recognized in net income | - | (0.2) | - | - | (0.2) |
| Foreign exchange differences | - | 0.1 | (2.8) | 0.5 | (2.2) |
| Reclassification and other | 2.2 | 0.2 | 0.4 | (2.4) | 0.4 |
| Carrying amount as of January 1, 2009 | 11.5 | 5.2 | 13.8 | 14.5 | 45.0 |
| Gross amount | 50.4 | 12.9 | 14.2 | 27.2 | 104.7 |
| Amortization | (38.9) | (7.7) | (0.4) | (12.7) | (59.7) |
| Acquisitions | 0.2 | 0.2 | 0.2 | 0.4 | 1.0 |
| Acquisitions resulting from business combinations | - | - | 4.3 | (0.3) | 4.0 |
| Disposals | - | - | - | - | - |
| Net increases in amortization | (2.6) | (0.1) | (0.1) | (0.5) | (3.3) |
| Impairment losses recognized in net income | - | (1.8) | (0.2) | (2.0) | |
| Foreign exchange differences | 0.1 | (0.1) | 0.1 | 0.1 | |
| Reclassification and other | 0.3 | (0.9) | 0.1 | 1.2 | 0.7 |
| Carrying amount as of June 30, 2009 | 9.5 | 2.6 | 18.2 | 15.2 | 45.5 |
| Gross amount | 51.5 | 12.1 | 18.7 | 28.9 | 111.2 |
| Amortization | (42.0) | (9.5) | (0.5) | (13.7) | (65.7) |
| (€ millions) | Mining assets |
Land and buildings |
Plant and equipment |
Down payments and assets under construction |
Other | Total |
|---|---|---|---|---|---|---|
| Carrying amount as of January 1, 2008 | 399.6 | 259.8 | 762.0 | 208.2 | 50.9 | 1,680.5 |
| Gross amount | 540.9 | 446.2 | 2,488.3 | 208.4 | 182.7 | 3,866.5 |
| Depreciation | (141.3) | (186.4) | (1,726.3) | (0.2) | (131.8) | (2,186.0) |
| Acquisitions | 27.8 | 28.5 | 69.2 | 95.1 | 8.5 | 229.1 |
| Acquisitions resulting from business combinations | 6.3 | 10.5 | 18.8 | (1.2) | 2.0 | 36.4 |
| Disposals | (1.8) | (3.8) | (4.1) | (0.2) | (0.4) | (10.3) |
| Net increases in depreciation | (30.7) | (12.3) | (123.3) | - | (12.9) | (179.2) |
| Impairment losses recognized in net income | (1.7) | (1.3) | (11.8) | (3.7) | (0.4) | (18.9) |
| Impairment losses reversed in net income | 0.6 | - | 2.4 | - | - | 3.0 |
| Foreign exchange differences | (4.9) | (5.5) | (17.0) | (0.8) | (1.9) | (30.1) |
| Reclassification and other | 0.4 | 5.9 | 168.6 | (167.3) | (8.5) | (0.9) |
| Carrying amount as of January 1, 2009 | 395.6 | 281.8 | 864.8 | 130.1 | 37.3 | 1,709.6 |
| Gross amount | 546.5 | 465.7 | 2,591.7 | 130.2 | 167.3 | 3,901.4 |
| Depreciation | (150.9) | (183.9) | (1,726.9) | (0.1) | (130.0) | (2,191.8) |
| Acquisitions | 15.7 | 0.5 | 6.0 | 29.4 | 2.1 | 53.7 |
| Acquisitions resulting from business combinations | (3.7) | (1.6) | (2.1) | - | 1.2 | (6.2) |
| Disposals | (0.1) | (0.5) | (0.9) | (0.1) | (0.1) | (1.7) |
| Net increases in depreciation | (11.7) | (6.4) | (62.0) | - | (5.5) | (85.6) |
| Impairment losses recognized in net income | (2.2) | - | (13.5) | (0.5) | (0.8) | (17.0) |
| Impairment losses reversed in net income | - | - | 0.3 | - | - | 0.3 |
| Foreign exchange differences | 3.0 | 2.6 | 6.7 | 3.3 | 0.2 | 15.8 |
| Reclassification and other | 0.3 | 7.0 | 73.6 | (83.7) | - | (2.8) |
| Carrying amount as of June 30, 2009 | 396.9 | 283.4 | 872.9 | 78.5 | 34.4 | 1,666.1 |
| Gross amount | 553.2 | 474.5 | 2,672.2 | 79.1 | 171.9 | 3,950.9 |
| Depreciation | (156.3) | (191.1) | (1,799.3) | (0.6) | (137.5) | (2,284.8) |
The depreciation of property, plant and equipment is estimated on a straight-line basis except for mining assets and certain industrial assets whose depreciation is estimated on the basis of their actual extraction, production or use.
The impairment test on the CGUs performed systematically on the annual closing is only renewed on the half-year closing where an impairment loss indicator is identified. Since the markets of the Group's activities are strongly deteriorated, the negative impacts on the results represent impairment loss indicators. As a consequence, tests are performed as of June 30, 2009. They are not revealing any impairment requirement. As of December 30, 2008, this test had required the recognition of an impairment loss on the entire carrying amount of the goodwill of the Performance Minerals North America CGU whose carrying amount totaled €51.6 million.
In addition, the identification of impairment loss indicators on an individual asset may also require the performance of the test at the level of this individual asset. As of June 30, 2009, an impairment loss of €18.7 million is recognized at the level of individual assets, mainly in relation to the restructuring of the industrial facilities of the Abrasives activity for an amount of €6.3 million. As of December 31, 2008, an impairment loss of €19.1 million had been recognized and mainly related to the restructuring of the industrial facilities of the Pigments for Paper business group for €10.6 million and the Materials and Monolithics business group for €4.5 million.
| June 30, 2009 | June 30, 2008 | 2008 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross | Write | Carrying | Gross | Write | Carrying | Gross | Write | Carrying | |
| (€ millions) | amount | down | amount | amount | down | amount | amount | down | amount |
| Raw materials | 187.7 | (9.2) | 178.5 | 203.9 | (10.4) | 193.5 | 235.4 | (11.7) | 223.7 |
| Work in progress | 58.1 | (0.1) | 58.0 | 45.6 | (0.1) | 45.5 | 64.4 | (0.1) | 64.3 |
| Finished goods | 224.1 | (7.8) | 216.3 | 238.5 | (7.4) | 231.1 | 274.5 | (7.6) | 266.9 |
| Merchandises | 37.2 | (0.6) | 36.6 | 60.9 | (0.6) | 60.3 | 56.7 | (0.6) | 56.1 |
| Total | 507.1 | (17.7) | 489.4 | 548.9 | (18.5) | 530.4 | 631.0 | (20.0) | 611.0 |
| IAS 39 financial assets | ||||||||
|---|---|---|---|---|---|---|---|---|
| At fair value | Hedge | |||||||
| through profit or loss | derivatives | |||||||
| Non | Loans | Fair | Cash | Non | ||||
| (€ millions) | Available- for-sale |
Non derivative |
hedge derivatives |
and receivables |
value hedge |
flow hedge |
IAS 39 assets |
Total |
| Non-current assets | 7.1 | - | - | 45.9 | 17.6 | 1.1 | - | - |
| Available-for-sale financial assets | 7.1 | - | - | - | - | - | - | 7.1 |
| Other financial assets | - | - | - | 6.0 | - | - | 7.8 | 13.8 |
| Other receivables | - | - | - | 39.9 | - | - | 0.5 | 40.4 |
| Derivative financial assets | - | - | - | - | 17.6 | 1.1 | - | 18.7 |
| Current assets | - | 4.4 | (0.4) | 832.3 | 1.0 | 0.5 | - | - |
| Trade receivables | - | - | - | 523.3 | - | - | - 523.3 | |
| Other receivables | - | - | - | 95.0 | - | - | 59.2 154.2 | |
| Derivative financial assets | - | - | (0.4) | - | 1.0 | 0.5 | - | 1.1 |
| Marketable securities and other financial assets | - | 4.4 | - | - | - | - | - | 4.4 |
| Cash and cash equivalents | - | - | - | 214.0 | - | - | - 214.0 | |
| Total as of December 31, 2008 | 7.1 | 4.4 | (0.4) | 878.2 | 18.6 | 1.6 | - | - |
| Non-current assets | 6.5 | - | 2.6 | 53.7 | (0.3) | 2.3 | - | - |
| Available-for-sale financial assets | 6.5 | - | - | - | - | - | - | 6.5 |
| Other financial assets | - | - | - | 7.3 | - | - | 6.7 | 14.0 |
| Other receivables | - | - | - | 46.4 | - | - | 0.6 | 47.0 |
| Derivative financial assets | - | - | 2.6 | - | (0.3) | 2.3 | - | 4.6 |
| Current assets | - | 6.5 | (0.5) | 943.1 | - | 14.0 | - | - |
| Trade receivables | - | - | - | 676.1 | - | - | - 676.1 | |
| Other receivables | - | - | - | 111.6 | - | - | 40.2 151.8 | |
| Derivative financial assets | - | - | (0.5) | - | - | 14.0 | - | 13.5 |
| Marketable securities and other financial assets | - | 6.5 | - | - | - | - | - | 6.5 |
| Cash and cash equivalents | - | - | - | 155.4 | - | - | - 155.4 | |
| Total as of June 30, 2008 | 6.5 | 6.5 | 2.1 | 996.8 | (0.3) | 16.3 | - | - |
| Non-current assets | 7.0 | - | 0.1 | 49.5 | 17.7 | 0.5 | - | - |
| Available-for-sale financial assets | 7.0 | - | - | 7.0 | ||||
| Other financial assets | - | 6.7 | 8.4 | 15.1 | ||||
| Other receivables | - | 42.8 | 0.3 | 43.1 | ||||
| Derivative financial assets | - | 0.1 | 17.7 | 0.5 | 18.3 | |||
| Current assets | - | 4.4 | (0.5) | 753.8 | 1.8 | 3.2 | - | - |
| Trade receivables | - | - | - | 490.4 | - | - | - 490.4 | |
| Other receivables | - | - | - | 79.7 | - | - | 45.6 125.3 | |
| Derivative financial assets | - | - | (0.5) | - | 1.8 | 3.2 | - | 4.5 |
| Marketable securities and other financial assets | - | 4.4 | - | - | - | - | - | 4.4 |
| Cash and cash equivalents | - | - | - | 183.7 | - | - | - 183.7 | |
| Total as of June 30, 2009 | 7.0 | 4.4 | (0.4) | 803.3 | 19.5 | 3.7 | - | - |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Number of shares outstanding at the opening | 62,786,590 | 63,126,856 | 63,126,856 |
| Capital increases | 12,558,518 | 28,366 | 29,734 |
| Capital decreases | (250) | (350,000) | (370,000) |
| Number of shares outstanding at the closing | 75,344,858 | 62,805,222 | 62,786,590 |
• On April 27, 2009, the Board of Directors noted that the share capital had been increased by a nominal amount of €2,000 as a result of the exercise since January 1, 2009 of 1,000 share options giving the right to the same number of Imerys shares.
• On June 2, 2009, the Chief Executive Officer noted that the share capital had been increased by a nominal amount of €25,115,036 by the issue of 12,557,518 new shares with €2 par value.
As a result of those operations, the fully paid-up share capital as of June 30, 2009 totaled €150,690,216. It was made up of 75,345,108 shares with €2 par value, of which 34,215,746 enjoyed double voting rights. Finally, the total number of voting rights attached to existing shares was 109,560,604.
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Other non-current provisions Other current provisions |
163.0 26.0 |
153.8 15.8 |
153.7 20.8 |
| Total | 189.0 | 169.6 | 174.5 |
The other provisions can be broken down as follows:
| (€ millions) | Management risks |
Environment and site restoration |
Other | Total |
|---|---|---|---|---|
| Balance as of January 1, 2008 | 39.9 | 91.2 | 34.2 | 165.3 |
| Increases | 4.7 | 9.9 | 23.2 | 37.8 |
| Utilizations | (9.5) | (8.3) | (23.8) | (41.6) |
| Non-utilized decreases | (0.1) | - | (1.0) | (1.1) |
| Changes in the scope of consolidation | 2.2 | 2.4 | 12.6 | 17.2 |
| Unwinding expense | - | 3.1 | 0.4 | 3.5 |
| Exchange rate differences | 0.3 | (6.5) | (1.5) | (7.7) |
| Reclassification and other | (0.1) | (0.5) | 1.7 | 1.1 |
| Balance as of January 1, 2009 | 37.4 | 91.3 | 45.8 | 174.5 |
| Increases | 4.4 | 5.1 | 23.1 | 32.6 |
| Utilizations | (3.3) | (2.3) | (9.3) | (14.9) |
| Non-utilized decreases | (2.0) | (1.3) | (0.3) | (3.6) |
| Changes in the scope of consolidation | (0.1) | 0.2 | (2.8) | (2.7) |
| Unwinding expense | - | 1.5 | 0.1 | 1.6 |
| Exchange rate differences | (0.3) | 2.6 | 0.2 | 2.5 |
| Reclassification and other | (0.2) | 1.0 | (1.8) | (1.0) |
| Balance as of June 30, 2009 | 35.9 | 98.1 | 55.0 | 189.0 |
The Group is exposed to litigation and claims arising from its ordinary activities. These risks relate to allegations of personal or financial injury caused by third parties implicating the civil liability of the Group's entities, the potential breach of some of their contractual obligations or employee, property and environmental law issues. The Group also has certain contractual indemnity obligations attributable to disposals of assets in the past. The provisions recognized with respect to such management risks amount to €35.9 million as of June 30, 2009 (€38.2 million as of June 30, 2008 and €37.4 million as of December 31, 2008). In addition, Imerys records provisions intended to cover environmental risks resulting from the Group's industrial activity as well as provisions for the restoration of mine sites at the end of their exploitation. These provisions amount to €98.1 million as of June 30, 2009 (€89.6 million as of June 30, 2008 and €91.3 million as of December 31, 2008). The other provisions mainly relate to legal and social litigation. As of June 30, 2009, they amount to €55.0 million (€39.9 million as of June 30, 2008 and €45.8 million as of December 31, 2008).
In the tables hereafter, the carrying amounts are representative of fair value for all instruments except for bonds for which an additional analysis presents the differences between carrying amount and fair value. For listed bonds, the fair value is equal to the market value at the end of the period. For unlisted bonds, the fair value is obtained by discounting the future flows at the risk-free rate. The measurements presented in these analyses include accrued interests.
| IAS 39 financial liabilities | ||||||
|---|---|---|---|---|---|---|
| At fair value | Hedge derivatives | |||||
| At | through profit or | Fair | Cash | Non | ||
| amortized | loss (non hedge | value | flow | IAS 39 | ||
| (€ millions) | cost | derivatives) | hedge | hedge | liabilities | Total |
| Non-current liabilities | 1,037.5 | (5.0) | 28.5 | 5.5 | - | - |
| Loans and financial debts | 1,029.6 | (8.6) | 17.9 | - | 3.9 | 1,042.8 |
| Other debts | 7.9 | - | - | - | 2.1 | 10.0 |
| Derivative financial liabilities | - | 3.6 | 10.6 | 5.5 | - | 19.7 |
| Current liabilities | 717.7 | - | 2.3 | 7.5 | - | - |
| Trade payables | 264.2 | - | - | - | - | 264.2 |
| Other debts | 159.8 | - | - | - | 89.7 | 249.5 |
| Derivative financial liabilities | - | - | 2.3 | 9.2 | - | 11.5 |
| Loans and financial debts | 290.2 | - | - | (1.7) | 0.8 | 289.3 |
| Bank overdrafts | 3.5 | - | - | - | - | 3.5 |
| Total as of June 30, 2009 | 1,755.2 | (5.0) | 30.8 | 13.0 | - | - |
The fair value of fixed rate bonds included in the row "Loans and financial debts" is inferior to their carrying amount by €63.4 million:
| in millions | Nominal amount | Maturity | Quotation | Nominal interest rate |
Effective interest rate |
Carrying amount |
Fair value |
Difference |
|---|---|---|---|---|---|---|---|---|
| JPY 7,000.0 | 9/16/2033 | Unlisted | 3.40% | 3.47% | 52.2 | 66.5 | 14.3 | |
| USD 140.0 | 8/6/2013 | Unlisted | 4.88% | 4.98% | 101.0 | 109.6 | 8.6 | |
| USD 30.0 | 8/6/2018 | Unlisted | 5.28% | 5.38% | 21.7 | 24.3 | 2.6 | |
| EUR 300.0 | 4/25/2014 | Listed | 5.13% | 5.42% | 302.8 | 289.7 | (13.1) | |
| EUR 500.0 | 4/18/2017 | Listed | 5.00% | 5.09% | 505.1 | 429.3 | (75.8) | |
| Total as of June 30, 2009 (in € millions) | 982.8 | 919.4 | (63.4) |
| IAS 39 financial liabilities | ||||||
|---|---|---|---|---|---|---|
| At fair value | Hedge derivatives | |||||
| At | through profit or | Fair | Cash | Non | ||
| amortized | loss (non hedge | value | flow | IAS 39 | ||
| (€ millions) | cost | derivatives) | hedge | hedge | liabilities | Total |
| Non-current liabilities | 1,023.1 | 12.6 | 4.7 | (12.9) | - | - |
| Loans and financial debts | 1,013.2 | (22.6) | 1.9 | - | 4.5 | 997.0 |
| Other debts | 9.9 | - | - | - | 5.7 | 15.6 |
| Derivative financial liabilities | - | 35.2 | 2.8 | (12.9) | - | 25.1 |
| Current liabilities | 1,200.1 | 0.6 | 2.1 | 2.1 | - | - |
| Trade payables | 323.9 | - | - | - | - | 323.9 |
| Other debts | 118.8 | - | - | - | 96.2 | 215.0 |
| Derivative financial liabilities | - | 0.5 | 2.1 | (0.2) | - | 2.4 |
| Loans and financial debts | 658.9 | 0.1 | - | 2.3 | 0.9 | 662.2 |
| Bank overdrafts | 98.5 | - | - | - | - | 98.5 |
| Total as of June 30, 2008 | 2,223.2 | 13.2 | 6.8 | (10.8) | - | - |
The fair value of fixed rate bonds included in the row "Loans and financial debts" is inferior to their carrying amount by €53.4 million:
| in millions | Nominal amount | Maturity | Quotation | Nominal interest rate |
Effective interest rate |
Carrying amount |
Fair value |
Difference |
|---|---|---|---|---|---|---|---|---|
| JPY 7,000.0 | 9/16/2033 | Unlisted | 3.40% | 3.47% | 42.5 | 50.2 | 7.7 | |
| USD 140.0 | 8/6/2013 | Unlisted | 4.88% | 4.98% | 90.5 | 93.0 | 2.5 | |
| USD 30.0 | 8/6/2018 | Unlisted | 5.28% | 5.38% | 19.4 | 20.4 | 1.0 | |
| EUR 300.0 | 4/25/2014 | Listed | 5.13% | 5.42% | 302.8 | 289.9 | (12.9) | |
| EUR 500.0 | 4/18/2017 | Listed | 5.00% | 5.09% | 505.1 | 453.4 | (51.7) | |
| Total as of June 30, 2008 (in € millions) | 960.3 | 906.9 | (53.4) |
| IAS 39 financial liabilities | ||||||
|---|---|---|---|---|---|---|
| At fair value | Hedge derivatives | |||||
| At | through profit or | Fair | Cash | Non | ||
| amortized | loss (non hedge | value | flow | IAS 39 | ||
| (€ millions) | cost | derivatives) | hedge | hedge | liabilities | Total |
| Non-current liabilities | 1,050.3 | (6.2) | 29.3 | 6.9 | - | - |
| Loans and financial debts | 1,039.5 | (9.2) | 20.0 | - | 4.4 | 1,054.7 |
| Other debts | 10.8 | - | - | - | 2.8 | 13.6 |
| Derivative financial liabilities | - | 3.0 | 9.3 | 6.9 | - | 19.2 |
| Current liabilities | 1,172.3 | - | 0.5 | 47.7 | - | - |
| Trade payables | 337.9 | - | - | - | - | 337.9 |
| Other debts | 103.3 | - | - | - | 96.4 | 199.7 |
| Derivative financial liabilities | - | - | 0.5 | 49.3 | - | 49.8 |
| Loans and financial debts | 728.2 | - | - | (1.6) | 0.7 | 727.3 |
| Bank overdrafts | 2.9 | - | - | - | - | 2.9 |
| Total as of December 31, 2008 | 2,222.6 | (6.2) | 29.8 | 54.6 | - | - |
The fair value of fixed rate bonds included in the row "Loans and financial debts" is inferior to their carrying amount by €109.5 million:
| in millions | Nominal amount | Maturity | Quotation | Nominal interest rate |
Effective interest rate |
Carrying amount |
Fair value |
Difference |
|---|---|---|---|---|---|---|---|---|
| JPY 7,000.0 USD 140.0 USD 30.0 EUR 300.0 EUR 500.0 |
9/16/2033 8/6/2013 8/6/2018 4/25/2014 4/18/2017 |
Unlisted Unlisted Unlisted Listed Listed |
3.40% 4.88% 5.28% 5.13% 5.00% |
3.47% 4.98% 5.38% 5.42% 5.09% |
56.0 102.6 22.0 310.6 517.7 |
75.5 115.1 27.1 264.8 416.9 |
19.5 12.5 5.1 (45.8) (100.8) |
|
| Total as of December 31, 2008 (in € millions) | 1,008.9 | 899.4 | (109.5) |
The net financial debt is used in the management of the Group's financial resources. This indicator is used in particular in the calculation of financial ratios that the Group has to comply with under financing agreements entered into with financial markets (Note 23.4). The link between this indicator and the consolidated statement of financial position is presented in the following table whilst its change is disclosed in Notes 25 and 26.
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Derivative financial assets | (22.8) | (18.1) | (19.8) |
| - less operational hedging instruments | 1.8 | 11.8 | 1.4 |
| Marketable securities and other financial assets | (4.4) | (6.5) | (4.4) |
| Cash and cash equivalents | (183.7) | (155.4) | (214.0) |
| Loans and financial debts - non-current | 1,042.8 | 997.0 | 1,054.7 |
| Derivative financial liabilities | 31.2 | 27.5 | 69.0 |
| - less hedging instruments on energy | (9.5) | (0.9) | (51.0) |
| Loans and financial debts - current | 289.3 | 662.2 | 727.3 |
| Bank overdrafts | 3.5 | 98.5 | 2.9 |
| Net financial debt | 1,148.2 | 1,616.1 | 1,566.1 |
As of June 30, 2009, all hedging derivative instruments were measured on the basis prices at the end of the period provided by third parties active on financial markets. The fair value is as follows by type of derivative:
| (€ millions) | Assets Liabilities | June 30, 2009 | Net | June 30, 2008 Assets Liabilities Net |
2008 Assets Liabilities Net |
||||
|---|---|---|---|---|---|---|---|---|---|
| Interest rate instruments Forward contracts |
18.3 18.2 |
19.7 17.3 |
(1.4) 0.9 |
4.6 2.0 |
25.1 23.4 |
(20.5) (21.4) |
18.7 18.7 |
19.2 17.4 |
(0.5) 1.3 |
| Options | 0.1 | 2.4 | (2.3) | 2.6 | 1.7 | 0.9 | - | 1.8 | (1.8) |
| Foreign exchange instruments | 2.7 | 4.4 | (1.7) | 1.7 | 1.5 | 0.2 | (0.3) | 25.5 | (25.8) |
| Forward contracts | 2.7 | 4.2 | (1.5) | 2.5 | - | 2.5 | 0.1 | 20.2 | (20.1) |
| Options | - | 0.2 | (0.2) | (0.8) | 1.5 | (2.3) | (0.4) | 5.3 | (5.7) |
| Energy risk instruments | 1.8 | 7.1 | (5.3) | 11.8 | 0.9 | 10.9 | 1.4 | 24.3 | (22.9) |
| Forward contracts | 0.2 | - | 0.2 | 1.4 | - | 1.4 | 0.4 | 1.3 | (0.9) |
| Options | 1.6 | 7.1 | (5.5) | 10.4 | 0.9 | 9.5 | 1.0 | 23.0 | (22.0) |
| Total | 22.8 | 31.2 | (8.4) | 18.1 | 27.5 | (9.4) | 19.8 | 69.0 | (49.2) |
| Non-current | 18.3 | 19.7 | (1.4) | 4.6 | 25.1 | (20.5) | 18.7 | 19.2 | (0.5) |
| Current | 4.5 | 11.5 | (7.0) | 13.5 | 2.4 | 11.1 | 1.1 | 49.8 | (48.7) |
| Operational hedge instruments | 1.8 | 9.5 | (7.7) | 11.8 | 0.9 | 10.9 | 1.4 | 51.0 | (49.6) |
| Financing hedge instruments | 21.0 | 21.7 | (0.7) | 6.3 | 26.6 | (20.3) | 18.4 | 18.0 | 0.4 |
As of June 30, 2009, the Group holds interest rate derivatives intended to hedge the exposure to changes in fair value of the different loans. These derivatives hedge the risk of change in the risk-free rate and not the differential corresponding to the credit risk of the issuer. The hedged loans as well as the interest rate derivatives present the same characteristics.
| Currency | Notional amount (in millions) | Fixed rate received | Floating rate paid |
|---|---|---|---|
| Japanese Yen | 7,000 | 2.39% | Libor Yen 6 months |
| Euro | 100 | 4.32% | Euribor 3 months |
| Euro | 100 | 4.33% | Euribor 3 months |
| US Dollar | 140 | 4.88% | Libor USD 3 months |
As of June 30, 2009, the Group holds a certain number of derivative instruments intended to hedge some of its future purchases or sales in foreign currencies, a portion of its debt at floating rate and part of its energy consumption in the United States, in Great Britain and in France. The following table discloses the amounts before income taxes of the cash flow hedges recognized in equity as well as those reclassified in profit or loss.
| (€ millions) | Exchange rate risk |
Interest rate risk |
Energy risk |
Total |
|---|---|---|---|---|
| Balance as of January 1, 2008 | 1.8 | 1.9 | 0.2 | 3.9 |
| Recognition in equity | 4.1 | - | 3.6 | 7.7 |
| Reclassification in profit or loss | (1.8) | (2.9) | 5.1 | 0.4 |
| Balance as of June 30, 2008 | 4.1 | (1.0) | 8.9 | 12.0 |
| Recognition in equity | (28.6) | (15.2) | (37.5) | (81.3) |
| Reclassification in profit or loss | (0.7) | (3.6) | 6.0 | 1.7 |
| Balance as of December 31, 2008 | (25.2) | (19.8) | (22.6) | (67.6) |
| Recognition in equity | 20.4 | 0.8 | 18.2 | 39.4 |
| Reclassification in profit or loss | 0.3 | 1.0 | (0.7) | 0.6 |
| Balance as of June 30, 2009 | (4.5) | (18.0) | (5.1) | (27.6) |
| of which reclassification to profit or loss expected in 2009 | (4.5) | (18.0) | (5.1) | (27.6) |
Imerys hedges part of its net investments in foreign entities by loans or exchange rate swaps. These transactions aim at hedging the Group's exposure to the exchange rate risks on these investments. Exchange rate gains or losses on these transactions are recognized in equity together with exchange rate gains or losses of net investments in these entities. As of December 31, 2008, the main loans and exchange rate swaps hedging net investments in foreign entities are the following: USD558.1 million, JPY1,000.0 million and CHF35.0 million as of June 30, 2009 (USD524.6 million, JPY2,182.3 million and CHF45.0 million as of June 30, 2008 and USD724.1 million, JPY2,182.3 million and CHF35.0 million as of December 31, 2008).
Borrower's liquidity. As a borrower, the Group faces the liquidity risk to that extent that it has to meet the repayment obligations of its financial liabilities. As of June 30, 2009, the maturity of financial liabilities on issue is analyzed as follows:
| 2009 | 2010 - 2014 | 2015 and later | ||||
|---|---|---|---|---|---|---|
| (€ millions) | Capital | Interests | Capital | Interests | Capital | Interests |
| Bond issues | - | 28.8 | 454.0 | 223.2 | 581.9 | 94.2 |
| Eurobond / EMTN | - | 21.1 | 353.0 | 191.4 | 508.1 | 57.3 |
| Private placements | - | 7.7 | 101.0 | 31.8 | 73.8 | 36.9 |
| Commercial paper issues | 105.0 | - | - | - | - | - |
| July 2013 syndicated credit | - | - | - | - | - | - |
| Miscellaneous bilateral facilities | 147.1 | - | - | - | - | - |
| Miscellaneous facilities due within one year | 44.8 | - | - | - | - | - |
| Total gross financial debt | 296.9 | 28.8 | 454.0 | 223.2 | 581.9 | 94.2 |
| Net cash and marketable securities | (184.6) | |||||
| Total net financial debt | 112.3 | 28.8 | 454.0 | 223.2 | 581.9 | 94.2 |
| Trade payables | - | - | - | - | - | - |
| Other debts | - | - | - | - | - | - |
| Total operating debts | 112.3 | 28.8 | 454.0 | 223.2 | 581.9 | 94.2 |
In addition, a large part of the debt at fixed rate on issue being swapped into floating rate, the maturity of the net financial debt after interest rate swap is analyzed as follows:
| (€ millions) | 2009 | 2010 - 2014 | 2015 and later | Total |
|---|---|---|---|---|
| Total debt at fixed rate | - | 104.7 | 527.2 | 631.9 |
| Debt at fixed rate on issue | - | 403.8 | 578.9 | 982.7 |
| Swap fixed rate into floating rate | - | (299.1) | (51.7) | (350.8) |
| Total debt at floating rate | 112.3 | 349.3 | 54.7 | 516.3 |
| Debt at floating rate on issue | 296.9 | 50.2 | 3.0 | 350.1 |
| Net cash and marketable securities | (184.6) | - | - | (184.6) |
| Swap fixed rate into floating rate | - | 299.1 | 51.7 | 350.8 |
| Total net financial debt | 112.3 | 454.0 | 581.9 | 1,148.2 |
As of July 24, 2009, Imerys has filed its new Euro Medium Term Note program (EMTN) with the Commission de Surveillance du Secteur Financier (CSSF, Luxemburg). The total program amounts to €1.0 billion and shall be used, if needed, to issue notes considered as ordinary bonds of a minimum maturity of 1 month and a maximum maturity of 30 years. As of June 30, 2009, outstanding securities total €454.3 million. As of June 30, 2009, Imerys also has a French commercial paper program limited to €800.0 million (€800.0 million as of June 30, 2008 and €800.0 million as of December 31, 2008). The program is rated P-3 by Moody's (P-2 as of June 30, 2008 and P-2 as of December 31, 2008). As of June 30, 2009, outstanding securities total €105.0 million (€300.5 million as of June 30, 2008 and €205.5 million as of December 31, 2008). As of June 30, 2009, Imerys has access to €1,322.4 million of bank facilities (€1,318.7 million as of June 30, 2008 and €1,322.9 million as of December 31, 2008), part of which secures the issued commercial paper in accordance with the financial policy of the Group.
The main restrictive terms and conditions existing in certain bilateral credit facilities, part of the bond issues under private placements and the syndicated credit are as follows:
• Purpose: general corporate financing requirement;
The failure to comply with the above obligations on one of the financing contracts concerned could lead to the cancellation of its available amount and, upon demand of the creditor(s) concerned, make the amount of the corresponding financial debt immediately callable. Apart from two exceptions, the financing contracts of the Group do not provide for any cross default with each other in case of breach of a mandatory covenant applicable to one of these contracts.
Medium-term financial resources provided by bilateral or syndicated bank credit facilities may be used for very short drawing periods (from 1 to 12 months) while remaining available for longer maturities (5 years). The market liquidity thus belongs to the risks followed in the management of the Group's financial resources.
Market liquidity. Financial resources are the main adjustment variable of the financing capacities available to the Group. These capacities exist either as drawn financial debt or as financing commitments granted by first rank banking institutions. The tables below list resources by their maturity date and nature.
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Maturity less than one year | 85.4 | - | - |
| Maturity from one to five years | 1,686.1 | 618.7 | 1,473.6 |
| Maturity beyond five years | 575.8 | 1,699.9 | 880.0 |
| Total financial resources | 2,347.3 | 2,318.6 | 2,353.6 |
| Average life span (in years) | 5.0 | 5.9 | 5.5 |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
| Eurobond / EMTN | 853.0 | 850.0 | 853.0 |
| Private placements | 171.9 | 149.9 | 177.7 |
| Bond resources | 1,024.9 | 999.9 | 1,030.7 |
| Average life span (in years) | 7.1 | 7.9 | 7.6 |
| Syndicated credit | 750.0 | 750.0 | 750.0 |
| Miscellaneous bilateral facilities | 572.4 | 568.7 | 572.9 |
| Bank resources | 1,322.4 | 1,318.7 | 1,322.9 |
| Average life span (in years) | 3.4 | 4.4 | 3.9 |
| Total financial resources | 2,347.3 | 2,318.6 | 2,353.6 |
| Average life span (in years) | 5.0 | 5.9 | 5.5 |
Over the past three years, Imerys has sought to maintain the amount of its financial resources at approximately €2.0 billion (€2,347.3 million as of June 30, 2009, €2,318.6 million as of June 30, 2008 and €2,353.6 million as of December 31, 2008) and to lengthen their maturity. As of June 30, 2009, Imerys has a long-term rating of Baa3 by Moody's (Baa2 as of June 30, 2008 and as of December 31, 2008). Imerys manages the amount of its financial resources by comparing it regularly with the amount of its utilizations in order to measure by difference the financial liquid borrowings to which the Group may have access. The robustness of financial resources is assessed on the basis of their amounts and average maturity. The table below measures the amount of available financial resources after the repayment of financing from uncommitted resources. It measures the Group's real exposure to an illiquidity crisis on both financial and banking markets.
| June 30, 2009 | June 30, 2008 | 2008 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (€ millions) | Resources | Utilization | Available | Resources | Utilization Available | Resources | Utilization | Available | |
| Bonds | 1,024.9 | 1,024.9 | - | 999.9 | 999.9 | - | 1,030.7 | 1,030.7 | - |
| Commercial papers | - | 105.0 | (105.0) | - | 300.5 | (300.5) | - | 205.5 | (205.5) |
| Committed bank facilities | 1,322.4 | 147.1 | 1,175.3 | 1,318.7 | 335.9 | 982.8 | 1,322.9 | 484.4 | 838.5 |
| Bank facilities and accrued interests | - | 10.3 | (10.3) | - | 12.9 | (12.9) | - | 32.4 | (32.4) |
| Other debts and facilities | - | 45.5 | (45.5) | - | 30.3 | (30.3) | - | 28.6 | (28.6) |
| Resources, utilizations and available amounts |
2,347.3 | 1,332.8 | 1,014.5 | 2,318.6 | 1,679.5 | 639.1 | 2,353.6 | 1,781.6 | 572.0 |
As of June 30, 2009, available financial resources, after repayment of uncommitted resources, total €1,014.5 million (€639.1 million as of June 30, 2008 and €572.0 million as of December 31, 2008), which gives the Group substantial room to maneuver and is a guarantee of financial stability.
The conversion of financial statements risk is the risk generated by the conversion in Euro of financial statements of entities in foreign currencies.
The objective of Imerys is to manage the conversion of financial statements risk through the proportion of its financial debts stated in foreign currencies. To that extent, any exchange rate fluctuation affecting net assets in foreign currencies is, to a certain extent, offset by a symmetrical effect resulting from the exchange rate fluctuation concerning its financial debts in the corresponding foreign currencies.
In that framework, Imerys carried out foreign currencies swaps for a notional amount remeasured at €153.3 million as of June 30, 2009 (€247.1 million as of June 30, 2008 and €248.9 million as of December 31, 2008). The table below describes the financial debt before and after the impact of these foreign currencies swaps.
| June 30, 2009 | June 30, 2008 | 2008 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Before | After | Before | After | Before | After | |||||
| exchange Exchange exchange | exchange Exchange | exchange | exchange Exchange | exchange | ||||||
| (€ millions) | rate swap rate swap rate swap | rate swap rate swap | rate swap | rate swap rate swap | rate swap | |||||
| Euro | 960.7 | (153.3) | 807.4 | 1,351.0 | (247.1) | 1,103.9 | 1,293.1 | (248.9) | 1,044.2 | |
| US Dollar | 281.6 | 80.8 | 362.4 | 261.9 | 150.7 | 412.6 | 383.4 | 177.7 | 561.1 | |
| Japanese Yen | 66.5 | (25.4) | 41.1 | 47.9 | (19.9) | 28.0 | 72.3 | (22.1) | 50.2 | |
| Other foreign currencies | 24.0 | 97.9 | 121.9 | 18.7 | 116.3 | 135.0 | 32.8 | 93.3 | 126.1 | |
| Total | 1,332.8 | - 1,332.8 | 1,679.5 | - | 1,679.5 | 1,781.6 | - | 1,781.6 |
As of June 30, 2009, the portion of the financial debt in each foreign currency, after swap, is as follows:
| (€ millions) | Euro | US Dollar |
Japanese Yen |
Other foreign currencies |
Total |
|---|---|---|---|---|---|
| Gross financial debt Net cash and marketable securities |
807.4 (67.1) |
362.4 (31.3) |
41.1 (11.4) |
121.9 (74.8) |
1,332.8 (184.6) |
| Net financial debt | 740.3 | 331.1 | 29.7 | 47.1 | 1,148.2 |
The interest rate risk is the risk whereby the interest flow due in relation to the financial debt is deteriorated by a rise in the market interest rates.
The interest rate risk is managed for the net financial debt with the primary objective of guaranteeing its medium-term cost. To do so, Imerys manages this risk centrally, based on trends in the net financial debt. Knowledge of this debt is provided by a regular reporting that describes the financial debt of each entity and indicates its various components and characteristics. Every year, the Corporate Treasury Department draws up a management policy document approved by the Financial Department and the Board of Directors. Reporting is reviewed monthly by the Financial Department and quarterly by the Board of Directors. This enables the situation to be monitored and the management policy to be adjusted as necessary. As part of that management process, the Corporate Treasury Department works with leading banks and obtains data from leading financial information providers.
The Group's policy is to obtain financing mainly in Euro, the most accessible financial resource and at a fixed rate. Certain medium-term fixed-rate bond issues are then converted to floating rates using interest rate swaps. In the framework of its general management policy, the Group defined the various derivative instruments to be used solely to hedge risks on firm and highly probable commitments. These products include interest rate swaps, options - including caps, floors, swaptions and futures. The Group does not authorize the use of derivatives for speculative purposes. Finally, given anticipated trends in interest rates in 2009, the Group fixed the interest rate for part of its future financial debt (2009-2013) on various terms.
The table hereafter provides a breakdown of the financial net debt between floating and fixed rate by currency as of June 30, 2009:
| (€ millions) | Euro | US Dollar |
Japanese Yen |
Other foreign currencies |
Total |
|---|---|---|---|---|---|
| Total debt at fixed rate | 607.9 | 23.6 | 0.5 | - | 632.0 |
| Debt at fixed rate on issue | 807.9 | 122.7 | 52.2 | - | 982.8 |
| Swap fixed rate into floating rate | (200.0) | (99.1) | (51.7) | - | (350.8) |
| Total debt at floating rate | 132.4 | 307.5 | 29.2 | 47.1 | 516.2 |
| Debt at floating rate on issue | 152.8 | 158.9 | 14.3 | 24.0 | 350.0 |
| Net cash and marketable securities | (67.1) | (31.3) | (11.4) | (74.8) | (184.6) |
| Swap fixed rate into floating rate | 200.0 | 99.1 | 51.7 | - | 350.8 |
| Exchange rate swap | (153.3) | 80.8 | (25.4) | 97.9 | - |
| Total net financial debt | 740.3 | 331.1 | 29.7 | 47.1 | 1,148.2 |
The table hereafter provides a breakdown of interest rate hedging operations June 2009 - June 2010 by foreign currency:
| US | Japanese | Other foreign |
||||
|---|---|---|---|---|---|---|
| (€ millions) | Euro | Dollar | Yen | currencies | Total | |
| Exposure at floating rate before hedging | 132.4 | 307.5 | 29.2 | 47.1 | 516.2 | |
| Fixed rate hedges | (150.0) | (367.9) | - | - | (517.9) | |
| Swap at average rate of | 4.04% | 3.48% | - | - | ||
| Capped rate hedges | (400.0) | (14.2) | - | - | (414.2) | |
| Cap at average rate of | 4.57% | 5.27% | - | - | 4.59% | |
| Exposure at floating rate after hedging | (417.6) | (74.6) | 29.2 | 47.1 | (415.9) |
The table hereafter provides a breakdown of interest rate hedging operations in 2009 and after by maturity dates:
| (€ millions) | 2009 less than 1 year |
2010 - 2014 1 to 5 years |
2015 and later beyond 5 years |
|---|---|---|---|
| Total exposure before hedging | 516.2 | 516.2 | 516.2 |
| Fixed rate hedges | (467.9) | (517.9) | - |
| Swap at average rate of | 3.80% | 3.64% | - |
| Capped rate hedges | (414.2) | - | - |
| Cap at average rate of | 4.59% | - | - |
| Total exposure after hedging | (365.9) | (1.7) | 516.2 |
The energy price risk is the risk whereby the cash flow due by an entity in relation to an energy purchase may be subject to a deterioration caused by a rise in the market price of that energy source. Imerys is exposed to the price risk of the energies that enter into the production cycle of its activities, mainly natural gas, electricity and coal to a lesser extent. The Group's geographical locations and supply sources are diversified.
Confronted with the energy price risk, the Group makes important efforts to pass on energy price increases to the selling price of its products. Furthermore, the management of the price risk of natural gas, both in Europe and the United States, is centralized, the Corporate Treasury Department being responsible for implementing the framework and resources needed for the application of a common management policy, which includes appropriate use of the financial instruments available in those markets.
Since 2006, the Group has strengthened its research programs on alternative energy sources as well as its projects on the reduction of energy consumption. In May 2007, a Group Energy Supervisor has been appointed to coordinate the analysis, monitoring and control programs on energy consumption. Since 2008, energy managers are designated at site level as well as at activity levels. Each site has to prepare an energy savings plan and energy audits are carried out on the main facilities. The sharing of good practices is fostered by the implementation of appropriate systems.
| Net notional amounts (in MWh) |
Maturities | |
|---|---|---|
| Underlying position | 1,643,669 | < 12 months |
| Management transactions | 869,261 | < 12 months |
| (€ millions) | June 30, 2009 | Income | Translation | Scope and reclassification |
2008 |
|---|---|---|---|---|---|
| Deferred tax assets Deferred tax liabilities |
60.4 (67.9) |
4.9 8.2 |
1.7 (2.3) |
(2.1) 1.6 |
55.9 (75.4) |
| Net deferred tax position | (7.5) | 13.1 | (0.6) | (0.5) | (19.5) |
In the statement of financial position, deferred tax assets and liabilities are offset by tax entity (legal entity or tax consolidation group).
The net financial debt is used in the management of the Group's financial resources. This indicator is used in particular in the calculation of financial ratios that the Group has to comply with under financing agreements entered into with financial markets (Note 23.5). The link between this indicator and the statement of financial position is presented in Note 23.2. The following notes present the change in the net financial debt in two steps: from current operating income to current free operating cash flow (Note 25) and from current free operating cash flow to the change in net financial debt (Note 26).
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Current operating income | 110.0 | 241.5 | 414.6 |
| Operating amortization, depreciation and impairment losses | 90.5 | 95.0 | 193.2 |
| Net change in operating provisions | 0.9 | (11.2) | (28.4) |
| Provisions for mining assets | (0.1) | - | 0.2 |
| Share in net income of associates | (0.9) | (4.9) | (10.4) |
| Dividends received from associates | 3.7 | 1.8 | 4.2 |
| Operating cash flow before taxes (Current EBITDA) | 204.1 | 322.2 | 573.4 |
| Notional taxes on current operating income (1) | (31.5) | (65.8) | (110.6) |
| Current net operating cash flow | 172.6 | 256.4 | 462.8 |
| Paid capital expenditures (2) | |||
| Intangible assets | (79.0) (1.0) |
(141.6) (4.0) |
(248.8) (4.0) |
| Property, plant and equipment (3) | (46.4) | (95.8) | (201.5) |
| Overburden mining assets | (9.5) | (14.3) | (32.6) |
| Debts on acquisitions | (22.1) | (27.5) | (10.7) |
| Carrying amount of current asset disposals | 0.7 | 8.5 | 11.5 |
| Change in the operational working capital requirement | 93.4 | (83.0) | 32.3 |
| Inventories | 129.4 | (22.7) | (94.6) |
| Trade accounts receivable, advances and down payments received | 41.2 | (39.9) | 105.1 |
| Trade accounts payable, advances and down payments paid | (77.2) | (20.4) | 21.8 |
| Current free operating cash flow | 187.7 | 40.3 | 257.8 |
| (1) Effective tax rate on current operating income | 28.7% | 27.3% | 26.7% |
| (2) Recognized capital expenditures / asset depreciation ratio | 62.9% | 120.2% | 123.3% |
| The recognized capital expenditures / asset depreciation ratio equals the paid | |||
| capital expenditures (except for debts on acquisitions) divided by the increases | |||
| in amortization and depreciation. | |||
| Increases in asset amortization and depreciation | 90.4 | 94.9 | 193.1 |
| (3) Of which acquisition of assets under finance lease | - | (0.2) | (0.9) |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| Current free operating cash flow | 187.7 | 40.3 | 257.8 |
| Financial income (loss) Financial impairment losses and unwinding of the discount Income taxes on financial income (loss) Change in income tax debt Change in deferred taxes on current operating income Change in other items of working capital Change in fair value Change in dividends receivable from availanle-for-sale financial assets |
(44.9) 4.7 12.9 30.5 (6.4) (2.7) 0.8 0.1 |
(20.6) 1.7 5.6 (13.1) 8.4 (34.2) (1.0) (0.1) |
(47.1) 4.9 12.5 (48.8) 19.8 (23.4) 4.2 (0.1) |
| Current free cash flow | 182.7 | (13.0) | 179.8 |
| External growth Acquisitions of investments in consolidated entities after deduction of the net debt acquired Acquisitions of available-for-sale financial assets |
(10.0) (10.0) - |
(119.7) (119.8) 0.1 |
(155.8) (155.8) - |
| Disposals Disposals of investments in consolidated entities after deduction of the net debt disposed of Disposals of available-for-sale financial assets Non-recurring disposals of property, plant and equipment and intangible assets |
14.4 14.5 (0.1) - |
0.1 - 0.1 - |
1.2 0.9 0.3 - |
| Cash flow from other operating revenue and expenses | (18.7) | (23.5) | (42.4) |
| Dividends paid to shareholders and minority interests | (0.7) | (119.5) | (119.7) |
| Financing requirement | 167.7 | (275.6) | (136.9) |
| Transactions on equity Net change in financial assets |
248.5 (0.3) |
(17.8) (1.2) |
(5.0) (0.3) |
| Change in net financial debt | 415.9 | (294.6) | (142.2) |
| Opening net financial debt | (1,566.1) | (1,343.0) | (1,343.0) |
| Change in net financial debt Impact of changes due to exchange rate fluctuations Impact of changes in fair value of interest rate hedges Impact of changes in accounting policies and other |
415.9 4.2 1.4 (3.6) |
(294.6) 19.6 - 1.9 |
(142.2) (63.2) (20.0) 2.3 |
| Closing net financial debt | (1,148.2) | (1,616.1) | (1,566.1) |
The operating segments reported by Imerys correspond to the four business groups followed by the Executive Management in its business reporting: Minerals for Ceramics, Refractories, Abrasives & Foundry; Performance & Filtration Minerals; Pigments for Paper and Materials & Monolithics. The holding structures dedicated to the centralized financing of the Group are no operating segments. In Notes 27 and 28, their aggregates are thus presented in a reconciliation column with inter-segment eliminations.
Revenue from transactions of Imerys with each of its external customers never exceeds a threshold of 10.0% of the Group's revenue.
| (€ millions) | Performance & Filtration Minerals |
Pigments for Paper |
Materials & Monolithics |
Minerals for Ceramics, Refractories, Abrasives, & Foundry |
Inter segment eliminations & holdings aggregates |
Total Imerys group |
|---|---|---|---|---|---|---|
| External revenue | 247.0 | 308.9 | 443.4 | 374.7 | - | 1,374.0 |
| Sales of goods | 218.4 | 249.5 | 402.6 | 344.2 | - | 1,214.7 |
| Rendering of services | 28.6 | 59.4 | 40.8 | 30.5 | - | 159.3 |
| Inter-segment revenue | (0.7) | 0.6 | - | 8.5 | (8.4) | - |
| Revenue | 246.3 | 309.5 | 443.4 | 383.2 | (8.4) | 1,374.0 |
| Current operating income of which share in net income of associates |
9.1 0.1 |
15.0 1.5 |
84.3 - |
13.8 0.1 |
(12.2) (0.8) |
110.0 0.9 |
| Operating income | 0.6 | 0.2 | 91.7 | (14.6) | (14.5) | 63.4 |
| of which amortization, depreciation and impairment losses | (19.0) | (25.7) | (18.2) | (26.6) | (1.0) | (90.5) |
| of which net operating provisions | (0.5) | (4.8) | (2.0) | 0.3 | (0.4) | (7.4) |
| Financial income (loss) | (3.1) | 6.2 | (1.7) | (8.0) | (38.3) | (44.9) |
| Interest revenue | 0.1 | 0.1 | 0.1 | 0.4 | 0.2 | 0.9 |
| Interest expenses | (0.2) | (0.4) | (0.6) | (1.2) | (36.5) | (38.9) |
| Income taxes | (0.3) | 13.1 | (30.8) | 5.1 | 5.8 | (7.1) |
| Net income | (2.8) | 19.5 | 59.2 | (17.5) | (47.0) | 11.4 |
| Minerals for | Inter | |||||
|---|---|---|---|---|---|---|
| Ceramics, | segment | |||||
| Performance | Pigments | Materials | Refractories, | eliminations | Total | |
| & Filtration | for | & | Abrasives, | & holdings | Imerys | |
| (€ millions) | Minerals | Paper | Monolithics | & Foundry | aggregates | group |
| External revenue | 283.9 | 364.5 | 542.9 | 582.8 | - | 1,774.1 |
| Sales of goods | 246.7 | 304.0 | 500.3 | 532.1 | - | 1,583.1 |
| Rendering of services | 37.2 | 60.5 | 42.6 | 50.7 | - | 191.0 |
| Inter-segment revenue | 7.5 | 1.0 | 0.2 | 12.7 | (21.4) | - |
| Revenue | 291.4 | 365.5 | 543.1 | 595.5 | (21.4) | 1,774.1 |
| Current operating income | 28.9 | 34.5 | 125.3 | 75.6 | (22.8) | 241.5 |
| of which share in net income of associates | - | 3.1 | 0.8 | 1.0 | - | 4.9 |
| Operating income | 21.9 | 21.2 | 125.3 | 75.5 | (25.2) | 218.7 |
| of which amortization, depreciation and impairment losses | (16.0) | (26.5) | (20.9) | (30.4) | (1.2) | (95.0) |
| of which net operating provisions | 0.3 | (2.7) | (1.5) | 6.1 | 0.2 | 2.4 |
| Financial income (loss) | 2.0 | 3.8 | (2.4) | (1.5) | (22.5) | (20.6) |
| Interest revenue | 0.1 | 0.2 | 0.1 | 0.8 | 0.8 | 2.0 |
| Interest expenses | (0.3) | (0.6) | (1.0) | (0.9) | (26.6) | (29.4) |
| Income taxes | (5.8) | (1.2) | (40.9) | (19.7) | 14.8 | (52.8) |
| Net income | 18.1 | 23.8 | 82.0 | 54.3 | (32.9) | 145.3 |
| Minerals for | Inter | |||||
|---|---|---|---|---|---|---|
| Ceramics, | segment | |||||
| Performance | Pigments | Materials | Refractories, | eliminations | Total | |
| & Filtration | for | & | Abrasives, | & holdings | Imerys | |
| (€ millions) | Minerals | Paper | Monolithics | & Foundry | aggregates | group |
| External revenue | 559.2 | 717.3 | 1,040.7 | 1,132.0 | - | 3,449.2 |
| Sales of goods | 484.6 | 577.4 | 950.5 | 1,030.7 | - | 3,043.2 |
| Rendering of services | 74.6 | 139.9 | 90.2 | 101.3 | - | 406.0 |
| Inter-segment revenue | 12.3 | 1.9 | 0.7 | 27.9 | (42.8) | - |
| Revenue | 571.5 | 719.2 | 1,041.4 | 1,159.9 | (42.8) | 3,449.2 |
| Current operating income | 46.1 | 60.2 | 228.3 | 127.8 | (47.8) | 414.6 |
| of which share in net income of associates | - | 7.2 | 1.3 | 1.9 | - | 10.4 |
| Operating income | (20.6) | 32.6 | 222.2 | 121.5 | (56.0) | 299.7 |
| of which amortization, depreciation and impairment losses | (33.7) | (56.9) | (38.4) | (61.8) | (2.4) | (193.2) |
| of which net operating provisions | 0.4 | (3.6) | (0.3) | 5.7 | (0.9) | 1.3 |
| Financial income (loss) | 6.7 | (13.6) | (5.2) | 5.5 | (40.5) | (47.1) |
| Interest revenue | 0.3 | 0.5 | 0.6 | 1.4 | 1.3 | 4.1 |
| Interest expenses | (0.7) | (1.2) | (1.7) | (2.0) | (54.3) | (59.9) |
| Income taxes | (3.7) | (19.6) | (67.7) | (27.0) | 29.1 | (88.9) |
| Net income | (17.6) | (0.6) | 149.3 | 100.0 | (67.4) | 163.7 |
| Minerals for | Inter | |||||
|---|---|---|---|---|---|---|
| Performance | Pigments | Materials | Ceramics, Refractories, |
segment eliminations |
Total | |
| & Filtration | for | & | Abrasives, | & holdings | Imerys | |
| (€ millions) | Minerals | Paper | Monolithics | & Foundry | aggregates | group |
| Capital employed - Assets | 702.5 | 920.1 | 856.1 | 1,286.7 | 1.5 | 3,766.9 |
| Goodwill (1) | 145.7 | 150.5 | 189.7 | 420.5 | 0.7 | 907.1 |
| Property, plant and equipment and intangible assets (2) | 398.3 | 534.5 | 337.6 | 431.3 | 9.9 | 1,711.6 |
| Inventories | 52.1 | 86.2 | 107.6 | 243.5 | - | 489.4 |
| Trade receivables | 86.9 | 76.1 | 191.2 | 141.4 | (5.2) | 490.4 |
| Other receivables - current and non-current | 19.5 | 72.8 | 30.0 | 50.0 | (3.9) | 168.4 |
| Investments in associates | 9.7 | 32.7 | 7.1 | 5.9 | (0.8) | 54.6 |
| Segment assets | 712.2 | 952.8 | 863.2 | 1,292.6 | 0.7 | 3,821.5 |
| Unallocated assets | 293.4 | |||||
| Total assets | 4,114.9 | |||||
| Capital employed - Liabilities | 78.2 | 65.6 | 171.4 | 163.6 | 6.8 | 485.6 |
| Trade payables | 46.6 | 55.7 | 90.8 | 86.7 | (15.6) | 264.2 |
| Other debts - current and non-current | 24.8 | 29.3 | 79.4 | 56.0 | 7.2 | 196.7 |
| Income taxes payable | 6.8 | (19.4) | 1.2 | 20.9 | 15.2 | 24.7 |
| Provisions | 70.6 | 56.6 | 66.4 | 79.1 | 51.0 | 323.7 |
| Segment liabilities | 148.8 | 122.2 | 237.8 | 242.7 | 57.8 | 809.3 |
| Unallocated liabilities | 1,497.5 | |||||
| Total current and non-current liabilities | 2,306.8 | |||||
| Total capital employed | 624.3 | 854.5 | 684.7 | 1,123.1 | (5.3) | 3,281.3 |
| (1) Increases in goodwill. | 7.6 | - | - | (1.4) | - | 6.2 |
| (2) Acquisitions of property, plant and equipment and intangible assets. | (8.3) | (18.4) | (21.8) | (29.3) | (1.2) | (79.0) |
| Minerals for Ceramics, |
Inter segment |
|||||
|---|---|---|---|---|---|---|
| Performance | Pigments | Materials | Refractories, | eliminations | Total | |
| (€ millions) | & Filtration Minerals |
for Paper |
& Monolithics |
Abrasives, & Foundry |
& holdings aggregates |
Imerys group |
| Capital employed - Assets | 748.8 | 966.0 | 943.7 | 1,361.7 | 3.1 | 4,023.3 |
| Goodwill (1) | 185.4 | 144.4 | 192.6 | 411.6 | 0.7 | 934.7 |
| Property, plant and equipment and intangible assets (2) | 377.6 | 536.8 | 334.1 | 428.3 | 6.5 | 1,683.3 |
| Inventories | 65.1 | 99.5 | 139.4 | 226.4 | - | 530.4 |
| Trade receivables | 106.7 | 100.2 | 245.8 | 236.1 | (12.7) | 676.1 |
| Other receivables - current and non-current | 14.0 | 85.1 | 31.8 | 59.3 | 8.6 | 198.8 |
| Investments in associates | - | 33.7 | 6.4 | 7.2 | - | 47.3 |
| Segment assets | 748.8 | 999.7 | 950.1 | 1,368.9 | 3.1 | 4,070.6 |
| Unallocated assets | 251.9 | |||||
| Total assets | 4,322.5 | |||||
| Capital employed - Liabilities | 80.2 | 98.4 | 214.8 | 206.8 | (27.9) | 572.3 |
| Trade payables | 46.2 | 62.5 | 120.1 | 116.1 | (21.1) | 323.8 |
| Other debts - current and non-current | 29.0 | 39.6 | 91.3 | 66.8 | 3.9 | 230.6 |
| Income taxes payable | 5.0 | (3.7) | 3.4 | 23.9 | (10.7) | 17.9 |
| Provisions | 62.7 | 56.3 | 70.3 | 69.2 | 64.7 | 323.2 |
| Segment liabilities | 142.9 | 154.7 | 285.1 | 276.0 | 36.8 | 895.5 |
| Unallocated liabilities | 1,841.4 | |||||
| Total current and non-current liabilities | 2,736.9 | |||||
| Total capital employed | 668.6 | 867.6 | 728.9 | 1,154.9 | 31.0 | 3,451.0 |
| (1) Increases in goodwill. | 6.4 | 0.6 | 4.3 | 97.4 | - | 108.7 |
| (2) Acquisitions of property, plant and equipment and intangible assets. | (31.2) | (44.1) | (27.8) | (37.3) | (1.0) | (141.4) |
| Minerals for Ceramics, |
Inter segment |
|||||
|---|---|---|---|---|---|---|
| Performance | Pigments | Materials | Refractories, | eliminations | Total | |
| & Filtration | for | & | Abrasives, | & holdings | Imerys | |
| (€ millions) | Minerals | Paper | Monolithics | & Foundry | aggregates | group |
| Capital employed - Assets | 743.8 | 967.2 | 885.9 | 1,369.8 | 16.2 | 3,982.9 |
| Goodwill (1) | 144.4 | 148.2 | 188.7 | 417.4 | 0.7 | 899.4 |
| Property, plant and equipment and intangible assets (2) | 422.9 | 551.0 | 343.6 | 427.5 | 9.6 | 1,754.6 |
| Inventories | 71.8 | 108.1 | 136.7 | 294.4 | - | 611.0 |
| Trade receivables | 86.6 | 83.2 | 186.5 | 180.7 | (13.7) | 523.3 |
| Other receivables - current and non-current | 18.1 | 76.7 | 30.4 | 49.8 | 19.6 | 194.6 |
| Investments in associates | - | 36.3 | 7.1 | 6.6 | - | 50.0 |
| Segment assets | 743.8 | 1,003.5 | 893.0 | 1,376.4 | 16.2 | 4,032.9 |
| Unallocated assets | 315.0 | |||||
| Total assets | 4,347.9 | |||||
| Capital employed - Liabilities | 84.6 | 101.3 | 195.3 | 207.3 | (23.9) | 564.6 |
| Trade payables | 49.9 | 67.4 | 111.1 | 131.0 | (21.5) | 337.9 |
| Other debts - current and non-current | 33.4 | 40.7 | 81.6 | 55.1 | 2.5 | 213.3 |
| Income taxes payable | 1.3 | (6.8) | 2.6 | 21.2 | (4.9) | 13.4 |
| Provisions | 70.4 | 47.5 | 66.7 | 69.1 | 54.0 | 307.7 |
| Segment liabilities | 155.0 | 148.8 | 262.0 | 276.4 | 30.1 | 872.3 |
| Unallocated liabilities | 1,929.3 | |||||
| Total current and non-current liabilities | 2,801.6 | |||||
| Total capital employed | 659.2 | 865.9 | 690.6 | 1,162.5 | 40.1 | 3,418.3 |
| (1) Increases in goodwill. | 6.6 | 1.2 | 3.8 | 99.7 | - | 111.3 |
| (2) Acquisitions of property, plant and equipment and intangible assets. | (53.0) | (71.0) | (46.9) | (72.1) | (4.9) | (247.9) |
| (€ millions) | June 30, 2009 | June 30, 2008 | 2008 |
|---|---|---|---|
| France | 362.7 | 447.9 | 841.6 |
| Other European countries | 476.6 | 692.9 | 1,327.7 |
| North America | 308.0 | 367.1 | 736.2 |
| Asia - Oceania | 159.2 | 192.4 | 394.6 |
| Other countries | 67.5 | 73.8 | 149.1 |
| Revenue by geographical location of the Group's entities | 1,374.0 | 1,774.1 | 3,449.2 |
| France | 298.8 | 359.9 | 667.0 |
| Other European countries | 489.3 | 719.7 | 1,368.5 |
| North America | 287.6 | 344.1 | 693.5 |
| Asia-Oceania | 189.0 | 233.3 | 482.8 |
| Other countries | 109.3 | 117.1 | 237.4 |
| Revenue by geographical location of the customers | 1,374.0 | 1,774.1 | 3,449.2 |
| Property, plant and equipment and intangible |
|||
|---|---|---|---|
| (€ millions) | Goodwill | assets | Total |
| France | 169.3 | 389.1 | 558.4 |
| Other European countries | 318.9 | 404.9 | 723.8 |
| North America | 124.5 | 518.8 | 643.3 |
| Asia-Oceania | 225.3 | 150.4 | 375.7 |
| Other countries | 61.4 | 291.4 | 352.8 |
| Total as of December 31, 2008 | 899.4 | 1,754.6 | 2,654.0 |
| France | 169.4 | 373.7 | 543.1 |
| Other European countries | 340.4 | 454.1 | 794.5 |
| North America | 155.5 | 441.5 | 597.0 |
| Asia-Oceania | 209.3 | 139.2 | 348.5 |
| Other countries | 60.1 | 274.8 | 334.9 |
| Total as of June 30, 2008 | 934.7 | 1,683.3 | 2,618.0 |
| France | 169.4 | 382.4 | 551.8 |
| Other European countries | 328.0 | 409.4 | 737.4 |
| North America | 130.1 | 490.0 | 620.1 |
| Asia-Oceania | 216.5 | 145.9 | 362.4 |
| Other countries | 63.1 | 283.9 | 347.0 |
| Total as of June 30, 2009 | 907.1 | 1,711.6 | 2,618.7 |
The related parties of Imerys are the Canadian group Power and the Belgian group Frère-CNP. These groups are the ultimate controlling parties of Imerys. Through their joint venture Parjointco, they exercise joint control on the Swiss group Pargesa that controls Imerys through a direct investment and an indirect investment in the Belgian group GBL; in this respect, Pargesa is a related party. The GBL group is a related party as it exercises a direct significant influence on Imerys. Imerys and the Pargesa group terminated by mutual agreement effective January 1, 2008 the strategic consulting services agreement provided by the Pargesa group. As a consequence, no item remains recognized in profit or loss and in the statement of financial position with respect to this agreement since 2008.
The members of the key management personnel qualifying as related parties are the members of the Board of Directors and the 9 members of the Executive Committee, including the Chief Executive Officer who is also member of the Board of Directors. Remuneration and assimilated benefits granted to these related parties are disclosed in Note 33 of the annual report.
The post-employment benefit plans for the benefit of Imerys employees are related parties. The amount of the contributions to external funds recognized as an expense as of June 30, 2009 amounts to €10.6 million (€12.2 million as of June 30, 2008 and €34.5 million as of December 31, 2008), of which €6.7 million to Imerys UK Pension Fund Trustees Ltd. / ECC Combined Investment Fund (Great Britain) (€7.9 million as of June 30, 2008 and €18.2 million as of December 31, 2008) and €2.3 million to Sun Trust Bank (United States) (€2.0 million as of June 30, 2008 and €12.3 million as of December 31, 2008).
The FCPE Imerys Relais 2006 was created to collect the employee subscriptions for the Employee Shareholding Plan 2006. The FCPE Imerys Relais 2006 was merged into the FCPE Imerys Actions on February 20, 2007. It is managed by BNP Paribas Asset Management SAS. The management of the FCPE Imerys Actions is controlled by a Supervisory Board of 14 members, equally made up of shareholders' and Imerys representatives. As Imerys exercises together with the shareholders a joint control over the FCPE Imerys Actions, the FCPE Imerys Actions is a related party. The amounts recognized as of June 30, 2009 for the FCPE Imerys Actions are insignificant.
ERNST & YOUNG Audit
Faubourg de l'Arche 11, allée de l'Arche 92037 Paris - La Défense Cedex A simplified limited liability company with open stock
The Auditors A member of the Versailles regional institute of auditors
185, avenue Charles-de-Gaulle 92524 Neuilly-sur-Seine Cedex A société anonyme with a €1,723,040 share capital
The Auditors A member of the Versailles regional institute of auditors
Period from January 1, 2009 to June 30, 2009
This is a free translation into English of the statutory auditors' review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction and construed in accordance with French law and professional auditing standards applicable in France.
To the Shareholders,
In accordance with our appointment as statutory auditors by your Annual General Meeting and pursuant to Article L.451- 1-2 III of French Monetary and Financial Code (Code Monétaire et Financier), we hereby report to you on:
These condensed half-year consolidated financial statements are the responsibility of the Board of Directors. They were prepared in a context of heavy market volatility, and an economical and financial crisis characterised by an uncertain outlook regarding the future, a situation which already prevailed at the December 31, 2008 year-end. Our role is to express a conclusion of these financial statements based on our review.
We conducted our review in accordance with professional practice standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical procedures. A review is substantially less in scope than an audit conducted in accordance with professional practice standards applicable in France. Consequently, the level of assurance we obtained about whether the condensed half-year consolidated financial statements taken as a whole are free of material misstatements is moderate, and lower than that obtained in an audit.
Based on our review, no material misstatement has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared in accordance with IAS 34 of the IFRSs, as adopted by the European Union with respect to interim financial reporting.
Without calling the above conclusion into question, we hereby draw your attention to Note 2 – Changes in accounting methods to the condensed half-year consolidated financial statements related to the changes in accounting methods of the period.
We have also verified the information given in the half-year management report commenting the condensed half-year consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements.
Paris-La Défense and Neuilly-sur-Seine, August 27, 2009 The Statutory Auditors
ERNST & YOUNG Audit Jean-Roch VARON
Deloitte & Associés Arnaud de PLANTA
154, rue de l'Université - F - 75007 Paris Tel: +33 (0)1 49 55 63 00 - Fax: +33 (0)1 49 55 63 01 - www.imerys.com
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