Annual Report • Apr 23, 2015
Annual Report
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2014 Combined sales (before intra-Group eliminations)
101%
74%
Net financial debt / Total equity (consolidated)
60%
60% 70% 80% 90% 100% 110%
65%
2010 2011 2012 2013 2014 50%
57%
* 2012 figures are restated for IAS 19. 2010 and 2011 figures have not been restated
| - | |
|---|---|
| INTRODUCTION | 02 |
|---|---|
| Profile | 03 |
| Highlights for 2014 and the start of 2015 | 04 |
| Letter from the Chairman of the Board of Directors and the Chief Executive Officer | 11 |
| Report by the Board of Directors * | 14 |
| GROUP STRATEGY AND ACTIVITIES | 30 |
| Group strategy | 32 |
| Activities | 37 |
| Insulation | 38 |
| Bedding | 40 |
| Flexible Foams | 42 |
| Automotive | 44 |
| RESEARCH AND DEVELOPMENT | 46 |
| HUMAN RESOURCES & PRODUCTION PLANTS | 48 |
| CORPORATE GOVERNANCE STATEMENT * | 54 |
| Applicable rules and reference code | 55 |
| Internal control and risk management | 55 |
| External audit | 56 |
| Composition of the Board of Directors | 57 |
| Committees set up by the Board of Directors | 60 |
| Audit Committee | 60 |
| Remuneration and Nomination Committee | 60 |
| Executive Management Committee | 61 |
| Remuneration report | 62 |
| Transactions and other contractual ties between the Company and affiliated companies and members of the Board of Directors or members of the Management Committee |
68 |
| Insider trading and market manipulation | 68 |
| Relationships with the reference shareholders and other elements related to possible public takeover bids |
68 |
| LEXICON | 70 |
| FINANCIAL REPORT * | 72 |
| KEY FIGURES | 170 |
* These chapters form an essential part of the Report of the Board of Directors and contain the information required by the Belgian Company Code regarding consolidated accounts.
This document contains specific quantitative and/or qualitative futuristic statements and expectations regarding results and the financial state of affairs of the Recticel Group. Such forward-looking statements are not a guarantee for future achievements considering the future holds several risks and uncertainties that relate to future events and developments. The reader is reminded to take sufficient care with the interpretation of these future expectations because the actual results and events may be influenced in the future by one or more factors, both external and internal. As a result, the actual results and performances may possibly deviate considerably from the predicted expectations, objectives and possible statements. The most important and most relevant risk and uncertainty factors are described in more detail in the Chapter "Risk factors and risk management" of the financial section of this Annual Report. Recticel is not committed in any manner possible to updating possible changes and developments in these risk factors, nor to releasing the possible impact on the prospects, either immediately or with some delay.
Recticel seeks to make an essential difference in the daily life of everyone.
The Group is present in four selected application areas: Insulation, Bedding, Flexible Foams and Automotive. Although the Group primarily produces semi-finished products (Flexible Foams and Automotive), it also manufactures finished goods and durable goods for end users (Bedding and Insulation). Its core competence relies on the conversion of polyurethane chemistry.
Mattresses and slat bases are marketed in the Bedding division under well-known brand names (such as Beka®, Lattoflex®, Literie Bultex®, Schlaraffia®, Sembella®, Superba®, Swissflex®, …) and ingredient brands (GELTEX Inside®). The Insulation division provides finished high quality thermal insulation products that can immediately be used in building projects and renovations. These insulation products are marketed under well-known brand and product names: Eurowall®, Powerroof®, Powerdeck®, Powerwall®, Recticel Insulation®,... Technological progress and innovation have led to breakthrough at the biggest names in the Automotive industry thanks to Colofast®, ColoSense® and ColoSense® Lite.
Recticel emphasizes on innovation, technological progress and superior product quality and customer service.
As a market leader in most of its activities, Recticel currently employs on a combined basis (including its pro rata share in joint ventures) 7,578 people in 99 sites, spread over 27 countries. The Group's global presence is focused mainly in Europe, but it also has several activities in the United States and in Asia. In 2014 the Group realized combined sales of EUR 1,280.1 million (IFRS 11 consolidated sales: EUR 983.4 million).
Recticel aims to achieve added value and a steady and profitable growth for its clients and shareholders in a sustainable and balanced manner.
Recticel (EuronextTM: REC.BE – Reuters: RECTt.BR – Bloomberg: REC.BB) is listed on the EuronextTM stock exchange in Brussels.
First quarter 2015 trading update Ex-coupon date Annual General Meeting Dividend payment date First half-year 2015 results Third quarter 2015 trading update 22 April 2015 (before opening of the stock exchange) 23 April 2015 26 May 2015 (at 10:00 AM CET) 02 June 2015 28 August 2015 (before opening of the stock exchange) 30 October 2015 (before opening of the stock exchange)
Recticel reaches a settlement with the European Commission in the Commission's polyurethane foam investigation, which will bring the matter to a close. Under the settlement decision, Recticel's effective total fine, including Recticel's 50% share of the fine relating to Eurofoam's conduct, amounts to EUR 26,976,500.
Recticel Insulation introduces 3 new innovative products at Batibouw, the leading fair for the construction and renovation sector in Belgium. Recticel Insulation presented upgraded products with improved insulation values (λ−lambda), with new dimensions and with a better pressure resistance. At the same time Recticel Insulation also introduced its new external thermal insulation composite solution (ETICS) for the Belgian market. Finally, Recticel Insulation announced also the launch of a specific product line, called "Home", for the promising Do-It-Yourself market.
February
Beka® and Lattoflex®, two leading mattress brands in Belgium, launch a global TV commercial for their new innovative GELTEX® Inside mattresses for the Belgian market. With this innovative concept, the Group confirms its European leadership in the higher market segment of the bedding sector. These GELTEX® Inside mattresses are distributed via the ZNOOOZ® sleep comfort store concept. The ZNOOOZ® bed store concept, which has been developed by Recticel, has been gradually deployed in close cooperation with selected independent sleep specialist distribution partners in Belgium and the Grand Duchy of Luxembourg. The ZNOOOZ® stores will exclusively focus on the distribution of top quality sleep systems in which the patented Recticel technology GELTEX® Inside is incorporated. The ZNOOOZ® stores were introduced in October 2013. Early 2014 some 50 different ZNOOOZ® selling points were operational throughout Belgium. (www.znoooz.be)
Recticel Bedding (Schweiz) AG announced its intention to rationalize its Swiss bedding activities by closing its production and logistics operations in Büron (Switzerland). These activities have in the meantime been transferred to other sites of the Group.
Recticel Bedding (Schweiz) AG received the Red Dot Design Award 2014 in the category Product Design, for its novelty Swissflex® slat base uni-22_95 bridge, a revolutionary selfregulating relief and full-body support, featuring a perfect ergonomic design. The Red Dot Design Award is one of the most famous, prestigious and therefor, desired awards worldwide.
Recticel BV announced its intention to streamline its converting activities by closing its foam converting factory of Wijchen (The Netherlands). In the meantime these activities have been fully integrated in the other existing operations.
Recticel Insulation becomes a member of the Energy Saving Pioneers coalition from Bond Beter Leefmilieu. The Energy Saving Pioneers coalition is an initiative by Bond Beter Leefmilieu (BBL), the Federation for a Better Environment, which brings together companies who are working with BBL for a more ambitious energy-saving policy in Belgium. In addition, they are also lobbying for a mandatory European energy-saving target of 40% by 2030. Recticel Insulation supports this initiative and has signed the mission statement with its ten policy recommendations.
March
http://www.energysavingpioneers.be/leden
Recticel is nominated for the new multi-year contract for the production of instrument panel trim parts for a new Scania truck model. This contract represents estimated cumulative life time sales of approximately EUR 7 million. The interior trim parts will be supplied from the existing plant in the Czech Republic on the basis of the patented Colo-Sense® Lite Spray technology.
Recticel is also nominated for the production of door panel skins of the new Renault Scenic. These skins will be produced in the Czech Republic on the basis of the patented Colo-Sense® Lite Spray technology. This is the first time that Recticel Automotive Interiors will work with Renault.
In addition, Recticel is nominated for the new multiyear contract for the production of instrument panel trim parts for the Volkwagen Magotan for the Chinese market. This contract represents estimated cumulative life time sales of approximately EUR 75 million. The interior trim parts will be supplied from the Changchun plant in the People's Republic of China on the basis of the patented Colo-Sense® Lite Spray technology.
The International Development Center (IDC), Recticel's centralized Research & Development department, officially opens its new Innovation Room in Wetteren (Belgium). The new Innovation Room offers customers and other stakeholders a better insight in the creativity soul of the Recticel organization. Its set-up, divided over the four activity domains of the Group, provides a perfect visualization of the capabilities of the IDC's latest inventions in the world of polyurethanes and its related products.
Mr Ralf Becker (°1960, German) becomes the new Group General Manager Insulation in replacement of Mr Paul Werbrouck who retire after a career of 31 years at Recticel. Mr Ralf Becker is also appointed as member of the Management Committee.
2014 May
The International Development Center (IDC) hosted the Flanders' Drive congress on Plastics, which focused in particular on the creation of light weight solutions. During the congress interesting topics were discussed with respect to the new trends in finding an optimal balance between low material usage, hereby reducing weight, and the maximisation of their mechanical strength. At the end of the day several new spinoff ideas using polyurethanes have been defined after inspiring congress.
June
Recticel is nominated for the new multi-year contract for the production of interior trim parts for the new Peugeot 3008/5005 model. This contract represents estimated cumulative life time sales of approximately EUR 51 million. The interior trim parts will be supplied from the existing plants in the Czech Republic on the basis of the patented Colo-Sense® Lite Spray technology.
6 RECTICEL ANNUAL REPORT 2014
Recticel announced that its German bedding affiliate, Recticel Schlafkomfort GmbH, has reached a settlement with the German Federal Cartel Office ("FCO") in the framework of an investigation the FCO launched into the German bedding market. This settlement brings this matter to a close for Recticel. Under the settlement decision, Recticel Schlafkomfort GmbH's fine amounts to EUR 8.2 million. This fine has been fully paid in September 2014.
After the opening of a first site in Taloja, Navi (Mumbai) in November 2011, Recticel expands its presence in India with the inauguration of a second Flexible Foams converting plant in Neelamangala, at 30 kilometers from Bangalore (India). With this new 3,500 m² site, Recticel wants to further increase its position in one of the fastest growing economies. Both Indian converting plants are focusing on the transformation of reticulated foam blocks for air filters, which are used as highend air filter foams in the rapidly growing regional motorcycle and automotive sector.
Recticel appoints Mr Bart Massant (°1963, Belgian) as Group Human Resources & Communications Manager. Mr Bart Massant becomes a member of the Management Committee.
September
Recticel Insulation extends its thermal insulation product range for the do-it-yourself market, by introducing new, easy-to-install DIY products, all having a core in PIR foam that offers a perfect thermal shield. Depending on the final application, the DIY product range includes: Combodeco® Home, a decorative insulation system; Comboprime® Home, a ready to finish in one go insulation solution; Combobase® Home, an insulation and floor slab in one panel; and Fitforall® Home, the universal PIR insulation panel.
http://www.recticelinsulationhome.be/
2014
Recticel Insulation (UK) officially opens its new 56,000 square feet warehouse extension, engineering and office facilities, which is a part of a broader capacity improvement project on its site in Stoke-on-Trent (United Kingdom). With this new investment Recticel Insulation UK is now in a position to meet the increasing demand from the growing construction market. As a direct result of this project Recticel Insulation (UK) has created 21 permanent jobs.
October
Recticel Automobilsysteme GmbH, a fully owned subsidiary of the Recticel Group, announced its intention to close down the remainder of its production operations (25 jobs) in Rheinbreitbach (Germany). This final restructuring step in Rheinbreitbach relates to the announcement made on 07 December 2011, saying that the Automotive Interiors division had not been nominated for the production of interior components for the new Mercedes C-class, hence the need for the initial restructuring.
Recticel Automotive is present at IZB, the International Suppliers Fair in Wolfsburg (Germany). Apart from the lightweight skins and the third generation sprayed skins, Recticel Automotive showed its novelty innovation; the metallic effect - a modern spray process based on two-tone, whereby the second color is enriched with a metallic effect and an individual grain structure, hereby superseding conventional trim ledges.
Dr. Martin Winterkorn CEO Volkswagen AG, inspecting the instrument panel of the new VW Passat
Recticel's Soundcoat Company, part of the Flexible Foams Division, signed a three-year agreement with SpaceX Inc., the Californianbased space transport services company. Soundcoat and SpaceX have agreed on supply of high-performing thermo-acoustic insulation for the next 17 space launches, which are scheduled for completion by mid-2016. This multimillion US\$ contract has further upward potential if SpaceX meets or surpasses its launch targets.
December
Recticel is nominated for the essenscia Innovation Award 2014. essenscia vzw/asbl, is the Belgian Federation for Chemistry and Life Sciences industries, a multisectoral umbrella organisation that represents the numerous sectors of activities in the field of chemicals and the life sciences. Through this initiative, the federation intends to encourage Belgian companies to innovate even more and to protect their intellectual assets.
Recticel announces that it has won a new multiyear contract for the production of interior trim parts for the new BMW X3 model. This contract represents estimated cumulative life time sales of approximately EUR 84 million. The interior trim parts will be supplied from the existing plants in China and the USA on the basis of the patented Colo-Sense® Lite Spray technology.
Recticel is also nominated for the new multi-year contract for the production of instrument panel trim parts for the Volkwagen Tiguan. This contract represents estimated cumulative life time sales of approximately EUR 20 million. The interior trim parts will be supplied from the existing plants in the Czech Republic on the basis of the patented Colo-Sense® Lite Spray technology.
Recticel appoints Mr Marc Clockaerts (°1950, Belgian) as Group General Manager Flexible Foams in replacement of Mr Rik De Vos, who left the company. At the same time, Recticel appoints Mr Jan Meuleman (°1965, Belgian) as Group General Manager Automotive in replacement of Marc Clockaerts. Mr Jan Meuleman becomes a member of the Management Committee.
Jan Meuleman
Marc Clockaerts
Recticel announces that it has sold its 50% participation in the joint venture company Kingspan Tarec Industrial Insulation (KTII) to its joint venture partner Kingspan Group plc, who consequently will own 100% of the shares of KTII, who has a production site in Turnhout (Belgium) and in Glossop (United Kingdom).
In response to the changing European car manufacturing landscape, Proseat, the 51/49 joint venture between Recticel and Woodbridge, announces its intention to close its plant in Rüsselsheim (Germany). All 77 employees at the site have been put under risk of redundancy.
Recticel announces it will increase its share capital by EUR 75 million, through the issuance of new shares. The proceeds of the capital increase will be used to support Recticel's growth strategy and to strengthen its balance sheet. The newly issued shares will be listed on Euronext Brussels in the course of May 2015.
March
At the occasion of Batibouw, the leading fair for the construction and renovation sector in Belgium, Recticel Insulation introduces L-MentsTM, a new innovative roof thermal insulation solution which meets very high insulation standards for tomorrow's nearly zero-energy buildings. Recticel Insulation presents fully integrated and self-supporting roof thermal insulation structures for pitched roofs. These L-MentsTM building elements have the characteristic that they offer a truly time and cost-efficient solution for the instalment of pitched roofs. L-MentsTM can be used for new builds as well as for renovation projects.
Proseat starts production at its new plant in Schwarzheide (Germany), a green field project which was launched at the end of 2013 in the industrial park of BASF Schwarzheide (Germany). The new plant will focus on the serial production of EPP parts for the automotive sector. This new production facility will focus on the newest EPP process technology which offers a solution that fits the trend of reduced CO2 emissions by offering low weight products with favorable shock absorption capabilities. In addition, this plant will have the advantage of supply of raw materials from the production unit of BASF on site via pipeline, which significantly reduces the logistic costs.
Mr. Etienne Davignon Chairman of the Board of Directors
Chief Executive Officer
Dear Employee, Dear Shareholder,
Dear Reader,
2014 has been an important year for Recticel.
In a still very volatile business environment due to economic, financial and geopolitical uncertainties, the business, entirely geared towards slow moving consumer goods and investment goods, most of it in Europe, has grown again in 2014 by +1.7% after having shrunk in 2012 and 2013.
On January 29th and August 20th respectively, the Group has announced the settlements in the context of the EU Commission cartel investigation in the European Flexible Foams market and of the BundesKartelAmt cartel investigation in the German Bedding market, bringing these two historical liabilities to an end. Moreover, significant progresses have been accomplished in the simplification and rationalisation of the Group.
As a consequence, the Board of Directors has decided that it is now appropriate to launch a €75 million capital increase in order to further the execution of the Group strategic plan, to continue to grow in Insulation, and to reinforce the growth momentum initiated, among others, by recently introduced innovations such as Geltex® Inside in Bedding. Mr. Olivier Chapelle
Brussels, April 22nd 2015
After a strong first quarter 2014, supported by very favourable weather conditions, leading to sales turnover growth of +4.9% y-o-y, the economic environment has deteriorated in the second quarter (-0.9% y-o-y), before returning to growth in the third quarter (+0.5% y-o-y) and fourth quarter (+2.3% y-o-y). As a consequence, sales have increased by 1.7% in 2014. The Automotive market, which had shrunk in Europe for 6 consecutive years, has bounced back in 2014 by about 6%, with positive impacts on Automotive Interiors, on Proseat and on the technical foam segment of the Flexible Foams division. The Bedding division has maintained its volumes and sales, in negative European Bedding markets. And the Insulation division has grown by 3% despite very sluggish construction markets, especially in France and Belgium. Raw material prices, which were relatively cheap in the first half of the year, have sharply increased in the second half on the back of supply chain issues regarding the polyols, putting profitability under pressure.
During 2014, the execution of our strategic plan has remained our guideline: prioritisation of resource allocation to the highest value creation segments and projects, expansion outside of Europe, rationalization of the company structure and industrial footprint, and innovation.
Our level of investment has been adapted to the economic environment, and prioritised according to our segment strategy. The capacity increase in our Stoke-on-Trent insulation facility (UK) is taking place, and will be ready to start up in May 2015. A new EPP (Expanded Poly Propylene) production facility has been decided and set up by Proseat, co-located in the Schwarzheide site (Germany) of our supplier BASF, in order to provide light weight solutions to its automotive seating clients. Production has started in February 2015.
Expansion outside of Europe has happened in Bangalore (India) where Flexible Foam has started up a second converting after having opened Taloja in 2012. A new Automotive Interior facility is planned to be started up in the second quarter of 2015 in Changchun, China, to supply VW and Volvo.
Rationalization efforts have continued in 2014 to adapt our industrial footprint and workforce to the market needs. In this respect, we have closed our Flexible Foam facility in Wijchen (NL) and discontinued our Bedding production operations in Büron (CH). We have also implemented 75% of the restructuring in our Automotive Interiors plant of Rheinbreitbach (Germany), the full closure of which has been announced in October 2014, to happen by the end 2015. In parallel, Proseat has announced the closure of its Rüsselsheim operations (Germany), to take place by June 2015.
To further simplify the company, and increase the focus on its building insulation activities, Recticel has announced on 18 February 2015 that it has sold its 50% participation in the joint venture company Kingspan Tarec Industrial Insulation (KTII) to its joint venture partner Kingspan Group plc.
Key inroads have been accomplished in Innovation, where we have measured the impact of the most recently introduced innovations, and pressed on with further programs. Sales of Geltex®, the new foam introduced in 2013 in all our Bedding markets, have grown by 55% to reach €47m in 2014. ColoSense® Lite, high quality/light weight skins have been recognised by multiple premium OEM's contracts to equip Porsche, BMW, Mercedes, Volvo, VW. In 2014, new programs have secured with Renault, VW and Peugeot. The order book represents now more than €600m sales over 7 years. In Flexible Foams, deliveries of our Soundcoat® fuselage acoustic solution to Boeing are progressing well, and a new USD 1.5m annual sales contract with SpaceX has been secured.
On 29 January 2014, the EU Commission has announced a settlement of €27m with Recticel in the context of the investigation in the Flexible Foams markets for alleged cartel activities. Two of the three fine instalments have already been paid to date. On 20 August 2014, the BundesKartellAmt has announced a settlement of €8.2m in the context of the investigation in the German Bedding markets for alleged cartel activities. The fine has been paid in full in October 2014. Having put these two liabilities behind, now fully booked in the accounts, Recticel can now look forward and plan its next development steps with more serenity now that these cases, and their uncertainties, are behind.
To that extent, the Board of Directors has decided to launch a €75m capital increase by means of a public rights' issue on 23 April 2015. This will allow the company to pursue its growth strategy, to finalize its streamlining efforts and to rebalance its financing structure.
After a few months into 2015, a more supportive market environment and positive developments in all divisions can be observed. Although visibility remains weak due to many existing or new geopolitical developments in the world, industrial markets are progressively improving in Europe along with consumer confidence, on the back of a cheaper oil price and more competitive Euro valuation. In that context, Recticel expects its activity to positively develop in 2015, and the Management Committee and the Board of Directors are confident that the Group will be able to leverage the upcoming market opportunities.
Etienne Davignon has served as Director of the Company since 1992 and became Chairman of the Board 12 years ago. Being convinced that Recticel's future development is in very good hands, thanks to its highly competent and motivated management team under the recognised leadership of its CEO, and benefiting from the support of its dedicated Board, Etienne Davignon has estimated that this was the proper time to step down. He and the Board were delighted that Mr Johnny Thijs accepted to take over the Chairmanship and put his respected personality and expertise at the disposal of Recticel.
We want to thank our employees for their contributions in 2014, and our shareholders for their trust and continued support.
Olivier Chapelle Etienne Davignon Chief Executive Officer Chairman of the Board of Directors
| in million EUR | |||
|---|---|---|---|
| FY2013 2 (a) |
FY 2014 (B) |
Δ 2014/2013 (b)/(a)-1 |
|
| Sales | 976.8 | 983.4 | 0.7% |
| Gross profit | 166.9 | 172.2 | 3.2% |
| as % of sales | 17.1% | 17.5% | |
| EBITDA | 13.6 | 36.8 | 169.8% |
| as % of sales | 1.4% | 3.7% | |
| EBIT | (20.9) | 8.8 | n.a. |
| as % of sales | -2.1% | 0.9% | |
| Result of the period (share of the Group) | (36.1) | (9.7) | n.a. |
| Result of the period (share of the Group) - base (per share, in EUR) | (1.27) | (0.34) | n.a. |
| Gross dividend per share (in EUR) | 0.20 | 0.20 | 0.0% |
| Total Equity | 186.8 | 166.2 | -11.0% |
| Net financial debt 1 | 138.2 | 168.3 | 21.8% |
| Gearing ratio | 74.0% | 101.3% |
3 Excluding the drawn amounts under non-recourse factoring/forfeiting programs: EUR 55.1 million per 31 December 2014 and EUR 53.4 million per 31 December 2013.
All comparisons are made with the comparable period of 2013, unless mentioned otherwise. The figures mentioned are audited
For the definition of other used terminology, see lexicon.
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Sales | 632.6 | 626.0 | 1 258.6 | 645.2 | 634.9 | 1 280.1 | 2.0% | 1.4% | 1.7% |
| Gross profit | 95.1 | 103.7 | 198.7 | 108.3 | 105.7 | 214.0 | 13.9% | 2.0% | 7.7% |
| as % of sales | 15.0% | 16.6% | 15.8% | 16.8% | 16.6% | 16.7% | |||
| REBITDA | 33.3 | 39.5 | 72.8 | 38.8 | 27.1 | 65.9 | 16.6% | -31.5% | -9.5% |
| as % of sales | 5.3% | 6.3% | 5.8% | 6.0% | 4.3% | 5.2% | |||
| EBITDA | 20.2 | 7.5 | 27.7 | 26.2 | 23.1 | 49.3 | 29.5% | 208.0% | 77.9% |
| as % of sales | 3.2% | 1.2% | 2.2% | 4.1% | 3.6% | 3.9% | |||
| REBIT | 13.4 | 19.8 | 33.2 | 20.8 | 9.9 | 30.7 | 54.7% | -50.0% | -7.7% |
| as % of sales | 2.1% | 3.2% | 2.6% | 3.2% | 1.6% | 2.4% | |||
| EBIT | (0.8) | (14.5) | (15.3) | 8.1 | 5.3 | 13.4 | - | - | - |
| as % of sales | -0.1% | -2.3% | -1.2% | 1.2% | 0.8% | 1.0% | |||
| Total Equity | 217.3 | 186.8 | 186.8 | 174.1 | 166.2 | 166.2 | -19.9% | -11.0% | -11.0% |
| Net financial debt 1 | 156.1 | 165.1 | 165.1 | 191.8 | 194.5 | 194.5 | 22.9% | 17.8% | 17.8% |
| Gearing ratio | 71.8% | 88.4% | 88.4% | 110.2% | 117.1% | 117.1% |
Excluding the drawn amounts under non-recourse factoring/forfeiting programs: EUR 62.7 million per 31 December 2014 and EUR 59.7 million per 31 December 2013.
Detailed comments on the sales and results of the different segments (IFRS 8) are given in chapter 7 on the basis of the combined figures (joint ventures integrated following the proportionate consolidation method).
Combined Sales: from EUR 1,258.6 million to EUR 1,280.1 million (+1.7%)
There were no material impacts neither from exchange rate differences, nor from changes in the scope of consolidation.
| in million EUR | ||||
|---|---|---|---|---|
| 1Q2014 | 2Q2014 | 3Q2014 | 4Q2014 | |
| Flexible Foams | 156.1 | 144.0 | 144.1 | 148.8 |
| Bedding | 76.0 | 59.4 | 67.5 | 78.8 |
| Insulation | 55.5 | 55.3 | 59.9 | 56.4 |
| Automotive | 68.7 | 71.9 | 59.9 | 63.6 |
| Eliminations | (22.9) | (18.7) | (21.9) | (22.1) |
| TOTAL COMBINED SALES | 333.4 | 311.8 | 309.5 | 325.4 |
| Elimination joint ventures contribution (IFRS 11) |
(77.5) | (73.7) | (70.3) | (75.2) |
| TOTAL CONSOLIDATED SALES | 255.9 | 238.1 | 239.2 | 250.2 |
| in million EUR | ||||||
|---|---|---|---|---|---|---|
| 2H/2013 | 2H/2014 | Δ 2H | FY2013 | FY2014 | Δ FY | |
| 286.1 | 292.9 | 2.4% | Flexible Foams | 583.4 | 593.0 | 1.6% |
| 143.0 | 146.2 | 2.3% | Bedding | 283.0 | 281.6 | -0.5% |
| 110.5 | 116.3 | 5.2% | Insulation | 220.0 | 227.0 | 3.2% |
| 128.7 | 123.5 | -4.1% | Automotive | 258.4 | 264.0 | 2.2% |
| (42.4) | (44.0) | 3.8% | Eliminations | (86.2) | (85.6) | -0.8% |
| 626.0 | 634.9 | 1.4% | TOTAL COMBINED SALES | 1 258.6 | 1 280.1 | 1.7% |
| 3Q/2013 | 3Q/2014 | Δ 3Q | 4Q/2013 | 4Q/2014 | Δ 4Q | |
|---|---|---|---|---|---|---|
| 139.6 | 144.1 | 3.3% | Flexible Foams | 146.6 | 148.8 | 1.5% |
| 67.1 | 67.5 | 0.5% | Bedding | 75.8 | 78.8 | 3.9% |
| 57.6 | 59.9 | 3.9% | Insulation | 52.8 | 56.4 | 6.7% |
| 64.0 | 59.9 | -6.5% | Automotive | 64.7 | 63.6 | -1.7% |
| (20.5) | (21.9) | 6.7% | Eliminations | (21.9) | (22.1) | 1.2% |
| 307.9 | 309.5 | 0.5% | TOTAL COMBINED SALES | 318.1 | 325.4 | 2.3% |
Combined sales increased from EUR 318.1 million in 4Q2013 to EUR 325.4 million in 4Q2014 (+2.3%).
After a strong 1Q2014 (+4.9%), and much softer 2Q2014 (-0.9%) and 3Q2014 (+0.5%), sales grew by 2.3% in 4Q2014 supported by strong Bedding and Insulation sales in December.
The Insulation segment grew by 6.7% in 4Q2014, resulting in annual sales increase of 3.2%.
The Bedding segment grew by 3.9% in 4Q2014, generating stable annual sales in overall weak Bedding markets.
The Flexible Foams segment grew by 1.5% in 4Q2014 despite weak furniture markets, and ended 2014 with a 1.6% annual growth.
As expected, the Automotive segment recorded lower sales in 4Q2014 (-1.7%), as a consequence of planned phase-out of some programs in Interiors. On an annual basis total Automotive segment sales increased by +2.2%.
Recurrent profitability in 2H2014 was severely impacted by significant temporary increases of raw material prices (polyols) during 4Q2014, due to the shortage of propylene oxide (an intermediate in polyol production) in Europe, following two major incidents at suppliers' plants. In addition, several operational issues in the Flexible Foams factories have weighed on the 4Q2014 result.
In this respect it is to be noted that the tension on polyol supply is now easing and that polyol prices are normalizing, with the progressive resolution of the issues which took place at a supplier of propylene oxide. Likewise, the operational issues at the origin of the Flexible Foams weak performance in 4Q2014 have been actively worked upon, and are progressively being resolved.
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Flexible Foams | 15.0 | 15.3 | 30.3 | 17.3 | 10.4 | 27.7 | 15.2% | -32.1% | -8.7% |
| Bedding | 4.7 | 8.1 | 12.8 | 3.5 | 10.0 | 13.5 | -26.2% | 23.7% | 5.4% |
| Insulation | 12.7 | 15.0 | 27.7 | 13.3 | 13.8 | 27.1 | 4.8% | -8.0% | -2.2% |
| Automotive | 8.5 | 10.3 | 18.8 | 12.8 | 2.1 | 14.9 | 50.6% | -79.4% | -20.8% |
| Corporate | (7.5) | (9.2) | (16.8) | (8.0) | (9.3) | (17.2) | 5.5% | 0.6% | 2.8% |
| Total combined REBITDA | 33.3 | 39.5 | 72.8 | 38.8 | 27.1 | 65.9 | 16.6% | -31.5% | -9.5% |
Flexible Foams has improved the product/market-mix throughout the year, in particular with higher valueadded sales in the sub-segment Technical Foams. However, results in 2H2014 have been severely affected by the sudden surge in polyol prices during 4Q2014 and several operational issues which took place during 4Q2014.
Bedding results improved in a weak market environment throughout the year. The very innovative GELTEX® inside product line has grown by 55% versus 2013, and its positive impact on profitability more than compensated the significant additional advertising efforts.
In Insulation, volume growth has compensated to a large extent the price erosion that took place in Belgium and France, due to higher competition in weak construction markets.
The result of the Automotive segment decreased as expected, due to the lower volumes in Interiors (model phase-outs), new program start-up costs and the surge in raw material costs in 2H2014 impacting Proseat.
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Flexible Foams | 8.9 | 9.2 | 18.0 | 11.6 | 4.8 | 16.5 | 31.6% | -47.5% | -8.6% |
| Bedding | 1.6 | 4.7 | 6.3 | 0.1 | 7.0 | 7.2 | -91.7% | 49.9% | 13.5% |
| Insulation | 9.9 | 12.1 | 22.0 | 10.3 | 10.8 | 21.1 | 4.6% | -11.2% | -4.1% |
| Automotive | 1.2 | 3.6 | 4.8 | 7.2 | (3.1) | 4.2 | 518.3% | -185.6% | -12.1% |
| Corporate | (8.1) | (9.8) | (17.8) | (8.6) | (9.6) | (18.2) | 6.0% | -1.1% | 2.1% |
| Total combined REBIT | 13.4 | 19.8 | 33.2 | 20.8 | 9.9 | 30.7 | 54.7% | -50.1% | -7.7% |
EBIT includes non-recurring elements for a total net amount of EUR -17.3 million (compared to EUR –48.6 million in 2013).
| in million EUR | ||||
|---|---|---|---|---|
| 2013 | 1H2014 | 2H2014 | 2014 | |
| Provision for settlement German Federal Cartel Office investigation |
0.0 | (8.2) | 0.0 | (8.2) |
| Fine European Commission | (27.0) | 0.0 | 0.0 | 0.0 |
| Restructuring charges and provisions | (14.7) | (4.2) | (3.4) | (7.6) |
| Loss on liquidation or disposal of financial assets | (0.4) | 0.0 | 0.0 | 0.0 |
| Gain on liquidation or disposal of investment property | 1.6 | 0.0 | 0.0 | 0.0 |
| Fair value gain on investment property | (0.8) | 0.0 | 0.0 | 0.0 |
| Other (i.e. Legal and advisory fees, ) | (3.9) | (0.2) | (0.6) | (0.8) |
| Total impact on EBITDA | (45.1) | (12.6) | (4.0) | (16.6) |
| Impairments | (3.5) | (0.1) | (0.6) | (0.7) |
| Total impact on EBIT | (48.6) | (12.7) | (4.6) | (17.3) |
The main non-recurring charge was the fine resulting from the settlement with the German Federal Cartel Office investigation (EUR -8.2 million) in the Bedding segment (cfr press release dd 22 August 2014).
Furthermore various restructuring measures were implemented in execution of the Group's rationalisation plan:
Impairment charges (EUR -0.7 million) (2013: EUR -3.5 million) relate mainly to value adjustments for industrial buildings.
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Flexible Foams | 12.6 | (14.9) | (2.3) | 16.2 | 8.9 | 25.1 | 28.3% | nr | nr |
| Bedding | 3.6 | 6.8 | 10.4 | (6.6) | 9.6 | 2.9 | -284.9% | 41.2% | -71.6% |
| Insulation | 12.6 | 15.0 | 27.6 | 13.3 | 13.8 | 27.1 | 5.4% | -8.0% | -1.9% |
| Automotive | 0.5 | 9.9 | 10.4 | 12.4 | 0.1 | 12.5 | nr | -98.8% | 19.9% |
| Corporate | (9.0) | (9.3) | (18.3) | (9.0) | (9.3) | (18.2) | -0.9% | -0.2% | -0.5% |
| Total combined EBITDA | 20.2 | 7.5 | 27.7 | 26.2 | 23.1 | 49.3 | 29.5% | 208.1% | 77.9% |
| Elimination contribution joint ventures (IFRS 11) |
(5.8) | (8.3) | (14.1) | (6.0) | (6.6) | (12.6) | 3.2% | -20.9% | -10.9% |
| Total consolidated EBITDA | 14.4 | (0.8) | 13.6 | 20.2 | 16.6 | 36.8 | 40.1% | nr | 169.8% |
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Flexible Foams | 6.4 | (22.8) | (16.4) | 10.5 | 2.7 | 13.2 | 62.9% | nr | nr |
| Bedding | 0.5 | 3.3 | 3.8 | (10.0) | 6.6 | (3.5) | nr | 96.0% | nr |
| Insulation | 9.8 | 12.1 | 21.9 | 10.3 | 10.8 | 21.1 | 5.4% | nr | -3.8% |
| Automotive | (8.0) | 2.6 | (5.3) | 6.9 | (5.1) | 1.8 | nr | nr | nr |
| Corporate | (9.6) | (9.8) | (19.4) | (9.6) | (9.6) | (19.2) | 0.0% | nr | -1.0% |
| Total combined EBIT | (0.8) | (14.5) | (15.3) | 8.1 | 5.3 | 13.4 | nr | nr | nr |
| Elimination contribution joint ventures (IFRS 11) |
(1.7) | (3.8) | (5.5) | (2.2) | (2.5) | (4.6) | 23.6% | -35.4% | -16.8% |
| Total consolidated EBIT | (2.6) | (18.3) | (20.9) | 5.9 | 2.9 | 8.8 | nr | nr | nr |
Net interest charges increased from EUR -9.4 million to EUR -10.0 million as a consequence of slightly increased credit margins and higher average net interest-bearing debt, including the usage of 'off-balance' factoring/ forfeiting programs.
'Other net financial income and expenses' (EUR -2.8 million, compared to EUR -1.9 million in 2013) comprise mainly interest capitalisation costs under provisions for pension liabilities (EUR –1.5 million versus EUR -1.6 million in 2013), exchange rate differences (EUR -0.4 million versus EUR -0.4 million in 2013) and EUR -0.8 million costs relating to the deferred payment terms for the EC fine.
Current income tax charge: EUR -2.7 million (2013: EUR -2.9 million);
Deferred tax charge: EUR -3.0 million (2013: EUR -1.0 million).
Consolidated result of the period (share of the Group): from EUR -36.1 million to EUR -9.7 million
On 31 December 2014, the Group net consolidated financial debt amounted to EUR 168.3 million, excluding the amounts drawn under off-balance non-recourse factoring/forfeiting programs of EUR 55.1 million, compared to EUR 138.2 million and EUR 53.4 million on 31 December 2013. The first tranche payment of the EC fine (EUR 6.5 million) and the payment of the fine to the German Federal Cartel Office (EUR 8.2 million) contributed substantially to the increase in net financial debt.
On a combined basis, net financial debt amounted to EUR 194.5 million on 31 December 2014 excluding the amounts drawn under the off-balance non-recourse factoring/forfeiting programs of EUR 62.7 million, compared to EUR 165.1 million and EUR 59.7 million on 31 December 2013. The first tranche payment of the EC fine amounted to EUR 13.9 million, including the Group's share in the fine due by the Eurofoam joint-venture, and the payment of the fine to the German Federal Cartel Office (EUR 8.2 million) contributed substantially to the increase in net financial debt.
Total equity on 31 December 2014 amounts to EUR 166.2 million compared to EUR 186.8 million on 31 December 2013.
Hence, on a consolidated basis 'net debt to equity' ratio increased to 101.3% (2013: 74.0%).
On a combined basis, 'net debt to equity' ratio is 117.1%, compared to 88.4% at the end of 2013.
The Group confirms that all conditions under the financial arrangements with its banks are respected on 31 December 2014.
On 29 January 2014, Recticel announced that it reached a settlement of EUR 27 million with the European Commission in the context of the investigation in the Flexible Foams markets for alleged cartel activities.
In April 2014, Recticel has obtained confirmation by the European Commission's Directorate General for Budget allowing it to pay its fine (excluding the fine to be paid by the joint venture Eurofoam) in three annual installments on 30 April 2014, 2015 and 2016. On 30 April 2014, the Group has paid EUR 13.9 million (including its portion in the Eurofoam fine). The balance of the EC fine will be paid on 30 April 2015 (EUR 6.5 million) and on 30 April 2016 (EUR 6.9 million).
On 22 August 2014, Recticel announced that its German bedding affiliate, Recticel Schlafkomfort GmbH, has reached a settlement with the German Federal Cartel Office ("FCO") in the framework of an investigation the FCO launched into the German bedding market. This settlement brings this matter to a close for Recticel.
Under the settlement decision, Recticel Schlafkomfort GmbH's fine amounted to EUR 8.2 million, which has been fully paid in September 2014.
The Board of Directors will propose to the Annual General Meeting of 26 May 2015 the payment of a gross dividend of EUR 0.20 per share (2014: EUR 0.20).
The multiple measures that the Group has undertaken over the last years are producing the expected effects in an economic environment which has been and remains both unsupportive and uncertain in Europe. The Board of Directors will provide guidance for 2015 at the occasion of the General Shareholders Meeting.
The Group maintains its focus on the execution of the strategy, which includes (i) a strict prioritization of the allocation of its resources to its portfolio of business, (ii) a continuous effort to streamline operations and reduce complexity, (iii) geographical diversification to reduce dependency on Europe and (iv) the introduction of new innovative solutions.
The Group has adopted IFRS 8 since 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of the internal reporting structure of the Group that allows a regular performance review by the chief operating decision maker and an adequate allocation of resources to each segment. Therefore, the Group will continue to comment on the development of the different segments on the basis of the combined figures, consistent with the managerial reporting and in line with IFRS 8.
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Sales | 297.3 | 286.1 | 583.4 | 300.1 | 292.9 | 593.0 | 0.9% | 2.4% | 1.6% |
| REBITDA | 15.0 | 15.3 | 30.3 | 17.3 | 10.4 | 27.7 | 15.2% | -32.1% | -8.7% |
| as % of sales | 5.0% | 5.4% | 5.2% | 5.8% | 3.6% | 4.7% | |||
| EBITDA | 12.6 | (14.9) | (2.3) | 16.2 | 8.9 | 25.1 | 28.3% | - | - |
| as % of sales | 4.2% | -5.2% | -0.4% | 5.4% | 3.0% | 4.2% | |||
| REBIT | 8.9 | 9.2 | 18.0 | 11.6 | 4.8 | 16.5 | 31.6% | -47.5% | -8.6% |
| as % of sales | 3.0% | 3.2% | 3.1% | 3.9% | 1.6% | 2.8% | |||
| EBIT | 6.4 | (22.8) | (16.4) | 10.5 | 2.7 | 13.2 | 62.9% | - | - |
| as % of sales | 2.2% | -8.0% | -2.8% | 3.5% | 0.9% | 2.2% |
Combined external sales increased in 4Q2014 from EUR 130.2 million to EUR 132.0 million (+1.4%). Total combined sales, including intersegment sales (4Q2014: EUR 16.7 million; +2.3%), increased from EUR 146.6 million to EUR 148.8 million in 4Q2014 (+1.5%).
For the full year 2014, combined external sales grew by +1.65% from EUR 520.2 million to EUR 528.7 million. Total combined sales, which include intersegment sales of EUR 64.3 million (+1.6%), increased by +1.6% from EUR 583.4 million to EUR 593.0 million. Sales decreased slightly in the sub-segment Comfort (EUR 367.3 million; -1.4%); while growing in Eastern Europe and the UK. In the sub-segment Technical foams sales grew by a strong +6.9% to EUR 225.6 million, particularly driven by high demand from the automotive clients.
In April 2014, Recticel BV (The Netherlands) announced its intention to streamline its converting activities by closing its foam converting factory of Wijchen (cfr press release dd 07 May 2014). This closure has been fully executed by the end of 2014.
EBITDA improved from EUR -2.3 million to EUR 25.1 million. In 2013 EBITDA had been heavily impacted by non-recurring elements of EUR -32.6 million, including the European Commission fine.
EBITDA includes EUR -2.6 million of non-recurring elements: i.e. (i) restructuring costs for EUR –2.3 million (2013: EUR -3.6 million), including the closure costs of the plant in Wijchen (The Netherlands) and additional streamlining measures, and (ii) other non-recurring elements (EUR -0.5 million).
In 4Q2014, despite falling oil prices, polyol prices have significantly increased due to the shortage of propylene oxide (an intermediate in polyol production) in Europe, following two major incidents at suppliers' plants. In addition, operational issues of a temporary nature in several factories have weighed on the fourth quarter result.
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Sales | 140.0 | 143.0 | 283.0 | 135.4 | 146.2 | 281.6 | -3.3% | 2.3% | -0.5% |
| REBITDA | 4.7 | 8.1 | 12.8 | 3.5 | 10.0 | 13.5 | -26.2% | 23.7% | 5.4% |
| as % of sales | 3.4% | 5.7% | 4.5% | 2.6% | 6.9% | 4.8% | |||
| EBITDA | 3.6 | 6.8 | 10.4 | (6.6) | 9.6 | 2.9 | nr | 41.2% | -71.6% |
| as % of sales | 2.6% | 4.7% | 3.7% | -4.9% | 6.5% | 1.0% | |||
| REBIT | 1.6 | 4.7 | 6.3 | 0.1 | 7.0 | 7.2 | -91.7% | 49.9% | 13.5% |
| as % of sales | 1.2% | 3.3% | 2.2% | 0.1% | 4.8% | 2.5% | |||
| EBIT | 0.5 | 3.3 | 3.8 | (10.0) | 6.6 | (3.5) | nr | 96.0% | nr |
| as % of sales | 0.4% | 2.3% | 1.4% | -7.4% | 4.5% | -1.2% |
Combined external sales increased in 4Q2014 from EUR 70.5 million to EUR 73.5 million (+4.3%). Total combined sales, including intersegment sales (4Q2014: EUR 5.2 million; -1.9%), increased from EUR 75.8 million to EUR 78.8 million in 4Q2014 (+3.9%).
The sub-segment Brand sales increased by +14.4% in 4Q2014. The product-mix further improved as the GELTEX® inside products continued to grow (+38% versus 4Q2013), supported by advertising campaigns and promotion activities at retail stores.
Sales in the sub-segment Non-Branded/Private Label decreased by -6.6% in 4Q2014 in a weak and very competitive market.
For the full year 2014, combined external sales slightly increased from EUR 260.6 million to EUR 261.0 million (+0.2%). Total combined sales, including intersegment sales (2014: EUR 20.7 million; -7.7%), decreased from EUR 283.0 million to EUR 281.6 million (-0.5%).
Sales in the sub-segment Brand increased by +5.1% supported by the further development of the GELTEX® inside products. The sub-segment Non-Branded/ Private Label overall recorded lower sales (-6.0%) in a very competitive market environment.
In March 2014, Recticel Bedding (Schweiz) AG announced (cfr press release dd 07 May 2014) its intention to rationalize its Swiss bedding activities by closing its production and logistics operations in Büron (Switzerland). The plant in Büron was vacated in early October and the production activity has been transferred to other Recticel plants.
While REBITDA progressed from EUR 12.8 million to EUR 13.5 million, more than compensating additional promotion/advertising (EUR +4.7 million versus 2013), EBITDA was negatively impacted by EUR -10.6 million non-recurring elements (2013: EUR -2.5 million); i.e. a fine of EUR -8.2 million in respect of the settlement of the German Federal Cartel Office investigation and restructuring charges in Switzerland.
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Sales | 109.5 | 110.5 | 220.0 | 110.8 | 116.3 | 227.0 | 1.1% | 5.2% | 3.2% |
| REBITDA | 12.7 | 15.0 | 27.7 | 13.3 | 13.8 | 27.1 | 4.8% | -8.0% | -2.1% |
| as % of sales | 11.6% | 13.6% | 12.6% | 12.0% | 11.9% | 11.9% | |||
| EBITDA | 12.6 | 15.0 | 27.6 | 13.3 | 13.8 | 27.1 | 5.4% | -8.0% | -1.8% |
| as % of sales | 11.5% | 13.6% | 12.5% | 12.0% | 11.9% | 11.9% | |||
| REBIT | 9.9 | 12.1 | 22.0 | 10.3 | 10.8 | 21.1 | 4.6% | -11.1% | -4.1% |
| as % of sales | 9.0% | 11.0% | 10.0% | 9.3% | 9.3% | 9.3% | |||
| EBIT | 9.8 | 12.1 | 21.9 | 10.3 | 10.8 | 21.1 | 5.4% | -11.1% | -3.7% |
| as % of sales | 8.9% | 11.0% | 10.0% | 9.3% | 9.3% | 9.3% |
Combined sales increased from EUR 52.9 million in 4Q2013 to EUR 56.4 million in 4Q2014 (+6.7%).
After a very strong 1Q2014 (+11.1%), a comparatively weaker 2Q2014 (-8.2%) and a better 3Q2014 (+2.1%), sales in the sub-segment Building Insulation recorded a solid growth rate of +6.8% in 4Q2014, in overall soft European residential construction and renovation markets, except in the United Kingdom.
The sub-segment Industrial Insulation recorded higher sales in 4Q2014 (+5.0%) as well.
For the full year 2014, sales increased from EUR 220.0 million to EUR 227.0 million (+3.2%).
Sales in the sub-segment Building Insulation, which accounts for 93% of the segment , increased by +2.5% to EUR 211.6 million. The activity was particularly strong in the United Kingdom.
grow on the long term as a result of stricter insulation standards and regulations (cfr. European Energy Performance of Buildings Directive (EPBD) (Directive 2010/31/EU) which will be progressively adopted by the EU member states), higher energy prices and ever growing awareness of the need for more and better
The sub-segment Industrial Insulation recorded significantly higher sales in 2014 (+14.3%).
insulation.
EBITDA slightly decreased to EUR 27.1 million (-1.8%), despite the higher volumes, as a result of increased competition leading to price erosion in a still weak (continental) European construction market.
The structural demand for high performing polyurethane building insulation products is expected to continue to
| in million EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 1H13 | 2H13 | FY13 | 1H14 | 2H14 | FY14 | Δ 1H | Δ 2H | Δ FY | |
| Sales | 129.7 | 128.7 | 258.4 | 140.6 | 123.5 | 264.0 | 8.4% | -4.1% | 2.2% |
| REBITDA | 8.5 | 10.3 | 18.8 | 12.8 | 2.1 | 14.9 | 50.6% | -79.4% | -20.8% |
| as % of sales | 6.5% | 8.0% | 7.3% | 9.1% | 1.7% | 5.6% | |||
| EBITDA | 0.5 | 9.9 | 10.4 | 12.4 | 0.1 | 12.5 | nr | -98.8% | 19.9% |
| as % of sales | 0.4% | 7.7% | 4.0% | 8.8% | 0.1% | 4.7% | |||
| REBIT | 1.2 | 3.6 | 4.8 | 7.2 | (3.1) | 4.2 | 518.3% | nr | -12.1% |
| as % of sales | 0.9% | 2.8% | 1.8% | 5.2% | -2.5% | 1.6% | |||
| EBIT | (8.0) | 2.6 | (5.3) | 6.9 | (5.1) | 1.8 | nr | nr | nr |
| as % of sales | -6.2% | 2.1% | -2.1% | 4.9% | -4.1% | 0.7% |
Combined sales decreased from EUR 64.7 million in 4Q2013 to EUR 63.6 million in 4Q2014 (-1.7%). Both Interiors (-0.7%) and Seating (-3.5%) reported lower sales.
For the full year 2014 combined sales increased by +2.2% from EUR 258.4 million to EUR 264.0 million. Since October 2013, the automotive markets have improved, confirmed by new car registrations in the EU-28.
Sales in Interiors decreased by -2.0% from EUR 110.7 million to EUR 108.5 million. This drop was expected as some programs (e.g. Mercedes C Class) were phasingout. In contrast, the volumes in China grew significantly compared to 2013, due to the start-up of the Beijing plant (Daimler) and higher volumes in the Shenyang plant (BMW).
Sales in Seating (i.e. Proseat, the 51/49 joint venture between Recticel and Woodbridge), more than compensated for the lower sales volumes in Interiors, with an increase of +5.5% from EUR 136.8 million to EUR 144.3 million.
Full year 2014 sales in 'Exteriors' increased by +2.8% to EUR 11.2 million.
EBITDA improved by 19.9% from EUR 10.4 million to EUR 12.5 million, after absorption of non-recurring charges of EUR –2.4 million (2013: EUR –8.4 million) which relate mainly to the final closure costs of the Rheinbreitbach (Germany) Interiors plant. The lower recurrent profitability resulted from lower volumes in Interiors, start-up costs of new programs, higher raw material prices in Seating and lower mould sales.
On 18 February 2015 Recticel announced that it has sold its 50% participation in the joint venture company Kingspan Tarec Industrial Insulation (KTII) to its joint venture partner Kingspan Group plc, who consequently will own 100% of the shares of KTII nv (Turnhout, Belgium) and KTII Ltd (Glossop, United Kingdom).
Kingspan Tarec Industrial Insulation (KTII) develops and produces premium performance insulation products for the thermal insulation of pipework in process and petrochemical applications and for the cool truck industry. KTII was established in 2006 by Recticel and Kingspan, when both companies decided to combine their respective industrial insulation activities. In 2014, KTII realised annual sales of circa EUR 31 million.
Recticel sells its 50% stake in KTII for a consideration of EUR 8.5 million (enterprise value).
Mid-February 2015, Proseat, the 51/49 joint venture between Recticel and Woodbridge, announced its intention to close its plant in Rüsselsheim (Germany). All 77 employees at the site have been put under risk of redundancy. Discussions with the works council already started in order to identify the most appropriate social support measures.
The related closure costs will be charged to the results of 1H2015.
The Annual General Meeting decides on the appropriation of the amounts available for distribution on the basis of a proposal from the Board of Directors.
When drawing up its proposal, the Board of Directors tries to achieve the right balance between ensuring a stable dividend for shareholders and maintaining sufficient investment and selffinancing opportunities to secure the company's longer-term growth.
The Board of Directors decided to present the following appropriation of the results to the General Meeting:
| in EUR | |
|---|---|
| Profit for the period | (9 542 390.93) |
| + Profit brought forward from previous year | 62 163 537.64 |
| Result to be appropriated | 52 621 146.71 |
| - Addition to the legal reserves | 0.00 |
| - Addition to other reserves | 0.00 |
| - Gross dividend | (5 932 851.20) |
| Profit to be carried forward | 46 688 295.51 |
Subject to approval by the General Meeting of 26 May 2015 of the profit appropriation, a dividend of EUR 0.20 gross will be paid per ordinary share, or EUR 0.15 net (-25% withholding tax). This dividend will be payable from 02 June 2015. KBC bank acts as Paying Agent.
The payment for the registered shares will take place via bank transfer on the shareholders' bank account.
| DIVIDEND KEY DATA | |
|---|---|
| Gross dividend per share | EUR 0.20 |
| Ex-coupon date | 23 APRIL 2015 |
| Dividend payment date | 02 JUNE 2015 |
Consistently building on the strategic growth pillars of innovation, geographical diversification and operational excellence.
By leveraging its outstanding expertise in polymer applications, particularly but not limited to polyurethane, Recticel aims to offer competitive high value added solutions to its customers, in order to create shared value for its customers, its employees, its shareholders and other stakeholders.
Be the leading global provider of high value added solutions in its core markets, supporting key worldwide trends such as environment protection, energy conservation, aging and increasing population and water management.
Recticel's strategy is to sustainably position the Group as the leading supplier of high value added solutions in the Group's key markets.
Priority will be given to:
Continuous improvement in the development of its human resources, as people and teams are key to success. Likewise, meeting sustainable development criteria in all business decisions is considered to be a mandatory contribution to long term success.
The building blocks of the Group's strategy can be illustrated as follows:
The Group's strategy is defined on the basis of its core competences of transforming PU and other polymers and materials in value-added applications, the relative attractiveness of the markets in which it operates and the competitive strengths of the Group in each of these markets. The strategic plan prioritises resource allocation to the various business segments.
The Group assessed the attractiveness of the markets in which each Business Line is operating, based on criteria such as size, growth, profitability and capital intensity. In addition, the Group's competitiveness in each of these markets was evaluated. On the basis of this analysis the Group concluded that the Business Line Insulation is the most attractive, followed by Bedding and Flexible Foams. Given the positioning of Recticel's Business Line Automotive, both divisions of this Business Line are considered non-core for Recticel in realising its strategy going forward.
On the basis of the above illustrated Business Line positioning and looking forward, the Group has defined specific strategic actions. In some cases these actions are common to all Business Lines, in other cases the Group will pursue Business Line specific actions. As a result, each Business Line has its own strategy, which can be summarized as follows:
| Insulation: | Grow through international expansion, innovation and the introduction of new products, modules and distribution channels, supported by capacity expansion, selective growth initiatives and acquisitions. |
|---|---|
| Bedding: | Improve its profitability through operational efficiency and selective growth initiatives. Organic growth will be based upon a strong marketing strategy, product innovation, the right Brand/Private Label strategy, and an optimised network of production facilities. |
| Flexible Foams: | Improve its profitability through operational efficiency and selective growth initiatives. This will be realised through rationalisation and modernisation of the manufacturing footprint. Selective growth initiatives will be based on new products and further geographical expansion in the Technical Foams Division. |
| Automotive: | Fully capitalize on the existing production capacity. This is envisaged to be realized through tight investment control. Both Divisions are envisaged to be stabilized through the introduction and support of innovative products and the continuous optimisation of their industrial footprint and capacity utilisation. |
To support the execution of the different Business Line strategies, Recticel believes that each should be further supported and guided by the following three action pillars:
The Group intends to further simplify its structure, organisation and processes in order to increase its operational efficiency and to reduce fixed costs. This should allow the Group to react even more quickly on market evolutions, increase its profitability and better manage its people and processes.
The Group has taken actions in different fields such as the reduction of headcount, the decrease in number of plants, joint ventures and legal entities, but also a reduction in the number of product ranges and optimisation of the customer portfolio. In addition, the Group aims to foster on its synergies via further centralisation, standardisation and optimisation of common processes and administrative tasks.
Although significant progress was made in the past four years, the Group will continue to strive for further streamlining and optimisations. Over the last five years, the Group has reduced the number of plants from 128 to 99. At the same time, the workforce has been reduced by about 2,300 employees to approximately 7,578 employees and the number of joint ventures has been scaled down from 22 entities to 12. In the same context, the number of subsidiaries has been reduced from 119 legal entities to 90. Also the number of product references has been brought down. Over the last five years, restructuring costs amounted in aggregate approximately EUR 51 million.
Holding strong market positions in various European markets, the Group intends to further pursue growth via international expansion, inside as well as outside Europe. In this respect, the Group defined a clear strategy per Business Line.
Via its Business Line Insulation, Recticel is today a market leader in the PUR/PIR segment in Belgium and has leading positions in the United Kingdom, France and The Netherlands. Furthermore it is selling in Germany and Poland. The Group is determined to expand its presence further in Europe in the first instance via continued development of its activities in existing markets such as France (where a new plant was launched in 2013) and the United Kingdom, as well as through potential expansion into new markets. In addition, the Group wants to expand its insulation activities outside Europe to play an active role in the development of high growth markets.
The Business Line Bedding is currently mainly present in European countries such as Austria, Belgium, Germany, Poland, Scandinavia, Switzerland and The Netherlands. A small fraction of the business is done through export to France, Italy, Eastern Europe, China and Australia. Europe will remain the focus market for the Business Line Bedding where it will further develop its presence in existing and new markets.
The Business Line Flexible Foams is currently already globally active, but the majority of its operations are based in Europe. Via its Division Technical Foams, Recticel is also present in North-America, Asia and North-Africa. It aims to further grow these activities in the United States besides India, China, and Morocco.
Via its Division Interiors, Recticel is present mainly in (Eastern) Europe, but also in the United States and increasingly China. The geographical expansion of Interiors follows the end customers, the Original Equipment Manufacturers (OEMs). By setting up its activities physically in the customer plants (plant-in-plant concept) the business can obtain the required customer proximity whilst limiting the investments needed.
The Division Seating has a strong presence in Europe via its plants in the Czech Republic, France, Germany, Poland, Spain and the United Kingdom. Going forward, the Division aims to grow further within Europe as this is the territory agreed with its joint venture partner.
Market-driven innovation is at the heart of Recticel's success. In order to successfully capture future opportunities, the Recticel Research & Development department has been organized in order to increase the pull effect by the different Business Lines. Also the flexibility in the Group's resource utilisation has been upgraded with the goal of providing successful innovation.
The following important innovations have been brought into the markets:
In the Business Line Insulation, several new products have been introduced, including a higher performance product with an insulation factor (lambda) reaching 0.021 W/mK. This is a new generation of PIR panels offering a 10% improvement in thermal insulation by its improved chemistry. This can create savings up to 1cm in living space. The product was launched on the Belgian construction fair Batibouw in 2014.
For the Business Line Bedding, an innovative new product, branded as GELTEX® inside has been created. In this application area it is the Division's largest and most important innovation of the last decade. The product differentiates itself through its combination of optimal pressure distribution, ideal support and maximum permeability/climate control properties. The development of the GELTEX® inside brand has already been translated in effective and growing sales.
In the Business Line Flexible Foams, new generation of acoustic foams have been introduced. In this context Recticel's Technical Foams Division won new contracts for Boeing. Also new products and solutions have been developed and marketed for acoustic insulation for the building sector. The Group has further developed a new comfort foam angelpearl® for its third party bedding customers.
In the Business Line Automotive, an important innovation has been marketed as from 2013. The product is branded under the name Colo-Sense® Lite. It is a high performance skin for automotive interiors applications enabling a weight reduction of 25% responding to the OEM's constant search for lighter products. The product is not only lighter, but has premium optic and haptic characteristics, with the same quality and durability properties as its predecessor Colo-Fast®. This innovation attracted the attention of several premium OEMs and resulted in a series of new contracts.
Next to the strategic action pillars (simplification – international expansion - innovation) Recticel believes that the successful execution of its strategy can only be realized by a professional human resources process.
In the present rapidly changing business environment, the ability to learn quickly and to rapidly acquire new competencies can be a key competitive advantage for the future growth of the Group. All employees should therefore be able and get the chance to continuously develop and learn new competencies. To reach this objective, the Group has implemented a wide set of policies, programmes and actions.
In addition to the training programmes, Recticel has also implemented a Group performance management process which should help employees to focus on results and promote key behaviours and success attributes. The Group aims to reward performance. The annual performance review helps managers to coach and to develop the employees in the best possible way.
The performance reviews make the performance visible and assign accountability for business success to each and every employee. The performance standards also create alignment; hereby ensuring that all employees and departments are working on the implementation of the Group's strategy.
In order to strengthen the implementation of the Group strategy, the Management Committee was reinforced by several new appointments in the last few years including three new Business Line Managers and the introduction of two new important positions: Chief Procurement Officer and Chief Sustainability Officer.
Looking forward, the Group and its actions are expected to be more and more guided by sustainability concerns. The Group endeavours to embrace sustainability in order to create a competitive edge and create value for all its stakeholders. For all new investments, the element of sustainability will be taken into consideration
Recticel is committed to prioritise investments in segments and/or products contributing to the sustainable development of society. This includes additional investment to optimize and expand its building insulation segment. The Group manages its production processes and supply chain to minimize raw material, energy and water consumption and takes initiatives to reduce waste and transports. In its constant strive for innovative solutions, the Group intends to develop solutions enabling proper re-use or re-cycling of products after their end of life. This is supported by the introduction of R&D development programs for processes and chemistry. In addition, Recticel operates to the highest standards of safety and environmental protection which is carefully monitored and continuously reviewed for improvement by its department for Health, Safety and Environment.
The Group plans to communicate on its achievements via the regular publication of a sustainability report, starting in 2016.
GROUP STRATEGY AND ACTIVITIES
Ever since its entry in the world of polyurethane technology some 65 years ago, Recticel has continuously shown its pioneering spirit by regularly developing innovative applications and solutions. As a manufacturer and transformer of polyurethane, Recticel offers a broad variety of ultimate comfort applications; which are all organised around four distinctive business lines. Although their activities have a clear link with the polyurethane technology, they are nevertheless very distinctive as each of them serves specific market sectors. Around 94% of the total Group sales are generated in Europe.
The Insulation business line concentrates on the production and commercialisation of high-performance and durable thermal insulation material in rigid closed cell polyurethane - (PU or PUR) and polyisocyanurate foam (PIR). This segment, the smallest of the Group, accounts for 16.6% of total combined sales and contains till February 2015* two divisions: building insulation and industrial insulation.
* see II.6.4. Subsequent events in Financial section
| COMBINED KEY FIGURES 2012 2013 2014 |
in million EUR | |||
|---|---|---|---|---|
| Sales (1) | 220.7 | 220.0 | 227.0 | |
| Growth rate of sales (%) -1.1% -0.3% 3.2% |
||||
| REBITDA 36.3 27.7 27.1 |
||||
| REBITDA margin (as % of sales) 16.5% 12.6% 11.9% |
||||
| EBITDA 36.1 27.6 27.1 |
||||
| EBITDA margin (as % of sales) 16.4% 12.5% 11.9% |
||||
| REBIT 32.3 22.0 21.1 |
||||
| REBIT margin (as % of sales) 14.6% 10.0% 9.3% |
||||
| EBIT 32.1 21.9 21.1 |
||||
| EBIT margin (as % of sales) 14.6% 10.0% 9.3% |
||||
| Investments in intangible assets (exclusive of goodwill) and 25.9 4.8 6.2 property, plant and equipment |
||||
| Investments as % of sales 11.7% 2.2% 2.7% |
(1) before eliminations of intra-Group transactions
Sales Insulation 2014 EUR 227.0 million
The Bedding business line focuses on the development, production and the commercialisation of finished mattresses, slat bases and box springs. The strategy is articulated around strong national brands supported by ingredient brands such as GELTEX® Inside, complemented by Private Labels for its customers, hereby enabling an optimised use of its manufacturing footprint. The Bedding segment accounts for 20.6% of the Group's total combined sales.
is available at: Beka®, Lattoflex®, Schlaraffia®, Sembella®, Superba®, Swissflex®, and Ubica®
| in million EUR | |||
|---|---|---|---|
| COMBINED KEY FIGURES | 2012 | 2013 | 2014 |
| Sales (1) | 276.5 | 283.0 | 281.6 |
| Growth rate of sales (%) | -5.3% | 2.3% | -0.5% |
| REBITDA | 14.6 | 12.8 | 13.5 |
| REBITDA margin (as % of sales) | 5.3% | 4.5% | 4.8% |
| EBITDA | 12.8 | 10.4 | 2.9 |
| EBITDA margin (as % of sales) | 4.6% | 3.7% | 1.0% |
| REBIT | 9.1 | 6.3 | 7.2 |
| REBIT margin (as % of sales) | 3.3% | 2.2% | 2.5% |
| EBIT | 7.3 | 3.8 | -3.5 |
| EBIT margin (as % of sales) | 2.6% | 1.4% | -1.2% |
| Investments in intangible assets (exclusive of goodwill) and property, plant and equipment |
3.8 | 1.7 | 3.5 |
| Investments as % of sales | 1.4% | 0.6% | 1.3% |
(1) before eliminations of intra-Group transactions
Sales Bedding 2014 EUR 281.6 million
Mattresses & Bed bases
Brands versus Non-brands
Evolution sales Bedding
Flexible Foams business focuses mainly on the production, transformation and commercialization of predominantly semifinished products in flexible polyurethane foam. Historically, this business line has been the largest (43.4% of total sales) within the Group and it consists of two divisions: Comfort (mainly commodities) and Technical Foams (mainly specialties).
| in million EUR | |||
|---|---|---|---|
| COMBINED KEY FIGURES | 2012 | 2013 | 2014 |
| Sales (1) | 588.3 | 583.4 | 593.0 |
| Growth rate of sales (%) | -1.3% | -0.8% | 1.6% |
| REBITDA | 29.9 | 30.3 | 27.7 |
| REBITDA margin (as % of sales) | 5.1% | 5.2% | 4.7% |
| EBITDA | 24.3 | -2.4 | 25.1 |
| EBITDA margin (as % of sales) | 4.1% | -0.4% | 4.2% |
| REBIT | 16.4 | 18.0 | 16.5 |
| REBIT marge (as % of sales) | 2.8% | 3.1% | 2.8% |
| EBIT | 9.8 | -16.4 | 13.2 |
| EBIT margin (as % of sales) | 1.7% | -2.8% | 2.2% |
| Investments in intangible (excluding goodwill) and tangible fixed assets |
10.9 | 11.0 | 10.3 |
| Investments as % of sales | 1.8% | 1.9% | 1.7% |
(1) before eliminations of intra-Group transactions
EUR 593.0 million
Evolution sales Flexible Foams
The Automotive business line includes the following two activities:
| in million EUR | |||
|---|---|---|---|
| COMBINED KEY FIGURES | 2012 | 2013 | 2014 |
| Sales | 289.7 | 258.4 | 264.0 |
| Growth rate in sales (%) | -10.8% | -10.8% | 2.2% |
| REBITDA | 24.1 | 18.8 | 14.9 |
| REBITDA margin (as % sales) | 8.3% | 7.3% | 5.6% |
| EBITDA | 22.5 | 10.4 | 12.5 |
| EBITDA margin (as % of sales) | 7.8% | 4.0% | 4.7% |
| REBIT | 8.1 | 4.8 | 4.2 |
| REBIT margin (as % of sales) | 2.8% | 1.8% | 1.6% |
| EBIT | 5.9 | -5.3 | 1.8 |
| EBIT margin (as % of sales) | 2.0% | -2.1% | 0.7% |
| Investments in intangible assets (exclusive of goodwill) and property, plant and equipment |
6.4 | 9.3 | 13.0 |
| Investments as % of sales | 2.2% | 3.6% | 4.9% |
(1) before eliminations of intra Group transactions
Sales Automotive 2014
Evolution sales Automotive
Innovation is a key item in Recticel's strategy. The International Development Center (IDC) is a central element in the creation of new solutions and is exploring the various types of innovation from incremental to breakthrough innovations.
The Development Center focuses on the execution of projects for various business lines and also seeks for solutions in new areas driven by market needs.
In the bedding area the focus has been primarily on the triangle of sleep: an innovative method to evaluate excellent sleeping systems such as the recently developed Geltex® Inside.
In the flexible foam area a number of new technical foams have been created for various applications. Special attention and emphasis was given to develop solutions for better vibrational damping and acoustic performances.
In the automotive interiors domain the new Colo-Sense® Lite product showed to be a sustainable hit. The product is not only 25% lighter but has an even better performance, such as flexibility and soft feel. The new product appears to be a success on the market resulting in more than 500 Mio € new contracts. This innovation got a nomination for the Essenscia innovation award (the Belgian Federation for Chemistry & Life Sciences Industries).
In the insulation area the main efforts were directed towards reaching even better insulation values and further developing improved fire performances.
The corporate program, which focuses on longer term developments, has focused on a sustainability program with different aspects to generate even more sustainable solutions. Various cooperations with knowledge institutes and external partners were initiated. The program focuses on reducing the CO2 footprint. 15 Trend in composition of annual budget for Research & Development
2010 2011 2012 2013 2014 Flexible Foams Bedding Insulation Automotive Corporate Program 0 5 10 15 2010 2011 2012 2013 2014 in million EUR Flexible Foams Bedding Insulation Automotive Corporate Program for Research & Development
In 2014 the Group spent EUR 13.1 million EUR representing about 1.0% of total combined sales.
Trend in composition of annual budget
Recticel is conscious that success depends to a large extent on the quality, the dedication and the enthusiasm of all its work force. To realise its corporate objectives, Recticel not only wants to attract and maintain the best people, but it also tries to support them in their development within the company. To realise this ambitious plan, Recticel continued and strengthened various human resources' initiatives and implemented different new HR supporting programs during 2014. All these efforts aim at improving the individual employability, the effectiveness, the personal performance and the professional development of each employee. In addition, these initiatives also allow a better articulation and alignment of the expectations, behaviours, competences, needs and values of the whole organization. All this is taken at heart with the purpose to eventually deliver best-in-class results and to meet Recticel's global corporate objectives.
In 2014 more than 1,000 managers and employees in more than 20 countries participated in the annual performance appraisal process, using one global tool. Purpose of the performance appraisals was to strengthen the core competencies and key behaviours of Recticel, share feedback and to discuss the needed development and training activities.
During the 2014 performance appraisals, emphasis was also put on the follow-up of the previous training and development related action plans as well as on developing an open feedback culture, hereby supporting employees in case of work related stress.
Recticel has invested a lot in internal development programs which are carried under the Recticel University roof. All Recticel University programs are designed based on the strategic needs of the company.
During the year 2014, approximately 300 managers and employees participated in the Recticel University programs. In 2014 Recticel University offered circa 700 training days and 22 standard or business line specific development courses. 440 Recticel employees finalised one or more E-University courses (separate e-learning courses mainly related to strategy execution, communication, leadership and lean management).
The biggest development investments have been made to the following skills and behaviours: key account management and customer intimacy, communication and presentation skills, feedback, leadership and project management. During 3Q2014, Recticel also started an extensive roll out of the lean management approach program, which will be continued in 2015.
In November 2014, a new global HR organization structure was implemented. In addition to the corporate HR Functions (mainly centred around Talent Management and Compensation & Benefits) and the established country HR organizations, the role of HR Business Line Partners was introduced for each of the four Business Lines. Four existing country HR managers took up these roles in addition to their current duties.
This new global HR team took up the challenge to re-define the global HR strategy 2015-2017 by April 2015. Two main pillars have already emerged: a global grading project will lead to more organisational clarity and career path design; and the introduction of a streamlined People Review Process, which will lead to enhanced high potential identification, organisational redesign and succession planning.
| 31 DEC 2013 | 31 DEC 2014 | |||
|---|---|---|---|---|
| Germany | 1 234 | 15.9% | 1 152 | 15.2% |
| Belgium | 1 180 | 15.2% | 1 116 | 14.7% |
| Poland | 872 | 11.2% | 948 | 12.5% |
| Czech Republic | 709 | 9.1% | 800 | 10.6% |
| France | 639 | 8.2% | 643 | 8.5% |
| United Kingdom | 752 | 9.7% | 533 | 7.0% |
| The Netherlands | 331 | 4.3% | 312 | 4.1% |
| People's Republic of China | 250 | 3.2% | 269 | 3.5% |
| Spain | 254 | 3.3% | 248 | 3.3% |
| Austria | 227 | 2.9% | 240 | 3.2% |
| Romania | 211 | 2.7% | 223 | 2.9% |
| Sweden | 200 | 2.6% | 198 | 2.6% |
| USA | 157 | 2.0% | 153 | 2.0% |
| Switzerland | 166 | 2.1% | 141 | 1.9% |
| Hungary | 124 | 1.6% | 128 | 1.7% |
| Finland | 93 | 1.2% | 93 | 1.2% |
| Turkey | 79 | 1.0% | 86 | 1.1% |
| Estonia | 77 | 1.0% | 81 | 1.1% |
| Italy | 65 | 0.8% | 64 | 0.8% |
| India | 28 | 0.4% | 54 | 0.7% |
| Norway | 49 | 0.6% | 36 | 0.5% |
| Bulgaria | 21 | 0.3% | 20 | 0.3% |
| Slovakia | 11 | 0.1% | 10 | 0.1% |
| Serbia | 8 | 0.1% | 10 | 0.1% |
| Ukraine | 11 | 0.1% | 9 | 0.1% |
| Lithuania | 9 | 0.1% | 8 | 0.1% |
| Russia | 5 | 0.1% | 5 | 0.1% |
| TOTAL | 7 758 | 100% | 7 578 | 100% |
| 31 DEC 2013 | 31 DEC 2014 | |||
|---|---|---|---|---|
| Western-Europe | 5 188 | 66.9% | 4 775 | 63.0% |
| Eastern-Europe | 2 051 | 26.4% | 2 237 | 29.5% |
| Rest of the world | 519 | 6.7% | 567 | 7.5% |
| TOTAL | 7 758 | 100% | 7 578 | 100% |
Full-time and part-time personnel, except for temporary personnel and disabled persons, including the proportional personnel count of joint ventures that are managed at least 33% by Recticel.
Thanks to the continuous improvement effort from the whole organisation, the Frequency index of labour accidents has been constantly reduced over the past years and has reached for the second year in a row a level below 10 (F= 8.4 in 2014) (see chart on the inside cover at the beginning of this annual report). There's a strong commitment to continue this effort in order to reach a Frequency below 5 in the coming years.
| COUNTRY | INSULATION | BEDDING | FLEXIBLE FOAMS(1) | AUTOMOTIVE |
|---|---|---|---|---|
| AUSTRIA | Timelkam | Kremsmünster Linz |
||
| BELGIUM | Turnhout (2) Wevelgem |
Geraardsbergen Hulshout |
Wetteren | |
| CZECH REPUBLIC | Mladá Boleslav Most |
|||
| ESTONIA | Tallinn | |||
| FINLAND | Kouvola | |||
| FRANCE | Bourges | Langeac Louviers Trilport |
Trilport | |
| GERMANY | Hassfurt Jöhstadt Wattenscheid |
Burkhardtsdorf Ebersbach |
Espelkamp Rheinbreitbach (3) Rüsselsheim (4) Schönebeck Wackersdorf Mörfelden Schwarzheide |
|
| HUNGARY | Sajóbábony | |||
| INDIA | Taloja, New Bombay Bangalore |
|||
| ITALY | Gorla Minore | |||
| NORWAY | Åndalsnes | |||
| PEOPLE'S REPUBLIC OF CHINA |
Shanghai | Beijing Ningbo Shenyang |
||
| POLAND | Łódz | Zgierz | Bielsko Biala | |
| ROMANIA | Miercurea Sibiului | Sibiú | ||
| SPAIN | Catarroja Ciudad Rodrigo |
Santpedor | ||
| SWEDEN | Gislaved | Gislaved | ||
| SWITZERLAND | Flüh | |||
| THE NETHERLANDS | Kesteren | Kesteren | ||
| TURKEY | Istanbul | |||
| UNITED KINGDOM | Glossop (2) Stoke-on-Trent |
Alfreton Corby |
Manchester | |
| U.S.A. | Deer Park, NY Irvine, CA |
Auburn Hills, MI Tuscaloosa, Al |
||
| (1) For Flexible Foams, only the major foams plants are listed. |
(2) Sold in February 2015 (cfr II.6.4. Subsequent events in Financial Section) (3) In the process to be closed (4) In the proces to be closed in 2015 (cfr II.6.4. Subsequent events in Financial Section)
The above table lists the principal production units of the Recticel Group (including joint venture companies). Besides these sites, the Group has 43 other conversion units and 5 sales offices in Europe, the United States and Asia. End 2014, the Group had in total 99 production units in 27 countries.
Recticel publishes its Corporate Governance Charter on its web site (www.recticel.com) in accordance with the requirements of the Belgian Corporate Governance Code 2009. The latest version is dated 26 March 2015. Any interested party can download the Charter there, or request a copy from the company's registered office. The Charter contains a detailed description of the governance structure and the company's governance policy.
Recticel uses the Belgian Governance Code of 2009 as reference code, which can be found on the website of the Corporate Governance Committee (www.corporategovernancecommittee.be).
Recticel complies with all recommendations contained in the reference code, except with the following provisions:
• principle 5.2. /4. of the Belgian Corporate Governance Code 2009 which provides that at least the majority of the members of the Audit committee must be independent. Recticel's Board of Directors contends however that Mr. DAVIGNON and Mr. VANDEPOEL have proven a de facto independence stature, though they no longer meet the legal independence requirements, only due to their term as director exceeding twelve years.
This chapter contains information regarding corporate governance in general and, the application of the Code during the last financial year in particular.
In accordance with the Belgian Companies Code, the Board of Directors is authorized to undertake all necessary actions to achieve the company's objective, except those that only the general meeting is authorized to perform by law. The authority granted to the Board of Directors was not further limited in the articles of association.
The terms of reference of the Board of Directors are described in more detail in Recticel's Corporate Governance Charter.
Every entity exists to create value for the stakeholders and this forms the basis of risk management for every company. The challenge that faces the Board of Directors and executive management is in determining how much uncertainty they wish to accept in their strive for creating value. The value is maximized if the administration is successful in creating an optimal balance between growth and turnover on the one hand and the connected risks on the other.
Identifying and quantifying the risks and setting up and maintaining an efficient control mechanism is the responsibility of Recticel Group's Board of Directors and executive management.
The framework for internal control and risk management applied by the Recticel Group is based on the COSO (Committee of Sponsoring Organisations of the Treadway Commission) model and is in line with the requirements imposed by the Belgian Corporate Governance Code, taking into account the Recticel Group's size and specific needs.
Since mid-2010 the Board of Directors and the executive management have reviewed the framework for internal control and risk management and an amended Compliance programme is implemented.
The basis is formed by the revised Code of Conduct, applicable on all Recticel directors, corporate officers and employees, and published on Recticel's website (www. recticel.com).
Important matters like ethics, safety, health and environment, quality, conflicts of interest, anti-trust, fraud and others are being dealt with.
Corporate policies have been elaborated to cover these principles that are further explained in the Business Control Guide, which provides more concrete and detailed guidelines, for instance guidelines on the level of Tax management, Treasury management, Accounting policies, Investments, Purchases, Mergers and Takeovers, and such. The internal financial reporting and control occurs based on the Group Accounting Manual, Group Accounting Methodology and Cost Accounting Methodology.
This Business Control Guide includes the general delegation of deciding powers and responsibilities for specific areas of competence.
The Board of Directors and executive management regularly reviews the most important risks that the Recticel Group is exposed to and submits a list of priorities. A general description of the risks can be found in the financial part of this annual report under chapter VIII.
One of the objectives of the internal control and risk management system is also to ensure a timely, complete and accurate communication. To this end the Business Control Guide and all other guidelines contain the necessary regulations on roles and responsibilities. Also, the necessary attention is given to ensuring the security and confidentiality of the data exchange, if and when necessary.
The Recticel Group has also revised its internal reporting system in the event of violation of internal or external laws and regulations. Indeed, a Group Policy for the Reporting of Misconduct and the Protection of Whistle-blowers has been activated to enable anyone to report on behaviour that may represent a violation of the applicable Code of Conduct, the Group Corporate Policies or any other laws and regulations.
Finally, the Audit committee, amongst other, has the task of informing and advising the Board of Directors regarding the annual follow up of the systems of internal control and risk management.
The Internal Audit Department works based on an Internal Audit Charter and has the primary function of delivering objectives opinions about the internal control in place in the Recticel Group. The Internal Audit aims at providing the reasonable assurance that the strategic, operational, compliance and reporting objectives of the Recticel Group can be realized in the most efficient way. To this end they seek to ensure the following objectives:
The external audit of Recticel SA/NV's company and consolidated annual accounts has been entrusted by the Annual General Meeting of 2013 to the limited liability cooperative company "DELOITTE Bedrijfsrevisoren", represented by Mr. William BLOMME. Mr. William BLOMME left DELOITTE on 1 December 2014 and is replaced by Mr. Joël BREHMEN.
The Auditor conducts its audits in accordance with the standards of the Belgian Institute of Company Auditors and delivers a report, which confirms if the company's annual accounts and the consolidated financial statements of the company reflect a true and fair view of the assets, financial condition and results of the company. The Audit committee investigates and discusses these bi-annual reports in the presence of the Auditor, and afterwards also with the Board of Directors.
The Auditor's remuneration on the audit of Recticel NV's company and consolidated account and the consolidated financial statements intended in article 134, §1 of the Companies Code, amounts to EUR 400,670 for 2014.
Apart from this remuneration the Auditor also invoiced EUR 273,456 for additional audits and EUR 150,077 for other consulting assignments. The details of these compensations are included in the explanatory notes on VOL 5.15 in the statutory annual account.
The global amount of the Auditor's remunerations for additional services to the Recticel Group amounts to EUR 618,380. This global amount comprises the sum of EUR 344,924 for additional tax, legal and corporate finance assignments. Provided that the total remuneration for the services offered by the Auditor amount to EUR 949,347 at Group level, it shall be noticed that the limit intended in article 133 of the Belgian Companies Code on consolidated level has not been exceeded.
Details on these compensations are included in the explanatory notes in the financial part of the Consolidated Annual report.
The Auditor's mandate was renewed in 2013 and will end after the upcoming Ordinary General meeting of 2016.
Recticel's Board of Directors currently consists of twelve members. There are eleven non-executive directors, four of which are independent. OLIVIER CHAPELLE SPRL/BVBA, Chief Executive Officer, is the executive director.
The Chief Executive Officer represents the management and four directors represent the reference shareholder.
With reference to the Law of 28 July 2011 setting the obligation to have, by 1 January 2017, at least 1/3 of the members of the Board of the opposite gender, the Board is committed to comply with this obligation in due time. Since the introduction of the law two additional female directors were appointed and hence currently three of the twelve members of the Board of Directors are of the opposite gender.
The following table provides an overview of the current members of Recticel's Board of Directors.
| NAME | FUNCTION | TYPE | YEAR OF BIRTH |
START OF MANDATE |
END OF MANDATE |
PRIMARY FUNCTION OUTSIDE OF RECTICEL |
MEMBERSHIP COMMITTEE |
|---|---|---|---|---|---|---|---|
| Etienne DAVIGNON | Chairman | Non-executive | 1932 | 1992 | 26/05/15 | Brussels Airlines Chairman |
AC |
| Olivier CHAPELLE (1) | Managing Director |
Executive | 1964 | 2009 | 2016 | MC | |
| André BERGEN (2) | Director | Independent | 1950 | 2011 | 26/05/15 | Cofinimmo Chairman |
|
| François BLONDEL (3) | Director | Non-executive | 1963 | 2012 | 26/02/15 | RC AC |
|
| Benoit DECKERS (4) | Director | Non-executive | 1964 | 26/02/2015 | 2015 | Chief Financial Officer Compagnie du Bois Sauvage |
RC |
| Marion DEBRUYNE (5) | Director | Independent | 1972 | 29/05/2012 | 2016 | Vlerick Leuven Gent Management School Partner and Associate Professor |
RC |
| Pierre-Alain DE SMEDT | Director | Independent | 1944 | 2011 | 26/05/15 | Deceuninck Group NV Chairman |
RC |
| Ingrid MERCKX (6) | Director | Independent | 1966 | 29/05/2012 | 2016 | Agfa Graphics Chief Operating Officer |
RC |
| Wilfried VANDEPOEL (7) | Director | Non-executive | 1945 | 1999 | 2017 | Lessius Corporate Finance NV Managing Director |
|
| Patrick VAN CRAEN | Director | Non-executive | 1953 | 2012 | 2016 | CFE International Director | AC |
| Frédéric VAN GANSBERGHE (8) |
Director | Non-executive | 1958 | 2014 | 2016 | Managing Director Galactic NV | |
| Pierre-Yves de Laminne de Bex (9) |
Director | Non-executive | 1969 | 2014 | 2018 | Companie du Bois Sauvage Director Unit International SA, Finance Manager |
|
| Jacqueline ZOETE | Director | Non-executive | 1942 | 2010 | 2016 | Sioen Industries NV Director |
AC |
(1) in his capacity as General Manager of Olivier Chapelle SPRL/BVBA.
(2) in his capacity as General Manager of André Bergen Comm. V.
(3) in his capacity as Permanent Representative of Compagnie du Bois Sauvage Services SA.
(4) in his capacity as Permanent Representative of Compagnie du Bois Sauvage Services SA.
(5) in her capacity as General Manager of Marion Debruyne BVBA
(6) in her capacity as General Manager of Imrada BVBA
(7) in his capacity as Managing Director of Revam BVBA
(8) in his capacity as Permanent Representative of Entreprises et Chemins de Fer en Chine SA (9) in his capacity as Permanent Representative of Compagnie du Bois Sauvage SA
AC = Audit Committee
MC = Management Committee
RC = Remuneration & Nomination Committee
The following table provides an overview of the members of the Board of Directors of Recticel of who the mandate expired in the course of the 2014.
| NAME | FUNCTION | TYPE | YEAR OF BIRTH |
START OF MANDATE |
END OF MANDATE |
PRIMARY FUNCTION OUTSIDE OF RECTICEL |
MEMBERSHIP COMMITTEE |
|---|---|---|---|---|---|---|---|
| Guy PAQUOT | Vice Chairman | Non-executive | 1941 | 1985 | 27/03/14 | Entreprises et Chemins de Fer en Chine SA, Chairman and Managing Director |
As proposed by the Board of Directors and based upon the recommendation made by the Remuneration and Nomination committee, the following has been decided during the Ordinary General Meeting dated 27 May 2014 :
Moreover it should be noted that the Board of Directors of 9 May 2014 has accepted the resignation of Mr. Guy PAQUOT as Director with effect from 27 March 2014. The General Meeting of 27 May 2015 has accepted and confirmed this resignation.
On 26 February 2015, Mr. François BLONDEL resigned with immediate effect as permanent representative of Compagnie du Bois Sauvage Services SA. The latter has proposed Mr. Benoit DECKERS as new permanent representative which was ratified by the Board of Directors of 26 March 2015.
Taking into account the above, and upon advice of the Remuneration & Nomination Committee, the Board of Directors will propose at the Ordinary General Meeting of 26 May 2015 to approve the:
In replacement of Mr. Pierre-Alain DE SMEDT, which mandate expires at the end of the General Meeting, appointment of Mr. Kurt PIERLOOT as non-executive and independent director for a term of three years expiring after the General Meeting of 2018.
Renewal of the mandate as Director of Compagnie du Bois Sauvage Services SA, represented by Mr. Benoit DECKERS for a term of three years expiring after the General Meeting of 2018.
The Board of Directors gathered a total of eleven times in 2014. One meeting handled mainly the 2014 budget and two meetings handled the establishment of the annual accounts as per 31 December 2013 and the mid-year accounts as per 30 June 2014.
Each meeting also addressed the state of affairs per business line and the most important current acquisition and/or divestment files. Other subjects (human resources, external communication, litigations and legal issues, delegations of authority and such) are discussed as and when necessary.
The written decision procedure was not applied in 2014.
Mr. Dirk VERBRUGGEN, General Counsel and General Secretary, acts as Secretary of the Board of Directors.
The individual attendance rate of the directors at the meetings in 2014 was:
| NAME | ATTENDANCE RATE 2014 |
|---|---|
| Etienne DAVIGNON | 11/11 |
| Olivier CHAPELLE | 11/11 |
| André BERGEN | 9/11 |
| François BLONDEL | 10/11 |
| Pierre-Yves de LAMINNE de BEX (1) | 7/8 |
| Marion DEBRUYNE | 6/11 |
| Pierre-Alain DE SMEDT | 10/11 |
| Ingrid MERCKX | 7/11 |
| Guy PAQUOT (2) | 1/1 |
| Wilfried VANDEPOEL | 10/11 |
| Patrick VAN CRAEN | 11/11 |
| Frédéric VAN GANSBERGHE (3) | 10/10 |
| Jacqueline ZOETE | 11/11 |
(1) start of mandate 27/05/2014
(2) end of mandate 27/03/2014 (3) start of mandate 09/05/2014
The Board of Directors organises a self-assessment of its functioning on a regular basis. Such self-assessment starts through a questionnaire to be remitted to and completed by each individual director. The results of the questionnaire are then be discussed and further analysed during a subsequent meeting of the Board of Directors.
In accordance with company law, the audit committee governs the financial reporting process, the effectiveness of the internal control and risk management systems of the company, the internal audit, the statutory control of the annual accounts and the consolidated accounts, and the Auditor's independence. The Audit committee's terms of reference are included in the Corporate Governance Charter.
The Audit committee consists of four members. All members are non-executive directors and two members, one of which is the Chairman, are independent directors in the sense of article 526ter of the Belgian Companies Code.
Mr. Dirk VERBRUGGEN, General Counsel and General Secretary, acts as Secretary of the Audit committee.
The composition of the Audit committee complies with the stipulations of Recticel NV's articles of association and the relevant provisions of the Belgian Companies Code, but does not comply with principle 5.2. /4. of the Belgian Corporate Governance Code 2009 which provides that at least the majority of the members of the Audit committee must be independent. Recticel's Board of Directors contends however that Mr. DAVIGNON and Mr. VANDEPOEL have proven a de facto independence stature, though they no longer meet the legal independence requirements, only due to their term as director exceeding twelve years.
In accordance with article 526bis of the Companies Code, Recticel NV declares that the Chairman of the Audit committee, Mr. André BERGEN, meets the independence requirements and that he possesses the requisite expertise in accounting and auditing.
The following table contains the members of the Audit committee during the financial year 2014 to date.
| NAME | FUNCTION | ATTENDANCE RATE IN 2014 |
|---|---|---|
| André BERGEN | Chairman | 4/5 |
| Etienne DAVIGNON | Member | 5/5 |
| Wilfried VANDEPOEL | Member | 5/5 |
| Patrick VAN CRAEN | Member | 5/5 |
The Audit committee convened five times in 2014. Four meetings were devoted primarily to the audit of the annual accounts per 31 December 2013 and the interim accounts per 30 June 2014. All meetings also focus on the internal audit program, risk management, compliance, taxation and IFRS related accounting questions.
The Audit Committee conducts each year an informal selfassessment of its functioning during one of its meetings and reserves the necessary time to discuss and analyse the same.
The Remuneration and Nomination Committee makes proposals to the Board of Directors regarding the remuneration policy and the individual remuneration of directors and members of the Management committee and will in future prepare and explain the remuneration report at the Ordinary General Meeting. They also make the necessary proposals regarding the evaluation and reappointment of directors as well as the appointment and induction of new directors. The terms of reference of the Remuneration and Nomination Committee are included in Recticel's Corporate Governance Charter.
The Remuneration and Nomination Committee consists of four members, all non-executive directors, of which three are independent directors.
Mr. Dirk VERBRUGGEN, General Counsel and General Secretary, fulfils the role of secretary of the Remuneration and Nomination Committee.
The composition of the Remuneration and Nomination committee meets the new requirements with respect to the Companies Code, as well as the requirements of the Belgian Corporate Governance Code.
| NAME | FUNCTION | ATTENDANCE RATE IN 2014 |
|---|---|---|
| Pierre-Alain DE SMEDT | Chairman | 4/4 |
| André BERGEN | Member | 3/4 |
| Marion DEBRUYNE | Member | 4/4 |
| François BLONDEL | Member | 2/4 |
In accordance with article 526quater of the Companies Code, Recticel declares that the Remuneration and Nomination committee possesses the necessary expertise in the area of remuneration policy.
The Remuneration and Nomination committee convened four times in 2014.
Two meetings dealt with the fixed and variable remuneration of the executive management as well as with the election and re-election of directors. Other meetings concerned a.o. the election of the future Group General Manager Insulation.
The set-up and functioning of the Remuneration and Nomination Committee was thoroughly reviewed at the end of 2010 following the introduction of the Law dated 6 April 2010 amending the Belgian Companies Code and introducing an article 526quater, whereby the setting-up of a Remuneration and Nomination Committee has become mandatory.
Consequently, the Remuneration and Nomination Committee conducts each year an informal self-assessment of its functioning during one of its meetings and reserves the necessary time to discuss and analyse the same.
The Board of Directors has entrusted the day-to-day management of the company to its Managing Director and Chief Executive Officer, "OLIVIER CHAPELLE" SPRL/ BVBA, located in 1180 Brussels, Avenue de la Sapinière 28, represented by its General Manager and permanent representative, Mr. Olivier CHAPELLE.
The Chief Executive Officer is assisted by the Management committee, of which the members (for the period 2014 to present) are indicated in the following list:
| NAME | FUNCTIE |
|---|---|
| Olivier CHAPELLE (1) | Chief Executive Officer |
| Ralf BECKER | Group General Manager Insulation |
| Betty BOGAERT | Group ICT & Business Support Manager |
| Philipp BURGTORF | Group General Manager Bedding |
| Marc CLOCKAERTS (2) | Group General Manager Automotive |
| Marc CLOCKAERTS (3) | Group General Manager Flexible Foams |
| Jean-Pierre DE KESEL | Chief Sustainability Officer |
| Rik DE VOS (4) | Group General Manager Flexible Foams |
| Bart MASSANT (5) | Group HR & Communications Manager |
| Jean-Pierre MELLEN | Chief Financial Officer |
| Jan MEULEMAN (6) | Group General Manager Automotive |
| François PETIT | Chief Procurement Officer |
| Dirk VERBRUGGEN | General Counsel & General Secretary |
| Bart WALLAEYS | Group Manager Research and Development |
| (1) In his capacity as General Manager of Olivier Chapelle SPRL/BVBA. |
(2) tot 1/2/2015 in zijn hoedanigheid van Zaakvoerder en Vaste Vertegenwoordiger
van Emsee BVBA. (3) vanaf 1/2/2015 in zijn hoedanigheid van Zaakvoerder en Vaste Vertegenwoordiger van Emsee BVBA. (4) t/m 31/12/2014.
(5) vanaf 15/9/2014.
(6) vanaf 1/2/2015.
The Management committee has an advisory role on behalf of the Chief Executive Officer and is not an executive committee in the sense of article 524bis of the Belgian Companies Code.
The Recticel Group's Remuneration policy can be found in the Corporate Governance Charter on the Recticel web site (www.recticel.com).
The Group Remuneration Policy was not amended during the year 2014. There are no changes expected in the next two financial years.
The Board of Directors of the Group has determined the remuneration of the Management Committee (hereafter the "Senior Management" or the "Senior Managers") on recommendation of the Remuneration and Nomination Committee.
In order to assist the Committee in its analysis of the competitive environment in Belgium and Europe, as well as other factors that are necessary for the evaluation of remuneration matters by the committee, the committee can call on the services of internationally acknowledged remuneration consultants.
As such, a compensation benchmarking exercise of the Management Committee members was organised in the second half of 2011 together with Towers Watson.
In line with the recommendation of the Remuneration and Nomination Committee, the Board has reaffirmed the general principles of the Group Remuneration Policy for the year 2015.
The company's directors are rewarded for their services with a fixed remuneration for the year, as well as a fixed attendance fee per attended meeting. The remuneration is determined by the Board of Directors upon proposal of the Remuneration and Nomination Committee and presented for approval to the General Meeting for the current year. The Chairman of the Board receives a remuneration of 200% of the remuneration specified for other members of the Board.
The General Meeting also decides on the additional remuneration for Board Committee members. The Chairman of the Committees receives a remuneration of 150% of the remuneration specified for other members of the Committee. The level as well as the structure of the remuneration of the directors is reviewed on an annual basis. For 2015, no changes are proposed.
Non-executive directors of the Company receive no remuneration, bonus, or equity-linked, or other incentives from the Company and/or its affiliates except as remuneration for their services as Director to the Company and/or its affiliates. The company will not grant credit, nor maintain credit, nor award credit in the form of a personal loan, nor extend an existing credit, to any member of the Board of Directors.
The remuneration of the Senior Management is calculated to:
The level as well as the structure of the remuneration of the Senior Management is reviewed annually by the Remuneration and Nomination Committee, which consequently presents a proposal to the Board of Directors for approval.
The remuneration package for Senior Management combines three integrated elements, which together form the "total direct remuneration". These integrated elements are the basic compensation, the annual incentive bonus and the long-term incentives. The company will not grant credit, nor maintain credit, nor award credit in the form of a personal loan, nor extend an existing credit, to any member of the Senior Management.
When determining the remuneration levels for Senior Management, along with the internal factors, the remuneration of executives in multinational companies of similar size and/or similar activities with headquarters in Belgium and neighbouring countries are taken into account. It is the intention to establish remuneration levels that, in general, lie on or around the average market level, for as far as the results of the company allow this.
The CEO receives a bonus remuneration based on his performance over the calendar year. This bonus remuneration can amount up to maximum 100% of the annual basic remuneration. The evaluation criteria are based on financial targets linked to certain key performance indicators ("KPI's") in relation to the annual budget and debt level at Group level, as well as non-financial targets linked to the development of the company for the future (for example structure, commercial practices, new products and/or markets, M&A, human resources, compliance, etc.). Achieving a financial target leads to a pay-out of 75% of the maximum for that target. Financial objectives count for 60% of the bonus. Non-financial objectives amount for 40%.The Remuneration Committee makes the evaluation in a private session and discusses the evaluation with the CEO before presenting a proposal to the Board for approval.
The Group General Managers at the head of the four different business lines likewise receive a bonus remuneration based on their performance during the calendar year. Their bonus remuneration can amount up to maximum 50% of their annual basic remuneration. The evaluation criteria are based on financial targets linked to certain KPI's in relation to the annual budget, both at Group level, as at the level of their respective business lines. Financial targets account for 60% of the bonus. Non-financial targets account for 40% linked to the development of the business line for the future (for example structure, commercial practices, new products and/or markets, M&A, human resources, compliance, etc.).
For the support functions within the Management Committee (CFO, General Counsel, Procurement, ICT, HR and R&D), financial targets account for 45% and relate to the Group results, the department budget and/or specific projects. Non-financial targets account for 55% linked to the development of the department for the future (for example structure, new products, M&A, human resources, compliance, etc.). Their bonus remuneration can amount up to maximum 50% of their annual basic remuneration.,
The CEO performs the evaluation of the other members of the Management Committee, and discusses the results of the evaluation with the Remuneration Committee.
With regard to article 520ter of the Companies Code, relating to the need to defer variable remuneration payments over a three year period in case certain thresholds are passed, the Board of Directors had proposed to the 2014 General Shareholder meeting to approve a deviation from the said rule in line with the possibility offered by the legislation, as this principle was only applicable to the Managing Director and CEO, OLIVIER CHAPELLE SPRL/BVBA, as all other members of the Management Committee remained below the 25% threshold, since the calculation is done here on the basis of the total compensation package.
The 2014 General Shareholders' meeting approved this proposal for the year 2014.
The Remuneration Committee and the Board of Directors reviewed again the various possibilities that the legislation offers for its application and finally decided that it would remain in the best interest of the company to keep the variable remuneration payment structure at the same level for all Management Committee members. As the target variable remuneration bonus pay-out for the Managing Director and CEO surpasses the 25% maximum threshold, the Board will hence propose to the 2015 General Shareholders' meeting to approve, as for last year, the said deviation from the principle of a deferral over three years, and hence to allow the full payment of the variable remuneration within one year.
It shall be finally noted that there exists no right of recovery in case the variable remuneration would have been granted based on incorrect financial data.
Since 2006 directors have received a remuneration of EUR 1,650 per attended meeting, and the Chairman has received double this amount. The members of the Audit Committee received EUR 2,500 per attended meeting and the Chairman EUR 3,750. The members of the Remuneration and Nomination Committee are entitled to EUR 2,500 per year; the Chairman EUR 3,750.
For 2014, a fixed annual consideration was approved and granted for an amount of EUR 9,000 for a director and EUR 18,000 for the Chairman of the Board. For 2015, the proposal to be presented to the General Shareholders' meeting will remain at the same level.
The remuneration of the executive director (Olivier Chapelle SPRL/BVBA) in his capacity as director, as included in the above overview is taken into account for its total compensation package on the basis of its management services agreement.
| NAME | DIRECTORS FEES 2014 |
ATTENDANCE FEES BOARD OF DIRECTORS 2014 |
AUDIT COMMITTEE 2014 |
REMUNERATION AND NOMINATION COMMITTEE 2014 |
REMUNERATION FOR SPECIAL ASSIGNMENTS |
TOTAL (GROSS) 2014 |
|---|---|---|---|---|---|---|
| DAVIGNON Etienne | € 18,000.00 | € 36,300.00 | € 12,500.00 | - | - | € 66,800.00 |
| OLIVIER CHAPELLE BVBA | € 9,000.00 | € 18,150.00 | - | - | - | € 27,150.00 |
| PAQUOT Guy | € 2,250.00 | € 1,650.00 | - | - | - | € 3,900.00 |
| ANDRÉ BERGEN Comm V | € 9,000.00 | € 14,850.00 | € 15,000.00 | € 2,500.00 | - | € 41,350.00 |
| COMPAGNIE DU BOIS SAUVAGE SERVICES SA |
€ 9,000.00 | € 16,500.00 | - | € 2,500.00 | - | € 28,000.00 |
| COMPAGNIE DU BOIS SAUVAGE SA | € 5,365,38 | € 11,550.00 | - | - | - | € 16,915.38 |
| DE SMEDT Pierre-Alain | € 9,000.00 | € 16,500.00 | - | € 3,750.00 | - | € 29,250.00 |
| ENTREPRISES ET CHEMIN DE FER EN CHINE SA |
€ 5,810.44 | € 16,500.00 | - | - | - | € 22,310.44 |
| MARION DEBRUYNE BVBA | € 9,000.00 | € 9,900.00 | - | € 2,500.00 | - | € 21,400.00 |
| IMRADA BVBA | € 9,000.00 | € 11,550.00 | - | - | - | € 20,550.00 |
| REVAM BVBA | € 9,000.00 | € 16,500.00 | € 12,500.00 | - | - | € 38,000.00 |
| VAN CRAEN Patrick | € 9,000.00 | € 18,150.00 | € 12,500.00 | - | - | € 39,650.00 |
| ZOETE Jacqueline | € 9,000.00 | € 18,150.00 | - | - | - | € 27,150.00 |
| TOTAL COST FOR THE COMPANY |
OLIVIER CHAPELLE SPRL REPRESENTED BY OLIVIER CHAPELLE |
OF THE MANAGEMENT COMMITTEE | OTHER MEMBERS | TOTAL | ||
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |
| Number of persons | 1 | 1 | 13 | 12 | 14 | 13 |
| Basic salary | € 486,000 | € 486,000 | € 2,563,853 | € 2,769,803 | € 3,049,853 | € 3,255,803 |
| Variable remuneration | € 243,148 | € 243,148 | € 788,664 | € 784,937 | € 1,031,812 | € 1,028,085 |
| Subtotal | € 729,148 | € 729,148 | € 3,352,517 | € 3,554,740 | € 4,081,665 | € 4,283,888 |
| Pensions | - | - | € 154,660 | € 144,341 | € 156,660 | € 144,341 |
| Other benefits | € 60,206 | € 71,243 | € 281,378 | € 268,389 | € 341,584 | € 339,632 |
| Total | € 789,354 | € 800,391 | € 3,788,555 | € 3,967,470 | € 4,577,909 | € 4,767,861 |
The table above is established in line with the new guidance provided by the Belgian Corporate Governance Committee, meaning that for members with employee status, the gross remuneration is taken, without the employer social contributions, and for members utilising a management company, total remuneration fees invoiced for the year.
Variable remuneration means the remuneration earned for the performance over 2014, but which will only be paid out in 2014. The amount of the variable remuneration which has been paid out in 2014, can be found under the exercise year 2013.
Members of the Management Committee with an employee status also have a company vehicle (including fuel) and company mobile phone at their disposal. The costs thereof have been included in the above amount of "other benefits". Members of the Management Committee operating through a management company receive no such benefits, though certain costs may be invoiced separately, in which case they are also taken into account in the above overview.
With regard to group insurance and pension arrangements, a distinction needs to be made between members being employees, and members operating through a management company. The latter receive no group insurance or pension arrangements.
Members of the Management Committee with an employee status employed before 2001 are included in the Recticel Group Defined Benefit Plan. Members hired externally since 2001 are included in the Recticel Group Defined Contribution Plan. The service costs relating thereto have been included in the above overview
In line with the Corporate Governance Code, the Board of Directors requested the Ordinary General Meeting of May 2013 for approval and obtained said approval for the issue of a stock option plan of maximum up to 480,000 warrants for the senior managers of the Group.
During the year 2013, no stock options or warrants, shares or other rights to acquire shares were allocated to the leading staff members of the Group, due to a closed period. The plan of 2013 was finally issued in April 2014.
This plan relates to 316.000 stock options for a total of 52 managers. The exercise price was fixed on the average share price during the previous 30 days, namely € 6.73 and the exercise period runs from 1 January 2018 till 28 April 2020. The total cost for the Company for this serie 2013 is € 0.846 per share option or € 267.336 in total, spread over 4 years (issue year and three years vesting period).
Under this plan the members of the Management Committee received the following warrants :
| NAME | NUMBER OF WARRANTS RECEIVED | THEORETICAL VALUE OF WARRANTS AT THE MOMENT OF THE ATTRIBUTION |
|---|---|---|
| Olivier Chapelle | 30,000 | € 25,380.00 |
| Betty Bogaert | 9,900 | € 8,375.40 |
| Philipp Burgtorf | 9,900 | € 8,375.40 |
| Marc Clockaerts | 9,900 | € 8,375.40 |
| Jean-Pierre De Kesel | 9,900 | € 8,375.40 |
| Rik De Vos | 9,900 | € 8,375.40 |
| Jean-Pierre Mellen | 9,900 | € 8,375.40 |
| Jan Meuleman | 7,000 | € 5,922.00 |
| François Petit | 9,900 | € 8,375.40 |
| Dirk Verbruggen | 9,900 | € 8,375.40 |
| Bart Wallaeys | 9,900 | € 8,375.40 |
| Paul Werbrouck | 9,900 | € 8,375.40 |
Mr. De Vos has left the group on its own initiative at the end of 2014, and thus lost all rights on his warrants.
During the year 2014, no stock options or warrants, shares or other rights to acquire shares were allocated to the members of the Board of Directors.
During 2014, the following stock options were exercised by the members of the Management Committee :
| NAME | NUMBER OF WARRANTS EXERCISED |
PLAN |
|---|---|---|
| Betty Bogaert | 9.900 | December 2008 |
| 8.500 | December 2009 | |
| Marc Clockaerts | 9.900 | December 2008 |
| Jean-Pierre De Kesel | 9.900 | December 2008 |
| Jean-Pierre Mellen | 9.900 | December 2008 |
| 16.500 | December 2009 | |
| Bart Wallaeys | 9.900 | December 2008 |
| 16.500 | December 2009 | |
| Dirk Verbruggen | 3.000 | December 2008 |
The total shares and warrants held by the members of the Board of Directors as of 23 April 2015 is :
| DIRECTORS | SHARES | WARRANTS |
|---|---|---|
| Etienne Davignon | 0 | 0 |
| Olivier Chapelle BVBA | 0 | 0 |
| Olivier Chapelle (permanent representative) | 0 | 210,000 |
| Entreprises et chemins de fer en Chine SA | 158,024 | 0 |
| Frédéric Van Gansberghe (permanent representative) | 0 | 0 |
| André Bergen Comm. V. | 0 | 0 |
| André Bergen (permanent representative) | 0 | 0 |
| Compagnie du Bois Sauvage Services SA | 0 | 0 |
| Benoit Deckers (permanent representative) | 0 | 0 |
| Compagnie du Bois Sauvage SA | 8,358,006 | 0 |
| Pierre-Yves de Laminne de Bex (permanent representative) | 0 | 0 |
| Marion Debruyne BVBA | 0 | 0 |
| Marion Debruyne (permanent representative) | 0 | 0 |
| Pierre-Alain De Smedt | 0 | 0 |
| Imrada BVBA | 0 | 0 |
| Ingrid Merckx (permanent representative) | 0 | 0 |
| Revam BVBA | 2,920 | 0 |
| Wilfried Vandepoel (permanent representative) | 0 | 0 |
| Patrick Van Craen | 2,500 | 0 |
| Jacqueline Zoete | 758,374(1) | 0 |
| Johnny Thijs(2) | 4,000 | 0 |
Notes:
(1) For these 758.374 shares, 745.105 shares are held by SIHOLD NV and 13.269 are held by SICORP NV. Both entities are controlled by Jacqueline ZOETE.
(2) Mr; Johnny Thijs is not yet member of the Board of Directors. The Board of Directors has approved unanimously the recommendation of the Remuneration & Nomination Committee to appoint at the Annual General Meeting of 26 May 2015 Mr. Johnny Thijs as new member of the Board of Directors. Subject to this appointment, the Board of Directors has announced his intention to appoint Mr. Johnny Thijs has new Chairman of the Company.
| MEMBERS OF THE MANAGEMENT COMMITTEE | SHARES | WARRANTS |
|---|---|---|
| Ralf Becker | 0 | 0 |
| Betty Bogaert | 0 | 87,800 |
| Philipp Burgtorf | 0 | 19,800 |
| Marc Clockaert | 0 | 90,900 |
| Jean-Pierre De Kesel | 7,400 | 89,300 |
| Jean-Pierre Mellen | 0 | 77,800 |
| Jan Meuleman | 0 | 34,500 |
| François Petit | 0 | 36,300 |
| Dirk Verbruggen | 3,242 | 38,800 |
| Bart Wallaeys | 350 | 79,800 |
| Bart Massant | 0 | 0 |
The total shares and warrants held by the members of the Management Committee as of 23 April 2015 is:
Most agreements with the members of the Management Committee contain no specific end of contract regulation. Consequently common labour law is decisive. Some members do have such regulation in proportion to their seniority. Below an overview of the dismissal period and severance pay for each member of the Management Committee. Mr. Rik De Vos, formerly Group General Manager Flexible Foams, left the Recticel Group on his own initiative at the end of 2014 and hence received no several payment.
| NAME | DISMISSAL PERIOD/SEVERANCE PAY |
COMMENTS |
|---|---|---|
| Olivier Chapelle | 12 months | |
| Ralf Becker | 12 months | |
| Betty Bogaert | 12 months | Legal minimum - Claeys formula applies until 31/12/2013 - Then new legislation |
| Philipp Burgtorf | 12 months | |
| Marc Clockaerts | 3 months | |
| Jean-Pierre De Kesel | 18 months | Legal minimum - Claeys formula applies until 31/12/2013 - Then new legislation |
| Bart Massant | 6 months | 12 months as from September 2015 |
| Jean-Pierre Mellen | 15 months | |
| Jan Meuleman | 15 months | Legal minimum - Claeys formula applies until 31/12/2013 - Then new legislation |
| François Petit | 12 months | |
| Dirk Verbruggen | 12 months | Legal minimum |
| Bart Wallaeys | 15 months | Legal minimum - Claeys formula applies until 31/12/2013 - Then new legislation |
Chapter VII.1. of the Recticel Corporate Governance Charter describes Recticel NV's policy on related party transactions that are not governed by the legal conflict of interest scheme. The application of this policy is explained hereafter.
Commercial transactions, which are mainly the result of a joint product development, occur between the Sioen Group and the Recticel Group.
More specifically, Recticel Group companies booked purchases worth EUR 1,050,774.73 and sales worth EUR 118,104.35 with companies of the Sioen Group during the year 2014.
During 2014, no conflicts of interests arose between a director and the Company as referred to in Articles 523 and 524 of the Belgian Companies Code ,except in the context of the stock option plan edition April 2014 whereby Mr Chapelle a conflict of interest had. The procedure laid down in Article 523 was applied. Reference is made here to the statutory annual report, which contains an extract of the minutes of April 29, 2014 in this regard.
The company policy regarding the prevention of insider trading and market manipulation is further explained in chapter VII.2 of Recticel's Corporate Governance Charter.
These measures include the implementation of restrictions on the execution of transactions (« closed periods ») applicable since 2006.
Mr. Dirk VERBRUGGEN was appointed as Compliance Officer, responsible for monitoring the observance of these regulations.
Here follows the overview of the shareholders who, under the statutes of the law, have addressed a notification to the company and to the FSMA:
| Name | DATE OF NOTIFICATION |
NUMBER OF SHARES | % OF VOTING RIGHTS ATTACHED TO SHARES (EXCLUDING SHARES HELD BY RECTICEL) |
% OF VOTING RIGHTS ATTACHED TO SHARES (INCLUDING SHARES HELD BY RECTICEL) |
|---|---|---|---|---|
| Compagnie du Bois Sauvage SA (3) | 2 September 2014 | 8,358,006 | 28.49% | 28.18% |
| Entreprises Chemins de Fer en Chine SA (3) | 2 September 2014 | 158,024 | 0.54% | 0.53% |
| Total Compagnie du Bois Sauvage SA | 8,516,030 | 29.03% | 28.71% | |
| Capfi Delen Asset Management NV | 16 April 2012 | 905,201 | 3.08% | 3.05% |
| BNP Paribas Investment Partners UK Ltd | 1 July 2014 | 882,424 | 3.01% | 2.97% |
| Petercam | 12 December 2014 | 884,926 | 3.02% | 2.98% |
| Public | N/A | 18,151,875 | 61.57% | 60.89% |
| Total (excluding treasury Shares) | 29,340,456 | 100% (4) | 98.90% | |
| Treasury Shares | N/A | 326,800 | 1.10% | |
| Total (including treasury Shares) | 29,667,256 | 100% (4) |
Notes:
(1) The percentage of voting rights is calculated on the basis of the 29,667,256 existing Shares as at 31 March 2015. The calculation is adjusted to take into account that the voting rights attached to the 326,800 own Shares held by the Company are suspended by operation of law.
(2) The percentage of voting rights is calculated on the basis of the 29,667,256 existing Shares as at 31 March 2015 (including the own Shares held by the Company).
(3) For the purposes of their transparency declaration dated 2 September 2014, Compagnie du Bois Sauvage SA and Entreprises et Chemins de Fer en Chine SA included the 326,800 own Shares held by the Company in the number of Shares controlled by them, given that they are deemed to be acting in concert with the Company for the purposes of the applicable transparency disclosure rules.
(4) Due to rounding, the sum of the percentages of voting rights included in this table may not exactly amount to 100%.
The capital structure, with the number of shares, strips, convertible bonds and warrants of the company can be found in the chapter "Information on the Share" on the Recticel website (www.recticel.com).
There are no legal or statutory limitations on transfer of securities. There are no securities with special control rights. There is no mechanism for the control of any employee share scheme. There are no legal or statutory restrictions on the exercise of voting rights, for as far as the shareholder is legally represented at the Ordinary General Meeting, and his/her voting rights have not been suspended for any reason.
In accordance with the powers granted at the extraordinary general meeting on 28 May 2013, and incorporated in article 6 of the Statute, the Board of Directors have certain powers to issue new shares, convertible bonds, bonds or subscription rights, with or without preferential rights, and offering these to shareholders or other persons, with restriction of the preferential right, under the Companies Code. In this way the Board of Directors can, via the authorized capital, increase the subscribed capital in all possible ways. The authorization is valid for a period of three years, and can be renewed following the applicable legal rules. It may even be exercised after receipt of the notice given by FSMA that a notice of public takeover was submitted.
Under article 15 of the articles of association, the Company is entitled to acquire or dispose of shares in the Company, without a decision by the general meeting, if this acquisition is necessary in order to avoid an imminent and serious harm to the company under article 620 or 622 of the Belgian Companies Code.
There are no agreements between the Company and its directors or employees that would provide for compensations after a public takeover bid, the directors resigning or departing without any valid reason, or the employment of the employees being terminated.
The following agreements, whereby the company is party, contain the clauses that take effect, undergo changes or end, in the event of a change of control over Recticel SA/NV:
These clauses were specifically approved by Recticel's General Shareholder Meeting.
| Blowing agent | Carbon dioxide is produced from the reaction of isocyanate and water. This gas functions as blowing agent in the production of flexible foam. |
|---|---|
| Catalyst | Accelerates the reaction process and ensures the balance in the polymerization and the blowing. Catalysts determine the foaming speed of the process. |
| Dodecahedron | A regular dodecahedron or a spatial figure with 12 pentagonal faces, 20 end points and 30 edges. This is one of the five regular polyhedra in three dimensions. |
| Colo-Fast® | Aliphatic polyurethane that is distinguished by its colour fastness (light stable). |
| Colo-Sense® | Variation of Colo-Fast®. |
| Frequency rate of indus trial accidents |
Time cost of industrial accidents per million working hours. |
| IDC | Is short for International Development Centre, the department for international research and development of the Recticel Group. |
| Isocyanate | Highly reactive substance that easily combines with other substances (such as alcohols). The structure of these alcohols determines the hardness of the PU-foam. |
| Lambda | Expression of the thermal conductivity of thermal insulation. |
| MDI | Is short for Methylene diphenyl diisocyanate. |
| PIR | Abbreviation for polyisocyanurate. |
| Polyisocyanurate | Is an improved version of polyurethane. PIR-foam has an improved dimensional stability, excellent mechanical properties such as compressive strain and is a much stronger fire retardant. PIR is mainly used as thermal insulation. |
| Polyol | Synonym for PU polyalcohol, which is acquired from propylene oxide. |
| Polyurethane | Represents an important group of products within the large family of polymers or plastics. Polyurethane is a generic term for a wide range of foam types. |
| PU or PUR | Polyurethane. |
| REACH | Is a system for Registration, Evaluation and Authorization of Chemical substances that are produced or imported in the European Union. This regulation came into force on 01 June 2007. |
| Stabilizers | Provides the homogeneous structure and the stabilization of the cellular network up to the complete rise of the foam in the reaction process. |
| Severity index of accidents | Number of calendar days lost per thousand working hours. |
| TDI | Toluene diphenyl diisocyanate. |
| Appropriated capital | Net intangible fixed assets + goodwill + tangible fixed assets + working capital. Average = [Appropriated capital at the end of last year + Appropriated capital at the end of the last period] / 2. |
|---|---|
| Appropriated capital, Average |
Half yearly: average appropriated capital at the beginning and at the end of the period. Average = [Appropriated capital at the end of last year + Appropriated capital at the end of the last period] / 2. For the full year: average of the half yearly averages. |
| Associated companies | Entities in which Recticel has a significant influence and that are processed using the equity-method. |
| CGU | Is short for Cash Generating Unit or cash flow generating unit. |
| Combined figures | Figures including Recticel's pro rata share in the joint ventures, after elimination of intercompany transactions, in accordance with the proportional consolidation method. |
| Consolidated figures | Figures following the application of IFRS 11, whereby Recticel's joint ventures are integrated on the basis of the equity method. |
| Earnings per share, base | Net result for the period (Group share) / Average outstanding shares over the period. |
| Earnings per share, diluted | Net result for the period (Group share) / [Average number of outstanding shares over the period – own shares + (number of possible new shares that have to be issued within the framework of the existing outstanding stock option plans x dilution effect of the stock option plans)]. |
| EBIT | Operating results + profit or loss from equities. |
| EBITDA | EBIT + depreciation and additional impairments/increases on assets. |
| Equity capital | Total equity, including minority interests. |
| Gearing ratio | Net financial debt / Total equity (including shares of external parties). |
| Investments | Capitalized investments in tangible and intangible assets. |
| Joint ventures | Entities that are controlled jointly and that are consolidated proportionately. Following the early adaption of IFRS 11 since 2013, these participations are consolidated following the equity method. |
| Market capitalization | Closing price x total number of outstanding shares. |
| Net financial debt | Interest bearing financial debts at more than one year + interest bearing financial debts within maximum one year – cash and cash equivalents - Available for sale investments + Net marked-to-market value position of hedging derivative instruments. |
| Non-recurring elements | Non-recurring elements include operating revenues, expenses and provisions that pertain to restructuring programmes (redundancy payments, closure & clean-up costs, relocation costs,), reorganisation charges and onereous contracts, impairments on assets ((in)tangible assets and goodwill), revaluation gains or losses on investment property, gains or losses on divestments of non-operational investment property, and on the liquidation of investments in affiliated companies, gains or losses on discontinued operations, revenues or charges due to important (inter)national legal issues. |
| Recurring EBIT(DA) or REBIT(DA) |
EBIT(DA) before non-recurring elements. |
| Return on Capital Employed |
EBIT / average appropriated capital. |
| Return on Equity (ROE) | Net result for the period (share of the Group) / Average total equity over the period (the Group's share). |
| ROCE | Represents Return on Capital Employed. |
| Subsidiaries | Fully consolidated entities under Recticel control. |
| Working capital | Inventories + trade receivables + other receivables + recoverable taxes - trade payables - payable taxes - other commitments. |
| Consolidated financial statements a � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 76 | |||
|---|---|---|---|
| I.1. | Consolidated income statement � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 76 | ||
| I.2. | Earnings per share� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 76 | ||
| I.3. | Consolidated statement of comprehensive income� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 77 | ||
| I.4. | Consolidated balance sheet� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �78 | ||
| I.5. | Consolidated cash flow statement � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �79 | ||
| I.6. | Statement of changes in shareholders' equity� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �81 | ||
| Notes to the consolidated financial statements for the year ending 31 December 2014 a � � � 82 | |||
| II.1. | Summary of significant accounting policies� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 82 | ||
| II.1.1. | Statement of compliance – basis of preparation� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 82 | ||
| II.1.2. | General principles� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 82 | ||
| II.1.3. | Balance sheet items� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 85 | ||
| II.1.4. | Revenue recognition� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 89 | ||
| II.1.5. | Critical accounting assessments and principal sources of uncertainty� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 90 | ||
| II.2. | Changes in scope of consolidation � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 93 | ||
| II.3. | Business and geographical segments� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 93 | ||
| II.3.1. | Business segments� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 93 | ||
| II.3.2. | Geographical information � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 98 | ||
| II.4. | Income statement� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 99 | ||
| II.4.1. | Sales and marketing expenses� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 99 | ||
| II.4.2. | Other operating revenues and expenses� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 99 | ||
| II.4.3. | Earnings before interest and taxes (EBIT)� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 101 | ||
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| II.6.10. | ||
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Obligations under financial leases� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �133 Financial instruments and financial risks� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 134 II.5.22. Trade and other payables� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 142 Business combinations and disposals� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 142 II.5.24. Capital structure management� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 142 Miscellaneous� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 143 Operating lease arrangements� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 143 Other off-balance sheet items� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 143 Share-based payments� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 143 Events after the balance sheet date � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 145 Related party transactions� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 145 Remuneration of the Board of Directors and of the Management Committee � � � � � � � � � � � � � � � � � � � � � � �146 Exchange rates� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �147 Staff� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �147 Audit and non-audit services provided by the statutory auditor� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �148 Contingent assets and liabilities� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �148 Recticel s.a./n.v. – General information� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �150 Recticel s.a./n.v. – Condensed statutory accounts� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �151 Declaration by responsible officers a� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �153 Auditor's report on the consolidated financial statements for the year ending 31 December 2014 a � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �154 Comparable overview of the consolidated financial statements (2005-2014)� � � � � � � � � � � � � � � � � � � � � � � � �156 Risk factors and risk management a � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �158 |
The consolidated financial statements have been authorised for issue by the Board of Directors on 26 February 2015.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | NOTES* | 2014 | 2013 |
| Sales | II.3. | 983 367 | 976 763 |
| Distribution costs | (54 135) | (52 934) | |
| Cost of sales | (757 025) | (756 916) | |
| Gross profit | 172 207 | 166 913 | |
| General and administrative expenses | (72 299) | (74 397) | |
| Sales and marketing expenses | II.4.1. | (73 257) | (64 532) |
| Research and development expenses | (13 277) | (14 177) | |
| Impairments | (688) | (3 365) | |
| Other operating revenues (1) | 11 653 | 9 344 | |
| Other operating expenses (2) | (24 520) | (41 110) | |
| Other operating result (1)+(2) | II.4.2. | (12 867) | (31 766) |
| Income from joint ventures and associates | II.5.7. | 8 964 | 439 |
| EBIT | II.4.3. | 8 783 | (20 885) |
| Interest income | 608 | 758 | |
| Interest expenses | (10 639) | (10 163) | |
| Other financial income | 8 473 | 11 467 | |
| Other financial expenses | (11 272) | (13 407) | |
| Financial result | II.4.4. | (12 830) | (11 345) |
| Result of the period before taxes | (4 047) | (32 230) | |
| Current income taxes | II.4.5. | (2 675) | (2 916) |
| Deferred taxes | II.4.5. | (3 027) | (992) |
| Result of the period after taxes | (9 749) | (36 138) | |
| of which non-controlling interests | 0 | 0 | |
| of which share of the Group | (9 749) | (36 138) |
* The accompanying notes are an integral part of this income statement.
| in EUR | |||
|---|---|---|---|
| Group Recticel | NOTES * | 2014 | 2013 |
| Basic earnings per share | II.4.7. | (0.34) | (1.27) |
| Diluted earnings per share | II.4.8. | (0.34) | (1.27) |
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | NOTES * | 2014 | 2013 |
| Result for the period after taxes | (9 749) | (36 138) | |
| Other comprehensive income | |||
| Items that will not subsequently be recycled to profit and loss | |||
| Actuarial gains and losses on employee benefits | (10 323) | (4 010) | |
| Deferred taxes on actuarial gains and losses on employee benefits | 429 | 117 | |
| Total | (9 894) | (3 893) | |
| Items that subsequently may be recycled to profit and loss | |||
| Hedging reserves | (298) | 2 203 | |
| Available for sale investments | (32) | (16) | |
| Currency translation differences | 1 668 | (6 072) | |
| Foreign currency translation reserve difference recycled in the income statement | (137) | 110 | |
| Deferred taxes on hedging interest reserves | 79 | (749) | |
| Total | 1 280 | (4 524) | |
| Other comprehensive income net of tax | (8 614) | (8 417) | |
| Total comprehensive income for the period | (18 363) | (44 555) | |
| Total comprehensive income for the period | (18 363) | (44 555) | |
| of which attributable to non-controlling interests | 0 | 0 | |
| of which attributable to the owners of the parent | (18 363) | (44 555) |
For more details of other comprehensive income from Interests in Joint Ventures and Associates, see II.5.7.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | NOTES * | 31/12/14 | 31/12/13 |
| Intangible assets | II.5.1. | 12 384 | 11 954 |
| Goodwill | II.5.2. | 24 949 | 24 610 |
| Property, plant & equipment | II.5.3.& II.5.4. | 202 733 | 204 614 |
| Investment property | II.5.5. | 3 306 | 3 330 |
| Interests in joint ventures and associates | II.5.7. | 73 644 | 72 507 |
| Other financial investments | 160 | 161 | |
| Available for sale investments | 771 | 275 | |
| Non-current receivables | II.5.8. | 13 373 | 10 973 |
| Deferred tax | II.4.5. | 46 834 | 48 929 |
| Non-current assets | 378 154 | 377 353 | |
| Inventories and contracts in progress | II.5.9. & II.5.10. | 96 634 | 94 027 |
| Trade receivables | II.5.11. | 78 109 | 64 516 |
| Other receivables | II.5.11. | 49 597 | 46 358 |
| Income tax receivables | II.4.5. | 504 | 3 851 |
| Other investments | 75 | 60 | |
| Cash and cash equivalents | II.5.12. | 26 163 | 26 237 |
| Disposal group held for sale | II.5.13. | 8 569 | 0 |
| Current assets | 259 651 | 235 049 | |
| Total assets | 637 805 | 612 402 |
* The accompanying notes are an integral part of this balance sheet.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | NOTES * | 31/12/14 | 31/12/13 |
| Capital | II.5.14. | 74 161 | 72 368 |
| Share premium | II.5.15. | 108 568 | 107 042 |
| Share capital | 182 729 | 179 410 | |
| Treasury shares | (1 735) | (1 735) | |
| Retained earnings | 1 768 | 27 364 | |
| Hedging and translation reserves | (16 599) | (18 279) | |
| Equity - share of the Group | 166 163 | 186 760 | |
| Non-controlling interests | 0 | 0 | |
| Total equity | 166 163 | 186 760 | |
| Pensions and similar obligations | II.5.16. | 54 548 | 44 557 |
| Provisions | II.5.17. | 7 301 | 8 149 |
| Deferred tax | II.4.5. | 8 907 | 8 203 |
| Bonds and notes | II.5.18. | 26 037 | 0 |
| Financial leases | II.5.20. | 15 057 | 18 113 |
| Bank loans | II.5.18. | 99 240 | 78 850 |
| Other loans | 1 801 | 1 871 | |
| Interest-bearing borrowings | II.5.18. | 142 135 | 98 834 |
| Other amounts payable | II.5.19. | 6 810 | 444 |
| Non-current liabilities | 219 701 | 160 187 | |
| Pensions and similar obligations | II.5.16. | 2 205 | 1 809 |
| Provisions | II.5.17. | 4 687 | 6 732 |
| Bonds and notes | 0 | 25 536 | |
| Other loans | 52 798 | 40 645 | |
| Interest-bearing borrowings | II.5.18. | 52 798 | 66 181 |
| Trade payables | II.5.22. | 96 373 | 81 720 |
| Income tax payables | II.4.5. | 414 | 3 086 |
| Other amounts payable | II.5.22. | 95 464 | 105 927 |
| Current liabilities | 251 941 | 265 455 | |
| Total liabilities | 637 805 | 612 402 |
* The accompanying notes are an integral part of this balance sheet.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | NOTES * | 2014 | 2013 |
| EARNINGS BEFORE INTEREST AND TAXES (EBIT) | II.4.3. | 8 783 | (20 886) |
| Amortisation of intangible assets | II.5.1. | 2 490 | 2 721 |
| Depreciation of tangible assets | II.5.3. | 23 740 | 27 283 |
| Amortisation of deferred long term and upfront payment | II.4.3. | 1 092 | 1 168 |
| Impairment losses on intangible assets | 5 | 109 | |
| Impairment losses on tangible assets | II.5.3. | 683 | 3 256 |
| Write-offs on assets | 1 948 | 1 061 | |
| Changes in provisions | (3 718) | (730) | |
| Fair value gains | 0 | 800 | |
| (Gains) / Losses on disposals of assets | (489) | (1 715) | |
| Income from joint ventures and associates | (8 962) | (439) | |
| GROSS OPERATING CASH FLOW BEFORE WORKING CAPITAL MOVEMENTS | 25 571 | 12 628 | |
| Inventories | (2 090) | (5 472) | |
| Trade receivables | (15 590) | 10 388 | |
| Other receivables | (2 760) | 709 | |
| Trade payable | 19 444 | (11 791) | |
| Other payable | (19 385) | 20 467 | |
| Trade and other long term debts and debt maturing <1 year | 13 334 | 0 | |
| Changes in working capital | (7 047) | 14 302 | |
| Income taxes paid | (1 926) | (2 033) | |
| NET CASH FLOW FROM OPERATING ACTIVITIES (a) | 16 598 | 24 897 | |
| Interests received | 407 | 574 | |
| Dividends received | 256 | 7 287 | |
| New investments and subscriptions to capital increases | 0 | 0 | |
| (Increase) / Decrease of loans and receivables | (1 118) | (3 371) | |
| Investments in intangible assets | II.5.1. | (3 422) | (3 558) |
| Investments in property, plant and equipment | II.5.3. | (28 984) | (12 610) |
| Acquisitions of subsidiaries | 0 | 0 | |
| Acquisitions of own shares | 0 | (1 735) | |
| Investment in associates | (255) | 0 | |
| Disposals of intangible assets | II.5.1. | 391 | 0 |
| Disposals of property, plant and equipment | II.5.3. | 844 | 4 926 |
| Disposals of investments in subsidiaries | 182 | 0 | |
| Disposals of investments in associates | 0 | 2 | |
| (Increase) / Decrease of investments available for sale | (16) | (15) | |
| NET CASH FLOW FROM INVESTMENT ACTIVITIES (b) | (31 714) | (8 500) | |
| Interests paid (1) | (9 869) | (7 784) | |
| Dividends paid (2) | (5 797) | (8 424) | |
| Increase (Decrease) of capital (3) | 3 319 | 68 | |
| Increase of financial debt (4) | 27 260 | 7 529 | |
| (Decrease) of financial debt (5) | 0 | 0 | |
| NET CASH FLOW FROM FINANCING ACTIVITIES (c)=(1)+(2)+(3)+(4)+(5) | 14 914 | (8 611) | |
| Effect of exchange rate changes (d) | 129 | 64 | |
| Effect of changes in scope of consolidation and of foreign currency translation reserves recycled (e) | 0 | (147) | |
| CHANGES IN CASH AND CASH EQUIVALENTS (a)+(b)+(c)+(d)+(e) | (74) | 7 704 | |
| Net cash position opening balance | 26 237 | 18 533 | |
| Net cash position closing balance | 26 163 | 26 237 | |
| CHANGES IN CASH AND CASH EQUIVALENTS | (74) | 7 704 | |
| NET FREE CASH FLOW (a)+(b)+(1) | (24 985) | 8 613 | |
| For the investment/disposal activities, only the cash payment and cash receipts have been reported as stipulated under IAS 7. |
* The accompanying notes are an integral part of this cash flow statement.
The gross operating cash flow before working capital movements increased from EUR 12.6 million to EUR 25.6 million, or +102.5% compared to 2013. The variance is primarily the result of:
The net cash flow from operating activities deteriorated by EUR 8.3 million to EUR 16.6 million, or -33.3% compared to 2013, despite a substantially higher gross operating cash flow (EUR +12.6 million). Increased net working capital needs, essentially due to the lower outstanding amount of 'other payables', are the main reason for the deterioration (EUR -21.2 million).
The main operating working capital elements which influenced this variance are:
The net cash flow from investment activities amounted to EUR -31.7 million versus EUR -8.5 million in 2013. Net cash outlays for investments in property, plant & equipment (EUR -29.0 million versus EUR -12.6 million in 2013) increased significantly. EUR 0.8 million has been generated from the disposal of fixed assets, compared to EUR 4.9 million in 2013.
The cash flow from financing activities amounts to EUR +14.9 million versus EUR –8.6 million in 2013. Interests payments increased (EUR –9.9 million versus EUR –7.8 million in 2013) and the dividend paid was reduced (EUR -5.8 million versus EUR -8.4 million in 2013). The share capital increased by EUR 3.3 million in 2014 following the exercise of warrants.
Gross financial debt increased by a net amount of EUR 27.3 million in 2014. This gross debt increase, in combination with the above cash flow items, exchange rate changes and changes in the scope of consolidation, resulted in a stable 'cash and cash equivalents' position (EUR -0.07 million).
The net free cash flow resulting from (i) the net cash flow from operating activities (EUR +16.6 million) (ii) the net cash flow from investment activities (EUR –31.7 million) and (iii) the interests paid (EUR –9.9 million), amounts to EUR -25.0 million, compared to EUR +8.6 million in 2013.
| in thousand EUR | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | CAPITAL | SHARE PREMIUM | TREASURY SHARES | INVESTMENT REVALUATION RESERVE |
ACTUARIAL GAINS AND LOSSES (IAS 19R) |
IFRS 2 OTHER CAPITAL RESERVES |
RETAINED EARNINGS |
TRANSLATION DIFFERENCES RESERVES |
HEDGING RESERVES |
TOTAL SHAREHOLDERS' EQUITY |
NON- CONTROLLING INTERESTS |
TOTAL EQUITY, NON-CONTROL- LING INTERESTS INCLUDED |
| At the end of the period (31 December 2013) |
72 368 107 042 | (1 735) | (16) | (9 535) | 2 811 | 34 103 | (12 080) | (6 199) | 186 760 | 0 | 186 760 | |
| Dividends | 0 | 0 | 0 | 0 | 0 | 0 | (5 724) | 0 | 0 | (5 724) | 0 | (5 724) |
| Stock options (IFRS 2) | 0 | 0 | 0 | 0 | 0 | 171 | 0 | 0 | 0 | 171 | 0 | 171 |
| Capital movements | 1 793 | 1 526 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3 319 | 0 | 3 319 |
| Shareholders' movements | 1 793 | 1 526 | 0 | 0 | 0 | 171 | (5 724) | 0 | 0 | (2 234) | 0 | (2 234) |
| Profit or loss of the period | 0 | 0 | 0 | 0 | 0 | 0 | (9 749) | 0 | 0 | (9 749) | 0 | (9 749) |
| Other comprehensive income |
0 | 0 | 0 | (32) | (10 262) | 0 | 0 | 2 036 | (356) | (8 614) | 0 | (8 614) |
| At the end of the period (31 December 2014) |
74 161 108 568 | (1 735) | (48) | (19 797) | 2 982 | 18 631 | (10 044) | (6 555) | 166 163 | 0 | 166 163 |
| in thousand EUR | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | CAPITAL | SHARE PREMIUM |
TREASURY SHARES |
INVESTMENT REVALUATION RESERVE |
ACTUARIAL GAINS AND LOSSES (IAS 19R) |
IFRS 2 OTHER CAPITAL RESERVES |
RETAINED EARNINGS |
TRANSLATION DIFFERENCES RESERVES |
HEDGING RESERVES |
TOTAL SHAREHOLDERS' EQUITY |
NON CONTROLLING INTERESTS |
TOTAL EQUITY, NON-CONTROL LING INTERESTS INCLUDED |
| At the end of the preceding period (31 December 2012 - as published) |
72 329 107 013 | 0 | 0 | 0 | 2 562 | 92 447 | (5 964) | (7 763) | 260 624 | 0 | 260 624 | |
| Changes in accounting policies | 0 | 0 | 0 | 0 | (5 597) | 0 | (13 849) | (89) | 0 | (19 535) | 0 | (19 535) |
| At the end of the preceding period (31 December 2012 - restated for IAS 19R) |
72 329 107 013 | 0 | 0 | (5 597) | 2 562 | 78 598 | (6 053) | (7 763) | 241 090 | 0 | 241 090 | |
| Dividends | 0 | 0 | 0 | 0 | 0 | 0 | (8 357) | 0 | 0 | (8 357) | 0 | (8 357) |
| Stock options (IFRS 2) | 0 | 0 | 0 | 0 | 0 | 249 | 0 | 0 | 0 | 249 | 0 | 249 |
| Capital movements | 39 | 29 | (1 735) | 0 | 0 | 0 | 0 | 0 | 0 | (1 667) | 0 | (1 667) |
| Shareholders' movements | 39 | 29 | (1 735) | 0 | 0 | 249 | (8 357) | 0 | 0 | (9 775) | 0 | (9 775) |
| Profit or loss of the period | 0 | 0 | 0 | 0 | 0 | 0 | (36 138) | 0 | 0 | (36 138) | 0 | (36 138) |
| Other comprehensive income |
0 | 0 | 0 | (16) | (3 938) | 0 | 0 | (6 027) | 1 564 | (8 417) | 0 | (8 417) |
| At the end of the period (31 December 2013) |
72 368 107 042 | (1 735) | (16) | (9 535) | 2 811 | 34 103 (12 080) | (6 199) | 186 760 | 0 | 186 760 |
Recticel SA/NV (the ''Company'') is a limited company domiciled in Belgium. The Company's consolidated financial statements include the financial statements of the Company, its subsidiaries, interests in jointly controlled entities (joint ventures) and in associates, both accounted for under the equity method (together referred to as ''the Group'').
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the European Union.
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (the IASB) and the International Financial Reporting Interpretations Committee (the IFRIC) of the IASB that are relevant to its operations and effective for annual reporting periods beginning on 1 January 2014, all of which were endorsed by the European Union.
Recticel adopted the following standards as from 1 January 2013 (early adoption):
Standards and interpretations applicable for the annual period beginning on 1 January 2014:
Standards and interpretations applicable for the annual period beginning on 1 January 2014:
The financial statements are presented in thousand euro (EUR) (unless specified otherwise), which is the currency of the primary economic environment in which the Group operates. The financial statements of foreign operations are translated in accordance with the policies set out below under 'Foreign Currencies'.
The financial statements have been prepared on the historical cost basis, except as disclosed in the accounting policies below. Investments in equity instruments which are not quoted in an active market and whose fair value cannot be reliably measured by alternative valuation methods are carried at cost.
Transactions in currencies other than EUR are accounted for at the exchange rates prevailing at the date of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are translated at closing rate. Non-monetary assets and liabilities carried at fair value and denominated in foreign currencies are translated at the exchange rates prevailing at the date the fair value was determined. Gains and losses resulting from such translations are recognised in the financial result of the income statement, except when deferred in equity.
For purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at closing rate. Income and expenses are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Resulting exchange differences are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate). On disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a jointly controlled entity that includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), exchange differences accumulated in equity are recognised in the income statement.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or jointly controlled entities (joint ventures) that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
Consolidated financial statements include subsidiaries and interests in jointly controlled entities (joint ventures) and associates accounted for under the equity method.
Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances.
All intra-group transactions, balances, income and expenses are eliminated in consolidation.
Subsidiaries are entities that are controlled directly or indirectly. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Consolidation of subsidiaries starts from the date Recticel controls the entity until the date such control ceases.
Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
However, when the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.
IFRS 11 replaces IAS 31 Interests in Joint Ventures, and the guidance contained in a related interpretation, SIC-13 Jointly Controlled Entities – Non-Monetary Contributions by Venturers, has been incorporated in IAS 28 (as revised in 2011). IFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and accounted for. Under IFRS 11, there are only two types of joint arrangements – joint operations and joint ventures. The classification of joint arrangements under IFRS 11 is determined based on the rights and obligations of parties to the joint arrangements by considering the structure, the legal form of arrangements, the contractual terms agreed by the parties to the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint ventures) have rights to the net assets of the arrangement. Previously, IAS 31 contemplated three types of joint arrangements – jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification of joint arrangements under IAS 31 was primarily determined based on the legal form of the arrangement (e.g. a joint arrangement that was established through a separate entity was accounted for as a jointly controlled entity).
The initial and subsequent accounting of joint ventures and joint operations is different. Investments in joint ventures are accounted for using the equity method (proportionate consolidation is no longer allowed). Investments in joint operations are accounted for such that each joint operator recognises its assets (including its share in any assets jointly held), its liabilities (including its share of any liabilities incurred jointly), its revenue (including its share of revenue from the sale of the output by the joint operation) and its expenses (including its share of any expenses incurred jointly). Each joint operator accounts for the assets and liabilities, as well as revenues and expenses, relating to its interest in the joint operation in accordance with the applicable Standards.
The directors of the Group reviewed and assessed the classification of the Group's investments in joint arrangements in accordance with the requirements of IFRS 11. The directors concluded that the Group's investments in Eurofoam, in Proseat and in Kingspan Tarec Industrial Insulation, which were classified as a jointly controlled entity under IAS 31 and was accounted for using the proportionate consolidation method, should be classified as a joint venture under IFRS 11 and accounted for using the equity method.
The results and assets and liabilities of joint ventures and associates are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, an investment in a joint venture and an associate is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the venture and the associate. When the Group's share of losses of a venture and an associate exceeds the Group's interest in that joint venture and associate (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint venture and associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture and associate.
Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of a joint venture and an associate recognised at the date of acquisition is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.
The requirements of IAS 39 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment in a joint venture and an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of fair value and fair value less costs to sell) with its carrying amount, Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.
Upon disposal of a joint venture and an associate that results in the Group losing significant influence over that joint venture and associate, any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with IAS 39. The difference between the previous carrying amount of the joint venture and associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the joint venture and associate. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that joint venture and associate on the same basis as would be required if that joint venture and associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that joint venture and associate would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when it loses significant influence over that joint venture and associate.
Acquisitions of businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred.
When Recticel acquires an entity or business, the identifiable assets and liabilities of the acquiree are recognised at their fair value at acquisition date, except for:
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Where such a difference is negative, the excess is, after a reassessment of the values, recognised as income immediately as a bargain purchase gain.
Non-controlling interests (minority shareholders) that are present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis.
If Recticel increases its interest in an entity or business over which it did not yet exercise control (in principle increasing its interest up to and including 50% to 51% or more) (a business combination achieved in stages), the Group's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (maximum one year after acquisition date), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised in profit or loss when the asset is derecognised.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.
Goodwill arising on an acquisition of a business is carried at cost less accumulated impairment losses, if any, and is presented separately in the consolidated statement of financial position.
Goodwill is reviewed for impairment at least annually. Any impairment loss is recognised immediately in the income statement and is not subsequently reversed.
On disposal of a subsidiary, associate or jointly controlled entity, the related goodwill is included in the determination of the profit or loss on disposal.
An item of property, plant and equipment is recognised if it is probable that associated future economic benefits will flow to the Group and if its cost can be measured reliably. After initial recognition, all items of property, plant and equipment are stated at cost, less accumulated depreciation and impairment losses, except for land which is not depreciated. Cost includes all direct costs and all expenditure incurred to bring the asset to its working condition and location for its intended use.
Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Subsequent expenditure related to an item of property, plant and equipment is expensed as incurred.
Depreciation is provided over the estimated useful lives of the various classes of property, plant and equipment using the straight-line method. Depreciation starts when the assets are ready for their intended use. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
The estimated useful lives of the most significant items of property, plant and equipment are within the following ranges:
| Land improvements | : 25 years |
|---|---|
| Offices | : 25 to 40 years |
| Industrial buildings | : 25 years |
| Plants | : 10 to 15 years |
| Machinery | |
| Heavy | : 11 to 15 years |
| Medium | : 8 to 10 years |
| Light | : 5 to 7 years |
| Pre-operating costs | : 5 years maximum |
| Equipment | : 5 to 10 years |
| Furniture | : 5 to 10 years |
| Hardware | : 3 to 10 years |
| Vehicle fleet | |
| Cars | : 4 years |
| Trucks | : 7 years |
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.
Leases are classified as financial leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under financial leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease.
The corresponding liability to the lessor is included in the balance sheet as a financial lease obligation. Lease payments are apportioned between financial charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Assets held under financial leases are depreciated over their expected useful lives on the same basis as owned assets, except if the lease does not transfer ownership of the asset, in which case the leased asset is depreciated over the shorter of its useful live and the lease term.
Leases under which substantially all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Rents under operating leases are charged to income on a straight-line basis over the lease term. Benefits received or to be received as an incentive to enter into an operating lease are also recognised on a straight-line basis over the lease term.
Except for goodwill and intangible assets with an indefinite useful life which are tested for impairment at least annually, other tangible and intangible fixed assets are reviewed for impairment when there is an indication that their carrying amount will not be recoverable through use or sale. If an asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cashgenerating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell or value-in-use and the carrying amount. In assessing the fair value or value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in previous years. However, impairment losses on goodwill are never reversed.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.
Investment property, which is property held to earn rentals and/or for capital appreciation, is stated at its fair value at the balance sheet date. Gains or losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they arise.
Investments are recognised or derecognised on the trade date which is the date the Group undertakes to purchase or sell the asset. Financial investments are initially measured at the fair value of the consideration given, including transaction costs.
Investments held for trading or available for sale are subsequently carried at their fair value. Where securities are held for trading purposes, gains and losses arising from changes in fair value are included in net profit or loss for the period.
For investments available for sale, gains and losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is deemed to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period.
Equity participations classified as 'available for sale', which are not quoted on an active market and for which the fair value cannot be measured reliably by alternative valuation methods, are measured at cost.
Financial investments which are 'held to maturity' are carried at amortised cost, using the effective interest rate method, except for short-term deposits, which are carried at cost.
The impairment loss of a financial asset measured at amortised cost is equal to the difference between the carrying amount and the estimated future cash flows, discounted at the initial effective rate. The impairment of an available-for-sale financial asset is calculated with reference to its current fair value.
An impairment test is performed, on an individual basis, for each material financial asset. Other assets are tested as groups of financial assets with similar credit risk characteristics.
Impairment losses are recognised in profit and loss. With respect to available-for- sale assets, in the event of an impairment loss, the cumulative negative changes in fair value previously recognised in equity are transferred to profit and loss.
The impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment was recognised.
For financial assets measured at amortised cost and available-forsale financial assets, the reversal is recognised in profit and loss. For available-for-sale financial assets which represent equity instruments, the reversal is recognised directly in equity. Impairment losses relating to assets recognised at cost cannot be reversed.
The Group derecognises a financial asset only when the contractual rights to the cash flows from the assets expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for the amounts it may have to pay.
If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On the entire derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity, is recognised in profit and loss.
On the partial derecognition of a financial asset other than its entirety (e.g. when the Group retains an option to repurchase part of a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer.
The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss.
A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method.
Net realisable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale.
Short-term receivables are recognised at their nominal value, as reduced by appropriate allowances for estimated irrecoverable amounts.
Interest-bearing borrowings and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all its liabilities.
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issuance costs.
The components of compound instruments (convertible notes) issued by the Company are classified separately as debt component and equity component in accordance with the substance of the contractual arrangements and the definitions of the debt portion and an equity portion of such instrument.
At the time the conversion option will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company's own equity instruments, such compound instrument is re-qualified as an equity instrument.
At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar nonconvertible instruments. This amount is recorded as a liability on an amortised costs basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date.
The value of the conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects and is not subsequently remeasured.
In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised; in which case the balance recognised in equity will be transferred to financial liability.
When the conversion option remains unexercised at the maturity date of the convertible note, the balance recognised in equity will be transferred to financial liability. No gain or loss is recognised in profit or loss upon conversion or expiration of the conversion option.
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognised directly in equity. Transaction costs relating to the liability component are including in the carrying amount of the liability component and are amortised over the lives of the convertible notes using the effective interest method.
Interest-bearing borrowings are classified at fair value through profit and loss ("FVTPL") if they are held for trading. Interest-bearing borrowings at FVTPL are stated at fair value with any resultant gains or losses recognised in profit and loss. A financial liability is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as FVTPL unless they are designated and effective as hedges.
In accordance with the laws and practices of each country, the affiliated companies of the Group operate ''defined benefit'' and/or ''defined contribution retirement benefit" plans.
By law, defined contribution pension plans in Belgium are subject to minimum guaranteed rates of return. Hence, those plans classify as defined benefit plans. The IASB recognized that the accounting for such so-called "contribution-based plans" in accordance with the currently applicable defined benefit methodology is problematic. Considering as well the uncertainty with respect to the future evolution of the minimum guaranteed rates of return in Belgium, the Company adopted a retrospective approach whereby the net liability recognized in the statement of financial position is based on the sum of the positive differences, determined by individual plan participant, between the minimum guaranteed reserves and the accumulated contributions based on the actual rates of return at the closing date (i.e. the net liability is based on the deficit measured at intrinsic value, if any).
Regarding the ''defined benefit" plans, the amount recognised in the balance sheet is the present value of the ''defined benefit obligation'' less the fair value of any plan assets.
If the amount to be recognised in the balance sheet is negative, the asset does not exceed the net total of the present value of any future refunds from the plan or reductions in future contributions to the plan.
In the income statement, current and past service costs (including curtailments), settlement costs and administration expenses are charged in ''other operating income & expenses'', while the net interest cost is booked in ''other financial income & expenses''.
The present value of the ''defined benefit obligations'' and the related current and past service costs are calculated by qualified actuaries using the ''projected unit credit method''.
The discount rate is based on the prevailing yields of high quality corporate bonds (i.e. AA corporate bonds) that have maturity dates approximating to the terms of the benefit obligations. The discount rate is rounded to the closest 25 bp.
The actuarial gains and losses, resulting from differences between previous actuarial assumptions and actual experience, as well as changes in actuarial assumptions, are determined separately for each ''defined benefit plan'' and recognised in other comprehensive income. The asset gains and losses and the effect of changes in the asset ceiling, excluding amounts included in the net interest, are also recognized in other comprehensive income.
Past service costs, which arise from plan amendments, are recognised immediately as an expense.
The entity shall recognize a liability and expense for termination benefits at the earlier of the following dates: (a) when the entity can no longer withdraw the offer of those benefits; and (b) when the entity recognizes costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits.
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of a Black & Scholes model. Further details on how the fair value of equity-settled share-based transactions has been determined can be found in the notes.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest.
The above policy is applied to all equity-settled share-based payments that were granted after 7 November 2002 that vested after 1 January 2005. No amount has been recognised in the financial statements in respect of the other equity-settled sharedbased payments.
Provisions are recognised in the balance sheet when the Group has a present obligation (legal or constructive) resulting from a past event and which is expected to result in a future outflow of resources which can be reliably estimated.
Provisions for warranty costs are recognised at the date of sale of the relevant products based on the best estimate of the expenditure required to settle the Group's liability.
Provisions for restructuring costs are recognised when the Group has a detailed formal plan for restructuring that has been communicated to affected parties before the balance sheet date.
Interest-bearing borrowings are recorded at the proceeds received, net of transaction costs incurred.
Borrowings are subsequently stated at amortised cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value (including premiums payable on settlement or redemption) is recognised in the income statement over the period of the borrowing.
Trade payables which are not interest-bearing are stated at cost, being the fair value of the consideration to be paid.
Derivative financial instruments are accounted for as follows:
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly in equity and the ineffective portion is recognised immediately in the income statement. If the cash flow hedge of a firm commitment or a forecasted transaction results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of an asset or a liability, amounts deferred in equity are recognised in the income statement in the same period in which the hedged item affects net profit or loss.
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income and accumulated in the foreign currency reserve. The gain or loss to the ineffective portion is recognised immediately in profit and loss.
A derivative instrument is recognised as fair value hedge when it hedges the exposure to variation of the fair value of the recognised assets or liabilities. Derivatives classified as a fair value hedge and the hedged assets or liabilities are carried at fair value. The corresponding changes of the fair value are recognised in the income statement.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to net profit or loss for the period.
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Revenue from the sale of goods is recognised when the goods are delivered and titles have passed, at which time all the following conditions are satisfied:
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts throughout the expected life of the financial asset to that asset's net carrying amount.
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.
Where the outcome of a construction contract can be estimated reliably, revenue and costs are recognised by reference to the stage of completion of the contract activity at the balance sheet date.
This is normally measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs, except where this would not be representative of the stage of completion.
Variations in contract work, claims and incentive payments are recognised when it is probable that these will be accepted by the customer and the amounts can be measured reliably.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received.
Government grants relating to staff training costs are recognised as income over the periods required to match them with the related costs and are deducted from the related expense.
Government grants relating to property, plant & equipment are treated by deducting the received grants from the carrying amount of the related assets. These grants are recognised as income over the useful life of the depreciable assets.
The tax expense represents the sum of the current tax expense and deferred tax expense.
The current tax expense is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expenditure that are taxable or deductible in other years and it further excludes items that will never become taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit. It is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and when it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at least at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised.
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Drawing up the annual accounts in accordance with IFRS requires management to make the necessary estimates and assessments. The management bases its estimates on past experience and other reasonable assessment criteria. These are reviewed periodically and the effects of such reviews are taken into account in the annual accounts of the period concerned. Future events which may have a financial impact on the Group are also included in this.
The estimated results of such possible future events may consequently diverge from the actual impact on results. Assessments and estimates were made, inter alia, regarding:
It is not excluded that future revisions of such estimates and assessments could trigger an adjustment in the value of the assets and liabilities in future financial years.
An impairment test is carried out with regard to the goodwill, intangible assets and property, plant and equipment on all CGEs. Such an test is carried out annually, or more frequently if there are indications that these items should be subject to impairment (see notes II.5.1, II.5.2. and II.5.3.).
The book value of the assets retained for impairment tests represents about 76.3% of the total goodwill, 23.8% of the total property, plant and equipment and 24.7% of the total intangible assets. The examined assets relate to (i) the Flexible Foams' activities in the United Kingdom, in Spain, in Norway and in Finland, (ii) Bedding activities in Germany and in Switzerland, as well as to (iii) the Automotive-Interiors' operations of the Group.
The most relevant results of these tests are listed below:
| Book value in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS | BEDDING | AUTOMOTIVE | TOTAL | ||||
| United Kingdom |
Spain | Finland | Norway | Germany | Switzerland | Interiors | ||
| Goodwill | 4 705 | 0 | 3 429 | 1 818 | 2 761 | 6 332 | 0 | 19 045 |
| Other intangible assets | 214 | 17 | 14 | 0 | 85 | 472 | 2 256 | 3 058 |
| Property, plant & equipment | 5 238 | 7 039 | 4 950 | 452 | 1 894 | 1 652 | 27 407 | 48 632 |
| Total | 10 157 | 7 056 | 8 393 | 2 270 | 4 740 | 8 456 | 29 663 | 70 735 |
| Impairments | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Net book value | 10 157 | 7 056 | 8 393 | 2 270 | 4 740 | 8 456 | 29 663 | 70 735 |
Footnote: The working capital is not included in the analysis.
For the impairment test of the balance sheet items included in the table above, certain assumptions were made. The recoverable amount of the total "cash-generating unit" ("CGU") is determined on the basis of the fair value or value-in-use model.
On the basis of this test and considering the business decisions taken, i.e. closure of certain plants (Automotive and Flexible Foams), no impairment has been recognised (see table above).
When determining its expected future cash flows, the Group takes into account prudent, though realistic, assumptions regarding the evolution of its markets, its sales, the raw materials prices, the impact of past restructurings and the gross margins, which all are based on (i) the past experiences of the management and/or (ii) which are in line with trustworthy external information sources. It can however not be excluded that a future reassessment of assumptions and/or market analysis induced by future developments in the economic environment might lead to the recognition of additional impairments.
For the discounting of the future cash flows, a uniform overall Group-based pre-tax discount rate of 8.83% is used for all CGUs (8.60% in 2013). This pre-tax discount rate is based on a (long-term) weighted average cost of capital based on the current market expectations of the time value of money and risks for which future cash flows must be adjusted; the risks being implicit in the cash flows. The Group applies a uniform overall pre-tax discount rate for the reason that 95% of the Group's operations are geographically located in Europe,
For countries with a higher perceived risk (i.e. emerging markets), the level of investments is relatively limited (4.5% of total fixed assets); hence no separate pre-tax discount rate is used.
The pre-tax discount rate for impairment testing is based on the following assumptions: (EUR based)
| Group target ratios: Gearing: net financial debt/total equity % net financial debt % total equity |
2014 : 50% : 33% : 67% |
2013 50% 33% 67% |
|---|---|---|
| Pre-tax cost of debt | : 5.00% | 4.00% |
| Pre-tax cost of equity = Rf + Em * β Risk free interest rate = Rf Beta = β Market equity risk premium = Em Small cap premium |
: 13.00% : 2.00% : 1.35 : 5.00% : 1.00% |
13.87% 2.30% 1.35 5.00% 1.00% |
| Corporate tax rate Assumed inflation rate |
: 25.00% : 1.50% |
25.00% 2.00% |
| Pre-tax WACC (weighted average cost of capital) |
: 8.83% | 8.60% |
The discount factors are reviewed at least annually.
II.1.5.1.1.1. Key assumptions
For the CGU "Flexible Foams – United Kingdom" the value-in-use model projections are based on budgets and financial plans covering a three-year period. After this 3-year period, a perpetuity value is taken into account without growth rate. 2014 was a difficult year due to industrial difficulties and the high level of raw material prices which could not be fully passed on in the selling prices. A major restructuring plan has been initiated in 2011 and was planned for execution over a 4-year period until 2014. The closing of the "Carobel" plant in 2H2011 was the first phase, the closing of the "Gwalia" plant in 2H2012 was the second phase, and the closing of the "Pendle" plant as a third phase in 1H2013. Management expects operations to recover after the reorganisation as a result of improvement of the industrial performance and better gross margins.
For the CGU "Flexible Foams – Spain", the value-in-use model projections are based on budgets and financial plans covering a three-year period. After this 3-year period, a perpetuity value is taken into account without growth rate. The value-in-use is dependent on the successful implementation of the business plan. The future cash flows take account of the 2015-2017 business plan and a perpetuity value based on an expected operating cash flow in 2018 without growth rate.
For the CGUs "Flexible Foams – Finland/Norway", the value-in-use model projections are based on budgets and financial plans covering a three-year period. After this 3-year period, a perpetuity value is taken into account without growth rate.
For the CGUs in the Flexible Foams segment no impairments have been recognized in 2014.
The pre-tax discount rate used amounts to 8.83% and is based on a weighted average cost of capital (WACC) based on the current market expectations of the time value of money and risks for which future cash flows must be adjusted. On this basis, the value-in-use of the CGU "Flexible Foams – United Kingdom" amounts to 2.3 times the net asset book value; the value-in-use of the CGU "Flexible Foams – Spain" amounts to 2.7 times the net asset book value and the value-in-use of the CGU "Flexible Foams – Finland" amount to 2.2 times the net asset book value and "Flexible Foams – Norway" amounts to 1.4 times the net asset book value.
A sensitivity analysis is performed to measure the impact of a changing WACC rate on the outcome of the impairment tests.
Another sensitivity analysis is performed to measure the impact of a changing gross margin – applied on the business plan 2015-2017 and the perpetuity - on the outcome of the impairment tests.
Another sensitivity analysis is performed to measure the impact of a changing gross margin on the outcome of the impairment tests.
II.1.5.1.2.1. Key assumptions
For the CGUs "Bedding – Germany/Switzerland" the value-in-use model projections are based on budgets and financial plans covering a six-year period.
The pre-tax discount rate used amounts to 8.83% and is based on a weighted average cost of capital (WACC) based on the current market expectations of the time value of money and risks for which future cash flows must be adjusted. On this basis, the value-in-use of the CGU "Bedding – Germany" amounts to 5.0 times the net asset book value and the value-in-use of the CGU "Bedding - Switzerland" amounts to 1.3 times the net asset book value.
A sensitivity analysis is performed to measure the impact of a changing WACC rate on the outcome of the impairment tests.
Another sensitivity analysis is performed to measure the impact of a changing gross margin on the outcome of the impairment tests.
Another sensitivity analysis is performed to measure the impact of a changing gross margin on the outcome of the impairment tests.
For the CGU "Interiors", the value-in-use model projections are based on the budgets and financial plans for the duration of each project/model, in combination with an overview of the entire capacity utilisation. Strongly impacted by the economic crisis in 2009, which affected the Automotive - Interiors activities, the profitability level improved significantly in 2011, 2012 and 2013 as a result of the reorganisation, other efficiency programs and planned phase-outs of some programs. 2014 should be considered as a transitional period with the termination of some programs and the beginning of some development phase for new programs to come with effective start-up in 2016. Project assets are depreciated over the project life time. As such, at the end of the project production life time, there will be no residual book value of specific project related assets.
The CGU "Interiors" also uses a project approach, as a result of which impairments are booked on property, plant and equipment and intangible assets if:
No impairments have been recognized in 2014.
The pre-tax discount rate used amounts to 8.83% and is based on a weighted average cost of capital based on the current market expectations of the time value of money and the risks for which future cash flows must be adjusted.
With regard to the CGU "Interiors", an increase in the pre-tax discount rate to 9.83% would not give rise to additional impairment.
With regard to the CGU "Interiors", an increase in the pre-tax discount rate to 10% would not have given rise to additional impairment.
Deferred tax assets are recognised for the unused tax losses carried forward and unused tax credits, to the extent that it is expected that future taxable profits will be available against which these unused tax losses carried forward and unused tax credits can be offset. For this purpose, the management bases its opinion the expected taxable profits on the basis of its business plans (see note II.4.5.).
There were no changes in the scope of consolidation in 2014.
Changes in the scope of consolidation in 2013 related to the following element:
• In July 2013 the Group sold its participation in IPF – Ingenieria de Poliurethano Flexible s.l. (Spain) (Flexible Foams), resulting in a loss of EUR -0.4 million.
Changes in the scope of consolidation and exchange differences has no material impact on sales.
The Group has adopted IFRS 8 with effect from 1 January 2009. IFRS 8 requires operating segments to be identified on the basis of the internal reporting structure of the Group that allows a regular performance review by the chief operating decision maker and an adequate allocation of resources to each segment. Despite the application of IFRS 11, the chief operating decision makers continue to operate on the basis of financial data per segment on a "Combined" basis, i.e. including Recticel's pro rata share in the joint ventures, after intercompany eliminations, in accordance with the proportionate consolidation method.
The identification of the Group's reportable segments has not changed following the adoption of IFRS 8. The information reported to the Group's chief operating decision maker for the purposes of resource allocation and performance assessment per segment is more specifically focussed on Sales, EBITDA, EBIT, Capital Employed and Operational Cash Flow per segment. The principal market segments for these goods are the four operating segments: Flexible Foams, Bedding, Insulation, Automotive, and Corporate. For more details on these segments, reference is made to the first part of this annual report. Information regarding the Group's reportable segments is presented below. Inter-segment sales are made at prevailing market conditions.
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS |
BEDDING | AUTOMOTIVE | INSULATION | ELIMINATIONS | COMBINED TOTAL (A) |
CONTRIBUTION JOINT VENTURES PROPORTIONALLY CONSOLIDATED IN SEGMENT REPORTING (B) |
CONSOLIDATED (A)+(B) |
| SALES | ||||||||
| External sales | 528 718 | 260 971 | 263 471 | 226 971 | 1 280 131 | |||
| Inter-segment sales | 64 252 | 20 671 | 567 | 70 | (85 560) | 0 | ||
| Total sales | 592 970 | 281 642 | 264 038 | 227 041 | (85 560) | 1 280 131 | (296 764) | 983 367 |
| EARNINGS BEFORE INTEREST AND TAXES (EBIT) | ||||||||
| Segment result | 13 224 | (3 481) | 1 780 | 21 089 | 0 | 32 612 | (4 606) | 28 006 |
| Unallocated corporate expenses (1) | (19 223) | 0 | (19 223) | |||||
| EBIT | 13 224 | (3 481) | 1 780 | 21 089 | 0 | 13 389 | (4 606) | 8 783 |
| Financial result | (12 830) | |||||||
| Result for the period before taxes | (4 047) | |||||||
| Income taxes | (5 702) | |||||||
| Result for the period after taxes | (9 749) | |||||||
| of which non-controlling interests | 0 | |||||||
| of which share of the Group | (9 749) | |||||||
(1) Includes mainly headquarters' costs (EUR 14.3 million (2013: EUR 15.9 million)) and R&D expenses (Corporate Programme) (EUR 3.6 million (2013: EUR 3.0 million)).
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS |
BEDDING | AUTOMOTIVE | INSULATION | CORPORATE | COMBINED TOTAL (A) |
CONTRIBUTION JOINT VENTURES PROPORTIONALLY CONSOLIDATED IN SEGMENT REPORTING (B) |
CONSOLIDATED (A)+(B) |
| Depreciation and amortisation | 11 227 | 6 362 | 10 702 | 5 974 | 999 | 35 264 | (7 944) | 27 320 |
| Impairment losses recognised in profit and loss | 619 | 59 | 10 | 0 | 0 | 688 | 0 | 688 |
| EBITDA | 25 070 | 2 940 | 12 492 | 27 063 | (18 224) | 49 341 | (12 550) | 36 791 |
| Capital expenditure/additions | 10 284 | 3 532 | 12 988 | 6 154 | 2 803 | 35 761 | (9 627) | 26 134 |
In 2014, impairment losses recognized in profit and loss are mainly related to real estate of the idle plant in Legutiano (Spain – Flexible Foams) (EUR -0.5 million), on the basis of a market appraisal value.
EBITDA per segment is commented in the first part of this annual report (section Report by the Board of Directors).
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS |
BEDDING | AUTOMOTIVE | INSULATION | ELIMINATION | COMBINED TOTAL (A) |
CONTRIBUTION JOINT VENTURES PROPORTIONALLY CONSOLIDATED IN SEGMENT REPORTING (B) |
CONSOLIDATED (A)+(B) |
| ASSETS | ||||||||
| Segment assets | 256 949 | 124 284 | 170 560 | 138 292 | (137 518) | 552 567 | (128 969) | 423 598 |
| Investment in associates | 13 408 | 0 | 0 | 0 | 0 | 13 408 | 67 372 | 80 780 |
| Unallocated assets | 146 301 | (12 874) | 133 427 | |||||
| Total consolidated assets | 712 276 | (74 471) | 637 805 | |||||
| LIABILITIES | ||||||||
| Segment liabilities | 128 910 | 70 527 | 82 758 | 71 998 | (137 518) | 216 676 | (52 066) | 164 610 |
| Unallocated liabilities | 329 437 | (22 405) | 307 032 | |||||
| Total consolidated liabilities (excluding equity) | 546 113 | (74 471) | 471 642 | |||||
| For the combined segment figures the contribution of the joint venture Kingspan Tarec Industrial Insulation (KTII) has not been impacted by IFRS 5. |
The unallocated assets which amount to EUR 146.3 million include the following items:
The unallocated liabilities which amount to EUR 329.4 million (equity excluded) include mainly the following items:
The breakdown of the goodwill per business line is as follows: 31 December 2014
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | COMBINED TOTAL (A) | CONTRIBUTION JOINT VENTURES PROPORTIONALLY CONSOLIDATED IN SEGMENT REPORTING (B) |
CONSOLIDATED (A)+(B) |
| Eurofoam | 473 | (473) | 0 |
| Germany | 808 | 0 | 808 |
| The Netherlands | 253 | 0 | 253 |
| Scandinavia | 5 598 | 0 | 5 598 |
| United Kingdom | 4 705 | 0 | 4 705 |
| Total Flexible Foams | 11 837 | (473) | 11 364 |
| Germany | 2 761 | 0 | 2 761 |
| Switzerland | 6 332 | 0 | 6 332 |
| Belgium | 859 | 0 | 859 |
| Austria | 948 | 0 | 948 |
| Total Bedding | 10 900 | 0 | 10 900 |
| Kingspan Tarec Industrial Insulation | 415 | (415) | 0 |
| Belgium | 1 619 | 0 | 1 619 |
| United Kingdom | 1 066 | 0 | 1 066 |
| Total Insulation | 3 100 | (415) | 2 685 |
| Proseat | 8 989 | (8 989) | 0 |
| Total Automotive | 8 989 | (8 989) | 0 |
| 0 | |||
| Total goodwill | 34 826 | (9 877) | 24 949 |
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS |
BEDDING | AUTOMOTIVE | INSULATION | ELIMINATIONS | COMBINED TOTAL (A) |
CONTRIBUTION JOINT VENTURES PROPORTIONALLY CONSOLIDATED IN SEGMENT REPORTING (B) |
CONSOLIDATED (A)+(B) |
| SALES | ||||||||
| External sales | 520 160 | 260 593 | 257 886 | 219 985 | 1 258 624 | |||
| Inter-segment sales | 63 259 | 22 398 | 537 | 23 | (86 217) | 0 | ||
| Total sales | 583 419 | 282 991 | 258 423 | 220 008 | (86 217) | 1 258 624 | (281 861) | 976 763 |
| EARNINGS BEFORE INTEREST AND TAXES (EBIT) | ||||||||
| Segment result | (16 413) | 3 839 | (5 324) | 21 912 | 0 | 4 014 | (5 497) | (1 483) |
| Unallocated corporate expenses (1) | (19 402) | 0 | (19 402) | |||||
| EBIT | (16 413) | 3 839 | (5 324) | 21 912 | 0 | (15 388) | (5 497) | (20 885) |
| Financial result | (11 345) | |||||||
| Result for the period before taxes | (32 230) | |||||||
| Income taxes | (3 908) | |||||||
| Result for the period after taxes | (36 138) | |||||||
| of which non-controlling interests | ||||||||
| of which share of the Group | (36 138) | |||||||
(1) Includes mainly headquarters' costs (EUR 15.9 million (2012: EUR 12.2 million)) and R&D expenses (Corporate Programme) (EUR 3.0 million (2012: EUR 3.0 million)).
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS |
BEDDING | AUTOMOTIVE | INSULATION | CORPORATE | COMBINED TOTAL (A) |
CONTRIBUTION JOINT VENTURES PROPORTIONALLY CONSOLIDATED IN SEGMENT REPORTING (B) |
CONSOLIDATED (A)+(B) |
| Depreciation and amortisation | 12 301 | 6 524 | 14 037 | 5 671 | 1 087 | 39 620 | (8 449) | 31 171 |
| Impairment losses recognised in profit and loss | 1 758 | 0 | 1 711 | 0 | 0 | 3 469 | (104) | 3 365 |
| EBITDA | (2 354) | 10 363 | 10 424 | 27 583 | (18 315) | 27 701 | (14 050) | 13 651 |
| Capital expenditure/additions | 11 033 | 1 715 | 9 279 | 4 800 | 3 665 | 30 492 | (7 134) | 23 358 |
In 2013, impairment losses recognized in profit and loss are related to the Rheinbreitbach plant (Germany - Automotive Interiors). It is the result from a value-in-use impairment test with a weighted average cost of capital of 8.6%. Besides, impairments were recognised in respect to a number of tangible assets in Spain (Flexible Foams).
EBITDA per segment is commented in the first part of this annual report (section Report by the Board of Directors).
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS |
BEDDING | AUTOMOTIVE | INSULATION | ELIMINATION | COMBINED TOTAL (A) |
CONTRIBUTION JOINT VENTURES PROPORTIONALLY CONSOLIDATED IN SEGMENT REPORTING (B) |
CONSOLIDATED (A)+(B) |
| ASSETS | ||||||||
| Segment assets | 262 995 | 118 922 | 145 842 | 127 276 | (122 564) | 532 471 | (126 013) | 406 458 |
| Investment in associates | 13 165 | 0 | 0 | 0 | 0 | 13 165 | 59 342 | 72 507 |
| Unallocated assets | 144 222 | (10 785) | 133 437 | |||||
| Total consolidated assets | 689 858 | (77 456) | 612 402 | |||||
| LIABILITIES | ||||||||
| Segment liabilities | 145 679 | 63 389 | 69 321 | 62 734 | (122 564) | 218 559 | (34 269) | 184 290 |
| Unallocated liabilities | 284 539 | (43 187) | 241 352 | |||||
| Total consolidated liabilities (excluding equity) | 503 098 | (77 456) | 425 642 |
The unallocated assets which amount to EUR 144.2 million include mainly the following items:
The unallocated liabilities which amount to EUR 284.5 million (equity excluded) include mainly the following items:
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | COMBINED TOTAL (A) | CONTRIBUTION JOINT VENTURES PROPORTIONALLY CONSOLIDATED IN SEGMENT REPORTING (B) |
CONSOLIDATED (A)+(B) |
| Eurofoam | 496 | (496) | 0 |
| Germany | 806 | 0 | 806 |
| The Netherlands | 253 | 0 | 253 |
| Scandinavia | 5 766 | 0 | 5 766 |
| United Kingdom | 4 396 | 0 | 4 396 |
| Total Flexible Foams | 11 717 | (496) | 11 221 |
| Germany | 2 761 | 0 | 2 761 |
| Switzerland | 6 226 | 0 | 6 226 |
| Belgium | 845 | 0 | 845 |
| Austria | 941 | 0 | 941 |
| Total Bedding | 10 773 | 0 | 10 773 |
| Kingspan Tarec Industrial Insulation | 413 | (413) | 0 |
| Belgium | 1 619 | 0 | 1 619 |
| United Kingdom | 996 | 0 | 996 |
| Total Insulation | 3 028 | (413) | 2 615 |
| Proseat | 8 978 | (8 978) | 0 |
| Total Automotive | 8 978 | (8 978) | 0 |
| 0 | |||
| Total goodwill | 34 496 | (9 887) | 24 609 |
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | FLEXIBLE FOAMS | BEDDING | AUTOMOTIVE | INSULATION | NOT ALLOCATED | COMBINED TOTAL |
| 2014 | ||||||
| Impairments | (619) | (59) | (10) | 0 | 0 | (688) |
| Restructuring charges | (2 219) | (2 389) | (2 389) | 0 | (528) | (7 525) |
| Fine German Federal Cartel Office | 0 | (8 200) | 0 | 0 | 0 | (8 200) |
| Other | (394) | 15 | (11) | 0 | (465) | (855) |
| TOTAL | (3 232) | (10 633) | (2 410) | 0 | (993) | (17 268) |
| 2013 | ||||||
| Impairments | (1 758) | 0 | (1 711) | 0 | 0 | (3 469) |
| Restructuring charges | (3 595) | (1 960) | (8 377) | (83) | (1 042) | (15 057) |
| Revalorisation tangible assets | 0 | 0 | 0 | 0 | 750 | 750 |
| Revalorisation financial assets | (554) | (15) | 0 | 0 | 0 | (569) |
| Other | (28 467) | (486) | 0 | 0 | (1 267) | (30 220) |
| TOTAL | (34 374) | (2 461) | (10 088) | (83) | (1 559) | (48 565) |
• Impairment charges are mainly related to the Automotive-Interiors activities in Rheinbreitbach (Germany) and the Flexible Foams activities in Spain (La Eliana and Legutiano).
The Group's operations are mainly located in the European Union.
The following table provides an analysis of the Group's sales and fixed assets by geographical market.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Belgium | 125 791 | 126 087 |
| France | 130 069 | 126 819 |
| Germany | 187 292 | 195 439 |
| Other EU countries | 408 611 | 392 090 |
| European Union | 851 763 | 840 435 |
| Other | 131 604 | 136 328 |
| TOTAL CONSOLIDATED | 983 367 | 976 763 |
Reliance on major customers: The Group has no major customers that represent more than 10% of total external revenues. The top-10 customers of the Group represents 26.9% of total consolidated sales.
| in thousand EUR | ||||
|---|---|---|---|---|
| ACQUISITIONS, INCLUDING OWN PRODUCTION | ||||
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 | 2014 | 2013 |
| Belgium | 69 571 | 69 238 | 7 963 | 7 261 |
| France | 41 149 | 41 875 | 3 418 | 3 552 |
| Germany | 26 384 | 27 229 | 2 664 | 2 190 |
| Other EU countries | 66 335 | 66 804 | 10 705 | 7 319 |
| European Union | 203 439 | 205 146 | 24 750 | 20 322 |
| Other (including non-EU countries) | 14 984 | 14 753 | 1 384 | 3 037 |
| TOTAL CONSOLIDATED | 218 423 | 219 899 | 26 134 | 23 359 |
Sales and marketing expenses increase by EUR 8.7 million to EUR 73.3 million. The increase is mainly due to higher advertising and promotion expenses in the Bedding segment (i.e. Geltex® inside campaigns) and in the Insulation segment.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Other operating revenues | 11 653 | 9 344 |
| Other operating expenses | (24 520) | (41 110) |
| TOTAL | (12 867) | (31 766) |
| Fine German Federal Cartel Office | (8 200) | 0 |
| Fine European Commission | 0 | (19 567) |
| Restructuring charges, including site closure and clean-up costs | (7 525) | (13 015) |
| Gain (Loss) on disposal of intangible and tangible assets | 428 | 2 803 |
| Gain (Loss) on disposal of financial assets | (66) | (389) |
| Gain (Loss) on realization of receivables/payables | (169) | (503) |
| Fair value gains | 0 | (800) |
| Other revenues | 5 429 | 5 443 |
| Other expenses | (2 764) | (5 738) |
| TOTAL | (12 867) | (31 766) |
In 2014, the fine results from the settlement with the German Federal Cartel Office investigation (cfr II.6.10)
In January 2014, Recticel announced that it reached a settlement with the European Commission in the PU foam sector investigation (see also II.6.10.). Under the settlement decision, Recticel's effective total fine, excluding Recticel's 50% share of the fine relating to Eurofoam's conduct, amounts to EUR 19.6 million.
During 2014, restructuring charges were mainly related to the Bedding segment where restructuring charges have been incurred with respect to the transfer of production activities from Büron (Switzerland) to Flüh (Switzerland) and other production site of the Group, leading to the closing of the Büron plant. Restructuring charges in Flexible Foams concern The Netherlands (Wijchen site) and the United Kingdom, Sweden, Spain and Turkey. In Automotive the restructuring charges related mainly to the last phase of the closure of the plant in Rheinbreitback (Germany)
During 2013, restructurings were carried out in various locations or declarations of intent were made to do so in a number of plants. Net restructuring charges were composed of (i) new provisions for reorganisation and onerous contracts (EUR 10.9 million) and (ii) the recognition of direct restructuring costs (EUR 2.1 million). Restructuring charges are mainly related to Automotive-Interiors in Germany (Rheinbreitbach site). New provisions were also booked for the Flexible Foams activities in the UK (closure of Pendle site). In Bedding restructuring charges were booked in Germany.
In 2014 this item related mainly to a disposal of a building in France (Bedding).
In 2013 this item related to a capital gain on (i) an asset deal (equipment and clientele) in Norway (EUR 0.7 million) and (ii) the sale of land in Turkey (EUR +0.6 million) and in Belgium (EUR +1.5 million).
In 2013 this item relates mainly to capital loss on the disposal of the Spanish subsidiary IPF (Flexible Foams).
In 2014 this item relates to a waiver of debt in favour of the Italian affiliate A.R.T.E srl
In 2013 this item relates to a waiver of debt in favour of the Italian subsidiary Orsafoam (Flexible Foams) (EUR -0.5 million), the writeoff of a receivable on the Italian affiliate ARTE srl (Flexible Foams) (EUR -0.3 million) and (ii) a reversal of a write-off of a receivable on Teknofoam Hellas (in liquidation) (Flexible Foams) (EUR +0.1 million).
The 2013 fair value gains relate to the reversal of the fair value adjustment on investment property in Belgium (EUR 0.8 million), following the disposal of land in Belgium.
"Other revenues and expenses" in 2014 comprised mainly: (i) The net impact of pension liabilities (EUR -3.0 million)
"Other revenues and expenses" in 2013 comprised mainly:
The components (by nature) of EBIT are as follows:
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | 2014 | 2013 | ||
| Sales | 983 367 | 100% | 976 763 | 100% |
| Purchases and changes in inventories | (506 429) | -51.5% | (505 885) | -51.8% |
| Other goods and services | (201 647) | -20.5% | (189 122) | -19.4% |
| Labour costs | (253 149) | -25.7% | (256 873) | -26.3% |
| Amortisation and depreciation on non-current assets | (26 229) | -2.7% | (30 004) | -3.1% |
| Impairments on non-current assets | (688) | -0.1% | (3 365) | -0.3% |
| Amounts written back/(off) on inventories | (879) | -0.1% | (871) | -0.1% |
| Amounts written off on receivables | 1 785 | 0.2% | (190) | 0.0% |
| Amortisation of deferred long term and upfront payment | (1 091) | -0.1% | (1 168) | -0.1% |
| Provisions | (4 579) | -0.5% | (10 287) | -1.1% |
| Gain/(Loss) on disposal financial fixed assets | (2 538) | -0.3% | (389) | 0.0% |
| Fair value adjustement on investment properties | 0 | 0.0% | (800) | -0.1% |
| Own production | 5 091 | 0.5% | 5 937 | 0.6% |
| Other revenues 1 | 27 022 | 2.7% | 26 631 | 2.7% |
| Other expenses 2 | (20 216) | -2.1% | (31 701) | -3.2% |
| Income from associates & joint ventures | 8 963 | 0.9% | 439 | 0.0% |
| EBIT | 8 783 | 0.9% | (20 885) | -2.1% |
| 2014 | 2013 | |
|---|---|---|
| 1 Revenues |
||
| Reinvoicing of expenses | 10 004 | 10 343 |
| Insurance premiums captive insurance company | 2 829 | 2 758 |
| Gain on disposal of tangible assets | 0 | 2 917 |
| Indemnities | 2 180 | 0 |
| Other | 12 009 | 10 613 |
| Total | 27 022 | 26 631 |
| 2 Expenses |
||
| EC fine | 0 | (19 567) |
| German Federal Cartel Office fine | (8 200) | 0 |
| Operating taxes | (5 998) | (5 467) |
| Other | (6 018) | (6 667) |
| Total | (20 216) | (31 701) |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Interest charges on bonds & notes | (1 537) | (1 466) |
| Interest on financial lease | (660) | (737) |
| Interest on long-term bank loans | (4 080) | (3 516) |
| Interest on short-term bank loans & overdraft | (1 559) | (1 520) |
| Interest on other long-term loans | (73) | (86) |
| Interest on other short-term loans | (1) | (103) |
| Net interest charges on Interest Rate Swaps | (1 960) | (2 014) |
| Net interest charges on foreign currency swaps | (230) | (246) |
| Total borrowing cost | (10 100) | (9 688) |
| Interest income from bank deposits | 55 | 166 |
| Interest income from financial receivables | 547 | 592 |
| Interest income from financial receivables and cash | 602 | 758 |
| Interest charges on other debts | (576) | (527) |
| Interest income from other financial receivables | 43 | 53 |
| Total other interest | (533) | (474) |
| Interest income and expenses | (10 031) | (9 404) |
| Exchange rate differences | (400) | (407) |
| Premium on CAP/Floor contracts | 0 | (9) |
| Result on derivative instruments | 0 | (9) |
| Interest actualisation and expected return on provisions for employee benefits | 0 | 0 |
| Interest actualisation for other provisions | (12) | (41) |
| Net interest cost IAS 19 | (1 533) | (1 611) |
| Interest on provisions for employee benefits and other debt | (1 545) | (1 652) |
| Other financial result | (854) | 127 |
| FINANCIAL RESULT | (12 830) | (11 345) |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Recognised in the income statement | ||
| Current tax: | ||
| Domestic | (97) | (2) |
| Foreign | (2 578) | (2 914) |
| Total current tax | (2 675) | (2 916) |
| Deferred taxes: | ||
| Tax effect on deferred tax adjustments related to previous years | 3 953 | (1 246) |
| Movements of temporary differences | (10 792) | (5 972) |
| Utilisation of previous years' losses | (2 432) | (1 506) |
| Deferred tax on current year's losses and prior losses not recognised in the past | 6 244 | 7 732 |
| Total deferred tax | (3 027) | (992) |
| Grand total | (5 702) | (3 908) |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Reconciliation of effective tax rate | ||
| Profit / (loss) before taxes | (4 047) | (32 231) |
| Minus income from associates | (8 963) | (439) |
| Result before tax and income from associates | (13 010) | (32 670) |
| Tax at domestic income tax rate of 33.99% | 4 422 | 11 105 |
| Tax effect of non-deductible expenses: | ||
| Non-deductible amortisation of goodwill and intangibles | (51) | (52) |
| Expenses not deductible for tax purposes | (14 536) | (14 432) |
| Other | (184) | (469) |
| Tax effect of tax-exempt revenues: | ||
| Non-taxable financial and other income | 8 357 | 2 647 |
| Other | 607 | 706 |
| Deferred tax effect resulting from a change in tax rates | (4 537) | 239 |
| Tax effect of current and deferred tax adjustments related to prior years | 3 662 | (1 449) |
| Effect of different tax rates of subsidiaries operating in other jurisdictions | (389) | (848) |
| Tax effect of notional interest deduction | 3 202 | 3 232 |
| Valuation allowance on deferred tax assets and tax assets not recognised | (6 255) | (4 587) |
| Tax expense and effective tax rate for the year | (5 702) | (3 908) |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Deferred tax income (expense) recognised directly in equity | ||
| Change in accounting policy | 0 | 117 |
| Impact of IAS 19R on equity | 68 | 0 |
| Impact of movements in exchange rates | 76 | 29 |
| Impact of movements in consolidation scope | 0 | 0 |
| On effective portion of changes in fair value of cash flow hedges | 79 | (749) |
| Total | 223 | (603) |
The global income tax charges of EUR -5.7 million is composed of two items:
The tax outflow mentioned in the cash flow for EUR -1.9 million represents the amount of tax paid during the exercise.
d) The reduction of the deferred tax of current and prior year's losses is resulting from a lower effect in contribution of loss making companies for which deferred tax assets could be recognized.
The effective tax expenses for the year (EUR -5.7 million) compared to the theoretical tax computation (EUR 4.4 million), resulting in a difference of EUR -10.1 million, is explained by different factors:
| in thousand EUR | |||||
|---|---|---|---|---|---|
| 31 DEC 2014 | 31 DEC 2013 | ||||
| Group Recticel | DEFERRED TAX ASSETS |
DEFERRED TAX LIABILITIES |
DEFERRED TAX ASSETS |
DEFERRED TAX LIABILITIES |
|
| Recognised deferred tax assets and liabilities | |||||
| Intangible assets | 9 578 | (777) | 9 797 | (962) | |
| Property, plant & equipment | 24 203 | (21 330) | 22 176 | (22 540) | |
| Investments | 253 | (941) | 260 | (769) | |
| Inventories | 266 | 0 | 191 | 0 | |
| Receivables | 439 | (1 131) | 3 426 | (1 395) | |
| Cash flow hedges (equity) | 2 116 | 0 | 2 037 | 0 | |
| Fair value of trading and economic hedge | 0 | 0 | 0 | 0 | |
| Other current assets | 1 671 | 0 | 653 | 0 | |
| Pension provisions | 13 636 | (2) | 10 820 | (3) | |
| Other provisions | 4 236 | (5 738) | 7 624 | (4 267) | |
| Other liabilities | 1 733 | (3 177) | 3 203 | (3 647) | |
| Notional interest deduction | 12 197 | 0 | 12 270 | 0 | |
| Tax loss carry-forwards/ Tax credits | 179 083 | 0 | 167 629 | 0 | |
| Total | 249 411 | (33 096) | 240 086 | (33 583) | |
| Valuation allowance (1) | (178 388) | 0 | (165 777) | 0 | |
| Set-off (2) | (24 189) | 24 189 | (25 380) | 25 380 | |
| Total (as provided on the balance sheet) | 46 834 | (8 907) | 48 929 | (8 203) |
(1) The variation of EUR -12.6 million (EUR 178,4 million minus EUR 165.8 million) is mainly explained by a valuation allowance of EUR -10.8 million, by an effect on tax rate changes of EUR +4.6 million, by an effect on exchange rate of EUR -6.1 million and an effect on equity of EUR -1.5 million.
(2) According to IAS 12 (Income Taxes), deferred tax assets and deferred tax liabilities should, under certain conditions, be offset if they relate to income taxes levied by the same taxation authority.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| One year | 6 000 | 3 020 |
| Two years | 14 768 | 1 740 |
| Three years | 20 860 | 12 369 |
| Four years | 13 826 | 20 190 |
| Five years and thereafter | 239 795 | 235 783 |
| Without time limit | 346 338 | 321 088 |
| Total | 641 587 | 594 190 |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | TOTAL POTENTIAL DEFERRED TAX ASSETS |
RECOGNISED DEFERRED TAX ASSETS |
UNRECOGNISED DEFERRED TAX ASSETS |
GROSS AMOUNT OF UNRECOGNISED TAX LOSSES |
| Tax losses carried forward (*) | 179 083 | 51 955 | 127 128 | 438 731 |
| Notional interest deductions (*) | 12 197 | 0 | 12 197 | 35 885 |
| Property, plant and equipment | 24 203 | 3 687 | 20 516 | 63 328 |
| Pension provisions | 13 636 | 4 797 | 8 839 | 29 181 |
| Other provisions | 4 236 | 1 352 | 2 884 | 11 826 |
| Other temporary differences | 16 056 | 9 232 | 6 824 | 25 653 |
| Total | 249 411 | 71 023 | 178 388 | 604 604 |
(*) As of 31 Dec 2014, deferred tax assets and notional interests deductions of EUR 51.9 million (2013: EUR 49.4 million) are recognized out of EUR 641.6 million (2013: EUR 594.1 million) tax losses carryforward. These deferred tax assets represent income likely to be realisable in the foreseeable future.
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | TOTAL POTENTIAL DEFERRED TAX ASSETS |
RECOGNISED DEFERRED TAX ASSETS |
UNRECOGNISED DEFERRED TAX ASSETS |
GROSS AMOUNT OF UNRECOGNISED TAX LOSSES |
| Tax losses carried forward | 167 629 | 49 396 | 118 233 | 406 133 |
| Notional interest deductions | 12 270 | 0 | 12 270 | 37 837 |
| Property, plant and equipment | 22 174 | 5 021 | 17 153 | 63 720 |
| Pension provisions | 10 820 | 4 090 | 6 730 | 10 619 |
| Other provisions | 7 624 | 4 505 | 3 119 | 9 262 |
| Other temporary differences | 19 569 | 11 297 | 8 272 | 36 539 |
| Total | 240 086 | 74 309 | 165 777 | 564 111 |
There are no temporary differences associated with investments in subsidiaries and branches, for which deferred tax liabilities have not been recognised (cfr IAS 12 §81 (f)).
Amounts recognised as distributions to equity holders in the period. Dividend for the period ending 31 December 2013 of EUR 0.20 (2012: EUR 0.29) per share.
Proposed dividend for the period ending 31 December 2014 of EUR 0.20 per share, or in total for all shares outstanding EUR 5,932,851.20 (2013: EUR 5,789,471.20).
The proposed dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
The calculation of the basic and diluted earnings per share is based on the following data:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Net profit (loss) for the period (in thousand EUR) | (9 749) | (36 138) |
| Net profit (loss) from continuing operations | (9 749) | (36 138) |
| Net profit (loss) from discontinuing operations | 0 | 0 |
| Weighted average shares outstanding | ||
| Ordinary shares on 01 January (excluding own shares bought back) | 28 620 556 | 28 931 456 |
| Shares bought back during the period | 0 | (326 800) |
| Exercise of warrants | 716 900 | 15 900 |
| Ordinary shares on 31 December (excluding own shares bought back) | 29 337 456 | 28 620 556 |
| Weighted average ordinary shares outstanding | 28 953 478 | 28 498 521 |
| Basic earnings per share | (0.34) | (1.27) |
|---|---|---|
| Group Recticel | 2014 | 2013 |
| in EUR |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Diluted earnings per share computation: | ||
| Dilutive elements | ||
| Net profit (loss) from continuing operations | (9 749) | (36 138) |
| Convertible bond (2) | 0 | 0 |
| Profit (loss) attributable to ordinary equity holders of the parent entity including assumed conversions | (9 749) | (36 138) |
| Weighted average ordinary shares outstanding | 28 953 478 | 28 498 521 |
| Stock option plans - warrants (1) | 0 | 0 |
| Convertible bond (2) | 0 | 0 |
| Weighted average shares for diluted earnings per share | 28 953 478 | 28 498 521 |
| in EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Diluted earnings per share | (0.34) | (1.27) |
| Diluted earnings per share from continuing operations | (0.34) | (1.27) |
| Diluted earnings per share from discontinuing operations | 0.00 | 0.00 |
| Group Recticel | 2014 | 2013 |
|---|---|---|
| Anti-dilutive elements | ||
| Impact on net profit from continuing operations | ||
| Convertible bond (2) | 1 268 | 1 251 |
| Impact on weighted average ordinary shares outstanding | ||
| Stock option plan - warrants - "out-of-the-money" (1) | 798 940 | 726 629 |
| Stock option plan - warrants - "anti-dilutive" (1) | 167 666 | 315 752 |
| Convertible bond (2) | 4 868 755 | 4 791 667 |
(1) Due to the loss of the year, no dilutive instruments are considered for the diluted earnings per share at closing 2013, as the inclusion of these instruments would have an adverse effect; i.e. reducing the loss per share.
(2) For 2014 and 2013, the impact of the convertible bond is considered to be anti-dilutive due to the loss of the period.
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | DEVELOPMENT COSTS |
TRADEMARKS, PATENTS & LICENCES |
CLIENT PORTFOLIO GOODWILL |
OTHER INTANGIBLE ASSETS |
ASSETS UNDER CONSTRUCTION AND ADVANCE PAYMENTS |
TOTAL |
| At the end of the preceding year | ||||||
| Gross book value | 12 966 | 42 566 | 8 820 | 231 | 5 333 | 69 916 |
| Accumulated amortisation | (12 333) | (29 735) | (8 459) | (170) | 0 | (50 697) |
| Accumulated impairment | (108) | (6 326) | 0 | 0 | (831) | (7 265) |
| Net book value | 525 | 6 505 | 361 | 61 | 4 502 | 11 954 |
| Movements during the year: | ||||||
| Acquisitions | 0 | 80 | 0 | 21 | 610 | 711 (1) |
| Own production | 0 | 0 | 0 | 1 | 2 238 | 2 239 (1) |
| Impairments | 0 | (5) | 0 | 0 | 0 | (5) |
| Expensed amortisation | (269) | (1 931) | (276) | (13) | 0 | (2 489) |
| Sales and scrapped | 0 | 0 | 0 | 0 | 0 | 0 (2) |
| Transfers from one heading to another | 317 | 1 356 | 0 | 13 | (1 686) | 0 |
| Exchange rate differences | (2) | (36) | 5 | (2) | 9 | (26) |
| At year-end | 571 | 5 969 | 90 | 81 | 5 673 | 12 384 |
| Gross book value | 13 704 | 44 083 | 8 880 | 341 | 6 504 | 73 512 |
| Accumulated amortisation | (13 101) | (31 792) | (8 790) | (260) | 0 | (53 943) |
| Accumulated impairment | (32) | (6 322) | 0 | 0 | (831) | (7 185) |
| Net book value | 571 | 5 969 | 90 | 81 | 5 673 | 12 384 |
| Useful life (in years) | 3-5 | 3-10 | 5-10 | 5 maximum | n.a. | |
| Acquisitions | Disposals | |||||
| Cash-out on acquisitions of intangible assets | (3 422) | Cash-in from disposals of intangible assets | 391 | |||
| Acquisitions included in working capital | 472 | Disposals included in working capital | (391) | |||
| Total acquisitions of intangible assets (1) | (2 950) | Total disposals of intangible assets (2) | 0 |
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | DEVELOPMENT COSTS |
TRADEMARKS, PATENTS & LICENCES |
CLIENT PORTFOLIO GOODWILL |
OTHER INTANGIBLE ASSETS |
ASSETS UNDER CONSTRUCTION AND ADVANCE PAYMENTS |
TOTAL |
| At the end of the preceding year | ||||||
| Gross book value | 13 052 | 38 538 | 8 842 | 592 | 5 833 | 66 857 |
| Accumulated amortisation | (12 395) | (27 677) | (8 133) | (339) | 0 | (48 544) |
| Accumulated impairment | 0 | (6 334) | 0 | 0 | (831) | (7 165) |
| Net book value | 657 | 4 527 | 709 | 253 | 5 002 | 11 148 |
| Movements during the year: | ||||||
| Acquisitions | 27 | 162 | 0 | 0 | 1 149 | 1 338 (1) |
| Own production | 0 | 8 | 0 | 0 | 2 631 | 2 639 (1) |
| Impairments | (107) | (1) | 0 | 0 | 0 | (108) |
| Expensed amortisation | (396) | (1 974) | (341) | (9) | 0 | (2 720) |
| Sales and scrapped | 0 | 0 | 0 | 0 | (126) | (126) (2) |
| Transfers from one heading to another | 359 | 3 839 | 0 | (181) | (4 139) | (122) |
| Exchange rate differences | (15) | (56) | (7) | (2) | (15) | (95) |
| At year-end | 525 | 6 505 | 361 | 61 | 4 502 | 11 954 |
| Gross book value | 12 966 | 42 566 | 8 820 | 231 | 5 333 | 69 916 |
| Accumulated amortisation | (12 333) | (29 735) | (8 459) | (170) | 0 | (50 697) |
| Accumulated impairment | (108) | (6 326) | 0 | 0 | (831) | (7 265) |
| Net book value | 525 | 6 505 | 361 | 61 | 4 502 | 11 954 |
| Useful life (in years) | 3-5 | 3-10 | 5-10 | 5 maximum | n.a. | |
| Acquisitions | Disposals | |||||
| Cash-out on acquisitions of intangible assets | (3 558) | Cash-in from disposals of intangible assets | 0 | |||
| Acquisitions included in working capital | (419) | Disposals included in working capital | 126 | |||
| Total acquisitions of intangible assets (1) | (3 977) | Total disposals of intangible assets (2) | 126 |
In 2014, the total acquisition of intangible assets and own production of intangible assets amounted to EUR 3.0 million, compared to EUR 4.0 million the year before. The investments in intangible assets in 2014 mainly related to "Assets under construction and advance payments" for new developments and licence costs related to the roll-out of the SAP IT platform (EUR 1.7 million) and capitalised development costs for Automotive-Interiors projects (EUR 1.1 million).
In 2013, the total acquisition of intangible assets and own production of intangible assets amounted to EUR 4.0 million, compared to EUR 3.4 million the year before. The investments in intangible assets in 2013 mainly related to "Assets under construction and advance payments" for new developments and licence costs related to the roll-out of the SAP IT platform (EUR 2.5 million) and capitalised development costs for Automotive-Interiors projects (EUR 0.9 million).
In December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal, Recticel SA/NV and/or its affiliates have pledged their main trademarks and patents in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31/DEC/2014 | 31/DEC/2013 |
| At the end of the preceding year | ||
| Gross book value | 38 433 | 39 084 |
| Accumulated impairments | (13 823) | (13 971) |
| Net book value | 24 610 | 25 113 |
| Movements during the year | ||
| Acquisitions or entering the consolidation scope | 0 | 0 |
| Impairments * | 0 | 0 |
| Exchange rate differences | 339 | (503) |
| At year-end | 24 949 | 24 610 |
| Gross book value | 39 215 | 38 433 |
| Accumulated impairments | (14 266) | (13 823) |
| Net book value | 24 949 | 24 610 |
| * See note II.1.5.1. Impairments on goodwill, intangible assets and property, plant and equipment. |
The carrying amount of goodwill acquired in business combination must be allocated on a reasonable and consistent basis to each CGU or smallest group of cash-generating units in accordance with IAS 36.
The goodwill is subject to an impairment test each year or more frequently if there are indications that these items should be subject to impairment. Regarding the main assumptions and findings and the sensitivity analyses, we refer to section II.1.5 Critical accounting assessments and principal sources of uncertainty.
The increase of the net book value is solely explained by exchange differences, especially in GBP.
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | LAND AND BUILDINGS |
PLANT, MACHINERY & EQUIPMENT |
FURNITURE AND VEHICLES |
LEASES AND SIMILAR RIGHTS |
OTHER TANGIBLE ASSETS |
ASSETS UNDER CONSTRUCTION |
TOTAL |
| At the end of the preceding year | |||||||
| Gross value | 186 154 | 489 636 | 23 251 | 35 324 | 5 169 | 8 237 | 747 771 |
| Accumulated depreciation | (112 243) | (381 512) | (18 981) | (10 939) | (1 299) | 0 | (524 974) |
| Accumulated impairments | (765) | (16 261) | (65) | (197) | (484) | (411) | (18 183) |
| Net book value at opening | 73 146 | 91 863 | 4 205 | 24 188 | 3 386 | 7 826 | 204 614 |
| Movements during the year | |||||||
| Acquisitions, including own production | 841 | 2 150 | 937 | 0 | 21 | 19 237 | 23 186 (1) |
| Impairments | (74) | (107) | (2) | 0 | (500) | 0 | (683) |
| Expensed depreciation | (4 059) | (16 380) | (1 567) | (1 616) | (82) | (36) | (23 740) |
| Sales and scrapped | (918) | (96) | (27) | 0 | 0 | 0 | (1 041) (2) |
| Reclassification to held for sale | (1 433) | 0 | 0 | 0 | 0 | 0 | (1 433) |
| Transfers from one heading to another | 1 139 | 10 213 | 695 | (1) | 9 | (12 034) | 21 |
| Exchange rate differences | 227 | 1 314 | 72 | 0 | (3) | 199 | 1 809 |
| At year-end | 68 869 | 88 957 | 4 313 | 22 571 | 2 831 | 15 192 | 202 733 |
| Gross value | 185 006 | 502 387 | 24 723 | 35 315 | 5 135 | 15 602 | 768 168 |
| Accumulated depreciation | (115 329) | (401 671) | (20 379) | (12 605) | (1 320) | (36) | (551 340) |
| Accumulated impairments | (808) | (11 759) | (31) | (139) | (984) | (374) | (14 095) |
| Net book value at year-end | 68 869 | 88 957 | 4 313 | 22 571 | 2 831 | 15 192 | 202 733 |
| Acquisitions | Disposals | ||||||
| Cash-out on acquisitions of tangible assets | (28 984) | Cash-in from disposals of tangible assets | 844 | ||||
| Acquisitions shown in working capital | 5 798 | Disposals shown in working capital | 197 | ||||
| Total acquisitions of tangible assets (1) | (23 186) | Total disposals of tangible assets (2) |
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | LAND AND BUILDINGS |
PLANT, MACHINERY & EQUIPMENT |
FURNITURE AND VEHICLES |
LEASES AND SIMILAR RIGHTS |
OTHER TANGIBLE ASSETS |
ASSETS UNDER CONSTRUCTION |
TOTAL | |
| At the end of the preceding year | ||||||||
| Gross value | 182 637 | 487 858 | 23 066 | 34 264 | 5 318 | 25 507 | 758 650 | |
| Accumulated depreciation | (107 743) | (380 041) | (19 738) | (9 413) | (1 349) | 0 | (518 284) | |
| Accumulated impairments | (749) | (19 067) | (58) | (256) | (484) | (572) | (21 186) | |
| Net book value at opening | 74 145 | 88 750 | 3 270 | 24 595 | 3 485 | 24 935 | 219 180 | |
| Movements during the year | ||||||||
| Outgoing entities | (1) | 0 | (1) | 0 | 0 | 0 | (2) | |
| Acquisitions, including own production | 121 | 4 626 | 1 039 | 1 266 | 37 | 12 292 | 19 381 (1) | |
| Impairments | (46) | (3 177) | (33) | 0 | 0 | 0 | (3 256) | |
| Expensed depreciation | (5 314) | (18 866) | (1 340) | (1 671) | (92) | 0 | (27 283) | |
| Sales and scrapped | (495) | (413) | (3) | 0 | 0 | (357) | (1 268) (2) | |
| Transfers from one heading to another | 5 126 | 22 466 | 1 352 | 0 | 0 | (28 874) | 70 | |
| Exchange rate differences | (390) | (1 523) | (79) | (2) | (44) | (170) | (2 208) | |
| At year-end | 73 146 | 91 863 | 4 205 | 24 188 | 3 386 | 7 826 | 204 614 | |
| Gross value | 186 154 | 489 636 | 23 251 | 35 324 | 5 169 | 8 237 | 747 771 | |
| Accumulated depreciation | (112 243) | (381 512) | (18 981) | (10 939) | (1 299) | 0 | (524 974) | |
| Accumulated impairments | (765) | (16 261) | (65) | (197) | (484) | (411) | (18 183) | |
| Net book value at year-end | 73 146 | 91 863 | 4 205 | 24 188 | 3 386 | 7 826 | 204 614 | |
| Acquisitions | Disposals | |||||||
| Cash-out on acquisitions of tangible assets | (12 610) | Cash-in from disposals of tangible assets | 4 925 | |||||
| Acquisitions shown in working capital | (6 771) | Disposals shown in working capital | (3 657) | |||||
| Total acquisitions of tangible assets (1) | (19 381) | Total disposals of tangible assets (2) |
Total acquisition of tangible assets amounted to EUR 23.2 million, compared to EUR 19.4 million last year.
At 31 December 2014, the Group had entered into contractual commitments for the acquisition of property, plant & equipment amounting to EUR 5.3 million.
At 31 December 2013, the Group had entered into contractual commitments for the acquisition of property, plant & equipment amounting to EUR 7.0 million.
In 2014, impairment losses recognized in profit and loss are mainly related to real estate of the idle plant in Legutiano (Spain – Flexible Foams) (EUR -0.5 million), as a result of a market appraisal value.
As a result of the impairment tests, impairments were booked in 2013 for an amount of EUR -3.3 million, which consists of EUR -1.7 million in Automotive and EUR -1.6 million in Flexible Foams.
Reclassification held for sale (EUR 1.4 million) relate to the building (Insulation) in Wolverhampton (United Kingdom).
As already stated under Intangible Assets, in December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a new joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal, Recticel SA/NV and/or its affiliates have pledged their production sites in Belgium, Germany, France, the Netherlands and Sweden in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31/DEC/2014 | 31/DEC/2013 |
| Total land and buildings | 22 513 | 10 302 |
| Total plant, machinery & equipment | 44 | 13 862 |
| Total furniture and vehicles | 14 | 24 |
| Total assets under financial lease | 22 571 | 24 188 |
| Fixed assets held under financial lease - Gross | 35 315 | 35 324 |
| Fixed assets held under financial lease - Depreciation | (12 605) | (10 940) |
| Fixed assets held under financial lease - Impairments | (139) | (196) |
| Fixed assets held under financial lease | 22 571 | 24 188 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31/DEC/2014 | 31/DEC/2013 |
| At the end of the preceding year | ||
| Gross book value | 3 429 | 4 551 |
| Accumulated impairments | (99) | (99) |
| Net book value | 3 330 | 4 452 |
| Movements during the year | ||
| Fair value gain | 0 | (800) |
| Sales | 0 | (322) |
| Transfer to property, plant and equipment | (24) | 0 |
| At year-end | 3 306 | 3 330 |
| Gross book value | 3 405 | 3 429 |
| Accumulated impairments | (99) | (99) |
| Net book value | 3 306 | 3 330 |
This section relates primarily to 31.36 hectares of industrial and agricultural land in Balen and Lommel (Belgium). Of the industrial lands in Balen/Lommel, 7.35 hectares is subject to a long term lease (up to 2039) to Ajinomoto Omnichem SA/NV.
5.58 Hectares of industrial land accommodates the permanent deposit, resulting from the clean-up of the entire site, executed over the years 2001-2006, and also private roads, etc.
About 17.78 hectares of industrial land in Balen and 0.63 hectares of agricultural land in Lommel remain available for sale.
Unless otherwise indicated, the percentage shareholdings shown below are identical to the percentage voting rights.
| 31 DEC 2014 | 31 DEC 2013 | ||||
|---|---|---|---|---|---|
| Austria | |||||
| Sembella GmbH | Aderstrasse 35 - 4850 Timelkam | 100.00 | 100.00 | ||
| Belgium | |||||
| s.c. sous forme de s.a. Balim b.v. onder vorm van n.v. | Olympiadenlaan 2 - 1140 Evere | 100.00 | 100.00 | ||
| s.a. Finapal n.v. | Olympiadenlaan 2 - 1140 Evere | 100.00 | 100.00 | ||
| s.a. Intergroup Coordination Services n.v. | Olympiadenlaan 2 - 1140 Evere | 100.00 | 100.00 | ||
| s.a. Recticel Management Services n.v. | Damstraat 2 - 9230 Wetteren | 100.00 | 100.00 | ||
| s.a. Recticel International Services n.v. | Olympiadenlaan 2 - 1140 Evere | 100.00 | 100.00 | ||
| China | |||||
| Ningbo Recticel Automotive Parts Co. Ltd. | No. 525, Changxing Road, (C Area of Pioneer Park) Jiangbei District, Ningbo Municipality | 100.00 | 100.00 | ||
| Recticel Foams (Shanghai) Co Ltd | No. 525, Kang Yi Road - Kangyiao Industrial Zone, 201315 Shanghai | 100.00 | 100.00 | ||
| Shenyang Recticel Automotive Parts Co Ltd | No 12, Hangtian Road, 110043 Shenyang | 100.00 | 100.00 | ||
| Beijing Recticel Automotive parts CO Ltd | 32A, Block Yi, No. 15, Jingsheng Nan Si Jie, Jingiao Science | 100.00 | 100.00 | ||
| Czech Republic | |||||
| RAI Most s.r.o. | Moskevska 3055 - Most | 100.00 | 100.00 | ||
| Recticel Czech Automotive s.r.o. | Chuderice-Osada 144 - 418,25 Bilina | 100.00 | 100.00 | ||
| Recticel Interiors CZ s.r.o. | Plazy, 115 - PSC 293 01 Mlada Boleslav | 100.00 | 100.00 | ||
| Estonia Recticel ou |
Pune Tee 22 - 12015 Tallin | 100.00 | 100.00 | ||
| Finland | |||||
| Recticel oy | Nevantie 2, 45100 Kouvola | 100.00 | 100.00 | ||
| France | |||||
| Recticel s.a.s. | 7, rue du Fossé blanc, bâtiment C2 - 92622 Gennevilliers | 100.00 | 100.00 | ||
| Recticel Insulation s.a.s. | 7, rue du Fossé blanc, bâtiment C2 - 92622 Gennevilliers | 100.00 | 100.00 | ||
| Germany | |||||
| Recticel Automobilsysteme GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 | ||
| Recticel Beteiligungsmanagement GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | - (a) | 100.00 | ||
| Recticel Dämmsysteme Gmbh | Hagenauer Strasse 42 – 65203 Wiesbaden | 100.00 | 100.00 | ||
| Recticel Deutschland Beteiligungs GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 | ||
| Recticel Grundstücksverwaltung GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 | ||
| Recticel Handel GmbH | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 | ||
| Recticel Schlafkomfort GmbH | Schlaraffiastrasse 1-10 - 44867 Bochum 6 - Wattenscheid | 100.00 | 100.00 | ||
| Recticel Verwaltung Gmbh & Co. KG | Rolandsecker Weg 30 – 53619 Rheinbreitbach | 100.00 | 100.00 | ||
| Luxembourg | |||||
| Recticel RE s.a. | 23, Avenue Monterey, L-2163 Luxembourg | 100.00 | 100.00 | ||
| Recticel Luxembourg s.a. | 23, Avenue Monterey, L-2163 Luxembourg | 100.00 | 100.00 | ||
| India | |||||
| Recticel India Private Limited | 407, Kapadia Chambers, 599 JSS Road, Princess Street, Marine Lines (East), 400002 Mumbai Maharashtra | 100.00 | 100.00 | ||
| Morroco Recticel Mousse Maghreb SARL |
31 Avenue Prince Héritier, Tanger | 100.00 | 100.00 | ||
| The Netherlands Akoestikon Geluidsisolatie B.V. |
Fahrenheitbaan, 4c - 3439 MD Nieuwegein | 100.00 | 100.00 | ||
| Enipur Holding BV | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 | ||
| Recticel B.V. | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 | ||
| Recticel Holding Noord B.V. | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 | ||
| Recticel International B.V. | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 | ||
| Rectigro BV | Spoorstraat 69 - 4041 CL Kesteren | 100.00 | 100.00 |
(a) Recticel Beteiligungsmanagement GmbH merged with Recticel Handel GmbH (b) Recfoam merged with Recticel Teknik Sünger Izolasyon (c) New establishment
(d) Eurofoam Gdansk & Poznan merged with Eurofoam Polska in 2013 (e) Liquidated
| % shareholding in | |||
|---|---|---|---|
| 31 DEC 2014 | 31 DEC 2013 | ||
| Norway | |||
| Westnofa Industrier AS | Øysand - 7224 Mehus | 100.00 | 100.00 |
| Poland | |||
| Recticel Sp. z o.o. | Ul. Graniczna 60, 93-428 Lodz | 100.00 | 100.00 |
| Romania | |||
| Recticel Bedding Romania s.r.l. | Miercurea Sibiului, DN1, FN, ground floor room 2 3933 Sibiu County | 100.00 | 100.00 |
| Sweden | |||
| Recticel AB | Södra Storgatan 50 b.p. 507 - 33228 Gislaved | 100.00 | 100.00 |
| Spain | |||
| Recticel Iberica s.l. | Carretera B-142km. 2,2 - 08213 Polinya | 100.00 | 100.00 |
| Switzerland | |||
| Recticel Bedding (Schweiz) AG | Bettenweg 12 Postfach 65 - 6233 Büron - Luzern | 100.00 | 100.00 |
| Turkey | |||
| Recfoam Poliuretan sünger sanayi ve ticaret limited sirkati | Esentrepe mylangarz Cad., 40 34870 Istanbul | -(b) | 100.00 |
| Teknofoam Izolasyon Sanayi ve Ticaret a.s. | Esentepe Milangaz caddesi 40 Kartal, Istanbul | 100,00 | 100,00 |
| United Kingdom | |||
| Gradient Insulations (UK) Limited | 1 George Street, Wolverhampton WV2 4DG, UK | 100.00 | 100.00 |
| Recticel (UK) Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 |
| Recticel Limited | Blue Bell Close Clover Nook Industrial Park - DE554RD Alfreton | 100.00 | 100.00 |
| United States of America | |||
| Recticel Interiors North America Llc. | 5600 Bow Point Drive - MI 48346-3155 Clarkston | 100.00 | 100.00 |
| Recticel Urepp North America Inc. | Metro North Technology Park - Atlantic Boulevard 1653 - MI 48326 Auburn Hills | 100.00 | 100.00 |
| The Soundcoat Company Inc. | Burt Drive 1 PO Box 25990 - NY 11729 Deer Park County of Suffolk | 100.00 | 100.00 |
(a) Recticel Beteiligungsmanagement GmbH merged with Recticel Handel GmbH (b) Recfoam merged with Recticel Teknik Sünger Izolasyon (c) New establishment
(d) Eurofoam Gdansk & Poznan merged with Eurofoam Polska in 2013 (e) Liquidated
In the framework of the EUR 175 million credit facility agreement ('club deal') dated 09 December 2011, Recticel SA/NV provided the following guarantees to its banks:
Recticel SA/NV has also provided bank guarantees for (i) an aggregate amount of EUR 1.5 million in favour of OVAM regarding the sanitation and rehabilitation projects on some of its sites and/or sites of its subsidiaries, and (ii) an aggregate amount of EUR 3.7 million in favour of the 'Office Wallon des Déchets'.
Recticel SA/NV also provides guarantees and comfort letters to and/or on behalf of various direct or indirect subsdiaries, of which the material (> EUR 1 million) ones are:
on behalf of Eurofoam GmbH and subsidiaries: EUR 7.5 million;
on behalf of Proseat NV: EUR 5.1 million;
Recticel has provided a bank guarantee to the European Commission to cover the outstanding cartel fine provision for EUR 13.4 million.
Moreover Recticel guarantees its associated companies Recticel Interiors North America LLP and Recticel Urepp North America Inc., in the framework of the revised agreements with the Johnson Control Group following the settlement by which the latter no longer fall under the Chapter 11 procedure (April 2010).
Recticel also guarantees in favor of Daimler AG the correct execution of all running Mercedes programs of the Interiors division.
| % shareholding in | |||
|---|---|---|---|
| 31 DEC 2014 | 31 DEC 2013 | ||
| Austria | |||
| Eurofoam GmbH | Greinerstrasse 70 - 4550 Kremsmünster | 50.00 | 50.00 |
| Belgium | |||
| s.a. Kingspan Tarec Industrial Insulation n.v. (1) | Olympiadenlaan, 2 - 1140 Evere | 50.00 | 50.00 |
| s.a. Proseat n.v. | Olympiadenlaan 2 - 1140 Evere | 51.00 | 51.00 |
| Czech Proseat Mlada Boleslav s.r.o. |
Plazy, 115 - PSC 293 01 Mlada Boleslav | 51.00 | 51.00 |
| France | |||
| Proseat s.a.s. | Avenue de Verdun, 71, 77470 Trilport | 51.00 | 51.00 |
| Germany | |||
| Eurofoam Deutschland GmbH Schaumstoffe | Hagenauer Strasse 42 – 65203 Wiesbaden | 50.00 | 50.00 |
| KFM-Schaumstoff GmbH | Rosenauer Strasse, 28 - 96487 Dörfles-Esbach | 50.00 | 50.00 |
| Proseat Gmbh & Co. KG | Hessenring 32 - 64546 Mörfelden-Walldorf | 51.00 | 51.00 |
| Proseat Schwarzheide GmbH | Schipkauer Strasse 1 - 01987 Schwarzheide | 51.00 (c) | - |
| Proseat Verwaltung Gmbh | Hessenring 32 - 64546 Mörfelden-Walldorf | 51.00 | 51.00 |
| Hungary | |||
| Eurofoam Hungary Kft. | Miskolc 16 - 3792 Sajobabony | 50.00 | 50.00 |
| The Netherlands | |||
| Eurofoam B.V. | Spoorstraat 69 - 4041 CL Kesteren | - (e) | 50.00 |
| Poland | |||
| Eurofoam Polska Sp. z o.o. | ul Szczawinska 42 - 95-100 Zgierz | 50.00 | 50.00 |
| Proseat Spolka. z o.o. | ul Miedzyrzecka, 16 - 43-382, Bielsko-Biala | 51.00 | 51.00 |
| Romania | |||
| Eurofoam s.r.l. | Str. Garii nr. 13 Selimbar 2428 - O.P.8 C.P. 802 - Jud. Sibiu | 50.00 | 50.00 |
| Spain | |||
| Proseat Foam Manufacturing SLU | Carretera Navarcles s/n, Poligono Industrial Santa Ana II - Santpedor (08251 Barcelona) | 51.00 | 51.00 |
| United Kingdom | |||
| Kingspan Tarec Industrial Insulation Ltd. (1) | Charlestown Works, Charlestown - SK13 8LE Glossop (Derbyshire) | 50.00 | 50.00 |
| Proseat LLP | Unit A, Stakehill Industrial Estate, Manchester, Lancashire | 51.00 | 51.00 |
(1) see also II.6.4. Events after the balance sheet date
(a) Recticel Beteiligungsmanagement GmbH merged with Recticel Handel GmbH (b) Recfoam merged with Recticel Teknik Sünger Izolasyon (c) New establishment
(d) Eurofoam Gdansk & Poznan merged with Eurofoam Polska in 2013 (e) Liquidated
There are no specific restrictions on the ability of joint ventures to transfer funds to Recticel in the form of cash dividends, or to repay loans or advances made by Recticel.
Reference is made to "II.6.10 Contingent assets and liabilities" for the investigation by the EC in which Eurofoam was involved.
| 31 DEC 2014 | 31 DEC 2013 | |||
|---|---|---|---|---|
| Bulgaria | ||||
| Eurofoam-BG o.o.d. | Raiko Aleksiev Street 40, block n° 215-3 Izgrev district, Sofia | 50.00 | 50.00 | |
| Czech Republic | ||||
| B.P.P. spol s.r.o. | ul. Hájecká 11 – 61800 Brno | 25.68 | 25.68 | |
| Eurofoam Bohemia s.r.o. | Osada 144, Chuderice - 418 25 Bilina | 50.00 | 50.00 | |
| Eurofoam TP spol.s.r.o. | ul. Hájecká 11 – 61800 Brno | 40.00 | 40.00 | |
| Sinfo | Souhradi 84 - 391 43 Mlada Vozice | 25.50 | 25.50 | |
| Eurofoam Industry | ul. Hájecká 11 – 61800 Brno | 50.00 | 50.00 | |
| Italy | ||||
| Orsafoam s.p.a. | Via A. Colombo, 60 21055 Gorla Minore (VA) | 33.00 | 33.00 | |
| Lithuania | ||||
| UAB Litfoam | Radziunu Village, Alytus Region | 30.00 | 30.00 | |
| Poland | ||||
| Caria Sp. z o.o. | ul Jagiellonska 48 - 34 - 130 Kalwaria Zebrzydowska | 25.50 | 25.50 | |
| Eurofoam Gdansk Sp. z o.o. | ul. Przyrodników 23 - 80-298 Gdansk | - (d) | 50.00 | |
| Eurofoam Poznan Sp. z o.o. | ul. Gnieznienska 4 Janikowo K/Poznan - 62-006 Kobylnica | - (d) | 50.00 | |
| PPHIU Kerko Sp. z o.o. | Nr. 366 - 36-073 Strazow | 25.86 | 25.86 | |
| Romania | ||||
| Flexi-Mob Trading s.r.l. | Interioara Street, 3 Pol. II, Inc. Federalcoop, Nr. 1, Constanta | 25.00 | 25.00 | |
| Russian Federation Eurofoam Kaliningrad |
Kaliningrad District, Guierwo Region , 238352 Uszakowo | 50.00 | 50.00 | |
| Slovak Republic | ||||
| Poly | Dolné Rudiny 1 - SK-01001 Zilina | 50.00 | 50.00 | |
| Serbia | ||||
| Eurofoam Sunderi d.o.o. | Vojvodanska Str. 127 - 21242 Budisava | 50.00 | 50.00 | |
| Ukraine | ||||
| Porolon Limited | Grodoocka 357 - 290040 - Lviv | 47.50 | 47.50 |
(a) Recticel Beteiligungsmanagement GmbH merged with Recticel Handel GmbH
(b) Recfoam merged with Recticel Teknik Sünger Izolasyon
(c) New establishment
(d) Eurofoam Gdansk & Poznan merged with Eurofoam Polska in 2013 (e) Liquidated
There are no specific restrictions on the ability of associates to transfer funds to Recticel in the form of cash dividends, or to repay loans or advances made by Recticel.
Reference is made to "II.6.10 Contingent assets and liabilities" for the antitrust procedures initiated by the Italian authorities in which Orsafoam s.p.a. is involved.
Some subsidiaries more than 50% controlled are not consolidated because they are (still) non-material. As soon as they have reached a sufficient size, however, they will be included in the scope of consolidation.
| % shareholding in | |||
|---|---|---|---|
| 31 DEC 2014 | 31 DEC 2013 | ||
| China | |||
| Recticel Shanghai Ltd | No. 518, Fute North Road, Waigaoqiao Free Trade Zone - 200131 Shanghai | 100.00 | 100.00 |
| France | |||
| Lebed s.a.s. | Zone d'activité de l'Allmend - Boîte postale 34 - 68290 Maseveaux | - (e) | 100.00 |
| Greece | |||
| Teknofoam Hellas | Kosma Etolou Street, 13 - Neo Iraklio - Attica | 100.00 | 100.00 |
| Japan | |||
| Inorec Japan KK | Imaika-Cho 1-36, Anjo-Shi | 50.00 | 50.00 |
| Luxembourg | |||
| Recfin S.A. | 412F, route d'Esch, L-2086 Luxembourg | 100.00 | 100.00 |
| Romania | |||
| Eurofoam s.r.l. Baia Mare | Str. Margeanulin, 5 - 4800 BAIA MARE | 50.00 | 50.00 |
| Russian Federation | |||
| Proseat LLC, in liquidation | Domodedovskoye shosse 1/1, Podolsky district, Moskow Region, 142116 Selkhoztekhnica | 51.00 | 51.00 |
| Sweden | |||
| Nordflex A.B. | Box 507 - 33200 Gislaved | 100.00 | 100.00 |
| Switzerland | |||
| Prefoam AG, in liquidation | c/o KPMG Private Steinengraben, 5 - 4003 Basel | - (e) | 50.00 |
(a) Recticel Beteiligungsmanagement GmbH merged with Recticel Handel GmbH (b) Recfoam merged with Recticel Teknik Sünger Izolasyon (c) New establishment
(d) Eurofoam Gdansk & Poznan merged with Eurofoam Polska in 2013 (e) Liquidated
A list of the significant investments in joint ventures and associates is included in note II.5.6.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| At the end of the preceding period | 72 507 | 69 123 |
| Movements during the year | ||
| Actuarial gains/(losses) recognized in equity | (1 331) (1) | 52 |
| Deferred tax relating to components of other comprehensive income | 361 | (47) |
| Exchange rate differences | (84) | (940) |
| Group's share in the result of the period | 8 964 (2) | 439 |
| Dividends distributed | (119) | (6 300) |
| Result transfer | 227 | (1 144) |
| Capital increase | 255 | 11 324 (4) |
| Reclassification to held for sale | (7 136) (3) | 0 |
| At the end of the period | 73 644 | 72 507 |
(1) In 2014 the actuarial losses relate to the impact of the lower discount rate under IAS19 pension liabilities
(2) In 2014 the Group's share in the result of the joint ventures (EUR 7.8 million) and of the affiliates (EUR 1.1 million) is significantly higher than in 2013 due the EC fine for Eurofoam, which was recognized in 2013 (EUR -7.2 million)
(3) In 2014 this item relates to the investment in the joint venture Kingspan Tarec Industrial Insulation (KTII), which was sold in February 2015.
(4) In 2013 this relates to the Proseat entities (Automotive-Seating).
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | EUROFOAM GROUP PROSEAT GROUP |
KINGSPAN TAREC INDUSTRIAL INSULATION |
TOTAL | |||||
| 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 | |
| Non current assets | 143 852 | 146 811 | 70 755 | 68 049 | 8 163 | 8 541 | 222 770 | 223 401 |
| Cash and cash equivalents | 8 930 | 10 535 | 20 722 | 13 023 | 2 224 | 1 481 | 31 876 | 25 039 |
| Current assets | 119 025 | 112 967 | 152 586 | 117 748 | 10 931 | 10 815 | 282 542 | 241 530 |
| Total assets | 262 877 | 259 778 | 223 341 | 185 797 | 19 094 | 19 356 | 505 312 | 464 931 |
| Interest-bearing borrowings | (40 487) | (50 078) | (18 165) | (8 757) | 0 | 0 | (58 652) | (58 835) |
| Non current liabilities | (56 498) | (64 964) | (51 768) | (41 194) | (7 344) | (7 121) | (115 610) | (113 279) |
| Interest-bearing borrowings | (37 342) | (29 440) | (74 426) | (47 824) | (1 045) | (2 629) | (112 813) | (79 893) |
| Current liabilities | (79 863) | (67 876) | (116 700) | (87 923) | (4 788) | (6 277) | (201 351) | (162 076) |
| Total liabilities | (136 361) | (132 840) | (168 468) | (129 117) | (12 132) | (13 398) | (316 961) | (275 355) |
| Net equity | 126 516 | 126 938 | 54 873 | 56 680 | 6 962 | 5 958 | 188 351 | 189 576 |
| Revenues | 396 563 | 386 289 | 256 253 | 239 426 | 34 552 | 30 211 | 687 368 | 655 926 |
| Amortization, Depreciation and Impairments | (7 598) | (7 947) | (6 935) | (7 368) | (1 025) | (1 047) | (15 558) | (16 362) |
| EBIT | 23 267 | 31 122 | (327) | 1 090 | 1 168 | (137) | 24 108 | 32 075 |
| Interest income | 390 | 355 | 337 | 256 | 0 | 0 | 727 | 611 |
| Interest expense | (2 523) | (2 806) | (1 703) | (1 706) | (43) | (7) | (4 269) | (4 519) |
| Result from ordinary activities before taxes | 20 795 | 28 456 | (1 423) | (1 261) | 1 084 | (184) | 20 456 | 27 011 |
| Total income taxes | (4 751) | (5 142) | (1 064) | (110) | (3) | 38 | (5 818) | (5 214) |
| Profit or (loss) of the period | 15 993 | 23 174 | (3 094) | (726) | 1 122 | (106) | 14 021 | 22 342 |
Footnote: Recticel NV has issued (i) a comfort letter for EUR 7.5 million on behalf of the joint venture company Eurofoam GmbH (Austria/Germany) to cover a local bank loan, (ii) a EUR 5.1 million guarantee on behalf of the joint venture Proseat also to cover a local bank loan and (iii) a EUR 4.5 million guarantee on behalf of the joint venture Proseat to cover a local lease agreement.
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | EUROFOAM GROUP | PROSEAT GROUP | KINGSPAN TAREC INDUSTRIAL INSULATION |
||||
| 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 | ||
| Net equity (Group share) | 63 258 | 63 469 | 27 985 | 28 907 | 3 481 | 2 978 | |
| Goodwill | 473 | 498 | 8 989 | 8 978 | 415 | 414 | |
| Provision EC fine | 0 | (7 410) | 0 | 0 | 0 | 0 | |
| Intragroup eliminations | (5 591) | 3 588 | 12 574 | 11 287 | (100) | (200) | |
| Debt as equity | 0 | 0 | 15 807 | 15 807 | 3 245 | 3 245 | |
| Deferred taxes | 776 | 99 | (324) | (272) | 95 | 115 | |
| IAS 19 assumptions | (641) | (1 719) | 0 | (143) | 0 | 0 | |
| Other | (310) | 1 910 | 0 | 0 | 0 | 0 | |
| Investment in affiliates | (33 232) | (42 699) | (29 523) | (29 510) | 0 | 0 | |
| Carrying amount of interests in joint ventures | 24 733 | 17 736 | 35 508 | 35 054 | 7 136 | 6 552 |
The following key figures for the associates are shown on a 100% basis:
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| ORSAFOAM S.P.A. | EUROFOAM GROUP | TOTAL | ||||
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 |
| Non current assets | 31 739 | 29 060 | 5 520 | 5 538 | 37 259 | 34 598 |
| Current assets | 56 034 | 56 434 | 9 850 | 9 960 | 65 884 | 66 394 |
| Total assets | 87 773 | 85 494 | 15 370 | 15 498 | 103 143 | 100 992 |
| Non current liabilities | (3 252) | (6 124) | (1 578) | (2 829) | (4 830) | (8 953) |
| Current liabilities | (51 716) | (47 129) | (7 713) | (6 415) | (59 429) | (53 544) |
| Total liabilities | (54 968) | (53 253) | (9 291) | (9 244) | (64 259) | (62 497) |
| Net equity | 32 805 | 32 241 | 6 079 | 6 254 | 38 884 | 38 495 |
| Revenues | 76 852 | 77 287 | 35 145 | 34 381 | 111 997 | 111 668 |
| Profit or (loss) of the period | 549 | 834 | 1 996 | 2 066 | 2 545 | 2 900 |
in thousand EUR
| 31 DEC 2014 | 31 DEC 2013 | |||||
|---|---|---|---|---|---|---|
| Group Recticel | AGGREGATE COMPREHENSIVE INCOME FROM JOINT VENTURES |
AGGREGATE COMPREHENSIVE INCOME FROM ASSOCIATES |
TOTAL | AGGREGATE COMPREHENSIVE INCOME FROM JOINT VENTURES |
AGGREGATE COMPREHENSIVE INCOME FROM ASSOCIATES |
TOTAL |
| Result from continuing operations | 7 877 | 1 086 | 8 963 | (637) | 1 075 | 438 |
| Actuarial gains/(losses) on employee benefits | 1 331 | 0 | 1 331 | (52) | 0 | (52) |
| Deferred taxes on actuarial gains/(losses) on employee benefits |
(361) | 0 | (361) | 47 | 0 | 47 |
| Foreign currency translation differences recycled in the income statement |
(6) | 0 | (6) | 0 | 0 | 0 |
| Currency translation differences | 568 | 94 | 662 | 594 | 171 | 765 |
| At the end of the period | 9 409 | 1 180 | 10 589 | (48) | 1 246 | 1 198 |
| The following IAS 28 - §37a, §37e, §37g and §40 paragraphs are not applicable. |
| in thousand EUR | |||||
|---|---|---|---|---|---|
| Group Recticel | LOANS | CASH ADVANCES & DEPOSITS | TRADE RECEIVABLES | OTHER RECEIVABLES | TOTAL |
| Gross value at the end of the preceding period | 9 536 | 2 084 | 0 | 3 278 | 14 898 |
| Amounts written-off at the end of the preceding period | (3 925) | 0 | 0 | 0 | (3 925) |
| Net book value at the end of the preceding period | 5 611 | 2 084 | 0 | 3 278 | 10 973 |
| Gross value at end of the current period | 8 807 | 646 | 0 | 5 746 | 15 199 |
| Amounts written-off at the end of the current period | (1 826) | 0 | 0 | 0 | (1 826) |
| Net book value at end of current period | 6 981 | 646 | 0 | 5 746 | 13 373 |
The carrying amounts of these non-current receivables approximate the fair value since the interest rate is a variable rate in line with market conditions.
The maximum exposure to credit risk equals to the carrying amounts of these assets as recognized on the balance sheet.
There are no due but unpaid receivables, nor impairments on the outstanding receivables. There are no specific guarantees offered for the outstanding receivables.
'Cash advances and deposits' is a significant item under 'Non-current receivables', consisting of the following:
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
|---|---|---|
| Rent | 435 | 422 |
| Supplies (water, electricity, telecom, waste treatment, ) | 115 | 113 |
| Early retirements | 0 | 1 486 |
| Other | 96 | 63 |
| Total | 646 | 2 084 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Raw materials & supplies - Gross | 57 493 | 54 433 |
| Raw materials & supplies - Amounts written off | (5 061) | (4 596) |
| Raw materials & supplies | 52 432 | 49 837 |
| Work in progress - Gross | 9 799 | 10 224 |
| Work in progress - Amounts written off | (148) | (163) |
| Work in progress | 9 651 | 10 061 |
| Finished goods - Gross | 30 291 | 30 049 |
| Finished goods - Amounts written off | (2 013) | (1 442) |
| Finished goods | 28 278 | 28 607 |
| Traded goods - Gross | 3 144 | 3 341 |
| Traded goods - Amounts written off | (339) | (472) |
| Traded goods | 2 805 | 2 869 |
| Down payments - Gross | 283 | 486 |
| Down payments - Amounts written off | 0 | 0 |
| Down payments | 283 | 486 |
| Contracts in progress - Gross | 3 185 | 2 167 |
| Contracts in progress - Amounts written off | 0 | 0 |
| Contracts in progress | 3 185 | 2 167 |
| Total inventories | 96 634 | 94 027 |
| Amounts written-off on inventories during the period | (879) | (871) |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Contract revenues recognised over the period | 20 089 | 2 882 |
| Contract costs incurred plus recognised profits less recognised losses to date | 7 705 | 2 671 |
| Advance payments received | 972 | 37 |
In the automotive activity, Recticel (i) developed a polyurethanebased technology for the manufacturing of interior trim components and (ii) produces moulded seat cushions in polyurethane for the car industry. For optimum implementation of these two applications, based on the specifications given by its customers, Recticel ensures the manufacturing of the moulds with its own suppliers during the pre-operating phase, before starting production of components. At the end of this subcontracting process, the moulds are sold to the customer. In 2014 the contract revenues were positively influenced by the mould and tooling developments for the recently acquired new Interior contracts since 2013.
Considered as a long-term contract, the recognition of the costs and revenues of the 'moulds' activity is reflected in the accounts by reference to the stage of completion. Under the so-called 'percentage of completion' method, contract revenue is matched with the contract costs incurred in reaching the stage of completion.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Trade receivables | 85 363 | 71 724 |
| Write-off on doubtful trade receivables | (7 254) | (7 208) |
| Total trade receivables | 78 109 | 64 516 |
| Other receivables (1) | 19 509 | 17 009 |
| Other derivatives | 438 | 515 |
| Loans carried at amortised cost | 29 650 | 28 834 |
| Total financial assets (2) | 30 088 | 29 349 |
| Subtotal (1)+(2) | 49 597 | 46 358 |
| Total loans and receivables | 127 706 | 110 874 |
Trade receivables at the balance sheet date 2014 comprise amounts receivable from the sale of goods and services for EUR 78.1 million (2013: EUR 64.5 million).
This net amount of EUR 78.1 million consists of:
(i) gross trade receivables amounting to EUR 148.1 million (2013: EUR 134.8 million), after deduction of the following:
In 2014, other receivables amounting to EUR 19.5 million relate essentially to (i) VAT receivable (EUR 6.0 million), (ii) advances paid to third parties for operating costs spread over several financial years (EUR 7.5 million), (iii) prepayments, tax credits and subsidies, and contractual commitments with co-contractors (EUR 6.0 million).
In 2014, other financial assets (EUR 30.1 million) mainly consist of financial receivables on affiliated companies which are not consolidated (EUR 5.7 million), a receivable of EUR 24.0 million (2013: EUR 20.0 million) relating to the balance not drawn under non-recourse factoring programmes in Belgium, France, Germany, The Netherlands and the United Kingdom which includes residual risks which remain with the affiliated companies involved following their continuing involvement, as well as EUR 0.4 million relating to the revaluation of interest rate and exchange rate hedging instruments.
As already mentioned above, in December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal and the agreement relating to the subordinated loans, Recticel SA/NV and/or its subsidiaries have granted a floating charge mandate in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
The Group's principal current financial assets are cash & cash equivalents, trade and other receivables, and investments, which represent the Group's maximum exposure to credit risk in relation to financial assets.
The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and their assessment of the current economic environment.
The risk profile of the trade receivables portfolio is segmented by business line and based on the conditions of sale observed on the market. At the same time, it is confined by the agreed limits of the general conditions of sale and the specifically agreed conditions. The latter also depend on the degree of industrial and commercial integration of the customer, as well as on the level of market competitiveness.
The trade receivables portfolio in Flexible Foams, Bedding and Insulation consist of a large number of customers distributed among various markets, for which the credit risk is assessed on an on-going basis via the commercial and financial conditions granted to customers. In addition, the credit risks on trade receivables, with the exception of Automotive, are mostly covered by credit insurance policies which the Group manages centrally and harmonises. The credit risk management is also bolstered by the implementation of SAP software modules (FSCM) and best practice processes regarding the collection of receivables.
In Automotive, the credit risks are reasonably concentrated and the Group relies on the solvency ratios allocated by independent rating agencies.
The average credit periods taken on sales vary from 45 to 90 days, depending on the business line and the country of operations.
In order to confine credit risks, non-recourse factoring, forfaiting and discounting programmes were established for a total amount of EUR 98.5 million (of which EUR 77.2 million were actually used at 31 December 2014).
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Factoring without recourse | ||
| Gross amount | 68 850 | 58 972 |
| Retention | (24 043) | (19 985) |
| Net amount | 44 807 | 38 987 |
| Amount recognized in debt * | 442 | 574 |
| Forfeiting - net amount | 8 308 | 9 687 |
| Amount recognized in debt * | 1 598 | 2 643 |
| * included in the current interest-bearing borrowings |
The average uncovered outstanding amounts from due receivables vary according to business line between 1% and 4.5% of total sales. The Group considers that there is no particular risk of non-recovery, although it is necessary to remain vigilant.
The retention figure includes amounts not withdrawn from banks for various contractual reasons including year-end bonuses, credit notes and amounts related to continuous involvement of Recticel which as such cannot be taken off the Group balance sheet.
Ageing balance of trade receivables due, for which no provision has been recognised:
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| 30 days | 7 990 | 11 939 |
| 60 days | 1 930 | 1 855 |
| 90 days | 560 | 629 |
| 120 days | 266 | 334 |
| 150 days | 396 | 135 |
| 180 days and more | 398 | 618 |
| Total overdue | 11 540 | 15 510 |
| Undue receivables | 58 919 | 50 660 |
| Total trade receivables | 70 459 | 66 170 |
The aging balance of the overdue trade receivables is related to gross trade receivables of EUR 148.1 million (in 2013: EUR 134.8 million). The total trade receivables include the impact of factoring/forfaiting for EUR 77.2 million (2013: EUR 68.7 million).
Globally speaking, the lower amounts of overdues for all reference periods are explained by the stricter follow-up of overdue trade receivables. The higher amount of undue receivables is mainly explained by higher sales in the last months of 2014.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| At the end of the preceding period | (7 207) | (7 477) |
| Write off | (1 338) | (1 333) |
| Reversal | 982 | 1 143 |
| Non-recoverable amounts | 419 | 262 |
| Exchange differences | (110) | 127 |
| Changes in the scope of consolidation | 0 | 71 |
| Total | (7 254) | (7 207) |
| Reference to II.4.2. |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| 30 days | 218 | 288 |
| 60 days | 3 | 44 |
| 90 days | 1 | 29 |
| 120 days | 6 | 4 |
| 150 days | 2 | 7 |
| 180 days and more | 172 | 58 |
| Total overdue | 402 | 430 |
| Undue other receivables | 19 106 | 16 579 |
| Total other receivables | 19 508 | 17 009 |
Cash and cash equivalents includes cash held by the Group and short-term bank deposits with an original maturity of three months and less. The carrying amount of these assets approximates to their fair value.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Short-term bank deposits - equal to or less than 3 months | 10 000 | 10 000 |
| Cash at bank & in hand | 16 163 | 16 237 |
| Total cash and cash equivalents | 26 163 | 26 237 |
This item relates to the recognition (IFRS 5) of two transactions in Insulation to be realised in 2015: (i) Kingpan Tarec Industrial Insulation (EUR 7.2 million) (see II.6.4.) and (ii) a building in Wolverhampton (United Kingdom) (EUR 1.4 million) (cfr II.5.3.).
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Issued shares | ||
| 29 664 256 ordinary shares without nominal value (2013: 28 947 356 shares) | 74 161 | 72 368 |
| Fully paid-up shares | ||
| 29 664 256 shares without nominal value (2013: 28 947 356 shares) | 74 161 | 72 368 |
| in thousand EUR | |
|---|---|
| Group Recticel | |
| Balance at 31 December 2013 | 107 042 |
| Premium arising on issue of equity during 2014 | 1 527 |
| Expenses of issue of equity shares during 2014 | 0 |
| Balance at 31 December 2014 | 108 569 |
Several Recticel companies operate defined benefit and/or defined contribution plans.
Over 99% of the defined benefit obligation is concentrated in four countries: Belgium (40%), UK (38%), Germany (13%) and France (8%).
Within these four countries Recticel operates funded and unfunded retirement plans. These defined benefit plans typically provide retirement benefits related to remuneration and period of service. The two largest retirement plans make up 73% of the total defined benefit obligation. They are the Belgian white-collar pension plan (35%) and the UK pension plan (38%).
Recticel sponsors only one defined benefit plan in the UK. It is a funded pension plan which is closed to future accrual since 2008. The plan is administered by a separate board of Trustees which is legally separate from Recticel. The Trustees are composed of representatives of both the employer and employees. The Trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day to day administration of the benefits.
The plan functions in and complies with a large regulatory framework (including compliance with minimum funding requirements).
Under the plan, employees are entitled to annual pensions on retirement at age 65 based on the final pensionable salary and the years of service. Members also receive benefits on death.
UK legislation requires that pension schemes are funded prudently. The last funding valuation of the plan was carried out as at 01 January 2014 and showed a deficit of GBP 7.7 million. In order to meet the shortfall in funding of the UK pension scheme, Recticel had agreed in 2012 to pay a total amount, on a nondiscounted basis, of GBP 12.3 million as recovery contributions during the period 1 January 2012 to 31 December 2023. The outstanding amount at 31 December 2014 is GBP 10.6 million.
Over the past year the Trustees have analysed the Fund's investment strategy. Based on this analysis they decided to move the Scheme's assets to a new asset manager, implementing a more prudent and passively managed investment strategy (based on equities, corporate bonds and gilts).
The main plan is the white-collar retirement plan, which was closed for new employees since 2003. The plan is funded through a group insurance for which the majority of the assets are invested in "Branch 23" funds.
The plan functions in and complies with a large regulatory framework (including compliance with minimum funding requirements). At 31 December 2014 the plan assets exceed the minimum funding requirements.
Under the plan, white-collar employees are entitled to a lump sum on retirement at age 65 as a function of final pensionable salary and years of service. Active members also receive a benefit on death-in-service.
The most significant risks associated with Recticel's defined benefit plans are:
Asset volatility :
The liabilities are calculated using a discount rate set with reference to corporate bond yields. If assets underperform this yield, this will create a deficit. The schemes hold a significant proportion of equities which, though expected to outperform corporate bonds in the long-term, create volatility and risk in the short-term. The allocation to equities is monitored to ensure it remains appropriate given the long term obligations.
Changes in bond yields :
A decrease in corporate bond yields will increase the value placed on the liabilities for accounting purposes, although this will be partially offset by an increase in the value of the bond holdings.
Inflation risk :
The benefit obligations are linked to inflation, and higher inflation will lead to higher liabilities (although, in some cases, caps on the level of inflationary increases are in place to protect against extreme inflation). The majority of the assets are either unaffected by or only loosely correlated with inflation, meaning that an increase in inflation will also increase the deficit.
Life expectancy :
Many of the obligations are to provide benefits for the life of the member or take into account member mortality rates, so increases in life expectancy will result in an increase in the liabilities.
Currency risk :
The risk that arises from the change in price of euro against other currencies.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Evolution of the net liability during the year is as follows: | ||
| Net liability at 1 January | 42 632 | 39 998 |
| Expense recognised in the income statement | 3 409 | 4 008 |
| Employer contributions | (3 694) | (5 316) |
| Amount recognised in other comprehensive income | 8 992 | 4 062 |
| Exchange differences | 821 | (120) |
| Net liability at 31 December | 52 160 | 42 632 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Pension costs recognised in profit and loss and other comprehensive income: | ||
| Service cost: | ||
| Current service cost | 2 034 | 2 180 |
| Past service cost (including curtailments) | (367) | 0 |
| Administration expenses | 324 | 372 |
| Net interest cost: | ||
| Interest cost | 3 405 | 3 270 |
| Interest income | (1 987) | (1 814) |
| Pension expense recognised in profit and loss | 3 409 | 4 008 |
| Remeasurements in other comprehensive income | ||
| Return on plan assets (in excess of)/below that recognised in net interest | (4 092) | (2 869) |
| Actuarial (gains)/losses due to changes in financial assumptions | 13 396 | 3 179 |
| Actuarial (gains)/losses due to changes in demographic assumptions | 0 | (884) |
| Actuarial (gains)/losses due to experience | (312) | 4 636 |
| Total amount recognised in other comprehensive income | 8 992 | 4 062 |
| Total amount recognised in profit and loss and other comprehensive income | 12 401 | 8 070 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Amount recorded in the balance sheet in respect of the defined benefit plans are: | ||
| Defined benefit obligations for funded plans | 104 587 | 89 641 |
| Fair value of plan assets | (59 578) | (53 617) |
| Funded status for funded plans | 45 009 | 36 024 |
| Defined benefit obligations for unfunded plans | 7 151 | 6 608 |
| Total funded status at 31 December | 52 160 | 42 632 |
| Net liabilities at 31 December | 52 160 | 42 632 |
| Current liabilities | 4 574 | 6 409 |
| Non-current liabilities | 47 586 | 36 223 |
| The key actuarial assumptions used at 31 December (weighted averages) are: | ||
| Discount rate | 2,20% | 3,65% |
| Future pension increases | 2,22% | 2,39% |
| Expected rate of salary increases | 2,75% | 3,00% |
| Inflation | 1,82% | 2,20% |
| The mortality assumptions are based on recent mortality tables and the mortality tables of the UK allow for expected future improvements in mortality rates. | ||
| Movement of the plan assets | ||
| Real value of plan assets at 1 January | 53 617 | 48 985 |
| Interest income | 1 987 | 1 814 |
| Employer contributions | 3 694 | 5 316 |
| Benefits paid (direct & indirect, including taxes on contributions paid) | (5 276) | (4 590) |
| Return on assets, excl. interest income | 4 092 | 2 869 |
| Actual administration expenses | (324) | (372) |
| Exchange differences | 1 788 | (405) |
| Real value of plan assets at 31 December | 59 578 | 53 617 |
| The funded plans' assets are invested in mixed portfolios of shares and bonds, or insurance contracts. The plan assets do not include direct investments in Recticel shares, Recticel bonds or any property used by Recticel companies. |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Plan assets portfolio mix at 31 December | ||
| Government bonds (quoted) | 19.97% | 0.00% |
| Government bonds (non-quoted) | 0.00% | 0.00% |
| Corporate bonds (quoted) | 6.56% | 0.00% |
| Corporate bonds (non-quoted) | 0.00% | 0.00% |
| Equity (quoted) | 10.87% | 11.85% |
| Equity (non-quoted) | 0.00% | 0.00% |
| Non unit-linked Insurance contracts (quoted) | 0.00% | 0.00% |
| Non unit-linked Insurance contracts (non-quoted) | 20.39% | 23.31% |
| Unit-linked Insurance contracts (quoted) | 0.00% | 0.00% |
| Unit-linked Insurance contracts (non-quoted) | 37.95% | 58.51% |
| Cash (quoted) | 0.04% | 1.84% |
| Cash (non-quoted) | 0.00% | 0.00% |
| Property (quoted) | 0.00% | 0.00% |
| Property (non-quoted) | 0.00% | 0.00% |
| Derivatives (quoted) | 0.00% | 0.00% |
| Derivatives (non-quoted) | 0.00% | 0.00% |
| Asset backed securities (quoted) | 0.00% | 0.00% |
| Asset backed securities (non-quoted) | 0.00% | 0.00% |
| Structured debt (quoted) | 0.00% | 0.00% |
| Structured debt (non-quoted) | 0.00% | 0.00% |
| Other (quoted) | 4.20% | 4.49% |
| Other (non-quoted) | 0.00% | 0.00% |
| Where the unit-linked insurance contracts can be divided in the following asset classes: | ||
| % bonds | 68.07% | 29.20% |
| % equity | 22.69% | 66.32% |
% cash 9.24% 4.48%
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Movement of the defined benefit obligation | ||
| Defined benefit obligation at 1 January | 96 249 | 88 983 |
| Current service cost | 2 034 | 2 180 |
| Interest cost | 3 405 | 3 270 |
| Benefits paid (direct & indirect, including taxes on contributions paid) | (5 276) | (4 590) |
| Actuarial (gains)/losses on liabilities arising from changes in financial assumptions | 13 396 | 3 179 |
| Actuarial (gains)/losses on liabilities arising from changes in demographic assumptions | 0 | (884) |
| Actuarial (gains)/losses on liabilities arising from experience | (312) | 4 636 |
| Past service cost (incl. curtailments) | (367) | 0 |
| Exchange differences | 2 609 | (525) |
| Defined benefit obligation at 31 December | 111 738 | 96 249 |
| Split of the defined benefit obligation per population | ||
| Active members | 52 717 | 48 427 |
| Members with deferred benefit entitlements | 30 321 | 23 608 |
| Pensioners/Beneficiaries | 28 700 | 24 214 |
| Total defined benefit obligation at 31 December | 111 738 | 96 249 |
| Weighted average duration of the defined benefit obligation at 31 December | 13 | 13 |
| Sensitivity of defined benefit obligation to key assumptions at 31 December | ||
| Current defined benefit obligation at 31 December | 111 738 | 96 249 |
| % increase in defined benefit obligation following a 0,25% decrease in the discount rate | 2.43% | 2.78% |
| % decrease in defined benefit obligation following a 0,25% increase in the discount rate | -2.31% | -2.64% |
| % decrease in defined benefit obligation following a 0,25% decrease in the inflation rate | -1.85% | -2.46% |
| % increase in defined benefit obligation following a 0,25% increase in the inflation rate | 1.94% | 2.49% |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2015 | 2014 |
| Estimated contributions for the coming year | ||
| Expected employer contributions | 2 580 | 3 458 |
The total contributions paid by Recticel during the current year amount to EUR 5,957,149, compared to an amount of EUR 6,239,531 last year.
Defined contribution plans in Belgium and Switzerland are subject to a minimum guaranteed return. Nevertheless, these plans are lodged under the defined contribution plans, because the plan assets exceed the sum of the account balances taking into account the minimum guaranteed rates of return.
In Belgium certain employees participate in defined contribution plans, funded through group insurances. The employer contributions paid to the group insurances are based on percentage of the salary. By law, Belgian employers are required to provide an average minimum guaranteed rate of return over the employee's career, currently equal to 3.25% on employer contributions paid as from January 1, 2004 onwards. Those rates may be modified in the future by Royal Decree in which case legislation currently foresees that the new rates also apply to the accumulated past contributions as from the date of modification onwards. There is a risk that the Company may have to pay additional contributions related to past service. Any such additional contributions will depend on the actual investment returns as well as the future evolution of the minimum guaranteed rates of return. For the Belgian plans the total contributions paid amount to EUR 1,995,826 and the total amount of the assets is EUR 11,424,986 at 31 December 2014, compared to an amount of EUR 8,049,279 last year, which is invested in insurance contracts with a fix return and possible profit sharing on top. Since the minimum guaranteed reserves were entirely covered by plan assets, no amounts were recognized in the statement of financial position at December 31, 2014 and 2013.
For the Swiss plans, Recticel jointly operates a retirement foundation with the employees. The assets and liabilities of the retirement foundation are held separately from Recticel. The foundation board is equally composed of representatives of the employee and of the employer. The foundation covers all the employees in Switzerland and provides benefits on a defined contribution basis. Each employee has a retirement account to which the employee and Recticel contribute at a rate set out in the foundation rules based on a percentage of salary. Every year, the foundation decides the level of interest, if any, to apply to the retirement accounts based on the agreed policy. At retirement, an employee can take the retirement account or have this paid as a pension. Because the foundation board is expected to eventually pay out all of the foundation's assets as benefits to employees and former employees, no surplus is deemed to be recoverable by Recticel. The value of the fund investments is EUR 22,321,378 at 31 December 2014, compared to EUR 21,114,380 last year, and is 17% in excess of the guaranteed amounts. The fund is invested as follows: 32% bonds; 22% equities; 26% real estate; 7% cash, 9% Alternative Assets and 4% other.
| in thousand EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | EMPLOYEE BENEFITS |
OTHER LITIGATION |
DEFECTIVE PRODUCTS |
ENVIRONMEN TAL RISKS |
REORGANISA TION |
PROVISIONS FOR ONEROUS CONTRACTS |
OTHER RISKS | FINANCIAL RISKS ON DISPOSAL SUBSIDIARIES |
TOTAL |
| At the end of the preceding year | 46 366 | 107 | 1 619 | 4 775 | 7 908 | 164 | 308 | 0 | 61 247 |
| Movements during the year | |||||||||
| Expected returns on assets/actuarial gains (losses) recognized in equity |
8 993 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 8 993 |
| Actualisation | 1 533 | 0 | 0 | 0 | 0 | 6 | 6 | 0 | 1 545 |
| Increases | 4 183 | 0 | 396 | 0 | 3 381 | 889 | 87 | 0 | 8 936 |
| Utilisations | (4 671) | (18) | (76) | (565) | (6 677) | (170) | 0 | 0 | (12 177) |
| Write-backs | (472) | (39) | (135) | 0 | 0 | 0 | 0 | 0 | (646) |
| Transfer from one heading to another | (1) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (1) |
| Exchange rate differences | 822 | 0 | 4 | 0 | 15 | 3 | 0 | 0 | 844 |
| At year-end | 56 753 | 50 | 1 808 | 4 210 | 4 627 | 892 | 401 | 0 | 68 741 |
| Non-current provisions (more than one year) | 54 548 | 50 | 1 713 | 3 960 | 338 | 839 | 401 | 0 | 61 849 |
| Current provisions (less than one year) | 2 205 | 0 | 95 | 250 | 4 289 | 53 | 0 | 0 | 6 892 |
| Total | 56 753 | 50 | 1 808 | 4 210 | 4 627 | 892 | 401 | 0 | 68 741 |
The provisions for defective products are mainly related to warranties granted for products in the bedding division. The provisions are generally calculated on the basis of 1% of yearly turnover, which corresponds to the management's best estimate of the risk under 12-month warranties. When historical data are unavailable, the level of the provisions is compared to the yearly effective rate of liabilities, and if necessary, the amount of provision is adjusted.
Provisions for environmental risks cover primarily (i) the identified risk at the Tertre site (see section II.6.11.1.) and (ii) pollution risks in Belgium and the Netherlands.
Provisions for reorganisation relate to the outstanding balance of expected expenses for (i) the previously announced restructurings and additional ones in in, Automotive (Germany), Flexible Foams (The Netherlands and United Kingdom) and Bedding (Switzerland); and (ii) additional onerous contracts in Automotive (Germany) and Bedding (Switzerland). The reorganisation plans are expected to be fully implemented by 2016 at latest.
For the major risks (i.e. environmental and reorganisation risks) the cash outflow is expected to occur within a two years' horizon.
| in thousand EUR | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | EMPLOYEE BENEFITS |
OTHER LITIGATION |
DEFECTIVE PRODUCTS |
ENVIRONMEN TAL RISKS |
REORGANISA TION |
PROVISIONS FOR ONEROUS CONTRACTS |
OTHER RISKS | FINANCIAL RISKS ON DISPOSAL SUBSIDIARIES |
TOTAL |
| At the end of the preceding year | 45 952 | 106 | 1 515 | 6 006 | 1 222 | 580 | 487 | 779 | 56 647 |
| Movements during the year | |||||||||
| Expected returns on assets/actuarial gains (losses) recognized in equity |
4 063 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4 063 |
| Actualisation | 1 611 | 0 | 0 | 0 | 0 | 34 | 7 | 0 | 1 652 |
| Increases | 2 629 | 81 | 204 | 6 | 11 112 | 0 | 81 | 0 | 14 113 |
| Utilisations | (6 546) | (34) | 0 | (1 237) | (4 144) | (450) | (262) | (300) | (12 973) |
| Write-backs | (1 223) | (38) | (94) | 0 | (287) | 0 | 0 | (479) | (2 121) |
| Transfer from one heading to another | 0 | (8) | 0 | 0 | 0 | 0 | 0 | 0 | (8) |
| Exchange rate differences | (120) | 0 | (6) | 0 | 5 | 0 | (5) | 0 | (126) |
| At year-end | 46 366 | 107 | 1 619 | 4 775 | 7 908 | 164 | 308 | 0 | 61 247 |
| Non-current provisions (more than one year) | 44 557 | 107 | 1 568 | 4 525 | 1 641 | 0 | 308 | 0 | 52 706 |
| Current provisions (less than one year) | 1 809 | 0 | 51 | 250 | 6 267 | 164 | 0 | 0 | 8 541 |
| Total | 46 366 | 107 | 1 619 | 4 775 | 7 908 | 164 | 308 | 0 | 61 247 |
| in thousand EUR | |||||
|---|---|---|---|---|---|
| NON-CURRENT LIABILITIES USED | CURRENT LIABILITIES USED | ||||
| Group Recticel | NOTES | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 |
| Secured | |||||
| Financial leases | 15 057 | 18 113 | 3 052 | 2 975 | |
| Bank loans | 99 240 | 78 850 | 0 | 0 | |
| Bank loans - factoring with recourse | 0 | 0 | 442 | 574 | |
| Discounted bills of exchange | 0 | 0 | 0 | 0 | |
| Total secured | 114 297 | 96 963 | 3 494 | 3 549 | |
| Unsecured | |||||
| Bonds & notes | 26 037 | 0 | 0 | 25 536 | |
| Non-current bank loans with current portion | 0 | 0 | 0 | 0 | |
| Other loans | 1 801 | 1 871 | 270 | 234 | |
| Current bank loans | 0 | 0 | 27 635 | 22 812 | |
| Bank loans - forfeiting | 0 | 0 | 1 598 | 2 643 | |
| Bank overdraft | 0 | 0 | 10 019 | 2 400 | |
| Other financial liabilities | II.5.18.2. | 0 | 0 | 9 782 | 9 007 |
| Total unsecured | 27 838 | 1 871 | 49 304 | 62 632 | |
| Total liabilities carried at amortised cost | 142 135 | 98 834 | 52 798 | 66 181 |
| in thousand EUR | ||||
|---|---|---|---|---|
| NON-CURRENT LIABILITIES UNUSED | CURRENT LIABILITIES UNUSED | |||
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 |
| Secured | ||||
| Bank loans | 61 609 | 95 000 | 0 | 0 |
| Bank loans - factoring with recourse | 0 | 0 | 0 | 0 |
| Discounted bills of exchange | 0 | 0 | 0 | 0 |
| Total secured | 61 609 | 95 000 | 0 | 0 |
| Unsecured | ||||
| Bank loans | 0 | 0 | 11 030 | 20 700 |
| Total unsecured | 0 | 0 | 11 030 | 20 700 |
| Total liabilities carried at amortised cost | 61 609 | 95 000 | 11 030 | 20 700 |
At the end of 2014, the gross interest-bearing borrowings of the Group amounted to EUR 194.9 million, compared to EUR 165.0 million at the end of 2013, i.e. an increase of EUR 29.9 million. This was mainly due to the partial payment of the EC fine, the payment of the German Federal Cartel Office fine and to difficult market conditions, and this in spite of the fact that a strict management of capital expenditure and working capital was maintained.
The non-recourse factoring/forfaiting programs amounted to EUR 55.1 million, compared to EUR 48.7 million in 2013.
At the end of 2014, the weighted average lifetime of debts payable after one year was 3.1 years. The bonds and the financial leases (except for the Bourges facility) are at fixed interest rates.
At the end of 2014, besides the net drawn amounts (EUR 99.1 million) and the guaranteed amount related to the EC fine (EUR 13.4 million) under the 'club deal' facility, the Group also benefited from EUR 46.7 million long term loan commitments (including short term part maturing within one year), of which EUR 3.3 million were maturing within one year. On top of this, the Group had also at its disposal EUR 61.6 million under the 'club deal' facility and EUR 54.4 million undrawn short term credit facilities ('on balance' (EUR 11.0 million) as well as 'off balance' (EUR 43.4 million)).
At the end of 2013, besides the drawn amounts (EUR 78.9 million) under the 'club deal' facility, other long term loan commitments amounted to EUR 49.3 million (including short term part maturing within one year), of which EUR 29.3 million related to the put option on the convertible bonds (of which only EUR 50,000 was exercised), were maturing within one year. On top of this, the Group had also at its disposal EUR 95.0 million under the 'club deal' facility and EUR 68.1 million of undrawn short term credit facilities.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Long term liabilities | ||
| Bonds & Notes | 26 037 | 0 |
| Financial leases | 15 057 | 18 113 |
| Other loans | 1 801 | 1 871 |
| Subtotal | 42 895 | 19 984 |
| Short term liabilities | ||
| Financial leases | 3 052 | 2 975 |
| Bonds & Notes | 0 | 25 536 |
| Loans - Factoring | 442 | 574 |
| Other loans | 270 | 234 |
| Subtotal | 3 764 | 29 319 |
| Total | 46 659 | 49 303 |
The fair value of floating rate borrowings is close to the nominal value. The interest cost for these variable interest rate borrowings ranged from 0.80% to 2.83% p.a. in EUR and to 1.82% p.a. in CHF.
At balance sheet date the total borrowings were directly or synthetically (through currency swaps) denominated for 76.2% in EUR, 4.4% in GBP, 4.7% in CHF, 3.0% in SEK, 1.7% in CZK, 4.0% in USD and 6.0% in various other currencies.
The majority of the Group's financial debt is centrally contracted and managed through Recticel International Services N.V./S.A., which acts as the Group's internal bank.
In 2013 and early 2014, Recticel, together with its banks, signed addendums to the club deal facility agreement of 2011 in which a.o. the definitions of the covenants were adjusted for the remaining period of the agreement, and the usage of the facility was extended to the issuance of guarantees. The EUR 10 million outstanding commitment held by one of the 7 participating banks has also been redistributed between the 4 lead banks, thereby reducing the total of participating banks from 7 to 6 banks.
The borrowings under the 'club deal' are subject to bank covenants based on a leverage ratio, an interest cover and a minimum equity requirement. At end-2014, Recticel complied with all its bank covenants. On the basis of the available budget 2015 and the business plan management expects to be in a position to meet the bank covenants in the coming year.
As stated in the club deal, the maximum dividend authorised for distribution amounts to the highest of (i) 50% of the consolidated net income of the Group for the previous financial year and (ii) EUR 8.0 million.
Reference to II.5.22. Liquidity risk:
The convertible bond was issued in July 2007, for a nominal amount of EUR 57.5 million, of which the Group bought back EUR 11.2 million during 2008, EUR 17.3 million in 2009 and EUR 1.4 million in 2011. Out of the remaining outstanding balance of EUR 27.7 million, EUR 26.0 million is recorded under financial debt. The remaining balance is entered in a specific capital account. This 5.0% p.a. coupon loan had a 10-year term at issuance, with a put option for investors in July 2014. Only EUR 50,000 was repaid through the exercise of this put option in July 2014.
This bond is convertible into shares. The initial conversion price was set at EUR 14.34 per share. This conversion price is subject to adjustments in function of the dividend payments. The current conversion price (at 31 December 2014) is fixed at EUR 11.81. The bonds are convertible until 16 July 2017 into ordinary shares at the current conversion price at that time.
Unless the bond is redeemed, converted or cancelled earlier, the bonds will be redeemed in cash on 23 July 2017 at par, together with the interest due and not yet paid. At year-end, this liability amounted to EUR 26.0 million on the balance sheet. As the put option came to maturity in July 2014, the bond has been reclassified as long term liability as of December 31, 2014. The fair value of the bond as of 31 December 2014 amounted to EUR 27.6 million.
This item consists of two leases. The first one finances the new Insulation plant in Bourges (France) and has an outstanding amount as of 31 December 2014 of EUR 12.1 million and is at a floating rate. The second one, in Belgium, has an outstanding amount as of 31 December 2014 of EUR 6.0 million on the balance sheet and is at a fixed rate.
On 09 December 2011, Recticel concluded a new five-year club deal with 7 European banks for a multi-currency loan of EUR 175 million. This new loan was used to refinance the outstanding amounts under the club deal of 2008, due in February 2013 but reimbursed anticipatively in order to secure long term funding in view of difficult market circumstances.
Interest rate swaps are the only instruments designated in cash flow hedge relationship.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Interest rate swaps | 7 035 | 6 486 |
| Interest charges on foreign currency swaps | 35 | 26 |
| Trading/economic hedge | 963 | 611 |
| Derivatives at fair value | 8 033 | 7 123 |
| Other financial debt | 221 | 137 |
| Interest accruals | 1 528 | 1 747 |
| Total | 9 782 | 9 007 |
| in thousand EUR | ||||
|---|---|---|---|---|
| NON-CURRENT LIABILITIES | CURRENT LIABILITIES | |||
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2014 | 31 DEC 2013 |
| Trade payables | 0 | 0 | 0 | 0 |
| Advances received on contracts in progress | 0 | 0 | 0 | 6 |
| Customers' deposits | 161 | 162 | 0 | 0 |
| Other amounts payable | 6 649 | 282 | 7 294 | 111 |
| Total other debts payable | 6 810 | 444 | 7 294 | 117 |
| in thousand EUR | ||||
|---|---|---|---|---|
| MINIMUM LEASE PAYMENTS |
PRESENT VALUE OF MINIMUM LEASE PAYMENTS |
MINIMUM LEASE PAYMENTS |
PRESENT VALUE OF MINIMUM LEASE PAYMENTS |
|
| Group Recticel | 31 DEC 2014 | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2013 |
| Lease payments due within one year | 3 358 | 3 052 | 3 393 | 2 975 |
| Between one and five years | 9 780 | 8 746 | 11 994 | 10 574 |
| Over five years | 7 980 | 6 310 | 9 329 | 7 539 |
| Total lease payments | 21 118 | 18 108 | 24 716 | 21 088 |
| Future financial charges | (3 010) | - | (3 628) | - |
| Present value of lease obligations | 18 108 | 18 108 | 21 088 | 21 088 |
| Less amounts due for settlement within 12 months | - | (3 052) | - | (2 975) |
| Amounts due for settlement after 12 months | - | 15 056 | - | 18 113 |
The financial leases were contracted by the operating affiliates to finance buildings and equipment amounting to EUR 18.1 million, with a funding cost ranging from 1.78% p.a. to 5.97% p.a.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note II.1.3. to the financial statements.
Categories of financial instruments
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | NOTES | 31 DEC 2014 | 31 DEC 2013 |
| Financial assets | |||
| Interest rate swaps designated as cash flow hedge relationship | 6 | 0 | |
| Subtotal interest rate swaps designated as cash flow hedge relationship (b) | II.5.11. | 6 | 0 |
| Fair value through profit or loss account ("FVTPL") | |||
| Hedging contract | 0 | 155 | |
| Trading/Economic hedge (FX forward) | 432 | 360 | |
| Financial assets at fair value through profit & loss account (b) | II.5.11. | 432 | 515 |
| Non-current trade receivables (a) | II.5.8. | 0 | 0 |
| Current trade receivables | II.5.11. | 78 109 | 64 516 |
| Trade receivables (A) | 78 109 | 64 516 | |
| Other non-current receivables (a) | II.5.8. | 5 746 | 3 278 |
| Cash advances & deposits (a) | II.5.8. | 646 | 2 084 |
| Other receivables (b) | II.5.11. | 19 508 | 17 009 |
| Other receivables (B) | 25 900 | 22 371 | |
| Loans to affiliates | II.5.8. | 5 032 | 3 826 |
| Other loans | II.5.8. | 1 948 | 1 785 |
| Non current loans (a) | 6 980 | 5 611 | |
| Financial receivables (b) | II.5.11. | 29 650 | 28 834 |
| Loans (C) | 36 630 | 34 445 | |
| Cash and cash equivalents (D) | I.4. & II.5.12. | 26 163 | 26 237 |
| Total loans & receivables (A+B+C+D) | 166 802 | 147 569 | |
| Other investments (available for sale investments) | 847 | 395 | |
| Non-current receivables (sum of (a)) | I.4. & II.5.8. | 13 372 | 10 973 |
| Other receivables (sum of (b)) | I.4. & II.5.11. | 49 596 | 46 358 |
| Financial liabilities | |||
| Interest rate swaps designated as cash flow hedge relationship | 7 035 | 6 486 | |
| Subtotal interest rate swaps designated as cash flow hedge relationship (E) | 7 035 | 6 486 | |
| Interest charges on foreign currency swaps | 35 | 26 | |
| Trading/Economic hedge (FX forward) | 963 | 611 | |
| Financial liability at fair value through profit & loss account (F) | II.5.18. | 998 | 637 |
| Non current financial liabilities at amortised cost | I.4. & II.5.18. | 142 135 | 98 834 |
| Current financial liabilities at amortised cost (G) | II.5.18. | 44 765 | 59 058 |
| Current financial liabilities (E+F+G) | I.4. & II.5.18. | 52 798 | 66 181 |
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
During the reporting period ending 31 December 2014, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | DESIGNATED IN HEDGE RELATIONSHIP |
AT FAIR VALUE THROUGH PROFIT OR LOSS - HELD FOR TRADING |
AVAILABLE FOR SALE |
LOANS & RECEIVABLES AT AMORTISED COST |
FAIR VALUE | FAIR VALUE LEVEL |
| Financial assets | ||||||
| Interest rate swaps designated as cash flow hedge relationship | 6 | 0 | 0 | 0 | 6 | 2 |
| Subtotal interest rate swaps designated as cash flow hedge relationship (b) |
6 | 0 | 0 | 0 | 6 | 2 |
| Trading/Economic hedge (FX forward) | 0 | 432 | 0 | 0 | 432 | 2 |
| Financial assets at fair value through profit & loss account (b) | 0 | 432 | 0 | 0 | 432 | 2 |
| Non-current trade receivables (a) | 0 | 0 | 0 | 0 | 0 | 2 |
| Current trade receivables | 0 | 0 | 0 | 78 109 | 78 109 | 2 |
| Trade receivables (A) | 0 | 0 | 0 | 78 109 | 78 109 | 2 |
| Other non-current receivables (a) | 0 | 0 | 0 | 5 746 | 5 746 | 2 |
| Cash advances & deposits (a) | 0 | 0 | 0 | 646 | 646 | 2 |
| Other receivables (b) | 0 | 0 | 0 | 19 508 | 19 508 | 2 |
| Other receivables (B) | 0 | 0 | 0 | 25 900 | 25 900 | 2 |
| Loans to affiliates | 0 | 0 | 0 | 5 032 | 5 032 | 2 |
| Other loans | 0 | 0 | 0 | 1 948 | 1 948 | 2 |
| Non current loans (a) | 0 | 0 | 0 | 6 980 | 6 980 | 2 |
| Financial receivables (b) | 0 | 0 | 0 | 29 650 | 29 650 | 2 |
| Loans (C) | 0 | 0 | 0 | 36 630 | 36 630 | 2 |
| Cash and cash equivalents (D) | 0 | 0 | 0 | 26 163 | 26 163 | 2 |
| Total loans & receivables (A+B+C+D) | 0 | 0 | 0 | 166 802 | 166 802 | |
| Other investments (available for sale investments) | 0 | 0 | 847 | 0 | 847 | 2 |
| Non-current receivables (sum of (a)) | 0 | 0 | 0 | 13 372 | 13 372 | |
| Other receivables (sum of (b)) | 6 | 432 | 0 | 49 158 | 49 596 | |
| Financial liabilities | ||||||
| Interest rate swaps designated as cash flow hedge relationship | 7 035 | 0 | 0 | 0 | 7 035 | 2 |
| Subtotal interest rate swaps designated as cash flow hedge relationship (E) |
7 035 | 0 | 0 | 0 | 7 035 | 2 |
| Interest charges on foreign currency swaps | 0 | 35 | 0 | 0 | 35 | 2 |
| Trading/Economic hedge (FX forward) | 0 | 963 | 0 | 0 | 963 | 2 |
| Financial liability at fair value through profit & loss account (F) | 0 | 998 | 0 | 0 | 998 | 2 |
| Non current financial liabilities at amortised cost * | 0 | 0 | 0 | 142 135 | 142 135 | 2 |
| Current financial liabilities at amortised cost * (G) | 0 | 0 | 0 | 44 765 | 44 765 | 2 |
| 2 | ||||||
| Current financial liabilities (E+F+G) | 7 035 | 998 | 0 | 44 765 | 52 798 | |
| * excluding financial leases and convertible bonds. |
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | DESIGNATED IN HEDGE RELATIONSHIP |
AT FAIR VALUE THROUGH PROFIT OR LOSS - HELD FOR TRADING |
AVAILABLE FOR SALE |
LOANS & RECEIVABLES AT AMORTISED COST |
FAIR VALUE | FAIR VALUE LEVEL |
| Financial assets | ||||||
| Fair value through profit or loss account ("FVTPL") | ||||||
| Hedging contract | 0 | 155 | 0 | 0 | 155 | 2 |
| Trading/Economic hedge (FX forward) | 0 | 360 | 0 | 0 | 360 | 2 |
| Financial assets at fair value through profit & loss account (b) | 0 | 515 | 0 | 0 | 515 | 2 |
| Non-current trade receivables (a) | 0 | 0 | 0 | 0 | 0 | 2 |
| Current trade receivables | 0 | 0 | 0 | 64 516 | 64 516 | 2 |
| Trade receivables (A) | 0 | 0 | 0 | 64 516 | 64 516 | 2 |
| Other non-current receivables (a) | 0 | 0 | 0 | 3 278 | 3 278 | 2 |
| Cash advances & deposits (a) | 0 | 0 | 0 | 2 084 | 2 084 | 2 |
| Other receivables (b) | 0 | 0 | 0 | 17 009 | 17 009 | 2 |
| Other receivables (B) | 0 | 0 | 0 | 22 371 | 22 371 | 2 |
| Loans to affiliates | 0 | 0 | 0 | 3 826 | 3 826 | 2 |
| Other loans | 0 | 0 | 0 | 1 785 | 1 785 | 2 |
| Non current loans (a) | 0 | 0 | 0 | 5 611 | 5 611 | 2 |
| Financial receivables (b) | 0 | 0 | 0 | 28 834 | 28 834 | 2 |
| Loans (C) | 0 | 0 | 0 | 34 445 | 34 445 | 2 |
| Cash and cash equivalents (D) | 0 | 0 | 0 | 26 237 | 26 237 | 2 |
| Total loans & receivables (A+B+C+D) | 0 | 0 | 0 | 147 569 | 147 569 | |
| Other investments (available for sale investments) | 0 | 0 | 395 | 0 | 395 | 2 |
| Non-current receivables (sum of (a)) | 0 | 0 | 0 | 10 973 | 10 973 | |
| Other receivables (sum of (b)) | 0 | 515 | 0 | 45 843 | 46 358 | |
| Financial liabilities | ||||||
| Interest rate swaps designated as cash flow hedge relationship | 6 486 | 0 | 0 | 0 | 6 486 | 2 |
| Subtotal interest rate swaps designated as cash flow hedge relationship (E) |
6 486 | 0 | 0 | 0 | 6 486 | 2 |
| Interest charges on foreign currency swaps | 0 | 26 | 0 | 0 | 26 | 2 |
| Trading/Economic hedge (FX forward) | 0 | 611 | 0 | 0 | 611 | 2 |
| Financial liability at fair value through profit & loss account (F) | 0 | 637 | 0 | 0 | 637 | 2 |
| Non current financial liabilities at amortised cost * | 0 | 0 | 0 | 80 721 | 80 721 | 2 |
| Current financial liabilities at amortised cost * (G) | 0 | 0 | 0 | 29 940 | 29 940 | 2 |
| 2 | ||||||
| Current financial liabilities (E+F+G) | 6 486 | 637 | 0 | 29 940 | 37 063 | |
| * excluding financial leases and convertible bonds. |
The gross amounts of the interest rate swaps designed as cash flow hedge relationship equal the net positions.
The Group is managing a portfolio of derivative financial instruments to hedge foreign exchange and interest rate exposures resulting from operational and financial activities. It is the Group's policy not to engage in speculative or leveraged transactions or to hold or issue derivative financial instruments for trading purposes.
Recticel is hedging the interest rate risk linked to its interest-bearing borrowings on a global basis. The main hedging instruments used to convert floating rate debt into fixed rate debt are Interest Rate Swaps (IRS) or Interest Rate Caps (CAPs). The amount of fixed rate arrangements in relation to total financial debt is reviewed on an on-going basis by the Finance Committee and adjusted as and when deemed appropriate. In this, the Finance Committee aims at maintaining an appropriate balance between fixed and floating rate arrangements based on a philosophy of sound spreading of interest rate risks.
In an interest rate swap ("IRS") agreement, the Group undertakes to pay or receive the difference between the amounts of interest at fixed and floating rates on a nominal amount. This type of agreement enables the Group to fix the rate on a portion of its floating rate debt in order to be protected against the risk of higher interest charges on a loan at floating interest rates.
The market value of the portfolio of interest rate swaps on the balance sheet date is the discounted value of the future cash flows from the contract, using the interest rate curves at that date.
The current portfolio of IRS covers a portion of such borrowings until February 2017 for EUR 10 million, until February 2018 for EUR 67 million and until October 2019 for EUR 10 million. The total IRS portfolio (EUR 87 million) qualifies for hedge accounting under the rules of IAS 39.
The weighted average life of the IRS portfolio is 3.2 years.
On 31 December 2014, the fair value of the interest rate swaps was estimated at EUR -7.0 million. The revaluation of the IRS portfolio directly impacts the Group equity (and not the profit and loss accounts) since these instruments are benefiting from a hedge accounting treatment based on periodic effectiveness testing validating the fact that those hedges perfectly match characteristics of underlying debt.
On 31 December 2014, there were no interest rate CAPs still outstanding.
The convertible bond (of which a EUR 26.0 million portion is booked as financial debt) and a portion of the total financial lease (i.e. EUR 6.0 million) were issued at a fixed rate; most other bank debt is contracted at floating rate. A current portfolio of derivative products provides a global hedge for a total of EUR 87.0 million at 31 December 2014, meaning that total fixed-rate arrangements represent 50% of the total debt.
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | AT THE END OF THE PRECEDING PERIOD |
PAYMENT OF INTERESTS |
FAIR VALUE RECOGNIZED IN EQUITY |
INTEREST RECOGNIZED IN INCOME STATEMENT |
TRANSFER | AT THE END OF THE CURRENT PERIOD |
| Interest Rate Swaps (IRS) assets | 0 | 0 | 0 | 6 | 0 | 6 |
| Interest Rate Swaps (IRS) liabilities | (6 486) | 1 881 | (298) | (1 966) | (166) | (7 035) |
| Net position | (6 486) | 1 881 | (298) | (1 960) | (166) | (7 029) |
| Reference to II.4.3. |
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | AT THE END OF THE PRECEDING PERIOD |
PAYMENT OF INTERESTS |
FAIR VALUE RECOGNIZED IN EQUITY |
INTEREST RECOGNIZED IN INCOME STATEMENT |
TRANSFER | AT THE END OF THE CURRENT PERIOD |
| Interest Rate Swaps (IRS) assets | 97 | 0 | 0 | 0 | (97) | 0 |
| Interest Rate Swaps (IRS) liabilities | (8 192) | 1 419 | 2 203 | (2 013) | 97 | (6 486) |
| Net position | (8 095) | 1 419 | 2 203 | (2 013) | 0 | (6 486) |
| Reference to II.4.3. |
| in EUR | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | OUTSTANDING IRS PORTFOLIO AS OF 31 DEC 2014 | |||||||||||
| START | MATURITY | RATE | 2015 | 2016 | 2017 | 2018 | FAIR VALUE AS PER 31 DEC 2014 |
|||||
| 22/02/14 | 22/02/17 | 1.05% | 10 000 | 10 000 | 0 | 0 | (212) | |||||
| 22/02/13 | 22/02/18 | 1.07% | 7 000 | 7 000 | 7 000 | 0 | (201) | |||||
| 22/02/13 | 22/02/18 | 3.96% | 25 000 | 25 000 | 25 000 | 0 | (3 230) | |||||
| 22/02/13 | 22/02/18 | 3.80% | 12 500 | 12 500 | 12 500 | 0 | (1 540) | |||||
| 22/02/13 | 22/02/18 | 3.64% | 12 500 | 12 500 | 12 500 | 0 | (1 466) | |||||
| 22/02/14 | 22/02/18 | 1.12% | 10 000 | 10 000 | 10 000 | 0 | (306) | |||||
| 6/10/14 | 6/10/19 | 0.48% | 10 000 | 10 000 | 10 000 | 10 000 | (74) | |||||
| Average rate | 2.60% | 87 000 | 87 000 | 77 000 | 10 000 | (7 029) |
The Group's interest rate risk exposure derives from the fact that it finances at both fixed and variable interest rates. The Group manages the risk centrally through an appropriate structure of loans at fixed and variable interest rates and through interest rate swaps (IRS) and interest cap contracts (caps). The interest rate hedges are evaluated regularly to bring them in line with the Group's view of the trend in interest rates on the financial markets, with the aim of stabilising the interest rate burden throughout the various economic cycles.
Had the interest rates yield curve risen by 100 basis points, with all other parameters unchanged, the Group's profit in 2014 would not have been impacted by the change in 'marked-tomarket' value of the derivatives. However the reserves in equity would have increased by EUR 3.2 million as a result of the change in the 'marked-to-market' value of the interest rate swaps concluded to hedge the outstanding debts (compared to EUR 3.4 million in 2013).
Conversely, had the interest rates yield curve fallen by 100 basis points, with all other parameters unchanged, the reserves in equity would have decreased by EUR 3.3 million as a result of the fall in the 'marked-to-market' value of the interest rate swaps concluded to hedge the debts (compared to EUR 3.5 million in 2013).
The sensitivity to interest rate variations decreased in 2014 compared to 2013, due to the effect of a lower modified duration (from 4.16% to 3.25%), and, despite an increase in the nominal amount of the portfolio (from EUR 77 million in 2013 to EUR 87 million in 2014).
Had the interest rates yield curve risen by 100 basis points, with all other parameters unchanged, the Group's profit in 2014 would have decreased by EUR 1.1 million (debt with floating rate without hedge), compared to EUR 1.2 million in 2013.
Conversely, had the interest rates yield curve fallen by 100 basis points, with all other parameters unchanged, the Group's profit in 2014 would have decreased by EUR 0.5 million, compared to an increase of EUR 1.2 million in 2013.
It is the Group's policy to hedge foreign exchange exposures resulting from financial and operational activities via Recticel International Services SA/NV (RIS), which acts as internal bank of the Group. This is mainly implemented through forward exchange contracts.
In general, the Group concludes forward exchange contracts to cover foreign exchange risks on incoming and outgoing payments in foreign currency. The Group also concludes forward exchange contracts and option contracts to cover exchange risks associated with planned sales and purchases of the year, at a percentage which varies according to the predictability of the payment flows.
At balance sheet date, forward exchange contracts were outstanding for a notional value of EUR 51.4 million and with a total fair value of EUR -0.4 million. The currency swap contracts, maturing under 12 months, have a notional value of EUR 39.5 million, corresponding to a total fair value of EUR -0.2 million. At balance sheet date, no currency option contracts were outstanding. Recticel does not apply hedge accounting treatment to FX contracts as they are all less than 1 year.
Trading/economic hedge assets amounted to EUR 0.5 million of which EUR 0.2 million for foreign exchange swaps and EUR 0.3 million for foreign exchange forwards.
Trading/economic hedge liabilities amounted to EUR -1.0 million of which EUR -0.4 million as foreign exchange swap and EUR -0.6 million as foreign exchange forwards.
Foreign exchange risks relating to a net investment in foreign currency are also hedged selectively. At balance sheet date, there was only one hedge of this type to lower the net investments in CHF for an amount of CHF 8 million. In so far as these investments and hedge are long term, the revaluation of these investments and the hedge thereof is undertaken via an equity account and not via the income statement.
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | FAIR VALUE POSITIVE AT 31 DEC 2014 |
FAIR VALUE NEGATIVE AT 31 DEC 2014 |
NET FAIR VALUE AT 31 DEC 2014 |
RECOGNISED IN THE INCOME STATEMENT OF 2014 |
RECOGNISED IN THE INCOME STATEMENT OF PREVIOUS YEARS |
| Forward purchasing contracts less than 6 months | 39 363 | 247 | (384) | (137) | 554 | (691) |
| Forward purchasing contracts more than 6 months | 0 | 0 | 0 | 0 | 148 | (148) |
| Forward sale contracts less than 6 months | 12 101 | 48 | (149) | (101) | 255 | (356) |
| Forward sale contracts more than 6 months | 0 | 0 | 0 | 0 | 192 | (192) |
| Total forward exchange contracts | 51 464 | 295 (a) | (533) (b) | (238) | 1 149 | (1 387) |
| in thousand EUR | ||||||
|---|---|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | FAIR VALUE POSITIVE AT 31 DEC 2013 |
FAIR VALUE NEGATIVE AT 31 DEC 2013 |
NET FAIR VALUE AT 31 DEC 2013 |
RECOGNISED IN THE INCOME STATEMENT OF 2013 |
RECOGNISED IN THE INCOME STATEMENT OF PREVIOUS YEARS |
| Forward purchasing contracts less than 6 months | 26 797 | 215 | (99) | 116 | (691) | 807 |
| Forward purchasing contracts more than 6 months | 15 026 | 22 | (112) | (90) | (148) | 58 |
| Forward sale contracts less than 6 months | 11 682 | 13 | (145) | (132) | (356) | 224 |
| Forward sale contracts more than 6 months | 1 172 | 0 | (10) | (10) | (192) | 182 |
| Total forward exchange contracts | 54 677 | 250 (a) | (366) (b) | (116) | (1 387) | 1 271 |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | FAIR VALUE POSITIVE AT 31 DEC 2014 |
FAIR VALUE NEGATIVE AT 31 DEC 2014 |
FAIR VALUE NET AT 31 DEC 2014 |
| Sales / Purchases | 20 114 | 24 | (389) | (365) |
| Purchases / Sales | 19 397 | 153 | (1) | 152 |
| Total currency swap contracts | 39 511 | 177 (a) | (390) (b) | (213) |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | NOMINAL VALUE | FAIR VALUE POSITIVE AT 31 DEC 2013 |
FAIR VALUE NEGATIVE AT 31 DEC 2013 |
FAIR VALUE NET AT 31 DEC 2013 |
| Sales / Purchases | 27 306 | 146 | (32) | 114 |
| Purchases / Sales | 21 534 | 119 | (213) | (94) |
| Total currency swap contracts | 48 840 | 265 (a) | (245) (b) | 20 |
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Assets (sum of (a)) | 432 | 360 |
| Liabilities (sum of (b)) | (963) | (611) |
| Trading/Economic hedge (FX forward) | (531) | (251) |
The Group deals mainly in 5 currencies outside the euro zone: GBP, USD, CHF, SEK, and CZK.
The following table details the sensitivity of the Group to a positive or negative variation, compared to the annual variation in the pairs of currencies during the previous financial year.
The sensitivity analysis covers only the financial amounts in foreign currency which are recognised in the balance sheet and which are due and past due, and determines their variations at the conversion rates based on the following assumptions: USD and GBP 10%; CZK, , CHF and SEK 5%.
The sensitivity analysis covers both external and internal loans of the Group where the currency of the operations differs from the local currency of the borrower and lender. A positive amount in the table below indicates an increase in the gain if the EUR strengthens by the given historical annual average. An equal counterpart loss will be measured if the EUR weakens by the same percentage.
The sensitivity of the Group to exchange rate variations increased in 2014 compared to 2013, due to higher net exposures. The only decrease relates to the USD, as more economic hedges were concluded to cover USD receivables linked to the new business in China.
| in thousand EUR | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| EUR/USD | EUR/CHF | EUR/GBP | EUR/CZK | EUR/SEK | ||||||
| Group Recticel | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Historical average variation | 10% | 10% | 5% | 5% | 10% | 10% | 5% | 5% | 5% | 5% |
| Profit or (loss) recognized in the P&L account | 781 | 167 | 84 | 218 | 1 374 | 1 156 | 339 | 75 | 83 | 311 |
| Profit or (loss) recognized in equity | 0 | 0 | (333) | 326 | 0 | 0 | 0 | 0 | 0 | 0 |
| Financial assets * | 10 368 | 17 167 | 4 026 | 4 722 | 7 227 | 15 509 | 18 041 | 4 147 | 1 697 | 9 667 |
| Financial liabilities * | (13 914) | (20 219) | (13 863) | (10 872) | (17 132) | (165) | (26 216) | (21 753) | (4 327) | (582) |
| Derivatives | (4 264) | 1 386 | 1 500 | 3 991 | 23 650 | (26 902) | 1 388 | 16 099 | 4 300 | (2 871) |
| Total net exposure | (7 811) | (1 666) | (8 336) | (2 159) | 13 744 | (11 558) | (6 786) | (1 507) | 1 670 | 6 214 |
* includes trade and other receivables and trade and other payables.
Financial assets and liabilities represent the foreign currency exposure of the different subsidiaries of the Group in relation to their local currency.
Since the crisis on the financial markets in 2007-2009, the liquidity risk of the Group has always remained well under control.
The financing sources are well diversified and the bulk of the debt is irrevocable and long-term. This debt includes the EUR 57.5 million convertible bond loan concluded in July 2007 and expiring in July 2017 (of which EUR 11.2 million was bought back in 2008, EUR 17.3 million in 2009 and EUR 1.4 million in 2011). It also includes the 5-year club deal concluded on 09 December 2011 for an amount of EUR 175 million. In addition, the Group still holds EUR 20.2 million in other long-term debt.
In addition to these long-term loans, the Group has a diversified range of short-term financing sources, including non-recourse factoring and forfaiting programmes.
The diversified financing structure and the availability of committed unused credit facilities for EUR 54.4 million (2013: EUR 68.1 million) guarantee the necessary liquidity to ensure the future activities and to meet the short- and medium-term financial commitments.
The Group does not enter in financial instruments that require cash deposits or other guarantees (e.g. margin calls).
The club deal is subject to bank covenants based on an adjusted leverage ratio, an adjusted interest cover and a minimum equity requirement. At the end of 2014, Recticel complied with all its bank covenants. On the basis of the 2015 budget and the business plan management expects to be in a position to meet its bank covenants in the coming year.
As stated in the club deal, the maximum dividend authorised for distribution amounts to the highest of (i) 50% of the consolidated net income of the Group for the previous financial year and (ii) EUR 8.0 million.
The convertible bond issued by Recticel is not subject to any financial covenants.
| in thousand EUR | |||||||
|---|---|---|---|---|---|---|---|
| Group Recticel | NOTES MATURING WITHIN ONE YEAR | MATURING BETWEEN 1 AND 5 YEARS |
MATURING AFTER 5 YEARS | TOTAL LONG- TERM | FUTURE FINANCIAL CHARGES |
CARRYING AMOUNT |
|
| Bonds and notes | 1 614 | 34 820 | 0 | 36 434 | (10 397) | 26 037 | |
| Financial leases | 3 358 | 9 780 | 7 980 | 21 118 | (3 009) | 18 109 | |
| Bank loans | 3 500 | 102 740 | 0 | 106 240 | (7 000) | 99 240 | |
| Other loans | 270 | 937 | 1 650 | 2 857 | (786) | 2 071 | |
| Total Financial liabilities - long term | 8 742 | 148 277 | 9 630 | 166 649 | (21 192) | 145 457 II.5.18.1. | |
| Bank loans | 27 635 | ||||||
| Bank loans - forfeiting | 1 598 | ||||||
| Bank loans - factoring with recourse | 442 | ||||||
| Bank overdraft | 10 019 | ||||||
| Other financial debt | 221 | ||||||
| Current accounts & cash pooling | 0 | ||||||
| Accrued liabilities - financial short term | 108 | ||||||
| Total Financial liabilities - short term (a) | 40 023 | ||||||
| Interest rate swaps | 0 7 035 |
0 | 7 035 | ||||
| Interest from FX swaps | 35 | 35 | |||||
| Trading/economic hedge | 963 | 963 | |||||
| Derivative instruments at fair value (b) | 998 | 7 035 | 0 | 8 033 | |||
| Grand total financial liabilities due within one year | 49 763 | ||||||
| Non-current financial liabilities | I.4. 142 135 |
||||||
| Current portion of non-current financial liabilities (b) | 3 322 | ||||||
| Total | 145 457 | ||||||
| Total financial liabilities - short term (a) | 40 023 | ||||||
| Derivative instruments at fair value (b) | 8 033 | ||||||
| Current portion of non-current financial liabilities (c) | 3 322 | ||||||
| Interest accruals on non-current financial liabilities | 1 420 |
| Total current financial liabilities | I.4. | 52 798 |
|---|---|---|
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | NOTES | MATURING WITHIN ONE YEAR |
MATURING BETWEEN 1 AND 5 YEARS |
MATURING AFTER 5 YEARS | TOTAL LONG- TERM | FUTURE FINANCIAL CHARGES |
CARRYING AMOUNT |
|
| Bonds and notes | 26 918 | 0 | 0 | 26 918 | (1 382) | 25 536 | ||
| Financial leases | 3 393 | 11 994 | 9 330 | 24 717 | (3 629) | 21 088 | ||
| Bank loans | 2 506 | 82 806 | 0 | 85 312 | (6 462) | 78 850 | ||
| Other loans | 234 | 920 | 1 600 | 2 754 | (649) | 2 105 | ||
| Total Financial liabilities - long term | 33 051 | 95 720 | 10 930 | 139 701 | (12 122) | 127 579 II.5.18.1. | ||
| Bank loans | 22 812 | |||||||
| Bank loans - forfeiting | 2 643 | |||||||
| Bank loans - factoring with recourse | 574 | |||||||
| Bank overdraft | 2 400 | |||||||
| Other financial debt | 26 | |||||||
| Current accounts & cash pooling | 111 | |||||||
| Accrued liabilities - financial short term | 593 | |||||||
| Total Financial liabilities - short term (a) | 29 159 | |||||||
| Interest rate swaps | 6 486 | 0 | 6 486 | |||||
| Interest from FX swaps | 26 | 26 | ||||||
| Trading/economic hedge | 611 | 611 | ||||||
| Derivative instruments at fair value (b) | 637 | 6 486 | 0 | 7 123 | ||||
| Grand total financial liabilities due within one year | 62 847 | |||||||
| Non-current financial liabilities | I.4. | 98 834 |
| Current portion of non-current financial liabilities (b) | 28 745 | |
|---|---|---|
| Total | 127 579 | |
| Total financial liabilities - short term (a) | 29 159 | |
| Derivative instruments at fair value (b) | 7 123 | |
| Current portion of non-current financial liabilities (c) | 28 745 | |
| Interest accruals on non-current financial liabilities | 1 154 | |
| Total current financial liabilities | I.4. | 66 181 |
Trade and other payables principally comprise amounts outstanding for trade purchases, on-going costs and the liability of EUR 13.4 million regarding the European Commission fine, for which Recticel submitted a request to spread the payments over a longer time horizon. The Group accepted shorter payment terms under the contracts offering substantial cash discounts. Consequently, the level of trade payables decreased compared to the previous year.
The item "Other payables" relates principally to the reversal of various operational accruals.
During 2014 there were no material business combinations. In 2013, the Group sold it participation in IPF, Spain (Flexible Foams).
At the end of 2014, the consolidated net financial debt remained stable at EUR 168.2 million (end 2013: EUR 138.2 million). The level of debt represents 101.3% of equity (2013: 74.0%). The Group aims for gradual improvement in the level of debt in the coming years.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Payments due within one year | (24 399) | (23 348) |
| Between one and five years | (53 923) | (56 411) |
| Over five years | (27 858) | (31 150) |
| Minimal future payments | (106 180) | (110 909) |
Operating lease payments represent rentals payable by the Group for certain of its industrial and/or office properties and for certain production, logistic and /or administrative equipment.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Operating lease - land and buildings | (14 672) | (14 897) |
| Operating lease - plant, machinery and equipment | (3 061) | (3 451) |
| Operating lease - furniture | (299) | (456) |
| Operating lease - vehicules | (7 772) | (8 008) |
| Total | (25 804) | (26 812) |
The above table only comprises the recognized lease payments of the financial period.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 |
| Guarantees given or irrevocably promised by Recticel SA/NV as security for debts and commitments of companies | 70 891 | 68 525 |
These guarantees include mainly parental corporate guarantees and letters of comfort for commitments contracted by subsidiaries with banks (EUR 39.1 million), lessors (EUR 16.2 million), governmental institutions (EUR 2.2 million), European Commission (EUR 13.4 million) and other third parties (EUR 0.03 million).
As already mentioned above, in December 2011, Recticel SA/NV and Recticel International Services SA/NV concluded a joint credit facility agreement ('club deal') amounting to EUR 175 million. Under this club deal and the agreement relating to the subordinated loans, Recticel SA/NV and/or its subsidiaries have granted a floating charge mandate in favour of the banks up to a maximum amount of EUR 175 million plus interest and related costs.
Since 1993, the Recticel Group has implemented a Group Stock Option Plan for its leading managers. All issued stock options up to and including 2000 have in the meantime been exercised, forfeited or they have expired.
| ISSUE | NUMBER OF WARRANTS ISSUED |
NUMBER OF WARRANT NOT YET EXERCISED |
EXERCISE PRICE (IN EUR) | EXERCISE PERIOD |
|---|---|---|---|---|
| 2006 | 306 000 | 300 000 | 9.65 | 01/Jan/10 - 21/Dec/17 |
| May 2007 | 48 000 | 43 500 | 10.47 | 01/Jan/11 - 01/May/18 |
| Dec 2007 | 390 000 | 390 000 | 9.78 | 01/Jan/11 - 02/Dec/18 |
| Dec 2009 | 584 000 | 244 000 | 5.05 | 01/Jan/13 - 21/Dec/15 |
| May 2011 | 354 500 | 335 000 | 7.69 | 01/Jan/15 - 29/May/17 |
| Dec 2011 | 438 000 | 411 500 | 4.03 | 01/Jan/15 - 21/Dec/17 |
| Dec 2012 | 326 800 | 300 900 | 4.95 | 01/Jan/16 - 20/Dec/18 |
| Apr 2014 | 316 000 | 300 100 | 6.73 | 1/Jan/18 - 28/Apr/20 |
| Total | 2 763 300 | 2 325 000 |
The expense recognised for the year for the share-based payments amounts to EUR 0.171 million (2013: EUR 0.249 million).
| in units | ||
|---|---|---|
| Group Recticel | 2014 | 2013 |
| Options - end of period (31 Dec) | 2 325 000 | 2 971 400 |
| Weighted average exercise price (in EUR) | 6.89 | 5.60 |
| Outstanding at the beginning of the period | 2 971 400 | 2 987 300 |
| Granted during the period | 316 000 | 0 |
| Expired during the period | 245 500 | 0 |
| Exercised during the period | 716 900 | 15 900 |
| Outstanding at the end of the period | 2 325 000 | 2 971 400 |
| Total exercisable at the end of the period | 977 500 | 1 852 100 |
| Total 'in-the-money' at the end of the period | 956 400 | 1 872 906 |
| Total exercisable and 'in-the-money' at the end of the period | 244 000 | 1 108 100 |
The options outstanding at 31 December 2014 had a weighted average exercise price of EUR 6.89, and a weighted average remaining contractual life of 3.27 years.
The Group follows the transitional provisions prescribed by IFRS 2 (i.e. equity instruments granted after 7 November 2002 and not yet vested on 1 January 2008).
In 2014, 716,900 warrants were exercised, and one new warrant plan (316,000 warrants with exercise price of EUR 6.73) was issued.
To date, the Group has not issued share appreciation rights to any of its managers or employees, nor has it implemented any share purchase plan.
The theoretical value of the warrants at issuance is calculated by applying the Black & Scholes formula, and taking into account certain hypotheses regarding dividend payment (last dividend compared to share price), interest rate (Euribor 5 years) and volatility (stock market data on the Recticel share).
| in units | ||
|---|---|---|
| ISSUEa | NUMBER OF WARRANTS OFFERED TO THE MEMBERS OF THE MANAGEMENT COMMITTEE |
NUMBER OF WARRANTS CANCELLED |
| 2006 | 122 000 | 0 |
| May 2007 | 15 000 | 0 |
| Dec 2007 | 159 500 | 0 |
| Dec 2009 | 223 500 | 0 |
| May 2011 | 168 500 | 0 |
| Dec 2011 | 205 500 | 0 |
| Dec 2012 | 129 000 | 0 |
| Apr 2014 | 129 000 | 9 900b |
| Total | 1 152 000 | 9 900 |
a the conditions of the various issues are reflected in the global overview table herabove. 9,900 warrants offered to Rik De Vos have been cancelled following his departure end 2014.
| in EUR | ||
|---|---|---|
| NAME | TOTAL NUMBER OF WARRANTS |
TOTAL THEORETICAL VALUE OF WARRANTS AT ISSUANCE (*) |
| Olivier Chapelle | 30 000 | 25 380.00 |
| Betty Bogaert | 9 900 | 8 375.40 |
| Philipp Burgtorf | 9 900 | 8 375.40 |
| Marc Clockaerts | 9 900 | 8 375.40 |
| Jean-Pierre De Kesel | 9 900 | 8 375.40 |
| Rik De Vos | 9 900 | 8 375.40 |
| Jean-Pierre Mellen | 9 900 | 8 375.40 |
| Jan Meuleman | 7 000 | 5 922.00 |
| François Petit | 9 900 | 8 375.40 |
| Dirk Verbruggen | 9 900 | 8 375.40 |
| Bart Wallaeys | 9 900 | 8 375.40 |
| Paul Werbrouck | 9 900 | 8 375.40 |
(*) The theoretical value is calculated by using a Black & Scholes formula, and taken into account certain hypotheses regarding dividend yield, interest rate and volatility,
On 18 February 2015 Recticel announced that it has sold its 50% participation in the joint venture company Kingspan Tarec Industrial Insulation (KTII) to its joint venture partner Kingspan Group plc, who consequently will own 100% of the shares of KTII nv (Turnhout, Belgium) and KTII Ltd (Glossop, United Kingdom).
Kingspan Tarec Industrial Insulation (KTII) develops and produces premium performance insulation products for the thermal insulation of pipework in process and petrochemical applications and for the cool truck industry. KTII was established in 2006 by Recticel and Kingspan, when both companies decided to combine their respective industrial insulation activities. In 2014, KTII realised annual sales of circa EUR 31 million.
Recticel sells its 50% stake in KTII for a consideration of EUR 8.5 million (enterprise value).
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | NON-CURRENT RECEIVABLES |
TRADE RECEIVABLES |
OTHER CUR RENT RECEIVABLES |
FINANCIAL LIABILITIES |
OTHER PAYABLES |
TRADE PAYABLES |
REVENUES | PURCHASES |
| Total Orsafoam companies | 0 | 703 | 1 194 | 0 | 0 | 209 | 160 | (268) |
| Total Eurofoam companies | 0 | 1 824 | 42 | 0 | 0 | 3 166 | 25 307 | (20 297) |
| Kingspan Tarec Industrial Insulation nv | 0 | 127 | 198 | 0 | 0 | 57 | 64 | (131) |
| Total Proseat companies | 5 033 | 3 983 | 4 144 | 0 | 13 358 | 17 | 33 011 | 188 |
| TOTAL | 5 033 | 6 637 | 5 578 | 0 | 13 358 | 3 449 | 58 542 | (20 508) |
| in thousand EUR | ||||||||
|---|---|---|---|---|---|---|---|---|
| Group Recticel | NON-CURRENT RECEIVABLES |
TRADE RECEIVABLES | OTHER CURRENT RECEIVABLES |
FINANCIAL LIABILITIES |
OTHER PAYABLES | TRADE PAYABLES | REVENUES | PURCHASES |
| Total Orsafoam companies | 0 | 527 | 1 241 | 0 | 0 | 160 | 193 | (405) |
| Total Eurofoam companies | 0 | 3 579 | 63 | 0 | 0 | 2 484 | 23 966 | (19 816) |
| Kingspan Tarec Industrial Insulation nv | 0 | 217 | 1 622 | 0 | 0 | 4 | 42 | (17) |
| Total Proseat companies | 3 825 | 1 209 | 4 108 | 0 | 13 417 | 37 | 31 656 | 91 |
| TOTAL | 3 825 | 5 532 | 7 034 | 0 | 13 417 | 2 685 | 55 857 | (20 147) |
Mid-February 2015, Proseat, the 51/49 joint venture between Recticel and Woodbridge, announced its intention to close its plant in Rüsselsheim (Germany). All 77 employees at the site have been put under risk of redundancy. Discussions with the works council already started in order to identify the most appropriate social support measures.
The related closure costs will be charged to the results of 1H2015.
Transactions between Recticel SA/NV and its subsidiaries, which are related parties, have been eliminated in the consolidation and are not disclosed in this note. Transactions with other related parties are disclosed below, and concern primarily commercial transactions done at prevailing market conditions. The tables below include only transactions considered to be material, i.e. exceeding a total of EUR 1 million.
| COUNTERPARTY CLASSIFICATION Group Sioen Sales |
in thousand EUR | ||
|---|---|---|---|
| TRADE RECEIVABLES | |||
| 118 | |||
| Group Sioen | Purchases | 1 051 |
The remuneration of the members of the Board of Directors and of the Management Committee is included in this note. For more information, reference is made to the remuneration report in the section 'Corporate Governance' of this annual report.
| in EUR | ||||||
|---|---|---|---|---|---|---|
| NAME | DIRECTOR'S FEES 2014 |
ATTENDENCE FEES BOARD 2014 |
AUDIT COMMITTEE 2014 |
REMUNERATION AND NOMINATION COMMITTEE 2014 |
REMUNERATION FOR SPECIAL ASSIGNMENTS |
TOTAL (GROSS) 2014 |
| DAVIGNON Etienne | 18 000.00 | 36 300.00 | 12 500.00 | - | - | 66 800.00 |
| OLIVIER CHAPELLE SPRL | 9 000.00 | 18 150.00 | - | - | - | 27 150.00 |
| PAQUOT Guy | 2 250.00 | 1 650.00 | - | - | - | 3 900.00 |
| ANDRÉ BERGEN Comm V | 9 000.00 | 14 850.00 | 15 000.00 | 2 500.00 | - | 41 350.00 |
| COMPAGNIE DU BOIS SAUVAGE SERVICES SA | 9 000.00 | 16 500.00 | - | 2 500.00 | - | 28 000.00 |
| COMPAGNIE DU BOIS SAUVAGE SA | 5 365.38 | 11 550.00 | - | - | - | 16 915.38 |
| DE SMEDT Pierre-Alain | 9 000.00 | 16 500.00 | - | 3 750.00 | - | 29 250.00 |
| ENTREPRISES ET CHEMINS DE FER DE CHINE SA | 5 810.44 | 16 500.00 | - | 22 310.44 | ||
| MARION DEBRUYNE BVBA | 9 000.00 | 9 900.00 | - | 2 500.00 | - | 21 400.00 |
| IMRADA BVBA | 9 000.00 | 11 550.00 | - | - | - | 20 550.00 |
| REVAM BVBA | 9 000.00 | 16 500.00 | 12 500.00 | - | - | 38 000.00 |
| VAN CRAEN Patrick | 9 000.00 | 18 150.00 | 12 500.00 | - | - | 39 650.00 |
| ZOETE Jacqueline | 9 000.00 | 18 150.00 | - | - | - | 27 150.00 |
| TOTAL | 112 425.82 | 206 250.00 | 52 500.00 | 11 250.00 | 0.00 | 382 425.82 |
| in EUR | ||||||
|---|---|---|---|---|---|---|
| NAME | DIRECTOR'S FEES 2013 |
ATTENDENCE FEES BOARD 2013 |
AUDIT COMMITTEE 2013 |
REMUNERATION AND NOMINATION COMMITTEE 2013 |
REMUNERATION FOR SPECIAL ASSIGNMENTS |
TOTAL (GROSS) 2013 |
| DAVIGNON Etienne | 18 000.00 | 23 100.00 | 12 500.00 | - | - | 53 600.00 |
| OLIVIER CHAPELLE BVBA | 9 000.00 | 11 550.00 | - | - | - | 20 550.00 |
| PAQUOT Guy | 9 000.00 | 6 600.00 | - | - | - | 15 600.00 |
| VEAN NV | 3 659.34 | 1 650.00 | - | - | - | 5 309.34 |
| ANDRÉ BERGEN Comm V | 9 000.00 | 11 550.00 | 22 500.00 | 2 500.00 | - | 45 550.00 |
| COMPAGNIE DU BOIS SAUVAGE SERVICES SA | 9 000.00 | 11 550.00 | - | - | - | 20 550.00 |
| DE SMEDT Pierre-Alain | 9 000.00 | 6 600.00 | - | 3 750.00 | - | 19 350.00 |
| DEBRUYNE Marion | 4 153.85 | 3 300.00 | - | 2 500.00 | - | 9 953.85 |
| MARION DEBRUYNE BVBA | 4 846.15 | 6 600.00 | - | - | - | 11 446.15 |
| MERCKX Ingrid | 3 115.38 | 1 650.00 | - | - | - | 4 765.38 |
| IMRADA BVBA | 5 884.62 | 6 600.00 | - | - | - | 12 484.62 |
| REVAM BVBA | 9 000.00 | 11 550.00 | 15 000.00 | - | - | 35 550.00 |
| VAN CRAEN Patrick | 9 000.00 | 11 550.00 | 10 000.00 | - | - | 30 550.00 |
| VAN DOORSLAER Tonny | 3 659.34 | 3 300.00 | 5 000.00 | - | - | 11 959.34 |
| ZOETE Jacqueline | 9 000.00 | 9 900.00 | - | - | - | 18 900.00 |
| TOTAL | 115 318.68 | 127 050.00 | 65 000.00 | 8 750.00 | 0.00 | 316 118.68 |
| in EUR | |||||||
|---|---|---|---|---|---|---|---|
| TOTAL COST FOR THE COMPANY | REPRESENTED BY OLIVIER CHAPELLE | OLIVIER CHAPELLE SPRL | MANAGEMENT COMMITTEE | OTHER MEMBERS OF THE | TOTAL | ||
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||
| Number of persons | 1 | 1 | 13 | 12 | 14 | 13 | |
| Basic salary | 486 000 | 486 000 | 2 563 853 | 2 769 803 | 3 049 853 | 3 255 803 | |
| Variable remuneration | 243 148 | 243 148 | 788 664 | 784 937 | 1 031 812 | 1 028 085 | |
| Subtotal | 729 148 | 729 148 | 3 352 517 | 3 554 740 | 4 081 665 | 4 283 888 | |
| Pensions | 0 | 0 | 154 660 | 144 341 | 154 660 | 144 341 | |
| Other benefits | 60 206 | 71 243 | 281 378 | 268 389 | 341 584 | 339 632 | |
| Total | 789 354 | 800 391 | 3 788 555 | 3 967 470 | 4 577 909 | 4 767 861 |
| in EUR | |||||
|---|---|---|---|---|---|
| CLOSING RATE | AVERAGE RATE | ||||
| Group Recticel | 2014 | 2013 | 2014 | 2013 | |
| Bulgarian Lev | BGN | 0.511300 | 0.511300 | 0.511300 | 0.511300 |
| Swiss Franc | CHF | 0.831670 | 0.814598 | 0.823301 | 0.812309 |
| Yuan Renminbi | CNY | 0.132700 | 0.119773 | 0.122164 | 0.122480 |
| Czech Crown | CZK | 0.036056 | 0.036460 | 0.036316 | 0.038492 |
| Pound Sterling | GBP | 1.283862 | 1.199472 | 1.240510 | 1.177502 |
| Forint | HUF | 0.003169 | 0.003367 | 0.003239 | 0.003368 |
| Indian Rupee | INR | 0.013035 | 0.011714 | 0.012339 | 0.012832 |
| Yen | JPY | 0.006886 | 0.006910 | 0.007127 | 0.007712 |
| Lithuanian Litas | LTL | 0.289620 | 0.289620 | 0.289620 | 0.289620 |
| Moroccan Dirham | MAD | 0.090972 | 0.088976 | 0.089629 | 0.089477 |
| Norwegian Krone | NOK | 0.110595 | 0.119574 | 0.119698 | 0.128095 |
| Zloty | PLN | 0.234017 | 0.240714 | 0.238991 | 0.238238 |
| Romanian Leu (new) | RON | 0.223075 | 0.223664 | 0.225036 | 0.226296 |
| Serbian Dinar | RSD | 0.008238 | 0.008722 | 0.008515 | 0.008841 |
| Russian Rouble | RUB | 0.013824 | 0.022063 | 0.019626 | 0.023620 |
| Swedish Krona | SEK | 0.106462 | 0.112878 | 0.109908 | 0.115586 |
| Turkish Lira (new) | TRY | 0.353107 | 0.337781 | 0.344057 | 0.394705 |
| Ukrainian Hryvnia | UAH | 0.052032 | 0.088460 | 0.062111 | 0.092104 |
| US Dollar | USD | 0.823655 | 0.725111 | 0.752728 | 0.752945 |
| in thousand EUR | ||
|---|---|---|
| COUNTERPARTY | 31 DEC 2014 | 31 DEC 2013 |
| Management Committee | 14 | 13 |
| Employees | 1 876 | 1 845 |
| Workers | 4 036 | 4 170 |
| Average number of people employed (full time equivalent) on a consolidated basis (i.e. excluding joint ventures) | 5 926 | 6 028 |
| Average number of people employed in Belgium | 1 063 | 1 077 |
| Remuneration and social charges (in thousand EUR) | 253 149 | 256 874 |
Overview of the audit fees and additional services performed for the Group by the auditor and companies related to the auditor for the year ending 31 December 2014.
| in thousand EUR | ||
|---|---|---|
| Group Recticel | DELOITTE | OTHERS |
| Audit fees | 949 | 373 |
| Other legal missions | 96 | 0 |
| Tax services | 249 | 90 |
| Other services rendered related to other assurance reporting | 273 | 35 |
| Total fees in 2014 | 1 567 | 498 |
In the above overview the fees of the joint venture companies are included at 100%.
In 2010, officials from the European Commission and various national antitrust authorities conducted unannounced inspections at Recticel's offices in Brussels, Wetteren, and Alfreton (United Kingdom), as well as the office of Eurofoam in Kremsmünster (Austria). The purpose of these inspections was to collect information relating to allegedly unlawful conduct believed to have taken place in the European polyurethane foam sector.
In January 2014, the European Commission adopted a decision in which it found that Recticel and some of its subsidiaries participated in an infringement of article 101 TFEU from 26 October 2005 until 27 July 2010 in Germany, Austria, Hungary and Poland, France, Belgium, The Netherlands, the United Kingdom, from 1 January 2007 to 27 July 2010 in Romania and from 9 July 2007 to 27 July 2010 in Estonia. Under the settlement decision, Recticel's effective total fine, including Recticel's 50% share of the fine relating to Eurofoam's conduct, is EUR 26,976,500. Recticel's liability amounted to EUR 39,068,000 and consists of three components:
This lead to an effective total amount payable for Recticel of EUR 26,976,500.
The total amount of the fine to be paid was provisioned (for the total amount of the fine) in the accounts of 2013.
In April 2014, Recticel obtained confirmation by the European Commission's Directorate General for Budget allowing it to pay its fine (excluding the fine to be paid by the joint venture Eurofoam which had paid its fine in full when it became due) in three annual instalments on 30 April 2014, 2015 and 2016. On [30 April 2015], the Group paid EUR 13.9 million (including its portion in the Eurofoam fine). The balance of the fine will be paid on 30 April 2015 (EUR 6.5 million) and on 30 April 2016 (EUR 6.9 million), and is covered by a bank guarantee and is booked in the balance sheet under the header Other Debt.
On 6 March 2013, the Spanish Competition Authority adopted a decision in which it imposed a fine of EUR 9,358,000 upon Recticel's Spanish subsidiary, Recticel Ibérica S.L.U., for the infringement of article 1 of the Spanish Competition Act and article 101 TFEU for the period between January 1992 until 9 August 2010 and jointly with Recticel for the period between 1999 until 9 August 2010. The Spanish Competition Authority exempted Recticel Ibérica S.L.U. and Recticel from the payment of the fine because Recticel fulfilled, as an immunity applicant, the requirements for exemption set forth by the applicable legislation. All companies which had been fined have appealed the decision. It is expected that Recticel's exemption of the payment of the fine will not be affected by the outcome of these appeals. For the appeals which have been decided up to date, Recticel's position has not been affected.
In 2011, the German Federal Cartel Office started an investigation covering the sector of mattress and slat base manufacturers in Germany. Recticel's German bedding affiliate, Recticel Schlafkomfort GmbH, in Bochum was included in the investigation.
On 28 August 2014, the German Competition Authority adopted a decision in which it imposed upon Recticel Schlafkomfort GmbH a fine of EUR 8,208,169.35 (including costs) for the infringement of the relevant competition laws from July 205 until December 2009. Recticel Schlafkomfort GmbH did not appeal the decision, which has therefore become final. A provision for the total amount of this fine was booked in the accounts per 30 June 2014. The fine was fully paid in September 2014.
In 2013, the Company identified certain irregularities that took place in one of its subsidiaries over the period 2001 through 2010. The Company investigated these irregularities, proceeded with a regularisation and included a provision of EUR 1.2 million in its financial statements for the financial year ended on 31 December 2012. The Company does not expect these irregularities to further materially affect the Group.
The Group has been the subject of antitrust investigations at European and national level (see above - European level - and - Germany -) and is currently involved in various appeals procedures in Spain which have been started by competitors after a decision rendered by the Spanish competition authority in 2013 (see above II.6.10.1.). It cannot be excluded that claims (including class actions claims) based on the same facts, may arise. In 2014, the Italian antitrust authority initiated a procedure in which Orsafoam s.p.a. (in which the Group holds a 33% minority stake) is involved. As the investigation is still in an early stage, the Group does not yet have any information on its evolution and outcome.
A claim has been issued by a group of customers in the United Kingdom, including Hilding Anders International AB, Euro Comfort Holding GmbH, GNG Group Yorkshire PLC, Airsprung Group PLC and Hypnos Limited, in which these persons allege harm with regard to the European Commission's cartel decision (see also above - European level -). An informed judgment about the merits of this claim or the amount of potential loss for the Company, if any, cannot be made at this stage. Therefore, no provisions have been made in connection thereto. There is also a risk that the Company may become subject to additional legal proceedings and claims brought by other customers allegedly adversely affected by the conduct covered by the European Commission's cartel decision. However, the Company cannot predict to what extent such claims will be asserted, nor speculate on the merits of such potential claims nor on the amount of potential loss for the Company, if any, that might be incurred.
Recticel is involved in several litigation proceedings with a German distributor who claims that the Group has unjustifiably ceased its supply to it. So far, Recticel has received favourable judgments in the various court cases. Management feels confident that it can successfully defend the claims in the appeal proceedings initiated by the German distributor.
The Group is currently discussing a negotiated settlement with one of its German works councils in relation to a past restructuring of one of its German activities. Recticel is of the opinion that it in case litigation would be continued, there would be good arguments to defend the claim raised by the works councils.
Recticel has initiated opposition proceedings against the patent application of a Swiss competitor which had been developed by and has been since many years used by the Group. If such patent would be granted and the Swiss competitor would choose to enforce its patent towards the Group, Recticel is of the opinion that it would have good arguments to be entitled to continue to use the patented technology without material limitations.
Recticel is involved in litigation with a Dutch competitor in respect of the use of a trademark by such competitor. Recticel lost the proceedings at first instance, but was successful in the appeal proceedings before the appeal court. The Dutch competitor has the option to present the case to the Dutch supreme court for a revision of the legal reasoning of the case but will be precluded from submitting further facts. Recticel is of the opinion that the legal reasoning of the appeal courts will be upheld by revision, should the Dutch supreme court take the case up.
The Group is also subject to various tax inspections which may entail litigation or other legal proceedings and is involved in various litigations related to intellectual property (other than set out above), where Recticel has a policy of actively enforcing its patent and trademark portfolio (such as e.g. its gelfoam patent).
As of 31 December 2014, total litigation provisions amounted to EUR 69.878 in the combined financial statements.
Address: Avenue des Olympiades, 2 B-1140 Brussels (Evere)
Established: on 19 June 1896 for thirty years, later extended for an unlimited duration.
Object: (article 3 of the Coordinated Articles) The object of the company is the development, production, conversion, trading, buying, selling and transportation, on its own account or on behalf of third parties, of all plastics, polymers, polyurethanes and other synthetic components, of natural substances, metal products, chemical or other products used by private individuals or by industry, commerce and transport, especially for furniture, bedding, insulation, the construction industry, the automotive sector, chemicals, petrochemicals, as well as products belonging to or necessary for their production or which may result or be derived from this process.
It may achieve its object in whole or in part, directly or indirectly, via subsidiaries, joint ventures, participations in other companies, partnerships or associations.
In order to achieve this object, it can carry out all actions in the industrial, property, financial or commercial field which are associated with its object directly or indirectly, in whole or in part, or which would be of a nature to promote, develop or facilitate its operation or its trade or that of the companies, partnerships or associations in which it has a participation or an interest; it can in particular develop, transfer, acquire, rent, hire out and exploit all movable and immovable goods and all intellectual property.
Legal form: naamloze vernnootschap / société anonyme (limited company)
Company number: 405 666 668
Subscribed capital: EUR 74 160 640
Type and number of shares: at 31 December 2014 there was only one type of shares, namely ordinary shares (number: 29 664 256)
Portion of the subscribed capital still to be paid up: 0 shares/EUR 0.
Nature of the shares not fully paid up: none.
Percentage fully paid up: 100%. The shares are all fully paid up.
The accounts were prepared in accordance with requirements specified by the Royal Decree of 8 October 1976 on the annual accounts of trading companies, amended by the Royal Decree of 6 November 1987.
These annual accounts comprise the balance sheet, the income statement and the notes prescribed by law. They are presented hereafter in condensed form.
In accordance with Belgian law, the management report, the annual accounts of Recticel SA/NV and the report of the Statutory Auditor will be filed with the Belgian National Bank.
They are available on request from:
Recticel SA/NV Corporate Communications Avenue des Olympiades, 2 B-1140 Brussels (Evere)
Tel.: +32 (0)2 775 18 11 Fax: +32 (0)2 775 19 90 E-mail: [email protected]
The notes to the annual accounts are related to the financial situation of the company as shown in the balance sheet. The results are also commented on in the preceding annual report.
The Statutory Auditor has delivered an unqualified opinion with an emphasis of matter paragraph on the statutory annual accounts of Recticel SA/NV.
The statutory annual accounts of Recticel SA/NV, as well as the statutory report by the Board of Directors, is freely available on the company's web site http://www.recticel.com/index.php/investorrelations/annual-and-halfyear-reports.
| in thousand EUR | |||
|---|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 | |
| ASSETS | |||
| FIXED ASSETS | 657 002 | 654 713 | |
| I. | Formation expenses | 0 | 0 |
| II. | Intangible assets | 30 257 | 26 116 |
| III. | Tangible assets | 54 128 | 54 530 |
| IV. | Financial assets | 572 617 | 574 067 |
| CURRENT ASSETS | 100 478 | 100 700 | |
| V. | Amounts receivable after one year | 13 809 | 13 193 |
| VI. | Inventories and contracts in progress | 29 764 | 29 331 |
| VII. | Amounts receivable within one year | 53 837 | 54 373 |
| VIII. | Cash investments | 1 682 | 1 735 |
| IX. | Cash | 144 | 407 |
| X. | Deferred charges and accrued income | 1 242 | 1 662 |
| TOTAL ASSETS | 757 480 | 755 413 | |
| LIABILITIES | |||
| I. | Capital | 74 161 | 72 368 |
| II. | Share premium account | 108 568 | 107 041 |
| III. | Revaluation surplus | 2 551 | 2 551 |
| IV. | Reserves | 10 824 | 10 877 |
| V. | Profits (losses) brought forward | 46 688 | 62 164 |
| VI. | Investment grants | 41 | 62 |
| VII. | A. Provisions for liabilities and charges | 7 928 | 24 678 |
| B. Deferred taxes | 0 | 0 | |
| VIII. | Amounts payable after one year | 88 881 | 29 862 |
| IX. | Amounts payable within one year | 412 058 | 440 922 |
| X. | Accrued charges and deferred income | 5 780 | 4 888 |
| TOTAL LIABILITIES | 757 480 | 755 413 |
| in thousand EUR | ||||
|---|---|---|---|---|
| Group Recticel | 31 DEC 2014 355 051 (343 901) 11 150 3 654 (22 241) (7 436) 2 167 (4 179) (9 448) (94) (9 542) |
|||
| PROFIT AND LOSS ACCOUNT | ||||
| I. | Operating revenues | 359 347 | ||
| II. | Operating charges | (341 325) | ||
| III. | Operating profit (loss) | 18 022 | ||
| IV. | Financial income | 46 006 | ||
| V. | Financial charges | (21 239) | ||
| VI. | Current result before tax | 42 789 | ||
| VII. | Extraordinary income | 1 619 | ||
| VIII. | Extraordinary charges | (43 946) | ||
| IX. | Profit (loss) for the year before taxes | 462 | ||
| X. | Income taxes | 0 | ||
| XI. | Profit (loss) for the year after taxes | 462 | ||
| XII. | Transfer to untaxed reserves | 0 | 0 | |
| XIII. | Profit (loss) for the period available for appropriation | (9 542) | 462 |
The statutory annual accounts of Recticel SA/NV as well as the statutory report by the Board of Directors, is freely available on the company's web site www.recticel.com.
The Annual General Meeting decides on the appropriation of the amounts available for distribution on the basis of a proposal from the Board of Directors.
When drawing up its proposal, the Board of Directors takes into account the right balance between ensuring a stable dividend for shareholders and maintaining sufficient investment and selffinancing opportunities to secure the company's longer-term growth.
The Board of Directors decided to present the following appropriation of the results to the General Meeting:
| in EUR | ||
|---|---|---|
| Group Recticel | ||
| Profit/(Loss) for the financial year | (9 542 390.93) | |
| Profit/(Loss) brought forward from previous year | + | 62 163 537.64 |
| Profit/(Loss) to be added to legal reserves | - | 0.00 |
| Profit/(Loss) to be added to other reserves | - | 0.00 |
| Result to be appropriated | = | 52 621 146.71 |
| Gross dividend (1) | - | 5 932 851.20 |
| Profit to be carried forward | = | 46 688 295.51 |
(1) Gross dividend per share of EUR 0.20, resulting in a net dividend after tax of EUR 0.15 per ordinary share.
Mr Etienne Davignon (Chairman of the Board of Directors), Mr Olivier Chapelle (Chief Executive Officer) and Mr Jean-Pierre Mellen (Chief Financial Officer), declare that:
VI. Auditor's report on the consolidated financial statements for the year ending 31 December 2014
| in thousand EUR | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2012 | 31 DEC 2012 | 31 DEC 2011 | 31 DEC 2010 | 31 DEC 2009 | 31 DEC 2008 | 31 DEC 2007 | 31 DEC 2006 | 31 DEC 2005 | |
| Group Recticel | CONSOLIDATED CONSOLIDATED CONSOLIDATED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | ||
| ASSETS | |||||||||||
| Intangible assets | 12 384 | 11 954 | 11 148 | 13 031 | 12 580 | 13 307 | 14 301 | 20 104 | 19 779 | 18 838 | 21 039 |
| Goodwill | 24 949 | 24 610 | 25 113 | 35 003 | 34 688 | 34 365 | 33 311 | 39 164 | 37 555 | 43 616 | 43 626 |
| Property, plant & equipment | 202 733 | 204 614 | 219 180 | 270 904 | 255 347 | 270 979 | 286 789 | 336 560 | 349 381 | 342 262 | 381 136 |
| Investment property | 3 306 | 3 330 | 4 452 | 4 452 | 3 331 | 896 | 896 | 896 | 896 | 896 | 11 466 |
| Interest in associates | 73 644 | 72 507 | 69 123 | 13 784 | 12 957 | 15 451 | 15 697 | 13 626 | 11 078 | 9 175 | 6 749 |
| Other financial investments | 160 | 161 | 236 | 240 | 3 399 | 1 151 | 1 999 | 11 446 | 2 565 | 3 335 | 3 300 |
| Available for sale investments | 771 | 275 | 111 | 122 | 121 | 86 | 85 | 197 | 77 | 357 | 356 |
| Non-current receivables | 13 373 | 10 973 | 10 153 | 7 664 | 8 305 | 10 070 | 9 605 | 5 005 | 5 024 | 5 164 | 11 586 |
| Deferred tax | 46 834 | 48 929 | 49 530 | 45 520 | 50 290 | 55 739 | 43 365 | 52 020 | 56 367 | 67 158 | 64 714 |
| Non-current assets | 378 154 | 377 353 | 389 046 | 390 720 | 381 018 | 402 044 | 406 048 | 479 018 | 482 722 | 490 801 | 543 972 |
| Inventories and contracts in progress | 96 634 | 94 027 | 91 028 | 116 607 | 116 002 | 113 671 | 105 827 | 120 035 | 127 852 | 129 913 | 118 916 |
| Trade receivables | 78 109 | 64 516 | 78 359 | 114 540 | 132 910 | 141 783 | 142 104 | 170 117 | 175 496 | 183 963 | 179 282 |
| Other receivables | 49 597 | 46 358 | 56 528 | 48 123 | 39 567 | 62 285 | 58 016 | 60 095 | 61 825 | 88 333 | 77 558 |
| Income tax receivables | 504 | 3 851 | 3 736 | 4 345 | 3 847 | 3 552 | 4 367 | 1 130 | 1 315 | 1 032 | 661 |
| Available for sale investments | 75 | 60 | 45 | 45 | 205 | 181 | 156 | 293 | 411 | 531 | 483 |
| Cash and cash equivalents | 26 163 | 26 237 | 18 533 | 27 008 | 54 575 | 53 938 | 41 388 | 68 151 | 41 049 | 24 723 | 25 626 |
| Disposal held for sale | 8 569 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Current assets | 259 651 | 235 049 | 248 229 | 310 668 | 347 106 | 375 410 | 351 858 | 419 821 | 407 948 | 428 495 | 402 526 |
| Total assets | 637 805 | 612 402 | 637 275 | 701 388 | 728 124 | 777 454 | 757 906 | 898 839 | 890 670 | 919 296 | 946 498 |
| in thousand EUR | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Group Recticel | 31 DEC 2014 | 31 DEC 2013 | 31 DEC 2012 | 31 DEC 2012 | 31 DEC 2011 | 31 DEC 2010 | 31 DEC 2009 | 31 DEC 2008 | 31 DEC 2007 | 31 DEC 2006 | 31 DEC 2005 |
| CONSOLIDATED CONSOLIDATED CONSOLIDATED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | |||
| LIABILITIES | |||||||||||
| Capital | 74 161 | 72 368 | 72 329 | 72 329 | 72 329 | 72 329 | 72 329 | 72 329 | 72 329 | 71 572 | 70 833 |
| Share premium | 108 568 | 107 042 | 107 013 | 107 013 | 107 013 | 107 013 | 107 013 | 107 013 | 107 013 | 104 929 | 103 437 |
| Share capital | 182 729 | 179 410 | 179 342 | 179 342 | 179 342 | 179 342 | 179 342 | 179 342 | 179 342 | 176 501 | 174 270 |
| Treasury shares | (1 735) | (1 735) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Retained earnings | 1 768 | 27 364 | 75 565 | 95 010 | 85 191 | 75 179 | 67 582 | 51 222 | 47 453 | 25 492 | 47 429 |
| Hedging and translation reserves | (16 599) | (18 279) | (13 817) | (13 728) | (15 739) | (12 853) | (21 395) | (19 951) | (10 964) | (11 793) | (10 292) |
| Equity before non-controlling interests | 166 163 | 186 760 | 241 090 | 260 624 | 248 794 | 241 668 | 225 529 | 210 613 | 215 831 | 190 200 | 211 407 |
| Non-controlling interests | 0 | 0 | 0 | 0 | 0 | 0 | 429 | 23 090 | 32 491 | 38 203 | 39 828 |
| Total equity | 166 163 | 186 760 | 241 090 | 260 624 | 248 794 | 241 668 | 225 958 | 233 703 | 248 322 | 228 403 | 251 235 |
| Pensions and similar obligations | 54 548 | 44 557 | 44 548 | 28 048 | 35 289 | 34 988 | 37 209 | 40 155 | 45 235 | 48 365 | 45 218 |
| Provisions | 7 301 | 8 149 | 9 439 | 9 798 | 12 964 | 24 452 | 23 008 | 17 893 | 17 681 | 21 957 | 14 540 |
| Deferred tax | 8 907 | 8 203 | 7 257 | 8 554 | 9 134 | 8 800 | 8 187 | 9 429 | 9 549 | 7 408 | 6 792 |
| Subordinated loans | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 89 014 | 97 495 | 49 614 | 49 464 |
| Bonds and notes | 26 037 | 0 | 25 023 | 45 023 | 44 546 | 39 780 | 39 368 | 14 500 | 15 040 | 14 869 | 14 500 |
| Financial leases | 15 057 | 18 113 | 19 941 | 20 850 | 11 024 | 13 285 | 15 986 | 19 346 | 21 214 | 23 424 | 29 913 |
| Bank loans | 99 240 | 78 850 | 73 458 | 74 595 | 79 534 | 111 977 | 128 200 | 140 161 | 22 085 | 137 601 | 177 547 |
| Other loans | 1 801 | 1 871 | 2 038 | 2 039 | 2 111 | 2 082 | 2 201 | 5 123 | 5 794 | 2 214 | 2 302 |
| Interest-bearing borrowings | 142 135 | 98 834 | 120 460 | 142 507 | 137 215 | 167 124 | 185 755 | 268 144 | 161 628 | 227 722 | 273 726 |
| Other amounts payable | 6 810 | 444 | 704 | 501 | 353 | 510 | 359 | 1 782 | 462 | 3 938 | 1 159 |
| Non-current liabilities | 219 701 | 160 187 | 182 408 | 189 408 | 194 955 | 235 874 | 254 518 | 337 403 | 234 555 | 309 390 | 341 435 |
| Pensions and similar obligations | 2 205 | 1 809 | 1 404 | 1 529 | 3 126 | 3 846 | 3 893 | 4 674 | 4 083 | 4 529 | 4 073 |
| Provisions | 4 687 | 6 732 | 1 255 | 1 523 | 6 328 | 14 480 | 8 312 | 8 516 | 5 443 | 5 202 | 3 833 |
| Interest-bearing borrowings | 52 798 | 66 181 | 36 454 | 57 840 | 67 680 | 45 691 | 47 740 | 68 872 | 150 765 | 99 474 | 69 878 |
| Trade payables | 96 373 | 81 720 | 86 066 | 104 980 | 119 274 | 141 887 | 114 208 | 146 993 | 160 443 | 173 134 | 179 611 |
| Income tax payables | 414 | 3 086 | 2 071 | 2 281 | 3 974 | 7 542 | 4 712 | 3 389 | 9 659 | 5 212 | 1 063 |
| Other amounts payable | 95 464 | 105 927 | 86 527 | 83 203 | 83 993 | 86 466 | 98 565 | 95 289 | 77 400 | 93 952 | 95 370 |
| Current liabilities | 251 941 | 265 455 | 213 777 | 251 356 | 284 375 | 299 912 | 277 430 | 327 733 | 407 793 | 381 503 | 353 828 |
| Total liabilities | 637 805 | 612 402 | 637 275 | 701 388 | 728 124 | 777 454 | 757 906 | 898 839 | 890 670 | 919 296 | 946 498 |
| in thousand EUR | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2012 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | |
| Group Recticel | CONSOLIDATED CONSOLIDATED CONSOLIDATED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | COMBINED | ||
| INCOME STATEMENT | |||||||||||
| Sales | 983 367 | 976 763 | 1 035 050 | 1 319 488 | 1 378 122 | 1 348 430 | 1 276 662 | 1 555 450 | 1 611 788 | 1 474 422 | 1 391 558 |
| Distribution costs | (54 135) | (52 934) | (54 460) | (65 838) | (65 182) | (64 768) | (62 061) | (74 528) | (76 777) | (68 668) | (63 782) |
| Cost of sales | (757 025) | (756 916) | (809 871) | (1 042 700) | (1 101 628) | (1 066 780) | (982 511) | (1 260 090) | (1 279 997) | (1 170 165) | (1 140 184) |
| Gross profit | 172 207 | 166 913 | 170 719 | 210 950 | 211 312 | 216 882 | 232 090 | 220 832 | 255 014 | 235 589 | 187 592 |
| General and administrative expenses | (72 299) | (74 397) | (66 772) | (83 711) | (85 059) | (80 367) | (82 166) | (90 587) | (88 537) | (88 826) | (89 722) |
| Sales and marketing expenses | (73 257) | (64 532) | (65 796) | (74 792) | (73 836) | (74 331) | (81 040) | (88 077) | (89 454) | (87 070) | (75 845) |
| Research and development expenses | (13 277) | (14 177) | (12 940) | (14 899) | (14 820) | (15 794) | (13 941) | (17 006) | (17 936) | (18 224) | (16 362) |
| Impairments | (688) | (3 365) | (1 110) | (1 555) | (5 260) | (10 800) | (10 362) | (12 280) | (1 400) | (32 042) | (11 912) |
| Other operating revenues (expenses) | (12 869) | (31 766) | 2 867 | 3 033 | 8 363 | (10 075) | 31 | 26 367 | 5 561 | 5 537 | 15 893 |
| Income from associates | 8 964 | 439 | 6 008 | 711 | 1 741 | 935 | 1 608 | 1 899 | (24) | 1 013 | 1 538 |
| Income from investments | 2 | 0 | 0 | 0 | (406) | 1 164 | 7 | 265 | 2 013 | 312 | (2 291) |
| EBIT | 8 783 | (20 885) | 32 976 | 39 737 | 42 035 | 27 614 | 46 227 | 41 413 | 65 237 | 16 289 | 8 891 |
| Interest income and expenses | (10 031) | (9 405) | (9 320) | (11 889) | (13 270) | (11 770) | (16 919) | (24 414) | (25 181) | (25 441) | (25 199) |
| Other financial income and expenses | (2 799) | (1 940) | (2 271) | (2 450) | (3 414) | (5 325) | 3 125 | (2 022) | (3 566) | 479 | (2 735) |
| Financial result | (12 830) | (11 345) | (11 591) | (14 339) | (16 684) | (17 095) | (13 794) | (26 436) | (28 747) | (24 962) | (27 934) |
| Result of the period before taxes | (4 047) | (32 230) | 21 385 | 25 398 | 25 351 | 10 519 | 32 433 | 14 977 | 36 490 | (8 673) | (19 043) |
| Income taxes | (5 702) | (3 908) | (6 035) | (7 834) | (7 933) | 4 108 | (12 396) | (10 378) | (14 325) | (10 380) | (6 244) |
| Result of the period after taxes | (9 749) | (36 138) | 15 350 | 17 564 | 17 418 | 14 627 | 20 037 | 4 599 | 22 165 | (19 053) | (25 287) |
| Share of minority interests | 0 | 0 | 0 | 0 | 0 | (188) | 703 | 6 949 | (626) | (2 179) | (2 587) |
| Share of the Group | (9 749) | (36 138) | 15 350 | 17 564 | 17 418 | 14 439 | 20 740 | 11 548 | 21 539 | (21 232) | (27 874) |
The reader should carefully consider the risk factors set out below. All of these factors are contingencies which may or may not occur. The Company believes that the risks and uncertainties described below are all material risks and uncertainties relating to the Company. If additional risks and uncertainties not presently known to the Company or that are currently deemed to be immaterial occur, this may also have a material adverse effect on the Company's and / or the Group's business, prospects, operational results and financial condition.
The Group is exposed to the risks related to an economic recession. The (global) economy has recently been experiencing a period of significant turbulence and uncertainty and the outlook remains uncertain. Economic factors outside of the Group's control (including slowing economic growth, particularly in Europe where the Group realizes approximately 94% of its consolidated turnover, inflation or deflation or fluctuations in interest and foreign currency exchange rates) could affect the Group's financial results and prospects.
The Group's business and operating results have been affected by the global recession and other challenges that affected and continue to impact the global economy and the Group's customers. There can be no assurance that global economic conditions will improve and there is a risk that certain markets in which the Group is active will experience economic decline or a prolonged period of negligible growth in the future. The current uncertainty about economic recovery and the pace of growth may negatively affect the level of demand from existing and prospective customers. Additional factors which may influence customer demand include access to credit, budgetary constraints, unemployment rates and consumer confidence.
As a producer and converter of polyurethane foam and other products, the Group is sensitive to fluctuations in the prices of its chemical raw materials, in particular those chemical raw materials used for the production of polyurethane. The main chemical raw materials used by the Group are polyols (ester and ether polyols) and isocyanates (TDI and MDI). The markets for ether polyols and isocyanates are global markets with few strong global players having considerable production capacities in the EU, the Americas and Asia. The market for ester polyols is smaller with a few large players and a multitude of smaller, non-integrated players. Several of the key players on the market for both isocyanates and polyols are upward integrated in the precursor production or even the crude oil / gas market.
Chemical raw materials represent, on average, nearly 48% of the cost of sales of the Group's finished products. For certain flexible foam, seating and insulation applications, this share is considerably higher (up to 80 % of the cost price of products).
The Group's main chemical raw materials markets are driven by offer-demand balance and by the basic petrochemicals prices. However, the dynamics of the price evolution are different from one raw material to another. Even though, generally speaking, the prices tend to follow the general price evolution of the petrochemical prices, there are product specific evolutions that are not entirely correlated to the general market trend. Due to the limited number of players, a specific issue in one production unit can affect the supply side of the chain and have an impact on prices. This is difficult to predict long time in advance and cannot be overcome through diversification which in essence is limited due to the few numbers of players.
All these drivers lead to some price volatility. Contract prices are negotiated centrally by the Group's purchasing department with suppliers on a one on one basis. The centralized approach allows better negotiation power and continuous optimisation. The Group has a limited number of medium term supply agreements in place with terms ranging from 1 to 3 years. Other raw material supplies are negotiated centrally by the Group's purchasing department either monthly or quarterly with each market player, on the basis of estimated volume ranges, in order to obtain the best possible prices.
The impact of the raw material price fluctuations can affect differently each division as a function of its relative competitive positioning in the market or of its relative level of vertical integration (more important for instance between the flexible foam and the bedding division).
Although the Group monitors raw material price developments and tries to reflect price increases in its sales prices when appropriate, ultimately the extent to which such increased chemical raw material prices can be charged to customers depends on the commercial negotiations with customers and competition in the market. There may be periods of time in which the Group is not able to timely or fully recover increases in the cost of chemical raw materials due to weakness in demand for its products or the actions of its competitors. On the other hand, during periods in which market prices of Group's chemical raw materials fall, the Group may face demands from its customers to reduce its prices or experience falls in demand for its products while customers delay orders in anticipation of price reductions. In addition, higher energy costs can affect the prices of chemical raw materials, increasing the Group's production costs. Furthermore, failure in delivery of certain chemical raw materials through a disruption in the production process, may materially impact prices, as was the case for polyols in 2014. Two major production incidents occurred consecutively (although not connected to each other) within a few months, impacting the availability of propylene oxide (PO) which is an intermediate for polyol production, resulting in an adverse effect on the pricing thereof. All of these factors could have a material adverse impact on the Group's business, operations and financial results.
The Group has negotiated yearly or multi-year supply agreements with important suppliers to secure more than half of its yearly supplies of isocyanates. The supply of polyols is for a minority share secured under yearly supply agreements. The Group sources its remaining chemical raw materials essentially from suppliers with whom it has a long-term relationship, but with monthly or quarterly price and volume negotiations.
Notwithstanding the existence of long-term supply agreements for certain chemical raw materials, the risk of a delivery disruption of chemical raw materials cannot be excluded. Such delivery disruptions may result from, amongst others, a major accident or incident in a supplier's processing plant, transportation problems or any other fact or circumstance that can give rise to a force majeure situation. In such case, there can be no assurance that the Group can source alternative supplies of chemical raw materials on a timely basis and at acceptable conditions or at all, which could have a material adverse impact on the Group's business, operations and financial results. Neither can it be excluded that a decrease in volumes of raw material procurement (e.g. due to market trends) could have an impact on raw material prices or that it could incite suppliers to end their supplies to the Group, the latter scenario forcing the Group to search for other suppliers, which may not be available on a timely basis or at an acceptable conditions or at all. This could have a material adverse impact on the Group's business, operations and financial results.
The Group's operations depend on its ability to anticipate the needs for components, products and services and its suppliers' ability to deliver sufficient quantities of quality components, products and services at reasonable prices in time for the Group to meet its production schedules. Given the wide variety of products and systems that the Group offers, and the sometimes long lead times that are required to manufacture, assemble and deliver certain components and products, problems could arise in planning production and managing inventory levels that could materially harm the Group's operations, business and financial results. Other supplier problems that the Group could face include component shortages, shortage of supply, product discontinuations and risks related to terms of its contracts with suppliers.
The Group tries to diversify its sources of supply and to procure critical components, products and services from reliable suppliers. On the one hand, however, erroneous, late or no deliveries at all by the Group's suppliers may have as a result that deliveries in turn are delayed or faulty, which may lead to reduced sales and a negative impact on the Group's reputation, operations and financial results. On the other hand, some supply agreements entered into by the Group in respect of raw materials contain minimum purchase obligations, which may lead (if such minimum purchase obligations are not met) to sanctions being applicable to the respective Group Company or renegotations with the respective supplier.
Furthermore, the Group sources certain materials from single suppliers. The availability and sale of finished products would be harmed if any of these suppliers is not able to meet the Group's demand and production schedule and alternative suitable products are not available on time and on acceptable terms, if at all.
The Group mostly operates in highly competitive and mature industries and markets. If it is unable to compete effectively with its existing competitors or newcomers, its results will be impacted negatively
Most markets in which the Group operates are highly competitive and mature. The Group's annual sales and market share may therefore be impacted by either new entrants or existing competitors, in particular on markets where the Group enjoys a strong market position, e.g. the Belgian insulation market. Many of the Group's competitors are large, well-known companies with substantial financial, technical and human resources and, in particular for competitors of its Business Line Bedding, with strong brand names. Competitors, for example, may be able to respond more rapidly or more effectively than the Group can to new or emerging technologies, changes in customer requirements, supplier related developments, or a shift in the business landscape. They also may devote greater or more effective resources than the Group does to the development, promotion and sale support of its products and services.
Furthermore, in such highly competitive markets, the absence of long-term agreements in several of the Group's Business Lines could facilitate customer churn.
These factors could have a material adverse effect on the Group's operations, business and financial results.
Cyclicality of the Business Lines Insulation, Bedding, Flexible Foams and Automotive may adversely affect the results of operation, financial condition and cash flows of the Group and seasonality of the business may cause fluctuations in the Group's financial results and working capital needs
The Group's Business Lines Insulation, Bedding, Flexible Foams and Automotive all belong, directly or indirectly, to the consumer durables sector and are therefore cyclical, thus exposing the Group's business to economic cycles which could have a material adverse impact on the Group's operations, business and financial results. Depending on the individual market and to some extent the geographical region, the Group's Business Lines alternate between periods of market growth and periods of stagnation or market decline. The transition from market growth to market decline can be very swift. The cyclical nature of the Group's Business Lines may further result in overcapacity and consequently threaten the Group's pricing structure.
The Group's Business Lines are exposed to seasonality, such as the Business Line Insulation which is dependent on weather conditions influencing the construction market. This seasonality causes fluctuations in the Group's financial results and working capital needs. Furthermore, as a result, the Group's half-year operating results are not necessarily indicative of its full-year operating results or for future operating results.
If the Group fails to develop and introduce new products successfully it may lose key customers or product orders and its business could be harmed
The Group regularly introduces new products, such as Thermoflex® in its Business Line Flexible Foams, the ingredient GELTEX® inside brand in its Business Line Bedding, Lambda 21 Eurowall® in its Business Line Insulation and Colo-Sense Lite® in its Business Line Automotive.
The Group competes in industries that are changing and becoming more complex. The Group's ability to make a successful evolution of its existing products to new offerings and differentiation of its products requires that accurate predictions of the product development schedule as well as market demand are made. The process of developing new products is complex and often uncertain due to the frequent introduction of new products by competitors that offer improved performance and pricing. The Group may anticipate demand and market acceptance that differs from the product's realisable customer demand and revenue stream. Furthermore, in the face of intense industry competition, any unanticipated delay in implementing certain product strategies or in the development, production or marketing of a new product could adversely affect the Group's revenues.
The Group invests constantly in the development of new products. These investments are subject to a number of risks, including: difficulties and delays in the development, production, testing and marketing of products; customer acceptance of products; resources to be devoted to the development of new technology; and the ability to differentiate the Group's products and compete with other companies which are active in the same markets.
The Group's ability to generate future revenue and operating income depends upon, among other factors, its ability to timely develop products that are suitable for manufacturing in a cost effective manner and that meet defined product design, technical and performance specifications.
All of these factors could have a material adverse impact on the Group's business, operations and financial results.
A material part of the Group's turnover is generated through joint ventures, in particular:
• Orsafoam: a 33/67 joint venture with the Orsa Group, active in the production and conversion of flexible foam in Eastern Europe. Being a minority participation, this associated company is consolidated following the equity method. Its turnover is not reflected in the consolidated nor the combined figures. (total company turnover of € 69.3 million (at 100%) for the financial year 2014; The Group's total investment amounts to € 10.9 million in equity and to € 1.4 million in loans).
Recticel does not have exclusive control over these joint ventures. Under the joint venture agreements governing the relationship between joint venture partners or the applicable articles of association, the partners typically jointly control significant matters relating to the business of each joint venture and its subsidiaries (such as changes to the business plan, material transactions, disposals of assets, changes to the share capital, distributions, material borrowings and important investments) through the requirement of the approval by a qualified majority of the votes cast at the joint venture's shareholders' meeting (shareholder reserved matters) or board of directors (board reserved matters). As a result, the Group cannot decide on those significant matters without the consent of the joint venture partner.
Eurofoam and Proseat are joint ventures, with each shareholder having equal governance rights, and their functioning depends on such shareholders' continued solid relationship, failing which certain conflicts may arise in respect of dividend distribution, material transactions, etc. Failure to distribute dividends from these joint ventures or governance paralysis within these joint ventures could have a material adverse effect on the Group's operations, business and financial results. In certain cases, the failure to resolve conflicts may trigger buy/sell obligations to the highest bidder at moments in time or valuations that are inopportune for the Group. In Orsafoam the Group holds a 33% minority stake; hence it has no controlling power.
Furthermore, under certain joint venture agreements, the Group has taken up certain commitments to provide additional funding to the joint venture if and when required. Consequently, under certain joint venture agreements the Group may be required to provide additional equity, loans or guarantees and/or procure that bank guarantees are made available, if its joint venture partner reasonably determines that such further financial support is required or if the board of such joint venture entity (in which the Group as the case may be has a blocking right) so determines. If the Group fails to provide such funding it may be subject to penalties under the joint venture agreements. In addition, the joint venture agreements may provide for exclusive supply undertakings. Although the Group aims to identify and manage potential risks relating to the operations of its joint ventures in the same way as it does for the operations of its wholly owned subsidiaries, this often requires the agreement of the joint venture partner. As a result, the Group may not be successful in implementing procedures regarding the identification and management of potential risks in a way which is similar to the procedures adopted by the Group in respect of its wholly owned subsidiaries. The varying approaches towards these risks at the level of joint ventures may expose the joint ventures to risks that differ from those that the Group would have incurred or agreed to incur in respect of its wholly owned subsidiaries.
Making acquisitions and forming strategic alliances and/ or joint ventures are an integral part of the Group's growth strategy. There can be no assurance that any of these transactions will be realised or beneficial to the Group.
The Group may face difficulties integrating new businesses in different countries into its existing operations, as well as integrating employees whom the Group hires in different countries into its existing corporate culture. The integration of acquired businesses involves a number of risks, including:
If the Group does not effectively manage its international operations and the integration thereof, this may adversely affect its operations, business and financial results.
The Group's business is to a certain extent subject to concentration risk with respect to customers in certain markets. If top customers would decide to cease their relationship with the Group, its revenues may be impacted
A number of the Group's Business Lines are concentrated on certain customers in certain markets (the numbers below reflect the situation for the financial year ended on 31 December 2014):
An overly large concentration of activities on certain customers could have adverse consequences or conflict with the development of the Group's activities or the achievement of its strategic objectives.
The reduction, delay or cancellation of orders, or a delay in shipment of products to important customers, or the inability of the Group to develop additional customers, could and likely would have a material adverse effect on its operations, business and financial results. Moreover, should any of these customers decide to source its products from another supplier, this might have a material adverse effect on the Group's operations, business and financial results.
In many of the jurisdictions where the Group operates, it is required to have licenses, permits or titles covering several of its activities. Regulatory authorities may exercise considerable discretion in the timing of license issuances and renewal and the monitoring of licensees' compliance with license terms. Compliance with requirements imposed by these authorities, who require the Group, among other things, to comply with numerous industrial standards, maintain necessary equipment and quality control systems, monitor its operations, make appropriate filings and, upon request, submit appropriate information to licensing authorities, may be costly and timeconsuming and may result in delays in the commencement or continuation of production operations. In addition, the applicable requirements may be amended and new or more stringent requirements may be imposed, which may require the Group to modify its working practices and could restrict the Group's ability to conduct its business as it sees fit. Moreover, the Group's compliance with the terms of its licenses may be subject to challenge by regulatory authorities, competitors, or in some cases, members of the public. The Group's licenses may be invalidated, revoked or suspended, may not be issued or renewed, or if issued or renewed, may not be issued or renewed in a timely fashion or on conditions acceptable to the Group. In the recent past, the Group has not encountered any material issues in this regard. The occurrence of any of these events may require the Group to incur substantial costs or may restrict the Group's ability to conduct its operations or to do so profitably.
The Group relies on various intellectual property rights and commercialises its products under various trademarks, some of which are registered in several countries. Any misuse of its intellectual property rights in those countries may cause damage to its reputation and goodwill and may also result in loss of business
The Group owns patents and has a number of patent applications pending. The Group is also the holder of numerous trademarks in several countries. The Group mainly relies on a combination of patent rights and trademark rights, copyrights, rights in trade names and rights in know-how and trade secrets. Any misappropriation of or infringement upon any of these intellectual property rights may have a material adverse impact on the Group's operations, business and financial results.
The enforcement of patent rights and trademark rights, copyrights, rights in trade names and rights in know-how and trade secrets is costly, time consuming and highly uncertain. The Group cannot guarantee that it will be successful in preventing the misappropriation or infringement of its intellectual property rights.
Recticel cannot guarantee that the registration of the intellectual property rights applied for will be issued in the name of Recticel or any other member of the Group, and any failure to obtain such registrations could have a material adverse impact on the Group's operations, business and financial results.
The Group strives to respect the intellectual property rights of third parties. However, the Group cannot guarantee that any claims by a third party against a Group member for alleged misappropriation of or infringement upon any intellectual property rights of such third party would be unsuccessful. If any member of the Group would be liable for such misappropriation or infringement this could have a materially adverse impact on the Group's operations, business and financial results.
For certain intellectual property rights, the Group relies on licences from third parties. Some of those licence agreements contain restrictions that could limit the Group's ability to do business. Furthermore, while some of these licence agreements contain specific warranties and indemnification provisions protective to the Group, there is no assurance that the underlying intellectual property rights that are licensed to the Group do not infringe upon the intellectual property rights of third parties or that the licences will not be challenged by third parties. The reliance of the Group on third party licences or third party intellectual property rights cannot be guaranteed. If the Group cannot use such third party intellectual property rights or is not able to acquire or develop its own intellectual property, this could have a material adverse impact on the Group's operations, business and financial results.
Certain of the Group's intellectual property rights have been codeveloped together with third parties as part of a joint development agreement. The Group may be restricted to use such intellectual property rights on a stand-alone basis and may be obliged to make additional payments in order to obtain the other party's consent.
The Group's ability to maintain its competitive position and to implement its business strategy will largely depend on its ability to attract and retain skilled personnel and management. The loss or diminution in the services of skilled employees and management, or difficulties in recruiting or retaining them, could have a material adverse effect on the Group's operations, business and financial results. Competition for personnel with relevant expertise is intense due to the relatively small number of qualified individuals, and the Group may have difficulties in obtaining or enforcing non-compete obligations from its skilled personnel and management, all of which may seriously affect the Group's ability to retain existing skilled employees and management and attract additional qualified personnel. If the Group were to experience difficulties in recruiting or retaining qualified personnel, this could have a material adverse effect on the Group's operations, business and financial results.
The Group is subject to the risk of labour actions and employee claims that could negatively affect the Group's results of operations
A number of the Group's employees are unionized. Although the Group believes that it has good relations with its employees and unions, it cannot exclude that relations with its workforce will deteriorate, for instance as a result of restructurings, or that its workforce would initiate a strike, work stoppage or slowdown. In the event of such an action in the future, the Group's business, financial condition and results of operations could be negatively affected, and the Group cannot give assurances that it would be able to adequately meet the needs of its customers utilising its remaining workforce. In addition, similar actions by the Group's non-unionized workforce cannot be excluded.
Historically, the operations of certain sites have from time to time experienced work stoppages and other forms of industrial action. In addition, the Group has been subject to union demands for pay rises and increase benefits. Such actions and/or demands were limited and had no material impact on the financial result of the Group. Strike action at other industry participants' operations may encourage work stoppages in connection with any labour-related demands of employees or unions at the Group's operations. In the recent past, a part of the Group's strategy was focused on the restructuring and streamlining of its operations. The Group envisages to continue the implementation of its strategy of restructuring and streamlining its operations during 2015 and beyond, which could lead to work stoppages and other industrial action and have a material impact on the financial result of the Group. The Group could be adversely affected by labour disruptions involving third parties who provide the Group with goods or services at its operations. Strikes and other labour disruptions at any of the Group's operations, or lengthy work interruptions at its existing and future development projects, could material adversely affect the timing, completion and cost of any such project, as well as the Group's business, operational results or financial position.
The Group's collective agreements are negotiated with unions and other employee representative organisations from time to time. The collective agreements establish and set the terms and conditions of employment of the employees covered by the collective agreements. The Group's collective agreements have differing terms and expiry dates. Prior to the expiry of a collective agreement, negotiation of conditions for renewal occurs between the relevant employing entities within the Group and the relevant unions or other employee representative organisations. There can be no assurance that collective agreements will be renewed when due without work stoppages or other forms of industrial action, or without additional or unforeseen costs being incurred by the Group.
Although the Group seeks to comply with applicable labour laws, pension plans and collective agreements in all material respects, it cannot exclude that it applies these laws and agreements erroneously and may thus be subject to individual or collective claims or challenges by certain employees or unions. The outcome of, and the defence against, such claims, and any settlement thereof or alignment therewith, could have a material adverse impact on the Group's operations, business and financial results.
As at 31 December 2014, the Group's net combined debt amounted to € 194.5 million. Long-term interest-bearing borrowings amounted to € 174.5 million and short-term interestbearing borrowings amounted to € 63.3 million. Its long-term debt included an amount of € 99 million drawn under its 5 year € 175 million committed Syndicated Credit Facility dated 9 December 2011 and maturing in December 2016 (the Loan Facility). The Group's other long-term debts consist primarily of its senior unsecured convertible bonds due 23 July 2017, for an amount of € 26.0 million. As at 31 December 2012, 31 December 2013 and 31 December 2014, the Group's consolidated gearing ratio (net debt to total equity) was 57%, 74% and 101% respectively. As at 31 December 2012, 31 December 2013 and 31 December 2014, the Group's combined gearing ratio (net debt to total equity) was 72%, 88% and 117% respectively. The increase in the Group's combined gearing ratio is mainly due to the debt / equity impact of the fines paid by the Group in consequence of the settlement of both the EU and German investigations and the adaption of the Group's pensions provisions in accordance with IAS19.
Under the Loan Facility, the Group is subject to restrictive financial covenants. These covenants are linked to a leverage ratio, an interest cover ratio and a minimum total equity level and are measured at the end of each semester (based on June end and December end figures). The Group has so far been in compliance with its covenant obligations under the Loan Facility. A breach of covenant could materially adversely affect the Group's ability to finance its future operations or capital needs or to engage in other business activities that may be in its best interest. In addition, a breach of the terms of the Group's indebtedness could cause a default under the terms of other indebtedness, causing some or all of such indebtedness to become due and payable prior to its stated maturity. The Loan Facility also contains a change of control clause which is among others linked to the position of Compagnie du Bois Sauvage SA as largest shareholder of the Company. There can be no assurance that the Group would be able to generate the funds necessary to repay its indebtedness in the event of acceleration, and even if it does, such acceleration may materially adversely affect its business, results of operations and financial condition. Any such default could also result in the Group's creditors proceeding against inventories and receivables securing the Group's indebtedness. Any such action could have a material adverse impact on the Group's business, results of operations and financial condition.
The Group's debt level and contractual restrictions has important consequences, including, but not limited to:
limiting the Group's ability to pursue acquisition opportunities, mergers and joint ventures;
limiting the Group's flexibility in planning for, or reacting to, changes in technology, customer demand or other competitive pressures in the industries in which it operates;
The Group's compliance with its covenants depends on a number of factors, some of which are beyond its control. A prolonged economic contraction, and further deterioration in the industries in which it operates, may have a further material adverse effect on its earnings, which in turn could affect its ability to comply with these financial covenants. Even though the Group is of the opinion that this risk is carefully managed, there can be no assurance that the Group can continue to comply with its financial covenants, despite the intended capital increase (cfr press release dd 02 March 2015), in case of a prolonged economic contraction or further deterioration in the industries in which it operates.
The Loan Facility matures in December 2016 and the senior unsecured convertible bonds will fall due in July 2017. Furthermore, the maturities of the Group's non-recourse factoring and forfeiting programmes, under which € 62.7 million was outstanding as at 31 December 2014, which will fall due in September 2017. In the coming years the Group will thus have to refinance its existing financing sources.
There is no guarantee, however, that (re)financing, if needed, will be available at attractive conditions or at all. Furthermore, each debt financing, if available, may contain covenants limiting the Group's freedom to do business. If the Group is unable to obtain debt financing at favourable conditions when needed, the activities, revenues and financial condition of the Group may be materially adversely impacted.
The Group is subject to the risk that its counterparties will default to discharge an obligation, and more specifically that customers do not pay invoices when due, and cause the Group to incur a financial loss. If amounts that are due to the Group are not paid, this may impact both the Group's financial and commercial position. The Group's credit risk is primarily attributable to its trade receivables.
Although the Group (i) has developed internally a strict credit management policy to manage the terms and credits granted to each customer and (ii) has put in place various credit insurance and non-recourse factoring schemes to limit the impact of credit default that could arise on one or more of its customers, there is no assurance that these risks will not materialize, and if so, this might have a material adverse effect on the Group's operations, business and financial results.
Furthermore, the competitive environment in which the Group operates may require it to provide extended payment terms to customers in order to win or keep a contract. Customer payment terms may impact all or a portion of the margin obtained on the Group's products and services, and may also affect the Group's working capital needs. The Group may also provide financial guarantees to its customers. The Group's success may be dependent, in part, upon its ability to provide competitive customer payment terms relative to the customer's creditworthiness. If the Group is unable to provide competitive payment terms to its customers or if it extends credit to customers that are not creditworthy, this could adversely impact its revenues, profitability and financial position.
The Group will require a significant amount of cash to implement its strategy. If the Group is unable to generate this cash through its operations or through external sources, it may face liquidity pressure, be unable to fully fund its operations or undertake capital investments needed to achieve its business strategy
The Group continues to explore additional opportunities to implement its strategy which may require substantial investment and subsequent capital expenditures. To date, the Group has been able to fund its capital investment projects through cash generated from its internal operations and debt financing. If the Group's cash flows were reduced or if it were to make further acquisitions, the Group would need to seek to fund its cash requirements through additional debt and equity financing or through asset divestitures. The Group's ability to raise equity or debt or to divest assets and the terms upon which such transactions would be made are uncertain, and if additional debt is successfully incurred, it will increase the risks described above under "The Group's on-balance sheet debt has recently increased, making the Group subject to risks inherent in higher gearing". If the Group is not able to obtain alternative sources of external financing at an acceptable cost or in the amounts required, its planned capital investments may be substantially delayed or interrupted or it may not be able to fully implement its strategy, which could have a material adverse effect on the Group's business, operational results or financial position.
The Group has sought to address the deficit of its defined benefit pension schemes in the various jurisdictions where such plans were in place. Almost 99% of the Group's defined benefit obligations are concentrated in four countries: Belgium (40%), UK (38%), Germany (13%) and in France (8%). For these countries, all defined benefit pension schemes have been closed for new employees, i.e. in 2003 for Belgium, in 2009 for the United Kingdom, in 1998 for Germany and in 2005 for France. As at 31 December 2014, the Group's pension scheme deficit for funded and unfunded plans in accordance with IAS 19R stood at € 67,606,184 on a combined basis compared to € 54,097,556 on a combined basis as at 31 December 2013.
The funding coverage of the Group's defined benefit pension schemes might significantly deteriorate, in case global equity markets record a negative performance and/or interest rates would decrease substantially. In addition, changes in the mortality tables assuming employees would live longer, could significantly impact the Group's defined benefit obligations.
The expected cash outflows with regard to the Group's material post-employment pension and similar plans can vary over time. These cash outflows may decrease or increase due to changed parameters such as interest rates or mortality tables and/or due to changes in local statutory funding rules. However, the Group cannot guarantee it will be able to fund these plans at any moment in time. The Group's failure to fund the required cash contributions out of its normal operations would materially harm its business and financial positions.
The Group cannot guarantee it will be able to fund these pension schemes at any moment in time. The Group's failure to fund the required cash contributions out of its normal operations would materially harm its results, equity and cash situation.
Exposure to movements in interest rates may affect the Group's cash flows, earnings and equity. Besides certain fixed rate borrowings, the Group also concluded various other credit loans at floating interest rates. These floating rate borrowings primarily consist of the Loan Facility and various other short term credit lines. As at 31 December 2014, an amount of € 99 million was drawn under the Loan Facility and an amount of € 135 million was outstanding under the other floating rate short term lines or nonrecourse forfeiting and factoring programs.
In order to mitigate the impact of the interest rate fluctuations, the Group's finance committee reviews on a monthly basis the overall Group situation, including the proportion of the total debt that is concluded at fixed interest rates versus floating interest rates, and decides on the appropriate hedging arrangements. As at 31 December 2014, the Group had a portfolio of interest rate swaps for a total amount of € 87 million, maturing in February 2017, February 2018 and October 2019 and allowing the Group to convert a portion of its floating rate debt into fixed rate debt. There can however be no assurance that any interest rate hedging arrangements will be effective. For instance, if short term rates would not move up above the limits defined by each of the interest rate swap concluded, the swaps concluded would not be effective. Alternatively for the debt portion that as per decision of the finance committee is not hedged, an increase of the short term rates would have a PROFIT AND LOSS ACCOUNTS and cash impact for the Group. Movements (higher or lower than anticipated) in interest rates could therefore have an adverse effect on the effectiveness of the Group's interest rate management strategy and therefore on its cash flows and financial condition.
The Group has a presence and/or develops trading and/ or commercial activities in 27 countries, some of which are located outside of the Eurozone (Euro is the base reporting currency of the Group). The Group's earnings and cash flows may be influenced by foreign exchange rate fluctuations, when converted into the Group's functional currency (the Euro). This applies more specifically to fluctuations against the U.S. Dollar, the Czech Koruna, the Swedish Krona, the British Pound, the Swiss Franc, the Polish Zloty and the Chinese Renminbi. The impact can either be related to the so-called foreign currency translation risks and/or the foreign currency transaction/economic risks.
Foreign currency translation risk results from the conversion of the subsidiary's net equity and net results from its local currency to Euro (the base reporting currency of the Group) for consolidation and reporting purposes. Currency translation differences may impact the Group's group equity (negatively when the Euro appreciates against the foreign currency in which a foreign affiliate operates and positively when the Euro depreciates against the foreign currency in which a foreign affiliate operates). The foreign currency translation risk applies only to the Group's operations located outside of the Euro zone (which represented approximately 30% of the Group's consolidated turnover in the financial year 2014).
Foreign currency transaction risk results from transactions entered by one of Recticel's subsidiaries where the settlement currency differs from the functional currency of the subsidiary. This risk can apply to both operational and financial transactions. On the operational side, this risk mainly relates to the subsidiaries buying or selling in other currencies than their functional currency. For example, a UK (GBP based) subsidiary importing goods denominated in EUR has a GBP/Euro transaction foreign exchange risk.
On the financing side, this risk mainly relates to subsidiaries borrowing or lending in another currency than their own functional currency. For example, a Belgian (Euro based) entity lending in USD to a Chinese affiliate (RMB based) has a Euro/USD foreign exchange transaction risk while the Chinese entity has a RMB/USD foreign exchange transaction risk.
The Group has developed a hedging policy applicable to all its subsidiaries and joint ventures whereby all booked or committed transaction exposures are to be hedged as soon as identified and whereby all economic risks are to be hedged for at least 50% as soon as identified. Exposure identification is supported by a periodic reporting from all entities to the Group's treasury department in order to ensure a timely review of the exposures and appropriate hedging of identified risks with appropriate hedging instruments. Despite the hedging policy put in place by the Group, if not properly controlled, foreign currency fluctuations could have a material adverse impact on the Group's results and/ or equity.
The Group might fail to cover or foresee all potential risks for its factories and establishments in view of its depreciation risk analysis. Considering certain business decisions taken and the determination of expected future cash flows based on assumptions regarding the evolution of its market, its sales and costs components, the Group performs a periodical assessment of the value of its assets through the application of a fair value or value-in use model. There can be no assurance that a future reassessment of assumptions and/or market analysis induced by future developments in the economic environment will not lead to the recognition of additional impairments.
In accordance with IFRS, the Group tests on an annual basis the economic value of its goodwill and intangible assets and property, plant and equipment for impairment, in order to evaluate the need to adjust their carrying value. Both failure in the evaluation of depreciation risk and future potential impairment charges may materially adversely impact the Group's financial results and financial condition.
The Group is a global group that owns various subsidiaries and joint ventures in different parts of the world. As such it is depending on the results of operations generated by its subsidiaries and joint ventures.
To a large extent, the Group's operations are carried out through various subsidiaries and joint ventures active in a multitude of markets and different parts of the world.
As a result, Recticel derives its operating income and cash flows to a large extent from its subsidiaries and joint ventures. The Group's business, results of operations and financial condition are therefore dependent on the trading performance of members of the Group. Also, the Group's ability to pay dividends depends to a large extent on the level of distributions, if any, received from Recticel's subsidiaries and joint ventures, any amounts received on capital raisings and asset disposals and the level of cash balances. These subsidiaries and joint ventures are not required and may not be able to pay dividends to Recticel. Certain of Recticel's operating subsidiaries and joint ventures may, from time to time, be subject to restrictions on their ability to make distributions to Recticel, including as a result of, the lack of available cash flows, tax and company law constraints and other regulatory restrictions (such as foreign exchange limitations). With respect to its joint ventures, restrictions can also be included in the joint venture agreements entered into with the other joint venture partners or the applicable articles of association.
If in the future these restrictions are increased or if Recticel is otherwise unable to ensure the continued transfer of dividends and other income to it from its subsidiaries and joint ventures, its ability to pay dividends and/or make debt payments will be impaired. Any such restrictions may have a material adverse effect on Recticel's operations, business and financial results.
The Group's investment programs are subject to the risk of delays, cost overruns and other complications, and may not achieve the expected returns
The Group's businesses are, and will continue to be, capital-intensive. A number of its plants have operated for many years, and a large part of the Group's capital expenditures relate to the repair, maintenance and improvement of these existing facilities.
The Group's investments programs in the field of repair, maintenance and improvements of its existing equipment and facilities are subject to the risk of incorrect or inadequate evaluation. As a result, these investment programs may suffer from delays or other complications, and may not achieve the return projected at the beginning of such programs. Furthermore, the Group's actual expenditures may ultimately reveal to be higher than budgeted for various reasons beyond its control. Such cost increases may be material and may have a material adverse effect on its business, financial condition, operating results and cash flows.
The Group has to comply with stringent laws, regulations and standards in the most diverse areas of its business including company law, social security, taxation, labour law, consumer protection laws and environmental laws, which differ from one jurisdiction to another. Moreover, these laws, regulations and standards are often highly complex and are subject to changes in substance, implementation and interpretation. While it is the corporate policy of the Group to comply with all applicable laws, regulations and standards in each jurisdiction in which the Group operates, breaches of or deviations from such laws, regulations and standards may occur. In such a case, the Group could be subject to liability or payments towards third parties, employees or authorities, including by the imposition of fines or penalties, or could, in certain circumstances, be subject to orders of cessation or dissolution in respect of certain activities or businesses or entities, including the imposition of fines or penalties, which could have a material adverse effect on the Group's business, operational results or financial position.
Due to the nature of its activities, the Group is exposed to environmental risks (including of accidental pollution). The Group uses potentially hazardous substances (chemicals and the like) as part of its development activities and manufacturing processes. The handling of these same products constitutes a health risk for personnel, customers and other visitors, particularly in the event of failure to comply with the safety rules issued by the Group. Furthermore, certain of the Group's sites are categorized as Seveso plants under the Seveso II Directive (as amended by the Seveso III Directive), as (to be) implemented in each member state of the European Union. This presents the Group with onerous compliance obligations and costs, and implies inherently a higher risk of accidents. The Group's (current and past) operations may cause or have caused soil and/or groundwater pollution (and such past soil and groundwater pollution has been identified), as well as contamination with asbestos and asbestos-containing materials, which authorities may require to remediate or monitor. Instances of such pollution are being monitored in accordance with internal health and safety policies.
The Group's operations are subject to numerous health, safety and environmental laws, regulations and requirements in the various countries where it operates, which may govern, among other things, the discharge, emission, storage, handling and disposal of a variety of substances (which may be subject to change) that may be used in or result from its operations. Such laws, regulations and requirements in general have been increasing in stringency and it is possible that they will become significantly more stringent in the future.
Compliance with health, safety and environmental laws and regulations requires ongoing expenditure and considerable capital commitments. If any of the Group's plants or the operations of such plants are shut down, the Group may have to incur costs in performing soil and/or groundwater clean-up operations, upgrading its plants to comply with such regulations, or in appealing a decision of any relevant authority to close its facilities or take any other form of action. Further, even whilst any facility is closed, the relevant Group entity would potentially have to continue to make payments to its labour force and incur other operational costs.
While it is the corporate policy of the Group to comply with all applicable laws and regulations in each country where it operates, breaches of or deviations from such laws and regulations may occur. This may result in an increase in the Group's overall operating expenses which in turn would result in its profits decreasing.
The Group produces and sells both semi-finished and finished goods in the form of consumables (e.g. in its Business Line Bedding) and durables (e.g. in its Business Line Insulation), which must meet stringent industry, regulatory and customer requirements. In both cases, the Group is exposed to complaints and claims relating to product liability and warranty.
To mitigate product liability and warranty risks, the Group has implemented strict quality controls and has concluded a general liability insurance policy. Although the Group has never suffered significant losses with respect to product liability and warranty claims, there can be no assurance that this will not occur in the future nor is there any assurance that the Group's current liability insurance coverage is sufficient to meet potential product liability and warranty claims or that the Group will be able to obtain or maintain such insurance on acceptable terms or at appropriate levels in the future.
In case a product liability or warranty claim is made, the Group may incur expenses and losses in connection with, for example, product recalls, increased customer service and support, the payment of monetary damages to customers, lawsuits and the loss of customers. Also, the Group's reputation as a producer of high-quality products could suffer, which in turn could have a material adverse impact on its sales and financial situation.
The Group may be subject to misconduct by its employees and managers or third party contractors, such as theft, bribery, sabotage, violation of laws or other illegal actions and may be exposed to the risk of stoppages by third parties, such as transport companies. Any such misconduct may lead to fines or other penalties, slow-downs in production, increased costs, lost revenues, increased liabilities to third parties, impairment of assets or harmed reputation, any of which may have a material adverse effect on the Group's operations, business and financial results.
The Group has developed various internal initiatives to limit the risk of misconduct of its own employees and managers. These initiatives include the reinforcement of the internal audit function, the setting up of a Compliance Committee whose role is to investigate matters reported to it, as well as the organisation, on a regular basis, of various internal training sessions for employees aimed at increasing awareness on compliance. However, there can be no assurance that such initiatives will result in effectively preventing any misconduct by its employees and managers.
Furthermore, such initiatives are not aimed at third party contractors, as a result of which the Group relies on the third party contractors' capacity to prevent misconduct by their own employees and managers.
The Group is subject to litigation, other legal claims and proceedings, investigations and regulatory enforcement actions in the ordinary course of its business. The outcome of such proceedings, investigations and enforcement actions cannot be predicted with certainty and additional claims (including class actions claims) based on the same facts, may arise. There is no assurance that the results of current or future legal proceedings, investigations and enforcement actions will not materially harm the Group's business or reputation, nor can there be any assurance that it will not incur material losses in connection with current or future proceedings, investigations and enforcement actions which exceed (i) provisions taken with respect to such proceedings, investigations and actions or (ii) the limits of the Group's insurance coverage.
A claim has been issued by a group of customers in the United Kingdom, including Hilding Anders International AB, Euro Comfort Holding GmbH, GNG Group Yorkshire PLC, Airsprung Group PLC and Hypnos Limited, in which these entities allege harm with regard to damages allegedly suffered in consequence of purchases affected by the conduct covered by the European Commission's cartel decision. An informed judgment about the merits of this claim or the amount of potential loss for the Company, if any, cannot be made at this stage. Therefore, no provisions have been made in connection thereto. There is also a risk that the Company may become subject to additional legal proceedings and claims brought by other customers allegedly adversely affected by the conduct covered by the European Commission's cartel decision. However, the Company cannot predict to what extent such claims will be asserted, nor speculate on the merits of such potential claims nor on the amount of potential loss for the Company, if any, that might be incurred.
Moreover, the Company cannot predict whether the abovementioned parties or other third parties will succeed in asserting damages claims, or extracting settlements, in very significant amounts based on any of the investigations or any other alleged violations of numerous laws, including anti-trust laws, unrelated to any actual specific investigation or proceedings.
The outcome of current or future legal proceedings, investigations and actions in which the Group is or will be involved, is uncertain, and such outcome may have a material adverse impact on the Group's operations, business and financial results. In addition, the Company's defence against such claims, or the settlement thereof, may involve significant legal and other costs.
The Group entered into contracts subject to change of control clauses
In the past the Group entered into contracts that contain change of control clauses, including but without limitation: the Loan Facility (where the change of control clause is among others linked to the position of Compagnie du Bois Sauvage SA as largest shareholder of the Company), the senior unsecured convertible bonds and the factoring arrangements. The Group cannot assure that these change of control clauses will not be triggered. If the Group is unable to obtain a waiver from the contractual counterparties when a change of control event occurs, this may adversely affect the Group's business, results of operation or financial condition.
The Group maintains insurance policies in respect of major operational and industrial risks associated with its business. However, these insurance policies are subject to exclusions of liability and limitation of liability with respect to both the amount and the insured loss events. There exist liabilities, e.g. related to natural disasters, interruptions to power supplies or other hazards, for which the Group is not insured or cannot insure its operations. In addition, the Group may not succeed in passing on liabilities it is exposed to by its clients to it suppliers and hence be exposed to a gap between liabilities exposed to and liabilities covered. Furthermore, the Company cannot exclude that uninsured operational inefficiencies occur, adversely impacting the Group's business, operational results or financial position.
In the event that the Group suffers a major uninsured loss or a loss in excess of the amounts insured, such event could result in the loss of the capital invested by the Group in the affected asset as well as the loss of the anticipated future revenue from that asset (and future earnings in general). In addition, the Group could be held liable for the damages resulting from the uninsured risk and remain liable for any debt of other financial obligation, if any, relating to that asset.
A successful claim against the Group may have a material adverse effect on its revenues. Moreover, defending itself against such claims may cause a considerable strain on management resources, require it to incur significant legal fees and may adversely affect its reputation.
As a result, the Group's insurance coverage may not cover the full scope and extent of claims against it or losses that it incurs. The Group cannot guarantee that it is sufficiently and effectively insured against all possible contingencies. If the Group suffers an uninsured loss, this may have a material adverse effect on its business, operational results or financial position.
As an international group operating in 27 countries worldwide, the Group is subject to tax laws and regulations in many jurisdictions throughout the world. The Group structures and conducts its business globally in light of diverse regulatory requirements and the Group's commercial, financial and tax objectives. As a general rule, the Group seeks to structure its operations and arrangements in a tax efficient manner. Although it is anticipated that these are likely to achieve their desired effect, if any of them were successfully challenged by the relevant tax authorities, this could adversely affect the Group's effective tax rate, results of operations and financial condition.
Furthermore, given that tax laws and regulations in the various jurisdictions in which the Group operates do not necessarily provide clear-cut or definitive guidance, Recticel and its subsidiaries' structure, business conduct and tax regime is based on their interpretations of Belgian, Dutch, French, German and other local tax laws and regulations (e.g, in relation to transfer pricing, exit taxes, VAT, permanent establishment rules) in the jurisdictions in which Recticel and its subsidiaries operate. Although supported by local tax consultants and specialists, there is no assurance that such interpretations will not be questioned by the relevant tax authorities or that the relevant tax laws and regulations in some of these jurisdictions will not be subject to change, varying interpretations and inconsistent enforcement, or that the Company has erroneously applied tax laws and regulations or erroneously computed its tax liabilities, which could adversely affect the Group's effective tax rate, results of operations and financial condition.
Finally, changes in tax regulations may affect the use of deferred tax assets recognized by the Group – such as tax losses carried forward – which could adversely affect the Group's effective tax rate and financial condition.
The Group operates facilities in relation to which accidents may have serious consequences. The reputation of the Group and its capacity as a supplier of reliable and ethical products could be harmed as a result of events or accidents that are beyond its control or also as a result of its own acts. The occurrence of such events or accidents may have a material adverse effect on the Group's operations, business and financial results.
Furthermore, a wave of public mistrust of chemical products and their inherent danger could affect the chemical industry as a whole and the Group in particular, as well as in the case of poor or unfortunate communication.
Today, most of the Group's operations and methods are conducted and monitored by central information processing systems. Sections of the Group's IT infrastructure may experience interruptions, delays or cessations of service or product errors in connection with systems integration or migration work that takes place from time to time, including the installation of SAP modules in certain business divisions. The Group may not be successful in implementing new IT systems and transitioning data across systems, which could cause business disruptions and could reveal more expensive, time consuming, disruptive and resourceintensive than anticipated.
As with all large IT systems, the Group's IT systems may be vulnerable to a variety of other types of business interruptions, due to events beyond its control, such as computer viruses or other security breaches.
Such disruptions could adversely affect the Group's ability to fulfil orders and interrupt other processes. Delayed sales, higher costs or lost customers resulting from these disruptions could adversely affect the Group's operations, business and financial results.
As the Group operates in 27 countries worldwide, it is exposed to substantial and growing international sales activities. The Group's operations, business and financial results in a particular country could be affected by political or economic repercussions on a domestic, country specific or global level from acts of terrorism, civil disturbances and regional conflicts and the response to such acts. All of these factors could have a material adverse impact on the Group's business, operations and financial results.
Operational and industrial risks are usually covered by centrally managed insurance contracts. The conditions governing these contracts are reviewed on a regular basis. Recticel owns a reinsurance subsidiary, whose principal task consists of reinsuring the Group's own risk associated with the excesses that are payable by the Group under external insurance policies.
The risks and uncertainties for which provisions have been raised in accordance with IFRS rules are explained under the heading II.5.18. of the financial section of the annual report. More precisely, these are provisions for litigation, product guarantees, environmental risks and reorganisation charges.
Recticel's Internal Audit Department is involved in implementing control procedures in the broadest sense and ensures that they are complied with. It also plays a major role in the permanent monitoring of corporate risks and contributes to the basic considerations regarding these risks in the Group.
| in million EUR | |||||
|---|---|---|---|---|---|
| Group Recticel | 2010 | 2011 | 2012 | 2013 | 2014 |
| Combined income statement | |||||
| Sales | 1 348.4 | 1 378.1 | 1 319.5 | 1 258.6 | 1 280.1 |
| REBITDA | 104.0 | 88.6 | 87.7 | 72.8 | 65.9 |
| EBITDA | 83.5 | 88.8 | 78.2 | 27.7 | 49.3 |
| REBIT | 58.9 | 47.1 | 47.8 | 33.2 | 30.7 |
| EBIT | 27.6 | 42.0 | 36.8 | (15.4) | 13.4 |
| Result of the period after taxes | 14.6 | 17.4 | 15.4 | (36.1) | (9.7) |
| Combined profitability ratios | |||||
| REBITDA / Sales | 7.7% | 6.4% | 6.6% | 5.8% | 5.2% |
| EBITDA / Sales | 6.2% | 6.4% | 5.9% | 2.2% | 3.9% |
| REBIT / Sales | 4.4% | 3.4% | 3.6% | 2.6% | 2.4% |
| EBIT / Sales | 2.0% | 3.0% | 2.8% | -1.2% | 1.0% |
| Result of the period after taxes (share of the Group) / Sales | 1.1% | 1.3% | 1.2% | -2.9% | -0.8% |
| Annual growth rates (combined) | |||||
| Sales | 5.6% | 2.2% | -4.3% | -4.6% | 1.7% |
| REBITDA | -2.7% | -14.8% | -1.1% | -17.0% | -9.4% |
| EBITDA | -18.3% | 6.3% | -12.0% | -64.5% | 77.9% |
| REBIT | -3.7% | -20.0% | 1.5% | -30.6% | -7.6% |
| EBIT | -40.3% | 52.2% | -12.5% | -141.8% | nr |
| Result of the period after taxes (share of the Group) | -30.4% | 20.7% | -11.9% | nr | nr |
| in million EUR | |||||
| Consolidated balance sheet | |||||
| Non-current assets | 402.0 | 381.0 | 384.6 | 374.0 | 374.8 |
| Current assets | 375.4 | 347.1 | 248.2 | 235.0 | 251.1 |
| TOTAL ASSETS | 777.5 | 728.1 | 632.8 | 609.1 | 625.9 |
| Total Equity | 241.7 | 248.8 | 241.1 | 186.8 | 166.2 |
| Non-current liabilities | 235.9 | 195.0 | 182.4 | 160.2 | 219.7 |
| Current liabilities TOTAL LIABILITIES |
299.9 777.5 |
284.4 728.1 |
213.8 637.3 |
265.5 612.4 |
251.9 637.8 |
| Net working capital | 85.4 | 85.1 | 55.0 | 18.0 | 32.6 |
| Market capitalisation (December 31st) | 229.4 | 131.9 | 152.5 | 163.0 | 152.8 |
| Non-controlling interests | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Net financial debt | 157.6 | 149.6 | 137.7 | 138.2 | 168.3 |
| ENTERPRISE VALUE | 387.0 | 281.5 | 290.2 | 301.2 | 321.1 |
| in million EUR | |||||
| Combined Investments versus Depreciation | |||||
| Investments in intangible and tangible fixed assets | 35.2 | 33.4 | 52.3 | 30.5 | 35.8 |
| Depreciation (excluding amortisation on goodwill, including impairment) | 55.9 | 46.2 | 41.4 | 43.1 | 36.0 |
| Investments / Sales | 2.6% | 2.4% | 4.0% | 2.4% | 2.8% |
| Financial structure ratios | |||||
| Net financial debt / Total equity (including non-controlling interests) | 65% | 60% | 57% | 74% | 101% |
| Total equity (including non-controlling interests) / Total assets | 31% | 34% | 38% | 30% | 26% |
| Current ratio | 1.3 | 1.2 | 1.2 | 0.9 | 1.0 |
| Valuation ratios | |||||
| Price / Earnings (Market capitalisation (Dec 31st) / Result of the period | |||||
| (Group share)) | 15.9 | 7.6 | 9.9 | n.r. | n.r. |
| Enterprise value / EBITDA | 4.6 | 3.2 | 3.7 | 10.9 | 6.5 |
| Price / Book value (=Market capitalisation/Book value (share of the Group)) |
0.95 | 0.53 | 0.63 | 0.87 | 0.92 |
| in million EUR | |||||
|---|---|---|---|---|---|
| Group Recticel | 2010 | 2011 | 2012 | 2013 | 2014 |
| Combined sales per business line | |||||
| Flexible foams | 602.7 | 596.2 | 588.3 | 583.4 | 593.0 |
| growth rate | 5.6% | -1.1% | -1.3% | -0.8% | 1.6% |
| Bedding | 293.3 | 292.2 | 276.5 | 283.0 | 281.6 |
| growth rate | -6.2% | -0.4% | -5.3% | 2.3% | -0.5% |
| Insulation growth rate |
187.4 12.6% |
223.1 19.0% |
220.7 -1.1% |
220.0 -0.3% |
227.0 3.2% |
| Automotive | 324.9 | 324.8 | 289.7 | 258.4 | 264.0 |
| growth rate | 12.2% | 0.0% | -10.8% | -10.8% | 2.2% |
| Eliminations | (59.9) | (58.1) | (55.7) | (86.2) | (85.6) |
| Total sales | 1 348.4 | 1 378.1 | 1 319.5 | 1 258.6 | 1 280.1 |
| growth rate | 5.6% | 2.2% | -4.3% | -4.6% | 1.7% |
| in million EUR | |||||
| Combined EBIT per business line | |||||
| Flexible foams as % of sales |
22.2 3.7% |
22.6 3.8% |
24.3 4.1% |
(2.4) -0.4% |
25.1 4.2% |
| Bedding | 17.3 | 16.6 | 12.8 | 10.4 | 2.9 |
| as % of sales | 5.9% | 5.7% | 4.6% | 3.7% | 1.0% |
| Insulation | 35.5 | 39.5 | 36.1 | 27.6 | 27.1 |
| as % of sales | 18.9% | 17.7% | 16.4% | 12.5% | 11.9% |
| Automotive | 26.9 | 24.4 | 22.5 | 10.4 | 12.5 |
| as % of sales | 8.3% | 7.5% | 7.8% | 4.0% | 4.7% |
| Corporate | (18.3) | (14.3) | (14.5) | (18.3) | (18.2) |
| Total EBITDA | 83.5 | 88.8 | 81.1 | 27.7 | 49.3 |
| as % of sales | 6.2% | 6.4% | 6.1% | 2.2% | 3.9% |
| in million EUR | |||||
| Combined EBIT per business line | |||||
| Flexible foams | 1.2 | 7.5 | 9.8 | (16.4) | 13.2 |
| as % of sales Bedding |
0.2% 11.5 |
1.3% 10.9 |
1.7% 7.3 |
-2.8% 3.8 |
2.2% (3.5) |
| as % of sales | 3.9% | 3.7% | 2.6% | 1.4% | -1.2% |
| Insulation | 32.1 | 35.8 | 32.1 | 21.9 | 21.1 |
| as % of sales | 17.2% | 16.1% | 14.6% | 10.0% | 9.3% |
| Automotive | 1.6 | 2.8 | 5.9 | (5.3) | 1.8 |
| as % of sales | 0.5% | 0.8% | 2.0% | -2.1% | 0.7% |
| Corporate | (18.8) | (15.0) | (15.3) | (19.4) | (19.2) |
| Total EBIT | 27.6 | 42.0 | 39.7 | (15.4) | 13.4 |
| as % of sales | 2.0% | 3.0% | 3.0% | -1.2% | 1.0% |
| in units | |||||
| Key figures per share Number of shares (31 December) |
28 931 456 | 28 931 456 | 28 931 456 | 28 947 356 | 29 664 256 |
| Weighted average number of shares outstanding (before dilution) | 28 931 456 | 28 931 456 | 28 931 456 | 28 498 521 | 28 953 478 |
| Weighted average number of shares outstanding (after dilution) | 29 329 026 | 33 769 050 | 33 990 837 | 28 498 521 | 28 953 478 |
| in EUR | |||||
| REBITDA | 3.60 | 3.06 | 3.03 | 2.55 | 2.28 |
| EBITDA | 2.89 | 3.07 | 2.70 | 0.97 | 1.70 |
| REBIT | 2.04 | 1.63 | 1.65 | 1.16 | 1.06 |
| EBIT | 0.95 | 1.45 | 1.27 | (0.54) | 0.46 |
| Result of the period (share of the Group) - Basic (1) | 0.50 | 0.60 | 0.53 | (1.27) | (0.34) |
| Result of the period (share of the Group) - Diluted | 0.49 | 0.55 | 0.49 | (1.27) | (0.34) |
| Gross dividend | 0.27 | 0.28 | 0.29 | 0.20 | 0.20 |
| Pay-out ratio | 54% | 46% | 55% | n.r. | n.r. |
| Net book value (Group share) | 8.35 | 8.60 | 8.33 | 6.45 | 5.60 |
| Price / Earnings ratio (2) | 15.9 | 7.6 | 9.9 | n.r. | n.r. |
| (1) calculated on the basis of the weigthed average number of shares outstanding (before dilution effect) |
per share | (2) based on the share price of 31 December. Earnings = Result of the period (share of the Group) | |||
| in EUR | |||||
| Ordinary share | |||||
|---|---|---|---|---|---|
| on 31 December | 7.93 | 4.56 | 5.27 | 5.63 | 5.15 |
| lowest of the year | 5.04 | 3.78 | 4.26 | 4.63 | 4.90 |
| highest of the year | 8.64 | 8.20 | 6.25 | 6.82 | 7.98 |
| average daily volume traded (units) | 68 246 | 36 840 | 19 748 | 36 049 | 43 974 |
Olympiadenlaan 2 B - 1140 Brussels T. +32 (0)2 775 18 11 F. +32 (0)2 775 19 90
Michel De Smedt T. + 32 (0)2 775 18 09 F. + 32 (0)2 775 19 91 [email protected]
Dit verslag is beschikbaar in het Nederlands en het Engels. Ce rapport est disponible en néerlandais et anglais. This report is available in English and Dutch.
You can also download this Annual Report on www.recticel.com
Concept & Prepress: Lemon - Carlos Pavez General Coordination: Michel De Smedt
Thanks to all colleagues who contributed to the realisation of this Annual Report.
www.recticel.com
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