company report 2007 - tarkett...and chemicals consumption by 50% recyclable content of 5% to 7%...
TRANSCRIPT
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Company repor t 2007
S TA N D O N E XC E L L E N C E
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CEO’s introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Tarkett at a glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
What we do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Western Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Eastern Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
FieldTurf Tarkett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Worldwide presence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Tarkett financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Tarkett management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Content
2007 company repor t 3
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2007 was a year of continued profitable growth for the Tarkett Group . Our net sales worldwide have grown to 2 .087 billion e – a 9 .6% increase on 2006 . We achieved an EBIT figure of 136 .6 million e – compared to 112 .7 million in 2006 and delivered to our shareholders an overall profit of 72 .8 million e (versus 67 .6 million e in 2006) . Significant contributions came from Tarkett’s Eastern European Division as well as our expanding sports surface business FieldTurf Tarkett . In our market, demand continues to grow for innovative and high quality flooring, though the effects of global economic conditions resulted in a slowdown in some areas of activity, for example in residential demand in North America .
I joined the Group in September of 2007 to drive forward the company’s profitable growth . With its history, reputation and 9000 people worldwide supporting customers in their choice of innovative flooring solutions, Tarkett is in a leading position to expand its sphere of activities . Together with a new executive management team, we have adopted a new vision and strategy for Tarkett . The business has been reorganized into four Divisions to improve our customer focus . This decentralized organization will help the efficiency of our operations and encourage the entrepreneurial spirit needed to listen and develop solutions for local needs . Behind all of this we will continue to develop our values around integrity and sustainable approach to business that have earned Tarkett its worldwide reputation
Towards 2010, we’re focusing on profitable organic growth with a continued strong financial performance . And we’ll look to invest further in areas which will contribute to strengthening our geographic footprint and solutions .
We are proud to support the National Olympic Committee in France (CNOSF) as a corporate partner of the French Olympic team . Through Tarkett’s long involvement in the passion and practice of sport, we share the Olympic values of team spirit, respect for others and the quest for excellence .
I would like to thank our customers and all Tarkett employees worldwide for their continued commitment during 2007 and beyond .
Michel Giannuzzi
A five-year partnership supporting the French team
at the Olympic Games in Beijing (2008), Vancouver
(2010) and London (2012). Tarkett is working
alongside the CNOSF to develop the best technical
solutions for improved performance and safety for
sportsmen and women.
CEO’s introduction
e137million EBIT
e2,1 billion
+9.6% vs 2006
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SALES BY PRODUCT T YPE SALES BY ORGANIZATION
Tarkett at a glance f ive year summary
Vinyl / Linoleum Wood LaminateSports (artificial turf andother surfaces)
RubberVarious (accessories, textile and special automotive interiors)
Western Europe & Far East
Eastern Europe
North America
FieldTurf Tarkett(sports worldwide)
7%6%11%
11% 21%
9%
11% 28%
56% 40%
in millions of € 2007 2006 2005 2004 2003 NET SALES 2,087.2 1,903 .1 1,559 .0 1,384 .8 1,349 .2
PROFITEBIT 136.6 112 .7 95 .1 92 .4 96 .5(a)
Profit margin (b) 6.5% 5 .9% 6 .1% 6 .7% 7 .1%
Net profit incl . minority interests 72.8 67 .6 64 .7 55 .7 58 .6EBIT before unusual items 149.5 130 .2Profit margin (b) 7.2% 6 .8%
EBITDA before unusual items 226.9 205 .4 Profit margin (c) 10.9% 10 .8%
ASSETSNon current assets 862.9 957 .6 801 .6 536 .2 514 .6Current assets 817.5 795 .3 702 .0 598 .2 563 .9(of which cash) (106.9) (92 .6) (75 .4) (87 .9) (118 .1)Total assets 1680.4 1,752 .9 1,503 .6 1,134 .4 1078 .5
EQUITY AND LIABILITIESEquity incl minority interests 610.9 619 .5 585 .5 524 .0 493 .2Liabilities 1,069.5 1,133 .4 918 .1 610 .4 585 .3
KEY FIGURESNet debt 350.1 381 .9 260 .1 83 .2 71 .7Net debt/equity 57.3% 61 .6% 44 .4% 15 .9% 14 .5%
Return on capital employed (d) 11.1% 9 .8% 10 .7% 12 .3% 13 .2%
Number of employees (annual average) 8,882 7,281 6,961 6,896 6,993
OPERATING INVESTMENTS 122.0 91 .5 51 .2 53 .7 47 .5
(a) Earnings before goodwill amortization, financed items and taxes(b) EBIT in percent of net sales(c) EBITDA in percent of net sales(d) EBIT divided by the average balance sheet total after deducting short-term non-interest bearing liabilities and interest bearing assetsSintelon at 100% since 2006
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e2,1 billion sales 2007
9000 employees
28 production sites
50 sales and marketing offices companies
336 million m2 floor surfaces sold in 2007
sales in over 100 countries
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Tarkett is a worldwide leader in flooring and sports surfaces serving architects, contractors, facility professionals, distributors, retailers to meet individual tastes and functional needs . Everyday people all over the world experience our floors in different environments across:
What we do
Housing
Education
Sport
Health
Retail/Hospitality
Office
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Continuous R&D and technology innovation help us to deliver solutions to meet the everyday requirements of durability, design and sustainability over the life-cycle of all our products. The people in our R&D centres work to improve resistance, acoustics, surface treatments, simplicity of installation, design and impact on the environment.
Retail/Hospitality
We produce a wide range of sustainable floors in different materials :
Vinyl Linoleum Rubber Laminate Wood Artificial turf & other sports surfaces
Wood Protection layer
Layer of genuine wood
Ribb – supporting layer
Veneer – stabilizing layer
Artificial turfFibre
Infill of sand and rubber particles
Wide gauge tufting
Drainage system
VinylNon marking treatment
Protective layer
Decor
Stabilizing film – maintain tension
Sub-layer – sound insulation
LaminateOverlay
Decor layer
Core board
Balancing layer
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We began recycling raw materials some 50 years ago . A sustainable approach is a natural way for us to do business – one we call balanced choice . It’s a constant process of balancing the needs of business, people and the environment to continually improve the way we produce our floors .
OUR BAL ANCED CHOICE APPROACH FOCUSES ON FOUR AREAS:
•Materials:usingrenewableresourceswherepossibleandasmuchrecycledcontentaspossible
•Resources:reducingouremissionsandconsumptionofwater,electricityandchemicalsinproduction
•People-focused:floorsthatarequiet,requirefewer/nochemicalstomaintain,canbemovedorre-usedeasily, that add to the physical comfort of people .
•Recycling:usingmorerecycledcontentatthestartandrecyclingmoreproductattheend.
Sustainable means living in balance
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High share of recycled materials in our products, 20% to 30%, which in turn are 100% recyclable
Long lifetime and low maintenance
requirements result in a very
favorable resource consumption profile
57% of the raw materials used are derived from salt, a widely available
and easily renewable resource
Vinyl
Linoleum
Rubber
Laminate
Wood
Artificial turf
Consists of rapidly renewable raw
materials such as linseed oil, saw
dust, wood, jute and pigments
Proprietary xf™ surface treatment
reduces water, detergent
and chemicals consumption by 50%
Recyclable content of 5% to 7%
Functional life of up to 30 years and low maintenance
requirements minimizes the
consumption of resources
Manufactured from recycled materials, postconsumer truck
tires and post-industrial chips
No consumption of phosphates and
solvents required for cleaning
Manufactured from entirely renewable
raw materials
100% recyclable
Environmentally sensitive and sustainable
100% recyclable
Forests generate O2 and destroy CO2
Help recycling 300,000 tons or 50 million tires from
landfills each year in North America
Today’s products can be 95% recyclable
Can save up to 6,000 million liters of water compared to a natural grass
football field while eliminating
pesticides and 1,5 tons of fertilizers
every year
Carbon neutralAs part of a commitment to reduce impact on the environment, during 2007 Tarkett has engaged in a carbon neutral programme . 3,703 tonnes of C02 represents emissions made through production, commercial activities, transport, installation and recycling by Tarkett and its customers in France as measured under the French environmental declaration programme . To offset this Tarkett has invested in a reforestation project in Colombia, in partnership with Good Planet, the non-prof it organization promoting sustainable development founded by Yann Arthus-Bertrand .
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Western Europe
Tarkett Western Europe recorded sales of e837 .0 million representing 40% of Group sales – a stable result versus 2006 at comparable structure . Overall the flooring market in the region has continued versus benefit from a still buoyant construction activity for commercial, although residential sales have shown a decline mainly due to knock-on effects of the US housing market crisis . Tarkett continues to be very active in healthcare, education and housing sectors, supporting architects, project managers and public authorities in their choice of flooring solutions based on design, functional and cost requirements .
In its main markets, Tarkett experienced a good sales increase in France, a smaller increase in Germany and a flat performance in UK/Ireland . Nordic countries recorded strong growth with a continued demand for wood products, but also an increase in sales for vinyl and linoleum flooring – both driven by large-scale housing programmes .
Tarkett Western Europe also covers the fast developing new eastern EU member states and large export markets in Turkey, South America, and Asia – notably India and China . Far East sales increased around 15% - with significant growth coming from China in the healthcare sector and overall demand for resilient flooring from commercial customers . Central eastern markets (Poland, Romania, Hungary, Czech Republic) have seen double digit growth in 2007 thanks to strong construction activity . As vinyl flooring is still a recently introduced product for central eastern countries and the Far East, Tarkett is building up market acceptance fast .
e837 million sales
40%Group sales
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Commercial
Tarkett has continued its leading position in the region with the fullest range of resilient flooring solutions . Long standing experience in healthcare, education, housing and offices has helped the Division further refine the product fit with evolving customer requirements . Product launches at Domotex, the 2007 global flooring industry tradeshow, focused on simplified maintenance and surface treatments of products to respond to the increasing sensibility of customers for sustainable choice in flooring to reduce use of energy, detergents and water over the life cycle cost of even heavy traffic floors . The new iQ Gemstone displays an industry unique surface restoration system with sophisticated design . Tarkett also introduced a new line of high end homogeneous vinyl (Primo and Micra Premium) as well as a renewed Acczent and Optic heterogenous range .
Consolidation of Tarkett’s high end luxury vinyl tiles from the Marley and Tarkett collections into one ID Premier range now offers customers more flexibility across design, floor performance and budget . This will enable Tarkett to address the retail market more comprehensively in Europe in 2008 . Tarkett has also been diversifying the use of its resilient flooring solutions to create niche demand . For example, we have successfully built up a business case in southern Europe and Benelux countries for vinyl tiles as an alternative to carpet for offices where customers are looking for clean, less dusty working environment .
Linoleum sales across the region increased parti- cularly in Norway, UK and France . Tarkett gained market share from competition thanks to an improved product offer and breakthrough innovation in surface treatment which also helped increase average sales price .
Sustainable choice in flooring through innovation
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Beyond commercial healthcare activities, Tarkett is developing direct community support . Tarkett in France
is a sponsor for Fondation Claude Pompidou – in its work supporting elderly people affected by Alzheimer’s
disease . In addition to f inancial support, Tarkett encourages employees to get involved in volunteering .
assisting elderly people and their carers on visits .
Residential
For the Resilient Residential business, Tarkett continued to focus on margins through repositioning its medium to high end range . 30 new designs were launched during 2007 alone . This has helped improve customer focus, profitability and distribution delivering a significant sales uplift in key accounts in France and price improvements in the UK .
The wood business has seen continual growing demand in Scandinavia and Southern Europe . The market has been slower in the major markets of France, Germany and UK, with a noted return to oak . Anticipating customer preferences Tarkett had already begun in 2007 to reduce production of exotic woods at its facilities in Sweden and Poland . In addition to renewable raw materials, Tarkett has continued its sustainable approach in the wood business through innovations such as glueless installation and heat treatments to reduce use of exotic dark woods .
In 2007 Tarkett continued to build up its laminate business with further enhancement of the new facility at Eiweiler, Germany, to produce laminate
flooring on a fully integrated site . Progress has been made in 2007 in developing a stronger product differentiation on technical features and design . This is expected to continue in 2009 .
Developing expertise
To serve a growing UK demand for safety products, Tarkett restructured operations at its facility in Lenham, UK to focus on production of safety flooring . This is consistent with the Group strategy to strengthen local production and proximity for better service and availability for major customers . Vinyl production was transferred to Ronneby, Sweden and Sedan, France to improve efficiency, manufacturing costs and to site production closer to logistics and distribution networks . Investment was also made in the production facility at Clervaux, Luxembourg to automate movement of cyclinders used during the printing step of vinyl production which is already delivering significant time and labour savings .
Tarkett expanded its training activities to open a second training centre in Bezons, France to developprofessional expertise in flooring installation .During 2007 people from 90 customers from acrossWestern Europe received technical training and afurther 32 people successfully completed an industryrecognized qualification .
Western Europe
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Eastern Europe
Tarkett Eastern Europe recorded net sales of e576 .7 million – 23% above 2006 at comparable structure - contributing 28% of Group revenues . It represents the fastest growing geographic region for the Group where the overall flooring market has benefited from new construction and increased renovation in residential and commercial properties . Economic growth has driven up real income and individual prosperity, in turn bringing higher aspirations towards mid and high range products in residential flooring .
Russia represents close to 70% of total turnover in Eastern Europe . Increased disposable income has boosted residential and commercial construction and redevelopment . Social and economic conditions should enable further residential growth . Tarkett has a strong presence in Russia, with flooring solutions installed for commercial customers including Sberbank, Russia’s leading bank, large retailers like IKEA as well as in education and healthcare .
Other countries experiencing economic growth such as Ukraine and Moldova also contributed strong sales results with added value products . High levels of construction in Kazakhstan and Belarus have consistently increased flooring demand, though the financial situation towards the end of 2007 in Kazakhstan caused a temporary slowdown . Sales in Serbia and the Balkan countries were also significantly above 2006 .
Good product growth potential
In residential, the market for vinyl floors has enjoyed robust growth . Perceived as an inexpensive upgrade to traditional flooring and as average income of broader population rises, vinyl volumes are expected to grow . Tarkett Eastern Europe is well placed to benefit from this trend - being the largest manufacturer in the region . Sales in Eastern Europe showed constant increase in resilient flooring – primarily vinyl in Russia, Ukraine, Moldova, Kazakhstan, Belorussia .
e576.7 million sales
23% annual sales increase
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Sales of wood multilayer products from Tarkett’s production site in Serbia were more than 50% above 2006 in all regions – with strong demand in the Balkans and Ukraine . Tarkett is one of the leading wood flooring producers in the region . The market for laminate flooring is still developing in Eastern Europe . Seen as an alternative to wood floors, it is well suited to local purchasing power and is likely to grow at double digit rates over the coming years . Tarkett Eastern Europe recorded a small increase on laminate sales compared to 2006 . However investments and changes in logistics and local production are likely to support further growth in this market in future years .
For commercial activity there is good growth potential in Eastern Europe as governments increase public spending for education and healthcare infrastructures and upgrade from traditional ceramics to vinyl for its resistance and hygienic properties . The commercial market in Eastern Europe has grown shortly with a 30% increase in sales in 2007 . Most significant sales increase was in heterogeneous products through local production and also in homogeneous following the start of the new production line in Otradnyi, Russia .
Investment for regional development
The location of factories and logistics centres is important for supporting distribution networks, improving availability of products and ensuring quality service to customers . The significant sales increase in Tarkett Eastern Europe has been supported by continued investments in production facilities . At the Otradnyi site in Russia, already the largest producer worldwide of resilient floorings,
50% uplift in wood
production
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Eastern Europe
Tarkett has introduced an additional homogeneous production line . This production facility is closely linked to the logistics service centre in Russia and the new product and design development across all product lines carried out in the facility . In Kalush, Ukraine, Tarkett has significantly upgraded the production line for heterogeneous products . In Backa Palancka, Serbia, a site producing both resilient residential flooring and wood products, Tarkett has increased wood production capacity by 50% . A wood supply centre in Ukraine has been developed to help meet increasing demand in the region . At the end of the year Tarkett signed an agreement to invest in a factory in Mytischi near Moscow, Russia to increase its laminate flooring production and logistics . This investment is in line with Tarkett’s strategy for development in the region to extend local production facilities for core businesses .
Supporting professionalism in the flooring industry, Tarkett has held 24 sessions in the Tarkett Academy in Golitsyno, on the outskirts of Moscow, to train sales managers of key distributors and launched a country-wide competition to find the 12 best installation contractors . To help develop professionalism in the industry, Tarkett has begun a partnership with a construction university in Siberia to train students on flooring produts and application techniques .
Continued investments in production facilities
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Industry recognition
4 Adex Awards
& Contemporary Design Excellence
Award
North America
Tarkett North America achieved net sales of e450 .8 million, a decrease of 2 .9% versus 2006 at comparable structure, and exange rates, and contributing 21% of Group revenue . 2007 has been a challenging economic environment in North America, not least due to major movement in the dollar to e exchange rate . Additionally, new construction and home improvement expenditures have been significantly impacted by the sub prime mortgage and real estate crisis, along with cyclical declines in residential building . Even with commercial starts at their peak in 2007 with cyclical gains in the smaller hospitality and office segment and steady growth in the larger education and healthcare segments, rising raw material pricing continued to affect margins and profitability .
Economic challenges often become the catalyst for change and greater market differentiation . Such efforts already started in 2007, as part of the Group’s reorganization of its North American businesses into a single Division in order to become more market-focused and responsive . This new organization allows for a more in-depth understanding of the North American market and greater coordination between all operating units, leading to a cohesive approach to branding, distribution, logistics and responsiveness to customer need in both the commercial and residential segments .
Strengthening brand and customer experience in Commercial
Since Johnsonite was acquired in December, 2005, teams in the region have worked extensively to integrate the commercial product portfolios of Johnsonite and Tarkett, streamlining distribution and enhancing customer service . The key objective has been to position the Group as the commercial industry leader providing customers with a broad portfolio of solutions for almost every hard surface application, from vinyl to rubber and linoleum .
e450 million sales
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Johnsonite continued its sales and profit growth in 2007 . Johnsonite’s brand position and portfolio was strengthened with the introduction of the Tarkett Collection - commercial vinyl and linoleum products manufactured in Europe and marketed under the Johnsonite brand . The program was boosted further by a guarantee to customers of availability of key color palettes across all product categories . The market recognized Johnsonite’s achievement, rewarding Circulinity Modular Rubber Tile with a Platinum Adex Award and a Contemporary Design Excellence Award, rewarding Melodia Homogeneous Vinyl with a Platinum Adex Award, and naming Johnsonite the overall leader of excellence in resilient flooring .
Azrock sales were slightly below 2006 due to competitive pressures on the lower end of the business . It worked on improving operating efficiencies and establishing itself as a provider of premium tile solutions within the commercial segment, introducing an innovative adhesive and tile system to save on installation and maintenance
costs . Azrock further invigorated Achieve, its solid vinyl tile category with the introduction of Karim Kolors, a line of tiles with striking visuals by famed designer Karim Rashid . Again, the market recognized Azrock for these innovative introductions with a Gold Adex Award for Karim Kolors and Platinum Adex Award for Added Dimensions .
Brand clarity and domestic production for greater responsiveness in Residential
The Residential business, in the face of the mortgage crisis and reduced residential building activity, experienced an 8% decrease in sales during 2007 . The year was used to rebuild the Residential organizational structure and establish a brand strategy for a focused, consistent approach to the market which is being implemented in 2008 . The reorganizations strategies focused on the vinyl and laminate businesses and included the strengthening of marketing, manufacturing and customer service and improving efficiencies in operations .
21%Group revenue
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A new position for Tarkett was developed and introduced, clearly placing Tarkett as the brand for everyday moments in the lives of homeowners . This repositioning was supported by the re-introduction of FiberFloor . In 2008, over 70% of the product line will be manufactured in Farnham production facility in Canada . This percentage will further increase with the intent of being fully domestically sourced in 2009 . The year also saw the first commercial production of laminate flooring at the Clarion manufacturing facility in Pennsylvania, USA . A joint venture with Aconcagua, this state of the art facility will enable us to extend the prodution range and efficiency in 2008 . The Clarion laminate production facility is one of only a few such facilities in North America, and, like FiberFloor, allows Tarkett to fully source all laminate products domestically .Additionally in November 2007, the company exited the manufacturing of its pre-engineered wood business in the United States .
Sustainable approach
Residential and commercial customers in North America continue to show growing concern for sustainability in flooring . Tarkett’s long-standing environmental approach offers a range of solutions that help customers to make the right choice – balancing the environmental, human and financial consequences of sustainable products . Every initiative and decision has an impact and Tarkett strives to balance this impact across the environment, across the communities where we work and live and across our customers’ lives .
Leading in North America
The restructured organization is focused on providing customers an uncompromising positive experience from a lean and committed group of associates that will drive effective innovation, growth and profitability, moving Tarkett to a leading position in North America .
Long-standing environmental
approach offers a range of solutions
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North America
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FieldTurf Tarkett
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FieldTurf Tarkett, the Group’s worldwide sports surfacing activity, recorded sales of e222 .7 million . This represented an increase of 30% versus 2006 at comparable structure, and exchange rates . The majority of sales revenue comes from the artificial turf range designed for soccer, rugby, baseball and American football . FieldTurf Tarkett also supplies a full range of sporting surfaces – from synthetic and hardwood surfaces gymnasium flooring, hardwood courts, weight room flooring through to indoor and outdoor running tracks, playground surfacing, golf and tennis surfaces .
The leading market position that FieldTurf Tarkett enjoys in North America comes from strong strategic relationships at the highest levels of sport with endorsements from sporting associations and high profile installations . For example 21 out of 32 National Football League teams in North America play FieldTurf Tarkett .
In Europe, strong market presence – particularly in France and Spain – drove up sales performance – notably with 109 fields installed in France, 160 in Spain and 65 in the Netherlands . Market demand in Scandinavian countries has continued with on average 50 installations every year . A key event in 2007 was the completion of the FieldTurf Tarkett field in the Luzhniki Olympic Stadium in Moscow,
Russia which hosted the Euro 2008 qualifier between England and Russia in October . Sales for artificial turf in countries across South America, Africa and Asia also present good opportunities for growth . In 2007 FieldTurf Tarkett installed two FIFA accredited fields in Korea and Central/South America .
Soccer driving demand
Among the year’s highlights was the installation of 13 fields at City of Sparks Golden Eagle Regional Park in Nevada . It has been the largest artificial turf project in North America with installation of 1 .4 million square feet of turf (over 130,000m2) in a public park and sport complex .
In 2007, sales of artificial turf fields in parks and recreation grounds were largely driven by soccer - the largest growing segment of activity across all sporting surfaces . FieldTurf Tarkett has built up an impressive endorsement with high profile stadium installations in countries from Canada, Costa Rica, Colombia to UK, Norway, Sweden, Russia and Switzerland . In addition, seven of the North American professional soccer teams play on FieldTurf Tarkett . 80% of Premier League clubs in UK, Spain and France practice daily on FieldTurf Tarkett pitches which are also used for eight Champions League Clubs practice and training .
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11% Group revenuesLu
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FieldTurf Tarkett was the first artificial producer to achieve FIFA accreditation following rigorous testing and by end 2007 had 25 FIFA approved pitches . At the FIFA Under 20 World Cup in Canada in July, 24 teams from around the world made history as they participated in the first FIFA World Cup ever played on artificial turf . Almost half of the 52 matches up to finals were featured on FieldTurf Tarkett .
Beyond artificial turf fields, other sports installations carried out in 2007 included hardwood sports hall for University of Nebraska, USA, omnisports surfaces for Wuhan City, China and Lyon Barolles, France, linosport multisport surface in Birkenau, Germany and six running tracks in Washington DC, USA .
Investment for international presence
FieldTurf Tarkett has artificial turf production facilities in both the USA and France, as well as sites for manufacturing of indoor and outdoor tracks . Additional machinery has increased manufacturing capacity in Dalton, Georgia and more warehouse capacity in both US and European sites is driving up availability and distribution, especially during seasonal peak demand – usually the summer months . By the end space of 2007, the Auchel site in France had produced its 5 millionth m2 of artificial turf – the equivalent space of 600 large fields . FieldTurf Tarkett invested in specialist track company Defargo to strengthen its position as a one-stop-shop for all sports surfacing needs .
Strengthen position as a one-stop-shop for all sports surfacing needs
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I N M E M O R I A M
John Gilman, a pioneer of artif icial turf and the driving force behind FieldTurf since
1995, sadly died in mid 2007 . He will be missed by our people,
partners and customers .
FieldTurf Tarkett
The Tarkett Group signed a five year partnership with French National Olympic and Sports Committee (CNOSF) to become an official partner of the French Olympic team competing at the Olympic Games in Beijing (2008), Vancouver (2010) and London (2012) . In addition to a shared passion for excellence in sport, FieldTurf Tarkett will work alongside the CNOSF to study the needs of participants in various sporting disciplines for the best technical solutions for improved performance and safety .
FieldTurf Tarkett has added two artificial pitches to the French Football Federations’s (FF) national training centre at Clairefontaine, just outside Paris . It brings to 16,000m2 the installations – covering indoor, outdoor and tennis surfaces on the site, which has become a life-size showroom for FieldTurf Tarkett .
R&D investment continues to drive quality and industry leadership; FieldTurf has some 30 unique patents for its artificial turf range .
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Canada
USA
Mexico
UK
Luxembourg
Italy
Netherlands
Switzerland
Serbia
Turkey
France
Spain
Por tugal
Belgium
Germany
Greece
Worldwide Presence
Production sites Sales - Marketing - R&D
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Nor way
Sweden
Denmark
Lebanon
Ukraine
Poland
Lithuania
Slovakia
Russia
China
Czech Republic
Pakistan
Singapore
India
Australia
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Consolidated Income Statement
2007 2006
Net sales 2,087.2 1,903.1
Cost of sales -1,465 .9 -1,320 .6
Gross profit 621.3 582.5
% of net sales 29.8% 30.6%
Other operating income (a) 44 .8 22 .3
Selling expenses -378 .7 -363 .5
Research and development expenses -15 .2 -13 .1
General and administrative expenses -122 .5 -109 .6
Other operating expenses -13 .1 -5 .9
Operating profit before f inancial costs (EBIT) 136.6 112.7
% of net sales 6.5% 5.9%
Financial income 7 .6 5 .1
Financial expenses -43 .6 -25 .8
Net f inancial costs -36.0 -20.7
Share of Profit of Associates 0 .9 4 .3
Profit before tax 101.5 96.3
Income tax expense -28 .7 -28 .7
Profit for the year 72.8 67.6(a) 2007: of which 37m related to the sale of Nanterre building
2007 2006EBIT before unusual items 149 .5 130 .2
EBITDA before unusual items 226 .9 205 .4
In millions of e
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Dec 31,2007 Dec 31,2006
ASSETSProperty . plant and equipment 438 .7 461 .2
Intangible assets 340 .9 386 .8
Investments in associates 3 .2 2 .6
Other investments 45 .2 36 .0
Deferred tax assets 32 .5 49 .7
Other non-current assets 2 .4 21 .3
Non-current assets 862.9 957.6
Inventories 290 .7 300 .1
Trade receivables 309 .7 317 .1
Other receivables 84 .8 77 .0
Cash and cash equivalents 106 .9 92 .6
Assets classified as held for sale 25 .4 8 .5
Current assets 817.5 795.3
TOTAL ASSETS 1,680.4 1,752.9
EQUIT Y AND LIABILITIESShare capital 318 .1 318 .1
Share premium and reserves 120 .2 153 .8
Retained earnings 82 .8 63 .9
Net result for the year 68 .5 66 .2
Equity attr ibutable to equity holders of the parent 589.6 602.0
Minority interests 21 .3 17 .5
TOTAL EQUIT Y 610.9 619.5
Interest-bearing loans and borrowings 399 .2 413 .4
Other Financial Liabilities 102 .4 102 .2
Deferred Tax Liabilities 35 .5 81 .1
Provisions and other non-current liabilities 83 .9 86 .0
Non-Current Liabilities 621.0 682.7
Trade Payables 215 .5 227 .0
Other Liabilities 149 .0 139 .6
Interest-bearing loans and borrowings 57 .8 61 .1
Other Financial Liabilities 0 .8 3 .8
Provisions and other current liabilities 23 .3 19 .2
Liabilities classified as held for sale 2 .1 -
Current Liabilities 448.5 450.7
TOTAL EQUIT Y AND LIABILITIES 1,680.4 1,752.9
Consolidated Balance SheetIn millions of e
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Consolidated Cash Flow Statement
2007 2006
CASh FLOWS FROM OPERATING ACTIVITIES Net profit before tax 101 .5 96 .3
Adjustments for
Depreciation and amortization 111 .5 70 .9
Gain (loss) on sale of fixed assets -8 .3 -12 .1
Net financial items 36 .0 20 .7
Change in provisions and other non-cash items -55 .1 -13 .2
Income from associates -0 .9 -4 .3
Stock option costs - 0 .4
Operating profit before working capital changes 184.7 158.7
EFFECT OF ChANGES IN ASSETS AND LIABILITIESIncrease (-) / Decrease (+) in trade receivables -2 .6 -10 .2
Increase (-) / Decrease (+) in other receivables -8 .4 -0 .3
Increase (-) / Decrease (+) in inventories -7 .2 -27 .3
Increase (+) / Decrease (-) in trade payables -7 .1 -6 .4
Increase (+) / Decrease (-) in other payables 19 .3 2 .8
Cash generated from operations 178.7 117.3
Interest paid -25 .8 -21 .6
Income taxes paid -43 .2 -37 .0
Other items -1 .5 2 .7
Net cash from operating activities 108.2 61.4
In millions of e
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2007 2006
CASh FLOWS FROM INVESTING ACTIVITIESAcquisition of subsidiaries net of cash acquired -13 .9 -107 .5
Disposals of subsidiaries net of cash disposed of 69 .5 40 .3
Acquisition of property . plant and equipment -122 .0 -91 .5
Proceeds from sale of property . plant and equipment 8 .0 14 .9
Dividends received 0 .6 -
Net cash used in investing activities -57.8 -143.8
CASh FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of stocks 18 .5 -
Proceeds from loans 29 .4 154 .5
Repayment of loans -42 .7 -35 .9
Payment of finance lease liabilities -3 .2 -0 .2
Dividends paid -35 .2 -16 .4
Net cash from (used in) f inancing activities -33.2 102.0
Effect of exchange rate fluctuations on cash held -2 .9 -2 .4
Net increase (decrease) in cash 14.3 17.2
Cash balance . beginning of period 92 .6 75 .4
C ASh BALANCE. END OF PERIOD 106.9 92.6
In millions of e
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Segment Information
0
100
200
300
400
500
600
700
800
900
2006 2007
Net sales in millions of EUR
Western Europe
Eastern Europe
North America
FieldTurf Tarkett
884.3
837
500.8
450.8
330.3
576.7
187.7222.7
Net sales in millions of e
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Tarkett management
E X E C U T I V E M A N A G E M E N T C O M M I T T E E
Jeff BUTTITTA North America
Pierre-Philippe SIMPhLETSecretary to the board
Joe FIELDS FieldTurf Tarkett
Christoph STETTLERMarketing & Environment
Patrick MAThIEU Western Europe
Fabrice BARThÉLEMY Chief Financial Officer
Michel GIANNUZZI Chief Executive Officer
Dragan ZARKOVIC Eastern Europe
Vincent LECERF Human Resources
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E X E C U T I V E B O D I E S
S H A R E H O L D E R S T R U C T U R E
SUPERVISORY BOARD
Didier DECONINCK
Bernard-André DECONINCK
Eric DECONINCK
Henry R KRAVIS
Jacques GARAIALDE
Silke SCHEIBER
MANAGEMENT BOARD
Michel GIANNUZZI
Fabrice BARTHÉLEMY
Vincent LECERF
Headquartered in Nanterre, Tarkett S .A . - the holding entity for Tarkett’s worldwide operations - is a non
listed company . Its shares are held by a private holding company (Société d’Investissement Familiale) .
The shareholders of this SIF are 50% the Deconinck family and 50% Kohlberg Kravis Roberts and Co (KKR) .
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Tarkett SA
2 . rue de l‘EgalitéF 92748 Nanterre Cedex
Phone: +33 (0)1 41 20 42 03Fax: +33(0)1 41 20 47 05
Notes
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DE
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