half-year results 2010

HALF YEARREPORT

2010

2 # SIOEN half year report 2010

Sioen Industries is the world’s leading producer of coated technical textiles, European market leader in industrial protective clothing, a niche specialist in fine chemicals and a major world player in processing technical textiles into semi-finished products and technical end products.

> Net sales: At the end of the first half of 2010 the Sioen Indus-tries Group realized sales from continuing operations of EUR 145.8 million compared to EUR 128.7 million over the same period in 2009 or a growth of 13.2%. Successful introduction of new products and product lines and a slow revival of the economy are the driving forces behind the growth.

> Gross margin: Expressed as a percentage over net sales, gross margin increased slightly to 52.15% compared to 51.21% at the end of the same period last year. In Euro this results in an increase of EUR 10.1 million compared to the same period in 2009.

> Services and other goods: The substantial growth of sales has as a logical consequence that some variable costs evolved likewise: energy costs (+ EUR 1 million), consumables (+ EUR 0.9 million), transport charges (+ EUR 0.4 million), etc.

> Remuneration, social security and pensions: As a result of increased activity, personnel costs increased from EUR 29.5 million at the end of the first half of 2009 to EUR 30.6 million over the same period this year.

> Other operating charges: These charges consist primarily of non-profit related taxes and import duties.

> Write off inventories and receivables: Under this section we recorded, according to our accounting policies, reversals of existing provisions or additional write downs for obsolete stocks and doubtful debtors.

> Operating result: The operating result at the end of the first half of 2010 amounted to EUR 13.6 million compared to EUR 6.6 million over the same period last year or more than a duplication of the amount of last year.

> Financial result: Financial result of the Group for the first half of 2010 amounted to EUR -3.8 million compared to EUR -1.9 million over the same period last year. The main reason for the decreased financial result is related to the revaluation of general accounts (unrealized exchange gains/losses) compared to the same period last year.

> Profit for the period from continuing operations: The Group recorded a profit from continuing operations of EUR 9.3 million for the first half of 2010, which is more than twice the amount of last year (EUR 4.0 million at the end of the first half of 2009).

> Net cash flow from continuing operations: The net cash flow from continuing operations amounted to EUR 14.6 million compared to EUR 12.2 million over the same period last year.

HALF YEAR REPORT OF THE BOARD OF DIRECTORS

SIOEN half year report 2010 # 3

COatiNG DiviSiONThe coating division specializes in the coating (applying a protec-tive layer) of textiles. This division is fully vertically integrated. Everything starts with the extrusion of technical yarns (polyes-ter), which are woven into technical fabric and then coated with various polymers (PVC, silicons, etc.).The group is the only player in the world with full proficiency in various coating technologies, each with its own specific products and markets.

In the first half of 2010 the coating division achieved sales from continuing operations of EUR 75.5 million versus EUR 62.5 mil-lion over the same period last year or a growth ratio of 20.8%.The growth of the past half year was driven mainly by techno-logical developments and the improving economic conditions in various markets.

transport tarpaulins and side curtainsTransportation (side curtains and tarpaulins for trucks and trains) is the largest market, representing approximately 40% of the sales of the coating division. Sales are mainly in Western Europe, for both new tarpaulins and the replacement market. After last year’s dip, this year shows a clear revival. Analysts are also predicting substantial growth in coming years. This progno-sis is based on three factors;- Capacity utilization of the truck fleet is already 50% higher

than last year and continues to rise.- The average life of a truck fleet is 5 to 6 years which means

that trucks purchased in 2005 or 2006 (last peak period) need to be replaced in 2011/2012.

- Historical analysis shows that transport companies start investing in/replacing vehicles again approximately 2 years after the trough of a cycle.

Bioenergy and agricultureLast year’s R&D efforts are paying off. The new range is well re-ceived in the market and meets all technical requirements. With green/alternative energy becoming increasingly important we also expect steady growth in this segment in coming years.

SportsSignificant progress was also made in this segment. The range of phthalate-free products are child- and environmentally friendly, which is the foundation of the success. Customers are sports clubs, nursery schools, etc.

Geotextiles and roofingWith the long winter this product line got off to a relatively late start. From April, however, construction resumed and has been rising ever since.

Flexible, breathable technical textilesNewly developed products and improved existing ones are the key to success and growth in these markets (transfer coating materials for protective clothing and mattress protection).

Pool covers and linersSioen is the largest supplier of technical textile in this segment. The primary market is France where the largest manufacturers of swimming pool covers and liners are located.

textile architecture and campingThese are membranes for tents and structures in sailcloth. Textile architecture is one of the fastest growing markets for coated textiles. Advanced technical quality and a 5-year warranty create a high entry threshold.

DEvELOPmEnTS BY DIvISIOn


aPPaRel DiviSiONThis division stands for ‘technical protective clothing’. The apparel division is an innovative producer of a wide range of high-quality technical protective clothing that meets all European standards. Sioen Apparel is active in various sectors where attention to safety is a priority. Attention to customer needs, strong quality consciousness and continuing research and development, combined with technically advanced products, are the basis of the successful development of this division.Largely immune to the economic climate, the apparel division succeeded, after a strong first half of 2009, in again increasing sales by 4%.

industrial protective clothingIn this context, the division operates in almost all economic sectors (industry, agriculture, services, etc.) with a full range of products tailored to the needs of its customers. Sales in this segment follow the economic trend.

Specific markets (police, firefighters, army, etc.)In the market for specialized protective clothing, technical re-quirements are an absolute priority. The efforts of recent years are the driving force behind the successes and growth today.

leisure clothingA well controlled diversity of customers and products, impeccable quality and the fulfilling of promises guarantee the continued growth of this product line.

ChemiCalS DiviSiONSioen Chemicals processes basic raw materials (PVC powders, pigments, etc.) into high quality technical semi-finished products (pigment pastes and inks) for a wide range of applications.This division increased its sales by 18% compared to the same period last year.

Pigment pastesAs a supplier to coating companies this product line follows its customers’ business cycle. New developments and a positive eco-nomic development have also increased sales in these products.

inksDigital inks: Last year Sioen Chemicals developped a complete new range of digital printing inks. Today these are gradually introduced into the market. Initial reactions are very positive.Decorative inks: Sioen Chemicals has succeeded in further reinforcing its position in Eastern Europe, explaining the current growth figures.

iNDuStRial aPPliCatiONS DiviSiONIn this division we process technical textiles and produce filter cloth (felt) and industrial filters.

Filters and filter clothThe Group has, in Liège, a facility producing needle felt and de-rived products like filter cloth and even fully ready-to-use filters. These are used mainly in the food, heavy industry, metallurgy, paper-making and chemicals sector. Excellence, reliability and delivery guarantees are ensuring a steady growth in sales.

accessories and services By way of extension of the production of PVC coated material, Sioen is also the obvious partner for the production of industrial accessories like cadors, sio-steel cloth and carapax. The Group also provides a number of additional services such as pond liner cutting and welding. Completing the range , there is also a limited production of highly specialized applications such as roll-up doors, silos and camouflage cloth.


BalaNCe Sheet aND CaSh FlOW StatemeNtContinuous and maintained efforts to control the working capital level allowed the Group to keep the working capital, expressed as a percentage of net sales, at level compared to the end of last year (32.0% as per 30 June 2010 against 31.7% as per 31 December 2009). In nominal amounts, working capital needs increased by EUR 12 million at the end of June 2010. Given the net sales trend (increase by 13.2% compared to the same period last year) and the increased need of working capital, the company succeeded in decreasing the net financial debt from EUR 109 million, at the end of last year, to EUR 107 million at the end of June 2010.

OutlOOkEarly signs of an economic revival, the launch of newly developed products, a rigorous monitoring of costs and working capital employed are the driving forces behind the current results. The Sioen Group is back on a growth track and feels that, except for an adverse change in the current economic evolution, it will be able to preserve this trend throughout the year.

maNaGemeNt StatemeNtObligations to provide periodic information under the Transpa-rency Directive effective from 1 January 2008

The undersigned declare that:

- The half year accounts, prepared in accordance with the applicable standards for annual financial statements, give a true and fair view of the net assets, financial condition and results of Sioen Industries and the companies included in the consolidation.

- The half year report gives a true and fair overview of the development and results of the company and the position of Sioen Industries and the companies included in the consolida-tion, and a description of the principal risks and uncertainties that they face.

Michèle Sioen, CEOGeert Asselman, CFO

The full financial report with the management statement will be available from 31 August 2010 in the ‘Investor Relations’ section of our website www.sioen.com.


InTERIm COnSOLIDATED FInAnCIAL STATEmEnTS FOR THE 6 mOnTHS EnDED 30 JUnE 2010 UnAUDITED

CONteNt

> Condensed consolidated statement of financial position 8

> Condensed consolidated statement of comprehensive income by function and earnings per share 10

> Condensed consolidated statement of comprehensive income by nature 12

> Condensed consolidated statement of other comprehensive income 13

> Condensed consolidated statement of cash flows 14

> Condensed consolidated statement of changes in equity 15

> Notes to the condensed consolidated financial statements 16


CONDeNSeD CONSOliDateD StatemeNt OF FiNaNCial POSitiON IN THOUSANDS OF EUROS

aSSetS 30 June 2010 31 December 2009

unaudited audited

NoN-CurreNt assets

Intangible assets 11 317 12 856

Goodwill 17 552 17 557

Property, plant and equipment 124 657 129 508

Investment property 7 244 7 282

Interests in associates 2 2

Long term trade receivables 16 15

Other long term assets 530 565

Deferred tax assets 3 443 3 272

total non-current assets 164 761 171 057

CurreNt assets

Inventories 77 841 68 926

Trade receivables 52 691 42 199

Other receivables 2 887 3 135

Other financial assets 288 288

Cash and cash equivalents 28 988 29 574

Deferred charges and accrued income 1 703 1 498

Assets classified as held for sale 6 889 11 184

total current assets 171 287 156 804

tOtal aSSetS 336 048 327 861

six months ended twelve months ended


eQuitY & liaBilitieS 30 June 2010 31 December 2009

unaudited audited

equity

Share capital 46 000 46 000

Retained earnings 90 786 82 712

Hedging and translation reserves 1 356 145

total equity 138 142 128 857

Equity attributable to the owners of the Company 138 142 128 857

Minority interests 0 0

NoN-CurreNt liabilities

Borrowings 99 685 100 400

Provisions 1 456 1 245

Retirement benefit obligation 1 091 960

Deferred tax liabilities 8 518 10 373

Obligations under finance leases 18 179 19 401

Other amounts payable 3 3

total non current liabilities 128 932 132 382

CurreNt liabilities

Trade and other payables 25 964 24 163

Borrowings 17 125 16 623

Provisions 3 320 3 491

Retirement benefit obligation 39 39

Current income tax liabilities 3 069 2 040

Social debts 8 314 7 724

Other amounts payable 3 875 4 849

Obligations under finance leases 2 482 2 821

Accrued charges and deferred income 1 966 1 374

Liabilities directly associated with assets classified as held for sale 2 820 3 498

total current liabilities 68 974 66 622

tOtal eQuitY aND liaBilitieS 336 048 327 861

twelve months endedsix months ended


2010 2009

unaudited unaudited

Net sales 145 769 128 721

Cost of sales -112 752 -102 106

manufacturing contribution 33 017 26 615

Sales and marketing expenses -7 988 -8 156

Research and development expenses -2 766 -2 537

Administrative expenses -10 162 -10 720

Financial income 3 060 4 183

Financial charges -6 811 -6 045

Other income 2 734 1 882

Other expenses -1 207 -454

Non recurring result 0 0

Profit or loss before taxes 9 877 4 768

Income tax -582 -724

PROFit OR lOSS FOR the PeRiOD FROm CONtiNuiNG OPeRatiONS 9 295 4 044

Profit or loss for the period from discontinued operations 492 -3 511

Group profit/loss 9 787 533

Group profit/loss attributable to shareholders of Sioen Industries 9 787 533

Group profit/loss attributable to minority interests 0 0


Other comprenhensive income for the period, net of tax:

Exchange differences arising on translation of foreign operations 824 -238

Net value gain on cash flow hedges 0 0

Other comprehensive income for the period, net of tax 824 -238

total comprehensive income for the period 10 611 295

Attributable to shareholders of Sioen Industries 10 611 295

Attributable to minority interests 0 0

eBit 13 628 6 630

eBitDa 22 672 16 619

Net cash flow 14 588 12 172

six months ended 30 June

CONDeNSeD CONSOliDateD StatemeNt OF COmPReheNSive iNCOmeBy FUNCTION | IN THOUSANDS OF EUROS


2010 2009

unaudited unaudited

basiC earNiNgs per share

From continuing operations 0.43 0.19

From continuing and discontinued operations 0.46 0.02

DiluteD earNiNgs per share

From continuing operations 0.43 0.19

From continuing and discontinued operations 0.46 0.02


eaRNiNGS PeR ShaRe


2010 2009 unaudited unaudited

Net sales 145 769 128 721 Changes in stocks and WIP (work in progress) 4 741 -4 851 Other operating income (1) 2 906 1 883

Raw materials and consumables used 74 490 57 952

Gross margin 52.15% 51.21% Services and other goods -21 942 -18 578 Remuneration, social security and pensions -30 608 -29 457 Depreciations -9 509 -9 637 Write off inventories and receivables 369 -621 Other operating charges (2) -3 608 -2 878 Non recurring result 0 0

Operating result 13 628 6 630

Financial result -3 751 -1 862 Financial income 3 060 4 183 Financial charges -6 811 -6 045


Income tax -582 -724

PROFit OR lOSS FOR the PeRiOD FROm CONtiNuiNG OPeRatiONS 9 295 4 044


Group profit/loss 9 787 533 Group profit/loss attributable to shareholders of Sioen Industries 9 787 533 Group profit/loss attributable to minority interests 0 0

Group profit/loss 9 787 533 Other comprenhensive income for the period, net of tax: Exchange differences arising on translation of foreign operations 824 -238 Net value gain on cash flow hedges 0 0

Other comprehensive income for the period, net of tax 824 -238

total comprehensive income for the period 10 611 295 Attributable to shareholders of Sioen Industries 10 611 295 Attributable to minority interests 0 0

eBit 13 628 6 630

eBitDa 22 672 16 619

Net cash flow 14 588 12 172

(1) Other operating income mainly consists of received rent for buildings, transport recharges and received indemnities(2) Other operating charges mainly consist of taxes on tangible assets, local taxes and import duties


CONDeNSeD CONSOliDateD StatemeNt OF COmPReheNSive iNCOme By NATURE | IN THOUSANDS OF EUROS



2010 2009

Exchange differences on translating foreign operations Exchange difference arising during the period 1 248 -360

Cash flow hedges Gains arising during the period 0 0 Reclassification adjustment for amounts recognised in profit or loss 0 0

Income tax relating to components of other comprehensive income -424 123

tOtal COmPReheNSive iNCOme FOR the PeRiOD 824 -238 Attributable to shareholders of Sioen Industries 824 -238 Attributable to minority interests 0 0

CONDeNSeD CONSOliDateD StatemeNt OF OtheR COmPReheNSive iNCOme IN THOUSANDS OF EUROS



2010 2009

unaudited unaudited


Income tax expenses recognised in profit or loss 594 627

Finance costs recognised in profit or loss 6 129 5 973

Investment revenue recognised in profit or loss -2 533 -3 504

Group operating result 13 977 3 629

Depreciation and amortisation of non-current assets 9 734 10 407

Impairment of non-current assets 0 261

Write off inventories and receivables -445 760

Provisions -907 -1 017

movements in working capital:

Inventories -7 584 7 802

Trade receivables -7 597 -102

Other receivables, interests in associates & deferred charges -25 4 712

Trade and other payables 1 777 1 191

Current income tax liabilities, social debts, other amounts payable & accrued charges and deferred income 1 466 2 722

Amounts written off inventories and receivables 843 -91

Cash flow from operating activities 11 239 30 274

Income taxes paid -940 -1 007

Net CaSh FlOW FROm OPeRatiNG aCtivitieS 10 299 29 267

Interest received 29 37

Acquisitions of subsidiaries 0 0

Investments in intangible and tangible fixed assets -3 049 -3 311

Disposal and sale of intangible and tangible fixed assets 125 638

Increase in capital grants 0 0

Translation adjustments on intangible and tangible assets 5 -374

Net cash flow from investing activities -2 890 -3 010

Net cash flow before financing activities 7 409 26 257

Interest paid -3 272 -3 368

Disbursed dividend -1 691 -1 762

Increase long term borrowings 0 0

Decrease long term borrowings -714 -1 039

Increase/(decrease) short term borrowings 501 -20 192

Increase/(decrease) obligations under finance leases -1 585 -1 271

Other -20 -161

Currency result -2 379 -242

Net cash flow from financing activities -9 160 -28 035

Impact of cumulative translation adjustments and hedging 1 216 -296

Change in cash and cash equivalents -535 -2 074

Cash and cash equivalents at the beginning of the reporting period 30 223 14 545

Cash and cash equivalents at the end of the reporting period 29 688 12 471

CONDeNSeD CONSOliDateD StatemeNt OF CaSh FlOWS IN THOUSANDS OF EUROS


six months ended 30 June 2010

Balance at 1 January 2010 46 000 82 711 -454 600 128 857 0 128 857

Group profit/loss 9 787 9 787 0 9 787

Available for sale financial assets

Hedging

Deferred tax

Currency translation adjustments 1 210 1 210 0 1 210

Change in consolidation scope

Transfer to profit on cash flow hedges

Total comprehensive income for het period 46 000 92 497 757 600 139 854 0 139 854

Payment of dividends -1 711 -1 711 0 -1 711

Balance at 30 June 2010 46 000 90 786 757 600 138 142 0 138 142


Balance at 1 January 2009 46 000 95 541 125 695 142 361 0 142 361

Group profit/loss 533 533 0 533

Available for sale financial assets

Hedging

Deferred tax

Currency translation adjustments -303 -303 0 -303

Change in consolidation scope

Transfer to profit on cash flow hedges

Total comprehensive income for het period 46 000 96 074 -178 695 142 591 0 142 591

Payment of dividends -1 711 -1 711 0 -1 711

Balance at 30 June 2009 46 000 94 362 -178 695 140 879 0 140 879

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CONDeNSeD CONSOliDateD StatemeNt OF ChaNGeS iN eQuitY IN THOUSANDS OF EUROS


RePORtiNG eNtitYThe condensed consolidated interim financial statements of Sioen Industries NV (the ‘Company’) include the financial state-ments of the Company and its subsidiaries (together referred to as the ‘Group’).

The consolidated interim financial statements give a general overview of the Group’s activities and the results obtained. They give an accurate picture of the entity’s financial position, financial performance and cash flow, and are drawn up on a going concern basis.

The consolidated interim financial statements are stated in thousands of euros, as the euro is the currency of the primary economic environment in which the Group is active. The condensed financial statements of foreign participations are converted in accordance with the principles described in the section ‘Foreign currencies’ of the annual report 2009.

StatemeNt OF COmPliaNCe With iFRSThese condensed interim consolidated financial statements are for the six months ended 30 June 2010. They have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.

The condensed interim consolidated financial statements do not include all of the information required in annual financial statements in accordance with IFRS, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2009.

SiGNiFiCaNt aCCOuNtiNG POliCieSThese condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 December 2009. The following standards and interpre-tations revised or newly published by the IASB were mandatory as of the beginning of financial year 2010:

- IFRS 3 Business Combinations (Revised 2008) The revised standard (IFRS 3R) introduced major changes to

the accounting requirements for business combinations. It retains the major features of the purchase method of

accounting, now referred to as the acquisition method.

- IAS 27 Consolidated and Separate Financial Statements (Revised 2008)

The adoption of IFRS 3R required that the revised IAS 27 (IAS 27R) is adopted at the same time. IAS 27R introduced changes to the accounting requirements for transactions with non-controlling (formerly called ‘minority’) interests and the loss of control of a subsidiary. The Group did not have transac-tions with non-controlling interests in the current period and did not dispose of any of its equity interests in its subsidiaries. Therefore, the adoption of IAS 27R did not have an impact in the current period financial statements.

- Improvements to IFRSs 2009 The Improvements to IFRSs 2009 (‘2009 Improvements’) made

several minor amendments to IFRSs. The only amendment relevant to the Group relates to IAS 17 Leases. The amend-ment requires that leases of land are classified as finance or operating applying the general principles of IAS 17. Prior to this amendment, IAS 17 generally required a lease of land to be classified as an operating lease. The Group has reassessed the classification of the land elements of its unexpired leases at 1 January 2010 on the basis of information existing at the inception of those leases and has determined that none of its leases require reclassification.

The mandatory application of all other amendments to or improvements of standards and interpretations listed above did not give rise to any major effects on the Group’s financial position and financial performance.

The accounting policies have been applied consistently through-out the Group for the purposes of preparation of these condensed consolidated interim financial statements.

SeaSONalitY OF iNteRim OPeRatiONSThe consolidated income statement of the continuing operations used to reflect the seasonality of the coating business, as a result of which positive earnings were primarily generated in the first and second quarter of any one year. However, the apparel division (textile business), of which sales remain at level and positive earnings are primarily generated in the third and fourth quarter of any one year, has become more significant within the Group.

NOteS tO the CONDeNSeD CONSOliDateD FiNaNCial StatemeNtS


SiGNiFiCaNt eveNtS aND tRaNSaCtiONSThe Group’s management believes that the Group is well positioned in the current economic circumstances. Factors contributing to the Group’s strong position are:

- the Group does not expect to need additional borrowing facili-ties in the next 12 months, as a result of its significant financial resources, existing facilities and strong liquidity reserves.

The Group has no debt covenants to comply with.

- the Group’s major customers have not experienced financial difficulties. Credit quality of trade receivables as at 30 June 2010 is considered to be good.

Overall, the Group is in a strong position despite the current economic environment, and has sufficient capital and liquidity to service its operating activities and debt. The Group’s objectives and policies for managing capital, credit risk and liquidity risk are described in its recent annual financial statements.

aSSeSSmeNt CRiteRia iN the aPPliCatiON OF the valuatiON RuleSIn the application of the valuation rules, in certain cases an accounting assessment must be made. This assessment is done by making the most accurate assessment possible of uncertain future evolutions. The management determines its assessment on the basis of different realistically assessed parameters, such as future market expectations, sector growth rates, industry studies, economic realities, budgets and multi-year plans, expected profitability studies, etc. The most important elements within the Group that are subject to this are: impairments, provisions and deferred tax items.

impairment test for the six months ended 30 June 2010In order to provide the stakeholders with in-depth knowledge as to the financial strength of the Group, we reassessed the recoverable amount of assets.

Key assumptions related to all divisions of the Group, as described in our annual report of 2009, are still valid and review based on the latest developments did not result in any adverse changes. There are no impairment indicators during the first half of the year.


Coating apparel industrial Chemicals Other total from applications continuing operations


Revenue from external customers 65 898 38 535 19 929 21 407 145 769

Intersegment revenues 9 559 9 254 3 755

Segment operating profit 7 946 3 734 1 712 1 783 15 175

year ended 31 December 2009

Revenue from external customers 105 054 74 129 35 257 37 475 3 251 918

Intersegment revenues 18 530 6 9 222 5 580 3

Segment operating profit 2 125 3 380 1 194 1 422 8 121


Revenue from external customers 52 783 36 943 20 538 18 454 3 128 721

Intersegment revenues 9 676 14 296 2 808

Segment operating profit 1 787 3 184 1 516 755 7 242

Segment operating profit represents the operating profit earned by each segment without allocation of central administration costs, financial result and tax result. This is the measure reported to the chief operation decision maker for the purposes of resource allocation and assessment of segment performance.

SeGmeNt iNFORmatiON | in thousands of euros

The Group has adopted IFRS 8 Operating Segments. In identifying its operating segments, management generally follows the Group’s service lines, which represent the main products and services provided by the Group. Each of these operating segments is managed separately as each of these service lines requires different technologies and other resources as well as marketing approaches.

The adoption of IFRS 8 has not affected the identified operating segments for the Group compared to the recent annual financial statements. Under IFRS 8, reported segment profits are based on internal management reporting information that is regularly reviewed by the chief operating decision maker (management approach), and is reconciled to Group profit or loss on the following page. The chief operating decision maker assesses segment profit or loss using a measure of operating profit. The measure-ment policies the Group uses for segment reporting under IFRS 8 are the same as those used in its financial statements, except

that certain items are not included in arriving at the operating profit of the operating segments (some headquarter operating results). In addition, corporate assets, which primarily apply to the Group’s headquarters, have been allocated to the segments as far as possible.

The Group operates in four main business segments: coating, apparel, chemicals and industrial applications. These divisions are the basis on which the Group reports its segment information. The principal products and services of each of these divisions are described in the annual report of 2009. Inter- segment sales are undertaken at prevailing market conditions.

During the six month period to 30 June 2010, there have been no changes from prior periods in the measurement methods used to determine operating segments and reported segment profit or loss.

SeGmeNt ReveNueS aND ReSultS


six months year ended six months ended

ended 30 June 2010 31 December 2009 30 June 2009

Segment operating profit 15 175 8 121 7 242

Reconciling items:

Elimination of intersegment profits -1 547 -2 688 -612

Operating result 13 628 5 433 6 630

Financial charges -6 811 -10 259 -6 045

Financial income 3 060 4 373 4 183

Profit or loss before tax 9 877 -453 4 768

Segment operating profit can be reconciled to Group’s profit or loss as presented in its financial statements as follows:

Coating apparel industrial Chemicals Relating to unallocated/ total applications discontinued eliminations operations


Segment assets 166 349 62 318 25 024 43 848 6 889 31 620 336 048

Segment equity and liabilities 166 349 62 318 25 024 43 848 2 820 35 689 336 048


Segment assets 175 387 57 987 35 110 42 825 11 184 5 367 327 861

Segment equity and liabilities 175 387 57 987 35 110 42 825 3 497 13 054 327 861

Coating apparel industrial Chemicals head office total applications


Depreciations 5 590 620 610 2 018 671 9 509

Additions to non-current assets 1 509 335 84 197 261 2 386


Depreciations 11 299 1 122 1 069 4 192 1 564 19 246

Additions to non-current assets 5 096 1 365 1 753 383 932 9 529


Depreciations 5 497 562 667 2 155 756 9 637

Additions to non-current assets 3 373 828 1 663 216 646 6 726

SeGmeNt aSSetS, eQuitY aND liaBilitieS

OtheR SeGmeNt iNFORmatiON


Currency Rate 30 June 2010 31 December 2009 30 June 2009

EUR average 1.00000 1.00000 1.00000

closing 1.00000 1.00000 1.00000

USD average 1.31415 1.39631 1.33792

closing 1.22710 1.44060 1.41340

GBP average 0.86380 0.88996 0.89000

closing 0.81740 0.88810 0.85210

RMB average 8.96178 9.53698 9.14068

closing 8.32148 9.83497 9.65447

PLN average 4.00413 4.34692 4.53018

closing 4.14700 4.10450 4.45200

TDN average 1.88206 1.88179 1.86211

closing 1.86161 1.90042 1.88676

UAH average 10.45828 11.24025 10.67600

closing 9.76677 11.54521 10.82966

six months six months

ended 30 June 2010 ended 30 June 2009


income tax expense calculated at theoretical tax rate (1) 2 838 28,7% 1 372 28,8%

Tax impact of:

Effect of expenses that are not deductible in determining taxable profit 148 1,5% 176 3,7%

Effect of revenue that is exempt from taxation - 237 -2,4% - 248 -5,2%

Deferred tax assets not recognised 246 2,5% 1 048 22,0%

Tax assets recognised on current year losses - 2 0,0% - 770 -16,1%

Tax assets recognised on previously not recognised losses -1 317 -13,3%

New valuation allowance on previously recognised deferred tax assets

Adjustments recognised in current year in relation to the current tax of prior years - 177 -1,8% - 172 -3,6%

Notional interest deduction -1 055 -10,7% - 682 -14,3%

Tax on distributed profits (DBI) (2)

Other 138 1,4%

income tax expense recognised in profit or loss 582 5,9% 724 15,2%

Reconciliation between income tax and profit or loss before taxes:

(1) is the weighted average tax rate(2) reserves will not be distributed to the parent company unless this could be done at a zero tax rate

exChaNGe RateS

iNCOme tax | in thousands of euros


PlaN tO DiSPOSe OF the ‘eND-maRket, tRuCk COveR’ BuSiNeSSSince the decision on 30 November to dispose the Group’s ‘end-market, truck cover’ business, the Group is still actively seeking a buyer for this activity. No final agreement was reached after the latest profound negociations with interested parties. The ‘end market, truck cover’ business related to the division industrial applications.

aBaNDONiNG OF the ‘SPeCialiSeD autOmOtive FOilS iN Small BatCheS’ BuSiNeSSAs per 31 December 2009, the Group abandoned its ‘specialised

automotive foils in small batches’ business, consistent with the Group’s long-term policy to focus on its core activities in the automotive market. Details of the assets and liabilities aban-doned are disclosed in the disclosure ‘Assets classified as held for sale’. The ‘specialised automotive foils in small batches’ business related to the division coating.

aNalYSiS OF PROFit (lOSS) OF the YeaR FROm DiSCONtiNueD OPeRatiONSThe combined results of the discontinued operations included in the statement of comprehensive income are set out below.


2010 2009

profit or loss for the perioD from DisCoNtiNueD operatioNs

Net sales 3 723 7 797

Other operating income 207 118

Expenses -3 426 -12 480

Gain/(loss) on remeasurement to fair value less costs to sell 956

Profit or loss before tax 504 -3 609

Attributable income tax -12 98


Cash flows from DisCoNtiNueD operatioNs

Net cash flow from operating activities -36 -1 594

Net cash flow from investing activities -22 15

Net cash flow from financing activities 141 -265

Net cash flow 83 -1 844

DiSCONtiNueD OPeRatiONS | in thousands of euros


There were no issurances, repurchases and repayments of debt and equity securities for the six months ended 30 June 2010.

The Board of Directors does not propose to pay an interim dividend for the six months ended 30 June 2010.

During the reporting period, the Group invested for approximately EUR 2.3 milion on assets compared to EUR 6.7 million over the same period ended 30 June 2009. Investments in 2010 mainly relate to the construction of a new building for a new varnish pro-duction line in Moeskroen, the set-up of a new showroom ‘coating’, machinery in Indonesia and the implementation of a new ERP system at an entity of the Group. In 2009 investments mainly related to buildings under leasing amounting to EUR 3.4 million, expansion of the second floor in the Indonesian production factory and the implementation of a new ERP system at 4 entities of the Group.

Assets that were sold and disposed during the reporting period related to certain machinery and tools with a net value of EUR 0.2 million.

An impairment analysis has been done at the end of June 2010 (see ‘impairment test’ review).

The Group did not enter into any significant contractual commit-ments during the first half of 2010.

DeBt aND eQuitY SeCuRitieS

DiviDeNDS

PROPeRtY, PlaNt aND eQuiPmeNt


six months ended year ended 30 June 2010 31 December 2009

gross iNveNtory

Raw materials 25 554 21 970

Consumables 138 157

Work in progress 3 550 1 975

Finished goods 52 066 49 559

Goods in transit 4 718 3 701

tOtal 86 026 77 362

amouNts writteN off

Amounts written off raw materials -4 226 -3 686

Amounts written off consumables

Amounts written off work in progress

Amounts written off finished goods -3 959 -4 750

Amounts written off goods in transit

tOtal -8 185 -8 436

Net iNveNtory

Raw materials 21 328 18 283

Consumables 138 157

Work in progress 3 550 1 976

Finished goods 48 107 44 809

Goods in transit 4 718 3 701

tOtal 77 841 68 926

Gross inventories (excl. write-off) in respect of continuing operations increased by EUR 8.7 million or 11.2%. Increased activity resulted in an inventory increase in the coating division, chemicals division and the apparel division. In the division indus-trial applications stock decreased by 3.2% .

Obsolescence reserves on inventories in respect of the con-tinuing operations decreased by EUR 0.2 million and amount to

EUR 8.2 million at the end of the reporting period compared with EUR 8.4 million at the end of 2009. The decrease is explained by the sale of obsolete stock in the apparel division. There was no significant write-down of obsolete inventory to net realisable value in 2010. Obsolescence reserves are recorded on the basis of a detailed aging and rotation analysis per unit.

amounts (Other) Six months written off exchange rate movements or ended inventory 31 December 2009 write-down reversal differences adjustments 30 June 2010

8 436 791 -1 367 325 8 185

amounts (Other) Six months written off exchange rate movements or ended inventory 31 December 2008 write-down reversal differences adjustments 30 June 2009

8 335 167 -102 36 8 436

ChaNGeS iN iNveNtORieS | in thousands of euros


more than one year Within one year Provisions for 1 343 1 026 environmental issues Provisions for other 113 2 294 liabilities and charges Provisions 1 456 3 320

more than one year Within one year Provisions for 1 131 1 030 environmental issues Provisions for other 114 2 461 liabilities and charges Provisions 1 245 3 491

Provisions in respect of continuing operations amount to EUR 4.8 million at the end of the reporting period. The carrying amount of the provisions reflects the net present value of future liabilities discounted at the weighted average cost of capital, applicable for the operating unit.Provisions for environmental issues mainly consist of a provision relating to the sanitation of polluted soils in Temse belonging to TIS NV and the land in Ardooie belonging to Sioen Industries NV. For more information we refer to section III.6.13 ‘Provisions’ of the annual report 2009. Provisions for other liabilities and charges mainly relate to a provision for reimbursement of grants from the French authorities in the coating division (EUR 2.2 million). For more information we refer to section III.6.13 ‘Provisions’ of the annual report 2009.There have not been any significant changes in provisions of the Company compared to those disclosed in the consolidated financial statements of the Group for the year ended 31 December 2009.

Provisions for 2 163 151 -5 60 2 369 environmental issues

Provisions for other 2 574 -115 -52 2 407 liabilities and charges

total 4 736 151 -119 -52 60 4 776

Provisions for 2 763 -620 -78 97 2 162 environmental issues

Provisions for other 2 527 3 164 -958 -451 1 -1 709 2 574 liabilities and charges

total 5 290 3 164 -1 578 -451 1 -1 787 97 4 736

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PROviSiONS | in thousands of euros


Specialised automotive end-market

30 June 2010 foils in small batches truck cover

Intangible assets 51 51

Goodwill 41 15 26

Property, plant and equipment 1 045 158 887

Inventories 3 655 1 089 2 566

Trade receivables 605 1 014 -409

Other receivables 792 457 334

Cash and cash equivalents 700 173 527

total assets held for sale 6 889 2 907 3 982

Provisions 932 823 109

Trade and other payables 833 339 494

Current income tax liabilities 652 241 411

Deferred tax liabilities

Other amounts payable 403 130 273

total liabilities held for sale 2 820 1 533 1 287

Net assets held for sale 4 069 1 374 2 695

lONG-teRm iNteReSt BeaRiNG lOaNS, iNCluDiNG FiNaNCial lONG-teRm leaSiNG DeBtThere were no other significant changes in the long term borrowings of the Company compared to those disclosed in the consolidated financial statements of the Group for the year ended 31 December 2009.

There were no new commitments for the acquisition of intangible and tangible assets at the end of the reporting period.

Share capital as at 30 June 2010 amounted to EUR 46 million. There were no movements in the issued captial of the Company in either current or the prior interim reporting periods.

The major assets and liabilities of the discontinued operations at the end of the reporting period are as follows:

ShORt-teRm iNteReSt BeaRiNG lOaNSAs per 30 June 2010, short-term straight loans amounted to EUR 14.2 million. They only consist of dollar loans of USD 17.6 million, used for hedging purposes, with a weighted average interest rate of 1.5%.

At 30 June 2009, short-term straight loans amounted to EUR 18.5 million.

BORROWiNGS

OBliGatiONS uNDeR FiNaNCe leaSeS

ShaRe CaPital

aSSetS ClaSSiFieD aS helD FOR Sale | in thousands of euros


(1) Nominal value equals foreign currency amount*contract rate

RelateD PaRtY tRaNSaCtiONS | in thousands of euros

Nature of six months ended transaction 30 June 2010

Recticel Group Sale 644

Recticel Group Purchase 91

INCH Sale 555

SVB Purchase 59

Plama Purchase 0

Nature of six months ended

transaction 30 June 2009

Recticel Group Sale 586

Recticel Group Purchase 99

INCH Sale 520

SVB Purchase 83

Plama Purchase 16

These transactions consist of construction project services (SVB) and commercial transactions (Inch, Recticel Group) and are done on an ‘at arm’s length’ basis.

Other transactions with related parties, other than directors, are not included given the negligable amount (under EUR 10 000).

six months six months

ended 30 June 2010 ended 30 June 2009

Notional value (1) Fair value Notional value (1) Fair value

Forward sales contracts

Forward sales contracts within 1 year

Rights 0 0 0 0

Obligations 0 0 7 400 278

IRS Forward 0 0 0 0

The Group manages a portfolio of derivatives to hedge against risks relating to exchange rate and interest rate positions arising as a result of operating and financial activities. It is the Group’s policy to avoid engaging in speculative transactions or transactions with a leverage effect and not to hold derivatives for trading purposes.

FiNaNCial iNStRumeNtS | in thousands of euros


Roland Curtains uSa inc. & Roltrans Group america

in thousands of euros

Intangible assets 247

Property plant and equipment 62

Inventories 461

Trade receivables 218

total net asset value 988

30 June 2010

Cash and cash equivalents 29 449

Bank overdraft -461

Cash and cash equivalents (excl. assets classified as held for sale) 28 988

Cash and cash equivalents classified as held for sale 700

Cash and cash equivalents at the end of the reporting period 29 688

BuSiNeSS COmBiNatiONS aND DiSPOSal OF BuSiNeSS

As per 1 January 2010, the Group sold a part of the truck cover business in the USA. The sales price exceeded the carrying value of business, classified as discontinued at the end of 2009. The gain on the transaction is not substantial.Net assets (excluding the building) amount to EUR 0.9 million.

CaSh aND CaSh eQuivaleNtS | in thousands of euros

For the purposes of the statement of cash flows, cash and cash equivalents include cash at hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the statement of financial position as follows:

CONtiNGeNt aSSetS aND liaBilitieS

Changes in contingent liabilities or contingent assets since the end of the last annual reporting period:

- Although the court verdict at first instance was in favor of Sioen Industries, the coating division has been condemned to pay EUR 0.2 million related to a commercial dispute. Appeal has been lodged.

There were no other significant changes in the contingencies of the Company and its subsidiaries from those described above and those disclosed in the consolidated financial statements of the Group for the year ended 31 December 2009.

eveNtS aFteR RePORtiNG Date

There were no material events subsequent to the end of the interim period that have not been reflected in the financial statements for the interim period.

FiNaNCial RiSk maNaGemeNt

The Group’s financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2009.

aPPROval OF iNteRim FiNaNCial StatemeNtS

These condensed interim consolidated financial statements have been approved for issue by the Board of Directors on 27 August 2010.

We hereby confirm, to the best of our knowledge, that the condensed consolidated interim financial statements give a true and fair view of the financial position of the Group as at 30 June 2010, as well as of the financial performance and cash flows for the said period, fully in compliance with the accounting standards adopted for use in the EU for interim financial statements (EU adopted IAS 34, Interim Financial Reporting);

Michèle Sioen Geert AsselmanCEO CFO

SiOeN iNDuStRieSFabriekstraat 23B-8850 ArdooieT +32(0)51 74 09 80F +32(0)51 74 09 79E [email protected] www.sioen.comBTW BE 441.642.780RPR 0441.642.780 Brugge

JaaRveRSlaG / aNNual RePORtDit jaarverslag is beschikbaar in het Nederlands en het Engels.This annual report is available in English and Dutch.

FiNaNCial iNFORmatiON aND iNveStOR RelatiONSFor all further information, institutional investors and financial analysts are advised to contact: Geert Asselman, CFO.

FiNaNCial CaleNDaRTrading update third quarter results 2010 - friday 29 october 2010

Realisation: www.kliek.be - T +32 (0)51 40 43 12 - 10 0782

half-year results 2010

Documents

year eur

continuing operations

consumables eur

increase of eur

energy costs eur

transport charges eur

half yearreport20102

technical end products