Annual Report 2006 about Sioen

100 YEARS OF

Summary

Profile 1

Our products 2

100 years of Sioen 4

Innovation 6

Letter to shareholders 8

Mission & Strategy 10

Expertise 12

Expertise right down the line 14

Group Structure 15

Sioen worldwide 16

Coating division 18

Apparel division 24

Industrial applications 28

Vision 30

Human resources 32

Research & Development 33

Quality 34

Environment 35

Corporate information 1


Report from the Board of Directors 5

Group Structure 9

Share Information 10

Corporate Governance 12

General information 16

Financial overview 19

Definitions 77

Addresses 78

Only the English version of the annual report has evidential value.

Innovation

Expertise

Vision

ANNUAL REPORT

2006

A100 YEARS OF SIOEN AND TEXTILES

Innovation

Expertise

Vision

100 YEARS OF

Summary

Profile 1

Our products 2


Innovation 6



Expertise 12


Group Structure 15

Sioen worldwide 16

Coating division 18

Apparel division 24


Vision 30

Human resources 32


Quality 34

Environment 35




Group Structure 9





Definitions 77

Addresses 78


Innovation

Expertise

Vision

ANNUAL REPORT

2006


Innovation

Expertise

Vision

0

5

10

15

20

Group profitConsolidated CashflowEBITEBIT/TurnoverCashflow/Turnover

93 94 95 96 97 98 99 00 01 02 03 04 05 06

Key f igures 1993-2006 (in millions of euros)

40

50

60

Added valueGross marginTurnoverGross margin %

0

50

100

150

200

250

300

350

400

93 94 95 96 97 98 99 00 01 02 03 04 05 06


CoatingApparelIndustrial applications

93 94 95 96 97 98 99 00 01 02 03 04 05 06

Investments 1993-2006 (in millions of euros)

Capital & reserves/minority interestsProvisionsST liabilitiesLT liabilities

93 94 95 96 97 98 99 00 01 02 03 04 05 06

Financing of assets 1993-2006 (in %)

0

1000

2000

3000

4000

5000

TotalCoatingApparelIndustrial Applications

93 94 95 96 97 98 99 00 01 02 03 04 05 06

Development of employment 1993-2006

96 97 98 99 00 01 02 03 04 05 06

Stock price ( to 14-03-07) (in EUR)

CONSOLIDATED KEY FIGURES ( in mil l ions of euros) (1)

2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

Profi t & LossNet sales 339.4 316.2 309.8 272.8 237.7 226.0 192.4 161.1 141.2 107.9 85.1Operating profi t (EBIT) 25.9 25.5 27.0 27.2 24.6 33.8 32.6 28.4 19.6 15.0 9.7Financial result (6.6) (5.5) (7.3) (11.0) (8.7) (6.7) (3.0) (1.3) (1.7) (1.2) (1.1)Profi t on ordinary activities before taxes 19.3 20.0 19.6 16.2 15.9 27.1 29.6 27.1 17.9 13.8 8.6Profi t on ordinary activities after taxes 12.2 13.6 13.1 8.9 11.0 17.3 19.0 17.6 12.3 9.1 6.8EBIT (8) 25.9 25.5 27.0 24.4 23.1 32.4 31.5 27.3 19.0 14.5 9.2EBITDA (9) 44.8 43.6 44.8 52.8 42.8 50.9 45.0 37.8 27.1 19.6 13.2Cashfl ow (4) 31.5 29.5 31.1 37.3 30.2 35.8 32.5 29.5 20.7 14.2 10.8Net profi t (group share) 12.2 13.6 12.3 8.6 10.0 16.9 18.8 18.6 12.2 9.0 6.5Depreciation 17.9 17.9 17.8 22.1 19.8 18.6 14.1 11.6 7.1 4.7 3.2Personnel costs 67.6 63.5 61.7 54.5 47.0 42.8 34.5 30.9 24.1 17.3 13.0Number of employees (in units) 4 645 4 645 4 500 4 689 4 271 3 924 3 420 2 857 2 555 1 552 1 231Balance sheetEquity 135.8 129.4 118.3 123.5 125.3 123.9 112.0 97.5 79.8 33.6 25.1Long-term fi nancial debt 128.5 66.9 68.5 89.0 95.1 83.4 66.2 57.3 42.5 35.8 30.3Net fi nancial debt (2) 147.8 126.8 117.7 148.1 134.6 118.4 91.6 71.1 56.7 44.7 40.6Balance sheet total 371.8 337.7 330.7 346.9 331.8 310.3 262.9 227.6 185.3 112.6 89.5Working capital (3) 115.2 107.6 90.9 108.9 118.5 117.3 101.4 81.4 73.6 43.6 40.7Net investment in tangible fi xed assets (10) 23.1 16.6 7.1 11.9 30.6 27.1 27.4 28.3 22.4 15.6 10.9Fixed assets 150.4 142.3 141.4 175.8 153.1 138.9 115.7 99.5 73.6 40.7 29.1Ratio’sEBIT (8) 7.6% 8.1% 8.7% 9.0% 9.7% 14.3% 16.4% 17.0% 13.5% 13.5% 10.8%EBITDA (9) 13.2% 13.8% 14.5% 19.4% 18.0% 22.5% 23.4% 23.5% 19.2% 18.1% 15.5%Net profi t margin (7) 3.60% 4.30% 4.24% 3.3% 4.4% 7.6% 9.9% 11.8% 8.9% 8.5% 7.9%Cash fl ow/net sales 9.30% 9.34% 10.04% 13.7% 12.7% 15.8% 16.9% 18.3% 14.6% 13.2% 12.7%Liquidity (current assets/current liabilities) 2.11 1.38 1.33 1.40 1.78 1.91 2.05 2.11 2.12 1.92 2.00Solvency (equity/balance sheet total) 36.5% 38.3% 35.8% 35.6% 37.7% 39.9% 42.6% 42.8% 43.1% 29.8% 28.1%Net fi nancial debt/equity 1.09 0.98 1.00 1.20 1.07 0.96 0.82 0.73 0.71 1.33 1.62Return on equity (5) 9% 11% 10% 6.9% 8.1% 15.1% 19.3% 23.4% 36.3% 35.7% 34.8%Return on capital (6) 6.23% 7.09% 8.13% 10.0% 9.6% 15.6% 18.1% 19.3% 23.3% 21.5% 18.3%

Defi nitions see p77(1) Since 2004 IFRS/before BGAAP (2) Financial debt - other investments & deposits and cash & cash equivalents 3) Financial fi xed assets + current assets (less other assets & deposits and cash & equivalents) - non-fi nancial liabilities up to one year - accrued charges and deferred income.(4) Consolidated net profi t + depreciation - + provisions for liabilities and charges + impairments and valuation allowances + deferred taxes (5) Net profi t (group share) / equity(6) Operating profi t / (equity + minority interests + provisions for liabilities and charges + net fi nancial debts)(7) Net profi t / net sales for the fi nancial year (8) Earnings Before Interest and Taxes = Operating profi t - amortization of consolidation differences (goodwill) (9) Earnings Before Interest, Taxes, Depreciation and Amortizations = Operating profi t + depreciation + provisions for liabilities and charges + impairments and valuation allowance(10) Acquisition of tangible fi xed assets

CONSOLIDATED KEY FIGURES PER SHARE (1) (2)2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

Operating profi t 1.21 1.19 1.26 1.27 1.15 1.58 1.52 1.33 0.92 0.75 0.48Profi t on ordinary activities after taxes 0.57 0.64 0.61 0.42 0.52 1.27 0.89 0.82 0.58 0.43 0.32Net profi t (group share) 0.57 0.63 0.57 0.40 0.47 0.79 0.88 0.87 0.57 0.45 0.32Cashfl ow 1.47 1.38 1.45 1.74 1.41 1.67 1.52 1.38 0.97 0.71 0.54Consolidated equity 6.35 6.05 5.53 5.77 5.86 5.79 5.24 4.56 3.73 1.68 1.26Gross dividend 0.2600 0.2400 0.2200 0.20 0.17 0.16 0.14 0.12 0.09 0.07 0.05Net dividend 0.1950 0.1800 0.1650 0.15 0.13 0.12 0.11 0.09 0.07 0.05 0.04Pay-out (%) 45.6% 37.8% 38.4% 49.8% 35.9% 20.2% 15.8% 14.2% 15.7% 15.5% 14.5%Maximum share price 10.41 10.49 10.70 9.16 14.95 23.51 33.65 47.5 43.13 10.68 4.02Minimum share price 8.00 7.85 8.24 4.70 6.00 10.1 18.4 28.5 9.92 3.92 3.84Price at end December (3) 9.60 8.30 10.29 8.24 7.65 11.50 20.90 33.00 38.18 9.97 3.92Change in share price (5) 16% -19% 35% 8% -33% (45%) (36.7%) (14%) 283% 154% 13%Price/Earnings ratio (5) (6) 16.8 13.1 18.0 20.5 16.4 14.5 23.8 37.9 67.0 22.1 12.1Price/Cash fl ow ratio (5) (7) 6.5 6.0 7.1 4.7 5.4 6.9 13.8 23.9 39.4 14.0 7.3Average daily trading volume (no. of shares) (4) 13 396 12 771 6 550 4 406 5 310 5 104 9 548 13 216 26 671 20 950 43 410Average monthly trading volume (no. of shares) (4) 274 892 268 200 137 550 92 895 112 837 107 194 199 710 277 530 557 863 434 762 855 860Annual trading volume (in EUR millions) 30.1 29.5 16.2 8.3 10.4 20.7 63.7 122.5 162.6 33.9 8.2Number of Sioen shares outstanding (in thousands) (2) 21 391 21 391 21 391 21 391 21 391 21 391 21 391 21 391 21 391 19 965 19 965Stock market capitalization (in millions) (5) 205.3 177.5 220.1 176.3 163.6 246.0 447.1 705.9 816.6 199.0 78.2

(1) Since 2004 IFRS/Before BGAAP (2) Recalculated after the 1 to 55 share split on 13/09/96 and the 1 to 10 split on 05/11/98. (3) On 14 March 2007 the Sioen Industries share was trading at EUR 9.56. (4) 1996 data are strongly infl uenced by heavy trading shortly after the stock market fl otation on 18 October 1996. (5) Price at end of December (6) Share price / net profi t per share (7) Share price / cash fl ow per share

0

10

20

30

40

50

SioenEurostoxx50

0

10

20

30

40

50

0

5

10

15

20

Group profitConsolidated CashflowEBITEBIT/TurnoverCashflow/Turnover

93 94 95 96 97 98 99 00 01 02 03 04 05 06


40

50

60

Added valueGross marginTurnoverGross margin %

0

50

100

150

200

250

300

350

400

93 94 95 96 97 98 99 00 01 02 03 04 05 06


CoatingApparelIndustrial applications

93 94 95 96 97 98 99 00 01 02 03 04 05 06

Investments 1993-2006 (in millions of euros)

Capital & reserves/minority interestsProvisionsST liabilitiesLT liabilities

93 94 95 96 97 98 99 00 01 02 03 04 05 06

Financing of assets 1993-2006 (in %)

0

1000

2000

3000

4000

5000

TotalCoatingApparelIndustrial Applications

93 94 95 96 97 98 99 00 01 02 03 04 05 06

Development of employment 1993-2006

96 97 98 99 00 01 02 03 04 05 06

Stock price ( to 14-03-07) (in EUR)

CONSOLIDATED KEY FIGURES ( in mil l ions of euros) (1)

2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

Profi t & LossNet sales 339.4 316.2 309.8 272.8 237.7 226.0 192.4 161.1 141.2 107.9 85.1Operating profi t (EBIT) 25.9 25.5 27.0 27.2 24.6 33.8 32.6 28.4 19.6 15.0 9.7Financial result (6.6) (5.5) (7.3) (11.0) (8.7) (6.7) (3.0) (1.3) (1.7) (1.2) (1.1)Profi t on ordinary activities before taxes 19.3 20.0 19.6 16.2 15.9 27.1 29.6 27.1 17.9 13.8 8.6Profi t on ordinary activities after taxes 12.2 13.6 13.1 8.9 11.0 17.3 19.0 17.6 12.3 9.1 6.8EBIT (8) 25.9 25.5 27.0 24.4 23.1 32.4 31.5 27.3 19.0 14.5 9.2EBITDA (9) 44.8 43.6 44.8 52.8 42.8 50.9 45.0 37.8 27.1 19.6 13.2Cashfl ow (4) 31.5 29.5 31.1 37.3 30.2 35.8 32.5 29.5 20.7 14.2 10.8Net profi t (group share) 12.2 13.6 12.3 8.6 10.0 16.9 18.8 18.6 12.2 9.0 6.5Depreciation 17.9 17.9 17.8 22.1 19.8 18.6 14.1 11.6 7.1 4.7 3.2Personnel costs 67.6 63.5 61.7 54.5 47.0 42.8 34.5 30.9 24.1 17.3 13.0Number of employees (in units) 4 645 4 645 4 500 4 689 4 271 3 924 3 420 2 857 2 555 1 552 1 231Balance sheetEquity 135.8 129.4 118.3 123.5 125.3 123.9 112.0 97.5 79.8 33.6 25.1Long-term fi nancial debt 128.5 66.9 68.5 89.0 95.1 83.4 66.2 57.3 42.5 35.8 30.3Net fi nancial debt (2) 147.8 126.8 117.7 148.1 134.6 118.4 91.6 71.1 56.7 44.7 40.6Balance sheet total 371.8 337.7 330.7 346.9 331.8 310.3 262.9 227.6 185.3 112.6 89.5Working capital (3) 115.2 107.6 90.9 108.9 118.5 117.3 101.4 81.4 73.6 43.6 40.7Net investment in tangible fi xed assets (10) 23.1 16.6 7.1 11.9 30.6 27.1 27.4 28.3 22.4 15.6 10.9Fixed assets 150.4 142.3 141.4 175.8 153.1 138.9 115.7 99.5 73.6 40.7 29.1Ratio’sEBIT (8) 7.6% 8.1% 8.7% 9.0% 9.7% 14.3% 16.4% 17.0% 13.5% 13.5% 10.8%EBITDA (9) 13.2% 13.8% 14.5% 19.4% 18.0% 22.5% 23.4% 23.5% 19.2% 18.1% 15.5%Net profi t margin (7) 3.60% 4.30% 4.24% 3.3% 4.4% 7.6% 9.9% 11.8% 8.9% 8.5% 7.9%Cash fl ow/net sales 9.30% 9.34% 10.04% 13.7% 12.7% 15.8% 16.9% 18.3% 14.6% 13.2% 12.7%Liquidity (current assets/current liabilities) 2.11 1.38 1.33 1.40 1.78 1.91 2.05 2.11 2.12 1.92 2.00Solvency (equity/balance sheet total) 36.5% 38.3% 35.8% 35.6% 37.7% 39.9% 42.6% 42.8% 43.1% 29.8% 28.1%Net fi nancial debt/equity 1.09 0.98 1.00 1.20 1.07 0.96 0.82 0.73 0.71 1.33 1.62Return on equity (5) 9% 11% 10% 6.9% 8.1% 15.1% 19.3% 23.4% 36.3% 35.7% 34.8%Return on capital (6) 6.23% 7.09% 8.13% 10.0% 9.6% 15.6% 18.1% 19.3% 23.3% 21.5% 18.3%

Defi nitions see p77(1) Since 2004 IFRS/before BGAAP (2) Financial debt - other investments & deposits and cash & cash equivalents 3) Financial fi xed assets + current assets (less other assets & deposits and cash & equivalents) - non-fi nancial liabilities up to one year - accrued charges and deferred income.(4) Consolidated net profi t + depreciation - + provisions for liabilities and charges + impairments and valuation allowances + deferred taxes (5) Net profi t (group share) / equity(6) Operating profi t / (equity + minority interests + provisions for liabilities and charges + net fi nancial debts)(7) Net profi t / net sales for the fi nancial year (8) Earnings Before Interest and Taxes = Operating profi t - amortization of consolidation differences (goodwill) (9) Earnings Before Interest, Taxes, Depreciation and Amortizations = Operating profi t + depreciation + provisions for liabilities and charges + impairments and valuation allowance(10) Acquisition of tangible fi xed assets

CONSOLIDATED KEY FIGURES PER SHARE (1) (2)2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR

Operating profi t 1.21 1.19 1.26 1.27 1.15 1.58 1.52 1.33 0.92 0.75 0.48Profi t on ordinary activities after taxes 0.57 0.64 0.61 0.42 0.52 1.27 0.89 0.82 0.58 0.43 0.32Net profi t (group share) 0.57 0.63 0.57 0.40 0.47 0.79 0.88 0.87 0.57 0.45 0.32Cashfl ow 1.47 1.38 1.45 1.74 1.41 1.67 1.52 1.38 0.97 0.71 0.54Consolidated equity 6.35 6.05 5.53 5.77 5.86 5.79 5.24 4.56 3.73 1.68 1.26Gross dividend 0.2600 0.2400 0.2200 0.20 0.17 0.16 0.14 0.12 0.09 0.07 0.05Net dividend 0.1950 0.1800 0.1650 0.15 0.13 0.12 0.11 0.09 0.07 0.05 0.04Pay-out (%) 45.6% 37.8% 38.4% 49.8% 35.9% 20.2% 15.8% 14.2% 15.7% 15.5% 14.5%Maximum share price 10.41 10.49 10.70 9.16 14.95 23.51 33.65 47.5 43.13 10.68 4.02Minimum share price 8.00 7.85 8.24 4.70 6.00 10.1 18.4 28.5 9.92 3.92 3.84Price at end December (3) 9.60 8.30 10.29 8.24 7.65 11.50 20.90 33.00 38.18 9.97 3.92Change in share price (5) 16% -19% 35% 8% -33% (45%) (36.7%) (14%) 283% 154% 13%Price/Earnings ratio (5) (6) 16.8 13.1 18.0 20.5 16.4 14.5 23.8 37.9 67.0 22.1 12.1Price/Cash fl ow ratio (5) (7) 6.5 6.0 7.1 4.7 5.4 6.9 13.8 23.9 39.4 14.0 7.3Average daily trading volume (no. of shares) (4) 13 396 12 771 6 550 4 406 5 310 5 104 9 548 13 216 26 671 20 950 43 410Average monthly trading volume (no. of shares) (4) 274 892 268 200 137 550 92 895 112 837 107 194 199 710 277 530 557 863 434 762 855 860Annual trading volume (in EUR millions) 30.1 29.5 16.2 8.3 10.4 20.7 63.7 122.5 162.6 33.9 8.2Number of Sioen shares outstanding (in thousands) (2) 21 391 21 391 21 391 21 391 21 391 21 391 21 391 21 391 21 391 19 965 19 965Stock market capitalization (in millions) (5) 205.3 177.5 220.1 176.3 163.6 246.0 447.1 705.9 816.6 199.0 78.2

(1) Since 2004 IFRS/Before BGAAP (2) Recalculated after the 1 to 55 share split on 13/09/96 and the 1 to 10 split on 05/11/98. (3) On 14 March 2007 the Sioen Industries share was trading at EUR 9.56. (4) 1996 data are strongly infl uenced by heavy trading shortly after the stock market fl otation on 18 October 1996. (5) Price at end of December (6) Share price / net profi t per share (7) Share price / cash fl ow per share

0

10

20

30

40

50

SioenEurostoxx50

0

10

20

30

40

50

�

Prof i le

As an integrated industrial group Sioen Industries is the most important player in the technical textile worldwide. Vertical and horizontal integration, diversification and permanent growth are the key concepts that allow Sioen Industries to look ahead with great promise.

Our business

Sioen Industries is:

- The world market leader in coated technical textiles,- A market leader in industrial protective clothing, - A specialist in fine chemicals - A global player in the processing of technical textiles

Our s t rengths

- Vertical integration, making us independent of outside suppliers and giving us unrivalled expertise.

- Technical expertise. Sioen products predominate where technical specifications are decisive.

- A «hands-on», unbureaucratic corporate culture

Where we’re going

Exploiting our technology base to enter new markets and develop new products and processes as opportunities present themselves in Europe and elsewhere.

�

Our PrOducTS :SIOEn InduSTrIES – PArT Of Our dAIly lIVES

discreetly, without our realizing it, Sioen products

play an important part in our daily lives, protecting

us and those providing us with essential services, and

generally improving our quality of life.

Sioen provides filters to treat the water we drink,

the side curtains on the trucks bringing food to our

supermarkets, and protective clothing for medics,

firefighters, police forces, soldiers and pilots

on whom our society depends. Sioen products

strengthen our roads, improve the safety and comfort

of the cars we drive, and allow us to enjoy outdoor

sports in all weathers.

TransportTruck tarpaulins and curtains, mud flaps, inflatable

containers, railway wagon tarpaulins, protective and

industrial clothing for railway, bus, transport and

airline companies

Automobile Airbags, dashboards, sun shades, door panels,

gearlever covers, floor mats, seats, filters, trunk

curtains

construct ion and road works reinforcement for gyproc plates, insulation, road

fortification, rubble nets for scaffoldings, high

visibility protective clothing, silos, storage tents, sun

screens, sewage, filters

Agricul ture, hort icul ture, forestry and food industry Windbreak nets, drainage, protective clothing,

damming film, filters, pond foil, ultra-low

temperature clothing, hygienic protective clothing

chemical and petrochemical industr ies Specific protective clothing, oil dams, filters

S I O E n I n d u S T r I E S I O u r P r O d u c T S

Sioen provides filters to treat the water we drink, the side curtains on

the trucks bringing food to our supermarkets, and protective clothing

for medics, firefighters, police forces, soldiers and airmen on whom our

society depends. Sioen products strengthen our roads, improve the safety

and comfort of the cars we drive, and allow us to enjoy outdoor sports in

all weathers.

�

Medical sectorMedical protective clothing, air filters, mattress

covers, pillow-cases

Air and water t reatment filters, air conditioning and mine shaft air ducts

navigat ion, f ishing industry and water sports flotation suits, life jackets, protective aquatic

clothing, inflatable boats, boat tarpaulins, yacht

canvas, ship tarpaulins

Public inst i tut ions clothing, firemen’s clothing, clothing for police and

army, railways, airlines and post offices, tents and

truck tarpaulins

Inter ior decorat ionyarns and pigments for carpets, wall coverings,

insulation, ceilings, etc.

Sports Gym mats, safety nets, children’s playing mats,

clothing for hunters, golfers and fishermen,

motorcyclist’s clothing, reflective clothing for joggers,

cyclists and other outdoor sportsmen, pool covers

and pool reinforcement nets, surfer’s, ski and skater’s

clothing

Tents camping tents, party tents, awnings, canopies, halls,

semi-permanent buildings, kadors

Publici ty and promotion Indoor and outdoor publicity banners, promotional

clothing

corporate identi ty wear clothing for courier services, electricity companies,

petrol stations, breweries, telecom companies,

airlines, etc.

�

�00 yEArS Of Sioen text i les t radi t ion

1907 – Adolf Sioen starts a weaving mill in

rumbeke under the name Sioen-Sabbe. This is the

golden age of the cloth weaving industry in western

Belgium. Adolf Sioen is succeeded by daniel Sioen,

who continues to run Sioen-Sabbe.

1950 onwards: the flemish and northern french

textile industry enters a period of slow decline,

with growing competition from cheap imports and

synthetics.

1960 – daniel’s son Jean-Jacques Sioen, then aged

�5, creates his own company in the up-and-coming

area of technical textiles, with a first primitive

coating line at Beveren. The company is successful,

producing at first artificial leather, plastic tablecloths

and later truck tarpaulins. A major early order is

coated textile for beanbags.

1967 – Jean-Jacques’ wife Jacqueline Sioen starts an

apparel workshop in roeselare, using Sioen coated

textiles. Initial products include heavy duty clothing

for amongst others fishermen and farmers.

1970s. The company continues to grow, despite

the oil crisis and economic slowdown of the �970s

and early �980s. By the mid-�970s the two buildings

at Beveren and one at roeselare have become too

small.

1977 – company moves to a single new site

at Ardooie. At this stage it employs around �00

people in apparel, �0 in coating and �0 in sales and

administration

1980s – The company expand export into

neighbouring countries and further afield. Acquires

production sites in france, Ireland and Tunisia. In

�989 Jean-Jacques Sioen receives the export prize

from Prince Albert.

1991 – fire destroys Ardooie plant. All persons are

temporary out of work, and all of the production is

lost.

1993 – new, state-of-the-art plant inaugurated on

the Ardooie site. In �99� it reports sales of Eur �5

million and a workforce of 600.

1990s – Sioen continues its expansion, especially

in coated textiles. Apparel division opens additional

production facilities in Indonesia. Industrial

Applications begin.

1996 – Sioen goes public with an IPO on the

Brussels stock exchange. At this stage it has a

turnover of 85 million and �500 employees.

2000 – At the end of the century Sioen employs

�,�00 people and has a turnover of just under Eur

�00 million a year.

2000nd – The company continuously invests in

new applications, new processes and techniques and

focuses on profitability and growth.

2006 – The companies turnover amounts to Eur

��9.� million and now hold �8 subsidiaries in

�� different countries. �,687 people are currently

employed by Sioen.

S I O E n I n d u S T r I E S I � 0 0 y E A r S O f S I O E n T E x T I l E S T r A d I T I O n

5

Jean-Jacques SIOEn

When Jean-Jacques launched his f i rs t coat ing l ine in �960, i t was the s tar t of

Sioen Industr ies as we know i t today - a heal thy s tock l is ted company.

Al though the Sioen industr ies group was born �7 years ago, the Sioen text i les

t radi t ion is over a �00 years old. firs t in rumbeke, then in Beveren and

roeselare and now in Ardooie (al l three ci t ies in Belgium). In addit ion, the

group has now plants in �� countr ies al l over the world.

The philosophy of Mister Sioen has always been a pragmatic one: be bet ter,

faster and more innovative in al l act ivi t ies he deployed. from that point of

view grew the company adagio: “PrOTEcTIOn THrOuGH InnOVATIOn”.

Af ter �5 years as cEO and chairman of the company, Mister Sioen passed the

presidency of the company in �005 to his oldest daughter Michele. Today he

is chairman of the board of directors.

Innovation

Expertise

Vision

6

SIOEn InduSTrIES

InnOVATIOn

S I O E n I n d u S T r I E S I I n n O V A T I O n

I n n o v a t i o n

7

“Protect ion through Innovation” is Sioen’s corporate s logan. Along with creat ivi ty,

know-how and quali ty, i t is central to Sioen’s corporate cul ture. Innovation keeps us

ahead of the market with new products, processes and applicat ions based on our core

coat ing expert ise.

Over �5% of our �006 sales were of products developed over the past 5 years. Over

�0% were in markets we were not in �0 years ago. Since �000 we have spent well over

Eur �00 mil l ion on innovative manufacturing processes.

To be innovative we must know our markets and our customers. This input we get

f rom our dedicated and ef fect ive sales and market ing team. Our r&d department and

technical experts are at the cut t ing edge of our technologies. We must be able to

communicate internal ly but also external ly with suppliers , customers, r&d inst i tut ions

and experts . We must be entrepreneurial – take r isks, learn f rom our mistakes. This we

are.

8


“We are optimist ic on our short and long-term future.”

�006 was another year of strong growth at Sioen

Industries in terms of production and sales. It was

also a year of innovation par excellence, in which

investment projects were completed, r&d centres

opened, markets explored, and production processes

upgraded.

We are optimistic on the future of Sioen Industries.

Even if raw material prices are placing pressure on

earnings and competition is very sharp on certain

low-end markets, Sioen is showing itself to be

resilient and able to react fast to events.

Sioen Industries is a growth company in every field:

we are focused on growth and profit, think long-term,

and aim for market leadership in all our activities.

Our corporate slogan is “protection through

innovation”. It is innovation, know-how and vision

that take Sioen forward. Innovation is embedded

in our corporate culture, providing us with new

products, new processes, new applications and new

markets. Know-how and expertise are key assets, with

over �5 years’ experience of coating technologies,

markets and standards. Vision is our strength: we

possess entrepreneurship and creativity, a nose for

good business opportunities and are always ready for

new challenges.

“We are confirming our market leadership and achieving substant ial progress”

for the coating division �006, was a year in which

we confirmed our market leadership and achieved

substantial progress. It was also a year of challenges

with further rises in raw materials prices, rapidly

growing competition in transfer coating activities and

capacity shortages in direct coating and elsewhere.

rising raw materials prices we were able to offset

with cost reduction and price increases. We invested

in a new (additional capacity) varnish line and a

new direct coating machine to meet strongly rising

demand. With its extensive range and flexible

production apparatus, Sioen coating has succeeded

in capturing much of the growth in traditional

markets (transport, camping, textile architecture).

In �006 the strategy of extending our fine chemicals

activities took further shape. under the common

denominator of Sioen chemicals we now produce

colour pigment pastes, inks, varnishes and granulates.

We invested in a new production hall at the Bornem

site, took over part of the assets of Siegwerk Benelux

and acquired the french company richard colorants.

And in January �007 we bought the Belgian company

fillink, which specializes in inks for wide format

printers. In short we have, in a very short space of

time, built up an unique position that guarantees

further expansion in these sectors.

To react better and more effectively to a competitive

and constantly evolving market, the Apparel division

optimized its internal organization. We achieved ever

greater successes in technical markets like firefighting

clothing and flame retardent apparel. This division

also continues to perform well in its core industrial

protective clothing activities.

The Industrial Applications division, in which we

process technical textiles, did very well in �006.

The lion’s share of the growth in this product line

came from transport-related activities. We will

also be investing further in larger production shops,

automation and wide-format printing.

“r&d is a s tate of mind”

We are proud to announce that �006 was a strong

year. We are continuing with the same dynamism

dEAr MAdAM, dEAr SIr,

9

to carry out various investment projects which

will increase capacity and, through far-reaching

automation, improve cost control.

We continue to focus on growth and on profit, with

a permanent emphasis on r&d. This research and

development is providing us with new products,

new markets, new production processes and new

technical features. Sioen intends to be a market

leader in each of its activities.

In �006 we extended our ultra-modern central

r&d centre at Ardooie with a brand-new section

specializing in testing and research on industrial

protective clothing. r&d is a cornerstone of our

organization. It is a state of mind, an attitude of all

our employees, at every level. Workers, salespeople,

foremen, chemists, production managers, general

managers, we are all in our own way concerned with

improvement and innovation.

With this annual report we provide an overview of

the activities of Sioen Industries, a glimpse behind

the scenes, how we see the business, where we stand

and where we intend going.

We are convinced that this vision, dynamism and

team spirit will enable us to advance with unflagging

élan. We thank all Sioen employees for their devotion

and commitment in putting all this into practice day

after day. finally we thank you, our shareholders, for

your continuing trust in Sioen Industries.

Jean-Jacques Sioen Michèle Sioen

chairman of the Board cEO Sioen Industries n.v.

� 0

At Sioen, strategy consists first and foremost

of focusing on and pursuing its key success

variables, the things that Sioen does well and

which will ensure its future success.


Mission

Our task is to offer our customers high quality,

innovative products, made-to-measure solutions

and flexible service in every area in which we

are active: technical textiles, protective clothing,

industrial applications and fine chemicals.

We intend to retain and further extend our market

leadership in all segments, with an emphasis at

all times on technically sophisticated products

and innovation, and on seizing opportunities

for new markets and processes as these present

themselves.

We seek to offer our shareholders a sound

investment with reliable results and a growing

dividend stream.

We work with well-trained, result-oriented

employees, with a concern for safety and the

environment as fundamental values.

S t rategy

At Sioen strategy consists first and foremost of

focusing on and pursuing its key success variables,

the things that Sioen does well and which will ensure

its future success. These include:

MISSIOn And STrATEGy

� �

vertical integration

Mastering the entire value chain from the spinning

of yarn through to final production gives Sioen

a knowledge base unrivalled in the industry and

valuable independence from outside suppliers.

technical expertise

Sioen dominates where technical specifications are

decisive. Sioen is constantly working to maintain a

technical lead in its key product areas, and to make

sure innovative ideas are available across the group.

R&D

Sioen continuously invests in r&d. Sioen works

closely with customers to optimize quality and

delivery and respond to new needs.

innovation and new markets

Sioen is constantly looking for new areas in which

to profitably apply and expand its expertise. It has

repeatedly proved its ability to react rapidly to seize

new opportunities. The recent expansion into fine

chemicals is one example of this.

a hands-on, unbureaucratic corporate culture

The Sioen style is straightforward, plain talking,

appreciated by customers and employees alike.

� �

SIOEn InduSTrIES

ExPErTISE

S I O E n I n d u S T r I E S I E x P E r T I S E

S o l u t i o n s

� �

Know-how is one of Sioen’s great s t rengths. With over �5 years in the business, i t

shows more accumulated know-how of text i le coat ing technology and coated text i le

applicat ions than any other company in Europe. no other s ingle company masters

f ive di f ferent text i le coat ing techniques. no other company has as much experience

and knowledge of s tandards and rules. no other company has experience of as many

industr ial text i le applicat ions or as many markets .

This know-how is gained through systematical ly searching for solut ions to pract ical

problems, much of the t ime in close cooperat ion with our customers. I t is expanded by

using exis t ing know-how as a basis for enter ing new markets . I t is protected by s t rong

employee loyal ty and motivat ion.

� �

“ExPErTISE rIGHT dOWn THE lInE”

Sioen is involved at every stage of the production

and application of coated textiles, from spinning

the yarn, through weaving and coating to specialist

processing.

Its command of the complete chain, including all

main coating processes and a variety of processing

technologies, provide it with an unrivalled fund of

expertise and a leading place in its specialist areas.

Base material

5. coated fabrics sold

as semi-finished

products to outside

manufacturers

6. Apparel division -

Production of protective

clothing for industrial

and leisure use

7. Industrial Applications

division – Processing

of heavy-duty coated

textiles for specialist

niche markets

�. Application of coatings

(direct coating, transfer

coating, online coating,

extrusion coating,

calendering)

�. Spinning of polyester high-tenacity and/or polyamide

yarns

�. Weaving of the yarn into various base textiles

�. Preparation of colourings (pigment pastes and dyes) =

Sioen chemicals

coating s tage

finishing

�

� �

�

5 6 7


� 5(�) Quoted percentages have been rounded, and reflect the situation at �� december �006 (�) Via Sioen coating nv(�) The official name is Sioen coated fabrics Shanghai Trading ltd.(�) The official name is Gairmeidi caomhnaithe dhun na nGall Teoranta.(5) 5% via P.T. Sungintex (6) Via Monal s.a. and roltrans Group b.v. (7) In december �006 roland International b.v. acquired �00% of the shares of roland ukraine llc (8) The richard group was acquired in October �006(9) The official name is colorants Pigments distribution

SIOEn InduSTrIES nV

cOATInG dIVISIOn APPArEl dIVISIOn InduSTrIAl APPlIcATIOnS dIVISIOn

Sioen coating n.v. Sioen n.v. coatex n.v. direct coating Belgium Apparel Belgium Processing of coated fabrics and

films BelgiumSaint frères s.a.s. confection Tunisienne de Sécurité s.adirect coating france Apparel Tunisia Saint frères confection s.a.s.

Heavy-duty manufacturing france Sioen coating distribution n.v. donegal Protective clothing ltd (�) Sales Office Belgium Apparel Ireland Sioen nordifa s.a.

filter production BelgiumSioen fabrics s.a. Mullion Manufacturing ltdWeaving/Transfer coating Belgium Apparel u.K. roland International b.v. (6)

Manufacturing of truck tarpaulins Sioen fibres s.a. P.T. Sioen IndonesiaSpinning Belgium Apparel Indonesia roltrans Group

America Inc.Sioen Shanghai (�) P.T. SungintexSales office china Apparel Indonesia roland Planen GmbH

Siofab s.a. Sioen fibres s.a. roltrans Group Transfer coating Portugal central distribution unit Belgium Polska sp.z.o.o.

TIS n.v. Sioen france s.a.s. roland ukraine llc (7)Weaving Belgium Sales office france

roland Tilts uK ltd.

Veranneman TT n.v. Sioen Tunisie s.a.Weaving/direct coating Belgium Sales office Tunisia

Pennel Automotive s.a.s. Sioen Zaghouan s.a.calendering france Apparel Tunisia

Inducolor s.a. Sioen uSA Inc. (5)Ink production Belgium Sales office

European Master Batch n.v. Master batch production Belgium

richard s.a.s. (8)

copidis s.a.s. (9)

Astra colorants s.a.

99%

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�00%

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�00%

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99%

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�00%

90%

89%

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5%

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75% (�)

99%

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95%

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6�

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5

8 Sioen Shanghai SHANGHAI CHINA9 Saint Frères - Saint Frères Confection FLIXECOURT FRANCE10 Richard Colorants LOMME FRANCE Copidis s.a.s. LOMME FRANCE11 Astra Colorants s.a. LyON FRANCE12 Sioen France NARBONNE FRANCE13 Pennel ROUBAIX FRANCE14 P.T.Sungintex BEKASI BARAT INDONESIA15 P.T.Sioen Indonesia JAKARTA INDONESIA16 Donegal Protective Clothing DONEGAL IRLAND17 Roltrans Group Polska KONIN POLAND18 Siofab SANTO TIRSO PORTUGAL19 Roland International TEGELEN THE NETHERLANDS20 Sioen Tunisie - CTS - Sioen Zaghouan TUNIS TUNESIA21 Roland Ukraine RIVNE UKRAINE22 Roland Tilts UK BRADFORD UNITED KINGDOM23 Mullion Manufacturing Ltd. SCUNTHORPE UNITED KINGDOM24 Roltrans Group America TEXAS UNITED STATES

SIOEn WOrldWIdE

1 Sioen Coating Division/Apparel Division

Veranneman TT Sioen Coating Distribution

ARDOOIE

2 European Masterbatch/EMB

Fillink Technologies

BORNEM

3 TIS KERKSKEN

4 Sioen Nordifa LIÈGE

5 Inducolor MESLIN-L’EVÊQUE

6 Sioen Fibres - distribution/spinning

Sioen Fabrics - weaving and coating

MOUSCRON

7 Coatex POPERINGE


cOATInG

APPArEl

InduSTrIAl APPlIcATIOnS

� 7

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� 8

Sioen Industries masters 5 coating techniques and

has a firm control of all steps of the production

process. We spin the yarn, weave a base fabric

which we then coat with a home-made paste.


The product – technical coated text i les

Sioen has been specializing in the coating of

technical textile fabrics for nearly 50 years. Put in

simple terms, coating is the covering of a support

with a protective layer (PVc, Pu, silicon or another

polymer), to make the material waterproof, fireproof,

anti-static, breathable, printable, and so on, and

to afford protection against wind, water, cold and

chemical matter.

Production - vert ical integrat ion

Sioen handles the entire production process:

spinning, weaving and coating.

Spinning - Sioen has one of the most modern

spinning mills in the world, with an output of

approximately �5,000 tons of polyester high-tenacity

and/or polyamide yarns. A part of the yarns is twisted

in the twisting plant.

Weaving - The yarn is supplied as raw material

to the three weaving mills, each with its own

specialization: sailcloth, open structure textiles,

polyester high tenacity textiles, airbag textiles, etc.

The fabrics all meet high technical requirements

as tensile strength, tear resistance. Sioen has also

secured certificates of approval for automotive

applications.

Sioen also produces needle punch non-woven (liège)

which is used, among other things, as a support in

extrusion coating.

cOATInG dIVISIOn

� 9

Preparation of coating layer/colouring The coating layer can consist of PVc, polyurethane,

silicon or other polymers, which are sourced from

major chemicals companies. Sioen produces its own

pigment pastes and granulates used for colouring the

coating layer. Pastes are mixed in fully automatic

paste kitchens and then brought to the coating line by

robots.

CoatingSioen Industries applies five main coating processes,

at seven coating plants (� in Belgium, � in france

and � in Portugal), with some of the most advanced

production lines in the world.

Direct coating: the PVc coating paste is directly

applied to the fabric.

Applications: curtains for lorries and train

compartments, sports mats, swimming pool covers,

tarpaulins, advertising, …

Transfer coating: The coating paste

(polyurethane, silicone, etc.) is applied to the fabric

using a paper support.

Applications: protective clothing, outdoor sports

clothing, shoe protectors, mattress protectors, airbags

Online coating: In online coating, the fabric

passes from the loom into a coating bath before being

wound. This technique is used to manufacture open

structure textiles.

Applications: geogrids, swimming pool covers,

reinforcement nets, windbreak nets, filters, etc. ...

� 0


Extrusion coating: This technique allows other

base materials (textiles, non-woven, knitted fabrics,

etc.) to be coated with various polymers.

Applications: ventilation tubes, plastic sheeting for

ponds, plastic film for windows, sewer renovation,

etc. ...

Calendering (rolling): TPO (Thermoplastic

polyolefin) and PVc films are processed with rollers in

order to achieve the required motif/texture.

Applications: car dashboards and door panels, wall

coverings etc. ...

Main product markets

The majority of the total production from the

coated division is sold to external manufacturers

in the areas given below. It is difficult to give

meaningful figures for sales in each sector as these

can vary considerably from one year to the next.

The tarpaulin and side curtains sector is by far the

largest, accounting for around �0% (in some years

more) of external turnover of the coating division.

The balance is shared by the other markets, with the

individual percentages varying considerably from

year to year.

Tarpaulins and side curtains (direct

coating): The market for PVc coated tarpaulins and

side curtains for trucks and railway wagons is the

most important segment.

Sioen is the undisputed market leader here with an

estimated 50% market share.

This market, for both new and replacement tarpaulins

and side curtains, is mainly located in Western

Europe, where the large trailer builders are situated.

The use of tarpaulins has not yet become customary

in the American market, where trailers are usually

� �

hard-bodied. recent innovations include Siosteel, a

combination of PVc coated technical textile with a

coated steel net, which offer better protection against

vandalism. Sales of this product gathered momentum

when certain insurance companies began offering

cheaper insurance premiums to hauliers that equip

their trucks with Siosteel.

Geotextiles and roofing (online coating):

Technical textile is used as reinforcement

netting for roads, roofs and all types of plates.

With approximately 50% of the market Sioen

is the European market leader in this segment.

Geographical expansion to the uS and elsewhere is

one of the goals for the coming years.

Automotive (direct coating, transfer coating,

calendaring): about ��% of the coating division’s

production is for the automotive sector: TPO and

PVc films for car interiors, trunk covers and airbags.

Technical textile for car interiors is produced and

sold by Pennel Automotive, a long-established french

company with a strong presence in its home market

and an estimated market share of �0%.

Sioen profiles itself as a full service supplier in the

airbags market. Sioen extrudes the polyamide yarn

in its own spinning mill, weaves it into a carrier

and coats it in one of its plants. As an extra service

Sioen cuts the fabric with high tech laser cutters in

its coatex plant (a part of the Industrial Applications

division).

The yarn is produced in the spinning mill. This high-

tech spinning mill is one of the most modern in the

world. The yarn is then processed into fabrics that

are then coated in one of the coating plants.

� �


Sioen chemicals

Sioen has long produced masterbatches and pigment pastes used for dyeing al l

kinds of coat ings, as well as producing special varnishes, compounds and al l

types of lacquers.

In �006 Sioen took the s t rategic decis ion to expand i ts business in f ine chemicals

used in colouring pastes, plast ics and other materials , of which i ts own coating

divis ion is a heavy user, and in the same year purchased the decorat ive inks and

varnishes business of Siegwerk-Benelux AG and later richard colorants, france’s

leading producer of water-based colour pigments.

The Sioen Industr ies range of f ine chemicals now includes:

• pigment pastes for colouring polyurethane and PVc coatings, epoxies, acryl ic

resins and si l icones

Flexible, breathing technical textile

(transfer coating): for clothing and mattress covers.

Thanks to its modern production system, large

volumes, r&d and know-how and the advantages

of vertical integration, Sioen can hold its own in this

nonetheless competition-sensitive market.

Swimming pool covers and pool liners (direct

coating, extrusion coating). Sioen is by far the largest

global supplier of technical textiles for this segment.

The greater proportion of the turnover comes from

france, where the major producers of swimming pool

covers and overground pools are located.

Sign and textile architecture (direct,

extrusion and online coating): Sign is the collective

name for all types of publicity banners. Textile

architecture is understood as technical textiles for

tents and structures. These two growth markets will

be able to reap the benefits of r&d efforts in coming

years.

Geographical markets

87% of the coating division’s turnover comes from

the traditional Western European countries, with

france, Germany, the Benelux and Great Britain the

largest markets. Eastern Europe and Asia are other

important markets. Since �006, we are again fully

active on the uSA market, with an own salesoffice,

Sioen coating uSA.

The geographical distribution reflects the location of

final producers. Several large trailer manufacturers

are based in Germany and the uK, Germany has

a rich tradition of using geo-textiles, france has a

large number of swimming pool cover and mattress

cover makers, the largest digital printers are based in

Western Europe and Pennel Automotive has a long

history of contacts with french car makers.

Although the traditional Western European countries

comprise the largest proportion of turnover, the

Eastern European market is growing in importance.

Technical textiles for digital printing and truck

� �

tarpaulins and side curtains in particular are finding

their way to Eastern European customers.

competi t ive posi t ion

Sioen accounts for over �0% of total coating capacity

at European level. The remainder is shared among some

German competitors and a large number of smaller and

increasingly specialized competitors in france, Spain,

Italy, Austria, Germany, france, Scandinavia, etc.

new products and developments

In early �006 Sioen invested in a new direct

two-sided coating line and automated kitchen

in flixecourt (france). This investment, costing

Eur 5 million, adds an addition 50% of production

capacity and provides considerable cost savings.

In �007 Sioen will be investing to double its capacity

in open structure fabrics (anchoring nets, geotextiles,

windbreak nets and advertising banners)

Sales organizat ion

In addition to the permanent sales staff operating out

of the Ardooie, Mouscron and roubaix plants, and a

number of local agents, the coating division has its

own sales offices in Germany france, china and the

uSA (Sioen coating uSA).

• granulates for inject ion moulding, extrusion and blow-moulding

• a wide range of varnishes and inks with applicat ions including vinyl f loor and

wall coverings, paints , glues, Pu foams, shoe polishes, f inger paints and wax

crayons

In �006, EMB inaugurated a new factory building in Bornem (Belgium), with

brand new machines for producing varnishes, inks, pigment pastes and pigment

granules.

In January �007, Sioen acquired fi l l ink Technologies n.v. This Belgian company is

special ized in eco-solvent, solvent and uV inks for wide and super wide format

digi tal pr inters . I ts experience with unique product formulat ions and wide market

knowledge represent a real added value for Sioen chemicals .

� �


The product

Sioen is Europe’s leading producer and seller of

protective clothing for both industrial and leisure use.

Part of the clothing is produced from in-house coated

textiles in Sioen’s own factories.

The Industry range accounts for the greater part of

the Apparel division’s turnover. It includes protective

clothing ranging from simple rainwear to extremely

technical protective clothing.

With sustained commercial pressure on larger-

volume, low technicity markets, Sioen is focusing

strategically on products and applications with a high

degree of technical complexity such as bullet and

knife proof vests, flotation suits, fire fighting packs,

protective clothing for the petrochemicals sector,

forestry clothing, etc. The technical complexity

of these products means that competition is more

limited, and with international and European

standards and regulations becoming increasingly

stringent, demand for these products is continuing to

rise.

APPArEl dIVISIOn

� 5

design and production

With an eye for detail and expert knowledge of

production techniques and raw materials, our

creative designers and textile engineers develop

functional and comfortable protective clothing

which meets all legal regulations and technical

requirements.

Each design is produced carefully to the strictest

quality standards in one of our modern production

centres in Tunisia and Indonesia and elsewhere. We

are continually investing in the latest technologies to

enable us to meet the highest quality standards. Sioen

has the most recent ISO 900�/ En �900� certification

as well as the AQuAP certificate.

Applicat ion areas

The application areas for the standard range are as

divergent as they are extensive: Sioen protective

clothing is used in the petrochemicals industry, the

food sector, road construction and public works,

agriculture, gardening and the fisheries sector. Sioen

serves public authorities (municipal services, police,

army, firefighting, postal services, etc.) and private

companies.

new showroom and laboratory faci l i t ies

In �005 a former s toreroom and warehouse at the Ardooie headquarters were

converted into an immense showroom. As well as tel l ing the s tory of Sioen from

production process through to f inal products, the Apparel divis ion’s range of

protect ive clothing is given special prominence with more than �00 mannequins

throughout the display area.

In �005, the Apparel divis ion constructed a new ultramodern lab in Ardooie. With

i ts own sophist icated test equipment, i t is able to conduct f lame tests (En�67) and

thermal radiat ion tests (En ISO 69��) inhouse. This has enabled i t to be one of the

f i rs t producers in Europe to obtain cert i f icat ion for the new standard En�69:�005,

covering protect ive clothing for f i ref ighters . This opens the way for Sioen to play

a leading role in the development in f i re-retardant clothing. The lab also includes

a shooting laboratory where the impact of bul lets is tested on body armour.

� 6

Sioen outdoor leisurewear is aimed mainly at

hunters, anglers, horse riders, motor cyclists, hikers

and golfers (Baleno trade mark). Sioen is also a

valued partner for certain skiwear brands.

developments during �006

during �006 the division optimized its internal

organization, both in Belgium and at its

manufacturing plants in Tunisia and Indonesia.

In �006 Sioen also extended its ultra-modern

r&d centre at Ardooie with a brand-new section


� 7


protective clothing.

Whenever quality and technical excellence are vital

in protective clothing, Sioen has an appropriate

solution.

Geographical markets

The vast majority of products (around 75%) are sold

in Sioen’s traditional European markets (france,

Belgium uK, netherlands and Germany).

Sales and dis t r ibut ion

The sale of protective clothing is centralised at the

headquarters in Ardooie. Sioen Apparel also has a

number of local sales units and agents in france,

Scandinavia, Indonesia, Germany and the uK serving

local markets.

The finished products are shipped from the various

production centres to a fully automated dispatch and

distribution centre in Mouscron, and from there to

customers.

from our production centers in Tunesia and in

Indonesia, the finished products are sent to the

central dispatch and distribution centre, where they

are temporarily stored before being sent on to our

customers.

� 8

Product

The Industrial Applications division processes heavy-

duty coated textiles, mainly produced in-house, in a

wide variety of often highly specialist areas.

Markets

The markets in the division are as extensive as

they are divergent: the automotive industry, the

leisure sector, the food industry, heavy industry and

chemicals, transport, construction, mining etc.

Processing

different plants in france, Belgium, Germany, Poland

and ukraine each provide different specialty products

and services.

Kadors: Sioen processes in-house coated technical

fabric into kadors (flexible PVc tubes surrounded

by a technically coated fabric, used for instance for

sliding a tent on to a caravan.

Sio-steel: Sio-steel is a patented composite

consisting of a PVc coated steel net and double-

InduSTrIAl APPlIcATIOnS


� 9

sided PVc coated polyester fabric, used primarily

for intrusion-resistant truck and train tarpaulins and

side-curtains.

Cutting: cutting of lining materials and multi-

layer laser cutting of all kinds of materials, including

airbags for the automotive industry.

Pond and dam sheeting: cutting, splicing and

packaging of pond sheeting and sheeting for water

reservoirs, used in the construction of recreational

ponds and industrial reservoirs, cultivating beds and

dam sheeting, for customers worldwide.

Filters and filter cloths: Sioen specializes in

the production of felt and derived products such as

filters and filter cloths for the food industry (water

and air treatment in sugar refineries, breweries, etc.),

heavy industry - metallurgy, coke industry, mining,

power stations, paper processing, cement companies,

- the chemicals industry (dye production), city water

purification and after-burning plants. It recently

started producing acoustic and thermal insulation

panels for both visible and invisible use.

Tents, covering systems, roll-down shutter doors, compartment covers and silos: In-house coated fabric is processed into

finished products for high-tech niche markets such as

the army, the railways, the airline industry, and the

construction sector.

Camouflage fabric: Sioen specializes in the

design, production and marketing of camouflage

fabric and multi-spectral camouflage netting. This

high-tech market calls for considerable technical

knowledge and research and development.

Worldwide there are only a few companies active in

this segment.

Truck side curtains and tarpaulins: roland International (production units in Germany,

Poland, ukraine, romania) is the world’s largest

producer of tarpaulins and curtains for new trailers

(�5% of the market), using technical fabrics produced

by the coating division. Acquired by Sioen in

�00�, the company focuses on large volume, batch

production.

Geographic markets

Germany is by far the largest market, with �0% of

turnover, due mainly to the automobile and truck

tarpaulin activities). Another �0% is divided between

france, Belgium, the uK and netherlands. Eastern

Europe and the uSA both offer scope for growth.

Sales and dis t r ibut ion organizat ion

Sales and distribution channels differ from one

product to another. Increasing emphasis is being

placed on cross-selling.

� 0

SIOEn InduSTrIES

VISIOn

S I O E n I n d u S T r I E S I V I S I O n

V i s i o n

� �

This element of Sioen’s corporate cul ture is at once al l -pervasive and more di f f icul t

to def ine. I t is the abi l i ty to remain vigi lant and focused, with perfect knowledge and

mastery of our profession, ready to move forward and seize opportunit ies when they

ar ise, push open new doors, s t r ike out on new paths. I t is a rock-sol id confidence in

our own expert ise and abil i ty to tackle new areas. I t is a clear and real is t ic vis ion of

own strengths and weaknesses, where to push forward, where not to. I t is demonstrated

in Sioen’s abi l i ty in recent years to repeatedly enter new and prof i table markets at the

opportune moment.

� �


On december ��, �006 Sioen Industries employed

�.687 people in �6 different countries: Belgium,

china, Germany, france, Ireland, Indonesia, Portugal,

Tunisia, uK, the netherlands, Poland, uSA, Austria,

denmark and finland. This compares with �.6�5 at

the end of december �005. �.8�6 (8�%) were blue

collar and 87� were white collar (�9%) workers.

The large number of workers in Indonesia, Tunisia

and Poland are nearly all employed in the labour-

intensive apparel industry. As rationalization and

automation continue in this industry, there will be

less call on manual operatives and more on highly

qualified personnel.

Although the activities of the coating division are

capital intensive, this division employs 9�7 persons,

an increase of ��% compared with last year.

The “Group” in personnel per division relates to

the group services structure covering personnel

management, financial and treasury management,

budgeting, IcT and legal affairs from the group

holding company Sioen Industries n.v. in Ardooie (B)

(6� employees).

Working environment

Producing quality is impossible without a quality

working environment. The creation of a stimulating

working climate in which everyone has the

opportunity to develop their capacities to the full, is

one of the cornerstones of the Sioen Industries group.

Accordingly, our employees’ satisfaction is regularly

surveyed and analysed.

HuMAn rESOurcES

Our quality policy includes an ongoing

improvement process, with customer service

being the motivation behind all our efforts.

� �

Quali ty

Quality means satisfying the customer’s expectations

in terms of products and delivered services. The

customer can be both external and internal. for this

reason the principle of meeting all the customer’s

expectations applies throughout the organization,

and is not confined to those departments which

come into direct contact with the customer. Quality

is a key principle for all employees of the Sioen

Industries group as they perform their work, whether

in production, sales, accounting, customer service,

r&d or purchasing, etc.

Our quality policy includes an ongoing improvement

process, with customer service being the motivation

behind all our efforts.

Quali ty monitoring

The quality of the delivered product must meet the

customer’s most stringent criteria. To achieve this,

Sioen Industries does not confine itself to inspecting

the end product, but monitors for quality throughout

the production process. This starts with the screening

of suppliers, from whom a consistent quality level

is required. Permanent workfloor supervision and

sampling take place during production, using the

latest communication and IT applications.

cert i f icat ion

The Apparel division has met ISO 900� standards since

�996. It has also won AQAP-��0 certification, the

quality label for military tenders. Thanks to a constant

concern for quality the coating division was one of the

first coaters to acquire the ISO 900� certificate.

QuAlITy

� �


Sioen has a concerted focus on knowledge,

innovation and creativity: on new materials, new

production processes, new services, new niches,

new markets and new requirements. Knowledge is

its fundamental principle - yesterday’s, today’s and

tomorrow’s capital.

Sioen organizes its research and development

activities around three main areas: product

development, process improvement and

technological innovations, because the products

we develop must be those which both meet

customer expectations and create added value for

the business. Technological innovations connected

with continuous process optimisation are making a

substantial contribution to the group’s effectiveness.

A “spider’s web” r&d structure

Keeping ahead of the market means ongoing

investment in research and development. In �00� the

group therefore inaugurated a central r&d unit at its

headquarters in Ardooie, where professionals work

on product development and innovation and on

process improvement with state-of-the-art facilities.

50 people are involved in r&d and testing, and

their operating costs amount to Eur �.�7� million,

rESEArcH And dEVElOPMEnT

Sioen organizes its research and development

activities around three main areas: product

development, process improvement and

technological innovations, because the products

we develop must be those which both meet

customer expectations and create added value

for the business.

� 5

excluding production time excluding production

time and costs. If we add the costs, the total annual

r&d costs amount to 7.0�� mio Eur (= �,07% of

turnover).

As well as its central r&d unit, Sioen has ten other

research teams at major production sites, conducting

specific research and product testing in more

restricted rareas. Work done at the various research

centres is coordinated and managed from the central

r&d unit in Ardooie.

Sioen’s central and regional r&d teams cooperate

closely with various national and international

universities, European research institutes and

scientific funds. Sioen has a privileged relationship

with the textiles engineering department of Ghent.

Top f l ight test faci l i t ies

Sioen’s r&d centres and labs are fully equipped

with the latest testing equipment. Testing for tractile

and breaking strength, flame retardation, chemical

resistance, water column, colour fastness, ageing and

so on are all performed inhouse, and Sioen can stand

comparison with the world’s top research institutes in

this area.

for Sioen Industries, care for the environment is a

constant concern. As a responsible corporate citizen,

the group complies with all legal requirements. As

a market leader also seeks to operate a proactive

environmental policy, investing every year to keep its

emission of harmful substances to a minimum, and

applying stricter standards than those required by law.

The group is making increasing use of recycling and

energy recovery technologies. distillation towers

at plants, for example, reducing emissions to a

minimum and recovers valuable raw materials.

The direct coating sites have also been fitted with

distillation columns, allowing hot air to be recovered

and used to pre-heat ovens. Another series of

distillation columns enables contaminated solvents to

be distilled for re-use.

In addition to developing new products, technologies

and processes, the r&d team is also intensively

engaged in researching and developing recycling

options. Possibilities include the recycling of used

technical textiles in bags, insulation materials, mud

flaps and so on.

EnVIrOnMEnT


The group is making increasing use of recycling

and energy recovery technologies.

� 6� 6

Corporate InforMatIon

fInanCIaL oVerVIeW

�

Corporate Information

Letter to shareholders 3Letter to shareholders 3

I report of the Board of Directors 5I report of the Board of Directors 5

II Group Structure 9II Group Structure 9

III Share Information 10III Share Information 10

IV Corporate Governance 1�IV Corporate Governance 1�

V General information 16V General information 16

33

Letter to SharehoLDerS

Dear Shareholder,

“We are positive on our short and long-term future.”

�006 was another year of strong growth at Sioen

Industries in terms of both production and sales.

It was also a year of innovation par excellence, in which

investment projects were completed, r&D centres

opened, markets explored, and production processes

upgraded.

at eUr 339.4 million, consolidated turnover was up 7%

on �005. Gross margin was 50.7�% of sales. eBItDa

and eBIt rose 3% and �% respectively to eUr 44.8

million and eUr �5.9 million.

these results enable Sioen Industries to pay a dividend

of eUr 0.�6 per share to its shareholders. on the

stock market too, Sioen Industries gave a dynamic

performance, with the share price rising by more than

16% year-on-year.

We are bullish on the future of Sioen Industries. even if

raw material prices are placing pressure on earnings and

competition is very sharp on certain low-end markets,

Sioen is showing itself to be resilient and able to react

fast to events.

Sioen Industries is a growth company in every field:

we are focused on growth and profit, think long-term,

and aim for market leadership in all our activities. our

corporate slogan is “protection through innovation”.

It is innovation, know-how and vision that take Sioen

forward. Innovation is embedded in our corporate

culture, providing us with new products, new processes,

new applications and new markets. Know-how and

expertise are key assets, with nearly 50 years’ experience

of coating technologies, markets and standards. Vision is

our strength: we possess entrepreneurship and creativity,

a nose for good business opportunities and are always

ready for new challenges

“We are confirming our market leadership and

achieving substantial progress”.

for the Coating division �006 was a year in which





capacity shortages in direct coating and elsewhere.

rising raw materials prices we were able to offset with

cost reduction and price increases. We invested in a

new (additional capacity) varnish line and a new direct

coating machine to meet strongly rising demand. With

its extensive range and flexible production apparatus,

Sioen Coating has succeeding in capturing much of the

growth in traditional markets (transport, camping, textile

architecture).


activities took further shape. Under the common

denominator of Sioen Chemicals we now produce

colour pigment pastes, inks, varnishes and granulates.

4

S I o e n I n D U S t r I e S I C o r p o r a t e I n f o r M a t I o n

We invested in a new production hall at the Bornem

site, took over part of the assets of Siegwerk Benelux

and acquired french company richard Colorants. and

in January �007 we bought Belgian company fillink,

which specializes in inks for wide format printers. In

short we have, in a very short space of time, built up

an unique position that guarantees further expansion in

these sectors.

to react better and more effectively to a competitive

and constantly evolving market, the apparel division

optimized its internal organization. We achieved ever

greater successes in technical markets like firefighting

clothing and arc flame resistant apparel. this division

also continues to perform well in its core industrial

protective clothing activities.

the Industrial applications division, in which we

process technical textiles, did very well in �006. the

lion’s share of the growth in this product line came from

transport-related activities. We will also be investing

further in larger production shops, automation and

wide-format printing.

“R&D is a state of mind”.

We are proud to announce that �006 was a strong year.

We are continuing with the same dynamism to carry out

various investment projects which will increase capacity

and, through far-reaching automation, improve cost

control.

We continue to focus on growth and on profit, with

a permanent emphasis on r&D. this research and

development is providing us with new products, new

markets, new production processes and new technical

features. Sioen intends to be a market leader in each of

its activities.

In �006 we extended our ultra-modern central r&D

centre at ardooie with a brand-new section specializing

in testing and research in industrial protective clothing.

r&D is a cornerstone of our organization. It is a state of

mind, an attitude of all our employees, at every level.

Workers, salespeople, foremen, chemists, production

managers, general managers, we are all in our own way

busy with improvement and innovation.

With this annual report we provide an overview of

the activities of Sioen Industries, a glimpse behind the

scenes, how we see the business, where we stand and

where we intend going.

We are convinced that this vision, dynamism and team

spirit will enable us to advance with unflagging élan.

We thank all Sioen employees for their devotion and

commitment in putting all this into practice day after

day. finally we thank you, our shareholders, for your

continuing trust in Sioen Industries.

Jean-Jacques Sioen Michele Sioen

Chairman of the Board Ceo Sioen Industries n.v.

5

Sioen Industr ies group

Sioen Industries is the leading world 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.

In �006 Sioen posted net group sales of eUr

339.4 million, (of which eUr 3.7 million from

new acquisitions), up 7% on an annual basis from

eUr 316.� million the year before.

Despite historically high raw materials prices and

increased competition, the group succeeded in

maintaining its gross margin.

Services and miscellaneous goods rose

proportionally with sales. the largest increases in

this area were in energy and energy-related costs

(gas, electricity, fuel and energy).

personnel costs also rose in step with sales. to

be borne in mind here are obviously the two

acquisitions in the Chemicals group and sharply

rising demand in the Industrial applications

division. also included are a number of one-off

costs.

other operating costs consist mainly of a number of

non-profit related taxes such as property tax, taxe

professionnelle in france and the like. every year

these non profit-related taxes grow more onerous,

to the extent that they are now just as important as

corporation tax.

operating cash flow (eBItDa) rose 3% to

eUr 44.8 million.

financial costs were approx. eUr 1 million

higher than in �005. this is due primarily to a

eUr �1 million increase in net financial debt to

eUr 147.7 million, occasioned essentially by

takeovers and the relatively heavy investment

programme in �006.

the effective tax rate rose from 3�% to 37%, due to

the non-recognition of deferred tax assets in respect

of losses in certain subsidiaries.

this brings the final net profit for �006 to eUr

1�.1 million, compared with eUr 13.6 million in

�005.

net operating cash flow rose eUr � million from

eUr �9.5 to 31.5 million.

In �006 dividends of eUr 0.�4 per share (gross)

were paid in respect of �005.

the Board of Directors will be proposing to the

annual Meeting of Shareholders that the company

declare a dividend of eUr 0.�6 (gross) per share in

respect of �006.

I report of the BoarD of DIreCtorS

6


CoatInG DIVISIon

the Coating Division specializes in the integrated

coating of technical textiles, of which it masters the

entire production process from the extrusion of the yarn

(spinning), to weaving the technical fabric, producing

pigment pastes, granulates, varnishes and inks, and

coating with various materials. the group is the only

player in the world with proficiency in five different

coating technologies. Sioen enjoys a prominent position

in markets where technical excellence is a decisive

sales argument.

for the Coating division �006 was a year in which





capacity shortages in direct coating and elsewhere. With

its extensive range and flexible production apparatus,

Sioen Coating succeeding in capturing much of the

growth in traditional markets (transport, camping, textile

architecture).

the favourable economic climate in the transport

sector produced a sharp rise in demand for trucks &

trailers. this resulted in attractive growth in terms of

product and price for our direct coating line, and in

particular for products used for trailer and railway

tarpaulins. We invested in a new direct coating

machine to meet strongly rising demand.

our open structure fabrics product line (anchoring

nets, geotextiles, windbreak nets, advertising

banners) continued its solid advance. to meet

fundamentally rising demand, we are bringing

forward to �007 our planned investments to double

our capacity.

Despite price pressure in our traditional markets

(mattress protection and protective clothing) and

higher raw materials prices, the transfer coating

unit maintained its market position. new projects

provided further sales increases.

notwithstanding constant price increases for the

main raw materials (polyester granulate, pVC

powder, plasticizers and technical fillers), the

coating division was able to increase its operating

cash flow (eBItDa) by 15%. the reasons can be

found in improved production efficiency and price

increases.


activities took further shape. the colour chemicals

department, located in our eMB (european Master

Batch) subsidiary, grew spectacularly in �006. this

growth came both from our traditional markets of

pigment pastes and silicones, including investment

in a new production hall at our Bornem site and in

a new varnish line, and from two acquisitions that

opened up new sales markets:

first the takeover in September �006 of a number

of assets of Siegwerk Benelux. In this way eMB

acquired Siegwerk Benelux’s sales in the decorative

inks and varnishes market, and acquired a number

of new product formulae, with applications in

various markets in which eMB already supplies a

number of related products:

• floor coverings (vinyl, laminates)

• Wall coverings (flexo, gravure and screen printing

inks for paper and vinyl substrate)

• Decorative paper (inks for gravure printing on

paper and vinyl for decorating furniture, laminates,

etc.)

• rigid and flexible pVC panels.

Scarcely one month later eMB also acquired

the french company richard Colorants. richard

Colorants is france’s leading specialist producer

of water-based colour pigments. these pigments

are used in all applications which need colours in

liquid form for colouring:

• paint, ink, varnish, glues and textile coatings,

• wallpaper, paper and laminated paper,

• floor coverings, pU foam, plaster,

• shoe polish, sponges and gloves,

• finger paints, wax crayons.

and in January �007 we purchased the Belgian

company fillink, which specializes in inks for wide

format printers (see under “events after balance

sheet date” below).

In short we have, in a very short space of time, built up

an unique position that guarantees further expansion in

these sectors.

7

appareL DIVISIon

the apparel division designs and produces high quality

protective clothing for industrial applications. Sioen’s

reputation is based here on quality and flexibility.

During �006 the division optimized its internal

organization, both in Belgium and at its

manufacturing plants in tunisia and Indonesia.

together with a focus on professional markets, this

led to a slight drop in absolute sales, but provided

- more importantly - a 6% increase in operating

cash flow. operating result fell by 0.� million to

eUr 3.� million. this is explained mainly by a

number of one-off costs involved in redirecting

activities towards professional markets.

In �006 Sioen also extended its ultra-modern

r&D centre at ardooie with a brand-new section


protective clothing

examples of where Sioen is called on to produce

protective clothing abound:

- for a handling company at Brussels-national

airport Sioen supplied water and windproof jackets

to the customer’s own specifications.

- europe’s leading deep-frozen products

transportation and logistics company recently

opted for Sioen protective clothing for its 7,500

employees.

- nantes, Bordeaux, toulouse and Lyon are just a

few french cities in which Sioen won tenders for

rain protective clothing.

- In the netherlands Sioen supplies high-tech flame

retardant and anti-static rainwear to a major gas

producer.

- Dutch police motor cyclists will in future be clad

in Sioen rain overalls.

- the public tender to provide protective clothing

for Belgium’s fire fighting services for the next three

years has just been awarded to Sioen.

- the Belgian ports authority has chosen Mullion

lifejackets for its harbour pilots.

Whenever quality and technical excellence are vital in

protective clothing, Sioen has an appropriate solution.

InDUStrIaL appLICatIonS DIVISIon

the Industrial applications division processes coated

fabrics and pVC film into a range of industrial items.

the Sioen Group successfully prospects and

supplies a number of markets in the transport sector,

via various subsidiaries. for truck and container

curtains and tarpaulins Sioen is the preferential

supplier of europe’s best known trailer builders.

the group also produces train tarpaulins. a number

of technical innovations in production have again

given Sioen a significant position on the european

market.

�006 saw an unprecedented boom (+ 33% year-

on-year) in curtains and tarpaulins. three factors lie

behind this growth:

- the strong economic development of a number

of Central european countries following their

accession to the eU;

- rising demand for more complex and higher

added value products;

- increasing professionalization in the sector

(production, logistics etc.)

Sioen also supplies the military market with

truck and jeep covers (with or without printed

camouflage patterns), camouflage nets, tents, etc.

the group is hard at work on a number of tenders

8


for the armed forces, in particular for camouflage

netting, and has high hopes of winning a

substantial portion of these orders.

the Sioen group is applying its knowledge in a

very wide range of industrial markets. for example

with kadors (pVC-based coated fabric) for tents and

inflatable silos. We also cut airbags.

In the non-wovens market (needlefelt) we also made

significant technical breakthroughs that will ensure

the continued development of this activity. our

subsidiary Sioen nordifa has won no less than three

prizes for the innovative development of:

• a polylactyl-based biodegradable non-woven;

• a non-woven with specific acoustic features; and

• a non-woven that can separate out oil and water, with

the oil then broken down by bacteria.

a lack of production capacity led to the use of

subcontractors and the recruiting and training of

a relatively large number of new workers. this

occasioned a number of unforeseen expenditures

which depressed the operating result.

oUtLooK

Sioen Industries continues to focus on technical

excellence and innovation. the first months of �007

have continued the trends of the previous year, with

high demand for technical textiles. this demand set to

remain strong in the truck tarpaulins sector, where trailer

builders’ prognoses are very optimistic right through

�007. a number of capacity extension investments

are ready for finalization in the first half of the year.

these will give us additional capacity in online coating,

calendering and direct coating from �008 onwards.

eVentS after BaLanCe Sheet Date

In January eMB acquired Zaventem-based fillink

technologies n.v. fillink specializes in eco-solvent,

solvent and UV inks for wide format and superwide-

format digital printers. the group expects this new

takeover to add around eUr 7 million of sales in �007.

In January the smaller of our two Indonesian production

facilities suffered from flooding. assets and loss of

business are both insured. the group is doing everything

possible to minimize the operational and financial

implications.

9

(1) Quoted percentages have been rounded, and reflect the situation at 31 December �006 (�) Via Sioen Coating n.v.(3) the official name is Sioen Coated fabrics Shanghai trading Ltd.(4) the official name is Gairmeidi Caomhnaithe Dhun na nGall teoranta.(5) 5% via p.t. Sungintex (6) Via Monal s.a. and roltrans Group b.v. (7) In December �006 roland International b.v. acquired 100% of the shares of roland Ukraine Llc (8) the richard group was acquired in october �006(9) the official name is Colorants pigments Distribution

SIoen InDUStrIeS n.V.

CoatInG DIVISIon appareL DIVISIon InDUStrIaL appLICatIonS DIVISIon

Sioen Coating n.v. Sioen n.v. Coatex n.v. Direct Coating Belgium apparel Belgium processing of coated fabrics and

films BelgiumSaint frères s.a.s. Confection tunisienne de Sécurité s.aDirect Coating france apparel tunisia Saint frères Confection s.a.s.

heavy-duty manufacturing france Sioen Coating Distribution n.v. Donegal protective Clothing Ltd (4) Sales office Belgium apparel Ireland Sioen nordifa s.a.

filter production BelgiumSioen fabrics s.a. Mullion Manufacturing LtdWeaving/transfer Coating Belgium apparel U.K. roland International b.v. (6)

Manufacturing of truck tarpaulins Sioen fibres s.a. p.t. Sioen IndonesiaSpinning Belgium apparel Indonesia roltrans Group

america Inc.Sioen Shanghai (3) p.t. SungintexSales office China apparel Indonesia roland planen Gmbh

Siofab s.a. Sioen fibres s.a. roltrans Group transfer Coating portugal Central Distribution Unit Belgium polska sp.z.o.o.

tIS n.v. Sioen france s.a.s. roland Ukraine Llc (7)Weaving Belgium Sales office france

roland tilts UK Ltd.

Veranneman tt n.v. Sioen tunisie s.a.Weaving/Direct Coating Belgium Sales office tunisia

pennel automotive s.a.s. Sioen Zaghouan s.a.Calendering france apparel tunisia

Inducolor s.a. Sioen USa Inc. (5)Ink production Belgium Sales office

european Master Batch n.v. Master batch production Belgium

richard s.a.s. (8)

Copidis s.a.s. (9)

astra Colorants s.a.

99%

100%

100%

100%

100%

100%

100%

100%

99%

100%

100%

90%

89%89%

100%100%

5%5%

5%5%

100%100%

�5%

100%

100%

100%

100%100%

100%100%

100%100%

100%100%

100%100%

100%100%

100%100%

100%100%

99%

100%

95%

95%

100%

100%

99%

95%

10%(�)10%(�)

75% (�)75% (�)

I I GroUp StrUCtUre

1 0


I I I Share InforMatIon

List ing

In order to support and secure the company’s fast

growth, and in the conviction that a transparent

policy would further strengthen the group’s growth

possibilities, the Sioen Industries share was introduced

on the cash market, double fixing, of the Brussels Stock

exchange, on 18 october 1996.

a year later the share was listed on the semi-continuous

segment of the forward market. Since 11 March 1998

it has been quoted on the continuous segment of the

Brussels forward market, which has since become

euronext Brussels.

at the moment 7,758,538 shares or 36.3% of the total

number of shares are spread among the public. 60.3%

are controlled via the holding company Sihold n.v.,

controlled by the Sioen family, and 3.4% are held by

Shell pension fund

Public: 36.3%

Shareholders s t ructure

Sihold: 60.3%

Shell: 3.4%

evolut ion of the share in �006

the share was quoted at its highest price on 1�

December �006, at eUr 10.41. on 31 December �006,

at eUr 9.60, the share noted 16% higher than its price,

on 30 December �005 (eUr 8.30). With a combination

of steady growth of turnover, cash flow

and profit, a presence in the next prime segment and an

active communication policy, Sioen is seeking to pro-

actively stimulate investor interest. Market capitalization

amounted on 31 December �006 to eUr �05.3 million.

0

10

20

30

40

50

0

10

20

30

40

50

SioenEurostoxx50

SioenVolume

0

10

20

30

40

50

0

50,000

100,000

150,000

200,000

250,000

96 97 98 99 00 01 0� 03 04 05 06

3

1 1

Indices

In mid June �000 the Sioen Industries share was

included in the In.flanders, a share index made up of

the 100 most important listed employers in flanders. the

selection and weighting of the companies in the index

are a function of employment, established on the basis:

for subsidiaries of foreign enterprises, the number of

employees in flanders

for flemish enterprises, the number of employees

worldwide

the evolution of employment in flanders for the

subsidiaries, or worldwide for the flemish company.

the Sioen Industries share in this index is 1.��%

(31/1�/�005).

financial communicat ion policy

the Sioen Industries share is included on euronext

Brussels in Compartment B (Mid-Caps).

Dividend policythe Board of Directors aims for a pay-out ratio of more

than 15%, with the dividend increasing year after year,

in order to have the dividend closely linked to cash flow

expectations on the one hand, and on the other hand to

reward shareholders’ confidence in the company.

the pay out ratio for �006 amounts to 45.6%, as

compared to 37.8% last year. at eUr 0.�6 gross

(eUr 0.1950 net), the dividend is 8.3% higher than last

year. the dividend is payable at Dexia Bank, InG-Bank,

fortis Bank and KBC Bank from 8 June �007.

ISIn Be0003743573 Mep BrU Local

euronext code Be0003743573 Mnemo SIoe

type Stock - ordinary stock - Continuous

Market euronext Brussels - eurolist - Local shares Compartment B (Mid-Caps)

ICB Sector classification

3000, Consumer Goods

3700, personal & household Goods

3760, personal Goods

3763, Clothing & accessories

Reuters SIOE.BR

Bloomberg SIO.BB

Datastream B:SIO

1 �


IV Corporate GoVernanCe

the Sioen family has been supported by external,

independent directors since 1986. their expertise

and experience contribute to the proper and effective

management of the company.

on �� March �005 the Board of Directors adopted a

Corporate Governance Charter, in accordance with the

Belgian Corporate Governance Code. the Corporate

Governance Charter has been in force since the �005

General Meeting, and can be consulted on the Sioen

Industries website (www.sioen.com).

no changes have been made to the Corporate

Governance Charter since it came into effect.

the board of directors

Composition (situation as at 1 april �007)

CHAIRMAN Mr J. J. Sioen (1), chairman/director in various other companies

MANAGING

DIRECTOR

MJS Consulting b.v.b.a.represented by Ms M. Sioen (1)Director in various other companies

DIRECTORS (5) Ms J. N. Sioen-Zoete (1), director in various other companiesD-Lance b.v.b.a. (1)represented by Ms D. parein-Sioen (�)Director in various other companiesP. Company b.v.b.a.represented by Ms p. Sioen (1)Director in various other companiesPol Bamelis n.v.represented by Mr p. Bamelis (3)Director in various other companiesRevam b.v.b.a.represented by Mr W. Vandepoel (3)Managing director Lessius Corporate finance n.v.. Director in various other companiesSheng n.v.represented by Mr L.-h. Verbeke (3)Chairman of Mitiska n.v.. Director in various other companiesK.E.M.P. n.v.represented by Mr L. Sterckx (3)Ceo of Spe/Luminus. Director in various other companiesVean n.v.represented by Mr L. Vansteenkiste (3)Managing director of recticel n.v. Director in various other companies

SECRETARY Mr G. asselmanCfo Sioen Industries Group

STATUTORY

AUDITOR (4)

Deloitte Bedrijfsrevisoren c.v.b.a.represented by Mr G. Verstraeten and Mr G. Wygaerts

(1) executive director

(�) non-executive director

(3) Independent director. In defining which directors are independent, the Company has opted for the criterion whereby

a director may not remain in his post for more than three four-year mandates, as from the General Meeting of �005.

the consequence of this is that three current directors are considered as independent, although they have already held

directorships for more than twelve years in the Sioen Group. this is to ensure the continuity of the Company and its

management.

(4) the Statutory auditor’s mandate expires at the ordinary general meeting in �008.

(5) the directors’ mandates expire at the �008 general meeting.

1 3

the Board of Directors and how i t works

In accordance with the articles of association, the

Board of Directors meets regularly as a function of the

company’s needs and interests. In �006 it met six times.

the number of meetings attended by the individual

directors in �006 were as follows:

Mr Jean-Jacques Sioen 6

Ms Michèle Sioen 6

Ms Jacqueline Sioen-Zoete 5

Ms Danielle Sioen 6

Ms pascale Sioen 6

Mr pol Bamelis 6

Mr Wilfried Vandepoel 6

Mr Louis-henri Verbeke 6

Mr Luc Sterckx 6

Mr Luc Vansteenkiste 6

the permanent agenda of every Board of Directors

meeting includes the discussion of and taking of

decisions with respect to the individual results of

companies in the group, division results, consolidated

results, current investments and projects, new projects

and proposals for investment opportunities. the board

also deals with specific points on the agenda as a

function of concrete matters in hand.

Working committees

the Sioen Industries Group has three working

committees:

a) Audit Committee:

In �006 the audit Committee consisted of four

independent directors, namely Messrs Vandepoel

(Chairman), Bamelis, Verbeke and Sterckx.

the audit Committee met six times in �006. the

number of meetings individually attended by the

members of the audit Committee in �006 was as

follows:

Mr Wilfried Vandepoel 6

Mr pol Bamelis 3

Mr Louis-henri Verbeke 6

Mr Luc Sterckx 3

b) Remuneration Committee

In �006 the remuneration Committee was made up of

three independent directors, namely Messrs Bamelis

(chairman), Sterckx and Vansteenkiste.

the remuneration Committee advises the Board

of Directors on pay policy in general and on the

compensation paid to the members of the Board of

Directors and the Management Committee in particular.

the share option plans also fall under its remit. the

remuneration Committee met three times in �006.

all members of the committee were present at each

meeting.

c) Nomination Committee

on �� March �005 a nomination Committee was set

up in accordance with Sioen Industries’ Corporate

Governance Charter. It is made up of two independent

directors (Messrs Bamelis and Sterckx) and one

executive director (Mr Jean-Jacques Sioen).

(1) D-Lance b.v.b.a., represented by Ms parein - Sioen, no longer forms part of the Management Committee as of 1 January �007, but continues to attend Management Committee meetings as an observer from the Board of Directors.

1 4


Management Committee

the members of the Management Committee (as of 1

april �0071) are:

MJS Consulting b.v.b.a., represented by Ms M. Sioen

p.Company b.v.b.a., represented by Ms p. Sioen

Mr Geert asselman

Mr erwin Van Uytvanck

Mr Michel Devos

Secretary: Mr Loebrecht Lievens

external audit

Within the Sioen Industries group, external audit is

chiefly carried out by Deloitte Bedrijfsrevisoren. this

involves the auditing of both the statutory financial

statements and the consolidated annual financial

statements of Sioen Industries n.v. and its subsidiaries.

to the extent that the audits of a number of subsidiaries

are carried out by other auditing companies, Deloitte

makes use of their work, as stated in the Statutory

auditor’s report.

During the past financial year the Statutory auditor

received eUr 65,500 from Sioen Industries in respect of

its statutory auditor mandate. additionally the Statutory

auditor and its network received eUr 8,740 for other

auditing work, eUr 6,043 for fiscal consultancy services

and eUr 71,680 for other assignments outside its audit

mandate.

the mandate of Deloitte Bedrijfsrevisoren as Statutory

auditor of Sioen Industries n.v. expires at the annual

meeting of �008. Deloitte Bedrijfsrevisoren is

represented by Mr G. Verstraeten and Mr G. Wygaerts.

1 5

Share option plans

Under a Share option Scheme originally introduced in

1996, a total of 6,500 options were issued in �000 of

which 3,�50 remain outstanding and exercisable at a

price of eUr �0.335 per share until January �008. no

share options have been granted since �000. the Board

of Directors remains authorized to grant up to 158,000

options. no options have been allotted to directors until

now.

overview of the �000 share option plan

Date of Board decision 10/10/�000

option price as % of market price 7.5%

option price 1.5375

option exercise price �0.3550

allocation 6,500

Unused 3,�50

Balance to be exercised January �005-�008 (3,�50)

protocol to prevent insider t rading

to prevent privileged information being used illegally

by directors, shareholders, and members of the

management and staff (i.e. “insiders”), or even to

prevent such an impression possibly being created, the

Board of Directors of Sioen Industries n.v. has produced

a protocol for the prevention of abuse of insider

information (“1997 protocol”).

further to Directive �003/6/eU a new protocol was

approved by the Board of Directors on 1 May �005. the

protocol is initially aimed at protecting the market as

such, ensuring observance of the statutory provisions

and maintaining the group’s reputation.

In addition to a number of prohibitions concerning the

trading of Sioen Industries n.v. financial instruments

when insiders have privileged information that is not

(yet) available to the public, it also contains a number of

preventive measures and directives designed to maintain

the confidential nature of privileged information. all

insiders eligible for this have signed this protocol. a

Compliance officer has been appointed to monitor

observance of the protocol.

1 6


V GeneraL InforMatIon

registered of f ice and name (art icles 1 and �)

the registered office of Sioen Industries, a public limited

liability company under Belgian law, is established

at fabriekstraat �3, B-8850 ardooie. the company is

registered (in the register of legal persons of Brugge)

listed under enterprise number 441.64�.780.

Incorporat ion and publicat ion

Sioen Industries was incorporated under the name

“Sihold” by deed executed before notary-public Ludovic

du faux in Moeskroen on 3 September 1990, published

in the annexes to the Belgian official Journal of �8

September 1990, under no.: 9009�8-197.

financial year (art icle 36)

the financial year begins on 1 January and ends on 31

December of each year.

term (art icle 4)

the company is established for an indefinite period.

object of the company (art icle 3)

the company’s object, in Belgium and abroad, on its

own behalf and on behalf of third parties, is:

the weaving of fibres of all kinds, the coating

of fabrics and all other material, the printing

thereof, the manufacture of plastic and plasticised

material, the manufacture, purchase and sale, both

in Belgium and abroad, of material useful for or

relating to aforesaid products and raw materials, as

well as the manufacture of chemical products and

pigments;

the manufacture of pre-fabricated outer clothing

in woven fabric, the manufacture of all kinds

of tailor-made clothing and embroidery; the

manufacture of outer clothing in knitted fabrics, and

of household linen and interior decoration items

interior decoration items; the manufacture of wall

cladding, the printing and finishing of all fabrics;

the manufacture of ready-to-wear items and outfits

for ladies and gentlemen, knitwear, embroidery,

household and table linen, children’s clothing. the

manufacture of safety and high visibility articles.

the wholesale and retail trade in all the above-

mentioned items;

the investment in, subscription to, permanent

takeover, placement, purchase, sale, and trading

of shares, dividend certificates, bonds, certificates,

claims, currencies and other movable securities,

issued by Belgian or foreign companies, whether or

not in the form of trading companies, administration

offices, institutions and associations either with or

without a (semi-) public law status;

the management of investments and participations

in subsidiaries, the holding of executive posts, the

giving of advice, management and other services to

or in accordance with the activities carried out by

the company itself. these services may be provided

by virtue of a contractual or statutory appointment

and in the capacity of external consultant or

representative of the company.

all of this insofar as the company complies with the

statutory requirements. the company may, in Belgium

and abroad, effect all industrial, trading, financial,

movable and immovable transactions that may develop

or promote its business either directly or indirectly. It

may acquire all movable or immovable goods even

if these are not related directly or indirectly to the

company’s object. It may, by any means, acquire

participating interests in all associations, businesses,

enterprises or companies that are striving for the same

or a similar or related object or that can promote its

business or facilitate the sale of its products or services,

and it may collaborate or merge therewith.

Consultat ion of documents

the statutory and consolidated annual accounts of

the company and the accompanying reports are filed

with the national Bank of Belgium. the articles of

association and the special reports required by the

Companies Code as well as the annual and half-yearly

1 7

reports and all information published for the benefit of

the shareholders, are available at the registered office

of the company. the articles of association, the annual

and half-yearly reports can also be downloaded from the

website www.sioen.com.

historical development of the capital

the historical development of the capital is included

under the comments on the consolidated annual

accounts.

authorized capital

the board of directors is authorised during a period

of five years counting from the date of publication in

the annexes to the Belgian official Journal of the deed

concerning the amendment of the articles of association

of 30 May �003 (BoJ of �3 June �003) to increase the

subscribed capital on one or more occasions, by a

maximum amount of forty-six million euros.

this renewable authority is valid for capital increases

in cash, in kind or by conversion of reserves. at the

moment this full amount is still available.

In the framework of the authorised capital, the board of

directors is authorised, in the interest of the company

and subject to observance of the conditions laid down

in articles 535 and 59� to 599 of the Companies

Code, to cancel or restrict the preferential subscription

right that is granted to the shareholders by law. the

board of directors is authorised to restrict or cancel

the preferential subscription right in favour of one or

more particular persons, even if these persons are not

members of staff of the company or its subsidiaries.

In the event of the increase of the subscribed capital,

carried out within the limits of the authorised capital,

the board of directors is authorised to ask for an issue

premium. If the board of directors decides to do so, this

issue premium should be allocated to an unavailable

reserve account that can only be reduced or written

off by resolution of the general meeting passed in the

manner required for the amendment of the articles of

association.

In default of an express authorisation given by the

general meeting to the board of directors, the board of

directors’ authority to increase the subscribed capital

through a contribution in cash with cancellation or

restriction of the existing shareholders’ preferential

subscription rights, or through contribution in kind, is

suspended from the date of notification to the company

by the Banking, finance and Insurance Commission

of a public takeover bid for the company’s shares.

this authority will be reinstated immediately after the

closing of such a takeover bid. the general meeting of

�7 May �005 expressly authorised the board of directors

to increase the subscribed capital on one or more

occasions, from the date of notification by the Banking,

finance and Insurance Commission to the company of

a public takeover bid for the company’s shares, through

contributions in cash with cancellation or restriction of

the existing shareholders’ preferential subscription right

or by contributions in kind, in accordance with articles

557 and 607 of the Companies Code. this authority was

granted for a period of three years as from �7 May �005

and is renewable.

acquisi t ion by the company of shares in i ts own capital

the general meeting of the �8 of May �004 expressly

authorised the board of directors, in accordance with

the provisions of the Companies Code, to acquire or

have the disposal of its own shares or profit-sharing

bonds, if the acquisition thereof is necessary to avoid

an impending serious detriment to the company. this

authorisation is valid for a period of three years from the

date of publication of the above-mentioned resolution

in the annexes to the Belgian official Journal (BoJ of

�3 June �004).

the general meeting of the �6 May �006 authorised

the board of directors, in accordance with articles

6�0 to 6�3 and 6�5 of the Companies Code, to obtain

its own shares through purchase or exchange up to

the maximum number permitted by law, and at a

price equal to the market value of the shares. this

authorisation (also extends to the acquisition of shares

of the company by one or more of its direct subsidiaries

within the meaning of the law and is valid for a period

of eighteen months counting from �6 May �006 and is

renewable.

1 8

f InanCIaL oVerVIeW

1 9

fInanCIaL oVerVIeW

Sioen industries consolidated financial statements

I. Comments on the consolidated financial statements �0

II. financial statements ��

II.1. Consolidated balance sheet ��

II.�. Consolidated income statement �4

II.3. Consolidated cash flow statement �6

II.4. Consolidated statement of changes in equity �7

III. notes to the consolidated financial statements �8

III.1. Key accounting rules �8

III.�. Segment information 37

III.3. exchange rate 40

III.4. Detailed income statement 41

III.5. Detailed balance sheet 45

IV. other 68

V. Statutory auditor’s report 71

VI. Statutory annual accounts of Sioen Industries n.v. 73

VII. proposal to the annual meeting 76

Definitions 77

addresses 78

� 0

S I o e n I n D U S t r I e S I f I n a n C I a L o V e r V I e W

Sioen Industries is the leading world 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.

Sales

In �006 Sioen achieved net group sales of eUr

339.4 million, up 7% from eUr 316.� million the

year before. a booming transport sector in �006

with strongly rising demand for trucks and trailers

meant attractive growth figures for both our Coating

and our Industrial applications divisions (10% and

19.5% respectively). apparel division sales slipped

slightly as the division redirected its activities

towards more professional markets, producing a rise

in operating cash flow.

Gross margin-EBITDA-EBIT

Despite historically high raw materials prices and

increased competition, the group was able to

maintain its gross margin and to increase eBItDa at

group level by 3%. free cash flow (cash available

for investments) grew explosively from eUr 17.3

million in �005 to eUr 37.6 million in �006. this

rise is even stronger in the Coating division. price

increases for final products, a continuous drive for

cost efficiency and constant r&D efforts contributed

to this result. Whilst sales rose by 10%, operating

cash flow increased by 15%. the Apparel division

succeeded, in very competitive conditions, not only

to maintain but even increase its gross margin. this

obviously had a positive impact on operating cash

flow, which rose from eUr 5.8 million in �005

to eUr 6.1 million in �006. In this division too,

technical excellence is crucial, in particular with

professional users that set very high standards. the

Industrial Applications division faced a slight drop

in both gross margin and eBItDa. this fall is only

temporary, given recent price increases.

Services and miscellaneous goods rose in line with

sales. the fastest rising costs here are energy and

related costs (gas, electricity, fuel and transport).

Personnel costs also rose in step with sales. here

one should bear in mind the effect of the two

acquisitions by the Chemicals group and also

strongly rising demand in the Industrial applications

division. this heading also covers a number of non-

recurring costs.

Other operating costs covers a number of generally

non profit-related taxes like property tax, taxe

professionelle in france and the like. every year

these non profit-related taxes grow more onerous,

to the extent that they are now just as important as

corporation tax.

this gives the group an operating result of

eUr �5.9 million in �006 compared with �5.4

million in �005.

operating cash flow (eBItDa) rose by 3% to

eUr 44.8 million.

Financial costs were approx. eUr 1 million

higher than in �005. this is due primarily to a

eUr �1 million increase in net financial debt

to eUr 147.7 million, occasioned primarily by

takeovers and the relatively heavy investment

programme in �006.

the effective tax rate rose from 3�% to 37%, due

entirely to the non-recognition of latent tax assets in

respect of losses in certain subsidiaries.

this brings the final net profit for �006 to

eUr 1�.1 million, compared with eUr 13.6 million

in �005.

Net operating cash flow rose by eUr � million from

eUr �9.5 to 31.5 million.

Investments

total investment in tangible fixed assets amounted to

eUr �7.5 million. the largest items here are:

o the new production line at nordifa: eUr �.3 million

o the new production hall at eMB: eUr �.5 million

o Investment in a new erp package: eUr �.5 million

I . CoMMentS on the ConSoLIDateD fInanCIaL StateMentS

� 1

o a number of new looms: eUr 0.5 million

o air conditioning for the yarn extrusion plant:

eUr 0.4 million

o Initial investments in the new calendaring plant:

eUr 6.1 million.

In addition two acquisitions were made by the

group last year, representing a net investment of eUr

�3.5 million.

Last year the group received eUr 1.5 million in

investment grants. these are deducted from the

acquisition cost of the assets in question.

Balance sheet

In nominal amounts working capital rose from

eUr 107.5 million at 31/1�/�005 to eUr 111.8 million

at 31/1�/�006. Bearing in mind that sales have increased

by eUr �3 million, working capital as a percentage of

sales has fallen from 34% to 3�.9%. net financial debt

has risen to eUr 147 million, owing to the investment

programme of around eUr 47 million (investments and

capital expenditure together).

Risks

Sioen Industries nV is a company listed on euronext,

that does not itself exercise any industrial activity. Sioen

Industries holds participations in companies operating in

the following sectors:

- Coating of technical textiles

- Designing, developing and production of protective

clothing.

- processing heavy technical textiles into finished

products.

Sioen Industries is influenced, in particular in terms of its

income, by the economic performance of these divisions.

these divisions are in turn dependent on general

economic trends and more specifically:

the volatility of crude oil prices and the more or

less related volatility of prices of its principle raw

materials. (pVC, polyester, plasticizers, etc.)

With regard to the processing of heavy technical

textiles, the group’s evolution closely tracks the

economic cycles of the truck sector.

the protective clothing division follows the current

trend in industrial activity in Western europe. the

emphasis is here less on volume and more on the

technical specifications of the clothing.

� �


I I . ConSoLIDateD fInanCIaL StateMentS the consolidated financial statements for �006 were approved by the Board of Directors for publication on 19 March

�007.

I I .1. ConSoLIDateD BaLanCe SheetII .1. ConSoLIDateD BaLanCe Sheet in thousands of eurosin thousands of euros

ASSETS 2005 2006Note

Non-Current assets

Intangible assets III.5.1. � �67 17 716

Goodwill III.5.�. 16 548 17 935

property, plant and equipment III.5.4. 14� �78 150 4�0

Long term trade receivables III.5.5. 59 ��

other long term assets III.5.5. 5�4 504

Deferred tax assets III.5.15. 7 010 6 199

TOTAL NON-CURRENT ASSETS 168 686 192 796

Current Assets

Inventories III.5.6. 78 463 84 47�

trade receivables III.5.7. 69 416 70 414

other receivables III.5.8. 11 118 9 4�3

other investments and deposits III.5.8. �60 53�

Cash and cash equivalents III.5.8. 8 31� 1� 584

Deferred charges and accrued income III.5.8. 1 4�8 1 61�

TOTAL CURRENT ASSETS 168 997 179 037

TOTAL ASSETS 337 683 371 833

� 3

EQUITY & LIABILITIES 2005 2006

Equity Note

Share capital 46 000 46 000

retained earnings 81 317 88 338

hedging and translation reserves � 046 1 459

Minority interests 19 0

TOTAL EQUITY 129 383 135 797

Non-Current liabilities

Interest bearing loans - payable after one year III.5.11. 53 831 117 033

provisions III.5.10. 1 0�3 � 509

pension obligations III.5.9. 1 �56 1 671

Deferred tax liabilities III.5.15. 16 8�1 18 360

finance leasing - payable after one year III.5.1�. 13 049 11 4�8

other amounts - payable after one year III.5.11. 33 3

TOTAL NON CURRENT LIABILITIES 86 012 151 004

Current liabilities

trade and other payables III.5.13. 36 510 31 744

Interest bearing loans - up to one year III.5.11. 67 �90 31 16�

provisions - up to one year III.5.10. 379 1 �93

pension obligations - up to one year III.5.9. 65 4�

tax liabilities III.5.13. 5 589 7 364

finance leasing - up to one year III.5.1�. 1 14� 1 �70

other amounts payable - up to one year III.5.13. 11 313 1� 157

TOTAL CURRENT LIABILITIES 122 288 85 032

TOTAL EQUITY AND LIABILITIES 337 683 371 833

� 4


I I .�. ConSoLIDateD InCoMe StateMentII .�. ConSoLIDateD InCoMe StateMent by function I in thousands of eurosin thousands of euros

2005 % of 2006 % ofSales Sales

net sales 316 �37 100.0% 339 389 100.0%

Cost of goods sold -�51 877 (1) -79.6% -�67 436 -78.8%

Manufacturing contribution 64 360 20.4% 71 954 21.2%

Sales and marketing expenses -15 896 -5.0% -15 573 -4.6%

r&D expenses -5 554 (1) -1.8% -7 0�1 -�.1%

administrative expenses -19 887 -6.3% -�� 465 -6.6%

other operating result � 940 0.9% 304 0.1%

non recurring result (�) -505 -0.�% -1 307 (�) -0.4%

Operating profit 25 457 8.1% 25 891 7.6%

financial result -5 470 -1.7% -6 565 -1.9%

EBT 19 987 6.3% 19 326 5.7%

tax -6 399 -�.0% -7 17� -�.1%

EAT 13 588 4.3% 12 153 3.6%

Cash flow �9 535 9.3% 31 496 9.3%

eBItDa 43 647 13.8% 44 843 13.�%

eBIt �5 457 8.1% �5 891 7.6%

(1) in �005: reallocation of goods produced for r&D purposes to r&D expenses in an amount of keUr 1,337 in �005 to

permit comparison with figures for �006

(�) in �006: non-recurring items relate to restructuring expenses in france (pennel automotive SaS). a provision for

restructuring has been taken amounting to eUr 1.3 million eUr.

� 5

2005 % on

Turnover

2006 % on

TurnoverCONSOLIDATED PROFIT AND LOSS STATEMENT

a. turnover 316 �37 339 389

B. Changes in stocks and wip 4 647 1.47% 4 6�0 1.36%

D. other operating income 4 0�6 1.�7% 3 339 0.98%

I. revenue 3�4 910 347 348

II. Cost of sales 160 844 (1) 50.86% 171 856 50.64%

Gross margin 50.61% 50.72%

III. Services and other goods -50 705 (1) -16.03% -55 �66 -16.�8%

IV. remuneration, social security and pensions -63 450 -�0.06% -67 640 -19.93%

V. Depreciations -17 899 -5.66% -17 919 -5.�8%

VI. amounts written down on stocks and trade debts -86� -0.�7% -�30 -0.07%

VII. provision liabilities & charges 57� 0.18% -804 -0.�4%

VIII. other operating expenses -5 758 -1.8�% -6 435 -1.90%

Ix. non recurring items -505 -0.16% -1 307 -0.39%

X. OPERATING RESULT 25 457 8.05% 25 891 7.63%

XIII. fInanCIaL reSULt -5 470 -1.73% -6 565 -1.93%

XVI. PROFIT BEFORE TAX 19 987 6.32% 19 326 5.69%

XVII. taXeS -6 399 -�.0�% -7 17� -�.11%

XVIII. PROFIT AFTER TAX 13 588 4.30% 12 153 3.58%

XII. MInorItY IntereSt -6 0.00% 0 0.00%

XX. RESULT PART OF THE GROUP 13 582 4.29% 12 153 3.58%

EBIT 25 457 8.05% 25 891 7.63%

EBITDA 43 647 13.80% 44 843 13.�1%

Cash Flow 29 535 9.34% 31 496 9.�8%

(1) in �005: reallocation of goods produced for r&D purposes to r&D expenses in an amount of keUr 1,337 in �005 to

permit comparison with figures for �006

I I .�. ConSoLIDateD InCoMe StateMentII .�. ConSoLIDateD InCoMe StateMent by nature I in thousands of eurosin thousands of euros

� 6


I I .3. ConSoLIDateD CaSh fLoW StateMent I I .3. ConSoLIDateD CaSh fLoW StateMent I in in thousands of eurosthousands of euros

2005 2006

recurring operating result �5 96� �7 198non recurring items -505 -1 307

Depreciation 17 899 17 919Impairment 0Write off inventory and receivables 86� �30provision other risks and charges -1 0�6 � 79�

Changes in working capital -16 664 -� �54other changes -5�1 -175

Cash flow from operating activities 26 007 44 402

Current taxes -8 64� -6 78�

Net cash flow from operating activities 17 365 37 620

received interests 343 786acquired intangible and tangible assets through business combinations -16 594acquired working capital through business combinations -5 56�Goodwill resulting from business combinations -1 387Deferred tax resulting from business combinations 1 676Investments in intangible and tangible fixed assets -19 571 -�7 440Disposal and sale of intangible and tangible fixed assets 534 38�Increase in capital grants 830 1 565translation adjustments on intangible and tangible assets 558

Net cash flow from investing activities -17 865 -46 016

Net cash flow before financing activities -500 -8 396

paid interest -6 �80 -7 51�Disbursed dividend -4 706 -5 133Increase long term interest bearing loans �0 000 98 900Decrease long term interest bearing loans -�4 �93 -35 698Increase/(decrease) short term intrest bearing loans 8 097 -36 157Increase/(decrease) finance lease obligations -1 066 -1 493other -18 -45Currency result 484 �05

Cash flow from financing activities -7 781 13 068

Impact of cumulative translation adjustments and hedging 1 966 -1�8

Change in cash and cash equivalents -6 314 4 543

net cash position at the end of previous period 14 887 8 57�net cash position at the end of current period 8 57� 13 116

� 7

2006

Capital Reserves Translation

differences

Hedging

reserves

Minority

at the end of last financial year 46 000 81 318 � 466 -4�0 19

result 1� 153Dividends -5 134hedging 1 938Deferred tax -673Cumulative translation adjustments -1 766Change in consolidation scope -19transfer to profit on cash flow hedges -86

at the end of current financial year 46 000 88 337 700 759 0

the company paid in �006 eur 5.1 Mio dividends over �005.

proposed dividend over �007 under condition of approval by the general shareholders meeting amounts to eUr 5.6 Mio.

I I .4. ConSoLIDateD StateMent of ChanGeS In I I .4. ConSoLIDateD StateMent of ChanGeS In eQUItY eQUItY I in thousands of eurosin thousands of euros

2005

Capital Reserves Translation

differences

Hedging

reserves

Minority

at the end of last financial year 46 000 7� 439 -137 0

result 13 58� 6

Dividends -4 707

hedging -636

Deferred tax �16

Cumulative translation adjustments � 603 17

other 4 -4

at the beginning of last financial year 46 000 81 318 � 466 -4�0 19

� 8


SUMMarY of KeY aCCoUntInG rULeS

the consolidated annual financial statements of Sioen

Industries nV (the ‘Company’) include the annual

financial statements of the Company, its subsidiaries and

those entities which are consolidated by the proportional

method (together referred to below as the ‘Group’).

the consolidated financial statements are drawn up in

conformity with the International financial reporting

Standards (IfrS), as accepted within 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 1January �006, all of which have been

endorsed by the european Union.

applicat ion of new IfrS

the Group has not applied in advance the following

new standards and interpretations which, on the date of

approval of these annual accounts, had been issued, but

were not yet effective :

- IfrS 7 financial Instruments: Disclosures; effective for

annual periods beginning on or after 1 January �007

- IfrS 8 operating Segments; effective for annual periods

beginning on or after 1 January �009

- IfrIC 7 applying the restatement approach under IaS

�9; effective for annual periods beginning on or after 1

March �006

- IfrIC 8 Scope of IfrS �; effective for annual periods

beginning on or after 1 May �006

- IfrIC 9 reassessment of embedded Derivatives;

effective for annual periods beginning on or after 1 June

�006

- IfrIC 10 Interim financial reporting and Impairment;

effective for annual periods beginning on or after 1

november �006

- IfrIC 11 IfrS � Group and treasury Share transactions;

effective for annual periods beginning on or after 1

March �007

- IfrIC 7 Service Concession arrangements; effective for

annual periods beginning on or after 1 January �008

except for IfrS 7 and IfrS 8 which will impact the

amount of information to be disclosed, the future

application of the above-mentioned standards and

interpretations would appear at a first estimate to have

no material impact on the annual financial statements.

General pr inciples

the consolidated annual accounts 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 annual accounts are stated in thousands of euros,

as the euro is the currency of the primary economic

environment in which the Group is active. the annual

financial statements of foreign partipations are converted

in accordance with the principles described in the

section ‘foreign Currencies’.

the consolidated financial statements are presented on

the basis of the historical cost method, unless otherwise

stipulated in the accounting principles set out below.

Foreign currencies

on the basis of the Group’s relevant economic

environment and its transactions, the euro has been

chosen as the reporting currency.

foreign subsidiaries’ financial statements are converted

as follows:

transactions in foreign currencies are converted at

the exchange rate which applied on the date of the

transaction. on each balance sheet date, cash assets and

I I I . noteS to the ConSoLIDateD fInanCIaL StateMentS I in thousands of eurosin thousands of euros

I I I .1. KeY aCCoUntInG rULeSII I .1. KeY aCCoUntInG rULeS

� 9

liabilities expressed in foreign currency are converted at

the closing rate. non-cash assets and liabilities which

are shown at their fair value in a foreign currency are

converted at the exchange rate which applied when their

fair value was determined.

Gains and losses arising from such conversions are

recorded in the income statement. however, if they

are deferred, they are recorded as equity. assets

and liabilities from the Group’s foreign activities are

converted at the closing rate.

Income and expenses are converted at the average

exchange rate over the period, unless exchange rates

have fluctuated greatly. the resultant exchange rate

differences are recorded in equity, under the heading

“Conversion differences”.

If a foreign activity is disposed of, the cumulative amount

of the exchange rate differences that was recognised in

equity is recorded in the income statement.

Goodwill and adjustments to the fair value arising on

the acquisition of a foreign entity are treated as assets

and liabilities of the foreign entity and converted at the

closing rate.

Consolidat ion principles

Subsidiaries

Subsidiaries are companies over which the Company

exercises a decisive influence (‘control’). Control is

the power to steer an entity’s financial and operational

policy in order to derive benefit from its activities. the

consolidation of subsidiaries starts on the date on which

the Group acquires control over them and stops when

it loses that control. the companies in question are

accounted for by the full consolidation method.

Subsidiaries’ annual accounts are drawn up for the same

financial year as those of the parent company and on

the basis of uniform financial reporting principles for

comparable transactions and other events in similar

circumstances.

Combinations of companies

If the Group takes over an entity or business activity, the

identifiable assets, liabilities and contingent liabilities of

the party which has been taken over are adopted at their

fair value.

Subsidiaries’ financial statements are included in the

scope of consolidation from the date of acquisition until

control ceases.

the difference between the cost price and the acquiring

party’s stake in the net fair value of the identifiable

assets, liabilities and contingent liabilities is recorded as

goodwill. If this difference is negative, the surplus, after

reassessment of the fair values, is accounted for directly

in the income statement.

If the group increases its interest in an investment in

which it did not yet have control, the surplus or deficit

compared with the net asset, after adjustment to the fair

value that was acquired, is processed as if it were a new

acquisition according to the methodology explained in

the above section. If the group increases its interest in an

investment in which it already had control, the greater

or lesser price that was paid vis-à-vis the share in the

net assets that was acquired, is included directly in the

company’s own equity.

all intercompany transactions, intercompany balances

and unrealised profits on intercompany transactions are

eliminated unless they relate to a permanent write-down.

Minority interests are valued on the basis of their share

in the fair value of the recorded assets, liabilities and

contingent liabilities.

Balance sheet

Intangible assets

Intangible assets are valued at cost price. Intangible

assets are recognised if it is likely that the Group will

receive the associated future economic benefits and if

the asset’s cost price can be reliably determined. after

their initial recognition in the accounts, all intangible

assets are valued at cost price, less any accumulated

depreciation or impairments. Intangible assets are

3 0


depreciated on a straight-line basis over the best estimate

of their economic life.

the remaining economic life and the depreciation

method used are reassessed at the close of every

financial year. any change in the economic life of an

intangible asset is treated as a revaluation.

Internally generated intangible assets are only recognised

if all the following conditions are satisfied:

• an identifiable asset has been generated

• it is likely that the generated asset will yield future

economic benefits; and

• the asset’s cost price can be reliably determined.

Subsequent expenditure on capitalised intangible assets

is only included in the balance sheet if it increases the

likely future economic benefits associated with the asset

concerned. all other expenditure is recorded in the

income statement at the time it is incurred.

Licences, patents and similar rights

expenditure on purchased licences, patents, trademarks

and similar rights is capitalised and depreciated on

a straight-line basis over the contractual term, where

applicable, or over the estimate economic life, which is

deemed to be no more than five years.

Computer software

expenditure relating to the development or maintenance

of computer software is normally offset against the

result of theperiod in which it is incurred. only external

expenditure which is directly related to the purchase

and implementation of purchased software is recorded

as an intangible asset and depreciated on a straight-line

basis over three years. purchased erp software and the

associated implementation costs are depreciated on a

straight-line basis over seven years.

Research and development

research expenditure with a view to the acquisition of

new scientific or technological insights or knowledge is

included as a cost in the income statement as it arises.

Development expenditure in which research results are

used in a plan or design for the production of new or

substantially improved products and processes prior

to commercial production or implementation is only

recognised in the balance sheet if all the following

conditions are satisfied:

• the product or process is precisely defined and the

expenditure is individually identifiable and reliably

measurable;

• the product’s technical feasibility has been sufficiently

demonstrated;

• the product or process will be commercialised or used

within the company;

• the assets will generate future economic benefits (e.g.

a potential market exists for the product or its internal

usefulness has been sufficiently proven);

• the appropriate technical, financial and other resources

are available to finalise the project.

If the above criteria are not satisfied, the development

costs are taken to the income statement as they arise.

Capitalised development costs are depreciated on

a straight-line basis over the expected duration of

the generated benefits from the start of commercial

production or the implementation of the product or

process.

Goodwill

Goodwill represents the additional premium paid on

the acquisition of an interest over the fair value of the

Group’s interest in the acquired assets and liabilities at

the time of acquisition.

Goodwill is recorded as an asset and subjected to a

impairment test at least once a year. any impairment loss

is immediately recorded in the income statement and is

not subsequently written back.

negative goodwill represents the amount by which the

fair value of the Group’s interest in the acquired assets

and liabilities at the time of acquisition exceeds the price

paid.

on the disposal of a subsidiary, associated undertaking

or entity over which joint control is exercised, the related

I I I . noteS to the ConSoLIDateD fInanCIaL StateMentS

II I .1. KeY aCCoUntInG rULeSII I .1. KeY aCCoUntInG rULeS

3 1

goodwill is included in the calculation of the gain or loss

on disposal.

Tangible fixed assets

tangible fixed assets are valued at cost price less

accumulated depreciation and impairments. a tangible

fixed asset is recognised if it is likely that the Group will

receive the associated future economic benefits and if

the asset’s cost price can be reliably determined.

the cost price includes all direct costs and all directly

attributable costs incurred in order to bring the asset to

the location and condition necessary for it to function

in the intended way. Interest during construction is not

capitalised.

Subsequent expenditure associated with a tangible fixed

asset is usually recorded in the income statement as it is

incurred. Such expenditure is only capitalised if it can

be clearly shown to result in an increase in the expected

future economic benefits from the use of the tangible

fixed asset compared with the original estimate. repair

and maintenance costs which do not increase the likely

future economic benefits are recorded as costs as they

are incurred.

the different categories of tangible fixed assets are

depreciated by the straight-line method over their

estimated economic life. Depreciation commences once

the assets are ready for their intended use.

the estimated economic life of the main tangible fixed

assets lies within the following ranges:

Buildings: �0 years

Machines: 5 to 15 years

equipment: 10 years

furniture: 5 years

hardware: 5 years

Vehicles: 5 years

If an asset’s book value is lower than the estimated

realisable value, it is immediately written down to the

realisable value.

the gain or loss on the sale or disposal of an asset is

determined as the difference between the net income

on disposal and the asset’s book value. this difference is

recorded in the income statement.

Lease agreements

Financial leasing

Lease agreements which assign to the Group all the

main risks and benefits associated with ownership

are regarded as financial leasing. the assets acquired

under financial leasing arrangements are stated in the

balance sheet at their fair value at the start of the lease

agreement, or, if this is lower, at the present value of the

minimum lease payments, less accumulated depreciation

and impairments.

the discount rate used in the calculation of the present

value of the minimum lease payments is the interest

rate implicit in the lease agreement, where this can

be determined, or otherwise the company’s marginal

borrowing rate. Initial direct costs are included in the

capitalised amount. Lease payments are broken down

into interest charges and repayments of the principal. the

interest charges are spread over the duration of the lease

agreement such that a constant periodic interest rate is

obtained on the outstanding balance for each period. a

financial lease agreement results in the recording of both

a depreciation amount and an interest charge in each

period. the depreciation rules for assets acquired under

financial leasing arrangements are consistent with those

for assets over which full ownership is acquired.

Operational leasing

Lease agreements in which all the main risks and benefits

associated with ownership reside with the lessor are

regarded as operational leasing. In operational leasing,

the lease payments are recorded as costs and spread on

a straight-line basis over the lease period. the total value

of discounts or benefits granted by the lessor is offset

3 �


against the leasing costs and spread on a straight-line

basis over the lease period.

Property investments

a property investment, i.e. one which is maintained in

order to generate rental income, an appreciation of value

or both, is shown at fair value on the balance sheet date.

Gains or losses arising from a change in the fair value of

a property investment are recorded in the results for the

period in which they arise.

Financial investments

Investments are recorded in/ removed from the accounts

on the transaction date, i.e. the date on which an entity

undertakes to buy or sell the asset in question. financial

investments are valued at the fair value of the price paid,

plus the transaction costs. Investments held for trading

or available for sale are recorded at their fair value. If

investments are maintained for trading purposes, the

gains and losses arising from changes in the fair value

are taken to the income statement for the period in

question. In the case of investments which are available

for sale, gains and losses arising from changes in the

fair value are immediately recognised in equity until the

financial asset is sold or subject to impairment.

In this case, the cumulative gain or loss which had

previously been recognised in equity is included in the

income statement for the period. holdings which are not

classified as available for sale, which are not listed on

an active market and whose fair value cannot reliably be

determined using alternative valuation rules are valued

at cost price. financial investments which are held until

they mature are valued at their amortised cost price,

using the effective interest method. this does not apply

to short-term deposits, as these are valued at their cost

price.

Investment grants

Investment grants relating to the purchase of tangible

fixed assets are offset against the purchase price or

manufacturing cost of the assets in question. the

expected amount is recorded in the balance sheet at

the time of initial approval, and, if necessary, corrected

subsequently at the time of definitive allocation of the

grant. the grant is recorded in the income statement in

proportion with the depreciation of the tangible fixed

assets for which it was obtained.

Inventories

Inventories are valued at the lower of cost price or

realisable value. the cost price includes all direct and

indirect costs incurred to bring the goods to the stage of

completion they have reached on the balance sheet date.

the cost price is calculated using the weighted average

cost price method. the realisable value is the estimated

sale price minus the estimated finishing costs and costs

associated with marketing, sale and distribution.

Receivables

Short-term receivables are stated at nominal value, less

suitable provisions for any debts regarded as doubtful.

Long-term receivables are valued at amortised cost price.

Cash and cash equivalents

Cash and short-term investments which are maintained

until the end of the period are stated at their cost price.

Cash equivalents are short-term, extremely liquid

investments which can be converted immediately into

cash of a known amount, and which do not carry any

material risk of change of value.

Financial liabilities and equity instruments

financial liabilities and equity instruments are classified

on the basis of the economic reality of the contractual

agreement. an equity instrument is a contract which

includes the residual right to a share in the Group’s

assets, after the deduction of all liabilities. equity

instruments issued by the Company are recorded to the

amount of the received consideration, less the direct

costs of issue.

Income tax

tax expenses consist of tax due for the reporting

period and deferred taxes. the tax due for the reporting



3 3

period is based on the taxable profit for the period.

taxable profit differs from the net profit in the income

statement, because it excludes certain items of income

or expenditure which are taxable or deductible in

subsequent years, or which will never be taxable or

deductible.

the current tax liability is calculated on the basis of

the tax rates for which the legislative process has been

(substantially) completed by the balance sheet date.

Deferred taxes are taxes which are expected to be paid

or recovered on the basis of differences between the

book value of assets or liabilities in the annual accounts

and their taxable value used for the calculation of the

taxable profit. they are account for using the balance

sheet liability method. Deferred tax liabilities are usually

recognised for all taxable temporary differences and

deferred tax receivables are recognised to the extent

that it is likely that a taxable profit will be available

against which the recoverable temporary difference can

be offset. Such assets and liabilities are not recorded if

the temporary differences arise from goodwill or from

the initial recognition (other than in connection with a

business combination) of other assets and liabilities in a

transaction which has no effect on the taxable profit or

the profit before tax.

Deferred tax liabilities are recognised for taxable

temporary differences which relate to investments in

subsidiaries, associated undertakings and enterprises

accounted for by the equity method unless the Group

can determine the time when the temporary difference

will be resolved or if it is likely that the temporary

difference will not be resolved in the near future.

the book value of deferred tax receivable is assessed at

every balance sheet date and reduced if it is no longer

likely that sufficient taxable profit will be available to

make it possible to use all or some of the benefit of the

deferred tax receivable.

Deferred taxes are valued on the basis of the tax rates

which are expected to apply in the period in which the

tax recovery is realised or the liability is settled. Deferred

taxes are recorded as income or expenses in the income

statement for the period, unless the taxation arises from

a transaction or event that has been directly included in

equity. In this case, the deferred tax is also accounted for

in equity.

Pensions and related liabilities

In accordance with laws and practices of each country,

associated entities have either defined benefit schemes or

defined contribution schemes.

Defined contribution schemes

Contributions to defined contribution schemes are

recorded as an expense as they fall due.

Defined benefit schemes

In defined benefit schemes, the amount on the balance

sheet (the ‘net liability’) corresponds to the present value

of the gross liability, adjusted for unrecorded actuarial

gains and losses, after deduction of the fair value of the

scheme investments and unrecorded prior service costs.

the ‘present value of the gross liability of a defined

benefit scheme’ is the present value, before deduction

of the scheme investments, of expected future payments

required to settle the liability which results from the

employee’s service record in the current and previous

periods.

the discounted value of the liability arising from defined

pension rights and the assigned pension costs associated

with the year of service and prior service pension

costs are calculated by accredited actuaries using the

projected unit credit method.

the discount rate corresponds to the rate of return

on the balance sheet date on corporate bonds with a

high degree of creditworthiness and a remaining term

comparable with the term of the Group’s liabilities. the

discount rate is adjusted annually to reflect the market

return from high-value corporate bonds whose term is

consistent with the estimated term of the gross liabilities

arising from payments after retirement.

3 4


‘actuarial gains and losses’ include adjustments on the

basis of experience (the consequences of differences

between previous actuarial assumptions and what has

actually happened) and the consequences of changes to

actuarial assumptions. In principle, actuarial gains and

losses are not recognised at the moment they arise, but,

to the extent that the cumulative amount falls outside

a certain ‘corridor’, they are spread on a straight-line

basis over the expected average remaining working life

of the employees who are members of the scheme. this

corridor is determined individually for each defined

benefit scheme and has lower and upper limits of 110%

and 90% respectively of the higher of the present value

of the gross liabilities and the fair value of the scheme

investments.

‘prior service costs’ refer to the increase in the present

value of the gross liability for services provided by

employees in previous periods and which result in the

current period from the introduction of or changes to

payments after retirement or other long-term personnel

remuneration. prior service costs are taken gradually to

the income statement and spread on a straight-line basis

over the average term until the benefit rights have been

acquired.

If benefit rights can be regarded as acquired as a result

of a new scheme or changes to an existing scheme, prior

service costs are immediately recorded in the income

statement.

If the liability to be recorded on the balance sheet is

negative, the asset entry that is included may not exceed

the total unrecorded cumulative actuarial net losses

and prior service costs and the present value of future

repayments from the scheme or reductions in future

contributions to the scheme (the ‘asset ceiling’ principle).

In this case, however, the actuarial gains and losses are

immediately taken to the income statement if deferring

them would result in the recording of a gain purely as a

consequence of an actuarial loss in the current financial

year, or of a loss purely and simply as a consequence

of an actuarial gain in the current financial year. prior

service costs are in this case likewise immediately

included if spreading them out on a straight-line basis

would result in the recording of a gain purely as a

consequence of an increase in prior service costs during

the current financial year.

Other long-term personnel remuneration

other long-term personnel remuneration such as long-

service bonuses is accounted for using the ‘projected

unit credit’ method. however, the accounting treatment

differs from that of defined benefit schemes, in that

actuarial gains and losses and prior service costs are

recorded immediately.

Provisions

provisions are established in the balance sheet if the

Group has a legally enforceable or de facto liability on

the balance sheet date as a result of an event in the past,

for which it is likely that an outlay will be required of

resources which contain economic benefits, and if this

outlay can be reliably estimated. the amount recorded

as a provision is the best estimate on the balance sheet

date of the outlay required to satisfy the existing liability,

if necessary discounted if the time value of money is

relevant.

provisions for reorganisation costs are recorded if the

Group has a detailed formal plan for the reorganisation

that has already been communicated to the parties

concerned before the balance sheet date.

Interest-bearing financing

Interest-bearing financing is recorded at the value of the

income received less transaction costs incurred. It is then

valued at amortised cost price using the effective interest

rate method. any difference between the income (after

deduction of transaction costs) and the redemption value

(including premiums payable on redemption) is recorded

in the income statement over the period of the financing.



3 5

Trading accounts payable and other payables

non-interest-bearing trade liabilities are valued at their

cost price, which represents the fair value of the amount

payable.

Derivative financial instruments

the Group uses various derivatives to hedge against

currency risks arising from its operating activities,

financing and investment activities. the net risk of all

Group subsidiaries is managed centrally in line with

the objectives and rules established by the Group

management. It is the Group’s policy to avoid engaging

in speculative transactions or transactions with a

leverage effect and not to engage in trading in financial

instruments under any circumstances.

Derivative financial instruments are treated as follows:

Cash flow hedging

Changes in the fair value of derivative financial

instruments which are ascertained to provide effective

hedging for future cash flows are recorded directly

in equity, while the non-effective element of the gain

or loss on the hedging instrument is recorded in the

income statement. If the cash flow hedging of a fixed

commitment or a highly likely future transaction results

in the recognition of an asset or liability, then the

associated profits and losses on the derivative instrument

which were formerly recorded in equity are now

included in the initial valuation of the asset or liability at

the time of recognition. for hedges which do not result

in the recognition of an asset or liability, amounts which

were deferred in equity are recorded in the income

statement for the period during which the hedged item

affects the gain or loss.

Fair value hedging

a derivative instrument is recorded as a fair value

hedge if the instrument hedges against the risk that

the fair value of the recorded assets and liabilities may

change. Derivatives accounted for as fair value hedges

and hedged assets and liabilities are recorded at their

fair value. the corresponding changes in the fair value

are recorded in the income statement. Changes in the

fair value of derivative financial instruments which do

not qualify as hedging transactions are recorded in the

income statement when they arise. hedge accounting

is discontinued when the hedging instrument expires,

is sold, terminated or exercised or when the hedging

no longer satisfies the criteria for hedge accounting.

In this case the cumulative gain or loss on the hedging

instrument which is accounted for directly in equity

continues to be recorded separately in equity until the

expected future transaction takes place. If an expected

future transaction is not expected to take place any

more, the cumulative gain or loss shown in the equity is

transferred to the income statement for the period.

Income

Income is recorded if it is likely that the company

will receive the economic benefits associated with

the transaction and the amount of the income can

be measured reliably. turnover is recorded after the

deduction of turnover tax and discounts.

Income from the sale of goods is recorded when the

delivery and the complete transfer of risks and benefits

have taken place.

Interest income is recorded on a time basis that reflects

the actual return on the asset. royalties are included on

an accrual basis in accordance with the conditions of the

agreement.

Dividends are recorded when the shareholder’s right to

receive them has arisen.

Miscel laneous

Impairment of tangible and intangible assets

Like goodwill, which is subjected to an impairment test

every year, intangible assets and tangible fixed assets

also undergo such a test when there is an indication

that their book value may be lower than their realisable

value. If an asset does not generate a cash influx which

is independent of other assets, the Group estimates the

realisable value of the cash flow generating unit to which

the asset belongs.

3 6


the realisable value is the highest value of the fair value

minus sales costs and the value to the business.

the method of the going concern value uses cash flow

forecasts based on the financial budget that is approved

by the management. Cash flows after this period

are extrapolated by making use of the most justified

percentage growth over the long term for the sector

in which the cash flow-generating unit is active. the

management bases its assumptions (prices, volumes,

return) on past performances and on its expectations

with regard to the development of the market. the

weighted average growth percentages are in conformity

with the forecasts included in the sector reports. the

discount rate used is the estimated weighted average

equity cost of the group before taxes, and takes account

of the current market evaluations of the time value of

money and the risks for which the future cash flows are

adapted.

If the realisable value of an asset (or cash flow generating

unit) is estimated to be lower than its book value, the

asset’s (or cash flow generating unit’s) book value is

reduced to its realisable value. an impairment loss is

immediately recorded in the income statement.

If an impairment loss is subsequently written back, the

asset’s (or cash flow generating unit’s) book value is

increased to the revised estimate of its realisable value,

but only to the extent that the increased book value is

no higher than the book value that would have been

recorded if no impairment loss had been recorded for

the asset (or cash flow generating unit) in previous years.

however, impairment losses on goodwill are never

written back.

Post-balance sheet events

post-balance sheet events which provide additional

information about the company’s situation on the

balance sheet date (‘adjusting events’) are included in

the annual accounts. other post-balance sheet events

are mentioned in the notes only if they may have a

significant impact.

The most important assessment criteria in the

application of the Valuation rules

In 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.



3 7

I I I .�. SeGMent InforMatIonII I .�. SeGMent InforMatIon

prIMarY SeGMent InforMatIon

for management purposes, the Group is organised into three major operating divisions – Coating, apparel and Industrial

applications. these divisions are the basis on which the Group reports its primary segment information.

the principal products and services of each of these divisions are described previously.

for more details on these divisions reference is made to the first part of this annual report.

Inter-segment sales are done at prevailing market conditions.

Segments 2006 Coating Apparel Industrial applications

Eliminations Consolidated

Net sales 212 897 75 270 83 687 339 389

external sales 183 468 75 �11 80 710 339 389

Intersegment sales �9 4�9 60 � 976 -3� 465 0

Segment profit from operational activities

18 971 3 229 6 084 28 285

Unallocated profit from operational activities

-� 394

Profit from operational activities 25 891

net financial charges -6 565

Profit before taxation 19 326

taxes -7 17�

Profit after taxation 12 153

Segment assets �75 �17 58 4�4 54 508 -�� 746 365 40�

Unallocated assets 6 430

Total consolidated assets 371 833

Segment liabilities �75 �17 58 4�4 54 508 -�� 746 365 40�

Unallocated liabilities 6 430

Total consolidated liabilities 371 833

Other information Coating Apparel Industrial applications

Head office


Depreciation 13 949 1 499 1 691 780 0 17 919

Write downs of inventories

59 1 690 366 0 0 � 116

Write downs of receivables

-1 008 -356 -5�� 0 0 -1 886

additions to/(reversals) of provisions

605 76 1�3 0 0 804

eBItDa 3� 577 6 138 7 74� -1 64� �9 44 843

Impairments 0 0 0 0 0 0

reorganisation costs 1 195 61 1 50 0 1 307

Investments in intangible fixed assets

�8 3� � � 71� 0 � 773

Investments in tangible fixed assets

19 �66 7�1 � 561 548 0 �3 097

3 8


Segments 2005 Coating Apparel Industrial applications


Net sales 193 431 78 138 70 066 316 237

external sales 170 740 78 1�7 67 370 316 �37

Intersegment sales �� 691 11 � 696 -�5 398 0

Segment profit from operational activities

15 356 3 456 6 743 25 554

Unallocated profit from operational activities

-97

Profit from operational activities 25 457

net financial charges -5 470

Profit before taxation 19 987

taxes 6 399

Profit after taxation 13 588

Group share in profit or loss 13 582

Segment assets ��9 3�4 69 189 55 �06 -�0 604 333 015

Unallocated assets 4 667

Total consolidated assets 337 683

Segment liabilities ��9 3�4 69 189 55 �06 -�0 604 333 015

Unallocated liabilities 4 667

Total consolidated liabilities 337 683

Other information Coating Apparel Industrial applications

Head office


Depreciation 13 599 1 753 1 786 740 �� 17 899

Write downs of inventories

135 516 �78 0 0 930

Write downs of receivables

-145 105 -�8 0 0 -67

additions to/(reversals) of provisions

-5�� -30 -�0 0 0 -57�

eBItDa �8 4�3 5 800 8 760 517 147 43 647

reorganisation costs 419 83 0 50 0 505

Investments in intangible fixed assets

4� 43 �0 631 0 736

Investments in tangible fixed assets

11 395 1 081 3 390 765 0 16 63�

I I I .�. SeGMent InforMatIonII I .�. SeGMent InforMatIon

prIMarY SeGMent InforMatIon

3 9

2006 Gross sales Assets Cost of acquisitions

Germany 68 519 �0.0% 1 376 0.4% 4 0.0%

france 6� 657 18.3% 57 �86 15.4% 4 �93 16.6%

Belgium 39 801 11.6% �59 779 69.9% �0 143 77.9%

eastern europe 33 87� 9.9% 10 866 �.9% 819 3.�%

netherlands 31 �0� 9.1% 13 070 3.5% 8 0.0%

Great Britain �3 173 6.8% 1 95� 0.5% 0 0.0%

Italy 14 �3� 4.�% 0 0.0% 0 0.0%

Scandinavia 9 637 �.8% 0 0.0% 0 0.0%

Spain 8 979 �.6% 0 0.0% 0 0.0%

USa 8 654 �.5% 3 386 0.9% 151 0.6%

Ireland 4 �06 1.�% 3 1�7 0.9% 41 0.�%

Switzerland 4 138 1.�% 0 0.0% 0 0.0%

austria 3 759 1.1% 0 0.0% 0 0.0%

other �9 1�0 8.5% �0 99� 5.6% 411 1.6%

Subtotal 341 949 100.0% 371 833 100.0% �5 871 100.0%

Discounts � 560

net Sales 339 389

2005 Gross sales Assets Cost of acquisitions

france 64 331 �0.�% 40 597 1�.0% 5 014 �7.6%

Germany 56 308 17.7% 1 950 0.6% 45 0.�%

Belgium 39 087 1�.3% �30 584 68.3% 11 779 64.7%

Great Britain �7 560 8.7% 6 588 �.0% 58 0.3%

netherlands �6 73� 8.4% 13 4�6 4.0% �4 0.1%

eastern europe �5 707 8.1% 8 990 �.7% 306 1.7%

Italy 13 011 4.1% 0 0.0% 0 0.0%

Scandinavia 10 186 3.�% 0 0.0% 0 0.0%

Spain 8 357 �.6% 0 0.0% 0 0.0%

USa 7 133 �.�% � 78� 0.8% 98 0.5%

Switzerland 4 743 1.5% 0 0.0% 0 0.0%

austria 4 090 1.3% 0 0.0% 0 0.0%

Ireland 3 811 1.�% 3 076 0.9% 38 0.�%

other �7 417 8.6% �9 3�4 9.1% 834 4.6%

Subtotal 318 473 100.0% 337 683 100.0% 18 197 100.0%

Discounts � �36

net Sales 316 �37

4 0


I I I .3. eXChanGe rateII I .3. eXChanGe rate

Code RATE 2005 2006

eUr average 1.0000 1.0000

closing 1.0000 1.0000

USD average 1.�400 1.�63�

closing 1.1797 1.3170

GBp average 0.6836 0.6819

closing 0.6853 0.6715

rMB average 10.15�3 10.049�

closing 9.5�0� 10.�796

pLn average 4.0�17 3.9011

closing 3.8600 3.8310

tDn average 1.6114 1.674�

closing 1.611� 1.7106

Uah average 6.3199 6.3686

closing 5.9588 6.6551

4 1

2005 2006

NET SALESSales of goods 317 567 34� 190

Subcontracting � 156 1 641

Commissions and discounts -3 486 -4 44�

Net sales 316 237 339 389

COST OF GOODS SOLDpurchases 159 088 165 3�9

transport cost goods purchased 1 410 1 144

Stock variation -8 180 -3 440

Subcontracting 5 �06 5 669

personnel expenses 4� 199 43 439

Depreciation 14 697 14 589

Services and other goods 36 5�9 38 590

amounts written off inventory and receivables 930 � 116

Cost of goods sold 251 877 (1) 267 436

SALES AND MARKETINGSubcontracting 0 4

personnel expenses 8 �57 9 7�5

Depreciation 117 303

other services and other goods 7 590 7 4�8

amounts written off inventory and receivables -67 -1 886

Sales and marketing 15 896 15 573

RESEARCH AND DEVELOPMENTpersonnel expenses � 876 3 �7�

Depreciation 53� 544

other services and goods � 147 3 �06

Research and development expenses 5 554 (1) 7 021

GENERAL AND ADMINISTRATIVE EXPENSESpersonnel expenses 10 1�7 11 �45

Depreciation � 554 � 483

other services and goods 7 �06 8 737

General overhead expenses 19 887 22 465

OTHER OPERATING INCOME AND EXPENSESGain/loss on realization fixed assets 917 54

provision liabilities & charges 57� -804

Impairment loss 0 0

received indemnities 155 548

Local taxes -670 -910

other 1 966 1 416

Other operating income and expenses 2 940 304

I I I .4. DetaILeD InCoMe StateMentII I .4. DetaILeD InCoMe StateMent

(1) in �005: reallocation of goods produced for r&D purposes to r&D expenses in an amount of keUr 1,337 in �005 to permit

comparison with figures for �006.

4 �


2005 2006

NON RECURRING RESULTrestructuring expenses -505 -1 307

Non recurring result -505 -1 307

Operating result

X. OPERATING RESULT 25 457 25 891

FINANCIAL RESULTInterests received �51 56�

Interests paid -6 �80 -7 51�

realized currency result ��8 -174

Unrealized currency result 194 388

other 136 170

Financial result -5 470 -6 565

TAXESCurrent tax -8 64� -6 78�

Deferred tax � �4� -391

Taxes -6 399 -7 172

earnings after taxes 13 58� 1� 153

2005 2006Reconciliation between taxes and result before taxes Profit before taxes 19 987 19 326tax on profit of fiscal entities against theoretical local tax rate 6 0�4 6 53�

theoretical tax rate (1) 30,14% 33,80%

tax impact of change in tax rate (3) 1 147

non-deductible expenses 197 31�

Specific tax regimes -7�0 -810

Deferred tax assets not recognised 1 415 1 597

Valuation allowance on previously recognised deferred tax assets 1 771

Usage of non-recognised deferred tax assets -1 393

regularisation of current tax on previous years -84� 68

Carry back (4) -186

notional interest deduction -645

Deferred taxes on undistributed reserves �60 �5�

Sale Sirec (�) -1 576

other -130 �98

tax on profit as shown in the p&L 6 399 7 17�

(1) is the weighted average tax rate

(�) in �005 Sioen Industries sold Sirec to a reinsurance company. this resulted in the realization of a deferred tax liability.

(3) tax rate in netherlands �5.5% while last year 31.5%

(4) tax paid in �003 in pennel can be claimed back

I I I .4. DetaILeD InCoMe StateMentII I .4. DetaILeD InCoMe StateMent

4 3

DIVIDENDS

Dividend for the period ending 31 December �005 of eUr 0.�4 per share.

proposed dividend for the period ending 31 December �006 of eUr 0.�6 per share.

the proposed dividend is subject to shareholders’ approval at the annual general meeting and

is not shown as a liability in these annual accounts.

ORDINARY PROFIT PER SHARE

the calculation of the ordinary and diluted profit per share is based on the following data:

2005 2006

net profit or loss for the period 13 58� 1� 153

net profit or loss from continuing activities 13 58� 1� 153

Weighted average number of outstanding shares �1 391 070 �1 391 070

ordinary shares �1 391 070 �1 391 070

Weighted average number of shares for ordinary profit per share �1 391 070 �1 391 070

Ordinary profit per share 0.63 0.57

ordinary profit per share from continuing activities 0.63 0.57

DILUTED PROFIT PER SHARE

Diluted elements -

net profit or loss from continuing activities 13 58� 1� 153

profit or loss attributable to ordinary shareholders 13 58� 1� 153

Weighted average number of outstanding ordinary shares �1 391 070 �1 391 070

Weighted average number of shares for diluted profit per share �1 391 070 �1 391 070

Diluted profit per share 0.63 0.57

Diluted profit per share from continuing activities 0.63 0.57

Anti dilutive elements not included in the calculation

Shares option plan as the options are out of the money compared to the average share price in �005 and �006.

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Development expenses : acquisition 8 -8

Concessions, patents, licences etc.: acquisition 1 653 6 4 8 418 10 08�

Software : acquisition 8 399 � 767 15 -16 180 11 345

Customer portfolio : acquisition � 568 0 5 58� 0 8 150

TOTAL 12 628 2 773 0 0 7 -11 14 180 0 0 29 576

Development expenses : depreciation 0 0 0

Concessions patents licences etc.: depreciation 1 51� 4 �4� 1 758

Software : depreciation 7 334 1 -10 173 361 7 859

Customer portfolio : depreciation 1 514 0 0 7�9 0 � �43

TOTAL 10 361 0 0 0 1 -6 173 1 333 0 11 860

Intangible assets 2 267 2 773 6 -5 14 007 -1 333 0 17 716

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Development expenses : acquisition 0 8 8

Concessions, patents, licences etc.: acquisition

1 6�9 17 0 7 0 1 653

Software : acquisition 7 693 711 -�� 18 0 8 399

Customer portfolio : acquisition � 568 � 568

TOTAL 11 889 736 0 0 -22 24 0 0 0 12 628

Development expenses : impairment

Concessions patents licences etc.: impairment

Software : impairment

Customer portfolio : impairment 6 -6 0 0

TOTAL 6 0 0 -6 0 0 0 0 0 0

Development expenses : depreciation 0 0

Concessions patents licences etc.: depreciation

1 465 3 44 1 51�

Software : depreciation 6 90� -18 10 440 0 7 334

Customer portfolio : depreciation 7�0 794 1 514

TOTAL 9 088 0 0 0 -18 13 0 1 278 0 10 361

Intangible assets 2 796 736 6 -4 11 -1 278 0 2 267

I I I .5. DetaILeD BaLanCe SheetII I .5. DetaILeD BaLanCe Sheet

III .5.1 IntanGIBLe fIXeD aSSetS

4 5

total purchases of intangible fixed assets amount to

eUr �.8 million compared with eUr 0.8 million in

�005. this is mainly due to increased purchases of

software relating to the Sap implementation.

purchases of software in �005 consist predominantly

of the initial expenditure on the erp project (Sap).

also in �006 purchases of software consist mainly of

Sap implementation costs. as Sap was not in use,

no depreciation was recorded in �006. once in use,

purchased erp software and associated implementation

costs will be depreciated over seven years on a straight-

line basis.

assets acquired through the acquisition of Siegwerk

Benelux business and of richard Colorants Sa, Copidis

SaS and astra Sa (together «richard» below) are

mentioned under acquisition via business combination.

the client portfolio of the Siegwerk Benelux business

purchased in �006 was valued at eUr 1.4 million and

the product portfolio at eUr 5.9 million. the product

portfolio is being depreciated over 8 years, the client

portfolio over 5 years.

the client portfolio of richard was valued at eUr 4.�

million and the product portfolio at eUr �.5 million. this

product portfolio is being depreciated over 10 years, the

client portfolio over 5 years.

Depreciation of intangible fixed amounts to eUr 1.3

million and is shown in the income statement by

function. Depreciation of the customer portfolio is

included in sales and marketing expenses, depreciation

of the product portfolio is included in the manufacturing

contribution.

no development expenses have been capitalized.

Intangible assets that meet the recognition criteria of IaS

38 - Intangible assets are recognised to the extent that

future economic benefits are probable. to the extent

that the recoverable amount of the intangible assets

(i.e. the higher of its fair value less costs to sell and the

present value of the future cash flows expected from

the continuing use of these assets and their disposal)

is less than the carrying amount, an impairment loss

is recognised in accordance with IaS 36 - Impairment

of assets. the recoverable amount of a CGU (Cash-

Generating Unit) is generally determined on the basis

of value-in-use calculations. for certain assets clearly

identified, the “net selling price” in a binding sales

agreement of an arm’s length transaction can however be

used to determine the recoverable amount of the asset.

the value-in-use method involves cash flow projections

based on financial budget approved by management.

Cash flows are extrapolated using the most appropriate

estimated growth rate which does not exceed the long-

term average growth rate for the business in which the

CGU operates.

Management determines these assumptions (prices,

volumes and performance yields) based on past

performance and its expectations for the market

development. the weighted average growth rates used

are consistent with the forecasts included in the industry

reports. the discount rate used is based on the Group’s

estimated pre-tax weighted average cost of capital and

reflects current market assessments of the time value of

money and risks for which future cash

flows have not been adjusted and are similar to those

disclosed under caption “Goodwill”.

no impairments were recorded in �006.

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Goodwill 16 548 -� 1 388 17 935

2005

Goodwill 16 548 -� 0 16 548

I I I .5.� GooDWILL

In �006 the group purchased various assets of Siegwerk

Benelux. these were included in the consolidated

financial statements using the purchase accounting

method. the resultant goodwill of eUr 0.6 million is not

depreciated, in line with IfrS 3.

In �006 richard Colorants Sa, Copidis SaS and astra

Sa were purchased. the figures were included in the

Group’s financial statements from 1 october �006. the

purchased assets were included in the consolidated

annual accounts using the purchase accounting method.

the resultant goodwill of eUr 0.7 million is not

depreciated, in line with IfrS 3.

the book value of goodwill acquired in a business

combination must be allocated on a reasonable and

consistent basis to each cash flow-generating unit or

the smallest group of cash flow-generating units, in

conformity with IaS 36.

the realisable value of a cash flow-generating unit is

determined on the basis of the going concern value.

for calculating the going concern value, cash flow

forecasts are used that are based on financial budgets

and projections. these projections contain extrapolations

making use of the most justified growth percentage that

cannot be higher than the average growth percentage

over the long term for the sector in which the cash flow-

generating unit is active, that is, between �% and 3%.

Management bases its assumptions on past performances

and on its expectations over the coming years. the

discount rate used is calculated per segment and varies

between 6% and 10%.

Allocation to segments :

Coating 15 560

apparel � 360

Industrial application 15

4 7

I I I .5.3 SUBSIDIarIeS

% holding

2006 2005

Sioen n.v. Belgium ardooie 99.47% 99.47% apparel

Veranneman technical textiles n.v. Belgium ardooie 98.7�% 98.7�% coating

european Master Batch n.v. Belgium Bornem 100.00% 100.00% coating

Coatex n.v. Belgium poperinge 100.00% 100.00% industrial applications

Sioen france s.a.s. france narbonne 99.83% 99.83% apparel

Confection tunisienne de Sécurité s.a. tunesia tunis 89.�5% 89.�5% apparel

Donegal protective Clothing Ltd. Ireland Derrybeg 100.00% 100.00% apparel

Sioen Coating Distribution n.v. Belgium ardooie 100.00% 100.00% coating

Siofab s.a. portugal Santo tirso 100.00% 100.00% coating

p.t. Sungintex Indonesia Jakarta 100.00% 100.00% apparel

Saint frères s.a.s. france flixecourt 99.97% 99.97% coating

Sioen fabrics s.a. Belgium Moeskroen 100.00% 100.00% coating

Saint frères Confection s.a.s. france flixecourt 100.00% 100.00% industrial applications

p.t. Sioen Indonesia Indonesia Jakarta 100.00% 100.00% apparel

Sioen tunisie s.a. tunesia tunis 99.83% 99.83% apparel

Sioen fibres s.a. Belgium Moeskroen 100.00% 100.00% coating/apparel

tIS n.v. Belgium haaltert-Kerksken 100.00% 100.00% coating

Sioen UK Ltd. United Kingdom Chorley 100.00% 100.00% apparel

Mullion Manufacturing Ltd. United Kingdom Scunthorpe 100.00% 100.00% apparel

Sioen Shanghai China Shanghai 100.00% 100.00% coating

Sioen Zaghouan s.a. tunesia Zaghouan 99.50% 99.50% apparel

Sioen nordifa s.a. Belgium Luik 100.00% 100.00% industrial applications

Inducolor s.a. Belgium Meslin-L’evêque 100.00% 100.00% coating

Sioen Coating n.v. Belgium ardooie 99.47% 99.47% coating

pennel automotive s.a.s. france roubaix 100.00% 100.00% coating

roland International b.v. the netherlands tegelen 100.00% 100.00% industrial applications

roland planen Gmbh Germany Werlte 100.00% 100.00% industrial applications

roltrans Group america Inc. USa arlington 100.00% 100.00% industrial applications

roltrans Group polska Spzoo poland Konin 100.00% 100.00% industrial applications

roland tilts UK Ltd. United Kingdom Bradford 100.00% 100.00% industrial applications

Monal s.a. Luxemburg Luxemburg 100.00% 100.00% industrial applications

roltrans Group b.v. nederland tegelen 100.00% 100.00% industrial applications

roland-Ukraine Llc Ukraine rivne 100.00% 60.00% industrial applications

Sioen USa Inc. USa aberdeen 100.00% 100.00% apparel

richard s.a.s. france Lomme 100.00% 0.00% coating

Colorants pigments Distribution s.a.s. france Lomme 100.00% 0.00% coating

astra Colorants s.a. france Lomme 100.00% 0.00% coating

Sioen Industries n.v. Belgium ardooie 100.00% 100.00% group

Changes with respect to 2005:

the client portfolio of Sioen UK Ltd is acquired on 30 juni �006 by Sioen n.v.

roland International b.v. acquired in december �006 100% of the share in roland-Ukraine Llc

the group richard (richard s.a.s., Copidis s.a.s. en astra Colorants s.a.) has been acquired in october �006

4 8


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Land : acquisition 16 718 675 -1 -7 -61 308 0 17 633

Buildings : acquisition 50 31� � 539 -1�1 -179 -544 996 0 53 003

Infrastructure buildings : acquisition 16 580 3 166 -46 -15 � � �53 0 �1 940

plant, machinery and equipment : acquisition 151 46� 8 783 -3�4 -754 �3 -577 4 107 0 16� 7�1

furniture : acquisition 3 649 14� -18 -3 -116 568 0 4 ��

Vehicles : acquisition 3 407 693 -33 -441 -40 -30 �� 0 3 578

hardware : acquisition 5 335 4�6 -�6 -� -1�1 0 0 5 61�

Leasing land and buildings : acquisition �0 �45 -874 7 0 0 19 378

Leasing furniture and equipment: acquisition �77 156 -40 -347 -3 0 0 43

assets under construction : acquisition 10� 6 517 1 416 1 0 0 8 036

TOTAL 268 087 23 097 -568 -1 256 -7 -1 440 8 255 0 296 168

Buildings : depreciation �0 363 -64 5�5 -169 88� 1 849 �3 385

Infrastructure buildings : depreciation 10 057 -33 -15 � 1 9�7 1 �� 13 160

plant, machinery and equipment : depreciation 80 686 -110 -759 -1 -504 � 364 11 �80 9� 955

furniture : depreciation 3 304 -11 -7 0 -99 494 184 3 865

Vehicles : depreciation � 733 -33 -350 -30 -17 1 345 � 650

hardware : depreciation 3 9�8 -3 -�1 -85 0 580 4 400

Leasing land and buildings : depreciation 4 674 -411 � 0 1 064 5 330

Leasing furniture and equipment : depreciation 64 -37 -85 -1 0 61 3

assets under construction : depreciation 0 0 0 0

TOTAL 125 808 0 -253 -1 189 -1 -871 5 668 16 586 145 748

a) Land 16 718 675 -1 -7 -61 308 0 17 633

b) Buildings 36 47� 5 705 -70 0 -704 -374 440 -3 071 38 399

�) plant, Machinery and equipment 70 776 8 783 -�13 5 �4 -73 1 743 -11 �80 69 765

3) furniture and Vehicules � 4�6 1 �61 -31 -68 -10 -66 96 -1 110 � 498

4) fixed assets held under leasing and other simil 15 784 156 -� -7�6 3 0 -1 1�5 14 089

5) assets under construction and advance payments 10� 6 517 1 416 1 0 0 8 036

property, plant and equipment 14� �78 �3 097 -315 -67 -6 -569 � 587 -16 586 150 4�0

I I I .5.4 tanGIBLe fIXeD aSSetS

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Land : acquisition 16 814 -138 -1�6 168 0 0 16 718

Buildings : acquisition 46 414 3 559 -401 -�06 946 0 0 50 31�

Infrastructure buildings : acquisition 16 168 6�� -1 -�35 �4 0 0 16 580

plant, machinery and equipment : acquisition 139 746 10 770 -97� 1 005 914 0 0 151 46�

furniture : acquisition 3 437 9� -8 -7 6 1�8 0 0 3 649

Vehicles : acquisition 3 7�7 �79 -660 -35 95 0 0 3 407

hardware : acquisition 5 043 41� -�5� -�5 158 0 0 5 335

Leasing land and buildings : acquisition 19 �7� 516 466 -9 0 0 �0 �45

Leasing furniture and equipment: acquisition �04 58 -9 �3 0 0 �77

assets under construction : acquisition 151 3�4 -378 5 0 0 10�

TOTAL 250 976 16 632 -8 -2 431 463 2 453 0 0268 087

Buildings : depreciation 18 4�6 -�06 -4 �84 1 86� �0 363

Infrastructure buildings : depreciation 8 776 -1 -3 1� 1 �7� 10 057

plant, machinery and equipment : depreciation 69 388 -885 5� 745 11 387 80 686

furniture : depreciation � 955 -8 -7 0 101 �63 3 304

Vehicles : depreciation � 891 -566 -17 68 357 � 733

hardware : depreciation 3 4�� -�3� -�7 100 665 3 9�8

Leasing land and buildings : depreciation 3 655 �4 -3 999 4 674

Leasing furniture and equipment : depreciation �� -1 4 39 64

assets under construction : depreciation 0 0 0

TOTAL 109 535 0 -8 -1 897 25 1 310 16 843125 808

a) Land 16 814 -138 -1�6 168 0 16 718

b) Buildings 35 380 4 18� -195 -435 675 -3 134 36 47�

�) plant, Machinery and equipment 70 358 10 770 -87 953 169 -11 387 70 776

3) furniture and Vehicules � 940 783 0 -114 -10 11� -1 �85 � 4�6

4) fixed assets held under leasing and other simil 15 798 574 434 14 -1 037 15 784

5) assets under construction and advance payments 151 3�4 -378 5 0 10�

property, plant and equipment 141 44� 16 63� 0 -534 439 1 143 -16 843 14� �78

2006 ope

ning

bal

ance

purc

hase

s

Dis

posa

ls

Sale

s

tran

sfer

s

exch

ange

rat

e di

ffere

nces

acq

uire

d vi

a bu

sine

ss

com

bina

tion

Dep

reci

atio

n

Clo

sing

bal

ance

Land : acquisition 16 718 675 -1 -7 -61 308 0 17 633

Buildings : acquisition 50 31� � 539 -1�1 -179 -544 996 0 53 003

Infrastructure buildings : acquisition 16 580 3 166 -46 -15 � � �53 0 �1 940

plant, machinery and equipment : acquisition 151 46� 8 783 -3�4 -754 �3 -577 4 107 0 16� 7�1

furniture : acquisition 3 649 14� -18 -3 -116 568 0 4 ��

Vehicles : acquisition 3 407 693 -33 -441 -40 -30 �� 0 3 578

hardware : acquisition 5 335 4�6 -�6 -� -1�1 0 0 5 61�

Leasing land and buildings : acquisition �0 �45 -874 7 0 0 19 378

Leasing furniture and equipment: acquisition �77 156 -40 -347 -3 0 0 43

assets under construction : acquisition 10� 6 517 1 416 1 0 0 8 036

TOTAL 268 087 23 097 -568 -1 256 -7 -1 440 8 255 0 296 168

Buildings : depreciation �0 363 -64 5�5 -169 88� 1 849 �3 385

Infrastructure buildings : depreciation 10 057 -33 -15 � 1 9�7 1 �� 13 160

plant, machinery and equipment : depreciation 80 686 -110 -759 -1 -504 � 364 11 �80 9� 955

furniture : depreciation 3 304 -11 -7 0 -99 494 184 3 865

Vehicles : depreciation � 733 -33 -350 -30 -17 1 345 � 650

hardware : depreciation 3 9�8 -3 -�1 -85 0 580 4 400

Leasing land and buildings : depreciation 4 674 -411 � 0 1 064 5 330

Leasing furniture and equipment : depreciation 64 -37 -85 -1 0 61 3

assets under construction : depreciation 0 0 0 0

TOTAL 125 808 0 -253 -1 189 -1 -871 5 668 16 586 145 748

a) Land 16 718 675 -1 -7 -61 308 0 17 633

b) Buildings 36 47� 5 705 -70 0 -704 -374 440 -3 071 38 399

�) plant, Machinery and equipment 70 776 8 783 -�13 5 �4 -73 1 743 -11 �80 69 765

3) furniture and Vehicules � 4�6 1 �61 -31 -68 -10 -66 96 -1 110 � 498

4) fixed assets held under leasing and other simil 15 784 156 -� -7�6 3 0 -1 1�5 14 089

5) assets under construction and advance payments 10� 6 517 1 416 1 0 0 8 036

property, plant and equipment 14� �78 �3 097 -315 -67 -6 -569 � 587 -16 586 150 4�0

5 0


II I .5.4 tanGIBLe fIXeD aSSetS

Tangible fixed assets

During �006, a total of eUr �4.3 million of tangible

fixed assets were acquired (before deduction of

investment grants).

the main investments in �006 were:

• eUr 0.7 million in land at Moeskroen for calendering

project

• eUr 1.4 million in a building at Moeskroen for

calendaring project

• eUr 1.3 million in a building for richard Colorants at

Lomme

• eUr �.6 million in a new warehouse at eMB at

Bornem

• eUr 1.0 million in a new showroom at ardooie

• eUr 0.4 million in air conditioning at fibres

production plant

• eUr 1.9 million in a needle felt production line at

nordifa

• eUr 1.0 million in machinery at eMB

• eUr 0.5 million looms at Veranneman

• eUr 4.7 million calendering machinery

the fixed assets under construction consist of the

calendering factory expected to be in use by �008.

In total eUr 1.6 million of investment grants have been

received for the investments in nordifa.

In total, eUr 1.4 million of investment grants were

recognised in deduction of depreciation during period

�006.

During �005, the total acquisition of tangible fixed assets

amounted to eUr 16.6 million (including investment

grants).

the main investments in �005 were:

• eUr 3.6 million in a new coating line at Saint frères

enduction in france

• eUr 1.8 million in the further expansion of the

production hall at Saint frères enduction

• eUr �.1 million in a needle felt production line at

nordifa

• eUr 3 million on looms at Veranneman and tIS

• eUr � million on a new warehouse at eMB in Bornem

In �005 an investment grant of eUr 0.8 million was

received from the Walloon region. this has been

deducted from the acquisitions. the fixed assets under

leasing relate to the buildings at ardooie and the Saint

frères enduction building.

the building in tegelen (net book value of eUr 4

million) is not used in production and therefore is not

depreciated.

the different categories of tangible fixed assets are

depreciated by the straight-line method over their

estimated economic life. Depreciation starts once the

assets are ready for their intended use.

the estimated economic life of the main tangible fixed

assets lies within the following ranges:

Buildings: �0 years

Machines: 5 to 15 years

equipment: 10 years

furniture: 5 years

hardware: 5 years

Vehicles: 5 years

there are no mortgages secured on the tangible fixed

assets. tangible fixed assets are subject to the application

of IaS 36, Impairments, when there is an indication

that their book value may be lower than their realisable

value. If an asset does not generate a cash influx which

is independent of other assets, the Group estimates the

realisable value of the cash flow generating unit to which

the asset belongs. no impairments were recorded.

at 31 December �006, the Group had entered into

contractual commitments for the acquisition of property,

plant & equipment amounting to eUr 6.4 million.

5 1

I I I .5.5 LonG-terM traDe reCeIVaBLeS

Long term trade receivables

the term of these trade receivables is between two and three years. these long-term receivables have been valued at

their net current value.

2006opening balance

Increase Decrease fair value adjustment

Closing balance

trade debtors Lt 59 43 -59 -��

trade debtors Lt : revaluation

trade debtors Lt : impairment

Long term trade receivables 59 43 -59 -22 22

2005opening balance


Closing balance

trade debtors Lt 59 59

trade debtors Lt : revaluation

trade debtors Lt : impairment

Long term trade receivables 59 59

Other long term assets

as in previous years these other long term assets mainly consist of Vat deposits.

2006opening balance


Closing balance

affiliated enterprises : amounts receivable

other shares : acquisition

Guarantees and deposits : acquisition 5�4.00 41.00 -63.00 504.00

other amounts receivable long term :

acquisition

Other long term assets 524.00 41.00 -63.00 504.00

2005opening balance


Closing balance

affiliated enterprises : amounts receivable

other shares : acquisition

Guarantees and deposits : acquisition 684.00 -160.00 5�4.00

other amounts receivable long term :

acquisition

0.04

Other long term assets 684.00 -160.00 524.00

5 �


Gross inventory

2006 Closing balance

raw materials 3� 566

Consumables 848

Work in progress 5 101

finished goods 49 877

Goods in transit 3 845Contracts in progress

92 237

Amounts written off


amounts written off raw materials -� 888

amounts written off consumables

amounts written off work in progress

amounts written off finished goods -4 876

amounts written off goods in transit

amounts written off : contracts in progress

-7 765

Net inventory


1) raw materials �9 677

�) Consumables 848

3) Work in progress 5 101

4) finished goods 48 846

5) Contracts in progress

84 472

I I I .5.6 InVentorIeS

5 3

Gross inventories (excluding write-offs) rose eUr 8.4

million compared with �005. Increased activity in the

Coating segment caused an increase of eUr 7.8 million,

partially due to the acquisition of the richard Colorants

Group (eUr 4 million). Inventory in Industrial

applications increased by eUr � million. In apparel it

fell by eUr 1.4 million, reflecting decreased activity.

obsolescence reserves on inventories amount to

eUr 7.8 million (�005: eUr 5.4 million).

Write-downs of inventory for obsolescence to net

realisable value included in expenses amounts to

eUr �.1 million in �006 (�005: eUr 0.9 million).

these obsolescence reserves are recorded on the basis of

a detailed ageing and rotation analysis per unit.

Gross inventory


raw materials 3� �41

Consumables �98

Work in progress 7 �77

finished goods 40 065

Goods in transit 3 960

Contracts in progress

83 840

Amounts written off


amounts written off raw materials -� 137

amounts written off consumables

amounts written off work in progress

amounts written off finished goods -3 �40

amounts written off goods in transit

amounts written off : contracts in progress

-5 377

Net inventory


1) raw materials 30 105

�) Consumables �98

3) Work in progress 7 �77

4) finished goods 40 784

5) Contracts in progress

78 463

5 4


II I .5.7 traDe reCeIVaBLeS

2006trade receivables 69 599

trade receivabes doubtful 4 8�0

amounts written off -4 005

Total trade receivables 70 414

Outstanding Balance turnover

Customer 1 4 594 6.17% 11 565 3.41%

Customer � � 16� �.91% 5 940 1.75%

Customer 3 1 666 �.�4% 4 609 1.36%

Customer 4 1 631 �.19% 4 055 1.19%

Customer 5 1 413 1.90% � 717 0.80%

other 6� 953 84.59% 310 503 91.49%

total 74 419 100.00% 339 389 100.00%

2005trade receivables 69 953

trade receivabes doubtful 5 �45

amounts written off -5 78�

Total trade receivables 69 416

Outstanding Balance turnover

Customer 1 4 441 5.91% 10 976 4%

Customer � � 896 3.85% 7 331 �%

Customer 3 1 708 �.�7% 7 084 �%

Customer 4 1 635 �.17% 4 567 1%

Customer 5 1 371 1.8�% 4 378 1%

other 63 146 83.97% �81 900 89%

total 75 198 100% 316 �36 100%

trade receivables include amounts to be received

from the sale of goods of eUr 74.4 million. Compared

with last year, trade receivables decreased slightly

despite the increase of eUr 4.5 million due to business

combinations. Last year trade receivables rose through

major orders in the apparel Division, while this year in

the same division sales fell by more than eUr 3 million.

eUr 4 million in total has been provided for estimated

uncollectible amounts. a provision is recorded for

overdue trade receivables between 30 days and 150

days and more, based on estimated irrecoverable

amounts determined by reference to past default

experience.

as of 1/4/�005 the Group decided to cover itself for the

credit risk by concluding stop loss credit insurance.

the average credit period on sales of goods is 70 days.

Generally no interest is charged on overdue trade

receivables except when legal proceedings are started.

Before accepting any new customer, the Group uses an

external credit scoring system to assess the potential

customer’s credit quality and defines credit limits by

customer. Limits and scoring attributed to customers are

reviewed continuously.

5 5

I I I .5.8 other CUrrent aSSetS

Other current assets 2005 2006

advances 34 �6

Vat receivable 8 194 6 348

tax prepayment 1 641 � 493

Capital grants receivable 109 -

Insurance premiums receivable 99 36�

other 1 040 195

Other receivables 11 117 9 42

other current assets consist primarily of eUr 6.3 million of reclaimable Vat, pre-paid taxes of eUr �.5 million and

eUr 0.4 million of insurance premiums receivable.

the entry “other” related in �005 mainly to amounts receivable relating to the sales of the buildings in antwerp and in

foix.

Investments 2005 2006

other investments and deposits �60 53�

Investments 260 532

Investments relate to deposits on 3 months (but shorter than 1 year). the book value of the investment reflects the

estimated market value.

Cash and cash equivalents 2005 2006

Cash at bank 7 438 1� �10

at hand 874 374

Cash and cash equivalents 8 312 12 584

Deferred charges and accrued income 2005 2006

Deferred charges 1 343 1 476

other 85 136

Deferred charges and accrued income 1 428 1 612

Deferred charges amounting to eUr 1.5 million consist primarily of pre-paid rent, insurance policies and interest

charges.

5 6


II I .5.9 penSIon LIaBILItIeS

the following net liabilities are recognized for post-employment and other long term benefits :

2005 2006post-employment benefits (pension plans) 1 3�1 1 578

other long term benefits (jubilee benefits) 0 136

Total 1 321 1 714

the amounts recognised in the balance sheet are as follows:

present value of funded obligations 4�0

fair value of plan assets -381

present value of unfunded obligations 1 4�� 1 849

(Surplus)/deficit 1 4�� 1 888

Unrecognised actuarial gains/(losses) -101 -303

Unrecognised past service cost 0 -7

Net liability recognized in balance sheet 1 321 1 578 of which liabilities 1 3�1 1 578

the amounts recognised in profit or loss are as follows :

Service cost 119 139

Interest cost 60 8�

past service cost recognized -41 -4

actuarial losses (gains) recognized -30 -��

Curtailment (gain)/loss -3 -104

Benefit expense 105 91

Changes in the present value of the defined benefit obligation are as follows:

Opening defined benefit obligation 1 261 1 422Service cost 119 139

Interest cost 60 8�

past service cost 0 -4

Benefits paid -75 -11�

Curtailment 0 -104

actuarial losses (gains) �7 75

Liabilities assumed in a business combination 0 773

Currency translation changes 30 -�

Closing defined benefit obligation 1 4�� 69

Changes in the fair value of plan assets are as follows:

Contributions 75 11�

Benefits paid -75 -11�

assets acquired in a business combination 0 381

Closing fair value of plan assets 0 381

5 7

Cost relative to IaS 19 provisions are booked under

personnel expenses and allocated according the function

of the personnel involved (cost of goods sold, sales and

marketing expenses, r&D expenses and administrative

expenses). Interest component is recognised in financial

result.

PROVISIONS FOR PERSONNEL REMUNERATION

In accordance with law and practice in each country,

associated entities have either defined benefit schemes or

defined contribution schemes.

Defined contribution schemes

Contributions to defined contribution schemes are

recorded as an expense when they are due.

Defined benefit schemes

In defined benefit schemes, the amount on the balance

sheet (the ‘net liability’) corresponds to the present value

of the gross liability, adjusted for unrecorded actuarial

gains and losses, after deduction of the fair value of the

scheme investments and unrecorded prior service costs.

the discounted value of the liability associated with

defined pension rights and the assigned pension costs

associated with the year of service and prior service

pension costs are calculated by accredited actuaries

using the projected unit credit method.

Defined benefit schemes mainly relate to pension

liabilities in france, where such schemes are required

by law.

the plan assets represent investments in bonds;

the expected �007 contributions amount to keUr 4�.

principal actuarial assumptions at the balance sheet date :

2005 2006Eurozone Indonesia

discount rate 4.0% 4.60% 10,50%

future salary increase �.0% / 3.0% �.50% 8%

normal retirement age 60 60 55

the funded status and experience adjustments are as follows :

2005 2006Defined Benefit obligation 1 4�� 69

plan assets 0 -381

(Surplus)/deficit 1 4�� 1 888

5 8


II I .5.10 proVISIonS

2006 ope

ning

bal

ance

Incr

ease

Util

isat

ion

rev

ersa

l

exch

ange

rat

e di

ffere

nces

acq

uire

d vi

a

busi

ness

com

bina

tion

fair

val

ue

Clo

sing

bal

ance

Mor

e th

en o

ne y

ear

With

ing

one

year

provisions for taxation - -

provisions for environmental issues 1 0�3 500 5� 1 575 1 575 -

provisions for other liabilities and charges

379 � �13 -770 -43 448 � ��7 934 1 �93

VII. Provisions 1 402 2 713 -770 -43 448 52 3 802 2 509 1 293

2005

provisions for taxation - -

provisions for environmental issues 1 �4� -�19 1 0�3 1 0�3 -

provisions for other liabilities and charges

1 �45 538 -647 -851 94 379 379

VII. Provisions 2 487 538 -647 -1 070 0 0 94 1 402 1 023 379

the provisions for environmental issues consist mainly

of a provision relating to the cleaning of polluted

soils in temse belonging to tIS nV and the land in

ardooie belonging to Sioen Coating nV. the risk in

temse originates in the period before the takeover. the

risk in ardooie was identified during the periodical

environmental check-up of the site. these provisions are

set up for more than one year and are discounted using

the weighted average capital cost of the Group.

provisions for other liabilities and charges consist of the

social cost of restructurings currently being carried out

by Coating at pennel and by apparel in france during

�006, consisting of the termination cost of an agency

agreement by SCD nV.

5 9

I I I .5.11 IntereStBearInG LoanS

2006 Value at the end of year

Within one year � years 3 years 4 years 5 years

after 5 years

Bond 98 970 98 970

Bank loans 18 06� 17 363 10 048 5 013 1 689 1 �00 111

finance leases 11 4�8 1 ��8 1 551 1 199 1 �53 1 �94 6 130

other loans 3 3

Total interest bearing loans long term 128 463 18 591 11 600 6 212 2 943 2 495 105 214

Current portion of amounts payable after one year 17 36�

Credit institutions short term 13 800

Bank loans 31 16�

Current portion of leasing 1 ��8

Leasing short term 4�

finance leases 1 �70

Total interest bearing loans short term 32 433

2005 Value at the end of year


after 5 years

Bank loans 53 519 �0 984 36 477 9 791 4 750 1 4�9 1 071

finance leases 13 049 1 14� 1 344 1 377 1 494 1 105 7 7�9

other loans 344 344

Total interest bearing loans long term 66 912 22 126 37 821 11 168 6 244 2 534 9 144

Current portion of amounts payable after one year �0 984

Credit institutions short term 46 306

Bank loans 67 �90

Current portion of leasing 1 065

Leasing short term 77

finance leases 1 14�

Total interest bearing loans short term 68 432

Financial accounts payable

this note provides information about the group’s interest-

bearing loans.

Long-term accounts payable, including financial

long-term leasing debts.

the weighted average interest rate of long-term debts

in �006 is 4.77%, compared to 4.55% in �005. this

increase is mainly due to the longer term character of the

loans in �006 compared with �005.

all loans have a fixed interest rate, apart from one eUr

�0 million variable- rate roll-over loan. this ‘bullet’ loan,

taken up on �0/1�/�005 with expiry date 30/06/�007,

was repaid early on 14 March �006 without additional

cost.

on 14 March �006, a eUr 100 million bond listed on

eurolist by euronext Brussels was successfully issued,

with a ten-year term and fixed coupon interest of 4.75%.

to cover the interest rate on this bond issue, an IrS

6 0


(Interest rate Swap) was concluded on �0/1�/�005. this

IrS is described in the note on ‘financial instruments’,

and designated as ‘cash flow hedging’. effective

combined interest rate on the eUr 100 million bond is

4.7�%.

Short-term accounts payable

In �005, short-term straight loans amount to

eUr 44.6 million. they consist of eUr 36.4 million

of euro loans with a weighted average interest rate of

3.�4% and a dollar loan of USD 9.7 m. at 31/1�/�006,

the short-term straight loans were reduced to eUr 13.8

million.

there was also a tax prepayment financing which

expired on 10/4/�006.

no securities were issued for these financial debts. Most

(approx. 90%) of the Group’s financial liabilities are

centrally contracted and managed.

6 1

I I I .5.1� fInanCIaL LeaSInG DeBtS

Obligations under financial leases

2006

Value at the end of year


after 5 years

Leasing and other similar obligations Lt 11 4�8 1 551 1 199 1 �53 1 �94 6 130

Current portion of leasing 1 ��8 1 ��8

Leasing short term 4� 4�

Obligations under financial leases 12 698 1 270 1 551 1 199 1 253 1 294 6 130

Minimum lease payments

Present value of lease payments

Lease payments due within one year 0 1 �70

one - two years � 1�5 1 485

two - three years 1 984 1 406

three - five years 1 740 1 ��8

after 5 years 3 480 7 309

total lease payments 6 683 1� 698

future financial charges 16 067 1� 753

present value of lease obligations 3 314 0

Less amount due for settlement within 1� months 1 �70

amount due for settlement after 1� months 11 4�8

2005

Value at the end of year


after 5 years

Leasing and other similar obligations Lt 13 049 1 344 1 377 1 494 1 105 7 7�9

Current portion of leasing 1 065 1 065

Leasing short term 77 77

Obligations under financial leases 14 191

Minimum lease payments

Present value of lease payments

Lease payments due within one year 1 657 1 14�

one - two years � 188 1 543

two - three years � ��8 1 643

three - five years 3 480 � 5�6

after 5 years 8 4�3 7 336

total lease payments 17 975 14 191

future financial charges 3 784

present value of lease obligations 14 191 14 191

Less amount due for settlement within 1� months 1 14�

amount due for settement after 1� months 13 049

Leasing debts relate mainly to buildings (ardooie, flixecourt and Moeskroen). the interest inherent in the leases is fixed

for the entire lease term. the average effective interest rate contracted is approximately 5.44% p.a. (�005 5.44% p.a.).

6 �


II I .5.13 other aCCoUntS paYaBLe

TRADE ACCOUNTS PAYABLE AND OTHER DEBTS

2006Closing balance

trade payables 33 104

Credit notes to receive -� 010

advances 650

TOTAL 31 744

2005

trade payables 37 4�5

Credit notes to receive -1 �13

advances �99

TOTAL 36 510

trade and other payables include outstanding amounts for trade purchases and current charges. there is a decrease as

compared to �005.

OTHER DEBTS UP TO ONE YEAR

2005 2006

Current tax liabilities 5 589 7 364

Social debts 10 �88 10 940

other 6� 7�

accrued charges and deferred income 963 1 145

Total other debts up to one year 16 902 19 521

the tax liabilities consist primarily of corporate taxes and Vat payable.

6 3

I I I .5.14 fInanCIaL InStrUMentS

Financial Derivatives 2005 2006

Notional Value Fair Value Notional Value Fair Value

forward sales contracts

forward sales contracts within 1 year

rights � 933 41 7 375 6�

Duties 4 399 -8 11 063 -85

IrS forward 100 000 636 100 000 1 346

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.

Interest risk

the Group’s interest risk is relatively limited, as the

interest rate on virtually all loans is fixed. It is the group’s

strategy to arrange a fixed interest rate for the long-term

portion of debts, and to keep short-term debts floating.

thanks to an optimal portfolio of long-term and short-

term debt financing, potential negative interest-rate

fluctuations are minimised.

In connection with the group’s refinancing, it was

decided in December �005 to enlist the support of the

capital market via the issue of a eUr 100 million bond

over ten years with fixed coupon interest. Because such

an operation can easily take three months, and interest

rates at the end of December �005 were very attractive,

Sioen concluded a ten-year IrS starting in april �006,

the presumed starting date of the bond. as this IrS can

be regarded as effective cash flow hedging as per IaS39,

the KeUr 636 negative market value fluctuation on

31/1�/�005 of this IrS has been

deducted from equity.

on 0�/0�/�006, the fair value was up keUr 1,346, and it

was realised following the hedge strategy at the moment

of issuing of the bond. this received premium satisfies

the conditions for cash flow hedging defined in IaS39,

and will be spread out over the term of the bond.

the gain realised (keUr 1.346) was recognised in equity

and is taken into income over the life of the bond (10

years).

Exchange rate risk

It is the Group’s policy to hedge centrally against

exchange risks arising from financial and operating

activities.

the risks are limited by compensating for transactions

in the same currency, or by fixing exchange rates via

forward contracts or options.

the fluctuation in the market value of these exchange

rate contracts has been included in the income statement

and amounted to a KeUr 3� positive balance in �005

and a negative balance in �006 of KeUr �3.

Credit risk

In view of the relative concentration of credit risk (see

note “trade receivables), the company covers credit

risk on trade receivables via a stop loss insurance with

an own risk exposure of keUr 500. In addition, credit

control strategies and procedures have been devised in

order to monitor individual customers’ credit risk.

6 4


II I .5.15 DeferreD taX

2005 2006 2005 2006deferred tax

assetdeferred tax

liability

Intangible fixed assets 47 399 1 697

tangible fixed assets � 404 � 868 16 917 16 178

Inventories 1 765 1 656

receivables 31� �53

other assets

pension liabilities 411 51�

other provisions 3�9 339

other liabilities 44 59

Conversion differences 74 1 �70 1 937

hedging reserves �16 458

Undistributed reserves 1 904 � 15�

tax losses carried forward 15 779 10 95�

Total 21 307 17 112 20 091 22 422

non recognition of deferred tax receivable -11 0�7 -6 851

netting -3 �70 -4 06� -3 �70 -4 06�

Total 7 010 6 199 16 821 18 360

the value of carried-forward tax losses arranged by expiry date

one year

two years

three years � 037

four years 1 116 � 037

five years and later 17 557

no expiry date 45 481 16 319

Unrecognised carried forward tax losses 3� �87 17 �73

Unrecognised deferred tax on undistributed reserves 306 �95

Deferred tax assets which do not appear to be collectable

in the near future are not recognised. In this assessment

the management takes account of budgets and multi-year

planning.

Major deferred tax asset on tax losses carryforward is

relative to roland International BV. Based upon business

plans an asset has been recognised using estimated tax

profits over 9 years.

the company recognises deferred tax liabilities on non

distributed reserves in affiliates unless there is a firm

commitment not to distribute reserves from that particular

affiliate in the foreseeable future.

In the netherlands tax rate has decreased from 31.5% to

�5.5% resulting to 1.1 million eUr additional tax expense

as the deferred tax asset decreases.

Reconciliation of movement of deferred tax

net tax liability as per 31 December �005 9 811

net tax liability as per 31 December �006 1� 161

Difference � 350

Deferred tax as shown in the p&L 391

Deferred tax effect through equity 673

Deferred tax acquired via business combinations

1 �86

6 5

I I I .5.16 aCQUISItIonS anD DISpoSaLS of IntereStS

EFFECTS OF ACQUISITIONS AND SALES OF INVESTMENTS

2006Acquisition of Group Richard Colorants

Book value Adjustments Fair value

Non current assets 2 991 5 007 7 998

Intangible and tangible fixed assets � 991 5 007 7 998

Current assets 15 588 -280 15 308

Inventories 4 40� -1�7 4 �75

Debtors 6 113 -153 5 960

other debtors -

Cash and banks 5 073 5 073

Non current liabilities 1 168 2 238 3 406

provisions 548 �09 757

pensions 353 353

Deferred tax liabilities 1 676 1 676

Long term financial debt 6�0 6�0

Current liabilities 3 965 636 4 601

Creditors 3 406 3 406

other creditors 559 636 1 195

total net assets 13 446 1 853 15 �99

Goodwill on acquisition 75�

Paid in cash 16 051

Acquisition of assets of Siegwerk Benelux NV

Customer portfolio 1 4�5

product portfolio 5 948

Machinery 1 153

Goodwill 6��

Deferred tax asset 380

Paid in cash 9 528

2005Sale Sirec SACurrent assets 44

equity 8 6�9

Deferred tax liabilities 3 167

Short term payables 37

Sale price in cash 10 �05

Income (1) 1 576

(1) Given that the yield of this sales arises from the reversal of a deferred tax liability, this is included in deferred tax revenue.

6 6


II I .5.16 aCQUISItIonS anD DISpoSaLS of IntereStS

the richard group (richard s.a.s., Copidis s.a.s. en astra

Colorants s.a.) was acquired on �7 october �006.

the acquisition cost of eUr 16.1 million was paid in

cash. the necessary market valuations were performed

to determine the fair value of the customer portfolio and

the formulations.

richard Colorants is a french company based at

Lomme, near Lille. founded in 1864, the company has

specialized in pigment pastes since its early days. the

group consists of:

- richard Colorants in Lomme

- Copidis in Lomme

- astra in Lyon

richard Colorants excellently complements eMB-

Inducolor’s existing range. eMB and Inducolor produce

mainly solvent-based inks, varnishes and pigment pastes,

while richard Colorants specializes in water-based

paints and is france’s market leader in this field.

richard Colorants pigments are used to colour:

- paint, ink, varnish, glues and textile coatings,

- wallpaper, writing paper and laminated paper,

- floor coverings, pU foam, plaster,

- shoe polish, sponges and gloves,

- finger paints, wax crayons, etc.

In short, everything for which colours in liquid form are

required.

on end of September eMB bought assets of Siegwerk, a

producer of inks and varnishes. these inks and varnishes

have numerous applications in the various markets

related to the current eMB markets:

- floor coverings (vinyl, laminates, …)

- Wall coverings (flexo- gravure and screen printing inks

for paper and vinyl substrates)

- Decorative paper (inks for gravure printing on paper

and vinyl for decoration of furniture, laminates, …)

- rigid and flexible pVC panels (inks for gravure printing)

6 7

IV. other

IV.1. OPERATING LEASE ARRANGEMENTS

2005 2006

amounts recognised in income 1 030 1 17�

payments due within one year 953 985

Between one and five years 956 905

over five years 1�9

Minimal future payments � 038 1 889

these leases are mainly relative to vehicles, small equipment and office equipment.

IV.2 EVENTS AFTER BALANCE SHEET DATE

the smaller factory unit in Jakarta was flooded in January

�007. Damage to buildings and machinery (net book

value as of 31 December �006 of keUr 306), inventories

(net book value as of 31 December �006 of keUr 1,046)

and business interruption are adequately covered by

insurance.

on 18 January �007 the company fillink Sa was

acquired by eMB. fillink specializes in inks for

wide and super wide format digital printers. this

take over expresses the group’s intentions to enlarge

the “Chemicals” branch of Sioen Industries. fillink

distributes eco-solvent, solvent and UV-inks through a

selected network of distributors. these quality products

are high positioned in the market thanks to the know

how and market intelligence of the company. fillink’s

experience with unique product formulations and

wide market knowledge are real added value for Sioen

Chemicals.

IV.3. OFF BALANCE SHEET ITEMS

2005 2006

Guarantees given as securities for debts or commitments

rights due to hedging of foreign currencies � 933 7 375

Commitments due to hedging of foreign currencies 4 399 11 063

Commitments for the acquisition of intangible and tangible assets 8 516 6 447

6 8


IV.4. TRANSACTIONS wITH RELATED PARTIES

Nature of transaction 2006

recticel Group Sale 1 945

recticel Group purchase �64

InCh Sale 1 5�4

SVB purchase 0

Nature of transaction 2005

recticel Group Sale � 079

recticel Group purchase 344

InCh Sale 1 7��

SVB purchase 170

these transactions are done on an arm’s length basis.

other transactions with related parties other than directors are not included, given the negligible amount (under eUr 70.000).

With regard to directors’ remuneration, the reader is referred to section V.6.B.

IV.5. STAFF

Land 2005 2006Belgium 90� 930

China 16 16

Germany 18 �5

france �9� 39�

Ireland 4� 38

Indonesia � 016 1 900

netherlands 7 6

poland 490 539

portugal �5 �4

tunesia 788 766

UK 34 �8

USa 15 �3

Grand Total 4 645 4 687

Blue Collar 3 785 3 816

White Collar 860 871

Grand Total 4 645 4 687

6 9

2006Deloitte

audit fees Sioen Industries nV 65

other assurance services 9

tax services 6

non-audit related services 71

IV.7 CONTINGENT ASSETS AND LIABILITIES

a number of commercial disputes are pending, albeit

with a limited value in dispute.

apparel is currently faced with a quality claim in

france, the extent of which could reach eUr � million.

the quality problem is, however, exclusively due to

suppliers, who are sufficiently insured to cover Sioen’s

possible loss.

the mixed soil pollution identified at the ardooie site

and recorded as a contingent liability last year has

now provided against based upon the results of an

environmental study in �006.

IV.6. AUDIT AND NON AUDIT SERVICES PROVIDED BY THE STATUTORY AUDITORS AND HIS NETwORK

7 0


In �006 the following fees were paid to the members of

the Board of Directors and the executive management:

• non-executive and independent directors, as well as

the members of the executive Management in their

capacity as director:

Mr. Jean-Jacques Sioen eUr �0,000

MJS Consulting b.v.b.a. (represented by

Mrs. Michèle Sioen)

eUr �0,000

Mrs. Jacqueline Sioen-Zoete eUr �0,000

D-Lance b.v.b.a. (represented by

Mrs. Danielle Sioen)

eUr �0,000

p. Company b.v.b.a. (represented by

Mrs. pascale Sioen)

eUr �0,000

pol Bamelis n.v. (represented by

Mr. pol Bamelis)

eUr �8,�50

revam b.v.b.a. (represented by

Mr. Wilfried Vandepoel)

eUr �9,000

Sheng n.v. (represented by

Mr. Louis-henri Verbeke)

eUr �6,000

K.e.M.p. n.v. (represented by

Mr. Luc Sterckx)

eUr �7,500

Vean n.v. (represented by

Mr. Luc Vansteenkiste)

eUr �1,500

• Mrs. Michèle Sioen received in �006 as Ceo,

besides her remuneration as a member of the Board

of Directors, a fixed remuneration of eUr 370,000.

She has also received eUr 39,491 of variable

remunderation for �006.

• the fixed remuneration paid to the executive

Management including directors in their capacity as

members of the executive Management amounted to

eUr �,48�,508. Variable remuneration of eUr 89,5�5

for �006 was also granted. this includes contributions

to pension insurance.

• all sums above are gross sums and represent the entire

cost to the company.

In �006 there were no shares, share options or other rights

for the acquisition of shares granted to the Ceo and the

other members of the executive Management. there are

no specific recruitment agreements or agreements for a

golden handshake with the members of the executive

Management.

IV.8 Remuneration of the directors and the Executive Management

7 1

V. StatUtorY aUDItor’S report

StatUtorY aUDItor’S report to the

SharehoLDerS’ MeetInG on the ConSoLIDateD

fInanCIaL StateMentS for the Year enDeD

31 DeCeMBer �006

free translation – the original report is in Dutch

to the shareholders

as required by law and the company’s articles of

association, we are pleased to report to you on the

audit assignment which you have entrusted to us.

this report includes our opinion on the consolidated

financial statements together with the required additional

comment.

Unqualified audit opinion on the consolidated financial

statements

We have audited the accompanying consolidated

financial statements of Sioen Industries nV (“the

company”) and its subsidiaries (jointly “the group”),

prepared in accordance with International financial

reporting Standards as adopted by the european

Union and with the legal and regulatory requirements

applicable in Belgium. those consolidated financial

statements comprise the consolidated balance sheet as at

31 December �006, the consolidated income statement,

the consolidated statement of changes in equity and

the consolidated cash flow statement for the year then

ended, as well as the summary of significant accounting

policies and other explanatory notes. the consolidated

balance sheet shows total assets of 371.833 (000) eUr

and a consolidated profit for the year then ended of

1�.153 (000) eUr.

the financial statements of several significant entities

included in the scope of consolidation which represent

total assets of 69.4�4 (000) eUr and a total turnover of

77.094 (000) eUr have been audited by other auditors.

our opinion on the accompanying consolidated

financial statements, insofar as it relates to the amounts

contributed by those entities, is based upon the reports

of those other auditors.

the board of directors of the company is responsible

for the preparation of the consolidated financial

statements. this responsibility includes among other

things: designing, implementing and maintaining internal

control relevant to the preparation and fair presentation

of consolidated financial statements that are free from

material misstatement, whether due to fraud or error,

selecting and applying appropriate accounting policies,

and making accounting estimates that are reasonable in

the circumstances.

our responsibility is to express an opinion on these

consolidated financial statements based on our audit.

We conducted our audit in accordance with legal

requirements and auditing standards applicable in

Belgium, as issued by the “Institut des reviseurs

d’entreprises/Instituut der Bedrijfsrevisoren”. those

standards require that we plan and perform the audit to

obtain reasonable assurance whether the consolidated

financial statements are free from material misstatement.

In accordance with these standards, we have performed

procedures to obtain audit evidence about the

amounts and disclosures in the consolidated financial

statements. the procedures selected depend on our

judgment, including the assessment of the risks of

material misstatement of the consolidated financial

statements, whether due to fraud or error. In making

those risk assessments, we have considered internal

control relevant to the group’s preparation and fair

presentation of the consolidated financial statements in

order to design audit procedures that are appropriate in

the circumstances but not for the purpose of expressing

an opinion on the effectiveness of the group’s internal

control. We have assessed the basis of the accounting

policies used, the reasonableness of accounting

estimates made by the company and the presentation of

7 �


the consolidated financial statements, taken as a whole.

finally, the board of directors and responsible officers

of the company have replied to all our requests for

explanations and information. We believe that the audit

evidence we have obtained, together with the reports

of other auditors on which we have relied, provides a

reasonable basis for our opinion.

In our opinion, and based upon the reports of other

auditors, the consolidated financial statements give a

true and fair view of the group’s financial position as of

31 December �006, and of its results and its cash flows

for the year then ended, in accordance with International

financial reporting Standards as adopted by the eU and

with the legal and regulatory requirements applicable in

Belgium.

Additional comment

the preparation and the assessment of the information

that should be included in the directors’ report on the

consolidated financial statements are the responsibility

of the board of directors.

our responsibility is to include in our report the

following additional comment which does not change

the scope of our audit opinion on the consolidated

financial statements:

• the directors’ report on the consolidated financial

statements includes the information required by law

and is in agreement with the consolidated financial

statements. however, we are unable to express an

opinion on the description of the principal risks

and uncertainties confronting the group, or on the

status, future evolution, or significant influence of

certain factors on its future development. We can,

nevertheless, confirm that the information given is not

in obvious contradiction with any information obtained

in the context of our appointment.

Diegem, 15 March �007

the Statutory auditor

DeLoItte Bedrijfsrevisoren

BV o.v.v.e. CVBa

represented by

Guy Wygaerts Geert Verstraeten

V. StatUtorY aUDItor’S report

7 3

VI. StatUtorY annUaL aCCoUntS SIoen InDUStrIeS n.V.

Condensed balance sheet of Sioen Industries n.v. after appropriation of profit

December 31 (000) EUR 2006

2005

2004

2003

fixed assets 61 459 65 910 81 976 81 990

II. Intangible fixed assets 5 934 3 656 3 477 3 47�

III. tangible fixed assets 1 170 1 136 681 555

IV. financial fixed assets 54 355 61 118 77 818 77 963

Currents assets 179 90� 139 941 139 630 136 381

VII. amounts receivable within one year 178 807 138 611 139 �07 136 �05

IX. Cash at hand and in bank 8�5 1 045 �86 46

X. Deferred charges and accrued income �70 �85 137 130

Total assets 241 361 205 851 221 606 218 371

Capital and reserves 80 814 78 034 80 05� 79 660

I. Capital 46 000 46 000 46 000 46 000

IV. Legal reserves 3 766 3 339 3 174 � 910

V. profit brought forward 31 048 �8 695 30 878 30 750

Creditors 160 547 1�7 817 141 554 138 711

VIII. amounts payable after one year 115 765 51 613 60 �84 61 8�8

IX. amounts payable within one year 39 588 76 100 81 107 76 784

X. accrued charges and deferred income 5 194 104 163 99

Total liabilities 241 361 205 851 221 606 218 371

the statutory annual accounts of the parent company

Sioen Industries n.v. are shown below in condensed

form. In June �007, the annual report and annual

accounts of Sioen Industries n.v. and the auditor’s report

will be filed with the national Bank of Belgium in

accordance with articles 98-10� of the Companies act.

these reports are available on request at the following

address:

Sioen Industries n.v. – fabriekstraat �3 – 8850 ardooie.

the statutory auditor has issued an unqualified opinion

with explanatory paragraph on the statutory financial

statements of Sioen Industries n.v. the explanatory

paragraph is as follows:

the statutory auditor has issued an unqualified opinion

with explanatory paragraph on the statutory financial

statements of Sioen Industries n.v. the explanatory

paragraph is as follows:

Without qualifying the unqualified opinion expressed

above, we draw the attention to the annual report.

Sioen Industries n.v. has per December 31, �006, a

total outstanding receivable of 16,1 mio eUr on the

roltrans group, a 100% subsidiary of Sioen Industries

n.v. In addition, Sioen Coating Distribution n.v., a 100%

subsidiary of Sioen Industries n.v., has outstanding

receivables on the roltrans group for an amount of

19,0 mio eUr. the realisation of these amounts is

dependent of the further successful development of the

realised recovery plan. the accompanying financial

statements do not included any less values or provisions

relating to the above.

7 4


Condensed income statement of Sioen Industries n.v.

December 31 (000) EUR 2006 2005 2004 2003

I. Operating income 5 922 5 954 5 599 5 229a. Sales 5 715 5 889 5 317 5 010

D. other operating income �07 65 �8� �19

II. Operating charges -7 022 -6 113 -5 886 -5 075B. Services and other goods � 897 � 110 � 3�5 1 76�

C. renumeration 3 060 3 �36 � 579 � �56

D. Depreciation and amounts written off 944 754 901 1 0�3

G. other operating charges 1�1 13 81 34

III. Operating profit/loss -1 100 -159 -287 154

IV financial income �4 581 16 9�3 15 758 �1 �01

V. financial charges -7 438 -6 416 -6 531 -6 01�

Financial result 17 143 10 507 9 227 15 189

VI. Profit on ordinary activities 16 043 10 348 8 940 15 343

VII. Extraordinary result -7 402 -6 739 -3 596 0

IX. Profit before tax 8 641 3 609 5 344 15 343

X. Income taxes -99 -293 -71 -495

XI. Profit for the financial year 8 542 3 316 5 273 14 848

VI. StatUtorY annUaL aCCoUntS SIoen InDUStrIeS n.V.

7 5

Activity of Sioen Industries

the function of Sioen Industries is essentially to outline

the strategy of the three divisions. It also appoints the

management of the Group companies and supports the

Group companies in the areas of personnel management,

financial and treasury management, budgeting and

controlling, Management Information Systems and It,

and legal affairs.

Comments

the turnover of the holding company decreased by 3%

to eUr 5.7 million. other operating income increased by

eUr 0.14� million. In �006 the operating loss amounted

to eUr 1.1 million, compared with an operating loss

in �005 of eUr 0.159 million. financial income rose

to eUr 16 million, compared with eUr 10.3 million in

�004, as a result of higher dividend payments from the

various subsidiaries.

all participating interests have been recorded at book

value, which results in an extraordinary result for the

year.

the extraordinary income last year related to the capital

gain on the disposal of the participating interest in Sirec.

Accounting principles

the accounting principles and translation rules applied

to the statutory annual accounts of Sioen Industries in

accordance with Belgian Generally accepted accounting

principles.

Statement of capital

In accordance with articles 1 to 4 of the act of March

�, 1989 concerning the disclosure of important holdings

in listed companies and regulating take-over bids, the

applicable quotas were set at, one the one hand, 5

percent or a multiple thereof and on the other hand at

3 percent or a multiple thereof. (article 8 of the articles

of association). In accordance with article 4 of the

act of March �, 1989, the following notifications of

shareholdings in the company were received:

Situation at 31 March 2007

notifying party Date of notification number of shares

percentage of total number of shares:

Sihold n.v.(1)fabriekstraat �3, 8850 ardooie 18 october 1996

13.336.501 6�.5%

notification of change of percentage shareholding

Sihold n.v. 1� october �005 1�,715,010 59.4%

“Stichting Shell pensioenfonds” 1� october �005

7�6,3�0 3.4%

Sihold n.v. 30 January �006 1�,906,�1� 60.3%

total number of shares �1,391,070 100.0%

this foundation is controlled by the Sioen family.

(1) Sihold n.v. is controlled by Sicorp n.v., which is controlled in turn by the Dutch foundation Stichting administratiekantoor

Midapa.

7 6


VII . propoSaLS to the annUaL MeetInG

Proposals to the Annual Meeting of Sioen Industries n.v.

of May 25, 2007

the board of directors of Sioen Industries proposes to

the annual meeting to approve the annual accounts at

31 December �006 and to consent to the appropriation

of profit.

the profit for the financial year ended is eUr 8,54�,378,

compared to a profit of eUr 3,315,436 for the financial

year �005. the profit brought forward from the previous

financial year is eUr �8,694,595. the profit available for

appropriation is consequently eUr 37,�36,973.

The board of directors proposes to appropriate the

profit available for appropriation of EUR 37,236,973

as follows:

(in EUR)

Gross dividends for the �1.391.070 shares

5,561,678.�

Directors’ fees �00,000.00

transfer to the legal reserves 4�7,119

profit to be carried forward (31,048,176)

The proposed net dividend per share is calculated

as follows:

(in EUR)

net dividend per share 0.1950

Withholding tax �5/75 0.0650

Gross dividend per share 0.�600

pay-out ratio (1) 45.76%

the proposed dividend is 8.3% higher than that of �005.

If this proposal is accepted, the net dividend of

eUr 0.195 per share will be made payable as from 8

June, �007 onwards at Dexia Bank, InG Bank, fortis

Bank and KBC Bank on presentation of coupon no 9.

(1) Gross dividend in relation to the share of the Group

in the consolidated result

7 7

DefInItIonS

Gross margin % (turnover +/- stock movements finished goods - purchases raw materials -/+ stock movements

raw materials)/turnover

EBITDA earnings Before Interest, taxes, Depreciation and amortization = operating profit + amortization

+ provisions for liabilities and other risks + depreciation

EBIT earnings Before Interest and taxes = operating profit

EBT profit Before taxation

EAT profit after taxation

NOPAT eBIt - taxes

EVA nopat - cost of capital at start of the period

ROE net result part of the group / equity at end of previous financial year

ROCE nopat / Capital employed of the period

Cash flow consolidated net profit + depreciation + amortization + provisions for liabilities and charges +

deferred taxes

FFO net result + depreciations + provisions for liabilities and taxes + amortization + deferred taxes.

Net debt financial debt - cash deposits and cash equivalents

Free operating CF funds from operations - funds from investing activities

Capital equity + minority interests + provisions for liabilities and charges + amounts payable after one

year

working capital financial fixed assets + current assets (minus cash deposits and cash equivalents) - non financial

debt up to one year - accrued charges and deferred income.

Capital employed Working capital + tangible and intangible fixed assets + goodwill

7 8


aDDreSSeS

COATINGSIOEN COATING NV fabriekstraat �3 B-8850 ardooie België BtW Be 40�.753.106 rpr 040�.753.106 Brugge t +3� 51 74 09 00 f +3� 51 74 09 64 [email protected]

SAINT FRERES SAS 4 route de Ville Bp 1f-804�0 flixecourt france tVa fr 76408448850 rCS aMIenS B 408 448 850 t +33 3�� 51 51 45 f +33 3�� 51 51 49 [email protected]

SIOEN COATING DISTRIBUTION NV fabriekstraat �3 B-8850 ardooie België BtW Be 436.�41.167 rpr 0436.�41.167 Brugge t +3� 51 74 09 00 f +3� 51 74 09 64 [email protected]

SIOEN FABRICS SA Zoning Industriel du Blanc Ballot avenue Urbino 6B-7700 Mouscron Belgique tVa Be 458.801.684 rpM 0458.801.684 tournai

COATING t +3� 56 85 68 80 f +3� 56 34 61 31 [email protected]

wEAVING t +3� 56 85 01 40 f +3� 56 85 01 49 [email protected]

EUROPEAN MASTER BATCH NV – E.M.B. NV rijksweg 15 B-�880 Bornem België BtW Be 4�1.485.�89 rpr 04�1.485.�89 Mechelen t+3� 3 890 64 00 f+3� 3 899 �6 03 [email protected]

INDUCOLOR SA Chemin preuscamps 1� B-78�� ath (Meslin-L’evêque) Belgique tVa Be 400.685.1�5 rpM 0400.685.1�5 tournai t+3� 68 �5 0� 30 f+3� 68 55 �6 0� [email protected]

SIOEN FIBRES SA - extrusion Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique tVa Be 463.789.464 rpM 0463.789.464 tournai t+3� 56 48 1� 70 f+3� 56 48 1� 85 [email protected]

SIOEN COATED FABRICS (SHANGHAI) TRADING CO. LTD room o, floor 15, hengji Building no 99, huaihai road (east) �000�1 Shanghai p.r. of China

t+86 �1 63 84 �5 �1 f+86 �1 63 84 �7 39 [email protected]

SIOFAB SA Indústria de revestimentos têxteis rua da Indústria pt-4795-074 Vila das aves Santo tirso portugal Santo tirso

SoB o n° 4641 nIf 505.046.644 t+351 �5� 87 47 14 f+351 �5� 94 �9 68 [email protected]

TIS NV Driehoekstraat �a B-9451 haaltert (Kerksken) België BtW Be 405.085.064 rpr 0405.085.064 aalst t+3� 53 85 9� �0 f+3� 53 85 9� 56 [email protected]

VERANNEMAN TECHNICAL TEXTILES NV fabriekstraat 31 B-8850 ardooie België BtW Be 4�9.387.6�3 rpr 04�9.387.6�3 Brugge t+3� 51 �4 81 70 f+3� 51 �� 61 68 [email protected]

PENNEL AUTOMOTIVE SAS 310 rue d’alger f-59100 roubaix france tVa fr 53448�73615 rCS roubaix-tourcoing B 448 �73 615 t+33 3�0 76 �1 10 f+33 3�0 76 �1 1� [email protected]

RICHARD SAS rue lavoisier - zac novo - 59160 lomme t+33 3�0 00 18 88 f+33 3�0 00 18 80 [email protected]

ASTRA COLORANTS SA �0 avenue maréchal de lattre de tassigny - 69330 meyzieu + 33 478 31 58 0� f+33 478 04 0� 57 [email protected]

CONFECTIONSIOEN NV fabriekstraat �3 B-8850 ardooie - België BtW Be 478.65�.141 rpr 0478.65�.141 Brugge t+3� 51 74 08 00 f+3� 51 74 09 6� [email protected]

CONFECTION TUNISIENNE DE SECURITE SA – C.T.S. SA 5 Impasse n° � rue 861� – (Z.I.) La Charguia tn-�035 tunis tunisie Code tVa 03030 V / a / M / 000 rC B 133171996 t+�16 71 77 34 77 f+�16 71 78 40 47 [email protected]

GAIRMEIDI CAOMHNAITHE DHUN NA NGALL TEORANTA LTD (Donegal protective Clothing Ltd –Sioen Ireland) - Industrial estate Bunbeg Co. Donegal Ireland

Vat Ie 46�1355M Company nr. 78�1� t+353 74 953 11 69 f+353 74 953 15 91 [email protected]

MULLION MANUFACTURING LTD 44 north farm road South park Industrial estate Scunthorpe north Lincolnshire Dn17 �aY - UK

Vat GB 365.1873.34 Company nr. 1871440 t+44 17�4 �8 00 77 f+44 17�4 �8 01 46 [email protected]

SIOEN FRANCE-DIVISION SIP PROTECTION pavillon hermès 110 avenue Gustave eiffel ZI La Coupe f-11100 narbonne france tVa fr 49300774767 rCS narbonne B 300 774 767 t+33 4 68 4� 35 15 f+33 4 68 4� �7 43 [email protected]

P.T. SIOEN INDONESIA Jl. Irian raya Blok e-�6 nusantara Bonded Zone (Kawasat Berikat nusantara) Cakung Cilincing Jakarta 14140 Indonesia

npWp 1.068.001.5-05� t+6� �1 440 33 88 f+6� �1 440 14 �8 [email protected]

PT SUNGINTEX Jalan raya narogong Km 1�,5 pangkalan IV Desa Cikiwul Kec. Bantar Gebang Bekasi Barat 17310 Indonesia

npWp 1.068.01�.�-407 t+6� �1 8�5 �� f+6� �1 8�5 44 44 [email protected]

SIOEN FIBRES SA – distribution Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique tVa Be 463.789.464 rpM 0463.789.464 tournai t+3� 56 85 54 30 t+3� 56 34 66 10 [email protected]

SIOEN FRANCE SAS pavillon hermès 110 avenue Gustave eiffel ZI La Coupe f-11100 narbonne france tVa fr 49300774767 rCS narbonne B 300 774 767 t+33 4 68 4� 35 15 f+33 4 68 4� �7 43 [email protected]

SIOEN TUNISIE SA 7 Impasse n° � rue 861� – (Z.I.) La Charguia tn-�035 tunis tunisie Code tVa 614715 S / a / M / 000 rC B 19711998 t+�16 71 80 75 47 f+�16 71 80 9� 6� [email protected]

SIOEN UK Ltd Unit � Windsor house ackhurst Business park foxhole road Chorley Lancashire pr7 1nY UK

Vat GB 73�.4071.6� Company nr 376114� t+44 1�57 �7 7� 44 f+44 1�57 �7 7� 45 [email protected]

SIOEN ZAGHOUAN SA Zone Industrielle de Zaghouan tn-1100 Zaghouan tunisie Code tVa 7470�3 f / a / M / 000 rC B 17713�000 t+�16 7� 68 06 60 f+�16 7� 68 �6 60 [email protected]

SIOEN FRANCE DIVISION VIDAL PROTECTION Zone Industrielle Le passage Jean-rostand Bp167 f 81300 Graulhet t+33 5 63 34 5� 46 f+33 5 63 34 69 99 [email protected]

SIOEN USA Inc. c/o flom, french & Goodwin, L.L.C. 675 Line road Building 4, Suite B aberdeen, nJ 07747 USa

t+1 73� 441 1� 50 f+1 73� 441 1� 53 [email protected]

SIOEN NV – BALENO fabriekstraat �3 B-8850 ardooie België t+3� 51 74 08 00 f+3� 51 74 09 63 [email protected]

SIOEN DEUTSCHLAND am Zirkel 8 49757 Werlte Deutschland (allemagne) t+49 59 51 99 47 0 f+49 59 51 99 47 47 [email protected]

INDUSTRIAL APPLICATIONSCOATEX NV Industriezone Sappenleen Sappenleenstraat 3-4 B-8970 poperinge België BtW Be 434.140.4�5 rpr 0434.140.4�5 Ieper t+3� 57 34 61 60 f+3� 57 33 35 �3 [email protected]

SAINT FRERES CONFECTION SAS � route de Ville Bp 37 f-804�0 flixecourt france tVa fr 44408449098 rCS amiens 408 449 098 t+33 3�� 51 51 70 f+33 3�� 51 51 79 [email protected]

SIOEN NORDIFA SA rue ernest Solvay 181 B-4000 Liège Belgique tVa Be 474.�76.154 rpM 0474.�76.154 Liège t+3� 4 �5� �1 50 f+3� 4 �53 04 �5 [email protected]

ROLAND INTERNATIONAL B.V. Kasteellaan 33 nL-593�ae tegelen nederland BtW nL00381�5��B01 hr Venlo 1�011983 t+31 77 376 9� 9� f+31 77 373 69 66 [email protected]

ROLTRANS GROUP AMERICA INC. 3�1� pinewood Drive arlington, texas 76010 USa 75-1994308 Delaware Corporation # �044811

t+1 817 607 00 80 f+1 817 607 00 88 [email protected]

ROLAND PLANEN GMBH am Zirkel 8 49757 Werlte Deutschland Ust-id.nr.: De 81�873033 osnabrück hrB 1��96 t+49 59 51 99 55 70 f+49 59 51 99 55 71 [email protected]

ROLTRANS GROUP POLSKA SP.Z.O.O. Ul. nadbrzezna 1 pL-6�500 Konin polska nIp 665-100-18-19 rhB 1�10 t+ 48 63� 44 39 �5 f+48 63� 44 39 �1 [email protected]

ROLAND UKRAINE LLC Kievskaya 64-a rivne Ukraine t+38 36� �8 65 39 f+38 36� �8 65 39 [email protected]

ROLAND TILTS UK Ltd Unit 1 Usher Street off Wakefi eld road Bradford BD4 7DS UK Vat GB 311746186 Company nr 1380441 t+44 1�74 39 16 45 f+44 1�74 30 51 56 [email protected]

7 9

COATINGSIOEN COATING NV fabriekstraat �3 B-8850 ardooie België BtW Be 40�.753.106 rpr 040�.753.106 Brugge t +3� 51 74 09 00 f +3� 51 74 09 64 [email protected]

SAINT FRERES SAS 4 route de Ville Bp 1f-804�0 flixecourt france tVa fr 76408448850 rCS aMIenS B 408 448 850 t +33 3�� 51 51 45 f +33 3�� 51 51 49 [email protected]

SIOEN COATING DISTRIBUTION NV fabriekstraat �3 B-8850 ardooie België BtW Be 436.�41.167 rpr 0436.�41.167 Brugge t +3� 51 74 09 00 f +3� 51 74 09 64 [email protected]

SIOEN FABRICS SA Zoning Industriel du Blanc Ballot avenue Urbino 6B-7700 Mouscron Belgique tVa Be 458.801.684 rpM 0458.801.684 tournai

COATING t +3� 56 85 68 80 f +3� 56 34 61 31 [email protected]

wEAVING t +3� 56 85 01 40 f +3� 56 85 01 49 [email protected]

EUROPEAN MASTER BATCH NV – E.M.B. NV rijksweg 15 B-�880 Bornem België BtW Be 4�1.485.�89 rpr 04�1.485.�89 Mechelen t+3� 3 890 64 00 f+3� 3 899 �6 03 [email protected]

INDUCOLOR SA Chemin preuscamps 1� B-78�� ath (Meslin-L’evêque) Belgique tVa Be 400.685.1�5 rpM 0400.685.1�5 tournai t+3� 68 �5 0� 30 f+3� 68 55 �6 0� [email protected]

SIOEN FIBRES SA - extrusion Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique tVa Be 463.789.464 rpM 0463.789.464 tournai t+3� 56 48 1� 70 f+3� 56 48 1� 85 [email protected]

SIOEN COATED FABRICS (SHANGHAI) TRADING CO. LTD room o, floor 15, hengji Building no 99, huaihai road (east) �000�1 Shanghai p.r. of China

t+86 �1 63 84 �5 �1 f+86 �1 63 84 �7 39 [email protected]

SIOFAB SA Indústria de revestimentos têxteis rua da Indústria pt-4795-074 Vila das aves Santo tirso portugal Santo tirso

SoB o n° 4641 nIf 505.046.644 t+351 �5� 87 47 14 f+351 �5� 94 �9 68 [email protected]

TIS NV Driehoekstraat �a B-9451 haaltert (Kerksken) België BtW Be 405.085.064 rpr 0405.085.064 aalst t+3� 53 85 9� �0 f+3� 53 85 9� 56 [email protected]

VERANNEMAN TECHNICAL TEXTILES NV fabriekstraat 31 B-8850 ardooie België BtW Be 4�9.387.6�3 rpr 04�9.387.6�3 Brugge t+3� 51 �4 81 70 f+3� 51 �� 61 68 [email protected]

PENNEL AUTOMOTIVE SAS 310 rue d’alger f-59100 roubaix france tVa fr 53448�73615 rCS roubaix-tourcoing B 448 �73 615 t+33 3�0 76 �1 10 f+33 3�0 76 �1 1� [email protected]

RICHARD SAS rue lavoisier - zac novo - 59160 lomme t+33 3�0 00 18 88 f+33 3�0 00 18 80 [email protected]

ASTRA COLORANTS SA �0 avenue maréchal de lattre de tassigny - 69330 meyzieu + 33 478 31 58 0� f+33 478 04 0� 57 [email protected]

CONFECTIONSIOEN NV fabriekstraat �3 B-8850 ardooie - België BtW Be 478.65�.141 rpr 0478.65�.141 Brugge t+3� 51 74 08 00 f+3� 51 74 09 6� [email protected]

CONFECTION TUNISIENNE DE SECURITE SA – C.T.S. SA 5 Impasse n° � rue 861� – (Z.I.) La Charguia tn-�035 tunis tunisie Code tVa 03030 V / a / M / 000 rC B 133171996 t+�16 71 77 34 77 f+�16 71 78 40 47 [email protected]

GAIRMEIDI CAOMHNAITHE DHUN NA NGALL TEORANTA LTD (Donegal protective Clothing Ltd –Sioen Ireland) - Industrial estate Bunbeg Co. Donegal Ireland

Vat Ie 46�1355M Company nr. 78�1� t+353 74 953 11 69 f+353 74 953 15 91 [email protected]

MULLION MANUFACTURING LTD 44 north farm road South park Industrial estate Scunthorpe north Lincolnshire Dn17 �aY - UK

Vat GB 365.1873.34 Company nr. 1871440 t+44 17�4 �8 00 77 f+44 17�4 �8 01 46 [email protected]

SIOEN FRANCE-DIVISION SIP PROTECTION pavillon hermès 110 avenue Gustave eiffel ZI La Coupe f-11100 narbonne france tVa fr 49300774767 rCS narbonne B 300 774 767 t+33 4 68 4� 35 15 f+33 4 68 4� �7 43 [email protected]

P.T. SIOEN INDONESIA Jl. Irian raya Blok e-�6 nusantara Bonded Zone (Kawasat Berikat nusantara) Cakung Cilincing Jakarta 14140 Indonesia

npWp 1.068.001.5-05� t+6� �1 440 33 88 f+6� �1 440 14 �8 [email protected]

PT SUNGINTEX Jalan raya narogong Km 1�,5 pangkalan IV Desa Cikiwul Kec. Bantar Gebang Bekasi Barat 17310 Indonesia

npWp 1.068.01�.�-407 t+6� �1 8�5 �� f+6� �1 8�5 44 44 [email protected]

SIOEN FIBRES SA – distribution Zoning Industriel du Blanc Ballot Boulevard Métropole 9 B-7700 Mouscron Belgique tVa Be 463.789.464 rpM 0463.789.464 tournai t+3� 56 85 54 30 t+3� 56 34 66 10 [email protected]

SIOEN FRANCE SAS pavillon hermès 110 avenue Gustave eiffel ZI La Coupe f-11100 narbonne france tVa fr 49300774767 rCS narbonne B 300 774 767 t+33 4 68 4� 35 15 f+33 4 68 4� �7 43 [email protected]

SIOEN TUNISIE SA 7 Impasse n° � rue 861� – (Z.I.) La Charguia tn-�035 tunis tunisie Code tVa 614715 S / a / M / 000 rC B 19711998 t+�16 71 80 75 47 f+�16 71 80 9� 6� [email protected]

SIOEN UK Ltd Unit � Windsor house ackhurst Business park foxhole road Chorley Lancashire pr7 1nY UK

Vat GB 73�.4071.6� Company nr 376114� t+44 1�57 �7 7� 44 f+44 1�57 �7 7� 45 [email protected]

SIOEN ZAGHOUAN SA Zone Industrielle de Zaghouan tn-1100 Zaghouan tunisie Code tVa 7470�3 f / a / M / 000 rC B 17713�000 t+�16 7� 68 06 60 f+�16 7� 68 �6 60 [email protected]

SIOEN FRANCE DIVISION VIDAL PROTECTION Zone Industrielle Le passage Jean-rostand Bp167 f 81300 Graulhet t+33 5 63 34 5� 46 f+33 5 63 34 69 99 [email protected]

SIOEN USA Inc. c/o flom, french & Goodwin, L.L.C. 675 Line road Building 4, Suite B aberdeen, nJ 07747 USa

t+1 73� 441 1� 50 f+1 73� 441 1� 53 [email protected]

SIOEN NV – BALENO fabriekstraat �3 B-8850 ardooie België t+3� 51 74 08 00 f+3� 51 74 09 63 [email protected]

SIOEN DEUTSCHLAND am Zirkel 8 49757 Werlte Deutschland (allemagne) t+49 59 51 99 47 0 f+49 59 51 99 47 47 [email protected]

INDUSTRIAL APPLICATIONSCOATEX NV Industriezone Sappenleen Sappenleenstraat 3-4 B-8970 poperinge België BtW Be 434.140.4�5 rpr 0434.140.4�5 Ieper t+3� 57 34 61 60 f+3� 57 33 35 �3 [email protected]

SAINT FRERES CONFECTION SAS � route de Ville Bp 37 f-804�0 flixecourt france tVa fr 44408449098 rCS amiens 408 449 098 t+33 3�� 51 51 70 f+33 3�� 51 51 79 [email protected]

SIOEN NORDIFA SA rue ernest Solvay 181 B-4000 Liège Belgique tVa Be 474.�76.154 rpM 0474.�76.154 Liège t+3� 4 �5� �1 50 f+3� 4 �53 04 �5 [email protected]

ROLAND INTERNATIONAL B.V. Kasteellaan 33 nL-593�ae tegelen nederland BtW nL00381�5��B01 hr Venlo 1�011983 t+31 77 376 9� 9� f+31 77 373 69 66 [email protected]

ROLTRANS GROUP AMERICA INC. 3�1� pinewood Drive arlington, texas 76010 USa 75-1994308 Delaware Corporation # �044811

t+1 817 607 00 80 f+1 817 607 00 88 [email protected]

ROLAND PLANEN GMBH am Zirkel 8 49757 Werlte Deutschland Ust-id.nr.: De 81�873033 osnabrück hrB 1��96 t+49 59 51 99 55 70 f+49 59 51 99 55 71 [email protected]

ROLTRANS GROUP POLSKA SP.Z.O.O. Ul. nadbrzezna 1 pL-6�500 Konin polska nIp 665-100-18-19 rhB 1�10 t+ 48 63� 44 39 �5 f+48 63� 44 39 �1 [email protected]

ROLAND UKRAINE LLC Kievskaya 64-a rivne Ukraine t+38 36� �8 65 39 f+38 36� �8 65 39 [email protected]

ROLAND TILTS UK Ltd Unit 1 Usher Street off Wakefi eld road Bradford BD4 7DS UK Vat GB 311746186 Company nr 1380441 t+44 1�74 39 16 45 f+44 1�74 30 51 56 [email protected]

SIoen Industries nv fabriekstraat �3

8850 ardooie - Belgium

t +3� 51 74 09 00

f +3� 51 74 09 64

www.sioen.be

JaarVerSLaG / rapport annUeL / annUaL report

Dit jaarverslag is beschikbaar in het nederlands, het frans en het engels.

Ce rapport annuel est disponible en français, en néerlandais et en anglais.

this annual report is available in Dutch, french and english.

100 YEARS OF

Summary

Profile 1

Our products 2


Innovation 6



Expertise 12


Group Structure 15

Sioen worldwide 16

Coating division 18

Apparel division 24


Vision 30

Human resources 32


Quality 34

Environment 35




Group Structure 9





Definitions 77

Addresses 78


Innovation

Expertise

Vision

ANNUAL REPORT

2006


Innovation

Expertise

Vision

Date post:	28-Mar-2016
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Annual Report 2006 about Sioen

Documents