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STRATEGY OF THE SIOEN INDUSTRIES GROUP

SIOEN INDUSTRIES: PROTECTION THROUGH INNOVATION The Sioen Industries group focuses on sustainable growth, quality, innovation, and profitability. At the same time priority is always given to creating value for its shareholders. The group aims to achieve this: - by continuing its technical advances in each of the areas in which it is active; - by improving the quality and added value of its products and services through cost-effective innovation; - through greater penetration in its current markets and a greater geographical spread of its sales markets. With a view to maintaining and further developing its market position, the group will further develop its presence on the Asian and American continents over the next few years, both in terms of production facilities and sales possibilities. - through a sustained investment, research and development policy; - by continuing to anticipate opportunities that arise as a result of the group’s activities, both through an active acquisition policy and through internal growth; - by continuing integration, both vertical and horizontal; Further vertical integration in the Processing and in the Apparel Divisions are still a possibility. The horizontal integration consists of a continuous diversification (backlits, frontlits, architectural textiles, filters, ...) and developing other markets (protective clothing for forestry, firemen, ...). - by further refining our purchasing policy and tailoring it to quality, volume, and availability; - by continuing to create a stimulating work environment where career opportunities are offered and where there is room for entrepreneurship and creativity; - by increasing the reputation of our brand names and share of the market through targeted marketing; - by implementing an active environmental policy and paying the necessary attention to the working conditions of its employees.

1


GROUP STRUCTURE (1)

COATING DIVISION 100%

Sioen n.v. (2) Direct Coating Belgium

100%

Sioen Fibres s.a. Spinning

100%

Sioen Fabrics s.a. (2) Weaving / Transfer Coating

100%

TIS n.v. Weaving / Direct Coating

100%

Saint Frères s.a.s. Direct Coating France

100%

Veranneman TT n.v. Weaving / Direct Coating

80%

Siofab s.a. Transfer Coating Portugal

100%

Sioen Coating Distribution n.v. (3) Sales Office

96%

Sioen GmbH Sales office Germany

100%

Sioen Shanghai (4) Sales office China

(1) The stated percentages have been rounded, situation at April 30, 2002 (2) Sioen Industries also has a 99,1 % stake in Sirec S.A., the reinsurance company of the group. Sioen n.v., Sioen Fabrics s.a. and European Masterbatch n.v. hold the remaining interests, which is 0,3 % each. (3) On December 6, 2000, Sioen Fabrics n.v. was renamed Sioen Coating Distribution n.v. (4) The official name is Sioen Coated Fabrics Shangai Trading Ltd. (5) The official name is Gairmeidi Caomhnaithe Dhun na nGall Teoranta (6) Acquired in April 2001 (7) Activities taken over in February 2001 (8) Through Sioen n.v. (9) Acquired in June 2001 (10) Newly created in July 2000

2


N.V. (2)

100%

APPAREL DIVISION

PROCESSING DIVISION

Sioen n.v. (2)

European Masterbatch n.v. (2)

Apparel Belgium

Production Master Batches

10%(8)

Inducolor s.a. (9)

100%

Siotec b.v.b.a.

100%

CAD/CAM Services

Sioen Fibres s.a.

Production pigments pastes 100%

Central distribution and dispatching centre

Sioen France s.a.s.

100%

75%(8)

Saint Frères Confection s.a.s.

75%

Heavy Coated Fabrics France

Transformation de Textiles Enduits s.a.s. Apparel France

100%

Coatex n.v. Processing coated fabrics and films

Sales office France 100%

90%

Sioen Nordifa s.a. (7)

100%

Production of industrial filters

SIP® protection s.a.s. (6) Apparel France

100%

Vidal protection s.a.s. (6) Apparel France

100%

Sioen UK Ltd. Sales office United Kingdom

Donegal Protective Clothing Ltd. (5)

100%

Apparel Ireland 100%

Mullion Manufacturing Ltd. Apparel United Kingdom.

Confection Tunisienne de Sécurité s.a. 100% Apparel Tunisia 100%

Sioen Tunisie s.a. Sales office Tunisia

100%

Sioen Zaghouan s.a. (10) Apparel Tunisia

95%

P.T. Sioen Indonesia

5%

Apparel Indonesia 95%

P.T. Sungintex

5%

Apparel Indonesia

3


6 5 1 2

4

3

SIOEN WORLDWIDE & VALUE CHAIN

7

8

Belgium

9 24

Europe

10

14

11 12 Coating Division

13

China Apparel Division

23

Processing Division

17

16

15

20

21 22 18 19

Indonesia Australia

Raw materials raw materials

1 Sioen Coating Division, Sioen Apparel Division, Siotec, Veranneman TT, Sioen Coating Distribution (Ardooie) 2 Coatex (Poperinge) 3 Sioen fibres-distribution, Sioen Fabrics-weaving and coating, Sioen Fibres-spinning 4 TIS (Kerksken) 5 European Masterbatch/EMB (Bornem) 6 Sioen - Baleno® (Antwerpen) 7 Sioen Nordifa (Liège) 8 Sioen - Inducolor (Meslin-l’Evêque) 9 Donegal Protective Clothing (Donegal) 10 Mullion Manufacturing Ltd. (Scunthorpe) 11 Saint Frères (Flixecourt) 12 Saint Frères Confection (Flixecourt) 13 Transformation de Textiles Enduits/TTE (Rouen) 14 Sioen GmbH (Hannover) 15 Sioen France (Narbonne) 16 SIP® protection (Foix) 17 Vidal protection (Graulhet) 18 Sioen Tunisie (Tunis) 19 Confection Tunisienne de Sécurité/CTS (Tunis) 20 Siofab (Portugal) 21 P.T.Sungintex (Bekasi Barat) 22 P.T.Sioen Indonesia (Jakarta) 23 Sioen Shanghai (Shanghai) 24 Sioen UK

basis production of raw materials production yarns

raw materials

weaving knitting

finishing

direct coating

protective clothing

production pigment pastes

transfer coating

production chemical raw materials

other coatings

production granules

4

production

heavy confection coated fabrics

processing other applications

processing films

distribution


SIOEN INDUSTRIES PROFILE

Sioen Industries is a dynamic industrial group quoted on the Brussels Euronext. The group is the world leader in the sector of technical textiles, market leader in the field of protective clothing and is also a major player in specialised chemistry. Since its foundation in 1960, Sioen Industries has developed into a strong international group through a policy of vertical integration and permanent growth. Thanks to an active investment and acquisition policy, the group experienced rapid growth characterised by a broad diversification of activities and an international presence. In 2001 the group achieved a turnover of EUR 226.02 million, an increase of 17.49% compared to the previous year. Sioen employs around 3,900 highly skilled and dynamic workers in 21 production centres and in 9 separate sales offices worldwide. Operationally speaking, the group’s activities are divided into three divisions with a high degree of mutual integration. The Coating Division is the world leader in the integrated coating of synthetic fabrics and this core activity is the origin of the current Sioen Industries group. Thanks to the integration investments over the years, the division does not restrict itself to coating, but is responsible today for the entire production process, from the extrusion of polyester chips(1) via the production of yarns which, after being processed in one of our own weaving mills, are delivered to the group’s various coating lines. The Apparel Division is the market leader in designing and manufacturing high-quality protective clothing for both industrial and recreational use and makes maximum use of the transfer-coated fabrics of the Coating Division. The Processing Division is the most recent pillar of Sioen Industries and has been developed from the group’s vertical integration strategy. It is responsible for the production of pigment pastes and granules, the processing of coated fabrics and PVC films and for the production of filters for industrial applications. The processing division forms an important niche player in specialised chemistry.

EVOLUTION PERSONNEL 1993-2001 3924 4000 3369 3500 3000 2500 2000 1500 1000 555

500

• Total

0

• Workers • Employees + management '93 '94 '95 '96 '97 '98 '99 '00

'01

TURNOVER EVOLUTION PER DIVISION (in EUR millions) 150 124,8

120

113 90

96 83 68

60

53 42

30

29 Coating Division

16 '93 '94 '95 '96 '97 '98 '99 '00 '01 75,8

0 80 70 60

62

50 44,8 26,5 13 Apparel Division

17

48,6

40 30

31,4

20

21

10

'93 '94 '95 '96 '97 '98 '99 '00 '01

0 30

25,4

25 20

Each of the divisions is characterised by flexibility, innovation, and quality, the keys to the success of Sioen Industries.

16,5 17,2 13

15 10

8,9

(1) Polyester chips = PET granules (polyester granules) which are used as a raw material for the extrusion of polyester yarns. Processing Division

1,1 2,8 3,7

5,7

'93 '94 '95 '96 '97 '98 '99 '00 '01

5 0

5


LETTER TO THE SHAREHOLDERS

Dear Sir Dear Madam,

We are pleased to be able to present you the annual report for the year 2001. Last year we set the goal of expanding each of our three divisions, both internally and externally, in the first year of the new century. A year later we note with satisfaction that this objective, despite the less favourable economic climate, was easily achieved. Decisiveness in achieving the positive results is our strong vision of the future in which modernisation, an adequate investment and acquisition policy and a team of enthusiastic and highly skilled workers play a central role. All this results in a financially healthy company which guarantees a bright future. Turnover rose by 17,49% to EUR 226,02 million, a consequence of the investments of past years which made this strong, largely internal growth possible. The EBITDA and cashflow rose by 13,2% and 10,0% respectively to EUR 50,9 million and EUR 35,8 million. The current profit after tax amounted to EUR 16,95 million. We are pleased to note that each of the three divisions played its part in achieving these promising figures.

THE COATING DIVISION Thanks to the successful integration of Veranneman Technical Textiles, which was taken over at the end of 1999, the Coating Division was able to make optimum use of this potential and the additional capacity in 2001. The gradual introduction of extra looms and the development of new weaving techniques once again demonstrated the importance of the vertical integration of the Coating Division. As planned, the state-of-the-art spinning mill opened in 2000, allows the Coating Division to provide for its own requirements with specific regard to high-tenacity yarns. Furthermore, this investment significantly improves our margins and enables us to effectively anticipate the needs of the market in which the Sioen Industries group is active. The continuation of the strong internal growth of recent years will allow the capacity of the spinning mill to be doubled to 15.000 tonnes per annum in the course of 2002. Transfer-coating capacity was also increased (from 14 million m2 to 19 million m2) through the restructuring of the Portuguese Siofab, taken over in 2000. Extra investments are imminent and in 2001 Sioen started with the construction of a second transfer-coating line in Mouscron. The various points of sale set up in recent years throughout the world are gradually reaching cruising speed and give the Coating Division a unique competitive position. These sales outlets provide the best possible support for the marketing of coating products.

J.J. Sioen Chair Managing Director

6


LETTER TO THE SHAREHOLDERS

THE APPAREL DIVISION In 2001 the Apparel Division consolidated its leadership in designing and manufacturing high-quality protective clothing for both industrial and recreational use. The Apparel Division’s figures once again show that well-developed vertical and horizontal integration contributes to a strong market position. In 2001 the division again reaped the benefits of years of investment in technical know-how and hi-tech production centres. Strong internal and external growth prompted the Apparel Division to set up extra workshops. In 2001, among other things, additional jobs were again created in the sites in Indonesia and Tunisia. The group always makes use of the opportunities associated with existing activities and in 2001 this resulted in 2 major acquisitions. The takeovers at the beginning of April 2001 of the French Omnium de Confection Industrielle (now SIP®-protection, specific protective clothing for forestry) and Etablissements Roger Vidal et Fils (now Vidal-protection, fireproof protective clothing) mean further horizontal integration for the Apparel Division. Thanks to new products and brand names this means an even greater market penetration within the European Union.

In addition, the takeover of the activities of the former Nordifa® at the beginning of 2001 is a new step in the horizontal integration of the group. It shows once again that we do not fail to take advantage of opportunities which arise and fit in with the activities of our group. With this takeover the Processing Division adds the production of industrial filter applications for fluids ("wet" filters under the brand name Lainyl®), dedusting ("dry" filters under the brand name Clartex®) and membrane filters to its already highly diverse range of products. The synergies between Nordifa and the Sioen group can be found in the production of technical textiles, including coating and weaving. Furthermore, Nordifa specialises in non-wovens, a market in which the group wishes to expand. Meanwhile, we are now well into 2002 and new projects are being launched in each of the three divisions. These new projects are aimed at strengthening the firm and further increasing the group’s returns. With the loyal efforts of our workers, their dynamism and enthusiasm to enrich the company each day with their knowledge, we have faith in the future. We are convinced that our focus on growth and results is also valued by you, the investor.

THE PROCESSING DIVISION In 2001 the group’s latest division continued to develop into a profitable and innovative pillar of the Sioen Industries group. The takeover of Inducolor s.a. in June 2001 contributes to the further development of the Processing Division. Inducolor specialises in the production of pigment pastes and is a perfect complement to the activities of European Master Batch. In 2001 the companies Coatex and Saint Frères Confection continued to expand and consolidated their position in the market of the cutting, welding, sewing, and joining together of coated materials and PVC membranes.

J.N. Sioen-Zoete

M. Joris-Sioen

D. Parein-Sioen

P. Sioen

Managing Director

MJS Consulting b.v.b.a. Director

D. Lance b.v.b.a. Director

P. Company b.v.b.a. Director

7


REPORT OF THE BOARD OF DIRECTORS

CONSOLIDATED (in thousands) Turnover Operating profit

1996 €

1997 €

1998 €

1999 €

2000 €

2001 €

85.122

107.859

141.169

161.103

192.373

226.015

difference %difference € 33.642

17%

9.682

14.972

19.617

28.398

32.602

33.816

1.214

4%

Financial result

(1.074)

(1.213)

(1.680)

(1.326)

(3.024)

(6.698)

(3.674)

(121%)

Current profit

8.608

13.759

17.937

27.072

29.578

27.118

(2.460)

(8%)

Results before taxes

8.578

13.791

18.217

29.306

29.593

27.118

(2.475)

(8%)

Taxes

(1.846)

(4.636)

(5.698)

(10.355)

(10.598)

(9.849)

(749)

(7%)

Net result

6.732

9.156

12.519

18.951

18.995

17.269

(1.726)

(9%)

Cash flow

10.774

14.249

20.674

29.491

32.494

35.753

3.259

10%

8


REPORT OF THE BOARD OF DIRECTORS

Ladies and Gentlemen, The Board of Directors has the honour of reporting on the activities of the Sioen Industries Group and submitting the annual accounts as of December 31, 2001 to the general meeting for its approval.

2001: SIOEN INDUSTRIES REALISES A NET PROFIT OF EUR 16.95 MILLION OR 7.5% ON TURNOVER In 2001 Sioen Industries realised a turnover increase of 17,5% to EUR 226,02 million. This growth is the result of a strong organic growth (+11,5%) in combination with carefully targetted acquisitions (+6%). The turnover of the Coating Division rose with 10,25% compared to last year, i.e., to EUR 124,8 million. The Apparel Division grew with EUR 13,8 million (+ 22,19%) to a total turnover of EUR 75,8 million. The Processing Division, the youngest one, grew with 48% and sales exceeded EUR 25 million for the first time. The EBITDA rose from EUR 44,96 million in 2000 to EUR 50,91 million (22,5% on turnover) in 2001, or an increase of 13,23%. The EBIT also rose from EUR 31,47 million to EUR 32,43 million (14,3% on turnover) or an increase of 3%. This is due to major investments, which were written off for a full year for the first time and to the price pressure during the last quarter. The net profit in 2001 amounted to EUR 16,9 million or 7,5% on turnover (9,77% in 2000). The cash flow rose from EUR 32,5 million in 2000 to EUR 35,75 million in 2001, an increase of about 10% compared to last year.

2001: VERTICAL INVESTMENTS AND ORIENTED ACQUISITIONS All divisions of Sioen Industries, the Coating, Apparel and Processing Division, further invested in vertical integration in 2001. In the following chapters, the activities, investments and prospects of these divisions of the group are discussed in more detail.

9


COATING DIVISION

The Coating Division is the world leader in the integrated coating of synthetic fabrics and forms the cornerstone of the Sioen Industries group. By treating synthetic fabrics with PVC, PU, silicone or some other synthetic material they take on specific technical properties: they become watertight, microporous, fireproof, antistatic, breathable, printable, etc. and thus offer protection against water, wind, cold, and chemical products. SALES BY GEOGRAPHICAL MARKET

TURNOVER EVOLUTION 1993-2001 (in EUR millions)

Other 10,6%

150

Benelux Benelux 20,2%

124,8

France

Italy 9,4%

Germany United Kingdom

France 14,6% United States 4,1%

Spain 3,1% United Kingdom 7,7%

83 68

Scandinavia

42

Eastern Europe

30

29 16

Italy Germany 16,9%

60

53

United States

Scandinavia 5,1%

90

96

Spain

Eastern Europe 8,4%

'93 '94 '95 '96 '97 '98 '99 '00 '01

Other

CORE FIGURES

2001 €

2000 €

1999 €

1998 €

1997 €

1996 €

1995 €

1994 €

1993(1) €

Turnover towards third parties (in millions)

124,8

113,2

96,0

83,4

67,6

53,0

42,0

28,6

16,0

% increase

10,3%

17,9%

15,2%

23,3%

27,7%

26,2%

46,7%

78,9%

-

investments (in millions)

21,2

20,3

17,5

17,0

11,4

8,3

-

-

-

Number of co-workers on 31/12

553

576

427

358

201

152

103

84

53

(1) 18 months financial year

10

120

113

0


COATING DIVISION

The hi-tech looms of the three weaving mills can deliver fabrics up to 6,20 m in width. These superior-quality materials in turn serve as raw material for the various coating units, which form the core activity of the Coating Division.

The Coating Division is characterised by extensive vertical integration. Its activities are not limited to coating, but also include the spinning and weaving of fabrics. As a result, this division has developed into an integrated whole, allowing the group to achieve an ever-greater added value on its products (see the group’s value chain on page 4). SPINNING Sioen Fibres (Moeskroen, Belgium), the group’s state-of-theart spinning mill, forms the first link in the industrial chain. The company is active in the processing of raw materials: the extrusion of polyester chips into high-tenacity yarns. The ultramodern production unit also has its own twisting mill, where the fibres are twisted. Today, Sioen Fibres is able to process some 7,500 tonnes of polyester chips into high-quality synthetic threads which are delivered as raw material to the group’s various weaving mills. In 2002 this capacity is being increased to 15,000 tonnes. WEAVING In addition to the traditional synthetic materials, Sioen Fabrics weaving (Moeskroen, Belgium) also manufactures canvas for the production of airbags. Apart from weaving polyester hightenacity threads, TIS (Kerksken-Haaltert, Belgium) also specialises in weaving sailcloth. Veranneman Technical Textiles (Ardooie, Belgium) houses looms for polyester threads in conjunction with a coating line. In 2001 Veranneman Technical Textiles traded the old commercial premises in Roeselare for an ultramodern production unit in Ardooie. Investments were also made in new machines and additional equipment. This almost tripled both the production area and the capacity.

COATING In total, Sioen Industries consists of six coating sites which own the world’s most advanced production lines. These are extremely flexible and have short lead times, which means that Sioen can produce both large and small runs in any colour and width the customer chooses. In Sioen’s six coating units pigment pastes and compounds – supplied by EMB, a part of the Processing Division – are used to dye and coat the chemicals. Sioen Industries concentrates on direct coating, transfer coating and online coating. In direct coating the coating layer (PVC) is applied directly to the fabric. Transfer coating is the process whereby the paste is applied to the material via a paper carrier. In online coating the fabric is immersed from the loom in a coating bath. Sioen Ardooie (Belgium) was set up in 1960 and formed the basis of the current Sioen group. Today this site has an ultramodern broad coating line. In 2001 the state-of-the-art warehouse was opened, allowing the finished goods to be managed and dispatched faster and more efficiently. TIS (Kerksken-Haaltert, Belgium) includes a weaving mill and a direct coating line and specialises in the coating of synthetic fabrics with a PVC layer. Saint-Frères Enduction (Flixecourt, France) is active in the direct coating of fabrics for hi-tech niche markets, such as military tarpaulins with infrared reflection, camouflage tarpaulins, canvases for printing, architectural design, the storage of food or fertiliser, etc. Sioen Fabrics coating (Moeskroen, Belgium) is responsible for both transfer coating and light direct coating. Within these areas the company concentrates on new applications of polyurethane and silicone amongst other types of coating. In October 2001 the first stone was laid of a brand-new building, in which an extra transfer-coating line will be installed in 2002, thereby doubling production capacity.

11


breathability. These fabrics have many end-uses eg; industrial protective clothing, outdoor sports clothing, shoe protectors or medical textiles, such as mattress protectors. Coated open-structure fabrics are used in geotextiles for roadbuilding, drainage nets for agriculture and horticulture, windbreak nets for the construction sector, nets for the reinforcement of synthetic materials, roof coverings, swimming pool sheeting, seam strengthening nets and reinforcing nets for non-wovens.

Siofab (Sto. Tirso, Portugal) specialises in transfer coating, with the main applications being matress protectors, protective clothing and table protectors. In 2001 the firm was restructured, which resulted in a significant increase in production capacity.

SALES The products of the Coating Division are marketed worldwide under the well-known brand name Sio-Line®. In addition to the permanent sales employees and a number of local agents, the Coating Division has a separate sales office in Germany (Sioen GmbH), which concentrates on the important German market. The separate sales office is also expanding in China, allowing stocks to be sustained locally and thereby further developing the market position in the Far East. The distribution of the Coating Division’s products in the United States, Canada, and Mexico will be stimulated by the long-term distribution agreement with the Cooley Group, an American coating organisation.

Veranneman Technical Textiles (Ardooie, Belgium) is strong in the online coating of polyester fabrics. This technique allows the production of open-structure fabrics, which have various end-uses. APPLICATIONS Applications of direct-coated fabrics are numerous: tarpaulins, curtains for HGVs in the transport sector, front and backlits, carriers for screen printing and digital printing in the advertising sector, airbags, silos and storage systems in the food and agriculture industry, tents and cover systems in the leisure sector, etc. One of the specific properties of transfer-coated fabrics is their

PRODUCTION AND SALES ORGANISATION Company

Location

Activity

Production capacity/year

Sioen Fibres s.a.

Moeskroen (B)

Spinning/twisting

7.500 tonnes

Sioen Fabrics s.a.

Moeskroen (B)

Weaving

45 million m2

TIS n.v.

Kerksken (B)

Weaving

15 million m2

Veranneman Technical Textiles n.v.

Ardooie (B)

Weaving/ direct coating

10 million m2

Sioen n.v.

Ardooie (B)

Direct coating

30 million m2

Saint Frères s.a.s.

Flixecourt (F)

Direct coating

15 million m2

TIS n.v.

Kerksken (B)

Direct coating

11 million m2

Sioen Fabrics s.a.

Moeskroen (B)

Transfer coating

14 million m2

Siofab s.a.

Santo Tirso (P)

Transfer coating

5 million m2

Sioen GmbH

Hannover (D)

Sales office

-

Sioen Coated Fabrics Shanghai Trading Ltd. Shanghai (CN)

Sales office

-

Sioen Coating Distribution

Sales office

-

12

Ardooie (B)


C O AT I N G D I V I S I O N

TURNOVER In 2001 the Coating Division’s turnover rose by around 10% to EUR 124,8 million, all internal growth. Over the years, the geographical spread of the sales markets did not change substantially. The Asian, Eastern European and American markets where products for printing (backlits, frontlits, ...) and architectural textile are popular, are growing every year. THE MARKET The coating activities of the Sioen Industries group are characterised by the capacity and flexibility of a highly automated production apparatus, permanent attention to quality, the highly developed sense of innovation and the targeted R&D policy. The coated fibre market is very fragmented with many local, smaller manufacturers, among which Sioen is the largest with respect to both turnover and production capacity. The market is mainly located in Europe. The freight vehicle sector in America is indeed very limited for coated fibres since virtually all freight vehicles consist of closed aluminium constructions. Since its begin, Sioen predominantly manufactured coated fibres for the freight vehicle industry (used as curtains and tarpaulins). Although this is still an important market for the coating division, through the years Sioen has also specialised in various other applications.

2002 In mid-2002 the central R&D division will be opened at the Ardooie site. Via targeted research, this centre will support both the production and marketing of new products. As part of these R&D activities of the Coating Division, an advance test line will be set up in September 2002 for new developments. The 2.500 m2 research centre is unique in the sector in terms of equipment and expertise and helps us not only to anticipate the wishes of the customer, but also to retain and further consolidate our technological advances. The highly skilled R&D team thinks actively with the customer and develops perfect tailored solutions. This has allowed the group to acquire a leading position in a number of rapidly expanding markets (including airbags, advertising banners, textile architecture, siosteelÂŽ, etc.). To support the planned growth, the Coating Division will make the necessary expansion investments to double the capacity of the spinning mill to 15.000 tonnes/year and thereby further optimise the margin-increasing potential of vertical integration. In addition, the spinning mill will research and assess new products and applications in the R&D centre. Veranneman, which because of the extent of the growth, moved to new premises in Ardooie in 2001, is investing in extra machines and new developments in 2002: a fully automatic "kitchen" where the coating paste is made, new looms and technology, etc. This will increase production capacity, allowing them to meet demand. Sioen Coating Division is anticipating the demand for extra-wide materials and strengthening its machinery with a rashel loom (620 cm width) and a new, extra-wide loom (540 cm width). The planned developments in Sioen Fabrics Coating in Moeskroen will be implemented in 2002. In October 2001, construction of a brand-new building began, in which an extra transfer-coating line will be installed in 2002, thereby doubling production capacity.

From its existence, Sioen mainly produces coated fabrics for the transportation industry (truckcovers and side curtains). Although this is still an important market, the Coating Division specialised over the years in orther applications (publicity, architectural textiles, ... (see p. 12: Applications)). Thanks to its effective R&D team, Sioen industries is able to quickly anticipate new markets and trends. 2001 was a year of intensive development of products for rapidly expanding niche markets such as advertising, airbags, and textile architecture. The coating division is rapidly developing its market position in these niche markets.

13


APPAREL DIVISION

The Apparel Division designs and manufactures hi-tech protective clothing for both industrial and recreational use. Protection and safety during professional activities are concepts which are becoming increasingly important. Consequently, protective clothing must also satisfy ever-stricter technical requirements and standards in terms of both design and performance. SALES BY GEOGRAPHICAL MARKET

TURNOVER EVOLUTION 1993-2001 (in EUR millions)

Benelux USA Ireland Austria Eastern Europe Switserland Scandinavia Spain

1,5% 5,4% 1,4% 0,5% 2,9% 2,1% 0,8%

France Other 3,7%

75,8

Germany Benelux 23,5%

70

United Kingdom

60

62

Spain

50

Scandinavia

44,8

Switserland Eastern Europe

United Kingdom 19,5%

26,5

Austria Ireland

13

17

48,6

40 30

31,4

20

21

10

United States

France 31% Germany 7,9%

'93 '94 '95 '96 '97 '98 '99 '00 '01

Other

CORE FIGURES

2001 €

2000 €

1999 €

1998 €

1997 €

1996 €

1995 €

1994 €

1993(1) €

Turnover towards third parties (in millions)

75,8

62,0

48,7

44,8

31,4

26,5

21,1

17,0

13,0

8,6%

42,9%

18,4%

25,6%

24,1%

30,5%

-

% increase investments (in millions) Number of co-workers on 31/12 (1) 18 months financial year

14

22,19% 27,3%

80

5,3

3,8

4,8

2,3

1,5

0,7

-

-

-

3.151

2.659

2.271

2.062

1.234

992

777

598

519

0


A P PA R E L D I V I S I O N

DEVELOPMENT & DESIGN An independent, highly skilled team of designers and textile engineers translates technical aspects and statutory norms into customer-friendly solutions. Contemporary ease of wear, a modern image and styling are seamlessly combined with technical performance and statutory regulations. The result is a technically, commercially and qualitatively outstanding range of products.

this clothing must offer protection against rain, wind and cold. Sioen also offers a high-visibility range, often used when working on roads or at airports. The flame-retardant range offers protection against occasional fire and also has antistatic properties. The area of application par excellence is the petrochemicals industry.

The highly advanced research departments in various countries are responsible for the development of hi-tech fabrics. Furthermore, the R&D departments are customer-oriented and provide the Apparel Division with technical advances and extra competitive strength.

In addition, Sioen manufactures clothing for specific niche markets: cold storage clothing with the Nicewear® range, thermal floatation-suits and life-jackets for working on and around water under the brand name Mullion®, forestry clothing with the SIP®-protection label and Vidal fireman’s clothing. Sioen is also present in the world of industrial fishing with the Maratech® brand.

INDUSTRIAL PROTECTIVE CLOTHING Sioen Apparel’s standard range offers a series of well-thought-out, qualitative protective clothing. This clothing satisfies the strictest requirements and working conditions of any firm. The areas of application of the standard range are as varied as they are extensive: thus, Sioen protective clothing is used in the petrochemicals industry, the foodstuffs sector, road building and public works, agriculture and horticulture and the fishing sector. First and foremost

Both for industrial and sporting use, Sioen today produces the Siofit® range, a range of knitted goods which are used in a multi-layer concept both as base layers and thermal intermediate layers. This consists primarily of multifunctional underwear, T-shirts and polo shirts, pullovers and fleeces, in various colours including high-visibility.

15


ACTIVE OUTERWEAR More and more free time is giving rise to an ever-increasing demand for protective clothing for recreational use. The growing leisure market has led to higher technical standards. High-quality outdoor sports and leisure clothing is manufactured and marketed under the brand name Baleno®. The Baleno® range satisfies the specific requirements of, among others, hunting, fishing, golf, horse riding, motor sport, para-gliding, cycling, and trekking. In addition to its sports applications, Baleno® also has a collection of promotional clothing.

Today, the demand for customer-specific clothing lines is on the rise. This is because more and more companies see their staff’s clothing as an image-booster: it is a way of improving their reputation and lending weight to the company’s quality policy. It is also seen as an extra motivator for employees. Within this market Sioen establishes long-term partnerships. Customers are located in a variety of sectors: aviation, the energy sector, port and maritime companies, telecommunications, public services, courier services, etc.

PRIVATE LABEL The clothing department is also extremely active in designing and manufacturing outerwear collections under private label. By building up a strong reputation for quality both in terms of the design and production of fabrics and the design and manufacture of clothing, Sioen has become a wanted partner among renowned ski and sportswear brands throughout the world.

Exclusive brand names such as Flexothane‚ Siopor®, Mullion®, SIP-Protection® and SDS® are recognised as top-quality products all over the world. It is impossible to imagine the world of industrial protective clothing and outdoor sports clothing without them.

PRODUCTION AND SALES ORGANISATION Company

Location

Activity

Sioen n.v.

Ardooie / Antwerpen (B)

Clothing/sales

Siotec b.v.b.a.

Ardooie (B)

CAD/CAM

Sioen Fibers s.a.

Moeskroen (B)

Distribution

Sioen France s.a.s.

Narbonne (F)

Sales Office

®

O.C.I. (SIP Protection)

Foix (F)

Clothing/sales

Etabl. Roger Vidal et Fils s.a. (Vidal Protection)

Graulhet (F)

Clothing/sales

Transformation de Textiles Enduits s.a.

Elbeuf (F)

Clothing/sales

Sioen UK Ltd.

Lancashire (UK)

Sales office

Mullion Manufacturing Ltd.

Scunthorpe (GB)

Clothing/sales

Donegal Protective Clothing Ltd.

Derrybeg-Donegal (IRL)

Clothing/sales

Sioen Tunisie s.a.

Tunis (TU)

Sales office

Confection Tunisienne de Sécurité s.a.

Tunis (TU)

Clothing

Sioen Zaghouan s.a.

Zaghouan (TU)

Clothing

P.T. Sioen Indonesia

Jakarta (INDO)

Clothing/sales

P.T. Sungintex

Jakarta (INDO)

Clothing/sales

16


A P PA R E L D I V I S I O N

PRODUCTION Worldwide, the Apparel Division has 8 production centres. The various Sioen collections are manufactured in Europe (Belgium, France, Ireland, UK), North Africa (3 clothing companies in Tunisia) and Asia (2 units in Indonesia) in modern production plants to ISO 9001 standards. With the recently built production unit in Indonesia, Sioen has one of the most modern and most efficient clothing companies in the Far East. The production companies in the UK, Tunisia and Indonesia have their own design departments working in close collaboration with Siotec, at the Belgian headquarters. MARKET The Ready-to-Wear Division is the undisputed market leader in industrial protective clothing in Europe. In the world of corporate identity wear and industrial protective clothing, Sioen is the only manufacturer active in the entire European market. The Sioen Ready-to-Wear Division has local competition in every country. SALES With sales offices in Belgium, the UK, Ireland, Scandinavia, France, Tunisia and Indonesia, the Apparel Division is well represented. The sales teams in the various countries consist of local sales employees. This provides Sioen with better market knowledge, allowing it to react more quickly and alertly to local market trends and also provides a better service guarantee for our customers. The sales team therefore forms a customer-oriented organisation for both distributors and end-users.

DISTRIBUTION The central, fully automated dispatch and distribution centre at Moeskroen guarantees an optimum stock policy and rapid distribution of products to customers worldwide. The finished goods are shipped from the different production plants world wide to the central dispatch and distribution centre from where they are shipped by piece, box or pallet to the many customers all over the world. Sioen makes it a priority to deliver the goods quickly and on time to the customer. TURNOVER The turnover towards thirds of the Apparel Division rose by 22,19 % to EUR 75,8 million, which is in line with the expectations and entirely similar to the rhythm of growth of the past years. The initiated optimisations of 2000 show their impact on the division in 2001 and allow the division to organise its growth. The take over of the French ‘Vidal Protection’ in February and ‘Sip®-protection’ end March 2001 imply a rise of 9,5% of the turnover of the Apparel division and thanks to new products and brands, an even bigger market penetration. The geographical spread of the sales markets remained stable over the last years. Scandinavia and Eastern Europe are important growth markets.

17


PROCESSING DIVISION

The Processing Division is the youngest and fastest growing pillar of the group. The activities of the Processing Division are twofold and stand both at the beginning and at the end of the Sioen Industries group’s value chain (see value chain p. 4). At the beginning, because the Processing Division is responsible for the production of raw materials. It specialises in a niche market of the chemicals industry, namely the production of pigment pastes and granules. At the end, because the Processing division focuses on finished products and as a result processes coated fabrics, PVC membranes and filters for industrial applications. SALES BY GEOGRAPHICAL MARKET Austria 1,8% Eastern Europe 10% Scandinavia 0,5% Spain 1,4% United Kingdom 2,4%

TURNOVER EVOLUTION 1993-2001 (in EUR millions)

Benelux

Other 4,9%

30

France Benelux 31,7%

25,4

Germany

20

United Kingdom Spain

16,5 17,2

Scandinavia Germany 17,5%

13

Eastern Europe

1,1 2,8 3,7

Other

10

5,7

5

'93 '94 '95 '96 '97 '98 '99 '00 '01

France 29,8%

CORE FIGURES

2001 €

2000 €

1999 €

1998 €

1997 €

1996 €

1995 €

1994 €

1993(1) €

Turnover towards third parties (in millions)

25,4

17,2

16,4

13,0

8,9

5,7

3,7

2,8

1,1

48,0%

4,7%

26,4%

46,5%

55,7%

52,3%

investments (in millions)

0,6

2,7

2,7

5,8

2,3

2,4

2,0

-

-

Number of co-workers on 31/12

188

153

127

113

97

71

35

31

18

(1) 18 months financial year

18

15

8,9

Austria

% increase

25

32,5% 165,1%

-

0


PROCESSING DIVISION

RAW MATERIALS EMB, or European Master Batch (Bornem, Belgium), has been active for around twenty years as a producer of master batches. The company produces pigment pastes and granules which are used as raw materials for dying certain end products. Among other things, the pastes are used to dye polyurethane and PVC coatings, epoxies, etc. The latter are used in industrial textiles, PU foam, the automotive industry and floor coverings. The granules are used in injection moulding, extrusion (film, sheet and fibre) and blow moulding. EMB has experience in colouring PP, PE, PS, PET, ABS and many other technical polymers. EMB also specialises in the production of compounds and varnishes. The finished products can be found in the textiles sector, (for example in carpet fibres), packaging, plastics and many other branches of industry. EMB has distinguished itself on the market as a fast, flexible and serviceorientated supplier of tailor-made products. In 2001 the company Inducolor s.a. (Meslin l’Evêque, Belgium) was taken over by the group. This company specialises in the production of pigment pastes on a basis of acrylic resins, solvents and silicone. The activities of Inducolor and EMB complement each other and provide a solid base in these niche mar-

kets. The pastes produced by Inducolor are used in the cable, construction and automotive industries. PROCESSING Coatex and Saint-Frères Confection manufacture high-quality end products for demanding niche markets. Coatex (Poperinge, Belgium) is an established name in cutting, welding, sewing and joining of coated materials and PVC membranes mainly for the camping industry, textile architecture and the automotive industry. Coatex built up a worldwide reputation in kadors, the part of a tent in which metal poles can be inserted. For the automotive industry Coatex invested for example in laser cutters for cutting fabrics, coated or non coated with a silicone, layer into airbags. This technology is unique in the world and makes Coatex the strongest player on the European Market. For the transport sector, as curtains and tarpaulins for HGVs, Coatex offers an efficient and economic solution against vandalism: Sio-Steel®. This is made up of three layers and includes a metal structure, while also guaranteeing the flexibility of the coated material.

19


The company also processes impressive orders, such as inflatable silos and complex architectural constructions. DIVERSIFICATION At the beginning of 2001 Sioen Industries took over the activities of Nordifa (Liège, Belgium). Nordifa was established in 1800 and in time came to specialise in the production of technical fabrics, more specifically filter fabrics. The company’s products, marketed under the brand names Lainyl® (‘wet’ filters), Clartex® (‘dry’ filters) and Nordifa® (membrane filters), have a good reputation and are well known internationally.

Coatex’s PVC membranes are used in industry and for recreation. For example, they are used in creating recreational lakes and industrial reservoirs intended for irrigation and firefighting. In this market segment the company also developed PVC film to cover culture beds in horticulture and waterrepellent film for the construction industry. Coatex became worldleader in this segment.

The applications of Nordifa products can be found in the food industry (water and air treatment in sugar refineries, breweries, etc.), heavy industry (metallurgy, coke production, mining industry, electric power stations, paper mills, cement companies, etc.), the chemicals industry (such as the production of dyes), municipal water purification and afterburning systems.

Saint-Frères Confection (Flixecourt, France) is strong in the processing of coated fabrics into covering systems for hightech niche markets. Saint-Frères Confection supplies the army, the railways and the aviation industry. Vital here is razor-sharp quality control which requires significant know-how.

PRODUCTION AND SALES ORGANISATION Company

Location

Activity

European Masterbatch n.v.

Bornem (B)

Production of pigment pastes and granules

Inducolor s.a.

Meslin l’Evêque (B)

Production of granules

Coatex n.v.

Poperinge (B)

Processing of coated fabrics and films

Saint Frères Confection s.a.s.

Flixecourt (F)

Heavy and hi-tech fabrics

Sioen Nordifa s.a. (Established in 2001)

Luik (B)

Production of industrial filters

20


PROCESSING DIVISION

TURNOVER The Processing Division achieved an external turnover of EUR 25,4 million, an increase of 48% compared to 2000. The combination of further internal growth (15,5%), the starting up of Sioen Nordifa in February 2001 and the takeover of Inducolor (end june 2001) will allow this division to face the future full of confidence. In 2001, these acquisitions accounted for 32,5% of the turnover rise of the Processing Division.

2002 The Sioen Processing Division is continually highlighting its quality and flexibility and therefore works intensively on new developments and research. The companies Nordifa and Inducolor which were taken over last year, will provide the division with extra know-how and have now been fully integrated into the group. In addition, Coatex and Saint Frères Confection accurately anticipate demand and opportunities in the market. Thus, in 2002 the Processing Division is already reaping the benefits of past investment and developments in the field of airbags.

21


IMPORTANT EVENTS IN 2001

FEBRUARY 2001 Take-over of activities of Nordifa Luik Sioen Industries acquires the activities and assets of the bankrupt Nordifa Liège s.a. for an amount of 5 million euros. For the Sioen Industries group this takeover signifies a new step in the diversification and vertical integration of its technical textile activities. Nordifa s.a. is a specialist in the field of industrial filter applications for fluids, dedusting and membrane filters. MARCH 2001 Sioen Fabrics Coating: start of construction of second coating line The coating plant in Mouscron expands and begins construction of a brand-new production centre. The opening of the new transfer-coating line is planned for September 2002, which will double capacity. APRIL 2001 Takeover of Etablissements Roger Vidal et Fils s.a. Sioen Industries takes over 100% of the shares of the Etablissements Roger Vidal et fils s.a.. The company specialises in the niche market of leather protective clothing for fire-fighters. APRIL 2001 Take-over of Omnium de Confection Industrielle s.a. Sioen industries takes over the French company Omnium de Confection Industrielle (OCI) s.a.. The company holds several licences in the field of protection against accidents involving chainsaws in forestry. APRIL 2001 Extra jobs in Sungintex (Indonesia) The largest clothing workshop in the Sioen Industries group takes on 250 extra workers. JUNE 2001 Take-over of Inducolor s.a. The Sioen Industries group takes over the company Inducolor s.a.. This company specialises in the production of pigment pastes on a basis of acrylic resins, solvents, and silicones.

22

SEPTEMBER 2001 New home for Veranneman technical textiles The rapidly growing company Veranneman Technical Textiles, taken over in 1999, moves to a brand-new and ultramodern factory in Ardooie. OCTOBER 2001 Commissioning of Sioline warehouse The state-of-the art warehouse puts Sioline in a position to manage and dispatch the finished products even better, faster, and more efficiently. IMPORTANT EVENTS IN 2002 FEBRUARY 2002 Appointment of CFO: Geert Asselman On 1 February 2002 the Sioen Industries group appoints Mr Geert Asselman as CFO of the company. He replaces Mr Danny Carette (1987-2001: CFO Sioen Industries group), who is appointed CEO of Arplama Group, specialised in composite materials. Sihold, the family holding above Sioen Industries, controls 88% of Arplama Group. MARCH 2002 Sioen Industries takes over the transfer and direct coating activities of Sofitex. The Sioen Industries group has entered into an agreement with Sofitex, by which Sioen Industries takes over the PVC and transfer coating machinery of Sofitex. This acquisition allows Sioen Fabrics in Mouscron to complete its range of coated fabrics. Moreover, continuation and quality are further guaranteed to the clients.


PROSPECTS FOR 2002

PROSPECTS FOR 2002 The goals for internal and external growth postulated for 2001 were convincingly achieved, despite the less favourable economic climate. Turnover rose by 17,49% to 226,02 EUR million, the EBITDA and cash flow increased by 13,2 and 10,0% respectively. Even current profit after tax rose by 3,7% and amounted to 33,8 EUR million. These figures again show that the strategy pursued is clearly bearing fruit. In the past, the balance found between both internal and external growth on the one hand and a focus on profitability on the other, always guaranteed convincing growth and profit figures. 2002 will be a year of consolidation for the group, with the focus primarily on profitability. In particular, the group will concentrate on finalising and implementing a number of investments, the further expansion of geographical sales markets and the strengthening of its presence in important niche markets: • The doubling of the capacity of the spinning mill for spinning high-tenacity threads. The capacity of the spinning mill will be increased from 7.500 tonnes to 15.000 tonnes. This expansion will make the group entirely self-sufficient where high-tenacity yarns are concerned. • The French companies Etablissements Roger Vidal et Fils s.a. and Omnium de Confection Industrielle s.a., taken over in 2001, will be fully integrated into the group. The large-scale marketing of the products (protective clothing for fire-fighting and forestry) will contribute towards greater market penetration in these specific nichemarkets. • The market for open-structure fabrics is a new, rapidly growing niche. This new product line is entirely complementary to the existing coated fabric product lines. Test runs are already under way involving a brand-new loom 5 m 40 in width (unique in the world) for the production of open-structure fabrics (technical name "mesh"). Uses of these open fabrics include: windbreak nets on sports fields, covering for open stores, drainage nets, nets to reinforce synthetic materials, roof coverings and swimming pool sheeting, advertising banners which if desired, cover entire buildings. • Sioen Industries is also strengthening its position in the niche markets of textile architecture (building with technical textiles) and advertising (banners). • The marketing of a new fabric tested in 2001, namely rashel fabric. The main advantages of this weaving technique are firstly the speed with which it is woven and secondly the large width of the cloth (630 cm).

After this fabric is coated its applications are numerous: advertising banners, curtains, container tops, silos, and storage systems, etc. • The take-over of Inducolor s.a. in 2001 was a strategically successful operation. The integration of the company into the Sioen Industries group is running smoothly. In 2002 the chemical activities of the Processing Division will be brought further into line with each other. • By mid-2002 the new transfer-coating line in Moeskroen will be operational. This line has a maximum capacity of 14 million square metres and will be brought into use gradually. Very specific to this production line is the fact that it is suitable for the coating of fabrics which form the basis of manufacturing airbags. Here too the group is remaining faithful to its strategy of vertical integration and investments are being made in a number of looms that are suitable for producing the fabrics for airbags, which are subsequently coated. • In the middle of 2002 the R&D centre will be opened at the Ardooie site. Via targeted research, this centre will support both the production and marketing of new products. The centre is unique in the sector in terms of equipment and expertise and helps us to anticipate the wishes of the customer and to retain and further consolidate our technological advances. • The group is investing further in the automation of stock management and distribution. After all, delivering the correct products to the customer as quickly as possible at the right time is a major competitive advantage that we want to develop further. The distribution system and the stock management system are being continually optimised by our employees. An efficient stock and distribution system is very important in a vertically integrated structure. • Last but not least, investments are being made in a completely new coating line in the Ardooie factory, which can apply coating to fabrics via a different process. This advanced test line will be set up in the R&D centre for new developments and will be brought into use by the end of the year. The group’s healthy financial structure and the significant cash flows it is developing enables it to once again implement a healthy programme of investment in 2002 and also to remain alert to future take-over opportunities. On the basis of the current economical climate and the fact that Sioen Industries is a late cyclical organisation, we expect Sioen Industries in 2002 to realise the same results as in 2001.

23


THE SIOEN INDUSTRIES SHARE

CONSOLIDATED HIGHLIGHTS PER SHARE(1)

2001 €

2000 €

1999 €

1998 €

1997 €

1996 €

1995 €

1994 1993(2) € €

Operating profit

1,58

1,52

1,33

0,92

0,75

0,48

0,38

0,24

0,07

Consolidated profit

0,80

0,89

0,82

0,58

0,43

0,32

0,21

0,10

(0,05)

Profit for the group

0,79

0,88

0,87

0,57

0,45

0,32

0,21

0,10

(0,06)

Cash flow

1,67

1,52

1,38

0,97

0,71

0,54

0,38

0,24

0,14

5,79

5,24

4,56

3,73

1,68

1,26

0,93

0,74

0,64

(3)

Equity Return on equity(4)

15,1% 19,3% 23,4% 36,3% 35,7% 34,8% 29,1% 15,7% (6,2%)

Price-Earnings Ratio(5)

14,56

23,8

37,9

67,0

22,1

12,1

-

-

-

Price-Cashflow Ratio(5)

6,89

13,8

23,9

39,5

14,0

7,3

-

-

-

Highest share price

23,51

33,65

47,50

43,13

10,68

4,02

-

-

-

Lowest share price

10,1

18,40

28,50

9,92

3,92

3,84

-

-

-

STOCK EVOLUTION

Share price at year end

(6)

Evolution of the share(5) Average daily transaction volume

11,5

20,90

33,00

38,18

9,97

3,92

-

-

-

(45%)

(37%)

(14%)

283%

154%

-

-

-

-

5.104

9.548

13.216 26.671 20.950 43.410

-

-

-

Gemiddeld aantal verhandelde aandelen per maand(7)

107.194 199.710 277.530 557.863 434.762 855.860

-

-

-

Number of shares Sioen Industries issued (in thousands)(7)

21.391 21.391 21.391 21.391 19.965 19.965

-

-

-

(7)

Year volume (in millions)

20,7

63,7

122,5

162,6

33,9

8,2

-

-

-

Market capitalisation (in millions)(5)

245,9

447,1

705,9

816,6

199,0

78,2

-

-

-

0,16

0,14

0,12

0,09

0,07

0,05

-

-

-

0,12

0,11

0,09

0,07

0,05

0,04

-

-

-

-

-

-

DIVIDEND POLICY Gross dividend Net dividend

20,2% 15,8% 14,2% 15,7% 15,6% 15,6%

Pay-out (%)

(1) Recalculated after the split in 55 on 13/09/96 and the split in 10 on 05/11/98. (2) Accounting year of 18 months. (3) Consolidated profit for the year + depreciation of intangible and tangible fixed assets and other amounts written off + provisions for liabilities and charges + written off stocks, contracts in progress and trade debtors. (4) Profit for the group/ equity as of December 2000; for 1993 prorated to 12 months. (5) Share price end of December. (6) As of April 2, 2002 the price for a Sioen Industries share ws 12,40 EUR/ share. (7) The data relating to 1996 have been strongly influenced by the high volume traded after the IPO of October 18, 1996.

SHAREHOLDERS

SHARE PRICE EVOLUTION Price

Public 34,7%

Volume

50

160000

45

140000

40

120000

35 100000

30

Sihold 62,5%

25

80000

20

60000

15

Mercator Verzekeringen n.v. 2,8%

40000

10 20000

5

0

0 31-12-97

24

31-12-98

31-12-99

31-12-00

31-12-01


THE SIOEN INDUSTRIES SHARE

QUOTATION In order to enable Sioen Industries to maintain its rapid growth and in the conviction that a transparent policy would further strengthen the group’s potential for growth, on 18 October 1996, its shares were introduced on the Spot Market (double fixing) of Brussels Stock Exchange. A year later the shares were listed on the semi-continuous segment of the Futures Market before being quoted, since 11 March 1998, on the continuous segment of the Brussels futures market, which has in the meantime been turned into Euronext Brussels. Since the capital increase of October 1998 and the subsequent splitting of shares into ten parts, 7.426.070 shares or 34,7% of the total number of shares have been spread among the public. In addition, 2,8% of the shares are held by Mercator Verzekeringen n.v. The other 62,5% are controlled by the Sioen family through the holding Sihold n.v. CODES Exchange Market entrance ISIN Market segment Economic group Sector Sub-sector

Euronext Brussels BE0003743573 Next Prime Cyclical consumer goods Household goods & textile Other textiles & leather goods

Reuters Bloomberg Datastream

SIOE.BR SIO.BB B:SIO

DEVELOPMENT OF THE SHARE The share reached its highest rate on 8 February 2001 at EUR 23,51. Since its lowest price, EUR 10,1 on 24 September 2001, it gained 14% on 31 December 2001, at EUR 11,5. The declining interest in Belgian small caps is also reflected in the shares of Sioen Industries, firstly in the movement of the price and secondly in the volumes traded. Through the combination of steady growth, both of turnover, cash flow and profit, on the one hand and the entry into the Next Prime segment and an active communication policy on the other, we want to arouse the interest of investors proactively. The largest volume was traded on 28 December, with 74.321 items at an average price of EUR 11,5. INDICES Since 22 December 1997 the Sioen Industries shares have been included in the VLAM-21 index, a selection of 21 Flemish companies in which the Sioen Industries share amounts to 2,7%(1). On 8 June 2000 the Sioen Industries shares were also included in IN.flandersÂŽ, a new share index composed of the 100 principal employers in Flanders quoted on the Stock Exchange. The Sioen Industries share in this index is 1,4427%(2). Moreover, since 2 March 1998 the share has been incorporated in the investment register of Ethibel(3), an independent consultancy and audit agency for socio-ethical and ecological investments.

2002: FINANCIAL COMMUNICATION POLICY Since 1 January 2002 the Sioen Industries share has been included in the Next Prime segment. Via this segmentation Euronext wants to give a number of companies (mainly small and mid caps) the chance to distinguish themselves qualitatively by: - anticipating the introduction of International Accounting Standards. - the publication of quarterly results. - the annual publication of a reference document. This can take the form of an annual report. - the organisation of at least two analyst meetings. - the publication of a calendar with both the data from the financial publications and from the analyst meetings. - the use of English in publications. By being included in the Next Prime segment, Sioen Industries has committed itself to meeting all the aforementioned obligations and distinguishing itself accordingly. Sioen Industries is convinced that transparency will benefit shareholders. DIVIDEND POLICY With a return on own funds of 15,1%, Sioen Industries as a growth company is remaining loyal to its strategy pursued in recent years. The management has chosen to continue to aim for a payout of more than 15% and to allow the dividend to increase by 15 to 20% a year, thereby keeping the dividend close to cash flow expectations. The payout ratio for 2001 amounts to 20,2% compared to 15,8% the previous year. The gross dividend of EUR 0,16 (0,12 Euro net) dividend is 14,3% higher than the previous year. The dividend becomes payable at the counters of Artesia Bank, Bank Brussels Lambert, Fortis Bank and KBC Bank from 14 June 2002 onwards.

(1) Based on the index composition as at 31/12/2001 (2) Based on the index composition as at 28/12/2001 (3) Ethibel vzw carries out in-depth studies that integrate information on internal and external social policy and on environmental policy in the financial-economic analysis. Only shares that perform well in these areas are included in the Ethibel investment register. Financial products that only invest in stocks that were selected by Ethibel on the basis of the aforementioned studies are given the Ethibel label. This collective Benelux quality label guarantees the high socio-ethical and ecological content of a financial product. This inclusion is valid for a period of 3 years, unless new data justifies exclusion. Current information on the investment files can only be obtained from Ethibel vzw.

25


CORPORATE GOVERNANCE

BOARD OF DIRECTORS (1) CHAIRMAN AND MANAGING DIRECTOR MANAGING DIRECTOR DIRECTORS

Mr. J.J. Sioen (2), chairman/director of various other companies Mrs. J.N. Sioen-Zoete (2), director of various other companies MJS Consulting b.v.b.a., represented by its managing director, Mrs. M. Joris-Sioen (2) director of various other companies D-Lance b.v.b.a., represented by its managing director, Mrs. D. Parein-Sioen (2) director of various other companies P. Company b.v.b.a., represented by its managing director, Mrs. P. Sioen (2) director of various other companies Guanxi n.v., represented by its managing director, Mr. R. Everaert (3) Managing Director of Mercator Verzekeringen n.v.; director of various other companies Revam b.v.b.a., represented by its managing director, Mr. W. Vandepoel (3) Managing Director of Lessius n.v.; director of various other companies Sheng n.v., represented by its managing director, Mr. L.H. Verbeke (3) Lawyer-partner Allen & Overy; chairman/director of various other companies Van Marcke Investments n.v., represented by its managing director, Mr. J. Van Marcke (3) Chairman of Van Marcke Investments n.v.; chairman/director of various other companies Vean n.v., represented by its managing director, Mr. L. Vansteenkiste (3) Managing Director of Recticel n.v.; director of various other companies

SECRETARY

Mr. G. Asselman CFO Sioen Industries group

AUDITOR (4)

Arthur Andersen Bedrijfsrevisoren, represented by Mr. G. Desmet

(1) (2) (3) (4)

26

The term of office of all directors ends at the annual meeting of 2002. Executive and non-independent director. Non-executive and independent director. The term of office of the auditor ends on May 31, 2002.


C O R P O R AT E G O V E R N A N C E

CORPORATE GOVERNANCE Since 1986, the family directors of the Sioen Industries group have surrounded themselves with non-executive, independent directors, first in its advisory board, later in its board of directors. These directors were purposely hired for their experience and specialisation. This move was inspired by the concern and insight of the family directors to create, within the Sioen Industries group those instruments that are designed to assure the company, with the necessary insight and reserve, that the right decisions are taken and carried out effectively and correctly. To this end, the Sioen Industries group has already started up and/or optimised the necessary administrative and operational structures. A harmonious relationship was established with

dedicated (non-family) directors and shareholders, as well as an efficient board of directors. An adequate operational structure with a motivated management team and an enthusiastic staff guarantees the effective implementation of the proposed strategies. The Sioen Industries group endorses the strategy and objectives of the Institute of Directors, of which it became a founding member. Especially the development of a concept and a coherent vision of corporate governance, based on thorough research and taking into account our cultural identity and responding to practical management needs, is a top priority for both the Institute of Directors and the Sioen Industries group.

27


C O R P O R AT E G O V E R N A N C E

COMPOSITION OF THE BOARD OF DIRECTORS The board of directors is composed, in accordance with the articles of association, of at least three members whose term of office must not exceed six years. Retiring directors can be reelected. A majority of the directors is appointed from among the candidates proposed by the public limited liability company Sihold, insofar as the latter holds, either directly or indirectly, at least thirty-five percent of the shares of the company. There are no statutory or other rules concerning the age limit of directors or the exercise of the directorship. INDEPENDENCE OF ADMINISTRATION The balanced composition of the board of directors (there are 10 directors on the board, half of whom are independent and non-executive) offers extensive guarantees in terms of independence of administration in relation to the majority shareholders as well as to the management. RULES CONCERNING THE REMUNERATION OF DIRECTORS The executive and non-executive directors are remunerated according to the time they devote to their office. No fees are paid according to the group’s results. OPERATION OF THE BOARD OF DIRECTORS In accordance with the articles of association, the board of directors meets regularly as and when the needs and interests of the company require. In 2000 the board convened four times. Each meeting of the board of directors has a fixed agenda which comprises of the deliberation and decision on the individual results of the companies of the group, the divisional results, the consolidated results, the current capital expenditure programmes and projects, new projects and presentation of investment opportunities. The board also deals with specific agenda items that concern concrete issues and current events. The discussion of the agenda takes into account the general strategy, annual budgets and financing of the group, which are periodically determined and evolved by the board of directors. Apart from the statutory rule that, in the event of a tie, the chairman has the casting vote, there are no other special or statutory rules regarding the deliberation and decision-making process of the board of directors.

28

The board of directors has decided not to implement a special organization because of the association of the function of chairman and managing director in one person. No special procedures are implemented in order to allow individual directors to take independent expert advice at the company’s expense. Decisions on this matter are taken in the board of directors on an ad hoc basis. OPERATION OF THE MANAGEMENT In each department the daily activities are carried out and decisions taken by the respective heads of department, within predefined and limited powers. These heads of department are in turn accountable to the executing directors. Before each meeting the members of the board of directors receive a summary note in which the relevant director explains the main periodical management reports, which are then further discussed and clarified at the meeting of the board of directors. OPERATIONAL COMMITTEES On October 10, 2000 the Board of Directors set up the following operational committees: Remuneration committee: The remuneration committee is composed of three nonexecutive, independent directors (Messrs. Van Marcke, Vansteenkiste, and Verbeke) and two executive directors (Mr. Sioen and Mrs. Sioen-Zoete). Their term of office expires at the end of their directorship (annual meeting of 2002). The committee is to advise the Board and the top management on pay policy in general and on the salaries of top management and members of the Board in particular. The committee is also responsible for the share option plans. Audit committee: The audit committee is composed of two non-executive, independent directors (Messrs. Vansteenkiste and Vandepoel) and two executive directors (Mr. Sioen and Mrs. Sioen-Zoete). The chairman of the audit committee is appointed from among the independent directors and has a casting vote. Mr. Vandepoel was appointed chairman.


C O R P O R AT E G O V E R N A N C E

Since a substantial growth in profit is projected for the group, this means that the pay-out will fluctuate around 15 to 20% during the coming years.

The audit committee is to advise the Board and the top management on rules and procedures to be adhered to with regard to compiling the annual accounts in general and specific audit issues in particular. EXTERNAL AUDIT The external audits in the Sioen Industries group are mainly executed by Arthur Andersen Bedrijfsrevisoren. They include the audit of the statutory balance sheets as well as the consolidated balance sheets of Sioen Industries n.v. and subsidiaries. In accordance with Article 134 of the "coordinated Companies Acts", the company informs that Arthur Andersen Business Consulting has guided the implementation of the software for warehouse management. Apart from auditing the annual balance sheets, Arthur Andersen Bedrijfsrevisoren guided the implementation of IAS and advised on fiscal matters. The total fee paid to the auditor in 2001, amounted to 139.417 EUR.

RELATIONS BETWEEN SHAREHOLDERS Between Sihold n.v. and Mercator Verzekeringen n.v., who hold respectively 62,5% and 2,8% of the shares of Sioen Industries, there is an agreement that gives Sihold a pre-emptive right. This agreement also grants Mercator Verzekeringen n.v. a representation on the board of directors. No committee of shareholders was constituted. SHARES HELD BY DIRECTORS The total number of shares that are directly or indirectly held by directors amounts to 13.382.230 shares. SHARE OPTION PLANS At the introduction on the stock exchange in October 1996, the Board of Sioen Industries created a share option plan 1996 for the benefit of its higher supervisory staff, directors and consultants with a long-term partnership agreement. The aim was to promote dedication and motivation in the long term and enhance and strengthen the group's profitability. However, no options were as yet allocated to directors under the various option plans (see table).

The mandate of Arthur Andersen Bedrijfsrevisoren expires on the 31st of May 2002. Arthur Andersen Bedrijfsrevisoren is represented by Gino Desmet. SHAREHOLDERS POLICY ON THE APPROPRIATION OF PROFIT - DIVIDEND POLICY The Group has set itself the objective of paying the shareholders a dividend in accordance with its cash flow expectations.

Mercator Verzekeringen n.v. 2,8%

Public 34,7%

Over the next few years, the company intends to implement a number of major capital expenditure programmes that will require substantial financial resources. The group has opted to aim for a minimum 15% pay-out and an annual 15 to 20% increase in the dividend per share.

Sihold 62,5%

29


C O R P O R AT E G O V E R N A N C E

In the context of the share option plan 1996, the Board made a total 200,000 options(1) available. Each option gives the holder the right to acquire one share in Sioen Industries n.v. The price to be paid when an option is exercised is that equal to the share price at the stock exchange in force when the option is granted. The price for an option was fixed at 10% of the share price at the time of allocation in 1996. Fifty percent of the options could in each case be exercised in the third and fourth year after allocation. Upon exercise of the option, Sioen Industries n.v. would acquire its own shares on the stock exchange. On June 30,1999 and on October 10, 2000, the Board of Sioen Industries decided, in accordance with the new legislative provisions in this regard, to establish new share option plans within the allocation of remaining options under the share option plan 1996. The price for an option under the share option plans 1999 and 2000 was fixed at 7,5% of the average market price of the shares of Sioen Industries n.v. in the period of 30 days prior to the date of the offer. The allocation of the option is deemed to take place on the 60th day following the day of the offer, unless the beneficiary has before the end of that term notified in writing that he refuses to accept the offer. Below is an overview of the state of the various option plans. (1) after the split in 10 on November 5, 1998.

OVERVIEW STOCK OPTION PLANS Basic information Date decision of the board of directors Price of the option % of the striking price Price of the option Striking price (selling price) On the stock Exchange in 1996 Allocation Unused Total allocated Outstanding Exercises Outstanding Exercised December 1999 Exercised December 2000 Outstanding Average acquisition price- Exercise 1999 Average acquisition price- Exercise 2000 To exercise Outstanding Exercise January 2003 Exercise January 2004 Exercise January 2005 (1)

after the split in 10 on November 5, 1998.

30

Plan 1996(1) 17/10/1996 10,0% 0,3470 3,4705

Plan 1999 30/06/1999 7,5% 2,5000 33,3200

Plan 2000 10/10/2000 7,5% 1,5375 20,3550

36.250 (3.600) 32.650

6.050 (350) 5.700

6.500 6.500

32.650 (16.325) (16.325) 0 34,24 26,50

5.700

6.500

5.700

6.500

5.700 (2.850) (2.850) 0

6.500

0 0 0 0

(3.250) (3.250)

Total

200.000 48.800 (3.950) 44.850 155.150 44.850 16.325 16.325 12.200

12.200 (2.850) (6.100) (3.250)


C O R P O R AT E G O V E R N A N C E

PROTOCOL TO PREVENT INSIDER TRADING In order to prevent privileged information from being used unlawfully by directors, shareholders and members of the management and staff (insiders), or even to avoid such an impression being created, the board of directors of Sioen Industries elaborated a protocol to prevent insider trading ("1997 Protocol"). This 1997 Protocol is primarily designed to protect the market as such, to ensure compliance with the law, and to uphold the reputation of the group. Besides a number of prohibitions concerning the trading of financial instruments of Sioen Industries when insiders have privileged information which is not (yet) available to the public, the Protocol also contains a set of preventive measures and guidelines to safeguard the confidentiality of privileged information. Every insider who qualifies for this has signed this Protocol. EXECUTION OF VOTING RIGHT AT THE GENERAL SHAREHOLDERS MEETING No one has the right to vote at the General Meeting for more than thirty-five percent (35%) of the number of votes attached to the entirety of the shares issued by the company. These restrictions, however, do not apply if the vote concerns amendments to the company’s articles of association.

31


PERSONNEL OF THE SIOEN INDUSTRIES GROUP

The growth of the Sioen Industries group in 2001 (turnover +17,5%) also translates as an increase in the size of the workforce (+14,7%). At the end of 2001 Sioen Industries employed 3,924 people worldwide, of which 3,369 were workers and 555 salaried employees and executives. The increase (+ 14,7%) took place in 2 divisions, the Apparel and the Processing Division.

EVOLUTION PERSONNEL 1993-2001

3924 4000 3369 3500 3000 2500 2000 1500 1000 555

500 0

'93 '94 '95 '96 '97 '98 '99 '00 '01 • Total • Workers • Employees + management

32


PERSONNEL OF THE SIOEN INDUSTRIES GROUP

The Coating Division remained fairly stable in 2001 and saw a slight decrease (- 4%) to 553 members of staff. As of 31 December 2001 the Apparel Division employed 3.151 people (+ 18,5%). The rise is the result of the strong expansion of the production plant PT Sungintex in Indonesia, which was taken over in 1998. With 1.897 people, Indonesia employs the majority of the personnel of the Apparel Division. In addition Siotec, the design department of the Apparel Division, saw a sharp rise in staff. The Apparel Division will continue to invest further in hi-tech production and design equipment and highly skilled personnel. The growth in the Processing Division also led to a rise in the number of employees to 188 (+23%). This rise was mainly the result of the takeover of the Liège firm Nordifa s.a. and of Inducolor s.a.. In terms of management in the areas of staff policy, finances and treasury, budgeting, MIS, EDP and on a legal level, the various divisions and offices of the group are assisted by Sioen Industries n.v. The responsibilities of Sioen Industries n.v. in Ardooie also include providing these co-ordinating services.

applications, production processes and methods, management techniques, etc. The internal training programme will be developed further in the future. The Sioen Industries group is a family firm feeling very strongly about flexibility towards customers. This flexibility, combined with great enthusiasm, is a characteristic of all our employees. Sioen Industries attempts, entirely in line with our strategic objectives, to create a stimulating working environment where career opportunities are offered and where there is room for entrepreneurship and creativity. At Sioen Industries there is a share option plan for senior executives, directors and consultants with a long-term co-operation agreement. The purpose of this is to promote commitment and motivation in the long term and increase and perpetuate the profitability of the group. (See p.56)

In 2001 Sioen paid extra attention to the education and training of staff. This involves both internal and external training in sales techniques, customer relations, ISO procedures, IT

PERSONNEL PER DIVISION

PERSONNEL PER COUNTRY AS OF DECEMBER 31, 2001

Processing Division 5%

Ireland 3%

Group Services 1%

Other 3%

France 6% Coating Division 14%

Indonesia 48%

Belgium 19%

Apparel Division 80% Tunesia 21%

33


ENVIRONMENTAL POLICY

ENVIRONMENTAL POLICY Each day, Sioen Industries makes an effort to care for the environment. The group meets all legal standards and as a market leader also strives towards a proactive environmental policy. This policy rests on two pillars: emissions and recycling & energy recovery techniques. - The group invests annually to reduce the emission of harmful substances to a minimum, where the group prides itself on applying stricter standards than those required by law. Both in existing and new branches, Sioen Industries invests in post-combustion installations making it possible to approach close to zero emissions and make maximum use of heat recovery, which is subsequently used for heating the ovens for the coating lines. - the group increasingly makes use of recycling and energy recovery techniques: • The investment in a distillation column at the Sioen Fabrics plant in Mouscron guarantees for instance, maximum recovery of raw materials. This reduces emission to a minimum and also ensures substantial savings thanks to the recovery of raw materials. • The site in Ardooie is also equipped with a distillation column, making it possible to optimally recover the solvents used in the cleaning process.

QUALITY At Sioen Industries the customer and customer satisfaction, take centre stage. This calls for an approach in which the quality of the finished product and services provided must meet the customer’s highest demands. Sioen Industries therefore does not confine itself to just checking the end product, but implements an efficient quality policy to ensure appropriate monitoring throughout the entire production and sales process.

34


ENVIRONMENTAL POLICY

The Sioen Industries group demands a constant level of quality from all suppliers and employs the necessary specialists to carry out permanent monitoring on the shop floor and random sample checks. Here, Sioen Industries makes use of the latest communication and IT applications. Permanent support by our own research laboratories forms part of our active quality policy. By mid 2002 the central R&D centre will be opened at the Ardooie site. Via targeted research, this centre will support both the production and marketing of new products. The 2,500-m2 central research centre is unique in the sector in terms of equipment and expertise and helps us not only to anticipate the wishes of the customer, but also to retain and further consolidate our technological advances. The highly skilled R&D team thinks actively with the customer and develops perfectly tailored solutions.

Thanks to this constant attention to quality, all three divisions obtained the ISO 9001 certificate. The Apparel Division also obtained the AQAP-120 certificate, the quality label for military contracts. Today we are working towards obtaining the quality system for the car industry (PS 9000/ ISO TS 16949). However, Sioen Industries has not only been concerned with the quality of its products. Careful attention is also being given to superior working conditions. Creation of a stimulating working climate in which everyone gets the chance to develop their abilities, is one of the cornerstones of the policy. A flat corporate structure also ensures that information flows smoothly from the executive directors to the shop floor. This offers the advantage that decisions can be taken quickly and accurately.

35


FINANCIAL REVIEW

INDEX General information 38 Consolidated balance sheet 40 Consolidated Income statement 42 Funds flow statement 44 Consolidated companies as of December 31, 2001 45 Consolidation criteria and accounting principles 46 Comments on the consolidated annual accounts 48 Notes to the consolidated accounts 52 Statutory annual accounts of Sioen Industries n.v. 58 Condensed balance sheet 59 Condensed income statement 60 Notes 61 Statutory auditor’s report 62 Proposals to the annual meeting 63 of Sioen Industries n.v. Adresses Back cover

36


FINANCIAL REVIEW

INTERNATIONAL ACCOUNTING STANDARDS (IAS) Despite of the fact that the International Accounting Standards (IAS) will possibly only apply as from 2005, the Sioen Industries group opts to implement this standards as soon as possible, since the group participates in the indices of Euronext, who will provide regulations related to an internationally accepted reporting system. Accordingly, Sioen Industries recognises the importance of a commonly accepted international financial frame of reference within a more global perspective of external communication and internal management, in which the introduction of the IAS will lead to an indisputable advantage of standardisation for all companies of the group. At the moment, an inventory is being made of all practical implications of this introduction, with regard to financial reporting, results and additional comments and to the financial position of the group. The group implemented an action plan with the exact timing of implementation and training. In theory this plan should lead to the reporting being in accordance with the IAS standards as from the year 2003 onwards so that in 2005 (which is the year of the possible obliged introduction of the standards) comparable figures of at least three years would be available. It goes without saying that the group will implement the IAS standards earlier, if feasible. REPORTING ON A QUARTERLY BASIS In line with the (accelerated) implementation of IAS as an international financial reference, the Sioen Industries group finds it necessary to pursue a voluntary policy concerning a reliable and regular financial communication. The reporting on a quarterly basis comes high on the agenda and will allow the investors to have (swift) information, as close as possible to the daily activities of the group. Internally, the Sioen Industries group consolidates and reports for about twenty years on a monthly basis on operational level. However, the move towards a (complete) reporting on a quarterly basis requires additional structures, people and means.

37


GENERAL INFORMATION (1)

REGISTERED OFFICE AND COMPANY NAME (ART. 1 AND ART. 2) The registered office of Sioen Industries, a public limited liability company incorporated under Belgian law, is established at 23 Fabriekstraat, B-8850 Ardooie. The company is registered in the Bruges Trade Register under number 72.476. Its VAT number is BE 441.642.780. INCORPORATION AND PUBLICATION Sioen Industries was incorporated under the name "Sihold" by a deed executed before the notary public Ludovic du Faux in Mouscron on September 3, 1990, published in the annexes to the Belgian Official Journal of September 28, 1990 under number 900928-197. FINANCIAL YEAR (ART. 36) The financial year starts each year on January 1 and ends on December 31. DURATION (ART. 4) The company has been incorporated for an indefinite period. OBJECTS OF THE COMPANY (ART. 3 ) The company has for its objects, in Belgium and abroad, in its own name or in the name of third parties, for its own account or for account of third parties: 1. The weaving of all kinds of fabrics, the coating of fabrics and all other materials, the printing thereof, the manufacture of plastic and plastisized material, the manufacture, purchase and sale, in Belgium and abroad, of material useful for or connected with the said products and raw materials, as well as the manufacture of chemical products and pigments; 2. The manufacture of ready-to-wear outerwear in woven fabric, the manufacture of all sorts of tailor-made clothing and embroidery; the manufacture of ready-to-wear outerwear in knitted fabrics, as well as of household linen and interior decoration items; the manufacture of wall cladding, the printing and finishing of all fabrics; the manufacture of

38

ready-to-wear items and outfits for men and women; knitwear, embroidery, household and table linen, children’s clothing. The manufacture of safety and high visibility items. The wholesale and retail trade in all the above-mentioned items; 3. The investment in, subscription for, firm take-over, placement, purchase, sale and trading of shares, bonds, certificates, claims, currencies and other securities, issued by Belgian or foreign companies, which may or may not be trading companies, administrative offices, institutions and associations, with or without (semi-)public law status; 4. The management of investments and holdings in subsidiaries, the holding of directorship posts, the giving of advice, management and other services to or in accordance with the activities carried on by the company itself. These services may be provided by contractual or statutory appointment and in the capacity of external consultant or agency of the customer. All of this subject to the company complying with the legal requirements. The company may, in Belgium and abroad, perform all transactions of movable and immovable property that may serve directly or indirectly to expand or promote its undertaking. It may acquire all movable and immovable property, even if this is not directly or indirectly connected with the objects of the company. It may, by any means, take an interest in all associations, affairs, undertakings or companies that have the same, similar or related objects or that are likely to promote its undertaking or facilitate the sale of its products or services, and it may collaborate or merge therewith.

(1) Information based on the articles of association, updated until April 30, 2002.


GENERAL INFORMATION

CONSULTATION OF DOCUMENTS The statutory and consolidated annual accounts of the company and the accompanying reports are filed with the Belgian National Bank. The articles of association and the special reports required by the Companies Act are available from the Clerk’s Office of the Commercial Court of Bruges. The shareholders may request these documents, as well as the annual and half-yearly reports and all information published for the benefit of the shareholders, at the registered office of the company. The half-yearly and annual reports can be downloaded from the website http://www.sioen.com. HISTORY OF THE CAPITAL The history of the capital is included under the heading "Comments on the consolidated annual accounts" on page 50. AUTHORIZED CAPITAL The board of directors is authorized, during a period of five years from the publication in the Annexes to the Belgian Official Journal of the deed of amendment of the articles of association of February 4, 1999 (B.O.J. March 2, 1999), to increase the issued capital in one or in several stages by a maximum amount of fourty-six million EUR. This authorisation is renewable and is valid given for capital increases in cash, in kind and through incorporation of reserves. Today the amount is still fully available. Within the context of the authorized capital, the board of directors is authorized, in the interest of the company and in accordance with the conditions stipulated in Articles 592 till 599 of the Companies Act, to cancel or restrict the pre-emptive right that is granted to the shareholders by law. The board of directors is authorized to restrict or cancel the pre-emptive right in favour of one or several persons, even if these persons are not staff members of the company or its subsidiaries. On the occasion of the increase of the issued capital, carried out within the limits of the authorized capital, the board of directors is authorized to demand a share premium. If the board of directors decides to do so, this share premium must be recorded in an undistributable reserve account which can only be reduced or written off by a resolution of the general meeting, passed in the manner required for amendments to the articles of association. Failing an express authorization from the general meeting to the board of directors, the authority of the board of directors to increase the issued capital through contributions in cash, with cancellation or restriction of the pre-emptive right of the current shareholders, or through contributions in kind, shall be suspended from the date of notification of the company by the Banking and Finance Commission of a take-over bid for the shares of the company. This authority shall be reinstated

immediately after the closing of such a take-over bid. The general meeting of November 5, 1998 has expressly authorized the board of directors to increase the issued capital in one or in several stages, from the date of notification of the company by the Banking and Finance Commission of a takeover bid for the shares of the company, through contributions in cash, with cancellation or restriction of the pre-emptive right of the current shareholders, or through contributions in kind, in accordance with Article 607 of the Companies Act. This authorization has been granted for a period of three years from the date of publication of this resolution in the Annexes to the Belgian Official Journal (B.O.J. November 28, 1998), and is renewable. ACQUISITION OF OWN SHARES The general meeting of May twenty five has expressly authorized the board of directors, in accordance with the provisions of the Companies Act, to acquire or have the disposal of its own shares or participating bonds, if the acquisition thereof is necessary to avoid an impending serious detriment to the company. This authorization shall be valid for a period of three years from the publication of the above-mentioned resolution in the Annexes to the Belgian Official Journal (B.O.J. June 21, 2001) The general meeting of May 25, 2001 has authorized the board of directors, in accordance with Articles 620 till 623 and Article 625 of the Companies Act, to acquire 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 authorization is valid for a period of eighteen months from the publication of this resolution in the Annexes to the Belgian Official Journal (B.O.J. June 21, 2001), and is renewable in accordance with Articles 620 till 623 and Article 625 of the Companies Act.

39


CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET (in thousands) ASSETS DECEMBER 31

Notes

FIXED ASSETS II.

Intangible assets

EUR

EUR

EUR

138.886

115.655

99.478

980

1.189

2.075

19.881

16.534

17.346

IX.

117.258

97.435

79.671

A. Land and buildings

36.132

29.981

26.114

B. Plant, machinery and equipment

56.703

55.029

32.345

C. Furniture and vehicles

3.265

2.766

2.048

D. Leasing and other similar rights

8.157

8.867

9.111

13.001

792

10.053

767

497

386

767

497

386

767

497

386

171.386

147.237

128.090

E. Assets under construction and advance payments Financial assets B. Other investments 2. Amounts receivable CURRENT ASSETS VI. Amounts receivable after one year

X.

13

33

166

77.861

63.571

54.714

77.861

63.571

54.714

1. Raw materials and consumables

22.276

21.227

19.466

2. Work in progress

11.714

7.465

6.895

3. Finished goods

43.871

34.879

28.353

VII. Inventories and contracts in progress A. Inventories

VII. Amounts receivable within one year

82.303

71.773

61.277

A. Trade debtors

69.649

58.083

50.686

B. Other amounts receivable

12.654

13.690

10.591

1.235

1.279

1.616

IX. Cash deposits B. Other investments and deposits

1.235

1.279

1.616

Cash at hand and in bank

7.386

6.933

7.552

2.588

3.648

2.765

310.272

262.892

227.568

XI. Deferred charges and accrued income

TOTAL ASSETS

40

1999

XII.

IV. Tangible assets

X.

2000

VIII.

III. Consolidation differences

V.

2001


CONSOLIDATED BALANCE SHEET

LIABILITIES DECEMBER 31

Notes

CAPITAL AND RESERVES I. Capital

2001

2000

1999

EUR

EUR

EUR

123.920

112.031

97.502

46.000

46.000

46.000

XI.

71.564

59.294

44.691

339

131

72

VII. Investment grants

6.017

6.606

6.739

VIII. Minority interests

1.531

1.265

1.085

11.526

11.725

10.840

3.443

3.340

3.683

IV. Consolidated reserves VI. Translation differences

PROVISIONS, DEFERRED TAXES AND CONTINGENT TAX LIABILITIES IX. A. Provisions for liabilities and charges 2. Taxation

1.270

1.057

942

4. Other liabilities and charges

2.173

2.283

2.741

8.083

8.385

7.157

173.295

137.871

118.141

83.419

66.186

57.301

B. Deferred taxes and contingent tax liabilities

XIV.D.

CREDITORS X.

Amounts payable after one year

XIII.

A. Financial debts

83.419

66.186

57.301

3. Leasing and other similar obligations

12.328

8.378

8.696

4. Credit institutions

71.091

57.808

48.605

88.847

70.660

60.117

17.912

14.870

12.293

25.735

18.725

10.650

25.735

18.725

10.625

0

0

25

25.987

21.690

24.166

25.987

21.690

24.166

13.864

10.759

8.481

8.543

6.653

5.233

XI. Amounts payable within one year A. Current portion of amounts payable after

XIII.

one year B. Financial debts 1. Credit institutions 2. Other loans C. Trade debts 1. Suppliers E. Taxes, remuneration and social security 1. Taxes 2. Remuneration and social security F. Other amounts payable XII. Accrued charges and deferred income TOTAL LIABILITIES

5.321

4.106

3.248

5.349

4.616

4.527

1.029

1.025

723

310.272

262.892

227.568

41


CONSOLIDATED INCOME STATE

CONSOLIDATED INCOME STATE (in thousands) YEARS ENDED DECEMBER 31

I.

Notes

Operating income A. Turnover

XIV.A.

B. Variations in stocks of finished goods, work and

2001

2000

1999

EUR

EUR

EUR

238.555

200.349

175.640

226.015

192.373

161.103

10.110

5.860

9.369

0

941

588

2.430

1.175

4.580

(204.739)

(167.747)

(147.242)

106.614

86.424

80.636

106.622

87.671

82.379

contracts in progress (increase +, decrease -) C. Fixed assets - own construction D. Other operating income II.

Operating charges A. Raw materials, consumables and goods for resale 1. Purchases 2. Variations in stocks (increase -, decrease +)

(8)

(1.247)

(1.743)

34.802

30.348

23.909

XIV.B.

42.837

34.517

30.888

XIV.C.

17.169

12.985

10.479

58

(189)

(182)

(130)

(432)

(862)

B. Services and other goods C. Remuneration, social security costs and pensions D. Depreciation of formation expenses, intangible and tangible fixed assets and other amounts written off E. Written off stocks, contracts in progress and trade debtors (increase +, decrease -) F. Provisions for liabilities and charges (increase +, decrease -)

3.389

4.094

2.374

III. Operating profit

G. Other operating charges

33.816

32.602

28.398

IV. Financial income

3.749

6.062

5.772

A. Income from financial fixed assets B. Income from current assets C. Other financial income V.

Financial charges A. Interests and other debt charges B. Amortisation of consolidation differences C. Written off current assets other than those

XIV.C.

0

69

12

268

627

240

3.481

5.366

5.520

(10.447)

(9.086)

(7.098)

6.476

4.123

3.052

1.387

1.128

1.087

0

-

-

2.584

3.835

2.959

(6.698)

(3.024)

(1.326)

27.118

29.578

27.072

mentioned under II.E. (increase +, decrease -) D. Other financial charges Financial result VI. Profit on ordinary activities before taxation

42


CONSOLIDATED INCOME STATE

Notes

2001

2000

1999

EUR

EUR

EUR

27.118

29.578

27.072

0

65

2.483

0

0

203

E. Gain on disposal of fixed assets

0

0

2.267

F. Other extraordinary income

0

65

13

VI. Profit on ordinary activities before taxation VII. Extraordinary income D. Adjustments to provisions for extraordinary liabilities and charges

VIII.Extraordinary charges

0

(50)

(249)

D. Provision for extraordinary liabilities and charges

0

8

217

F. Other extraordinary charges

0

42

32

Extraordinary result

0

15

2.234

27.118

29.593

29.306

2.403

854

813

(2.157)

(959)

(2.235)

(10.095)

(10.493)

(8.933)

(10.172)

(10.557)

(9.357)

77

64

424

(9.849)

(10.598)

(10.355)

17.269

18.995

18.951

324

196

321

16.945

18.799

18.630

IX. Profit before taxation IXbis.

A. Transfer from deferred taxes and contingent tax liabilities

XIV.D.

B. Transfer to deferred taxes and contingent tax liabilities X.

Income taxes A. Current income taxes for the year B. Adjustment of income taxes and write-back of

XIV.D. XIV.D.

tax, provisions Total taxes XIV. Consolidated profit for the year A. Minority interest B. Profit for the group

43


FUNDS FLOW STATEMENT

FUNDS FLOW STATEMENT (in thousands) 2001

2000

1999

EUR

EUR

EUR

16.945

18.799

18.630

OPERATING ACTIVITIES Part of the group in the consolidated profit for the year Minority interest in the consolidated profit for the year Depreciation Written off stocks and trade debtors Written off other current assets Increase (decrease) of provisions Increase (decrease) of deferred taxes and contingent tax liabilities Net decrease of investment grants Change in working capital CASHFLOW FROM OPERATING ACTIVITIES

324

196

321

18.556

14.113

11.566

58

(189)

(182)

0

(376)

(762)

(111)

(458)

(1.342)

(89)

1.344

2.592

(589)

(133)

0

(16.089)

(19.690)

(7.603)

19.005

13.606

23.220

(38.180)

(31.141)

(35.056)

(271)

(111)

0

(4.734)

(316)

(3.026)

1.433

1.278

607

0

0

63

INVESTING ACTIVITIES Investment in tangible and intangible assets Investment in financial fixed assets Increase of consolidation differences Disposals of tangible and intangible assets Disposals of financial fixed assets CASHFLOW FROM INVESTING ACTIVITIES

(41.752)

(30.290)

(37.412)

CASHFLOW BEFORE FINANCING ACTIVITIES

(22.747)

(16.684)

(14.192)

FINANCING ACTIVITIES Capital increase of the mother company

0

0

0

Net increase of investment grants

0

0

2.089

35.145

23.755

27.107

(14.870)

(12.293)

(9.115)

Increase long term debt Repayments on long term debt Changes in short term financial debt

7.009

8.076

(3.221)

(4.304)

(3.870)

(3.112)

22.980

15.668

13.748

175

60

846

408

(956)

402

Cash at beginning of the period

8.213

9.168

8.766

Cash at end of year

8.621

8.212

9.168

Paid dividends and director's fees CASHFLOW FROM FINANCING ACTIVITIES Translation difference NET CASH FLOW

44


CONSOLIDATED COMPANIES

CONSOLIDATED COMPANIES AS OF DECEMBER 31, 2001 FULLY CONSOLIDATED SUBSIDIARIES

Chair

VAT-number

Percentage

Poperinge

BE 434.140.425

74,60%

European Masterbatch n.v.

Bornem

BE 421.485.289

99,47%

Sioen n.v.

Ardooie

BE 402.753.106

99,47%

BELGIUM Coatex n.v.

Ardooie

BE 436.241.167

99,47%

Sioen Fabrics s.a.

Mouscron

BE 458.801.684

100,00%

Sioen Fibres s.a.

Mouscron

BE 463.789.464

100,00%

Ardooie

BE 424.304.823

99,47%

Sioen Coating Distribution n.v.

(1)

Siotec b.v.b.a. Tis n.v.

Kerksken (Haaltert)

BE 405.085.064

100,00%

Ardooie

BE 429.387.623

100,00%

Veranneman Technical Textiles n.v.

Luik

BE 474.276.154

100,00%

Meslin-L’Evêque

BE 400.685.125

100,00%

Meslin-L’Evêque

BE 447.069.040

100,00%

Shanghai

-

100,00%

Hannover

DE 811299457

96,00%

Sioen France s.a.s.

Narbonne

FR 49300774767

99,47%

Saint Frères s.a.s.

Flixecourt

FR 76408448850

99,97%

Saint Frères Confection s.a.s.

Flixecourt

FR 44408449098

74,98%

Elbeuf

FR 76339759367

100,00%

Sioen Nordifa s.a.(8) Inducolor s.a

(9)

Inducolor Holding s.a.

(9)

CHINA Sioen Shanghai(2) (3) GERMANY Sioen GmbH FRANCE

Transformation de Textiles Enduits s.a.s. SIP Protection s.a.s.(11)

Foix

FR 41394215511

100,00%

Graulhet

FR 82717220222

100,00%

Derrybeg

IE 4621355M

99,47%

P.T. Sioen Indonesia

Jakarta

-

100,00%

P.T. Sungintex

Jakarta

-

100,00%

Luxemburg

-

100,00%

Santo Torso

NIF 505046644

80,00%

Sioen Tunisie s.a.

Tunis

-

99,83 %

Confection Tunisienne de Sécurité s.a.

Tunis

-

99,47%

Zaghouan

-

99,50%

Chorley

GB 732.4071.62

100,00 %

Scunthorpe

GB 365.1873.34

100,00 %

Vidal Protection s.a.s.(10) IRELAND Donegal Protective Clothing Ltd.(4) INDONESIA

LUXEMBURG Sirec s.a. PORTUGAL Siofab s.a.(5) TUNESIA

Sioen Zaghouan s.a.

(6)

UNITED KINGDOM Sioen UK Ltd. Mullion Manufacturing Ltd.(7)

(1) On December 6, 2000 Sioen Fabrics n.v. was renamed Sioen Coating Distribution n.v. (2) Consolidated from January 10, 2000 onwards. (3) The offical name is: Sioen Coated Fabrics Shanghai Trading Ltd. (4) The official name is: Gairmeidi Caomhnaithe Dhun na nGall Teoranta. (5) Consolidated from Juin 6, 2000 onwards. (6) Consolidated from October 17, 2000 onwards. (7) Consolidated from May 15, 2000 onwards. (8) Consolidated from February 28, 20001 onwards. (9) Consolidated from June 27, 2001 onwards. (10)Consolidated from January 31, 2001 onwards. (11)Consolidated from March 27, 2001 onwards.

45


CONSOLIDATION CRITERIA AND ACCOUNTING PRINCIPLES

1. CONSOLIDATION CRITERIA In the consolidated annual accounts, the assets and liabilities, rights and commitments, as well as the income and charges of Sioen Industries and its subsidiaries are entirely incorporated in the consolidation. Subsidiaries are companies over which Sioen Industries directly or indirectly has a decisive influence. All significant amounts payable to and receivable from those companies, and the transactions between those companies are eliminated in the consolidated annual accounts. 2. ACCOUNTING PRINCIPLES A. General The accounting principles comply with Belgian accounting law, which has been adapted to the provisions of the Seventh ECDirective. B. Specific The annual accounts of the consolidated companies have been drawn up in accordance with the following accounting principles and translation rules. 1. Intangible assets Intangible assets comprise chiefly the historical cost of trademarks and software licences. Trademarks are written off over their contractual term, if applicable, or over their estimated life cycle, with a maximum of ten years. Software licences are written off over three years from the moment they come into operation. Research and development costs are charged immediately to the results. 2. Consolidation differences The Group acknowledges a consolidation difference on its hol-

46

dings for the positive difference between the historical cost and the value of the net assets acquired, calculated on the basis of the uniform accounting principles of the Group. Insofar as possible, consolidation differences are applied to the relevant assets and/or liabilities. For each participation, the board of directors decides the amortisation period of the consolidation differences, according to the estimated period of realisation. In accordance with Article 139 of the Royal Decree of January 30, 2001, this consolidation difference was determined for the first consolidation at June 30, 1992 on the basis of the value of the net assets as at January 1, 1991, which is the starting date of the financial year concerned by these first consolidated annual accounts. In order to take account of the realisation period of the goodwill paid, this consolidation difference is written off over 20 years according to the straight-line method. The positive consolidation differences at the acquisition of P.T. Sungintex and TIS n.v. in 1998, of Veranneman Technical Textiles n.v. at October 18, 1999 and of Inducolor s.a. in 2001, are written off over 20 years, because of the size and strategic interest of these acquisitions. The consolidation differences of the less strategic acquisitions of Mullion Manufacturing Ltd. in 2000 and of Sip速 protection and Vidal protection in 2001 are written off over 5 years. 3. Tangible assets The land is valued at historical cost, including the additional costs, and is not written off. The other tangible assets are valued at historical cost, including the additional costs. They are written off according to the straight-line method by the percentages shown below and for a full financial year in the year of acquisition or coming in operation, except for the spinning mill which was written off pro rata in 2000, because of the importance of this investment.


CONSOLIDATION CRITERIA AND ACCOUNTING PRINCIPLES

ASSETS Buildings: Plant, machinery and equipment: Vehicles: Office equipment and furniture: Assets under construction:

PERCENTAGE 5% - 10% 10% - 20% 20% 20% - 33% are not written off

Leasing and other similar obligations are written off by de percentages of the linked asset, shown above. 4. Financial assets The financial assets are valued at historical cost. Deprecations are recorded if they are permanent. 5. Stocks Raw materials and consumables are valued at historical cost or at market price, whichever is lower. The historical cost is determined according to the FIFO method. Work in progress and finished goods are valued at prime cost. The prime cost comprises the direct and indirect production costs. Old stocks and stocks with a slow turnover are written down. 6. Receivables and payables Receivables and payables are valued at nominal value. Receivables are written down if there is uncertainty about their payment on the due date. 7. Provisions Provisions are being constituted for obligations and all other clearly defined risks, of which the existence at closing date is probable or sure and of which the amounts can be accurately estimated. The values are included if the amounts are due in the long term. The provision for stock option plans is constituted for all granted options for the amount of the value on balance sheet date of the shares included in the option, less the striking price per option.

Deferred tax demands are recognised for the future tax effect of transferable liquid fiscal losses and tax credits, except when the realisation of delayed tax demands is uncertain. No active deferred taxes are booked since the transferred fiscal losses are not substantive. C. Translation of foreign exchange The annual accounts of the foreign companies are translated into EUR as follows: • the assets and liabilities, except for the capital and reserves, are translated at the exchange rate of the European Central Bank on balance sheet date; • the elements of the capital and reserves are translated at the transaction exchange rate. • the income statement is translated at the average exchange rate of the year. The difference between the transaction exchange rate and the exchange rate on balance sheet date results in translation differences, which are directly incorporated in the capital and reserves under the heading "translation differences". All receivables and payables in foreign exchange existing at the end of the financial year are valued in the annual accounts of the consolidated companies at the exchange rate on balance sheet date, except for specifically hedged sums, which are translated at the contractual exchange rate. All positive and negative translation differences are incorporated in the income statement. D. Appropriation of profit The consolidated annual accounts are drawn up after appropriation of the profit of Sioen Industries and before appropriation of the profit of the subsidiaries.

8. Deferred taxes and contingent tax liabilities Deferred taxes are recorded on the untaxed reserves and the investment grants, included in the consolidated equity. Contingent tax liabilities are recorded for the future fiscal effect of all temporary differences between the book results and the fiscal results of the consolidated companies. The current tax rates are applied in the calculation of the deferred taxes and contingent tax liabilities.

47


COMMENTS ON THE CONSOLIDATED ANNUAL ACCOUNTS AS OF DECEMBER 31, 2001

BALANCE SHEET Consolidation differences At December 31, 2001 the consolidation differences amounted to 19,9 million EUR and break down as follows (after depreciation):

(in millions) First consolidation difference Consolidation difference acquisition P.T. Sungintex (1998) Consolidation difference acquisition TIS N.V. (1998) Consolidation difference acquisition Veranneman TT n.v. (01/10/99) Consolidation difference acquisition Mullion Manufacturing Ltd. (17/10/00) Consolidation difference acquisition Vidal Protection s.a.s. (01/02/01) Consolidation difference acquisition Sip Protection s.a.s. (27/03/01) Consolidation difference acquisition Inducolor s.a. (29/06/01) Intangible assets The intangible assets concern mainly the purchase of an ERP (1) software license which is being phased in from January 1, 1998 onwards and gradually extended and which is written off over 3 years. The intangible assets decreased with 0,2 million EUR and amounted to 0,98 million EUR. The capital expenditure in intangible assets in 2001 (0,97 million EUR) concern mainly the purchase of additional software licenses.

EUR 2,9 1,4 8,7 2,2 0,2 0,2 0,7 3,5

Any patent or license in no way binds Sioen Industries. None of the commercial or financial agreements or production processes is liable to bring Sioen Industries into a subordinate position nor do they influence its activities or profitability in a negative way.

Tangible assets In 2001 the tangible assets increased on balance by 19,8 million EUR. This net increase breaks down as follows: (in millions) Capital expenditure Depreciation in 2001 Other Change in consolidation scopes (1) Enterprise Resource Planning

48

EUR 27,1 (15,8) 2,7 5,82


COMMENTS ON THE CONSOLIDATED ANNUAL ACCOUNTS

The capital expenditure can be applied to the divisions as follows:

(in millions)

2000 EUR 20,3 3,8 2,7 0,6 27,4

1999 EUR 17,5 4,8 5,8 0,2 28,3

1998 EUR 17,0 2,3 2,3 0,8 22,4

1997 EUR 11,4 1,5 2,4 0,4 15,7

1996 EUR 8,3 0,7 2,0 11,0

Net capital expenditure 1994-2001 has evolved as follows (in millions) 2001 2000 EUR EUR Land and buildings 3,5 5,1 Plant / machinery 10,0 19,8 Furniture / vehicles 0,8 1,5 Leasing 0 0,2 Fixed assets under construction 12,8(7) 0,8 Total capital expenditure on tangible assets 27,1 27,4(6) Acquisitions / participating interest 7,1(11) 0,7(10)

1999 EUR 4,4 10,0 0,6 9,2 4,1(1) 28,3(5) 4,5(9)

1998 EUR 4,4 8,4 1,0 0,4 8,2(1) 22,4(4) 14,1(8)

1997 EUR 6,2 8,4 1,0 15,6(3) -

1996 EUR 2,1 8,3 0,6 11,0(2) 0,1

Coating Division Apparel Division Processing Division Group services Total

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

2001 EUR 21,2 5,3 0,6 0,4 27,5

The fixed assets under construction concern mainly the spinning mill in Mouscron, which was started up end 2000. Investment in the "transfer coating" in Mouscron. Balance of the "transfer coating" in Mouscron and commencement of the investment in the weaving mill in Mouscron. Investment in the Coatex building in Poperinge and in the "direct coating" in Saint Frères. Balance of the weaving mill in Mouscron and commencement of the investment in the spinning mill and in the central dispatching unit, both located in Mouscron. Investment in the spinning mill and in the central dispatching unit, both located in Mouscron. Extension of the Processing Division building in Bornem. Investments following the fire in theCoating Division in Ardooie in January 1999. Balance of the investment in the spinning mill. Investment in a new production unit in Tunisia, commencement of the investment in the extension of the plant in Ardooie (New production unit for Veranneman Technical Textiles and Research & Development Centre). Investment in doubling the capacity of the spinning mill Sioen Fibres (5,3 million EUR), the new transfer coating line in Sioen Fabrics (2,2 million EUR) and the R&D centre at Sioen n.v. in Ardooie (5,3 million EUR). TIS n.v. and Sungintex Veranneman Technical Textiles n.v. Mullion manufacturing Ltd. Sioen Nordifa s.a., SIP Protection s.a.s., Vidal Protection s.a.s., Inducolor s.a.

The company owns all the land it uses for its operations, with the exception of Saint Frères, where a commercial lease agreement is used.

Working capital (1) In 2001, the working capital rose in line with the turnover by 15,5% to 116,5 million EUR, compared to an increase of 24,6% last year. The amounts receivable within one year knew a similar increase of 14,67%. The share in the total assets decreased and amounted to 26,5% (27,3% in 2000). The stocks increased slightly more than in equal proportion to the turnover (22%), because of the fact that the vertical integration (spinning mill – weaving mill - coating) was extended further. The contribution to the total assets stayed roughly unchanged at 25,1% (against 24,2% in 2000). The share of the balance entry ‘trade liabilities within 1 year’ on the passive side remained at a low level, namely 8,4% (w.r.t. 8,3% previous year). This was reflected in the increase in the short-term financial liabilities to 25,7 million EUR.

Equity At December 31, 2001, the share capital of Sioen Industries n.v. was divided into 21.391.070 ordinary no-par-value shares. Both the capital and the number shares was unchanged during 2001.

(1) Working capital = current assets (investments and cash at bank and in hand excluded) - non-financial debts payable within one year - accrued charges and deferred income.

49


COMMENTS ON THE CONSOLIDATED ANNUAL ACCOUNTS

History of the share capital (1) Date 03/09/1990 14/11/1991 13/09/1996 09/10/1998 05/11/1998 04/02/1999 04/02/1999

Nature of the transaction

Share capital

Foundation Capital increase Split of shares in 55 Capital increase in cash Split of shares in 10 Capital increase by Incorporation of reserves Translation in EUR

230.000.000 363.000.000 363.000.000 1.853.243.150 1.853.243.150

Number of shares BEF BEF BEF BEF BEF

23.000 36.300 1.996.500 2.139.107 21.391.070

1.855.635.400 BEF 46.000.000 EUR

21.391.070 21.391.070

(1) Information based on the co-ordinated articles of association on April 30, 2002.

After payment of the proposed dividend by the parent company, the equity on December 31, 2001 amounted to 123,92 million EUR, an increase by 10,6% compared to last year. The investment grants concern mainly the grants allocated by the Walloon Region for the capital expenditure programmes in the weaving mill (38% of the total amount invested) and in the spinning mill (17% of the total amount invested) in Mouscron. On balance, the investment grants decreased by 0,59 million EUR due to the booked amortisation (0,88 million EUR). The differentiated taxes of 2,7 million EUR relative to the capital subsidies, 1,3 million EUR relative to the exempted capital gains and 4,0 million EUR relative to deferred taxes have been recorded in the IX.B column for liability assessment. Minority interests At December 31, 2001, the minority interests in the equity of the consolidated companies stood at 1,5 million EUR and concern interests in Coatex n.v. (25%), Saint Frères Confection s.a. (25%) and Siofab s.a. (20%). Provisions The provisions for other liabilities and charges (2,17 million EUR) consist mainly of 1,8 million EUR provisions in TIS n.v. They are related to technical guarantees, environmental risks and other obligations, originating in the period before the acquisition by the Sioen Industries Group or from the acquisition itself. The 1999 and 2000 stock option plans have still not required the posting of stock since the exercise price is higher than the share price on the balance date. The tax provision (1,3 million EUR) concerns tax assessments

50

that are expected or received due to the tax authorities challenging the deduction of insurance premiums paid to cover certain risks. Although the company appealed or will appeal against these tax assessments, a provision has already been constituted for the full amount. The dispute amounts to 1,7 million EUR of which 0,4 million EUR already has been paid. INCOME STATEMENT Turnover and other operating income In 2001, turnover went up 17,5% to 226,0 million EUR, mainly as a result of the continuous strong internal growth (11,5%). The remaining 6% was represented by the external growth of the group as a result of the acquisition of Sip Protection (1,5% of the total turnover), Vidal Protection (1,2%), Sioen Nordifa (1,5%) and Inducolor (1,0%). The Benelux remained the biggest market with 22% of the turnover (in 2000: 22 %, in 1999 25% and in 1998: 27 %), followed by France with 21% (in 2000: 21 %, in 1999: 19,3% and in 1998: 19,2%). Other important markets remain Germany (14%), the United Kingdom (11%), Italy (6%) and Scandinavia (4%). In 2001 the other operating yields were increased to 2,4 million EUR, among other things through capital gains realised from fixed assets and damage compensation received. In 1999, the effect on the operating yields was 3,8 million EUR resulting from insurance indemnities collected as the result of a fire. Operating profit The EBITDA increased with 13,23% from 44,96 million EUR in 2000 to 50,94 million EUR in 2001 (22,5% on turnover). The EBITDA has grown with 3% from 31,47 million EUR tot 32,43 million EUR (14,3% from turnover).


COMMENTS ON THE CONSOLIDATED ANNUAL ACCOUNTS

This is due to major investments, which were written off for a full year for the first time and to the price pressure during the last quarter. The gross margin(1) fell slightly as a result from 58,1% in 2000 to 57,3% w.r.t. the turnover in 2001. The operating profit remained with 15 % at a high level (16,9% in 2000). Financial result The average net financial debt (2) increased by 29% from 91,61 million EUR to 118,4 million EUR. The negative financial result, amounted in 2001 to 6,7 million EUR instead of 3 million EUR in 2000. This trend is mainly due to : - The continuing practice of paying suppliers cash at a discount - the financing charge for the spinning mill that was accepted for the first time as a charge for a full year. The other financial profit and costs mainly include capital subsidies (0,8 million EUR), payment discounts received (1 million EUR), interests received (0,2 million EUR), discounts permitted to customers (1,3 million EUR), bank charges (0,4 million EUR) and exchange rate profits (0,6 million EUR). Extraordinary result In 2001, the net result wasn’t influenced by any extraordinary results. The extraordinary result in 1999 was mainly due to insurance compensations received in relation to an incident in the Coating Division in Ardooie in January 1999. The amounts received compensated the loss of tangible fixed assets that were by then largely depreciated, thus causing a forced extraordinary gain of 2,3 million EUR.

Income taxes The total taxes (income taxes plus deferred taxes) decreased with 7,5% from 10,6 million EUR to 9,8 million EUR. The average tax rate in relation to the pre-tax profit increased from 35,8% in 2000 to 36,3% in 2001 (in 1999: 35,3%). Funds flow statement The need for working capital increased in 2001 by 15,6 million EUR to 116,5 million EUR, compared to 100,9 million EUR last year. The stocks and trade debtors and suppliers increased by 22,5%, 19,9% and 19,8%. The additional need for working capital was sufficiently intercepted by the cash flow from operating activities. The cash flow from investment activities increased with 37,8% to 41,8 million EUR. 54% was financed from the cash flow from operating activities. The balance was taken care of by an increase in the long-term financial debts, which increased to 83,4 million EUR. The share of these long-term financial debts in the total liabilities (on 31/12/01) amounted to 26,9%. The share of the short-term debts also rose and amounted to 28,6%. As a result, the solvability ratio (equity/balance sheet total) decreased to 39,94% On balance the net cash position increased by 0,4 million EUR to 8,6 million EUR.

(1) (Turnover + variation in stocks of finished goods, work and contracts in progress - raw materials, consumables ) / turnover (2) Financial debt - cash deposits - cash at hand and in bank.

51


NOTES TO THE CONSOLIDATED ACCOUNTS AS OF DECEMBER 31, 2001

VIII. STATEMENT OF INTANGIBLE FIXED ASSETS (in thousands)

Concessions, patents, licenses, etc. EUR

a) At cost At December 31, 2000 Changes for the year Expenditure Other changes At December 31, 2001

3.697 977 118 4.792

b) Amortisation and depreciation At December 31, 2000 Changes for the year Charge for the year Other changes At December 31, 2001 d) Net book value at December 31, 2001

52

2.508 1.293 11 3.812 980


NOTES TO THE CONSOLIDATED ACCOUNTS

IX. STATEMENT OF TANGIBLE FIXED ASSETS (in thousands)

a) At cost At December 31, 2000 Changes for the year Capital expenditure Sales and disposals Transfers Translation differences Other changes (1) At December 31, 2001

Land and buildings EUR

Plant, machinery and equipment EUR

40.245

98.980

4.825 (1.351) 381 111 4.780 48.991

11.702 (1.676) 205 207 1.854 111.272

10.264

43.951

c) Depreciation and amortisation At December 31, 2000 Changes for the year Charge for the year Depreciation for the year Transfers Translation differences Other changes (1) At December 31, 2001

2.230 (210)

11.474 (1.485)

38 537 12.859

170 459 54.569

d) Net book value at December 31, 2001

36.132

56.703

Furniture and vehicles EUR

Leasing and other similar rights EUR

8.490

9.962

1.860 (1.011)

(29)

44 437 9.820

9 9.942

5.724

1.095

1.464 (918) 0 18 267 6.555

708

(in thousands)

a) At cost At December 31, 2000 Changes for the year Capital expenditure Sales and disposals Transfers Translation differences Other changes (1) At December 31, 2001 c) Depreciation and amortisation At December 31, 2000 Changes for the year Charge for the year Depreciation for the year Transfers Translation differences Other changes (1) At December 31, 2001 d) Net book value at December 31, 2001 of which buildings

3.265

(22) 4 1.785 8.157 8.157

(1) Changes resulting from changes to the consolidation scope.

53


NOTES TO THE CONSOLIDATED ACCOUNTS

(in thousands)

Assets under construction and advance payments EUR

a) At cost At December 31, 2000 Changes for the year Capital expenditure Transfers Translation differences Other changes At December 31, 2001 d) Net book value at December 31, 2001 X. STATEMENT OF FINANCIAL FIXED ASSETS (in thousands) 2. Amounts receivable Net book value at December 31, 2000 Changes for the year Other Net book value at December 31, 2001 XI. CONSOLIDATED STATEMENT OF CHANGES IN RESERVES AND RETAINED EARNINGS (in thousands) At December 31, 2000 Changes for the year Profit for the year Other changes - Dividends declared 2001 - Director's fees Sioen Industries n.v. 2001 - Director's fees Confection Tunisienne de Sécurité s.a. 2001 At December 31, 2001 XII. STATEMENT OF CONSOLIDATION DIFFERENCES (in thousands) Net book value at December 31, 2000 Changes for the year Following an increase in the participation percentage and/or acquisitions Amortisation Net book value at December 31, 2001

54

792 12.774 (586) 20 1 13.001 13.001

Other investments EUR 497 270 767

EUR 59.294 16.945 (3.423) (174) (1.078) 71.564

EUR 16.534 4.734 (1.387) 19.881


NOTES TO THE CONSOLIDATED ACCOUNTS

XIII. STATEMENT OF AMOUNTS PAYABLE A. Analysis of the amounts originally payable after one year according to their residual term

Financial debts (in thousands) Debts falling due in 2002 2003 2004 2005 2006 later Total amount at December 31, 2001

EUR

%

17.912 16.971 16.069 16.011 13.634 20.734 101.331

18% 17% 16% 16% 13% 20% 100%

Analysis of amounts payable by currency All debts have been concluded in currencies from the Euro-zone, so there are no long-term debt related exchange risks. Average interest rate The average interest rate on all outstanding financial debts is 5,24 %

B. Amounts payable which are guaranteed by real guarantees given or irrevocably promised on the assets of the companies included in the consolidation Financial debts (in thousands)

EUR

3. Leasing and other similar obligations Total amount at December 31, 2001

13.345 13.345

XIV. RESULTS OF OPERATIONS A. Consolidated sales Per division (in millions)

2001 EUR

2000 EUR

1999 EUR

Coating Division Apparel Division Processing Division

124,8 75,8 25,4

113,2 62,0 17,2

96,0 48,7 16,4

Geographically (in millions)

2001 EUR

2000 EUR

1999 EUR

Benelux France Germany United Kingdom Italy Other

52,8 48,9 31,1 24,8 12,5 56,0

43,8 39,5 30,1 20,4 12,6 46,0

40,2 31,1 26,6 16,1 12,5 34,6

55


NOTES TO THE CONSOLIDATED ACCOUNTS

B. Personnel 2001 EUR 42.837

2000 EUR 34.517

1999 EUR 30.888

1998 EUR 24.116

Average number of employees (in units)

2001

2000

1999

1998

Average number of employees Blue collars White collars Management Average number of persons employed in Belgium by companies of the group Personnel, active in Research and Development

3.924 3.369 520 35

3.420 2.907 494 19

2.857 2.412 426 19

2.555 2.227 310 18

745 18

653 16

590 18

529 19

Group Services

Coating Division

Confectie Division

Processing Division

Total

32

414 14 4 100

147

152

111 119 1.897

36

(in thousands) Personnel charges

Personnel per division and per country as of December 31, 2001 (in units) Belgium China Germany France Ireland Indonesa Portugal Tunesia United Kingdom Total

553

845 32 3.151

188

745 14 4 247 119 1.897 21 845 32 3.924

2001 (EUR) 1.387 17.169 18.556

2000 (EUR) 1.128 12.985 14.113

1999 (EUR) 1.087 10.479 11.566

1998 (EUR) 618 6.448 7.066

21

32

C. Depreciation (in thousands) Positive consolidation differences Other fixed assets Total

56


NOTES TO THE CONSOLIDATED ACCOUNTS

D. Taxes Total taxes on yearly basis are as follows: (in thousands) Write-backs of deferred taxes and contingent tax liabilities Transfers to deferred taxes and contingent tax liabilities Current income taxes Total taxes for the year Taxes for previous years Provision for additional taxes Total taxes

2001 (EUR)

2000 (EUR)

1999 (EUR)

1998 (EUR)

2.403

854

813

643

(2.157) (9.959) (9.713) 77 (213) (9.849)

(959) (10.344) (10.449) 64 (213) (10.598)

(2.235) (9.144) (10.566) 424 (213) (10.355)

(1.570) (4.559) (5.486) 21 (233) (5.698)

The provision for additional taxes concerns tax assessments that are expected as a result of the tax authorities challenging the deduction of insurance premiums paid to cover certain risks. The total amount of the disputed taxes (based on received assessments and estimates) comes to 1,3 million EUR of which 1,7 million EUR is included in provisions and 0,4 million EUR has been paid. The group appealed against the received assessments.

(in thousands)

2001 (EUR)

2000 (EUR)

1999 (EUR)

1998 (EUR)

Deferred taxes Contingent tax liabilities

4.043 4.040

4.951 3.434

5.127 2.030

1.896 2.800

At December 31, 2001, the reserves contained tax-free reserves to the amount of 9,6 million EUR in Sirec s.a. These reserves are permanently kept and invested in Luxembourg. For this reason no contingent tax liabilities have been recorded. No contingencies were recognized. XV. RIGHTS AND COMMITMENTS NOT REFLECTED IN THE BALANCE SHEET 2001 (in thousands) (EUR) Commitments for capital expenditures Commitments to dispose of fixed assets

4.935(3) 8.676(3)

2000 (EUR)

1999 (EUR)

1998 (EUR)

1.144 -

10.023(1) 1.735(2)

13.584(1) -

(1) Spinning mill under construction. (2) Obligation of delivery related to a sale and lease back financing. (3) R&D centre – property leasing

The group does not use financial derivatives and does not take any speculative position. In 2001 there were no hedging actions. XVI. FINANCIAL RELATIONSHIPS WITH DIRECTORS OR MANAGERS OF THE CONSOLIDATING COMPANY The 2001 remuneration granted to the directors of Sioen Industries (director's fees included) for their responsibilities in the consolidating company and its subsidiaries amounted to 1,8 million EUR, the remuneration of five directors assuming management responsibilities in the group included.

57


STATUTORY ANNUAL ACCOUNTS OF SIOEN INDUSTRIES N.V.

The statutory annual accounts of the parent company Sioen Industries n.v. are shown below in condensed form. In June 2002, the annual report and annual accounts of Sioen Industries n.v. and the auditor’s report have been filed with the National Bank of Belgium in accordance with Articles 98-102 of the Companies Act. These reports are available on request at the following address: Sioen Industries n.v. Fabriekstraat 23 8850 Ardooie

The statutory auditor has expressed an opinion without reservation on the statutory annual accounts of Sioen Industries n.v. for the years 2001, 2000 and 1999.

58


CONDENSED BALANCE SHEET OF SIOEN INDUSTRIES N.V.

1. CONDENSED BALANCE SHEET OF SIOEN INDUSTRIES N.V. AFTER APPROPRIATION OF PROFIT (IN THOUSANDS) (in thousands)

2001

2000

1999

December 31

EUR

EUR

EUR

Fixed assets

51.497

42.798

58.560

Formation expenses

128

256

535

II.

Intangible fixed assets

754

1.100

1.993

III.

Tangible fixed assets

579

608

536

IV.

Financial fixed assets

50.036

40.834

55.496

Current assets

104.543

64.423

4.824

VII.

Amounts receivable within 1 year

103.441

64.282

4.757

IX.

Cash at bank and in hand

977

22

1

X.

Deferred charges and accrued income

125

119

66

156.040

107.221

63.384

Capital and reserves

58.831

52.577

47.109

Capital

46.000

46.000

46.000

I.

Total assets

I. IV.

Legal reserves

V.

Profit brought forward

1.417

917

421

11.414

5.660

688

VII.

Provisions

0

0

376

Creditors

97.209

54.644

15.898

VIII.

Amounts payable after 1 year

52.180

28.719

9.988

IX.

Amounts payable within 1 year

44.928

25.898

5.801

X.

Accrued charges and deferred income

101

27

109

156.040

107.221

63.384

Total liabilities

59


CONDENSED INCOME STATEMENT OF SIOEN INDUSTRIES N.V.

2. CONDENSED INCOME STATEMENT OF SIOEN INDUSTRIES N.V. (in thousands EUR) Years ended December 31 I.

1999

EUR

EUR

Operating income

5.142

4.721

4.481

4.857

4.443

3.824

0

121

292

285

157

365

(4.980)

(4.537)

(3.857)

B. Services and other goods

1.556

1.274

1.367

C. Remuneration

1.550

1.631

1.408

D. Depreciation and amounts written off

1.854

2.007

1.837

0

(376)

(757)

20

1

2

162

184

624

D. Other operating income Operating charges

F. Provisions G. Other operating charges III.

2000

EUR

A. Turnover C. Fixed assets - own construction

II.

2001

Operating profit / loss IV. Financial income

14.156

10.209

3.737

V. Financial charges

(4.380)

(1.550)

(979)

Financial result

9.776

8.659

2.758

Profit on ordinary activities

9.938

8.843

3.382

-

-

(5)

9.938

8.843

3.377

Extraordinary result Profit before tax Income taxes Profit for the financial year

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, MIS and IT, and legal affairs.

(87)

(207)

(576)

9.851

8.636

2.801

COMMENTS The turnover of the holding company increased by 9,3% to 4.86 million EUR. The other operating income increased 0,28 million EUR, compared to 0,16 million EUR in 2000. The operating profit amounted to 0,16 million EUR compared to 0,18 million EUR last year. The financial result further increased to 9,8 million EUR, due to higher dividends received from the different subsidiaries and from higher interest sums received from subsidiaries. Besides, the interest costs increased due to the increase of short term loans that are further lend to different subsidiaries and for which Sioen Industries receives interests.

60


CONDENSED INCOME STATEMENT OF SIOEN INDUSTRIES N.V.

3. ACCOUNTING PRINCIPLES The accounting principles and translation rules applied to the statutory annual accounts of Sioen Industries are the same as those used for the consolidated annual accounts, except for the treatment of the costs of the first listing on the Brussels Stock Exchange and the costs of the capital increase. In the consolidated annual accounts these costs are charged to the financial year, while in the statutory annual accounts they are capitalised and written off over 5 years. 4. STATEMENT OF CAPITAL In accordance with Articles 1 to 4 of the Act of March 2, 1989 concerning the disclosure of important holdings in listed companies and regulating take-over bids, the applicable quotas were set at 3 and 5 percent or a multiple of that. (Article 8 of the Articles of Association). In accordance with Article 4 of the Act of March 2, 1989, the following notifications of shareholdings in the company were received:

SITUATION AS OF DECEMBER 31, 2001 (1) Notifier Acting by mutual agreement: Sihold n.v., (2) Fabriekstraat 23, 8850 Ardooie Mercator Verzekeringen n.v., (3) Kortrijksesteenweg 302, 9000 Gent Total number of shares in notification Total number of shares

Date of Notification

Number of Shares

Percentage of total Number of shares (4)

October 18, 1996

13.365.010

62,5 %

October 18, 1996

599.990 13.965.000 21.391.070

2,8 % 65,3 % 100,0 %

(1) Number of shares recalculated after the split in 10 on November 5, 1998. (2) Sihold n.v. is controlled by Sicorp n.v., which is controlled by Stichting Administratiekantoor Midapa, a foundation according to Dutch law, which in turn is controlled by the Sioen family. (3) Mercator Verzekeringen n.v. is controlled by B창loise (Luxembourg) Holding s.a.,1, rue Emile Bian, 1235 Luxembourg. (4) The percentage was recalculated after the capital increase and the split of the shares. The shareholders concerned confirmed to us that this notification still corresponds to the percentages mentioned.

61


STATUTORY AUDITOR’S REPORT

To the Shareholders of Sioen Industries, NV : We have audited the consolidated balance sheet of SIOEN INDUSTRIES, NV and subsidiaries as of December 31, 2001, and the related consolidated statement of income, the consolidated statement of changes in cash and the notes and the directors’ report for the year then ended. The consolidated annual accounts have been prepared under the responsibility of the Board of Directors. The balance sheet total as of December 31, 2001 is EUR 310,272 (000) and the profit for the year then ended is EUR 17,269 (000). We did not examine the financial statements of a limited number of subsidiaries. The assets of these companies represent 11,7% of total consolidated assets at December 31, 2001. Their net profit represents 34,1% of the net profit of the group in 2001. Those statements were examined by other auditors whose reports have been furnished to us. Our opinion on the accompanying consolidated annual accounts, insofar as it relates to the amounts included for those companies, is based solely upon the reports of the other auditors. The consolidated annual accounts as of December 31, 2000 and 1999, presented for comparative purposes, have been certified by s without reservation.

OPINION, WITHOUT RESERVATION, ON THE CONSOLIDATED ANNUAL ACCOUNTS Our audit was made in accordance with the auditing standards of the Belgian Institute of Company Auditors. These require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated annual accounts are free of material misstatement, taking into account Belgian law and regulations with respect to the consolidated annual accounts. In accordance with these standards, we have taken into consideration the administrative and accounting procedures and system of internal control of the company. We examined, on a test basis, evidence supporting the amounts in the consolidated annual accounts. We also assessed the valuation rules, the

62

principles of consolidation, significant accounting estimates and the presentation of the consolidated annual accounts as a whole. We received from the management of the company the information and explanations we requested. We believe that these procedures provide a reasonable basis for our opinion. In our opinion, the accompanying consolidated annual accounts present fairly the financial position of Sioen Industries, NV and subsidiaries as of December 31, 2001 and the results of their operations and changes in cash for the year then ended, in conformity with the applicable Belgian law and regulations, and the notes to the consolidated annual accounts are adequate. ADDITIONAL STATEMENTS We complete our report with the following additional statements which do not modify the scope of the above-mentioned opinion on the annual accounts : - The consolidated directors’ report for the year ended December 31, 2001 is in agreement with the consolidated annual accounts and includes the information required by the law; - Regardless of formal aspects of minor importance, the consolidated annual accounts are established in conformity with applicable law and regulations.

The Statutory Auditor,

ARTHUR ANDERSEN, Bedrijfsrevisoren Gino Desmet - March 26, 2002.


PROPOSALS TO THE ANNUAL MEETING OF SIOEN INDUSTRIES N.V. OF MAY 31, 2002

The board of directors of Sioen Industries proposes to the annual meeting to approve the annual accounts at December 31, 2001 and to consent to the appropriation of profit. The profit for the financial year ended is 9.851.937,66 EUR, compared to a profit of 8.636.061,86 EUR for the financial year 2000. The profit brought forward from the previous financial year is5.659.950,57 EUR. The profit available for appropriation is consequently 15.511.888,23 EUR. The board of directors proposes to appropriate the profit available for appropriation of 15.511.888,23 EUR as follows: (in EUR) Gross dividends for the 21.391.070 shares Directors’ fees Transfer to the legal reserves Profit to be carried forward

3.422.571,20 173.525,47 500.000,00 11.415.791,56

The proposed net dividend per share is calculated as follows: (in EUR) Net dividend per share Withholding tax 25/75 Gross dividend per share Pay-out ratio (1)

0,12 0,04 0,16 20,2 %

The proposed dividend is 14% higher than that of 2000. The pay-out ratio amounts to 20,2%. If this proposal is approved, the net dividend of 0,12 EUR per share will be made payable as from June 14, 2002 onwards at the counters of Artesia Bank, Bank Brussel Lambert, Fortis Bank and KBC Bank on presentation of coupon no. 4.

(1) Gross dividend in relation to the share of the Group in the consolidated result

63


Annual Report 2001