RECTiCEL Business Report FY2008

Business Highlights

Financial overview
(in million of euro) FY2008 FY2007 Rate of change(%) Factors
Sales 1,555.4 1,611.8 (3.4) -
EBITDA 108.8 122.0 (10.8)
Sales 474.2 490.4 (3.3) (See below)
EBITDA 50.1 40.6 23.4

Factors in the Automotive Division
-In SEATING (Proseat – the 51/49 joint venture between Recticel and the Canadian group Woodbridge), sales rose by 7.3% to EUR241.5 million. This rise is mainly attributable to the effect of the integration (within Proseat) (from July 1, 2008) of the entire participating interest in Indepol, a Spanish molded foam manufacturer in the Barcelona area. In addition, two additional months must be taken into account in 2008 as a result of the Woodbridge activities acquired in the United Kingdom by Proseat since March 1, 2007. Without these two integrations, sales would have fallen by 4.4%.
-The rise in sales during the first half of the year of INTERIOR SOLUTIONS (EUR196.3 million; -11.2%) proved impossible to sustain during the second half of 2008. With the exception of the activities in the Czech Republic and China, falls were recorded in all countries. Lower volumes are the reason for this. In the United States, sales were also still slightly negatively influenced by the further devaluation of the USD. The plant in Most (Czech Republic) is in the midst of the preparatory phase prior to the start-up of the new projects for the Mercedes E and Peugeot 408, among others. These projects are proceeding according to plan.

(EUR 36.4 million, -17.6%) was also not immune to the global malaise on the automotive market. In addition, the weaker US D still depressed the overall sales. This division's worldwide customer portfolio of polyurethane systems for car window encapsulation, together with the specialized polyurethane compounds, was sold at the end of 2008 to BASF for EUR38.2 million. This sale had no impact on the sales of the division in 2008.

-EBITDA of the AUTOMOTIVE business line rose by 23.4% to EUR50.1 million (including net non-recurring elements of EUR+27.0 million (2007: EUR+1.0 million)). These non-recurring elements include in particular;
(i) the capital gain on the sale of part of exteriors to BASF, and
(ii) restructuring costs
Disregarding these non-recurring elements, each sector nevertheless managed to generate positive EBITDA.

-Within SEATING (Proseat), its profitability fell substantially compared to 2007. The result was negatively influenced by the difficulties in launching a new plant in Santpedor (Spain), lower volumes in the German and Czech plants and restructuring measures in Germany and Spain, among other factors.

-The profitability of INTERIOR SOLUTIONS also declined under the impact of
(i) lower volumes from September 2008 as a result of the worldwide crisis in the automotive sector, and
(ii) a number of restructuring costs in Germany.

-The operating performance in the United States, although still negative, improved compared to the figures of previous years.

-The result of EXTERIORS was very favorably influenced by the net capital gain on the sale of the customer portfolio and the specialized polyurethane compounds to BASF. Without these capital gains, the results fell in line with the trends on the automotive market. In addition, the division also suffered from the weaker USD.


-Proseat (joint venture between Recticel and Woodbridge) signed an agreement for the takeover of all the shares of Indepol. In January 2005, Proseat acquired a 25% interest in Indepol. Indepol manufactures moulded foam seat components for the automotive industry (Seat, GM and Ford) and has an annual turnover of EUR 35 million and a workforce of 400. (From a press release on July 7, 2008)

-The Company sold its polyurethane (PU) compound business for car window encapsulation to BASF for EUR 38.2 million. BASF's acquisition comprises the compounds' business from the Company's Exteriors division in Europe, the USA and Asia. The Company's two production plants in the Exteriors division, in Wetteren (Belgium) and Auburn Hills (USA), are not included in the transaction. (From a press release on October 28, 2008)


R&D Expenditure
(in million of euro) FY2008 FY2007 FY2006


15.9 15.2 18.2

R&D Structure
-The Company has an International Development Center (IDC) in Watteren, Belgium.
-EURO 15.9 million was invested in R&D in 2008
-57.1% was allocated to research in the automotive sector.

Product Developments
Colo-Sense(R) dashboard skins
-The new generation of Colo-Sense(R)dashboard skins was launched. These new patented skins combine better touch and feel (haptic) properties with competitive pricing. On the basis of their better quality and the character of these products, various new contracts were concluded which will be started up in the course of 2009-2010.In this connection, the production capacity in Most (Czech Republic) was increased in 2008 for this reason.

Colofast Spray(R)

Research into further optimization of the production of dashboard and door panel skins in the Colofast Spray(R) process, with a view to avoiding a number of 窶詫ost' pieces of skin having to be punched out at a later stage.

Investment Activities

Capital Expenditure
(in million euro) FY2008 FY2007 FY2006


48.7 45.6 44.9
Automotive 21.0 13.6 15.4