2007 annual reportannual report 16 2007 2006 2005 2004 2003 1,804 1,608 1,303 1,399 1,222 0 500 000...
TRANSCRIPT
2 0 0 7 A N N U A L R E P O R T
4850-couv rapport 2007 GB:Mise en page 1 6/06/08 10:33 Page 1
Pho
togr
aphi
c cr
édits
: Sté
pha
ne R
amb
aud
- P
hilip
pe
Car
on -
Vér
oniq
ue V
edre
nne
- P
ierr
e B
rune
t -
Cor
bis
- G
etty
Imag
es.
4850-couv rapport 2007 GB:Mise en page 1 6/06/08 10:33 Page 2
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORTFINANCIAL INFORMATION
PATRICK BATAILLARDGroup Chief Financial Officer
Tel: +33 475 232 526Fax: +33 475 031 877
Shareholder’s Service Tel: +33 475 235 878Web site: www.norbert-dentressangle.com (browse FINANCE)
AUDITORSERNST & YOUNG AUDIT
Member of the Versailles Regional Accountants Association
CABINET ALAIN BONNIOT & ASSOCIESMember of the Lyon Regional Accountants Association
Appointed Auditors
GROUPE NORBERT DENTRESSANGLE
BP 98 - 26241 Saint-Vallier-sur-Rhône - France
RCS ROMANS 309 645 539
to th
Bringi
2
people closer
eir dreams
ng
3
19881979 199419799
28 yearsof growth
Creation of the Norbert Dentressangle
Company
Introduction to the Paris Stock Exchange
Secondary Market
4
92332
Turnover in millions of euros
2006 20071998 2002
* Pro forma turnover including theChristian Salvesen group
Transfer to the Paris Stock Exchange Primary Market
5
1 053
1 608
3 083*
647
In 2007 Norbert Dentressangle
its position in 2 domains:
Spain, the United Kingdom,
And acquired major market position
strengfresh, chilled and
frozen logistics,
66
Belgium and the Netherlands.
in:
thened
and pallet distribution
777
Packed goods and temperaturecontrolled transport
Distribution Transport
Transport of goods in bulk Total Logistics: 43%
Total Transport: 57%
Ambient and reverse logistics
Fresh, chilled and frozenlogistics
€ 894m
€ 248m
€ 616m€ 400m
€ 925m
Norbert
a major European
8
A full range of Transport and Logistic services
Warehousing area: 4,000,000 sq.m
Tractor units: 8,500Trailers: 9,300
2007 pro-forma turnover:
3.083 billioneuros
Employees: 29,631
370 sites in 14 countries
United Kingdom 24%France
54.6%
Other countries 4.8%
The Netherlands 2.9%Italy 3.5%
Spain 10.2%
GermanyBelgiumIrelandLuxembourgPolandPortugalCzech RepublicRomaniaSwitzerland
Geographical turnover split2007 12 month pro-forma based turnover
Dentressangle,
player
9
The People ininterdependent
a
and committed entre
10
who make
Red:
excellence daily reality.
preneurs
11
12
What could be more
CONTENTS14
16
18
20
22
24
26
34
44
54
56
88
136
141
2007 Retrospective
Growth of key consolidated figures for the Norbert Dentressangle Group
The Norbert Dentressangle Group on the Stock Exchange
The Group’s Management
The Norbert Dentressangle message
Interview with Jean-Claude Michel
Passion Rouge 2010
Logistics
Transport
2007 Financial Report
Executive Board Management report
Consolidated financial statements
Company financial statements
Draft resolutions
13
appealing than a world that makes life easier ...
2007 Retrospective■ March
Norbert Dentressangle purchased 6.6 % of the capital of Interbulk, a British company specialising in intermodaltank container transport.
■ October Inauguration of the hub at Tours (France).
■ DecemberNorbert Dentressangle won the European Commission’sRoad Safety Excellence Award for large companies andmultinationals.
Increase in Norbert Dentressangle’s shareholding ofNovatrans, a French company specialising in intermodaltransport.
Inauguration of the logistics hub in Valenciennes dedicated to Michelin as customer.
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
14
■ 14 DecemberNorbert Dentressangle acquires the Christian Salvesen group.
Christian Salvesen is a British company present in 6 countries: the United Kingdom, France, Spain,Portugal, Belgium and the Netherlands. It employs14,000 people and generates revenues of 1.3 billioneuros. Its business expertise is Transport and Logisticswith 2 strong specialities: pallet distribution and coldstorage logistics.
15
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
16
2007
2006
2005
2004
2003
1,8041,6081,399
1,3031,222
0
500
1,000
1,500
2,000
TURNOVERin millions of euros
0
20
40
60
80
100
20032004
20052006
2007
50.6
65
51.5
83.1(1)
79.8
OPERATING INCOME BEFORE GOODWILL (EBITA)
in millions of euros(1) includes exceptional VAT refunds on motorway tolls
Growth of key consolidated figures for the Norbert Dentressangle Group
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
17
20032004
20052006
2007 0
10
20
30
40
50
60
70
80
27.2
36.2
62.7
49.849.3
NET EARNINGS - GROUP SHAREin millions of euros
0
50%
100%
150%
200%
20032004
20052006
2007
25%
81%
61%
41%
158%
NET GEARING AS A PERCENTAGE OF EQUITY
0
1
2
3
4
5
6
7
8
2007
2006
2005
2004
2003
5.14
5.19
6.77
3.662.88
NET EARNINGS PER SHAREin euros
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
18
The Norbert Dentressangle Groupon the Stock Exchange
ALLOCATION OF THE CAPITAL AND VOTING RIGHTS
CAPITALAs at 29/02/08, the capital of the Norbert Dentressangle Group was valued at € 19,672,482 divided into9,836,241 shares with par value of € 2.
61.46%
29.35%
0.59%
5.55%
3.05%
Allocation of capital Allocation of voting rights
0.53%
17.90%6.75%
74.82%
On 29 February 2008 Number Numberof shares of voting rights
Dentressangle Family 545,646 1,091,292
Financière Norbert Dentressangle (1) 6,045,400 12,090,800
Employees 58,061 85,109
General public 2,887,020 2,892,644
Shares held by the Norbert Dentressangle Group 300,114 0
TOTAL 9,836,241 16,159,845
(1) The Dentressangle family wholly owns the capital of Financière Norbert Dentressangle.
Dentressangle Family
Financière Norbert Dentressangle (1)
Employees
General public
Shares held by the Norbert Dentressangle Group
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
19
Cours extrêmes
DIVIDENDThe dividend was € 1.10 per share for 2007, up 10% from that of 2006. The dividend will be paid on 3 June 2008.
TRANSACTION
Stock market data 2007 2006 2005 2005 published restated published
Jan. 2
007
Jan. 2
006
March 2
006
May 20
06
July.
2006
Sept.
2006
Nov. 2
006
Jan. 2
008
March 2
007
May 20
07
July.
2007
Sept.
2007
Nov. 2
007
0
5,000
10,000
15,000
20,000
2006 - 2007
Jan. 2
007
Jan. 2
006
Marc
h 200
6
May
2006
July.
2006
Sept
. 200
6
Nov. 2
006
Jan. 2
008
Marc
h 200
7
May
2007
July.
2007
Sept
. 200
7
Nov. 2
007
200
400
600
800
1,000
0
NUMBER OF SECURITIES TRADED (daily average)
CAPITAL TRADED (daily average in thousands of euros)
0
10
20
30
40
50
60
70
80
Jan. 2
007
Jan. 2
006
March 2
006
May 20
06
July 2
006
Sept.
2006
Nov. 2
006
Jan. 2
008
March 2
007
May 20
07
July.
2007
Sept.
2007
Nov. 2
007
2006 - 2007
2006 - 2007
Lowestshareprice (in €)
Averageclosingprice (in €)
Number ofsecurities
traded (daily
average)
Capital(daily averagein thousands
of €)
Highestshareprice (in €)
Norbert Dentressangle: FR0000052870-GNDStock market: Euronext ParisMarket: Eurolist Compartiment BMain index: CACMid 100Other indices: CACMid & small 190
Jan. 2006 54.70 48.01 51.57 15,031 770
Feb. 2006 53.00 51.00 51.82 4,715 244
Mar. 2006 55.60 51.10 52.65 5,653 298
April 2006 65.00 56.30 59.22 15,931 930
May 2006 61.00 53.50 57.62 14,541 827
June 2006 56.20 46.05 52.91 12,042 637
July 2006 57.50 50.60 54.95 10,849 596
Aug. 2006 58.20 53.95 56.20 2,029 114
Sept. 2006 62.80 55.05 57.38 6,910 400
Oct. 2006 66.50 62.55 64.92 11,552 747
Nov. 2006 70.50 64.05 68.11 5,181 353
Dec. 2006 72.90 65.65 68.64 5,180 358
Jan. 2007 70.00 62.00 66.35 3,864 256
Feb. 2007 72.95 63.10 67.86 3,364 230
Mar. 2007 72.40 62.15 66.45 8,689 596
April 2007 71.00 68.34 69.64 7,280 509
May 2007 73.79 68.83 71.20 5,969 420
June 2007 76.00 69.00 72.95 6,231 455
July 2007 77.00 69.60 72.66 3,586 260
Aug. 2007 77.00 70.05 73.31 4,457 326
Sept. 2007 78.92 72.00 75.45 4,965 373
Oct. 2007 89.50 74.81 83.36 7,041 581
Nov. 2007 83.00 73.16 77.20 9,393 720
Dec. 2007 76.01 73.14 74.96 8,458 634
Jan. 2008 61.44 58.34 59.43 8,395 498
Feb. 2008 57.48 55.49 56.01 9,334 522
Price on 31 December in € 71.5 69.00 49.74 49.74Number of shares on 31 December (1) 9,836,241 9,835,693 9,923,306 9,923,306Market capitalisation in €m 703.3 679 494 494Net earnings per share in € (2) 5.14 5.19 6.77 6.56Net dividend in € 1.1 1.00 0.89 0.89Distribution ratio in € (1) 21.4 19.8 13.6 14.1(1) Including treasury stock (2) After cancellation of treasury stock
AVERAGE CLOSING PRICE (in euros)
20
THE SUPERVISORY BOARD
From left to right:Pierre-André Martel - Bruno Rousset - François-Marie Valentin - Henri Lachmann - Evelyne Dentressangle / Vice-chairman - Norbert Dentressangle / Chairman
The Group Governance
21
From left to right:
Hervé MontjotinTransport Division Executive Vice President Aged 43 / Ecole Normale Supérieure. ESCP MastersJoined the Group in 1995. Human Resources Manager from 1996 to 2001.Member of the Executive Board since1998. General Manager in charge of Organisation and Human Resourcesfrom 2001 to 2005.
Jean-Claude Michel Chief Executive Officer Aged 55 / EM Lyon.Joined the Group in 1990 as GeneralGoods Divisional Director. Appointed asGeneral Manager of the Group in 1994.CEO since 1998.
François Bertreau Logistics Division Executive Vice President Aged 54 / ESCP / MBA INSEAD.Joined the Group in 1998 as Logistics Divisional Director. Member of the Executive Board since 2002.
Patrick Bataillard Group Chief Financial Officer.Aged 43 / EM LyonJoined the Group in 1998 as Group’s Finance Controller. Transport DivisionFinance Director from 2000 to 2001.Member of the Executive Board since2001.
THE EXECUTIVE BOARD
Logistics Division Transport Division
LOGISTICS TRANSPORT
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
22
A message from Norbert Dentressangle
The history of the Norbert Dentressangle Group has been marked
since its creation in 1979 by a succession of entrepreneurial
challenges in transport and logistics, all faced with great success.
Over the course of the years and with successive development plans,
our Group has proved its capacity to achieve strong growth in its
activities while still maintaining a level of profitability consistently
above the sector average in Europe.
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
23
The “Norbert Dentressangle” brand, embodying our entrepreneurial culture and profession and our values forcommitment, excellence, and unity, has been considera-bly strengthened and today shines its light across Europewell beyond the single market sector of transport and logistics. The three years of “Challenge 2008”, characterised bysteady organic growth, successful external growth in ourtransport and logistics operations, a brave commitmenttowards sustainable development and by a healthy andsolid financial situation, have further consolidated theGroup’s position.I am also anxious to highlight how, during this period, ourGroup strengthened its capital and its human resource potential: motivated and committed teams who enjoy mycomplete confidence.So conditions came together for me in 2007 to acceleratethe speed of development of the Norbert DentressangleGroup and engage ourselves with the purchase of Chris-tian Salvesen, an opportunity for large-scale externalgrowth, resulting in doubling the size of the Group,strengthening its leadership in Europe in its two businessdomains while widening the range of services it offers.In reality, Christian Salvesen demonstrated all the quali-ties of an interesting target for our Group in our wish tocross a significant growth plateau. An historic actor in thetransport and logistics sector in Great Britain, of a com-parable size to our own Group, Christian Salvesen, quotedin the London markets, enjoys considerable fame and isreputed for its expertise.Additionally, we share with the Christain Salvesen teamsfamily origins and a common corporate culture. Thanks to these similarities, to the recognition of ourGroup in Europe and to the confidence of our financialpartners and our environment, we have been able to successfully engage in an amicable union with the supportof the Christian Salvesen Board and to give birth to thefourth largest transport and logistics group in Europe.Far from being an end result, the Christian Salvesen acquisition represents a first strategic step towards our global ambition.The economic consensus regarding transport and logisticsis that the volume of transported goods will continue togrow significantly and regularly during the next 20 years. And this will occur because of the emergence of new
economic powers, the acceleration of world trade, and alsoas a result of the distance between the manufacturing andthe consumer markets.There are as many growth factors for the volume of goodsto be transported as there are complexities in the trans-port streams to be organized and managed. With this in mind, our Group is confirming its role to assist its clients with their development by progressivelyequipping itself with the means to offer them efficient andcompetitive solutions to manage the global flow of goods.As a first step in this direction, the acquisition of Christian Salvesen brings together all the skills necessaryto continue to feature among the leaders in the Europeantransport and logistics market and to become the referencecompany in the profession. Our solid foundations and our powerful and common entrepreneurial values have forged our past successes.Even more so today, they constitute our key success factorsby inspiring each of our co-workers in their daily activities.The Norbert Dentressangle Group, strengthened by some14,000 new talented individuals who now share our global ambitions, is committed to take up a new challengeand to make a success of the integration of Christian Salvesen as soon as possible.
Norbert DentressangleChairman of the Supervisory Board
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
24
How would you evaluate 2007?
In 2007, the success story of the Norbert DentressangleGroup took a great leap forward. Not only are we on trackwith the objectives that we had set in 2005 as part of our“Challenge 2008” business plan, but, in terms of our exter-nal growth ambitions and with the acquisition of ChristianSalvesen on December 14th, 2007, we have far exceededthem. It is thanks to the acquisition that our Group doubledin size, becoming the 4th largest European operator in thetransport and logistics market.
What have you accomplished with Challenge 2008?
With Challenge 2008, we set ourselves three major objec-tives: strong growth in our activities, in particular in the in-ternational markets, better economic performance with anoperating margin close to 5% of turnover, and finally com-mitment to sustainable development in the daily operation of our transport and logistics activities.Revenues grew 12.2% in 2007 to € 1,894m with internalgrowth of 8.6% being in line with our goals.Net operating income before goodwill (EBITA) grew15.3% and achieved an historic level of 4.6% of turnovercompared to 4.3% in 2006 (excluding VAT refunds onmotorway tolls).The Transport Division registered growth of 12% on turnover and an improvement in operating margins. As aresult, net operating income in 2007 before goodwill(EBITA) amounts to 3.9% of turnover compared to 3.6 %in 2006 (excluding VAT refunds on motorway tolls). Overthe Challenge 2008 period, the Transport Division widened its network in central Europe and consolidatedits positioning as a transport organiser.Turnover for the Logistics Division increased 12.6%. Netoperating profits before goodwill (EBITA) on a like-for-likebasis reached a new record, being 5.7% of turnover compared to 5.5% in 2006. These results attest to theoutstanding operational mastery of the Logistics Division
as well as to the deployment of innovative new technical solutions for stock management and order preparation. The Group pursued its policies regarding sustainable development by recording progress along the four axes ofits commitments -reduction of greenhouse gas emissions,control over road risks, environmental site management,and social integration and promotion. Acquisitions of holdingsin Interbulk (6.6%), the English company specialising inintermodal container tank transport, and in Novatrans(15.3% on March 1st, 2008) also illustrate the involve-ment of the Group in alternate methods of transport. Regarding the measures undertaken for sustainable deve-lopment, with Challenge 2008 our Group became theFrench transport and logistics operator of referenceamongst institutional and key account customers.
How does Christian Salvesen constitute a goodopportunity for the Norbert Dentressangle Group?
We very quickly realised that Christian Salvesen presentedsignificant complementary characteristics for our Group -professionally, geographically and culturally. In addition,this large organisation brought with it considerable physi-cal presence in the United Kingdom, Spain, Portugal, theNetherlands and Belgium. In terms of know-how, the chief expertise of Christian Salvesen in chilled and frozen logistics and pallet distri-bution are ideal additions, enabling us to round out and infact complete our range of services.Finally, the two groups share a common entrepreneurialculture stemming from a family-based business, with thecentral focus always squarely targeted on customer servicequality and an on cost control.
What position does the Norbert Dentressangle Group occupyin its market today? With 2007 like-for like turnover of 3,083 billion euros, ofwhich nearly half was realised outside of France, and
Interview with Jean-Claude Michel
“In 2007, the success story of the Norbert Dentressangle Group took
a great leap forward. Our Group doubled in size and we became the
4th largest European operator in the transport and logistics market.
Meeting the challenges and keeping our commitments are the key
elements of our corporate culture which motivate every one of our
employees.”
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
25
29,631 employees including some 15,130 located outsideof France, the Norbert Dentressangle Group became thefourth largest transport and logistics operator in Europe,a Group with a very international profile and superbly po-sitioned for the challenges of the European markets.For each of its key activities, transport and logistics, ourGroup is developing a complete range of services for ma-nufacturers and large distributors, with significant posi-tions in ambient logistics, frozen store logistics, palletdistribution, packed and temperature controlled goodstransport and in bulk products.
In 2008 you are launching a new three-year business plan;what are your key goals?
By launching this new business plan, Passion Rouge 2010,we aim to become the transport and logistics Group ofchoice in Europe by ensuring all of our clients an optimalservice solution for the distribution of their productsacross all of Europe. Passion Rouge 2010 is therefore a key step in the deve-lopment of the Norbert Dentressangle Group and thesmooth integration of Christian Salvesen constitutes one ofthe major challenges. Bolstered by our new talents, we have to maintain a strongdynamic of internal growth and to deploy all of our trans-port and logistics services in every European country du-ring the next three years.Over these three years of Passion Rouge 2010, our newEuropean dimension coupled with the internationalisationof our policies and procedures in key areas such as pur-chasing and human resources, will bear fruit.By respecting our grass-roots and by deepening our com-mitments towards sustainable development, we have theambition to raise turnover to 4 billion euros and to achievean operating margin of 5%.
Passion Rouge 2010 is a new ambitious challenge for theteams of the Norbert Dentressangle Group. Meeting thechallenges - keeping the commitments which motivateevery one of our employees – these are the key elementsof our corporate culture.
Jean-Claude MichelChief Executive Officer
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
26
The new three-year
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
27
business plan of the Norbert Dentressangle Group
PASSION ROUGE 2010
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
28
Passion Rouge 2010 is a fundamental changeWith the purchase of Christian Salvesen, the Norbert Dentressangle Group has opened a new dimension.Passion Rouge 2010, developed in conjunction with this new range of activity, gives priority to internal growth:• by giving Group customers access to the entire range of Norbert Dentressangle services throughout Europe,• by bringing all employees up to speed with the best practices: commitment to sustainable development, customised
offers, Human Resource policies, innovation, cost reduction, and brand name promotion.
Structuring the organisation into its key professional specialities - Transport and Logistics, the Group has maximisedits efficacy. It will stay this way.
Passion Rouge 2010 will provide the Norbert Dentressangle Group with the expertise and excellence which is the verycore of its values and is at the heart of the expectations of its customers. This is why the Group will be aiming for a turnover of 4 billion euros with an operating margin of 5%.
All your Norbert Dentressangle in everycountryPRIORITY GIVEN TO INTERNAL GROWTHPassion Rouge 2010 is first and foremost a business plan forinternal growth.Having strengthened its range of transport and logistics services,having acquired a strong presence in several European countries,the Norbert Dentressangle Group has major advantages to offer.These will meet the expectations of its customers and willmaintain an annual internal growth rate of around 6% to 8%.
DEVELOPMENT OF THE EUROPEAN NETWORKThe Norbert Dentressangle Group now occupies major positionsnot only in France, but also in Spain, the United Kingdom, Italy,the Benelux and several Eastern European countries. The qualityand density of this European network constitute critical leverageto increase the strength of all its activities in every country.
ENLARGING THE RANGE OF SERVICESWith the integration of Christian Salvesen, the NorbertDentressangle Group has brought in top expertise in twospecialties:• chilled and frozen logistics• pallet distribution.
The Group has similarly acquired extremely useful know-how inthe field of reverse logistics.The aim being to knit together a European network offering thecomplete range of Norbert Dentressangle services in each of thecountries where the Group has a presence.
PASSION ROUGE
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
29
Reinforcing the uniqueness of the Norbert DentressangleGroup
MADE-TO-MEASURE OFFERINGS The commercial policies of the Group rely on the conception andimplementation of customised solutions for Transport and Logistics,meeting its customers’ performance expectations. A positioning thatis well-demonstrated on the ground with excellent control overtransport resources.
INNOVATIONTransport and logistics are congested markets. The quality ofcustomer relations and the creation of added value rely first andforemost on the capacity of the transport and logistics serviceprovider to propose innovative services.At Norbert Dentressangle, innovation is not restricted to thecommercial proposal. It is a key factor for progress in every fieldwithin the organisation: productivity, purchasing, and even in theday to day operational processes.
COST REDUCTION In the fields of Transport and Logistics, every detail counts -strict and timely execution make all the difference. Which is whythe Group is just as attentive to cost reduction as it is toenhancing the service offerings.
THE “NORBERT DENTRESSANGLE” BRANDThe Norbert Dentressangle brand constitutes a determining factorin the market - a factor which the Group intends to maximise fully.Employees are the front line of the brand’s representation: theirattitude and behaviour make them genuine ambassadors.Vigilance from everyone will be a permanent feature to ensure thatthe expression of the “Norbert Dentressangle” brand remainsalways as high as the ambitions and values of the Group.
2010
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
30 PASSION ROUGE 2010
As a pioneer in its commitment, Norbert Dentressangle intends toremain as the leader in this field. In each of our professions, it isthe daily activities of the Norbert Dentressangle teams that makethe difference and give substance to the principle of sustainabledevelopment. Which is why the Group’s 4 commitments on thissubject were chosen to be directly linked to the reality experiencedby every employee in the daily execution of their activities.For each of these commitments, an indicator and objective havebeen clearly defined.
All Group employees throughout Europe are implicated.
The challenge of the next 3 years is the dissemination of “sustainabledevelopment” practices and their adoption by every employee inany domain and in every country where the Group operates.
In addition, the Norbert Dentressangle Group has been recognisedas a distinguished contributor on matters relating to sustainabledevelopment in Transport and Logistics by institutions such as theFrench Environmental and Energy Management Agency(ADEME), the European Union, and even some large industrialgroups.In the 3 years ahead, the policy of maintaining the position as aprivileged partner on matters relating to this topic will be extendedright across Europe.
Sustainable developmenton a day-to-day basisthroughout Europe
Reduction of greenhouse gas emissions
Volume of CO2 emissionsper transported tonne/km
Number of km coveredby a driver without beingresponsible for an accident with a third-party
Number of sites underenvironmental management
Rate of internal promotion
50g/T/km
550,000 km
100% of sites
60%
COMMITMENTS INDICATORS OBJECTIVES
Road Safety
Environmental management of sites
Integration and internal promotion
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
31
Men and womenwho cultivate excellence
HUMAN RESOURCESIts people are the largest asset of the Norbert Dentressangle Group.In a service business, competitiveness depends directly upon themotivation of teams, their skills, and their command of thecompany’s goals.
The Group’s human resource policy primarily targets promotingthe growth of the entrepreneurial spirit amongst its people.The key elements of this policy, restated as part of the PassionRouge 2010 mission, are:
• participative local management,• employee commitment for growth and performance,• training that aims to augment employees’ expertise so that they
can enjoy the constant change that is part and parcel of theGroup’s transport and logistics businesses,
• internal promotions,• internal communications.
THE VALUES OF THE “PEOPLE IN RED”
ENTREPRENEURIAL SPIRIT In Norbert Dentressangle, each individual is an entrepreneur, driven by the desireto take on ambitious challenges and embodied in their sense of responsibility,appetite for performance and capacity to innovate. Day-to-day behaviour is basedon initiative, risk-taking and strict working practices.
UNITY In Norbert Dentressangle, individual advancement is directly linked to the successof the Group. Since challenges are met as a team, transparency, integrity andloyalty must be demonstrated by every individual.
COMMITMENTIn Norbert Dentressangle, each individual is actively involved in the realisation oftheir own goals and in meeting the challenges the Group has set itself. Eachindividual keeps their word. Difficulties and obstacles are seen as opportunitiesfor higher achievement.
EXCELLENCEAt Norbert Dentressangle, we aim for the summit of the mountain. Each individualis on the alert for the best way to accomplish a task and cultivates pride in a jobwell done. Being the best in their sector means constantly striving to improvepersonal skills.
PEOPLE AND PASSION RO
32
THE COMMITMENTS OF THE “PEOPLE IN RED”
TOWARD CLIENTSThe People in Red are commited to deliver the performance targets of theirclients. They are always ready to listen to their clients’ needs and to showhumility. The People in Red are accessible, reactive and innovative. They knowhow to adapt what they have to offer to the needs of their clients and strivedaily to win their loyalty and keep their trust.
TOWARDS SHAREHOLDERSThe People in Red honour their commitment to their shareholders. They striveto achieve top tier economic performance in their sector and provide truthfulinformation so that shareholders can evaluate risks accurately.
TOWARDS THE ENVIRONMENTThe People in Red are concerned by the common good. As such, they cultivatean attitude of responsibility in their profession and work to enhance thecommitment to sustainable development made by the Group on a daily basis.
TOWARDS FELLOW EMPLOYEESThe People in Red believe in good behaviour and set high standards forthemselves. They are always ready to help a colleague, share their passion fortheir trade and pass on their know-how. They actively seek out situations ofresponsibility and personal progress.
VALUESUGE 2010
33
A world of
34
35
LOGISTICS logistics solutions transcending space and time.
36
14,958 employees
Present in both ambient and
including 66% outside of France
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
192 logistics platformsin 9 European countries
A logistics service provider
Ambient and Reverse70% of turnover
37
frozen logistics markets
Employee distribution in Europe
Split by country
The United Kingdom 44%
France 34%
Czech Republic 1%Romania 1%Spain 9%
Belgium 3%Italy and Switzerland 2%
The Netherlands 5%Poland 1%
Belgium 8 50,000Czech Republic 2 35,000France 65 2,740,000Italy 15 285,000Poland 4 100,000Romania 1 30,000Spain 26 240,000Switzerland 2 45,000The Netherlands 5 290,000United Kingdom 64 740,000
Country Installations Warehousing area in sq.m
3,885,000 sq.m of warehousing area
with a European profile
Chilled and Frozen30% of turnover
The management committeeof the Logistics Division
Christophe Tchordjallian (1)Aged 41, France Commercial Director.
Gilles Favellet (2)Aged 55, Logistics Division Financial Director.
Jean-Luc Declas (3)Aged 47, Logistics Division Commercial Director.
Jean-Luc Bessade (4)Aged 41, Northern France Regional Director.
Thierry Ranson (5)Aged 47, Paris area Regional Director.
Gérard Martin (6)Aged 55, Orléans-Val de Loire area Regional Director.
Eduardo Galilea (7)Aged 41, Spain Managing Director.
Georges Laurent (8)Aged 47, Logistics Division IT Director.
Stéphane Point (9)Aged 44, UK Deputy Managing Director.
Richard Noël (10)Aged 53, Logistics Division Engineering Director.
38
1
2
3
4 5
67
8
9
10
39
Malcolm Wilson (11)Aged 49, UK Managing Director.
Dominique De La Cruz (12)Aged 58, South/Eastern France Regional Director.
Mauro Ungheretti (13)Aged 46, The Netherlands Managing Director.
Richard Cawston (14)Aged 34, UK Logistics Regional Director.
Marc Pastuzak (15)Aged 40, Poland Managing Director.
Ube Gaspari (16)Aged 48, Italy Managing Director.
Jean-Luc Fereyre (17)Aged 49, Central/Western France Regional Director.
François Bertreau (18)Aged 53, Logistics Division Executive Vice President.
Pascal Leroux (19)Aged 42, Central European Managing Director.
Frédéric Lavergne (20)Aged 50, Logistics Division Human Resources Director.
11 1213
14
15 16
17
18 19
20
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
40
LOGISTICSA response to every specificexpectation
A complete range of services to respond to the special requirements of ambient temperature logistics and frozenlogistics.
The logistics offers from the Norbert Dentressangle Group meetthe requirements of industrialists and supermarkets who want torefocus on their core businesses in order to better adapt to theinternationalisation of trade and specialisation in consumerexpectations.The Group’s ambition in logistics is to be a service and systemsprovider responsible for the flow of goods entrusted by clientcompanies and capable of optimising their supply chains. Supplychain management incorporates all procedures necessary topresent a finished product to the end-user.
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
41
AMBIENT TEMPERATURE LOGISTICS
• Delayed differentiation and Co-packing> simple assembly,
> kitting (assembly of up to 6 different components, in particularfor the mobile telephones sector),
> co-packing (for promotional batches),
> packing (film wrapping, made-to-order repackaging,boxing),
> labelling (in Braille, in all languages)
> samplings and Quality tests.
• Pre & post manufacturing• Order preparation• E-commerce logistics• Reverse logistics
With considerable expertise in the following sectors:> textiles
> foodstuffs
> consumer goods
> retailing
> white goods
> D-I-Y
CHILLED AND FROZEN LOGISTICS
• Delayed differentiation and Co-packing• Cross-docking• Delivery to points of sale • Reverse logistics• Support services• Quality controls• Aviation logistics
THE PRINCIPAL SERVICES OF THE NORBERT DENTRESSANGLE GROUP:
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
42
• WMS (Warehouse Management System)WMS is a software solution for warehouse management. It allowswarehouse inbound and outbound shipments to be tracked,including receipt, order preparation, dispatch and stockmanagement.
• TMS (Transport Management System)Developed by the Norbert Dentressangle Group, TMS is a softwaresolution for managing deliveries from their departure from thewarehouse. This software allows for deliveries to be organisedwith the best combination of sub-contracting/own fleet/express.According to the transport plan that has been selected, the filegoes back through the WMS filter: the delivery organisationdetermines the warehouse preparation plan.In the end, TMS makes it possible to control, trace and manage allthe information relating to the customer’s delivery.
• RMS (Replenishment Management System)RMS is used to manage stock replenishment. In practical terms,RMS is a concept for integrating tools and stages in the supply chainaimed at offering a full MSM service (Mutual Supply Management).
• RFID (Radio Frequency Identification Data) To guarantee its customers faultless traceability adapted to theirneeds, the Norbert Dentressangle Group has invested in RFIDtechnology for several years: advanced ID technology that usesradio frequency. The system makes it possible to improve thecustomer service levels by reducing location and preparationerrors and breakage ratios.At the same time, RFID increases competitiveness by reducinghandling costs. It also helps to minimise administrative costs, byreducing the frequency of required inventories and by disputeresolution.
THE IT SYSTEMS AND NEW TECHNOLOGIES OF THE NORBERT DENTRESSANGLE GROUPEngineering and control over IT systems and new technologies in the service of competitiveness and innovation for ourcustomers.
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
43
• Order preparation with voice recognitionThe Norbert Dentressangle Group has integrated voicerecognition technology into its order preparation process. Theresults: guarantee reliability, almost zero defects, and increasedproductivity. The voice recognition device allows the personpreparing an order to communicate using a hands -free unit in realtime with a voice server hosted on a computer. For each parcel,the computer informs the preparer of the quantities, pickingaddresses and product destination. The preparer uses hismicrophone to confirm the quantities picked for each order.
44
Transport solutions
45
TRANSPORT
serving business development.
46
Packed goods (including high-volume goods
and pallet distribution)
82%
Bulk products 14%
Temperature- controlled products
4%
14,673
France 64%
The United Kingdom18%
Spain 6%Germany 0.9%
Italy 0.1%Luxembourg 1%
Portugal 2%Poland 6%
Romania 2%
employees
A complete range of services
Innovation and commitment to results
Employee distribution in Europe including 36% outside of France
8,500 tractor units
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
A major European player in the
Turnover by marketbase: 1,757 million euros pro forma 2007
47
Pallet distribution 35%
Dedicated services and contract
distribution 14%
International groupage 4%
Domestic and international full loads
47%
Turnover by servicebase: 1,757 million euros pro forma 2007
supported by the control of resources:
175 sitesin 10 European countries
Czech Republic 1France 111Germany 1Italy 1Luxembourg 1Poland 4Portugal 5Romania 3Spain 26United Kingdom 22
Country Number of installations
Box-trailers 1,259Bulk powder tankers 1,065Chemical tankers 297Curtainsiders 5,388Flatbeds and container trucks 283Foodstuff tankers 24Hydrocarbon tankers 191Refrigerated semi-trailers 630Tippers 133TOTAL 9,270including 37% outside of France
transport market
Trailer fleet
Type of trailer Quantity
48
The management committee of the Transport Division
1
2
3
4
5
6
7
Emmanuel Saminada (1)Aged 46, Managing Director of the Distribution Business Unit.
Antoine Vermersch (2)Aged 49, Managing Director of the Northern area Business Unit.
Damien Chapotot (3)Aged 39, Managing Director of the Temperature-ControlledBusiness Unit.
Jérôme Burtin (4)Aged 47, Transport Division Commercial Director.
Frédéric Debus (5)Aged 54, Transport Division Financial Director
Hervé Montjotin (6)Aged 43, Transport Division Executive Vice President.
Peter Eglinton (7)Aged 39, Managing Director of the Norbert DentressangleTransport Services Business Unit.
49
8
9
10
11
12
13
14
Stephen MacDonald (8)Aged 58, Managing Director of the Norbert DentressangleGerposa Business Unit.
Michel Perrin (9)Aged 52, Transport Division Human Resources Director.
Henri Linière (10)Aged 47, Transport Division IT Director.
Yves Montignot (11)Aged 53, Managing Director of the Southern/Eastern EuropeArea Business Unit.
David Walkowiak (12)Aged 40, Managing Director of the Bulk Business Unit.
Daniel-Elie Létard (13)Aged 56, Managing Director of the Western Europe Area Business Unit.
Jacques Dauteuille (14)Aged 50, Managing Director of the Road Train Business Unit.
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
50
TRANSPORTOptimising our customers’supply chains
The Group maintains a resolutely different positioning in theEuropean transport market. Indeed, Norbert Dentressangleconsiders transport as a key factor in optimising and managing itscustomers’ supply chains. Our transport activities are developedin the service of a single goal: to be, for our customers, a leadsupply chain provider.
The Group therefore intervenes at every stage in the supply chain:transport and transport solutions for packed, bulk andtemperature- controlled products…
European Market Leader for the road transport of goods between Great Britain and the Europeancontinent with 168,000 Channel crossings in 2007, averaging about 660 per day.
NO
RB
ERT
DEN
TRES
SAN
GLE
2007
AN
NU
AL
REP
ORT
51
• transport solutions The Norbert Dentressangle Group is the single contact partnerof its customers for the management of all their transportneeds.
The new offering from the Group: the Key-PL® solution.
A transport solution driven by a made-to-measure IT systemand secured by the use of the transport capabilities of theGroup.
• domestic and international transport of full loadsThe Group organises transport of all type of productsthroughout all European countries.
• international groupageThe Norbert Dentressangle Group organises transportthroughout Europe starting from a single pallet.
• pallet distributionThe Norbert Dentressangle Group organises the palletdistribution for their customers in every country in theEuropean Union.
• outsourcing customer fleetsThe Group buys back and optimises the transport resources ofcustomers who have not externalised their transportmanagement.
• intermodal transportThe Norbert Dentressangle Group proposes intermodaltransport solutions that enable a permanent optimisation ofcosts and delivery schedules due to route planning for rail-river-sea-road transport. This transport planning makes surethat transport security conditions of hazardous goods arestringently observed and still significantly reduces fuelconsumption and greenhouse gas emissions.
• contract distributionThe Norbert Dentressangle Group dedicates a fleet of vehiclesfor the exclusive use of a particular customer.
• logistics on customer sitesThe Norbert Dentressangle Group manages logistics services onits customers’ industrial sites.
THE PRINCIPAL SERVICES OF THE NORBERT DENTRESSANGLE GROUP:
for the transport of bulkpowders in tankers
European Market Leader
52N
OR
BER
T D
ENTR
ESSA
NG
LE20
07A
NN
UA
L R
EPO
RT
INFORMATION FLOW MANAGEMENT.
Information flow management is one of the strengths of the NorbertDentressangle Group’s service offer. The associated services enable itto control the management of the flows of goods.
It was with this in mind that the Norbert Dentressangle Groupdesigned and introduced a completely secure information webexchange portal: “my.norbert-dentressangle.com” which is dedicatedto the management of Group customer supply chains.
These are its key features:• Computerised data exchange,• Online order monitoring,• Standard activity reporting,• On-line display of proof of deliveries,• Logistics partner management,• Supplier flow management.
for the transport of high-volume goods in road trains
European Market Leader
for the transport of packed goods
European Market Leader
53
54
2007 FINANCIAL REPORT
55
2007 ANNUAL REPORT
The 2007 consolidated financial statements of the Norbert DentressangleGroup are affected by the acquisition of the Christian Salvesen group, whichwas completed on 14 December 2007. As Norbert Dentressangle Group isthe sole owner of all shares in Christian Salvesen plc, the parent company ofthe acquired group, it is consolidated under the full consolidation method inthe Norbert Dentressangle Group financial statements as of that date.In terms of the income statement, consolidation of Christian Salvesen onlyaffects half of the month of December. In terms of balance sheet, ChristianSalvesen’s entire balance sheet is consolidated into the new entity’s net assetsas at 31 December 2007.
Change of consolidation methodWith a view to improving presentation of information and in accordance with
recommendation 2004-R02 of the Conseil National de la Comptabilité(French accounting standards board), dated 31 December 2007, NorbertDentressangle Group changed the presentation of the income statement andthe cash flow statement. In accordance with IAS8 and to ensure comparability of financial years, thecomparative data for 2005 and 2006 were adjusted to reflect this presentation.
The standards applied for the preparation of the financial statements for 2007and the comparative data for 2005 and 2006 are those published in theOfficial Journal of the European Union (JOUE) on 31 December 2007 andwhich are mandatory.
Consolidated income statement
The main headings of the consolidated income statement (with and without Christian Salvesen, following 14 December 2007) were as follows for 2007:
■ K€ 2006 2007 Consolidation Consolidation Changeearnings earnings excluding 14-31 dec-07 2007 2007/2006
C. Salvesen C. Salvesen earnings
REVENUE 1,607,905 1,756,454 47,887 1,804,341 12.2%
Underlying operating income 61,699 68,165 (508) 67,657 10%3.8% 3.9% 3.7%
EBITA PRIOR TO GOODWILL 83,088 80,315 (508) 79,808 (4%)EBITA as a % of revenue 5.2% 4.6% (1.1%) 4.4%
Goodwill impairment 3,144 3,144
EBIT 83,088 83,459 (508) 82,952 0%as a % of revenue 5.2% 4.8% (1.1%) 4.6%
Net financial items (6,581) (9,475) (233) (9,708)
NET INCOME Group share 49,792 49,822 (524) 49,300 (1%)as a % of revenue 3.1% 2.8% 2.7%
1.1 On a same consolidation basis (prior to the acquisition of ChristianSalvesen), revenue growth remained buoyant throughout 2007, up 9.2% over2006 including 8.1% organic growth. Actual revenues of € 1,756 millionexceeded the budget for the entire year.
Earnings before interest, taxes and amortisation (EBITA) amounted to € 80.3 million,€ 2.7 million down on 2006 EBITA, which was boosted by significantextraordinary gains, including € 13.8 million of VAT refunds on motorway tollfees, and € 3.7 million of capital gains on real estate.
Before extraordinary items, underlying operating income came in at € 68.2 millionrepresenting 3.9% of revenue and an increase over the 2006 figure of € 61.7 million.
EXECUTIVE BOARD MANAGEMENT REPORTFinancial year ended 31 December 2007
I - FINANCIAL POSITION OF THE NORBERT DENTRESSANGLE GROUP AS AT 31 DECEMBER 2007
56
57
2006 EBIT (Earnings Before Interest and Taxes) was identical to EBITA at € 83.1 million. 2007 EBIT was impaired by badwill from acquisitions relating to theacquisition of the ex- French subsidiary of the Beiersdorf group, which wasrendered necessary by a commercial logistics agreement with this customer.Following badwill of € 3.1 million 2007 EBIT came in at € 83.5 millionrepresenting 4.8% of revenue.
2007 net financial items, on a like-for-like basis prior to acquisition of ChristianSalvesen, was a net expense of € 9.5 million, broken down as follows:
- interest costs on finance leases: € 1.9 million- net liabilities/investments interest expenditure: € 6.8 million- gain on interest rate hedges: € 1.1 million- foreign exchange losses: € 1.5 million
The largest foreign exchange losses of € 0.812 million came from Groupsubsidiary ND Polska, which was hit by movements in the Polish Zloty.
2007 net income (prior to C. Salvesen) was 49.8 million, which is identicalto 2006 net income of € 49.792 million in absolute terms, representing a netmargin of 2.8% of revenue.
1.2 Given that Norbert Dentressangle Group was required toconsolidate Christian Salvesen group as from 14 December 2007(effective date of acquiring a controlling interest - the “scheme arrangement”was held by the Court of Edinburgh to be valid and effective as at that date),the 2007 Group consolidated income statement included 17/31ths ofChristian Salvesen’s income statement for December 2007.
As a consequence of this consolidation:
- Revenue was increased by € 47.9 million to € 1,804 million, up 12.2% over2006.
- Group EBITA and EBIT (earnings prior to and after goodwill) of € 79.8 million,representing 4.4% of consolidated revenue, were reduced by € 508,000 of losses.
- Group net income of € 49.3 million, representing 2.7% of consolidatedrevenue, was hit by a loss of € 524,000.
Overall, the impact of this acquisition was not therefore material in relationto the consolidated 2007 income statement. Clearly however, it had a majorimpact on the balance sheet as it will on the 2008 income statement due tothe “full year” effect of the acquisition.
Over 12 full months in 2007, the revenue and pro-forma EBITA for the full year of the new entity comprising Christian Salvesen and Norbert DentressangleGroup may be estimated as follows:
The EUR-GBP exchange rate applied for the pro forma data is the average rate for 2007 of 0.685.
■ K€ 01/01-31/12 01/01-31/12 01/01-31/122007 2007 2007
Norbert Dentressangle Croup C. Salvesen Pro forma
NET REVENUE 1,804,341 1,278,457 3,082,798Staff costs (531,233) (477,343) (1,008,576)Share of income/loss from joint venture 2 0 2Other expenses (income) and provisions (provision reversals) (1,117,553) (749,230) (1,866,783)Depreciation and amortisation charges (87,929) (28,421) (116,350)
EBITA 67,628 23,464 91,092
The reconciliation between underlying operating income and EBITA breaks down as follows:
■ M€ 2006 2007(Excluding C.Salvesen)
Underlying operating income 61.7 68.2As a % of revenue 3.8% 3.9%Restructuring costs (excluding TNT (*)) (4.7) (1.1)Capital gains on real estate 3.7 2.1Restructuring costs/TNT (*) (4.9) -Reversal of provisions /TNT (*) 13.7 11.1Capital gain on sale of LRF 0.6 -Expenses and impairment on acquisitions (0.9) -(Lombarda Logistica, SAVAM, VENDITELLI etc.)VAT receivable on Motorways 1996 to 2000 13.9 -
EBITA 83.1 80.3As a % of revenue 5.2% 4.6%
(*) this refers to the loss-making activities acquired from TNT group in December 2005
2007 ANNUAL REPORT58
Consolidated balance sheet as at 31 December 2007
The consolidated balance sheet of the new Group was significantly affected by the consolidation and the payment of the acquisition of Christian Salvesen inDecember 2007. The Asset/Liability summary set forth below shows the impact of consolidating Christian Salvesen :
■ ASSETS 2007 2007 2007 2006In K€ December December December December
New Group C. Salvesen Norbert DentressangleGroup
Goodwill 425,486 347,362 78,124 78,057Intangible assets 17,099 11,496 5,603 5,665Tangible assets 617,872 143,869 474,003 408,865Interests in associated companies 6,652 0 6,652 1,492Other non-current financial assets 21,412 (359,134) 380,546 19,335Net deferred tax assets 45,658 25,842 19,816 18,345
■ NON-CURRENT ASSETS 1,134,179 169,436 964,743 531,759
Inventories 17,454 9,116 8,338 7,390Trade receivables 533,872 206,057 327,815 330,103Other receivables 132,731 42,284 90,447 80,331Other current financial assets 19,475 18,529 946 1,425Cash and cash equivalents 220,708 46,791 173,917 255,706
■ CURRENT ASSETS 924,240 322,777 601,463 674,955
Non-current assets held for sale 455 0 455 717
■ TOTAL ASSETS 2,058,874 492,212 1,566,661 1,207,432
■ LIABILITIES 2007 2007 2007 2006In K€ December December December December
New Group C. Salvesen Norbert DentressangleGroup
Share capital 19,672 0 19,672 19,671Share premium 18,469 0 18,469 18,433Foreign exchange differences 818 (1,805) 2,623 760Consolidated reserves 249,273 (1) 249,274 208,561Net income for the year 49,299 (521) 49,820 49,792Minority interests 0 0 0 0
■ SHAREHOLDERS QUITY 337,532 (2,329) 339,859 297,217
Long-term borrowings 479,873 11,371 468,502 198,397Long-term provisions 95,278 67,221 28,057 51,224Deferred tax liabilities 61,575 21,990 39,585 37,065
■ NON-CURRENT LIABILITIES 636,726 100,582 536,144 286,686
Short-term provisions 42,244 25,626 16,618 11,796Trade payables 373,792 93,732 280,060 238,980Short-term borrowings 200,706 91,091 109,615 120,169Bank overdrafts 73,332 8,945 64,387 58,609Current tax payable 7,969 880 7,089 4,919Other accounts payable 386,574 173,692 212,882 189,056
■ CURRENT LIABILITIES 1,084,616 393,964 690,652 623,529
■ TOTAL LIABILITIES 2,058,874 492,218 1,566,654 1,207,432
59
Fixed assets increased by € 433 million between 31 December 2006 and 31 December 2007, mainly due to:- significant capital expenditure in vehicle fleets in 2007 within the Group’s
historic activities.This capital expenditure increased tangible fixed assets by € 75 million.Total capex, net of disposals, was € 123 million in 2007 (excluding companyacquisitions in the year and fixed asset payables), up from € 80 million in2006.- consolidation of the Christian Salvesen group which added € 349 million to
consolidated balance sheet assets in respect of goodwill on acquisition whichwas provisionally assessed in view of the short period prior to the balancesheet date. A final valuation shall be made within 12 months from the dateof acquisition pursuant to the “window period” provided for under IFRS 3.The consolidation of Christian Salvesen group also increased consolidatedtangible and intangible fixed assets by € 156 million.
It should be noted that this goodwill is denominated partly in euros and partlyin sterling. The sterling portion represents £ 69 million, which is linked to the£ 55 million of borrowings on acquisition (partial drawdown) and the £ 7 million of acquired shareholders’ equity. As forecast, as at the launch of thetakeover bid, this goodwill on acquisition represents virtually the entireacquisition price (€ 350 million out of a total price of € 359 million as at thedate hereof).
Working capital of the new group amounted to - € 84 million as at 31 December 2007, a sharp decrease of € 69 million as compared to 31 December2006 of - € 15 million including the following items: - an improvement of € 58 million in the Group’s historic activities that is
largely due to a € 47 million reduction in operating working capital, largelydue to a reduction in customer days outstanding (53.1 days on average as at31 December 2007)
- negative working capital of € 11 million due to Christian Salvesen at the timeof its first consolidation.
Net assets amounted to € 337.5 million as at 31 December 2007 includingforeign exchange losses of € 1.8 million attributable to the fall in the sterlingexchange rate at the end of 2007 on the Christian Salvesen acquisition whichwas posted to reserves.
Long term and short term provisions amounted to € 137 million as at 31 December 2007. This reflects strong growth in view of the ChristianSalvesen acquisition, given that provisions are stated after the estimated loss ofthe UK pension fund of £ 46.6 million (€ 62 million) as at 31 December.
■ In M€ 2006 2007 GND CSDecember December
CURRENTShort-term borrowings 113 192Finance leases 5.2 7.6Miscellaneous borrowings 0.9 0.3Employee profit-sharing 1 0.7
TOTAL CURRENT 120.2 200.6 109.2 91.4
NON-CURRENTShort-term borrowings 170.6 438.7Finance leases 23.2 30.7Miscellaneous borrowings 1 5.2Employee profit-sharing 3.5 5.3
TOTAL NON-CURRENT 198.4 479.9 468.2 11.7
■ TOTAL DEBT 318.5 680.5 577.4 103.1Investment securities 178.4 83.1Available cash 77.3 137.6 Cash at bank (58.6) (73.3) (64.4) (8.9)
■ NET CASH 197.1 147.3 109.5 37.8
■ NET BORROWINGS 121.5 533.2 467.9 65.3
The acquisition, which was partly funded by € 142 million in cash, clearlyhad a major impact on net consolidated borrowings. The Group also drewdown € 207 million from the credit facility of the syndicated bank pool(including a portion not yet transferred representing “loan notes” issued tothe former shareholders of Christian Salvesen who did not wish to receive theproceeds from the sale of their shares immediately). Furthermore, as at 31 December 2007 Norbert Dentressangle Group
consolidated a total net additional debt from Christian Salvesen of € 65 million. As at 31 December 2007, net borrowings therefore amountedto € 533 million, representing 1.58 times consolidated shareholders’ equity.Disregarding the acquisition of Christian Salvesen, borrowings would havebeen lower than the € 121 million as at 1 December 2006, i.e. gearing of lessthan 35%, despite the high 2007 capital expenditure.
2007 ANNUAL REPORT60
The cash flow statement shows that for equivalent net income in 2007 ascompared to 2006:
- The operating cash flow amounted to € 135 million, comprising:• € 20 million derived from Christian Salvesen (including a working capital
increase of € 31.7 million from 14 to 31 December 2007, during whichsuppliers were paid on time whereas practically no trade receivables werereceived),
• operating cash flow of € 163 million from the Group’s “historic activities”(prior to Christian Salvesen), up from 2006 operating cash flow of € 160 million,which includes a working capital reduction of € 45 million (excluding fixedasset payables of € 11 million).
- Capital expenditure net of disposals amounted to € 123 million over theyear, of which fixed asset payables of € 11 million as at 31 December 2007should be deducted. This capex largely reflects sharp growth in the numberof vehicles used in Norbert Dentressangle Group’s “own fleet”.
- Over 2007, € 369 million of investment securities were purchased, of which:• € 357 million for Christian Salvesen securities acquired immediately
(including previously funded loan notes of € 45 million included in groupdebt),
• € 11 million regarding other acquisitions in the year: ND&L (ex EDA), theBeiersdorf Logistics shares, 6.6% of Interbulk and finally € 0.7 million ofNovatrans shares (together with other purchases at the beginning of 2008).
- Financing cashflow amounted to an inflow of € 221 million, of which € 207 millionreflects a drawdown on the facility from Société Générale to finance thepurchase of Christian Salvesen. As at 31 December 2007, the “Tranche B”revolving loan had not been used. It was drawn in part in January 2008 torefinance Christian Salvesen’s prior “revolving facility”. Likewise, “TrancheC” intended to fund any loss of the UK pension fund has not been drawnfor the time being.
- Overall, the change in cash over the year therefore comes to an outflow of € 50 million (after an inflow of € 38 million from Christian Salvesen cash).
Over 2007, the “historic activities” of Norbert Dentressangle Group thereforeconsumed cash amounting to € 88 million, it being specified that € 142 million were applied to the acquisition (in part) of the ChristianSalvesen securities.As at 31 December 2007, available cash in the new group amounted to € 147 million.
Financial consequences of the acquisition of Christian Salvesen
In addition to the impact on the consolidated income statement, balancesheet and cash flow statement, Norbert Dentressangle Group was obliged totake the following steps, as described above:
- draw down part of its acquisition loan as from 18 December 2007amounting to € 207 million as at 31 December 2007, including £ 55 millionin interest-bearing payables in that currency,
- use part of its available cash of € 142 million.
In 2008, the Group expects to make additional purchases of securities not yetissued as at 31 December 2007 (stock options) for an estimated priceequivalent to € 4 million.
In light of the Group’s new debt, the change in the main balance sheet ratios was as follows:
2006 summary 2007 published proforma 2007Norbert Dentressangle Norbert Dentressangle Norbert Dentressangle
Group Group Group+ C. Salvesen + C. Salvesen
(12 months)
Gearing ratio 41% 158% 158%Net final debt/Net assetsInterest Cover 13 10.1 4.0EBITA/Net Interest Leverage ratio 0.8 n/a 2.7Net final debt/EBITAROCE 14% 15% 11%EBITA/Average capital employed (excluding VAT/motorwaysROE 14% 15% 20%Net income /Net assets
The Gearing ratio, the Interest Cover and the Leverage ratio were addressedin bank covenants relating to the acquisition loan implemented at the end of2007 to allow the purchase of the Christian Salvesen securities.
ROCE (EBITA on average capital employed) significantly deterioratedfollowing the acquisition, in light of the substantial capital employed (over € 1 billion as at the end of 2007) following the acquisition of Christian Salvesen.
ROE (Return On Equity) remained high in light of the rise in absolute termsof net income, with net equity that remained low in relation to the size of thenew group created following the acquisition of Christian Salvesen.
61
Operational results of the two divisions
Breakdown of revenue, underlying operating income (before extraordinary items), and EBIT between the two business divisions was as follows for the year ended31 December 2007:
■ CONSOLIDATED DATA IN K€ 2007 2007 2007 2006New Group C. Salvesen Norbert Dentressangle Norbert Dentressangle
Group Group(historic activities)
■ REVENUE (PUBLISHED) 1,804,341 47,887 1,756,454 1,607,905
Underlying operating income 67,628 (508) 68,164 61,6983.7% n.r. 3.9% 3.8%
EBITA 79,808 (507) 80,315 83,0884.4% n.r. 4.6% 5.2%
EBIT 82,952 (508) 83,460 83,0884.6% n.r. 4.8% 5.2%
■ TRANSPORT DIVISION IN K€
■ REVENUE (PUBLISHED) 1,129,050 20,581 1,108,514 1,008,147
Underlying operating income 38,873 (218) 39,091 35,4003.4% n.r. 3.5% 3.5%
EBITA 42,895 (218) 43,113 49,9503.8% n.r. 3.9% 5.0%
EBIT 42,895 (218) 43,113 49,9503.8% n.r. 3.9% 5.0%
■ LOGISTICS DIVISION IN K€
■ REVENUE (PUBLISHED) 675,291 27,306 647,940 599,758
Underlying operating income 28,782 (290) 29,072 26,3004.3% n.r. 4.5% 4.4%
EBITA 36,911 (290) 37,201 33,1385.5% n.r. 5.7% 5.5%
EBIT 40,056 (290) 40,346 33,1385.9% n.r. 6.2% 5.5%
This summary table highlights the following:
- Growth in the Transport Division was buoyant (up 12% in 2007, including€ 21 million in respect of Christian Salvesen and 9.8% organic growth); astable underlying operating margin between 2006 and 2007 representing3.5% of revenue for the Group’s historic activities; finally a reduction inEBITA (€ 42.9 million down from € 49.9 million in 2006) due to the non-recurrence of a € 13.8 million VAT refund on motorway toll fees in 2006.
- Within the Logistics Division, growth in 2007 revenue was also 12.6%(including € 27 million from Christian Salvesen for the period from 14 to 31 December 2007), and including 5.3% organic growth. The underlyingoperating margin remained high and improved in respect of the Group’s
historic activities from 4.4% in 2006 to 4.5%. EBIT on the Group’s historicactivities peaked at a record 6.2% of revenue, and 5.9% including ChristianSalvesen. In addition to the strength in underlying operating income, theseresults were also boosted by a € 10.6 million reversal of provisions recordedwhen TNT’s loss-making activities were taken over (offset aside to cover underlying risk and to fill two warehouses’ during 2007). As at 31 December 2007, the outstanding balance of these provisions forcontingent and certain liabilities recorded when said activities were takenover, amounted to € 20 million.
2007 ANNUAL REPORT62
• Transport Division
Revenues With like-for-like organic growth of 9.8% compared to 2006, the TransportDivision posted strong growth in spite of a downturn in business in its marketfor the second half-year, particularly during summer 2007.
Half of the organic growth, which was twice that of 2006, is due to price rises.The vehicle fleet grew 8%, which is slightly lower than the increase inrevenues.
The features of this organic growth are as follows:
• A continued upward trend in the “Transport solutions” activity in excess of15% to € 366 million accounting for 33% of total revenues; 97% ofrecurring revenues were renewed in 2007;
• Significant growth of the “contract distribution” activities amounting to € 229 million;
• Stable revenues from a Distribution activity, amounting to € 99 million (+ 5%);
• Revenues from the Warehousing activity amounting to € 36 million;
• Stable revenues from the “International groupage” activity amounting € 70 million;
• Revenues from the “Full loads” activity amounting to € 694 million (+ 8%),i.e., 62% of the aggregate revenues (more than half of this revenues beingfurthermore included within the “Transport solutions” activity).
Finally, 2007 saw an increase in the company’s offers, including in particularthe “KEY PL” offer, a new generation of transport solutions allowing wideroffers to be made and the possibility to use the Group vehicle fleet as abackup (thus requiring specific investment in IT equipment for the NorbertDentressangle Transport Management System, the target date for launchbeing scheduled for early 2008 on the basis of two major client files).
Over FY 2007, the 30 most significant clients generated 35% of revenues,whereas the main client of the Division generated 2.1% of the Group’sconsolidated revenues.
EarningsIn 2007, EBITA for the Transport Division amounted to € 43.1 million (that is3.9% of revenues);
These earnings show a € 7 million increase as compared to 2006 (Operating incomefor 2006 amounting to € 36.5 million [excluding the one-off € 12.3 million positiveimpact of VAT on motorway toll fees], i.e. 3.6% of revenues).This improvement in performance with respect to 2007 is mainly due to:
• a 4% increase in sale prices (net of the impact of fuel price rises),
• an appropriate transfer of the cost of fuel, which increased by 3% over the year,
• proper control of our variable costs,
• a significant reduction in structure costs through growth of revenues,
• capital gains on sales of transport equipment that largely exceeded thosederived in 2006, within the framework of an especially active second handvehicle market,
• an operating margin that still failed to meet our expectations in respect of thevehicule fleet operated in Poland,
• an unsatisfactory level of business over the month of December.
Finally, across all of its departments, the Transport Division continued toshorten client payment periods.
Human resources/ManagementIn connection with the acquisition of the three Christian Salvesen TransportBusiness Units (representing additional revenues of approximately € 660 million):
• A new Administrative and Financial Manager was hired and joined theFinancial Management of the Transport Division
• The Sales Management Department for France was expanded,
• As regards Road Safety, the “Safe Driving Plan” was maintained and evenimproved.
Regarding Employment issues, the following should be noted:• Wage negotiations in Poland and Romania will lead to a higher rate of wage
inflation in 2008 in these countries than in Western Europe,
• A number of employment contracts were terminated during the last quarterof FY 2007 and in early 2008, in connection with the Salvesen acquisition.
• Logistics Division
FY 2007 was a good year for the Norbert Dentressangle Group Logistics Divi-sion. Revenues for the entire Division were € 675 million, i.e. a 12.6% growthas compared to the previous year, including 5.3% of organic growth. EBITA for the Division (prior to consolidation of Christian Salvesen) was € 37.2 million (EBITA for the previous year was € 33.1 million).
Within the framework of the “Challenge 2008” Business Plan which spannedFY 2005 to FY 2007, revenues grew by 1/3 over 3 years, and operating incomeremained above 5%.
FranceRevenues from the French activities of the Logistics Division grew from € 435 mil lion for the previous year to € 465 million.
Sales grew satisfactorily and several earlier contracts were renewed.
The proper conduct of operations on the various sites led to very satisfactoryprofitability, exceeding the average figure for the Division.
Reversals of provisions that had been recorded at the time of acquisition ofthe French loss-making activities from the TNT group in December 2005 andwhich were no longer needed had an impact on the above earnings figure.
International review Revenues derived outside France by the “historic” subsidiaries of ND Logisticsgrew from € 157 million for the previous year to nearly € 179 million in2007. The logistics business of the Norbert Dentressangle Group thereforecontinued to grow rapidly at the international level, and peaked at the end ofthe year with the acquisition of Christian Salvesen, a major player in theUnited Kingdom and Spain, which also exhibits strong market presence inBelgium and the Netherlands.
63
However, overall profitability in 2007 was reduced by reason of performancesin Italy, Spain and the United Kingdom that failed to meet forecasts.
Effective launch of the activity in Poland took place in July 2007, throughthe Michelin contract. Construction of a 2nd warehouse commenced at theend of the year for a Mail Order Company, and a 3rd warehouse is currentlybeing built. Handover of this warehouse to a new client is provisionallyscheduled for end 2008.Satisfactory profitability was noted in respect of this new subsidiary.
In Romania, we acquired EDA, the service provider of a major distributiongroup in that country. The high growth of this client’s activity grew and thecurrent warehouse changes have had an impact on our financial position.
• Change in consolidation scope:
The Group did not transfer any activity during the financial period ended in2007.
Acquisition of companies:On 23 March 2007, the Norbert Dentressangle Group acquired 80% of theRomanian logistics company Northern Distribution and Logistics. Thiscompany’s head office is in Bucarest where it manages two warehouses havinga total area of 21,400 sq.m, generating annual revenues of € 4.5 million. Inlight of the extensive logistics business that has already been developed inArad, Romania, the Group now has 50,000 sq.m of logistics warehouse spacein that country.The Group granted a put option in respect of the 20% interest held by theminority shareholders, and in accordance with applicable standards and withthe terms and conditions of implementation set at Group level, this minorityshareholding has been recorded as financial debt.This company’s earnings were consolidated by applying the full consolidationmethod as of 23 March 2007.The positive goodwill on this acquisition amounted to € 1.851 million.
On 28 February 2007, in connection with the outsourcing of the BeiersdorfGroup’s industrial logistics in France, the Norbert Dentressangle Group alsoacquired the entire share capital of Beiersdorf Logistics France, whichsubsequently changed its name to ND BL.The earnings of this company were consolidated by applying the fullconsolidation method as of 28 February 2007.The negative goodwill on this acquisition amounted to € 3,144,000.The Norbert Dentressangle Group resolved to subscribe for InterbulkInvestments plc’s share issue, in the amount of € 5,902,000. As a result of thistransaction which was completed on 10 April 2007, the NorbertDentressangle Group holds 6.6% of the share capital of the company listedon the AIM market in London.The Norbert Dentressangle Group thus became the first shareholder of thatcompany possessing experience in the field of transport and logistics, as thetwo main shareholders are financial investors. The Group is a member of theboard of directors of Interbulk Investments plc, which comprises 9 members.Furthermore the Group has entered into strong business relationships. This company was consolidated by applying the equity method.The earnings of this firm will be consolidated in the Group’s financialstatements proportionally to the earnings of the companies to which theequity method was applied subject to a 3-month offset in light of the date ofclose of accounts of Interbulk Investments plc.
Finally, on 14 December 2007, the Norbert Dentressangle Group hascompleted the acquisition of the entire share capital of Christian Salvesen Plc.
This acquisition was carried out pursuant to a Scheme of Arrangement,which was entered into further to a sale by mutual agreement, with support
both on the part of the board of directors and from a number of majorshareholders (including the Salvesen family). This acquisition wasunreservedly approved on 6 December 2007 by the European Commissionpursuant to the EC Merger Regulation.
Christian Salvesen Plc has 14,400 employees and manages a fleet of 2,500tractors and 3,500 trailers. This Group manages approximately 1 millionsq.m of warehouse space distributed across 200 sites.
Christian Salvesen’s contribution to the Norbert Dentressangle Groupconsists of expert know-how and a significant position on the frozen andfresh product logistics and pallet distribution markets. Christian Salvesen’s presence in the United Kingdom, Spain and BeneluxStates strengthens the Norbert Dentressangle Group’s existing dominantpositions.
This strategic transaction, which is in line with Norbert DentressangleGroup’s growth targets, gave rise to a European leader in the transport andlogistics sector, with 29,631 employees, pro-forma revenues of € 3.1 billionin 2007, generated via 370 sites in 14 European States.
The Norbert Dentressangle Group acquired the entire share capital of theChristian Salvesen group. The earnings of this company were consolidated byapplying the full consolidation method as of 14 December 2007.
For the financial period ended as at 31 December 2007, the company’scontribution to the Group’s net earnings since its acquisition was a loss of € 524,000, the contribution to revenues was € 47,886,000 and thecontribution to total assets was € 238,916,000.The provisional positive goodwill recorded as at 14 December 2007, i.e. thedate of consolidation, was € 349,710,000.
• Human resources
As at 31 December 2007 the Norbert Dentressangle Group had 29,631employees.This figure is twice that recorded as at 31 December 2006 (14,608 employees),taking into account the acquisition of the Christian Salvesen group which wascompleted on 14 December 2007.49% of all staff are now employed abroad.
In 2007, staff costs amounted to € 531 million (costs for 2006 were € 455 million). If the Christian Salvesen group had formed part of the NorbertDentressangle Group during the entire FY 2007, the “pro forma” wage bill wouldhave totalled € 1,008,000.For information purposes, it should be noted that the “Profit-sharing scheme”and “Incentive” items for the “historic” scope of the Group amounted to € 8.8million in 2007. Those items grew sharply from the amount of € 7.9 million paidin 2006, operating income and net income being equivalent for both years.
No major employment dispute arose within the Group in 2007.
• Outlook
In 2008, the Norbert Dentressangle Group will be launching a new three-yearbusiness plan called “PASSION ROUGE 2010”, which will cover the years2008 to 2010 inclusive.
In light of the new scope of the Group following the acquisition of ChristianSalvesen, this new Business Plan defines organic growth as priority:
- by allowing Norbert Dentressangle Group clients to access the full range ofservices offered by Norbert Dentressangle throughout Europe,
- by circulating best practice information amongst all staff members; throughinvolvement in sustainable development, customisation of offers, HumanResource policies, innovation and cost reduction.
Structuring the group into trade division (Transport and Logistics) is a triedand tested method. This structure will therefore continue to apply.Endeavouring to achieve synergies between the two divisions will constitutean additional axis for development that is essential to ensure awareness of allthe offers amongst our clients and of best practice amongst all of our staff.
Passion Rouge 2010 will allow the Group to possess the expert know-howand display the approaches required to strive towards excellence, which liesat the core of our values and our clients’ expectations. Consequently, we aretargeting revenues of € 4 billion and 5% EBITA as at end 2010.
4 goals for the future:1 - “All your Norbert in every country”
The top priority will be organic growth: Passion Rouge 2010 is above allbusiness plan for growth.By broadening its range of transport and logistics services and by expandingits presence in several European countries, the Group has acquired additionaltools which will allow it to meet its clients’ expectations and sustain an annualorganic growth rate of + 6% to + 8%.
Broadening of the range of services: the acquisition of Christian Salvesenprovided the Group with state-of-the-art expert know-how in two specialisedareas: - Frozen logistics; and- Pallet distribution.We have also acquired high-potential know-how in the field of reverse logistics.
Developing the European network: the Norbert Dentressangle Group nowholds a significant market share in France, and also in Spain, the UnitedKingdom, Italy, the Benelux States and in Eastern Europe. The quality anddensity of this European network will provide us with essentiel leverage forthe growth of all of our trades in all of those countries.
2 - Sustainable development on a day-to-day basis
With its pioneering commitments, the Norbert Dentressangle Group’s goal isto continue to hold the leading position in this field. An indicator and a 2010 objective have been set for each commitment. Thechoice of the indicators is intended to allow the monitoring of progress as adirect reflection of the improvement in everyone’s behaviour:
Commitments Indicators Objectives
Reduction of greenhouse Volume of CO2 emissions 50 g/T/kmgas emissions per transported tonne/km
Road Safety Number of km 550,000 kmcovered by a driverwithout being responsible for an accident with a third-party
Environnemental Number of sites 100% of sitesmanagement of sites under environnemental
management
Integration and internal Rate of internal promotion 60%promotion
3 - Reinforcing the uniqueness of the Group
Customisation of offers: our sales policy is to design and provide customisedTransport and Logistics solutions to make our clients more competitive vis-à-vis their own clients.
Innovation: in a buyers’ market, innovation is a fundamental requirement.Clients will never request anything of their own initiative. Offering a serviceor an innovative service is what creates Added Value and lays the foundationfor the quality of a client relationship.Innovation should not be restricted to the marketing offer. It generatesprogress in all aspects of the firm: productivity, purchases, day-to-dayprocesses, etc.
Cost reduction: in our Transport and Logistics trades, every detail matters,and discipline in the performance of our services is what gives us an edge.This is why we devote equal attention to cost reduction and to developing ourrange of offers.
4 - Human Resources
Employees are the Norbert Dentressangle Group’s no. 1 asset. Within aservice provider firm, competitiveness directly depends on our staff’s level ofmotivation, their skills and their belief in the firm’s aims and plans.
The Group’s Human Resource policy is based on:- participative management - fostering entrepreneurship- training- internal promotion prospects- circulation of internal information- the Group’s commitments vis-à-vis its employees.
2007 ANNUAL REPORT64
65
The financial statements of the Group’s holding company, NorbertDentressangle Group S.A., show:- Net assets of € 196.3 million including earnings for 2007 in the amount of
€ 29,703,698.19, prior retained earnings of € 31,204,342.29 and “otherreserves” (also distributable) in the amount of € 95,000,000.
- Available cash flow of € 82.4 million as at 31 December 2007.
- Total gross financial debt of € 262.9 million, including in particular the fullamount of the acquisition loan subscribed to purchaser the ChristianSalvesen securities in December 2007.
- Income of € 29.7 million for the year, inclusive of corporation tax savings(as the Norbert Dentressangle Group S.A. is the bridgehead of the Frenchtax consolidation, it is eligible for tax savings generated by the losses ofsome of its subsidiaries), essentially consisting of € 20.3 million ofdividends paid by its subsidiaries.
• Long-term investments
The gross value is the cost of purchase.
At the close of the financial year, the acquisition cost is compared with thebalance-sheet value, the lesser of these two figures being recorded in thebalance sheet. In accordance with Opinion no. 2007-C of 15 June 2007 ofthe Emergency Committee of the CNC [French National AccountancyCouncil], the Norbert Dentressangle Group S.A has elected to record thecosts of acquisition of the equity investment, borne by way of anextraordinary depreciation over 5 years as of 1 January 2007, as assets.
• Non-tax deductible expenditure
In accordance with the provisions of Article 223 quater of the French GeneralTax Code, please note that none of the items of expenditure listed in Article39-4 of the French General Tax Code were included in the pre-tax earnings.
• Material events and amendments to Articlesof Association having occurred during thefinancial year
• Material events
The Combined Ordinary and Extraordinary General Meeting of 30 May 2007formally witnessed the resignation of Mr Jacques Gairard from his office asmember of the Supervisory Board and appointed Mr Bruno Rousset as newmember of the said Board for a period of four years.
Furthermore, the Company acquired the shareholdings referred to under theheading “Acquisitions of interest and takeovers” hereinbelow.
• Amendments to Articles of Association
The Combined Ordinary and Extraordinary General Meeting of 30 May2007, deliberating as an Extraordinary General Meeting, amended Articles 10 “Paying up of shares”, 20 “Term of office - age limits” and 29 “Shareholders’ meetings”.
• Material events and amendments to Articlesof Association having occurred since the closeof the financial year
• Material events
No event has had a significant impact on the financial statements of NorbertDentressangle Group S.A. since 31 December 2007.
• Amendments to Articles of Association
The memorandum and articles of association have not been amendedbetween the Combined Ordinary and Extraordinary General Meeting of 30 May2007 and the date hereof.
• Outlook
In 2008, the sources of income and expenditure of Norbert DentressangleGroup S.A. will be affected by the full consolidation of the Christian Salvesengroup in the financial statements of the Norbert Dentressangle Group.
• Activities and earnings of subsidiaries and controlled entities
The revenues and earnings of subsidiaries, which are all consolidated, appearon the following page. Furthermore, the description of the NorbertDentressangle Group’s activity as set forth hereinabove summarises theiractivity.
• Acquisitions of interest and takeovers
In 2007, the Company acquired 100% of the shares in Christian Salvesen Plc,a company incorporated under the laws of Great-Britain, 6.6% of InterbulkInvestments Plc, a company incorporated under the laws of Great-Britain,13.83% of Novatrans, a company incorporated under French law (includingadditional securities paid for in early January), 80% of Northern Distributionand Logistics, a company incorporated under Romanian law, as well as 100%of Beiersdorf Logistics France, a company incorporated under French law (inconnection with the award of the Beiersdorf business agreement).
II - PARENT COMPANY’S ACTIVITY, PRESENTATION OF FINANCIAL STATEMENTS
OFFICES AND POSITIONS HELD BY YOUR CORPORATE OFFICERS DURING FY 2007:
1. Members of the Supervisory Board
• Evelyne DENTRESSANGLE
Company Position
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
FINANCIERE NORBERT DENTRESSANGLE Director
FINAIXAM Member of the Supervisory Board and Vice-Chairman of the Supervisory Board
FELIX POTIN Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
SOFADE Chairman
TOURS NORD TRANSIT Manager
CAVAILLON TRANSIT Manager
LONGUEIL TRANSIT Manager
SAINT RAMBERT TRANSIT Manager
SAINT DESIRAT TRANSIT Manager
BEAUSEMBLANT IMMOBILIER Manager
CHAMBERY TRANSIT Manager
LILLE TRANSIT Manager
ND COULOGNE ENTREPOT Manager
PORT CHAMPAGNE Manager
SAINT VALLIER CALAIS Manager
2007 ANNUAL REPORT66
Salvesen and Interbulk are sterling-managed foreign companies. The closingrate is applied to share capital and stockholders’ equity, whereas an averageannual rate is applied to revenues and net earnings. The other columns,including in particular the value of securities, are based on the NorbertDentressangle Group financial statements as at 31/12/2007. The financialstatements of Novatrans are subject to approval by the shareholders’ meetingdue to be held in 2008.
Norbert Dentressangle Group S.A.’s securities portfolio is periodically valuedin order to assess whether a provision for depreciation should be recorded.
This is based on the consolidated value of the Company, its current and futureeconomic contribution to the consolidated income of the Group as well as itscurrent and future capacity to generate positive cash flow.Where the valuation carried out in light of these various criteria shows that thevalue of the securities exceeds the Company’s contribution capacity on thebalance sheet, a provision is recorded.
SUBSIDIARIES AND INTERESTS
■ K€
Subsidiaries Share Other % Gross Net Loans and Endorsements Revenues Net DividendsCapital stockholders held value of value of shareholder and surety earnings collected
equity securities securities loans bonds
NDT 38,850 132,752 100 99,639 99,639 (83,650) 0 28,482 8,926 4,662 ND LOGISTICS 31,171 42,032 100 59,303 59,303 (16,000) 0 384,483 15,218 14,650 OMEGA 2 1,800 573 100 1,800 1,800 (54,500) 0 1,678 464 990 SALVESEN 109,738 37,658 100 357,599 351,952 0 0 1,325,421 69,883 0 INTERBULK 43,469 41,520 7 5,978 5,902 0 0 239,703 407 0 NOVATRANS 3,600 6,975 11 769 769 0 0 114,817 (1,237) 0TOTAL 519,365 (154,150) 0 20,302
67
SAT 3D IMMOBILIER Manager
SAT 3E IMMOBILIER Manager
SAT 3G IMMOBILIER Manager
PLA 2F IMMOBILIER Manager
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
FINANCIERE NORBERT DENTRESSANGLE Deputy Managing Director
AIXAM MEGA Director
MEGA PRODUCTIONS Director
BORDEAUX TRANSIT Manager
• Norbert DENTRESSANGLE
Company Position
GROUPE NORBERT DENTRESSANGLE Chairman of the Supervisory Board
FINANCIERE NORBERT DENTRESSANGLE Chairman of the Board of Directors and Managing Director
ND INVESTISSEMENTS Chairman
FINAIXAM Chairman of the Supervisory Board
AXA Member of the Supervisory Board
FINANCIERE DE CUZIEU Chairman
SEB Director
SOGEBAIL Director
SOFADE Managing Director
NDI Manager
PLA 2A IMMOBILIER Manager
PLA 2B IMMOBILIER Manager
PLA 2C IMMOBILIER Manager
PLA 2E IMMOBILIER Manager
FINANCIERE DE LA GALAURE Manager
TEXIM Joint Manager
TEXMAT Joint Manager
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
FINANCIERE EGNATIA Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
EMIN LEYDIER Member of the Supervisory Board
SIPAREX CROISSANCE Director
EGNATIA Director
VIA LOCATION Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
IDB IMMOBILIER Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Chairman
SAT 3 D IMMOBILIER Manager
SAT 3 E IMMOBILIER Manager
VIA LOCATION ILE DE FRANCE Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
VIA LOCATION FRANCE PROVINCES Permanent representative of FINANCIERE NORBERT DENTRESSANGLE, Director
• Henri LACHMANN
Company Position
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
SCHNEIDER ELECTRIC S.A. Chairman of the Supervisory Board
AXA Member of the Supervisory Board
Various or mutual insurance companies of the AXA Group Director
VIVENDI Member of the Supervisory Board
FIMALAC Non-voting board member
TAJAN Non-voting board member
CENTRE CHIRURGICAL MARIE LANNELONGUE Chairman of the Board of Directors
FONDATION POUR LE DROIT CONTINENTAL Chairman
CONSEIL DES PRELEVEMENTS OBLIGATOIRES Member
FONDATION TELEMAQUE Chairman
INSTITUT MONTAIGNE Vice-Chairman and Treasurer
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
SCHNEIDER ELECTRIC S.A. Managing Director
SCHNEIDER ELECTRIC INDUSTRIES SAS Managing Director
VIVENDI UNIVERSAL Director
Various companies of the SCHNEIDER ELECTRIC Group Director
FINAXA Director
FIMALAC Director
ETABLISSEMENTS DE DIETRICH & CIE Director
• Pierre-André MARTEL
Company Position
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
CARAVELLE S.A. Chairman of the Board of Directors
XRT Chairman of the Supervisory Board
COOPER SAS Managing Director
ARCOLE INDUSTRIES Chairman of the Executive Board
PX HOLDING SAS Managing Director
NINA SAS Managing Director
SOPRA GMT S.A. Member of the Board of Directors
SOPRA GROUP S.A. Member of the Board of Directors
MARREL SAS Member of the Supervisory Board
FRUEHAUF SAS Member of the Supervisory Board
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
DUPLI 31 Director
INNODEC S.A. Member of the Board of Directors
LEGRIS INDUSTRYS S.A. Member of the Supervisory Board
SONOVISION-ITEP SAS Member of the Supervisory Board
2007 ANNUAL REPORT68
69
• François-Marie VALENTIN
Company Position
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
FINAIXAM S.A. Member of the Supervisory Board
FMV & ASSOCIES SARL Manager
VAUCRAINS PARTICIPATIONS Director
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
EGNATIA Director
ELCO BRANDT S.A. Member of the Supervisory Board
• Bruno ROUSSET
Company Position
GROUPE NORBERT DENTRESSANGLE Member of the Supervisory Board
AXERIA PREVOYANCE S.A. Permanent representative of APRIL GROUP, Director
AXERIA IARD S.A. Permanent representative of APRIL GROUP, Director
AXERIA COURTAGE S.A. Permanent representative of APRIL GROUP, Director
AXERIA VIE S.A. Permanent representative of APRIL GROUP, Director
APRIL GROUP VIE EPARGNE S.A. Permanent representative of APRIL GROUP, Director
APRIL PATRIMOINE S.A. Permanent representative of APRIL GROUP, Director
ISR COURTAGE S.A Permanent representative of APRIL GROUP, Director
SOLUCIA PROTECTION JURIDIQUE S.A. Permanent representative of APRIL GROUP, Director
ASSINCO Member of the Supervisory Board
APRIL GROUP PREVOYANCE INDIVIDUELLE S.A. Permanent representative of APRIL GROUP, Director
APRIL ASSURANCES Permanent representative of APRIL GROUP, Director
APRIL MOBILITE Permanent representative of APRIL GROUP, Director
APRIL SANTE S.A. Permanent representative of APRIL GROUP, Director
APRIL MARKETING SOLUTIONS S.A. Permanent representative of APRIL GROUP, Director
APRIL REUNION S.A. Permanent representative of APRIL GROUP, Director
SOLIDARIS Permanent representative of APRIL GROUP, Director
TMS CONTACT Permanent representative of APRIL GROUP, Director
APRIL GROUP DOMMAGES PARTICULIERS S.A. Permanent representative of APRIL GROUP, Director
APRIL IMMOBILIER Permanent representative of APRIL GROUP, Director
SFG S.A. Permanent representative of APRIL GROUP, Director
FGA S.A. Permanent representative of APRIL GROUP, Director
EASYSSUR S.A. Member of the Supervisory Board
FRANCE PLAISANCE ASSURANCE S.A. Permanent representative of APRIL GROUP, Director
ASSURTIS S.A. Permanent representative of APRIL GROUP, Member of the Supervisory Board
CGCA Permanent representative of APRIL GROUP, Director
GI2A Permanent representative of APRIL GROUP, Director
HABITANCE S.A Permanent representative of APRIL GROUP, Director
AMT ASSURANCES S.A. Permanent representative of APRIL GROUP, Director
APRIL IARD S.A. Permanent representative of APRIL GROUP, Director
MUTANT ASSURANCES S.A. Permanent representative of APRIL GROUP, Director
APRIL SOLUTIONS S.A. Permanent representative of APRIL GROUP, Director
ASSURDOM GESTION S.A. Permanent representative of APRIL GROUP, Member of the Supervisory Board
MORAL CARAÏBES S.A. Permanent representative of APRIL GROUP, Director
APRIL GROUP DOMMAGES ENTREPRISES S.A. Permanent representative of APRIL GROUP, Director
APRIL GROUP CORPORATE S.A. Permanent representative of APRIL GROUP, Director
COGEALP S.A. Member of the Supervisory Board
HAUSSMANN CONSEILS S.A. Permanent representative of APRIL GROUP, Director
APRIL ASSURANCES ENTREPRISES S.A. Permanent representative of APRIL GROUP, Director
APRIL SOLUTIONS ENTREPRISES S.A. Permanent representative of APRIL GROUP, Director
EUROPASSUR S.A. Permanent representative of APRIL GROUP, Director
CIARE S.A. Permanent representative of APRIL GROUP, Director
SASCO S.A. Permanent representative of APRIL GROUP, Director
APRIL COVER S.A. Permanent representative of APRIL GROUP, Director
APRIL CORPORATE BROKING S.A. Permanent representative of APRIL GROUP, Director
DOUDET CHARLET S.A. Member of the Supervisory Board
AVS SA Member of the Supervisory Board
EIG APRIL TECHNOLOGIES Permanent representative of APRIL GROUP, Director
EIG APRIL COURTAGE Permanent representative of APRIL GROUP, Director
EIG LA MAISON COMMUNE Chairman
FORUM FINANCES S.A. Director
APRIL ALPHA Director
APRIL DELTA Director
APRIL GAMMA Director
APRIL KAPPA Director
APRIL SIGMA Director
APRIL OMEGA Director
EVOLEM S.A. Chairman of the Board of Directors
MONCEAU ASSURANCES S.A. Director
KAELIA S.A. Permanent representative of EVOLEM 1
EM LYON Director
VIVIER-MERLE Joint Manager
APRIL CEE DEVELOPMENT KFT Managing Director
APRIL ITALIA SPA Director
APRIL FINANCIAL SERVICES AG Member of the Supervisory Board
APRIL GERMANY AG Member of the Supervisory Board
APRIL IBERIA S.A. Director
L&E TITLE GROUP Director
LETIS Director
APRIL YACHT BROKER DI ASSICURAZIONI SPA Director
DIERREVI SPA Director
APRIL NORTH AMERICA INC Director
DAVE ROCHON ASSURANCES INC Director
ESCAPADE ASSURANCES VOYAGES INC Director
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
VBS S.A. Director
EVOLEM 1 SAS Permanent representative of EVOLEM
TERRE D’ENTREPRISES S.A. Member of the Supervisory Board
BANQUE POPULAIRE DE LYON S.A. Director
2007 ANNUAL REPORT70
71
2. Members of the Executive Board
• Jean-Claude MICHEL
Company Position
GROUPE NORBERT DENTRESSANGLE Chairman of the Executive Board
STOCKALLIANCE Permanent representative of GROUPE NORBERT DENTRESSANGLE, Director
NDT Managing Director
OMEGA II Managing Director
ND SILO IBERICA Director
NORBERT DENTRESSANGLE HOLDINGS LIMITED Director
NORBERT DENTRESSANGLE IBERICA Chairman
NORBERT DENTRESSANGLE IBERICA ESTE Chairman
CHRISTIAN SALVESEN PLC Director
SALVESEN LOGISTICS LIMITED Director
HOLISTICA SOLUTIONS LIMITED Director
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
AROLAZ Manager
CIDEM Director
COMPAGNIE DES ENTREPOTS ET MAGASINS
GÉNÉRAUX DE CHAMPAGNE Permanent representative of GROUPE NORBERT DENTRESSANGLE, Director
FINANCIERE DE VSG Permanent representative of NDT, Director
LES ROUTIERS FRANCAIS – L.R.F. SAS Chairman
LMDI Permanent representative of GROUPE NORBERT DENTRESSANGLE, Director
SCI PGT3 Manager
SCI GPT4 Manager
SOCIETE D’EXPLOITATION DES MAGASINS
GÉNÉRAUX DE CHAMPAGNE Permanent representative of GROUPE NORBERT DENTRESSANGLE, Director
COREND Chairman of the Board of Directors
NAVAMAR Permanent representative of GROUPE NORBERT DENTRESSANGLE, Director
ND BELGIUM Permanent representative of NDT, Director
ND HOLDING UK Director
ND SILO BELGIUM Permanent representative of NDT, Director
NORBERT DENTRESSANGLE IBERICA OESTE Chairman
NORBERT DENTRESSANGLE IBERICA ESTE Chairman
NORBERT DENTRESSANGLE ITALIA Director
SAVAM LUX Permanent representative of NDT, Director
TRANSDUC Permanent representative of GROUPE NORBERT DENTRESSANGLE, Director
• Hervé MONTJOTIN
Company Position
GROUPE NORBERT DENTRESSANGLE Member of the Executive Board and Managing Director
AIR ND Joint Manager
BARLATIER CAMIONNAGE ORGANISATION Joint Manager
MNS Permanent representative of NDT, Director
ND FRANCHISE Joint Manager
ND INFORMATIQUE Joint Manager
ND MAINTENANCE Joint Manager
ND SERVICES Joint Manager
ND CHIMIE Chairman
ND MEDITERRANEE Chairman
ND PETRONALP (now ND HYDROCARBURES) Chairman
ND PETRONORD Chairman
NDT Chairman
SNM VALENCIENNES Chairman
SNN CLERMONT Chairman
STOCKALLIANCE Permanent representative of ND SERVICES, Director
UNITED SAVAM Chairman
VENDITELLI TRANSPORTS (now DISTRIBUTION NORBERT DENTRESSANGLE) Chairman
FINANCES TRANSPORTS ET PARTICIPATIONS Chairman
TRANSCONDOR Director
CHRISTIAN SALVESEN PLC Director
SALVESEN LOGISTICS LIMITED Director
INTERBULK Director
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
FINANCIERE DE VSG Chairman of the Board of Directors
LMDI Permanent representative of LOGIBAIL, Director
ND FORMATION Joint Manager
VENDILOG Chairman
NAVAMAR Secretary
ND SAVAM IBERICA Director
NORBERT DENTRESSANGLE HOLDINGS UK Director
TRANSDUC Secretary
• François BERTREAU
Company Position
GROUPE NORBERT DENTRESSANGLE Member of the Executive Board and Managing Director
STOCKALLIANCE Chairman of the Board of Directors and Managing Director
ND LOGISTICS Chairman
NDBL Chairman
AIXOR LOGISTICS Chairman
CEMGA LOGISTICS Chairman
COPAL LOGISTICS Chairman
VENDILOG Chairman
THT LOGISTICS Joint Manager
CCH Chairman
ND LOGISTICS ITALIA Chairman of the Board of Directors
ND LOGISTICS UK Director
ND LOGISTICS SWITZERLAND Manager
ND LOGISTICS HUNGARY Managing Director
CHRISTIAN SALVESEN PLC Director
SALVESEN LOGISTICS LIMITED Director
HOLISTICA SOLUTIONS LIMITED Director
2007 ANNUAL REPORT72
73
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
BARLATIER CAMIONNAGE ORGANISATION Joint Manager
LMDI Permanent representative of STOCKALLIANCE, Director
LE TRAIT D’UNION PACKAGING CONDITIONNEMENT Manager
COMPAGNIE DES ENTREPOTS ET MAGASINS GÉNÉRAUX DE CHAMPAGNE Permanent representative of STOCKALLIANCE, Director
SOCIETE D’EXPLOITATION DES MAGASINS GÉNÉRAUX DE CHAMPAGNE Permanent representative of STOCKALLIANCE, Director
CIDEM Chairman of the Board of Directors
• Patrick BATAILLARD
Company Position
GROUPE NORBERT DENTRESSANGLE Member of the Executive Board
LOCAD 07 Director
ND MANAGEMENT Joint Manager
NDT Managing Director
OMEGA II Chairman
OMEGA IV Manager
OMEGA V Manager
OMEGA VI Manager
IMMOTRANS SARL Manager
SCI DES VOLCANS Manager
SCI IMOTRANS Manager
SCI LOGIS-TRANS EUROPE Manager
STOCKALLIANCE Permanent representative of ND LOGISTICS, Director,
TEXLOG Manager
TRANSIMMO PICARDIE Joint Manager
UTL LOCATION Joint Manager
NORBERT DENTRESSANGLE HOLDINGS LTD Director
CHRISTIAN SALVESEN PLC Director
SALVESEN LOGISTICS LIMITED Director
CHRISTIAN SALVESEN INVESTISSEMENTS LTD Director
SALVESEN LOGISTICS HOLDINGS LTD Director
CHRISTIAN SALVESEN DISTRIBUTION LTD Director
CHRISTIAN SALVESEN FOOD SERVICES LTD Director
TENDAFROST FROZEN FOOD LTD Director
THE NATURAL VEGETABLE COMPANY LIMITED Director
OTHER OFFICES AND POSITIONS HELD DURING THE LAST 5 YEARS
COMPAGNIE DES ENTREPOTS ET MAGASINS GÉNÉRAUX DE CHAMPAGNE Permanent representative of ND LOGISTICS, Director
FINANCIERE DE VSG Director
LMDI Permanent representative of ND LOGISTICS, Director
LOCAD 03 Director
LOCAD 04 Director
LOCAD 05 Director
LOCAD 06 Director
ND AEROSERVICES Chairman
OMEGA III (now THT LOGISTICS) Manager
SCI GYVES Joint Manager
SOCIETE D’EXPLOITATION DES MAGASINS GÉNÉRAUX DE CHAMPAGNE Permanent representative of ND LOGISTICS, Director
TRANSPORTS LAURENT Manager
TRANSPORTS LECLERQ ET FILS Chairman
COREND Director
NAVAMAR Permanent representative of ND IBERICA, Director
TRANSDUC Permanent representative of ND IBERICA, Director
TND RHONE ALPES (now MGCA) Chairman
ND SILO IBERICA Director
NORBERT DENTRESSANGLE HOLDINGS LIMITED Director
• Remuneration and benefits paid to corporateofficers*
The fixed remuneration paid in 2007 to Mr Jean-Claude Michel, Chairman ofthe Executive Board, pursuant to his employment contract was € 382,433 (hewas paid € 358,270 in 2006).The remuneration paid in 2007 in respect of his appointment as corporateofficer was € 5,488 (he was paid € 5,488 in 2006).Furthermore, the estimated bonus to be awarded to him in 2008 on 2007results is € 225,020 (he was awarded a € 184,681 bonus in 2007 on 2006results). Finally the amount of his benefits in kind has been assessed at € 7,555 in2007 (he was granted benefits in kind amounting to € 14,577 in 2006).
The fixed remuneration paid in 2007 to Mr François Bertreau, member of theExecutive Board and Managing Director, pursuant to his employmentcontract was € 270,198 (he was paid € 254,819 in 2006).The remuneration paid in 2007 in respect of his appointment as corporateofficer was € 3,659 (he was paid € 3,659 in 2006). Furthermore, the estimated bonus to be awarded to him in 2008 for the 2007results is € 148,000 (he was awarded a € 122,888 bonus in 2007 for the 2006results). Finally the amount of his benefits in kind has been assessed at € 3,422 in2007 (he was granted benefits in kind amounting to € 3,663 in 2006).
The fixed remuneration paid in 2007 to Mr Hervé Montjotin, member of theExecutive Board and Managing Director, pursuant to his employmentcontract was € 260,444 (he was paid € 246,060 in 2006).The remuneration paid in 2007 in respect of his appointment as corporateofficer was € 3,659 (he was paid € 3,659 in 2006). Furthermore, the estimated bonus to be awarded to him in 2008 for the 2007results is € 125,000 (he was awarded a € 95,660 bonus in 2007 for the 2006results). Finally the amount of his benefits in kind has been assessed at € 2,955 in2007 (he was granted benefits in kind amounting to € 2,949 in 2006).
The fixed remuneration paid in 2007 to Mr Patrick Bataillard, member of theExecutive Board, pursuant to his employment contract was € 245,983 (he
was paid € 235,846 in 2006).The remuneration paid in 2007 in respect of his appointment as corporateofficer was € 3,659 (he was paid € 3,659 in 2006). Furthermore, the estimated bonus to be awarded to him in 2008 for the 2007results is € 125,640 (he was awarded a € 109,059 bonus in 2007 for the 2006results). Finally the amount of his benefits in kind has been assessed at € 1,225 in2007 (he was granted benefits in kind amounting to € 1,857 in 2006).
The variable portion of the remuneration of the Executive Board members isproportional to the Group’s consolidated net earnings, to the performance ofthe two business Divisions or based on the “Net income on stockholders’equity” ratio as well as an assessment of their individual performance.
The officers and directors are not entitled to any benefits or remunerationother than those listed hereinabove.
The remuneration paid in 2007 by the company to Mr NorbertDentressangle, pursuant to his appointment as Chairman of the SupervisoryBoard, amounted to € 124,500 (he was paid € 118,800 in 2006).The remuneration paid by Financière Norbert Dentressangle, the parentcompany of the Groupe Norbert Dentressangle, amounted to € 46,500 for2007. It is specified that Financière Norbert Dentressangle’s business does notsolely consist of controlling Groupe Norbert Dentressangle, but alsoencompasses other activities.
The director’s fees paid in 2007 to Mrs Evelyne Dentressangle, member of theSupervisory Board, amounted to € 11,400 (she was paid € 10,350 in 2006).
The director’s fees paid in 2007 to Mr Pierre-André Martel, member of theSupervisory Board, amounted to € 10,800, (he was paid € 10,350 in 2006).
The director’s fees paid in 2007 to Mr Jacques Gairard, member of theSupervisory Board until 30 May 2007, amounted to € 4,800, (he was paid € 10,350 in 2006).
The director’s fees paid in 2007 to Mr Henri Lachman, member of theSupervisory Board, amounted to € 10,800, (he was paid € 9,850 in 2006).The director’s fees paid in 2007 to 2007 to Mr François-Marie Valentin,
2007 ANNUAL REPORT74
75
member of the Supervisory Board, amounted to € 12,000 (he was paid € 10,350 in 2006).
The director’s fees paid in 2007 to Mr Bruno Rousset, member of theSupervisory Board, amounted to € 7,200.
The Shareholders’ General Meeting resolved that the aggregate amount ofdirectors’ fees for 2007 would be € 75,000. Those were allocated by theSupervisory Board in accordance with criteria that provide for a fixed portionfor all members of the Board, excluding the Chairman, as well as a variableportion based on effective attendance at meetings of the Supervisory Board.
* All remuneration figures set forth hereinabove are gross figures.
• Summary of the securities transactionscarried out in 2007 pursuant to Article 223-26 of the General Regulations of the French Financial Markets Authority
26,598 shares were purchased at a weighted average price per share of € 69.97 by companies connected to Mr Norbert Dentressangle.
10,200 shares were sold at a price per share of € 69.96 by a companyconnected to Mr Norbert Dentressangle.
Furthermore, Mr Bruno Rousset acquired 175 shares at a price per share of € 71.71
• Stock options - Issues reserved for employees- Share warrants
As at 31 December 2007, certain employees or officers and directors of yourCompany or of its subsidiaries were eligible for share purchase schemes. Asat such date, the following options or warrants had not been exercised: - 116,000 stock options, comprising 102,500 options to be exercised from
2008 and 13,500 options to be exercised from 2010.- 115,000 warrants, to be exercised from 1 June 2008 to 31 May 2009
inclusive, subject to performance targets.
In accordance with the provisions of Article L.225-102 of the FrenchCommercial Code, please note that no shares in the Company’s share capitalwere held as at 31 December 2007 by employees of the firm or relatedcompanies under a Company savings scheme provided for in Articles L.443-1 to L.443-9 of the French Labour Code or in connection with mutualfunds, governed by Chapter 3 of the French Act of 23 December 1988.
• Shareholding structure and breakdown of voting rights
As at 1 January 2008, Financière Norbert Dentressangle held over half of theshare capital and 74.59% of the voting rights. This company did not exceedany statutory threshold during the financial year. As at 31 December 2007,the Dentressangle family held 5.75% of the share capital and 6.73% of thevoting rights (Mr Norbert Dentressangle personally held less than 5% of theshare capital, but 5.73% of the voting rights).
Furthermore, as at 31 December 2007, Columbia Wanger Asset ManagementLP held 501,700 shares in the company, i.e. 5.10% of the share capital.
In accordance with the provisions of Article L.225-102 of the FrenchCommercial Code, please note that at the end of the financial year, thenumber of securities directly held by employees represented 0.60% of theshare capital and 0.53% of voting rights in the Company. None of thosesecurities were held within a company savings scheme.
• The Company’s employment andenvironmental achievements andcommitments – this report comprehensivelyaddresses the risks and contingencies facedby the Company due to the nature of itsbusiness.
The sustainable development policy launched in 2002 was designed andformally structured in 2005 on the basis of 4 commitments on the part of theGroup. These commitments were selected in light of the main expectationsof our customers, the general public and our employees. NorbertDentressangle Group wishes to set an example in those areas:- Integration and internal promotion,- Reduction of greenhouse gas emissions,- Environmental management of its sites,- Road safety.
Human Resources: Integration and internal promotion As at 31 December 2007, Norbert Dentressangle Group had 29,631 employees,15,130 of whom worked in France.
As at 31 December 2007, the distribution of Norbert Dentressangle Groupemployees by country was as follows:
The average Men/Women ratio for all businesses is 81:19.Average seniority is 6.6 years. The average age of employees is 38.4.
A sense of accountability, trust, cost saving, willingness for hard work,discipline, rapidity, and entrepreneurship are the underlying values behindthe Norbert Dentressangle Group’s Human Resources policy. Those valuesencourage individual progress based on talent and merit. The aim of theGroup’s Human Resources policy is to strengthen these values, so as to fosterindividual development.
The indicator selected by the Group to assess achievements in terms of thisteam spirit and internal promotion goal is the internal promotion ratio, i.e.,the percentage of staff promoted during the year. It embodies the Group’spolicy of encouraging upward mobility. In 2007, 45% of key vacant positionswithin the Norbert Dentressangle Group were filled through internalpromotions.The career management policy continued to be applied in 2007, with 986appraisals carried out in France, Italy and the United Kingdom.
France 14,501United Kingdom 9,098Spain 2,324Poland 1,016Netherlands 737Belgium 470Romania 405
Portugal 282Italy 274Czech Republic 201Luxembourg 176Germany 118Switzerland 29
More than ever, this is a topical approach which is designed to:
- Identify potential and skills likely to contribute to the growth of the Group.Thus 40% of the persons identified as “high potential” employees in 2006experienced a career change in 2007,
- Apply the skills required for such growth through the implementation oftailored individual development plans and collective training programmes.For instance, in 2007, the Logistics Division fully redesigned its “Advancedwarehouse management” training module in order to meet more specificallyidentified skills development requirements,
- Strengthen our employees’ motivation and loyalty.
In 2007, the Division management committees operated with reference tothese appraisals to confirm their employees’ potential, thereby encouraginglong-term management.
One of the highlights of 2007 for the Logistics Division was the signature ofan equal opportunities charter for disabled employees.
Within the Transport Division, one of the achievements of its operatormanagement plan launched in 2006 was a 35% reduction in staff turnover inthis sector (with reference to 2005 figures).Secondly, as a result of the new design of the “Safe Driving Plan” applied in2007, the Transport Division’s FCOS accreditation was furthermore renewedunconditionally for a period of 1 year.
Reduction of greenhouse gas emissionsUndertaking to reduce greenhouse gas emissions means a commitment toconsume less fuel - and therefore to spend less - for the same load carried.The indicator selected by the Norbert Dentressangle Group is the quantity ofCO2 (measured in grammes) emitted per tonne carried and per kilometre, asthis is the indicator that best reflects the impact of the carriage of goods interms of global warming - caused by greenhouse gases.Indeed, the operational leverage for improvement of this indicator consists ofthe vehicles’ fuel consumption, the number of kilometres travelled unloaded,and the optimisation of vehicle loads.The Group’s ambition is to achieve an emission rate of 50 g/T/km.
The greenhouse gas emission benchmark for 2007, computed on the basis ofthe data collected in each of the Group’s Transport branches, is 55.9 g/T/km,i.e. a 6% improvement as compared to 2006.
Charter of Voluntary Commitments to Reduce Greenhouse GasEmissions– ADEME (French Environmental and Energy ManagementAgency)As a pioneer in this field, Norbert Dentressangle Group has decided to signthe Charter of Voluntary Commitments to Reduce Greenhouse GasEmissions. Pending official signature of this document, the Group took partin the survey conducted by the firm TL&A in order to analyse theperformance and the level of know-how in the measurement of CO2emissions within the various signatory companies. In spirit of full disclosure,it also stated the internal measures implemented to attain its own reductiontarget. The Group also agreed to take part in the task groups with a view toimplementing common CO2 measurement tools.
Purchasing PolicyIts 4-year motor vehicle renewal policy allows Norbert Dentressangle Groupto operate vehicles equipped with the latest technology with a view toreducing fuel consumption and consequently greenhouse gas emissions.
Norbert Dentressangle Group operates the first fleet of motor vehiclescomplying with the EURO IV standard. As at end 2007, the breakdown ofNorbert Dentressangle Group’s road tractor fleet on the basis of Europeananti-pollution standards was as follows:
Environmental management of sitesIn 2007, the Group operated nearly 190 sites that consume energy, producewaste and interact with the environment. Reduction of energy consumption is a major contributor to cutting operatingcosts. Reducing the production of waste and the management of wasterecycling leads to a reduction in costs and requires close staff involvement.Environmental awareness fosters constructive relationships with institutionsand local authorities.
Norbert Dentressangle Group has defined a multi-dimensional environmentalmanagement standard:- regulatory compliance,- monitoring and measuring energy consumption,- systematically recording consumption and periodically reporting to generalmanagement for environmentally-managed sites,- monitoring and measuring emissions and waste production.
Norbert Dentressangle Group monitors the percentage of sites that achievecompliance with the internal environmental standard. As at end 2007, 48% of Group sites, that is 93 sites, met this internal criterion. The Group’sambition is to bring 100% of the Transport and Logistics sites intocompliance with this standard. The Group has applied for ISO 14001 certification, which is a more stringentstandard than environmental management, for all of its recent sites andsystematically for new sites. As at end 2007, 64 Norbert Dentressangle Groupsites were ISO 14001 certified, representing a 49% increase.
Within the Logistics Division, 49 warehouses in Europe have been awardedthe ISO 14001 environmental certification, that is 20 more sites than in 2006.To date, 76.2% of the warehouses operated by the Logistics Division aresubject to environmental management.
2007 ANNUAL REPORT76
Euro 5: 1.65%
Euro 4: 27%
Euro 3: 69%
Euro 2: 2.35%
1.65% 2.35%
27%
69%
77
Implementation of the carbon assessment system within LogisticsDivision: Simplified French carbon assessmentIn connection with Norbert Dentressangle Group’s involvement in theDemeter Club, this club has drawn inspiration from the ADEME’s (Agencepour le Développement et la Maîtrise de l’Energie - French Environmentaland Energy Management Agency) carbon assessment system to work towardsthe definition and implementation of a benchmark allowing greenhouse gasemissions to be measured within logistics activities.
The system was used in 2007 on all of the Group’s French logistics sites. Ittakes into account greenhouse gas emissions caused by:• Site energy consumption,• Coolant leaks,• Waste produced.
This work has led to a classification of all French logistics sites on the basisof their greenhouse gas emission levels. A list of the sites on which an actionplan must be implemented in 2008 has been drawn up.
Carbon assessment: Example of the Satolas (France) site dedicated toDécathlon, a customer.
In 2007 a Carbon assessment of the Décathlon SATOLAS site was performedidentifying the most significant sources of CO2 emissions. This led to anaction plan in respect of: - improving packaging,- improving the loading process,- reducing cardboard consumption,- optimising energy consumption.
Road safetyFor nearly 20 years, Norbert Dentressangle Group has endeavoured everyday to reduce the risk of road accidents. The indicator applied by the Groupis the number of kilometres travelled by a driver without being responsiblefor an accident with a third-party.In 2007, the Group largely exceeded its goal by recording nearly 620,000 kmwithout liability for an accident.
In late 2006, the Norbert Dentressangle Group confirmed its commitment bysigning the European Road Safety Charter. To date, it is the sole Frenchrepresentative of the transport and logistics sector, the other signatories beingindustrial groups.
In November 2007, Jacques Barrot, the Vice-President of the EuropeanCommission, awarded Norbert Dentressangle Group the “Road SafetyExcellence Prize”, in recognition of its effective and exemplary initiatives inthe field of road safety. For Norbert Dentressangle Group, this distinctionrewarded its driver training programme called the “Safe Driving Plan”.
This distinction therefore highlights the Group’s involvement and deliberatecommitment to this goal. To that end, the Group relies essentially on its staff’sprofessionalism and participation.
The “Safe Driving Plan” is a comprehensive system for road risk managementwithin the Group enabling us to achieve our goal set for the end of 2007. Thekey features of this system are: • Recruiting drivers with the right profile,• Training them in defensive driving,• Monitoring the application of the method,• Analysing each accident,• Encouraging supervisors to take part in driver management.
This is therefore a comprehensive plan, which covers: recruitment, trainingand management.
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1990 1994 1992 1996 1998 2000 2002 2004 20072006
Changes in frequency of accidents with liability on the part of Norbert Dentressangle
Summary table of the current powers granted by the shareholders’ general meeting to the Executive Board in respect of capital increases pursuant toarticles l.225-129-1 and l.225-129-2 of the French Commercial Code
Date of the Meeting Contents of the powers Expiry date Effective use that granted the powers of powers
30 may 2007 (10th resolution) Issue of ordinary shares, other equity-based securities or debt 29 july 2009 -instruments, without affecting the shareholders’ pre-emptive subscription right.
30 may 2007 (11th resolution) Issue of ordinary shares, other equity-based securities or 29 july 2009 -debt instruments, with waiver of the shareholders’ pre-emptive subscription right.
30 may 2007 (12th resolution) Delegation of powers to increase the company’s share capital by 29 july 2009 -capitalisation of share premium, reserves, retained earnings or other accounts.
30 may 2007 (13th resolution) Issue of ordinary shares, other equity-based securities or debt 29 july 2009 -instruments, without any shareholders’ pre-emptive subscription right, in consideration of contributions in-kind of equity securities or securities carrying an entitlement to share capital.
30 may 2007 (14th resolution) Delegation of powers to increase the number of securities to be issued in 29 july 2009 -the event of a capital increase, whether or not subject to a pre-emptive subscription right
30 may 2007 (15th resolution) Delegation of powers to vote on capital increases reserved for employees 29 july 2009 -
30 may 2007 (16th resolution) Power to grant share warrants. 29 july 2009 -
30 may 2007 (17th resolution) Power to allocate bonus shares. 29 july 2009 -
2007 ANNUAL REPORT78
• Net income appropriation
You are requested to deliberate on the appropriation of net income for thefinancial year, to wit:
Net income for the financial year € 29,703,698.19 Plus retained earnings brought forward € 31,204,342.29
Representing a total available amount of € 60,908,040.48
Appropriated as follows, the statutory reserve being fully funded:- to shareholders by way of dividends € 10,819,865.10 - appropriation of € 7,166 to a special reserve account
pursuant to Article 238 bis AB of the French General Tax Code € 7,166.00
- to the “distributable reserve” € 5,000,000.00 to increase the balance thereof to € 100,000,000
- the balance, to “retained earnings” € 45,081,009.38 ________________
That is a total amount of: € 60,908,040.48
Consequently, for the financial year, each share shall be allocated a € 1.10 dividend, entitling French resident individuals to the 40% tax reliefprovided for under Article 158.3-2° and 4° of the French General Tax Code,unless the taxpayer elects for a 18% withholding tax prior to payment. Thisdividend shall be paid to shareholders on 3 June 2008. Please note that theamount of dividends distributed in respect of the preceding three financialyears and the corresponding tax credits were as follows:
FY Net euro amount Relief in € Number of shares
2006 1 0.40 9,835,6932005 0.89 0.356 9,783,9932004 0.84 0.42 9,539,793
Dividends not paid in accordance with Article L.225-210 of the FrenchCommercial Code, i.e., those attached to shares held by the Company, shallbe appropriated to the “Retained earnings” account (4th resolution)..
III - REPORT ON RESOLUTIONS SUBMITTED TO THE ORDINARY AND EXTRAORDINARY GENERAL MEETING
79
• Renewal of term of office of members of the Supervisory Board
In order to comply with the new provisions of the Articles of Associationrequiring the term of office of half of the members of the Supervisory Board to be renewed every two years, those of Mrs Evelyne Dentressangle and Mr Bruno Rousset must be renewed.
• Appointment of members of the SupervisoryBoard
We request that you appoint as members of the Supervisory Board for a periodof four years:
- Mr Vincent Menez, aged 44, an ESC Nantes graduate holding an MBAspecialised in Finance from the University of Laval (Quebec), who has beenManaging Director of Financière Norbert Dentressangle since 1999, havingsuccessively held the positions of Currency Treasury Manager with CréditNational (Paris), Business Manager - Rhône-Alpes, Auvergne-BourgogneDivision with Crédit National (Lyon), and Head of Finance with GroupeNorbert Dentressangle.
- Mr Jean-Luc Poumarède, aged 62, an Essec graduate, has been a shareholderand Manager of the To Do Today personal service company, after successivelyholding the positions of Partner - Head of “French Desk” with PriceWaterhouse abroad (Madrid, New York), and Managing Director ofDELOITTE FRANCE.
• Aggregate amount of the annual directors’fees
The Executive Board proposes that you set the aggregate amount of directors’fees at € 231,000, to take into account the presence of two additionalmembers, as well as the implementation of an audit committee within theSupervisory Board.
• Trading in treasury shares - Power to begranted
At the Meeting of 30 May 2007 (8th resolution) shareholders authorised theCompany to trade in its treasury shares on the stock market. During FY 2007,no share was purchased or sold by the Company. At the close of the financialyear, the total number of treasury shares held was therefore 250,114,representing 2.54% of the Company’s share capital as at 31 December 2007.
Furthermore and pursuant to the provisions of Article L 225-209, paragraph2 of the French Commercial Code, between 31 May 2007 and 29 February2008, the Company purchased 50,000 shares at an average weighted price of€ 56.92 per share, and did not sell any shares.
These transactions were completed pursuant to a power of attorney grantedby the Company to Fortis Bank with a view to the allocation of stock optionsor bonus shares to its employees, corporate officers and/or to those of relatedcompanies.In the 10th resolution, we propose that you authorise the Executive Board, fora period of 18 months, to acquire shares in the Company up to the statutorycap of 10% of the number of the shares making up its share capital (5% inthe case of shares acquired to be held or exchanged, or to be transferred asconsideration in conjunction with merger, demerger or capital contributiontransactions), taking into account shares already purchased. In any event, thisauthorisation shall expire at the Shareholders’ General Meeting called to vote
on the financial statements for the financial year ending 31 December 2008.The maximum purchase price for the shares shall be € 100 per share. Thisnew authorisation supersedes the earlier authorisation. Please note that it ismandatory that these shares be registered and devoid of voting rights, andthat as a matter of course, they do not carry any entitlement to dividends.
• Cancellation of treasury shares held
We propose that you authorise the Executive Board to cancel treasury sharesheld by the Company, without exceeding 10% of the company’s share capital.This authorisation is requested for a term of 18 months and shall expire atthe annual meeting held in 2009 (eleventh resolution).
• Financial authorisations
We also wish that you delegate to your Executive Board the power to issuesecurities carrying an immediate or future entitlement to equity, or to theallocation of debt instruments, with or without a pre-emptive subscriptionright, so that the Company may have the requisite resources to continue theGroup’s development at the relevant time and as opportunities arise (12th,13th, 14th and 15th resolutions).
You are thus requested to authorise your Company to increase share capital,on one or more occasions, up to an aggregate nominal value of € 20,000,000.The nominal value of the securities that may be issued shall not exceed € 400,000,000.
However, these two limits shall not apply to any issue of securities inconsideration for transfers of non-monetary assets comprising equitysecurities or securities giving access to share capital.
These authorisations are requested for a term of twenty-six months.
The power to carry out a capital increase with a waiver of the pre-emptivesubscription right is granted to minimise the regulatory formalities and timeperiods required for a public issue, it being specified that the Executive Boardshall, in that event, reserve a priority right for shareholders allowing them tosubscribe for shares before the public are entitled thereto. Furthermore, inthe event of a share issue with a waiver of the pre-emptive subscription right,the amount due to accrue to the Company shall be at least equal to theweighted average quoted share price during the last three trading sessionsprior to computation of the said amount, reduced, where applicable, by amaximum discount of 5%, subject to adjustment if necessary.
In order to meet the requirements of Article L.225-129-6 of the FrenchCommercial Code, we propose that you authorise your Executive Board toincrease the company’s share capital by a maximum nominal value of € 393,000, representing approximately 2% of the company’s current sharecapital, by way of an issue of new shares to be subscribed for in cash by theGroup’s employees. The share issue price shall be at least equal to 80% of theaverage of the first share prices listed at the twenty trading sessions prior tothe Executive Board’s decision, or to 30% of such average figure where thevesting period is at least 10 years.
• Warrants
We propose that you authorise the Company to issue 245,000 warrants,comprising 125,000 BSA 2008 A-class warrants and 120,000 BSA 2008 B-class warrants in favour of named persons as well as all members of theExecutive Board (16th resolution). Each warrant shall carry an entitlement tosubscription for one share. This issue is intended to boost the Company’sperformance, as the exercise of these warrants will be inter alia contingent on
2007 ANNUAL REPORT
the attainment of economic targets approved by the Supervisory Boardmeeting of 20 March 2008. The unit price of exercise of the warrants shall bethe average quoted price during the 50 trading sessions preceding the date ofthe said Board meeting, plus 6%, that is € 59.52 in the case of BSA 2008 A-class warrants, and plus 8%, that is € 60.64 in the case of BSA 2008 B-classwarrants. The share issue price is set at € 0.50, that is a total price of € 60.02and € 61.14 per share respectively. These figures have been set to harmonisethis total price with the market value of the shares. It is also specified, for thepurposes of Article R. 225-115 of the French Commercial Code, that thenotional impact of the exercise of the BSA 2008 warrants on the listed value(average value of last 20 listed prices) as at 20 March 2008, will be € 0.14 pershare, whether or not shares likely to be issued are taken into account. Themaximum amount of the ensuing capital increase would be € 490,000, andthe exercise of the 245,000 BSA 2008 warrants would cause each shareholderto bear a 2.49% dilution, taking into account existing shares only, and a 2.46%dilution, taking into account the shares to be created pursuant to the earlierwarrant schemes.
• Amendments to articles of association
Finally, we propose that you amend the current memorandum and articles ofassociation (17th resolution) to:- modify Article 6-III pertaining to the number of shares to be held by the
members of the Supervisory Board, to made the provisions thereof consistentwith those of the internal regulations of the Supervisory Board,
- modify Article 29 to bring it in compliance with applicable legislation.
• Proposed resolutions
Please find attached hereto the draft resolutions that we propose to submit toyour vote. All documents required under applicable regulations are alsoappended hereto. We thank you in advance for the trust you will show in your Executive Board.
The Executive Board.
80
OBSERVATIONS OF THE SUPERVISORY BOARD
81
Ladies and Gentlemen,
The Supervisory Board has perused the report for 2007 presented by the Executive Board.
The satisfactory performance achieved in 2007 confirms the operational skills of Norbert Dentressangle Group staff, both in transport and logistics.Business underwent sustained growth and the operating margin improved in accordance with the ambition expressed in the Challenge 2008 business plan.
During the last three years, Norbert Dentressangle Group’s progress has spanned all fields and it has strengthened its position amongst the best Europeantransport and logistics operators.
Our strong market positions in our two business sectors, both in France and in Europe, the strength of our balance sheet and the skills of our staff contributedto the growth of the confidence placed in our group within its business, financial and institutional environment.
The setting was right to successfully initiate the acquisition of the Christian Salvesen group and, and on 14 December 2007, Norbert Dentressangle Groupstaff effectively launched the phase to integrate Christian Salvesen.
The Supervisory Board requests you to approve the Company and consolidated financial statements for the financial year ended 31 December 2007 and toadopt the resolutions submitted by the Executive Board, pertaining inter alia to the distribution of a 10% higher dividend and the change in members of theSupervisory Board. With a view to strengthening the Group’s corporate governance, in particular by establishing an audit committee, Messrs Jean-LucPoumarède and Vincent Menez are recommended as new members of the Supervisory Board.
A number of these resolutions are extraordinary resolutions as follows:
- authorisation requested by the Executive Board to cancel the treasury shares held by the Company by way of a capital reduction,- powers to be granted to the Executive Board to increase the Company’s share capital, allowing the Board, where applicable and without need for formalities,
to seize the best opportunities to raise capital,- issue of warrants in favour of named persons,- finally, amendments to Articles 6-III and 29 of the memorandum and articles of association with a view to making its clauses compliant, in particular with
the provisions of the internal regulations of the Supervisory Board.
We thank you in advance for the trust you will place in your Executive Board and your Supervisory Board.
The Supervisory Board
REPORT OF THE CHAIRMAN OF THE SUPERVISORY BOARD ONTHE CONDITIONS OF PREPARATION AND ORGANISATION OFBOARD’S WORKING SESSIONS AND ON THE INTERNAL AUDITPROCEDURES IMPLEMENTED BY THE COMPANY
In accordance with the provisions of Article L. 225-68 of the FrenchCommercial Code, this report sets forth our account of:- the conditions of preparation and of organisation of the working sessions of
your Supervisory Board;- the internal audit procedures implemented by the Company;- the principles and rules applied to compute the remuneration and all
benefits whatsoever awarded to corporate officers.
• Conditions of preparation and organisationof the working sessions of the SupervisoryBoard
Internal regulationsAt its meeting of 30 May 2007, the Supervisory Board resolved to adoptinternal regulations governing its internal operation and its relationship withthe Executive Board.
In particular, the Supervisory Board resolved to organise circulation ofinformation amongst the members of the Board so as to ensure that allmembers have the same information.
This report sets forth the main features of these internal regulations.
Membership of the BoardAll efforts are made to ensure that the Board comprises non-executivemembers who are able to guarantee the shareholders and the market that theBoard’s duties are fulfilled with the requisite independence and objectivity,thus avoiding the risk of conflict of interest between the Company and itsmanagement.
We wish to remind you that your Supervisory Board currently consists of sixmembers and that it must comprise at least 33% of non-executive members.During FY 2007, there were three non-executive members representing 50%of the Board.
The list of Board members, setting forth in particular the positions held withother companies, appears in the section of the management report addressingoffices and positions held.
As a general rule, a member of the Supervisory Board is deemed to be non-executive provided that none of his dealings with the Company, its Group orits management are likely to adversely affect his freedom of judgment.
Rules of disclosureEach member of the Board must, within 1 month from commencement of histerm of office, register the Company shares held by him, his spouse or hischildren, or deposit same with a bank.
Each member of the Board must personally hold shares in the Companyhaving a value equal to one year of director’s fees.
The members of the Supervisory Board and the members of the ExecutiveBoard must be periodically informed of the provisions of Article L. 621-18-2of the French Monetary and Financial Code and of the articles of the GeneralRegulations of the French Financial Markets Authority directly applicable tothem. For example, the members of the Board and of the Executive Boardmust directly file with the French Financial Markets Authority a declarationon any purchase, disposal, subscription or exchange of equity securities of theCompany, as well as on any transactions carried out on the financialinstruments attached thereto, within five days of occurrence thereof. Thisrequirement applies to the members of the Board and those of the ExecutiveBoard, as well as to all related individuals or legal entities as defined byapplicable regulations. Accordingly, these provisions apply to their spouseliving under the same roof, their dependent children, and to any other relativehaving residing in the same home for at least one year prior to the date of therelevant transaction, or to any legal entity managed by any of theaforementioned persons, or that is directly or indirectly controlled by suchperson, or incorporated for the benefit of such person, or the majoritybeneficial interest in which is held by such person.
The members of the Board shall take cognizance of the periods of prohibitionof transactions on the Company’s securities, and of their general obligationsvis-à-vis the market under applicable regulations.
Each member of the Board undertakes to inform the Chairman of the Boardof any event or information likely to give rise to a conflict of interest betweenhimself and the Company or its subsidiaries, as soon as he becomes awarethereof.In the event of such conflict of interest, the member in question may berequired to refrain from attending or voting at the Board meeting held inrespect of decision to be made.
Frequency of meetingsArticle 14 of the memorandum and articles of association requires theSupervisory Board to meet at least once per quarter, in particular to takecognizance of the reports submitted by the Executive Board and generally asoften as necessary in the interests of the Company. Thus, during the financialyear elapsed, your Supervisory Board met on five occasions.
2007 ANNUAL REPORT82
The Supervisory Board periodically addresses the suitability of its structureand operations in the performance of its duties.
This requirement consists of assessing the Board’s capacity to respond to theexpectations of the shareholders who appointed it to review the ExecutiveBoard’s management of the Company by periodically reviewing itsmembership, structure and operation.
Convening Supervisory Board membersA schedule of Board meetings must be drawn up early enough so as to alloweach of the members to be properly prepared.
Informing Supervisory Board membersIn order to allow each member of the Board to fulfil his duties and thereforeto make fully informed decisions, and to efficiently take part in Boardmeetings, each of them is sent a comprehensive file prior to each meeting.
This file comprises the documents required for proper information on theitems appearing on the agenda.
At least once per quarter, the Executive Board presents the Board with areport on the operations of the Company. In that regard, the Executive Boardsubmits a report drawn up by the financial management on the business ofthe Company, together with a balance sheet, income statement and cash flowstatement.
Within three months as of the close of each financial year, the Executive Boardsubmits the company’s annual financial statements and consolidated financialstatements to the Supervisory Board for verification and audit purposes. Inaddition, within the same period, it presents the Supervisory Board with theconsolidated financial statements for each of the first three quarters of thefinancial year, and the Company’s financial statements and the consolidatedfinancial statements for the first half-year ending 30 June.
Within the same period, the Executive Board provides it with the draft reportthat it proposes to submit to the Annual Shareholders’ General Meeting calledto vote on the financial statements for the financial year elapsed.
Forecasts are sent to the Supervisory Board together with an analysis reportwithin eight days of the preparation thereof by the Executive Board.
Furthermore, the Supervisory Board may at all times throughout the yearcarry out such inspections and audits as it shall deem appropriate, andrequest all documents that it deems necessary for the purposes of performingits duties.
Each member of the Supervisory Board may, at his discretion, meet with oneor more members of the Executive Board. In that event, such SupervisoryBoard member must give prior notice thereof to the Chairman of his Board,and subsequently inform him of the outcome of the said meeting.
The members of the Supervisory Board may also, at their discretion and incoordination with the Chairman of the Executive Board, meet with anyfunctional or operating manager.
The member of the Supervisory Board is under a duty to request any usefulinformation he may need to meet his duties. To that end, he must, in duetime, request from the Chairman of the Supervisory Board the informationthat he requires to make a fully informed decision in respect of the itemsappearing on the agenda, if he is of the opinion that the information availableto him is not sufficient. If a matter cannot be properly addressed at a meeting,the relevant decisions are postponed to the following session.
Finally, each member of the Board may, if he deems necessary, benefit fromadditional training in respect of the Company’s special features, its businesslines and sectors.
83
The timetable of Supervisory Board meetings, the main points appearing onthe agendas thereof, and the attendance rate of the directors during the
financial year elapsed are set forth hereinbelow:
Date Main points to the agenda Attendance rate
13/03/07 • Business of the Company and its subsidiaries in 2006. Executive Board presentation of consolidated financial statements and company financial statements for the year ended 31 December 2006 and trends for the 1st quarter 2007.Review of the Executive Board report to the Annual Shareholders’ General Meeting.
• Planned mergers or acquisitions.• Takeover of Stockalliance and ensuing capital increase.• Observations of the Supervisory Board on the Executive Board’s submissions to the Ordinary and Extraordinary
General Meeting.• Chairman’s report on the conditions of preparation and organisation of the working sessions of the Supervisory Board,
as well as internal audit procedures.• Remuneration of Executive Board members. 83%
30/05/07 • Executive Board presentation of consolidated financial statements for the period ended 31 March 2007. • Business report for the 1st quarter 2007 and trends for the 1st half-year 2007.• Mergers or acquisitions.• Approval of the internal regulations of the Supervisory Board 100%
29/08/07 • Executive Board presentation of consolidated financial statements for the period ended 30 June 2007.• Business report for the 2nd quarter 2007 and outlook for end 2007.• Overview of mergers or acquisitions. 66%
23/09/07 • Authorisations to be granted in respect of the acquisition of Christian Salvesen group. 100%
22/11/07 • Business report for the 3rd quarter 2007 and outlook for end December 2007. • Review of progress on Christian Salvesen and change of internal structure.• Insurance policies• Administrative services provided to Group companies. 66%
Conducting meetingsSupervisory Board meetings are held at any location specified in the notice.The Board meets at a venue selected by the Chairman of the Board so as toallow a maximum number of members to attend, or on the premises of oneof the Company’s subsidiaries, so as to foster better awareness of the Group’sactivities amongst members.
In order to facilitate attendance of Supervisory Board members at itsmeetings, videoconferences or teleconferences may be scheduled inaccordance with applicable regulations, as permitted under Article 23-1 of theCompany’s memorandum and articles of association.
Attendance via videoconference is not allowed at meetings held to draw upthe annual and consolidated financial statements or the Company or theGroup’s management report.
During the financial year elapsed, the meeting of 23 September 2007employed teleconference facilities, one member attending by this means.
Authorisation by the Supervisory Board of regulated agreementsDuring the financial year elapsed, the Supervisory Board has authorised thenew regulated agreements entered into or those amended during the year.These agreements were audited by the Company’s Statutory Auditors, whoreferred thereto in their special report.
Minutes of meetingsThe minutes of each meeting of the Board are drawn up following eachsession and a draft version thereof is provided to its members with the noticeof the following meeting at which they are approved.
• Internal audit procedures
Definition of internal controlInternal audit within the Norbert Dentressangle Group is a process thatimproves control over activities and operational efficiency.
The mission of internal audit is to ensure, inter alia:- that the Executive Board’s instructions and strategies are applied;- the proper operation of the Company’s internal procedures;- compliance with statutory provisions and regulations;- reliability of the financial information.
As with all control systems, please note that internal controls, howevercomprehensive, cannot provide anything more than reasonable assurance,and not an absolute guarantee, that the risks faced by the Group are fullyeliminated
Group structureThe Group’s activities are divided between two Divisions, Transport and Logistics,under the responsibility of two separate Management Committees.
Each of these two committees is chaired by a member of the Executive Board, thusensuring proper practice across both groups. This mechanism relies on a networkof delegation of authority and procedural guidelines. This system of delegation ofauthority and procedural guidelines, based on rules of conduct and integrity,ensures consistency in the distribution of the Group’s legal, financial, and humanresource policy.
Internal audit environment Compliance with the ethics and procedural policies distributed to eachemployee in particular through our commitment charter and our code ofethics is a priority for the Group. The ‘Group’ refers to the parent companyand the subsidiaries forming part of the consolidated Group.
Improvements and the sophistication of our software are a means ofstructuring our internal control system. For example, the Group uses theIntranet as the primary tool to distribute its procedures and managementpolicies. To date, most departments have one or more databases that areconstantly updated and upgraded.
In connection with the implementation of the reporting and Groupconsolidation system, an Intranet summarising the Group’s procedures andfinancial policies has been set up providing broad communication between allpersons involved.
While the Group’s operational structure remains decentralised, the use ofcentralised communications systems such as the Intranet allows distributionGroup Management of clear audit and control procedures throughout theGroup.
Throughout the financial year, in addition to systems improvements, theGroup also regularly and periodically reviewed the results of each businessunit, as one of the fundamental aspects of the internal control procedures.
Reinforcing the internal control system is a constant concern for the Group,which continues to upgrade its procedures, inter alia by means of improvedprocedural policies, establishing additional indicators as well as a newstructure of delegated powers.
The Group’s Internal Audit department consists of four experienced membersof staff acting under the authority of the Group’s financial management. Thereporting line is short, which ensures rapidity in the decision-making processand the correction of any weaknesses noted. Post-audit meetings aresystematically held following each assignment conducted by the InternalAudit department. These meetings are intended to present the relevantfindings and recommendations, and to address the measures to beimplemented to ensure the effectiveness of internal controls.
The Group has mapped the risks monitored by the Internal Auditdepartment. This chart is periodically updated following interviewsconducted with the operational management departments of each Divisionand with the multi-divisional functional departments. This chart is applied toascertain the coverage of the identified risks. The audit programme is definedaccordingly. In particular, it is validated by the Chairman of the SupervisoryBoard and the Group Finance Director.
Human resources policyWith the ongoing goal to strengthen a human resources policy based on theskills, know-how and high standards of its staff, the Group has initiated arecruitment policy, both at Group and Division level, designed to improvestaff professionalism to preserve the high level of expertise of its employees inconjunction with a staff skills development policy.
2007 ANNUAL REPORT84
85
• Parties involved in internal control andGroup operational and organisationalprocedures
The Supervisory Board and the Executive BoardThe dual form of the Company, comprising a Supervisory Board and anExecutive Board, the presence of non-executive members on the Board as wellas the rules of communication applied between the Supervisory Board andthe Executive Board are significant and underlying elements of the Group’sinternal controls.The advice provided by the Supervisory Board to the Executive Board as wellas the controls carried out allow for a better definition of the Group’sstrategies.
AuditThe Group comprises an Internal Audit department, operating under theauthority of the Group’s financial management. The reporting line is short,which ensures rapidity in the decision-making process and correction of anyweaknesses noted. Post-audit meetings are systematically held following eachassignment conducted by the Internal Audit department. These meetings areintended to present the relevant findings and recommendations, and toaddress the measures to be implemented to ensure the effectiveness of theinternal controls.
The Group has mapped the risks to be monitored by the Internal Auditdepartment. This chart is periodically updated following interviewsconducted with the operational management departments of each Divisionand with the multi-divisional management departments. This chart is appliedto ascertain the coverage of the identified risks. The audit programme isdefined accordingly. In particular, it is approved by the Chairman of theSupervisory Board and the Group Financial Director.
The Divisional Management Committees and Divisional SteeringCommitteesSignificant transactions and events as well as the performances of the variousbusiness units are reviewed within each Division by monthly Zone andRegional Steering Committees comprising members of the DivisionalManagement Committee, the operational managers and their financialcontrollers. Furthermore, the Management Committee of each Division meetsevery two months to discuss and plan the strategic orientations of the twoactivities.Significant transactions and events as well as the performances of eachDivision are reviewed each month at Divisional Steering Committeescomprising the General Managers, Finance Directors and Divisional Directorsof Human Resources on the one hand, and the Chairman of the ExecutiveBoard, the Group Financial Director and the Group Director of HumanResources on the other hand.
Divisional Capital Expenditure and Commitment CommitteesA Divisional Investment and Commitment Committee has been set up withineach Division for capital expenditure that exceeds the approval powers of theExecutive Board. It meets simultaneously with the Divisional ManagementCommittees. One of the duties of the Executive Board is to approve significantcapital expenditure and contractual undertakings. Requests for capital expenditure and undertakings are submitted by therelevant Head of Division, in accordance with pre-defined standardprocedures, with a strategic and financial presentation of the project. Whereapplicable, the criteria for approval by the Executive Board are updated totake into account the Group’s size and specific issues.
Divisional Legal and Insurance DepartmentsThe Legal Departments of each Division are centralised and are responsiblefor reviewing contractual and legal commitments. They are involved from
inception in commercial negotiations both with customers and suppliers.The management of insurance policies, contracted with reputableinternational brokers, is centralised by the Group Legal Department and isoutsourced following regular calls for tenders.
Divisional Operational Financial Control Divisional Operational Financial Controlling, which reports to the DivisionalFinancial Management, consist of a network of financial controllers secondedto each of the various operational managers of each Division. OperationalFinancial Controlling is a key component of the Group’s internal control.Operational Financial Control is responsible for the budget process. Eachmonth, it takes part in the drafting of the various financial reportingdocuments intended for the Group and is involved in the reconciliationbetween financial accounts and management reporting. Operational FinancialControl comments on performance at the Steering Committees, and inparticular on an analysis of variances between actual/ budget and actual /prior year figures. Where applicable, procedural audits, analyses and otherspecific reviews may be ordered by Divisional Management following theseSteering Committee meetings. Findings are addressed at the followingSteering Committee meetings.
Credit Management The management of Group commitments with third parties is centralisedwithin each Division, under the responsibility of Financial Management. Acentralised Group Credit Management department enables the Group to poolthe information collected from Divisional Credit Management departments.
The procedures and indicators implemented by Group Credit Management(regular credit analyses, setting permitted commitment thresholds, customerlimits etc.) ensure permanent monitoring of outstanding receivables andguarantee satisfactory reactivity in the event of default. Indicators areprovided to managers to maintain awareness and ensure coordinated actionby everyone involved.
PurchasesEach Division has a centralised Purchasing Department, which guarantees thequality and optimisation of strategic purchases. These Departments are alsoresponsible for diversifying suppliers.The Company has initiated a process of standardisation and grouping ofsuppliers by product range in order to improve the consistency of purchasingpractices and to ensure distribution of best practice.
Quality – Safety – EnvironmentQuality and safety control are key components of our Transport and Logisticsactivities. The Quality – Safety – Environment Departments report to therespective Managers of both Divisions and guarantee the performance of suchcontrol. Within the Logistics Division, teams of “quality and safety” co-ordinators are responsible for implementing safety and prevention proceduresat each warehouse.
The Group continues its certification procedure, and in particular with a viewto obtaining environmental standard ISO 14 001 for all of its new sites. TheGroup is devoting constant effort towards the “Safe Driving Plan”, the majoraims being to reduce the accident rate and maintain a high level of quality inour transport services.
All of the Group’s environmental initiatives are detailed in the ExecutiveBoard’s report under the heading “Corporate and environmentalachievements and commitments of the Company”.
ITBoth Divisions’ IT departments have continued to ensure the properoperation and continuity of our systems and have been allocated greaterresponsibilities since the computerisation of customer relations (EDI,customer portal, etc.), internal Group relations (Intranet, e-mails, etc.) andthe incorporation of information systems in general. The security of on-linesystems and the ability of our networks to operate in spite of faults andbreakdowns are becoming increasingly important. They are closelymonitored and are subject to strict procedures (protection, back-up, etc.).
External ConsultantsThe Group regularly engages external consultants to audit a number ofprocedures. These external audits pertain to issues as varied as sustainabledevelopment, sales staff or taxation.
• Procedures applicable to the preparation andtreatment of accounting and financial data
Financial control and the preparation of financial and accounting informationare based on the Group’s operational structure.Accordingly, within the framework of the decentralised structure, each legalentity is responsible for submitting a package of pre-defined financialinformation to the Group on a monthly and quarterly basis. The StatutoryAuditors review such data on a yearly and half-yearly basis.
Treasury and financing operationsThe Treasury team, which is centralised at Group level, allows transactions tobe strictly controlled. Payments and financing of French and foreignsubsidiary activities are centralised within each Division. Credit lines, loansand cash investment options are negotiated by the Group’s TreasuryDepartment and approved by the Executive Board. The Group TreasuryDepartment also manages the Group’s foreign currency and interest rate risks,applying limits set by Financial Management, with deliberately limitedrecourse to the market.
Finally, the simplified reports drawn up by the Treasury Department arereviewed by the Group Finance Director and sent to the Chairman of theSupervisory Board, and comprehensive reports are reviewed by members ofthe Executive Board every quarter.
Management reporting and Group Financial Control The reporting process is a key component of the Group’s management andinternal controls. Group Financial Controlling consolidates managementreports, drawn up on a monthly basis by the Operational FinancialControlling Department, within a single system. The reports are reconciledwith financial results, and compared with budgetary and prior year data on amonthly basis. The operational and financial data is always available for theGroup and Divisional Departments and operational managers and operationalfinancial controllers via the Group’s intranet, together with comparativebudgetary and historical data. Management reporting is systematically reconciled with the auditedaccounting data. Each month, Financial Management presents monthly management reportsto the Executive Board.
Where applicable, procedural audits, analyses and other specific reviews maybe ordered by Financial Management or the Executive Board.
ConsolidationConsolidated balance sheets, income statements and cash flow statements aredrawn up quarterly and published half-yearly. The Group’s consolidation unitissues instructions every quarter, setting the timetable for tasks and reiteratingthe methods for preparing consolidation packages intended for theaccounting departments / shared accounting departments of each country.The consolidation packages are verified by the consolidation unit prior toconsolidation. Each quarter, earnings are reconciled with those set forth in themanagement reports together with Group Financial Controlling.The Executive Board submits the management report and consolidation tothe Supervisory Board every quarter. The consolidation is published andapproved by the Statutory Auditors every half-year.
With a view to meeting the new standards and related statutory obligationsand to further standardise its policies and practices, the Group hasimplemented a consolidation and reporting system. This centralised ITsystem will contribute to the ongoing improvements in internal controlprioritised by the Group.
• Principles of remuneration
The members of the Supervisory Board are required to attend its meetings asregularly as possible. Furthermore, the allocation of directors’ fees to Boardmembers, the aggregate budget for which is approved at the Shareholders’General Meeting, takes into account the members’ attendance rate.
Where applicable, the Supervisory Board sets the remuneration of theChairman of the Board as well as that of the Vice-Chairman of the Board.
Finally, the Supervisory Board sets the procedures and amount of theremuneration of each of the Executive Board members pursuant to theiremployment contract. This remuneration consists of a fixed portion and avariable portion that is essentially contingent on the attainment of budgetedtargets.
The Chairman of the Supervisory Board,Norbert Dentressangle.
2007 ANNUAL REPORT86
87
STATUTORY AUDITORS’ REPORT DRAWN UP PURSUANT TO ARTICLE L. 225-235 OF THE FRENCH COMMERCIAL CODEON THE REPORT OF THE CHAIRMAN OF THE SUPERVISORYBOARD OF GROUPE NORBERT DENTRESSANGLE IN RESPECTOF INTERNAL CONTROLS GOVERNING THE PREPARATIONAND TREATMENT OF ACCOUNTING AND FINANCIALINFORMATION
Dear Shareholders,
In our capacity as Statutory Auditors of Groupe Norbert Dentressangle and in accordance with the provisions of Article L.225-235 of the FrenchCommercial Code, we hereby submit our report on the report drawn up by the Chairman of your Company pursuant to the provisions of Article L.225-68 of the French Commercial Code, for the financial year ended 31 December 2007.
In his report, the Chairman of the Supervisory Board must report, inter alia, on the conditions in which the proceedings of the Supervisory Board wereprepared and organised and on the internal controls implemented within the Company.
It is our duty to review and comment on the information set forth in the Chairman’s report on internal controls governing the preparation and treatmentof accounting and financial information.
We conducted our audit in accordance with the professional standards applicable in France, which require the implementation of procedures to assess theaccuracy of the information set forth in the Chairman’s report on internal controls governing the preparation and treatment of accounting and financialinformation. Such procedures consist inter alia of the following:
- taking cognizance of internal controls governing the preparation and treatment of accounting and financial information underlying the information setforth in the Chairman’s report, as well as existing documents;
- taking cognizance of the work having led to the preparation of such information and of existing documents;
- determining whether major deficiencies in internal controls governing the preparation and treatment of accounting and financial information that wenoted within the framework of our assignment have been duly addressed in the Chairman’s report.
Based on the above, we do not have any comments to make on the statements provided regarding internal controls governing the preparation and treatmentof accounting and financial information as set forth in the report drawn up by the Chairman of the Supervisory Board pursuant to the provisions of thelast paragraph of Article L.225-68 of the French Commercial Code.
Lyon, 10 April 2008
The Statutory Auditors
Alain Bonniot & Associés Ernst & Young AuditAlain Bonniot Daniel Mary-Dauphin
STATUTORY AUDITORS’ REPORTFinancial year ended 31 December 2007
2007 ANNUAL REPORT88
■ K€ Note 31/12/2007 31/12/2006 31/12/2005
■ REVENUE 1,804,341 1,607,905 1,399,316Other expenditure and external costs c (1,095,628) (992,001) (845,459)Staff costs c (531,233) (455,274) (408,328)Taxes, levies and similar costs c (35,936) (47,416) (38,350)Gains on sale of operating assets c 7,028 5,110 3,882Share of income/loss from joint venture c 2 (3) 63Other expenses (income) c (142) 18,781 4,094Depreciation and amortisation charges c (87,929) (79,524) (70,020)Provisions (provision reversals) c 7,125 4,120 3,231
■ UNDERLYING OPERATING INCOME 67,628 61,698 48,429Restructuring costs c (1,088) (9,593) (2,721)Real estate capital gains or losses c 1,872 3,913 2,094TNT provision reversals c 11,067 13,731 3,617Other non-current income and expenses c (5) 13,138 0Other non-current provisions and provision reversals c 334 201 0
■ E.B.I.T.A 79,808 83,088 51,419Amortisation of goodwill c 0 0 (1,602)Negative goodwill a & y 3,144 0 37,168
■ E.B.I.T 82,952 83,088 86,985Financial income d 22,577 10,092 5,764Financial costs d (32,285) (16,673) (11,553)
■ PRE-TAX INCOME 73,244 76,507 81,196Income tax expense e (23,881) (27,159) (16,764)Share of profit of associates (63) 444 291
■ GROUP NET INCOME 49,300 49,792 64,723Minority interests entitlements 0 0 0
■ NET INCOME GROUP SHARE 49,300 49,792 64,723
■ EARNINGS PER SHARE fBasic EPS on net income for the year 5.14 5.19 6.77Basic EPS on operating income 5.14 5.19 6.77Diluted EPS on net income for the year 5.08 5.12 6.72Diluted EPS on operating income 5.08 5.12 6.72
CONSOLIDATED INCOME STATEMENT
89
CONSOLIDATED FINANCIAL STATEMENTS
■ K€ Note 31/12/2007 31/12/2006 31/12/2005
Goodwill k 425,486 78,058 70,700Tangible fixed assets i 17,099 5,665 6,643Intangible fixed assets j 617,872 408,864 391,069Interests in related businesses l 6,652 1,491 1,148Other non-current financial assets m 21,412 19,337 19,835Net deferred tax assets t 45,658 18,344 26,163
■ NON-CURRENT ASSETS 1,134,179 531,759 515,558
Inventories n 17,454 7,390 6,366Trade receivables o 533,872 330,104 345,983Other receivables o 132,731 80,331 85,549Other current financial assets m 19,475 1,425 396Cash and cash equivalents p 220,708 255,706 194,627Assets held for sale j 455 717 990
■ CURRENT ASSETS 924,695 675,673 633,911
■ TOTAL ASSETS 2,058,874 1,207,432 1,149,469
LIABILITIES
■ K€ Note 31/12/2007 31/12/2006 31/12/2005
Share capital q 19,672 19,671 19,847Share premium 18,469 18,433 21,852Translation adjustments 818 760 (225)Consolidated reserves 249,273 208,561 153,616Net income for the financial year 49,300 49,792 64 723Minority interests 0 0 0
■ SHAREHOLDERS’ EQUITY 337,532 297,217 259,813
Long-term borrowings r 479,873 198,397 187,439Long-term provisions s 95,278 51,224 51,850Net deferred tax liabilities t 61,575 37,065 36,902
■ NON-CURRENT LIABILITIES 636,726 286,686 276,191
Short-term provisions s 42,244 11,796 26,366Trade payables u 373,791 238,980 229,707Short-term borrowings r 200,658 120,169 114,867Bank overdrafts p 73,380 58,609 50,922Current tax payable 7,969 4,919 3,715Other liabilities u 386,574 189,056 187,888
■ CURRENT LIABILITIES 1,084,616 623,529 613,465
■ TOTAL LIABILITIES 2,058,874 1,207,432 1,149,469
Consolidated balance sheets
ASSETS
2007 ANNUAL REPORT90
CASH FLOW STATEMENT
■ K€ 31/12/2007 31/12/2006 31/12/2005IFRS IFRS IFRS
Net income 49,300 49,792 64,723Depreciation and provisions 70,257 64,462 32,016Capital gains or losses on disposals of fixed assets (8,326) (6,270) (3,788)Net deferred tax assets or liabilities 856 7,635 1,142Net financial costs of financing transactions 8,729 6,580 5,789Other adjustments 1,395 245 (181)Operational cash flow 122,211 122,444 99,701Change in inventories (5,080) (1,186) (186)Trade receivables (16,242) 24,217 (41,710)Trade payables 36,008 6,045 18,385Operating working capital 14,686 29,076 (23,511)Social security receivables 10,067 11,346 4,969Tax receivables (8,384) 12,946 (13,043)Other receivables (3,500) (15,754) (1,946)Non-operating working capital (1,817) 8,538 (10,020)Operational working capital 12,869 37,614 (33,531)
■ NET CASH FLOW FROM OPERATIONS 135,080 160,058 66,170Sales of intangible and tangible fixed assets 47,432 50,980 65,177Receivables on sales of fixed assets (1,218) 0 0Sales of financial assets 18 621 9Acquisitions of intangible and tangible fixed assets (169,241) (132,189) (140,263)Payables on acquisitions of fixed assets 11,155 0 0Acquisitions of subsidiaries, net of cash acquired (293,658) (17,359) 57,388Sales of companies, net of cash transferrede 0 324 0
■ NET CASH FLOW FROM INVESTMENT TRANSACTIONS (405,512) (97,623) (17,689)
■ NET CASH FLOW (270,432) 62,435 48,481Dividends paid to parent company shareholders (9,586) (8,490) (7,979)Loan issues 370,623 138,764 93,200Capital increase/(reduction) 0 1,284 3,050Treasury shares 0 (7,278) (1,506)Other financial assets/liabilities (8) 0 0Repayment of loans (131,498) (127,526) (85,857)Net financial costs on financing transactions (8,729) (6,580) (5,789)
■ NET CASH FLOW FROM FINANCING TRANSACTIONS 220,802 (9,826) (4,881)Exchange differences on foreign currency transactions (139) 387 0Change in cash (49,769) 52,996 43,600Opening cash and cash equivalents 197,097 144,101 100,501Closing cash and cash equivalents 147,328 197,097 144,101Change in cash (closing - opening) (49,769) 52,996 43,600
The cash paid in respect of current tax amounts to € 19,038,000 as at 31 December 2007.
91
CHANGE IN CONSOLIDATED SHAREHOLDERS’ EQUITY
■ K€ Share Share Treasury Undistributed Other Minority Totalcapital premium shares reserves interests
■ AS AT 1 JANUARY 2005 19,533 19,116 (7,327) 169,548 (142) 511 201,239
Net income for financial year 2005 64,723 64,723Change in financial instruments revaluation reserve 257 257Exchange adjustments 402 402
■ Total expenditure and income for the financial year 0 0 0 64,723 659 0 65,382
Dividends paid in respect of FY 2004 (7,979) (7,979)Cancellation of acquisitions of treasury shares held (1,533) (1,533)Increase in share nominal value from € 1.60 to € 2 0Capital increase following exercise of stock options 314 2,736 3,050 Cost of payments in stock options 434 434Changes in consolidation 0Undertaking to redeem minority interests (511) (511) Other (269) (269)
■ AS AT 31 DECEMBER 2005 19,847 21,852 (8,860) 226,292 682 0 259,813
Group’s share of net income for FY 2006 49,792 49,792Change in financial instruments revaluation reservers 675 675Exchange adjustments 1,012 1,012
■ Total expenditure and income for the financial year 0 0 0 49,792 1,687 0 51,479
Dividends paid in respect of FY 2005 (8,491) (8,491)Cancellation of acquisitions of treasury shares held (322) (4,557) (2,399) (7,278)Increase in share nominal value from € 1.60 to € 2 146 1,138 1,284Capital increase following exercise of stock options 0Cost of payments in stock options 542 542 Changes in consolidation 0Undertaking to redeem minority interests 0Other (132) (132)
■ AS AT 31 DECEMBER 2006 19,671 18,433 (11,259) 267,593 2,779 0 297,217
Group’s share of net income for FY 2007 49,300 49,300Change in financial instruments revaluation reserve (335) (335)Exchange adjustments 58 58
■ Total expenditure and income for the financial year 0 0 0 49,300 (277) 0 49,023
Dividends paid in respect of FY 2006 (9,586) (9,586)Cancellation of acquisitions of treasury shares held 0Capital increase 1 36 (37) 0Capital increase following exercise of stock options 0Cost of payments in stock options 855 855Changes in consolidation 0Undertaking to redeem minority interests 0Other 23 23
■ AS AT 31 DECEMBER 2007 19,672 18,469 (11,259) 307,307 3,343 0 337,532
2007 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR 2007 IFRS STANDARDS
92
Name: Groupe Norbert Dentressangle.Registered office: “Les Pierrelles” 26240 BEAUSEMBLANT.
Legal form: public limited company (société anonyme) with an ExecutiveBoard and Supervisory Board, governed by the French Commercial Code(Code de commerce).The Group’s holding company is Groupe Norbert Dentressangle S.A.It is subject to French law.The Shareholders’ General Meeting called to vote on the financial statementsfor 2007 shall be held on 22 May 2008.The financial statements of Norbert Dentressangle Group were approved bythe Executive Board on 17 March 2008.The Group’s businesses are transport and logistics.
Three types of companies exist within Norbert Dentressangle Group:- Logistics operating companies, whose role in France and abroad is to
provide warehousing services as well as additional upstream activities (orderpreparation, product customisation and tracing, quality control, etc.) anddownstream services (distribution channel management and reverselogistics).- Transport operating companies, whose role is to operate a fleet of vehicles
with a team of drivers to ship goods in accordance with customerrequirements.
- Service companies, whose duties are to provide the operating companieswith services enabling them to focus on their core activities. These includethe holding company and country holding companies, whose role is toprovide assistance, particularly in strategy and communication.
The weighting of the two Group businesses may be assessed with reference tothe segment information set forth in the notes hereto.
I - GENERAL INFORMATION REGARDING THE ISSUER
a) Consolidation principles
• Basis and context for the preparation of the consolidated financial statements
Pursuant to EC Regulation 1606/2002 of 19 July 2002 on internationalstandards, the consolidated financial statements of Norbert DentressangleGroup for the financial year ended 31 December 2007 have been drawn upin accordance with International Financial Reporting Standards (IFRS)applicable as at that date, as approved by the European Union as at the dateof preparation of the financial statements.
Some of said standards may be subject to changes or interpretations withretroactive effect. As a consequence of such modifications, the Group maysubsequently restate the consolidated financial statements to meet IFRSrequirements.
Change of methodOn 31 December 2007, with a view to improving information and inaccordance with recommendation 2004-R02 of the National AccountingStandards Board, Norbert Dentressangle Group implemented changes inaccounting policies applicable to the presentation of the income statement aswell as to the cash flow statement. In accordance with IAS8 and in order toensure comparability between financial years, the prior year financialstatements were similarly restated.
The standards chosen for the preparation of the financial statements for 2007and the comparative financial statements for 2005 and 2006 are themandatory standards published in the Official Journal of the European Union(OJEU) as at 31 December 2007.
New standards and interpretations applicable in 2007 • IFRS 7 “Financial Instruments: Disclosures” and the amendment to IAS 1
“Presentation of Financial Statements” require disclosures on the significanceof financial instruments for the Group’s financial position and performance,as well as quantitative and qualitative information on the nature and extentof risks arising from financial instruments to which the Group is exposed.
The adoption of this standard did not have any impact on the Group’s earningsor financial position. However, it gave rise to additional notes.
• IFRIC interpretation 7 “Applying the Restatement Approach under IAS 29 -Financial Reporting in Hyperinflationary Economies” does not apply to thefinancial statements of Norbert Dentressangle Group.
• IFRIC interpretation 8 “Scope of IFRS 2 – Share-based payments” requiresthe application of IFRS 2 to all transactions involving issue of equityinstruments, when the value of consideration received is less than the fairvalue of the said equity-based investment. This interpretation did not haveany impact on the financial statements of the Group.
• IFRIC interpretation 9 “Reassessment of Embedded Derivatives” specifiesthat the analysis of the agreement to assess the existence of an embeddedderivative and whether it should be accounted for in accordance with IAS 39shall be carried out when the entity first becomes a party to the contract orin the event of a change in the terms of the contract that significantlymodifies the cash flows thereof. This interpretation did not have any impacton the financial statements of the Group.
• IFRIC interpretation 10 “Interim Financial Reporting and Impairment”prohibits the reversal of an impairment loss recognised as at the balancesheet date of interim financial statements on goodwill, investments in equityinstrument or financial assets. IFRIC interpretation 10 applies as of the dateof first application of standards IAS 36 and IAS 39, that is 1 January 2004 inthis case. This interpretation did not have any impact on the financialstatements of the Group.
New standards and interpretations subject to deferred application The Group did not elect for early application of the following standards,standard amendments and interpretations, adopted or pending adoption bythe European Union and scheduled for mandatory application after 31December 2007:• IFRS 8: “Operating segments”, applicable from 1 January 2009,• IFRIC interpretation 11 “IFRS 2: Group and Treasury Share Transactions”
specifies the accounting treatment of share-based payments involving anentity’s own equity instruments and share-based payments involving theparent’s equity instruments. This interpretation, which existed as at 31 December 2007 and applied to financial years beginning as from 1 March 2007, or in advance as from 1 January 2007, has not been appliedin advance by the Group as at 31 December 2007.
II - ACCOUNTING POLICIES AND METHODS
93
• IFRIC interpretation 12 “Service Concession Arrangements”, applicable tofinancial years beginning as from 1 January 2008.
• IFRIC interpretation 13 “Customer Loyalty Programmes”, applicable tofinancial years beginning as from 1 July 2008.
• IFRIC interpretation 14 “The Limit on a Defined Benefit Asset, MinimumFunding Requirements and their Interaction” applicable to financial yearsbeginning as from 1 January 2008.
• IAS 23 amendment “Borrowing Costs”, applicable to financial yearsbeginning as from 1 January 2009.
• IFRS 2 amendment “Vesting Conditions and Cancellations”, published inJanuary 2008.
• IFRS 3 revision “Business Combinations” published in January 2008.• IAS 27 revision “Consolidated and Separate Financial Statements”
published in January 2008.
The consequences of the application of these new standards are currentlybeing assessed.
In order to draw up its financial statements, the Group must make certainestimates and assumptions that can affect the financial statements. The Groupperiodically reviews its estimates and assessments to take into account pastexperience and other factors deemed to be relevant in light of economicconditions. Depending on changes in these various assumptions orconditions, the amounts recorded in its future financial statements may differfrom current estimates.The main financial statement headings that may be subject to estimates arethe following:- Impairment of doubtful receivables;- Fair value of assets and identifiable and contingent liabilities acquired as
part of a business combination;- Impairment of goodwill, the valuation of which is largely based on
assumptions regarding future cash flows, discount rates, terminal values,- Valuations of options under share subscription schemes granted to
employees and retirement commitments, the valuation of which is based ona number of actuarial assumptions,
- Valuation of financial instruments,- Deferred taxes and tax charges.
The financial statements reflect the best estimates based on availableinformation as at the balance sheet date.They were prepared in accordance with the historical cost principle,excluding certain items, in particular financial assets and liabilities, whichwere stated at fair value.The local financial statements of each Group company were drawn up inaccordance with the accounting policies and regulations in force within theirrespective countries. They are restated as necessary to comply withconsolidation policies applied within the Group.
• Scope of consolidation
The consolidated financial statements comprise the financial statements ofcompanies exclusively controlled, whether directly or indirectly, by GroupeNorbert Dentressangle S.A., the Group’s holding company.The balance sheet dates of the various entities comply with that set by theGroup.The scope of consolidation is detailed in Note III aa.
Exclusive controlControl is the power to directly or indirectly direct the financial andoperating policies of a firm so as to derive benefits from its activities. Controlis generally deemed to exist where the Group holds over half of the votingrights in the controlled company. The financial statements of subsidiaries areincluded in the consolidated financial statements as of the date of transfer ofeffective control until the date on which control ceases.
All significant transactions between consolidated companies as well as anyinter-company profits and losses are eliminated.
The Group consolidates French special purpose vehicles solely intended tofinance road tractors (see Notes III-z). These entities are known as “Locad” entities and are economic interestgroupings (EIGs) that are majority owned by a banking pool. They purchase a vehicle fleet meeting the Group’s requirements and financesame by means of loans from a banking pool. The vehicles are exclusivelyleased to the various French user companies. In compliance with SIC 12, these special purpose vehicle financing entitiesare consolidated by applying the full consolidation method. These companies have been granted firm buy-back commitments from themanufacturers of these motor vehicles.
Joint control Companies that the Group controls jointly with a limited number of partnerspursuant to a contractual agreement are consolidated by applying theproportional consolidation method.The assets, liabilities, income and expenditure are consolidated in proportionto the Group’s shareholding.
Significant influence Associated companies are those over which the Group exercises significantinfluence regarding financial and operational policies, without exercisingcontrol. Where an investor directly or indirectly holds at least 20% of thevoting rights in the company held, it is deemed to have significant influence,unless otherwise clearly shown. Companies over which the Group exercises significant influence areaccounted for under the equity method. Goodwill from these entities is included in the book value of the investment.
All of the companies in which the Group holds majority control areconsolidated, without any exception.
• Acquisition of minority interests
In accordance with the IAS 27 revision dated 10 January 2008, additionalacquisitions of minority interests shall be directly set off against shareholders’equity. This accounting treatment shall apply as of 1 July 2009 and will nothave any retroactive effect.As at 31 December 2007, the Group continued to apply the methodrecommended by currently applicable provisions. In the event of acquisitionsof additional interests in a subsidiary, the difference between the price paidand the book value of the minority interests acquired, as recorded in theGroup’s consolidated financial statements prior to the acquisition, isrecognised as goodwill.
b) Currency conversion The consolidated financial statements as at 31 December have been drawn upin euros, i.e. the Group’s operational currency.
• Recording foreign currency transactions inthe financial statements of consolidatedcompanies
Foreign-currency transactions recognised in the income statement areconverted by applying the exchange rate prevailing on the date of thetransaction. Monetary items recognised in the balance sheet and not subjectto hedging are converted by applying the exchange rate prevailing on thebalance sheet date. Any resulting foreign exchange differences are recorded inthe income statement.
• Translation of financial statements of foreignsubsidiaries
The balance sheets of foreign companies with non-euro operationalcurrencies are translated into euros at the exchange rate prevailing on thebalance sheet date and their income statements are translated at the averagerate for the financial year. Any resulting conversion adjustment is recognisedin shareholders’ equity as “Translation adjustments”.In the event of disposal of an entity, translation adjustments are recorded asincome for the financial year.Goodwill is tracked in the currency of the relevant subsidiary. None of theGroup’s significant subsidiaries are located in a high-inflation country.
c) Business combinationsUpon consolidation, the assets, liabilities and identifiable and contingentliabilities of the acquired entity that meet the criteria for recognition underIFRS are recognised at the fair value computed as at the date of acquisition,with the exception of fixed assets classified as assets held for sale, which arerecognised at fair value net of selling costs.
Only identifiable liabilities in the acquired entity that meet the criteria forrecognition as a liability are recognised in a business combination.Accordingly, a restructuring liability is not recognised as a liability of theacquired entity unless such entity is, as at the date of the acquisition, underan obligation to perform such restructuring.
Goodwill is computed as the difference between the sum of the assets,liabilities and identifiable contingent liabilities of the acquired entity assessedseparately at their fair value and the cost of acquisition of the securities in therelevant company.
Adjustments to the values of assets and liabilities pertaining to acquisitionsrecognised provisionally (due to ongoing valuations or additional analyses)are recognised as retrospective goodwill adjustments where they occur withintwelve months from the date of acquisition. After such period, the impact isrecorded directly in income unless it stems from the correction of an error.
Newly acquired companies are consolidated as from the effective takeover date.
In the event of acquisitions of additional interests in a subsidiary, thedifference between the price paid and the book value of the minority interestsacquired, as recorded in the Group’s consolidated financial statements priorto the acquisition, is recognised as goodwill. The Group continues to applythe method recommended by French accounting standards.
The current provisions of IAS 27 and IAS 32 have led the Group to recordcommitments to purchase minority interests as borrowings. The Group haselected to record as goodwill the difference between the discounted fair valueof the exercise price of the options and the value of minority interestscancelled in equity.
This goodwill is restated each year to reflect the variation in the exercise priceof the options and changes to minority interests. This treatment, which is theapplicable treatment in the event of current exercise of the options, bestreflects the substance of the transaction.
d) GoodwillGoodwill is valued at cost – such cost being the excess of the investment inconsolidated companies over the Group share of the net fair value of assets,liabilities and identifiable and contingent liabilities.
Goodwill is subject to impairment tests at least once per annum, or morefrequently where events or changes in circumstances indicate the occurrenceof impairment. Any impairment recorded is irreversible.
Negative differences between the acquisition cost and the acquiring entity’sinterest in the net fair value of assets, liabilities and identifiable contingentliabilities (negative goodwill) is recorded directly as income for the year afterverification of the amount thereof.
Goodwill is then allocated to the Cash Generating Units to which it relates.
Goodwill for companies accounted for under the equity method is recordedas “Investments in associated companies”.
e) Intangible fixed assets Intangible assets primarily consist of software subject to straight linedepreciation over 12 to 60 months.
Internally developed software is recorded on the balance sheet when thefollowing two conditions are met:- the entity is likely to collect the corresponding future economic benefits;and- its cost or value can be assessed with adequate reliability.The conditions laid down in IAS 38 in respect of capitalisation ofdevelopment costs must be complied with (including in particular thetechnical feasibility of the project, as well as the intention to complete thesoftware, and the availability of resources).
Two types of costs are applied in respect of internally developed software:- external costs (licences, use of specialist consultants, etc.); and- direct costs of employees involved in the project design, set-up and deliveryphases.The total cost thus recorded is matched with the recoverable value of thesoftware. This analysis may lead to impairment.
f) Tangible fixed assets
• Transport equipment
Transport equipment is initially recorded at cost. Each year, the Groupreviews market conditions and the buy-back terms agreed with its suppliers.These terms depend on the year of purchase and type of vehicle (tractor,semi-trailer and truck tractor).
Based on the said criteria, the Group projects the estimated useful life of thevehicles on a straight line basis and a depreciation period is thus obtained.Thus, vehicles are currently depreciated on a straight line basis over a periodof 80 to 150 months.
Residual values of other fixed assets are reviewed each year. Impairment testsare carried out in accordance with the procedure set forth hereinbelow insection h (Impairment tests).
2007 ANNUAL REPORT94
95
• Other tangible fixed assets
Investments in tangible fixed assets are initially recorded at purchase cost.
Depreciation is calculated on a straight line basis over the estimated useful lifeof the various categories of fixed assets.
The main expected useful lives of assets are the following:- Buildings: straight line over a period of 15 to 30 years,- Building fixtures and fittings: straight line over 10 years,- Plant, machinery and equipment: straight line over 5 years,- Other tangible fixed assets: straight line over 5 to 10 years.
In light of the nature of the fixed assets held by the Group, no majorcomponents were identified.
Residual values of fixed assets are reviewed annually. Impairment tests arecarried out where benchmarks are available (market value in the case of realestate).
Subsequent expenditure is capitalised provided it meets the asset recognitioncriteria defined under IAS 16 and in particular where it is likely that futureeconomic benefits will accrue to the firm. These criteria are assessed prior tothe expense being incurred.
A tangible fixed asset is eliminated from the accounts upon disposal or whereno future economic benefit is expected from the use or disposal thereof. Anygain or loss arising as a result of the disposal of an asset (computed withreference to the difference between the net sales proceeds and the book valueof the asset) is recorded in the income statement for the year in which theasset disposal occurs.
g) Lease contracts The Group records its finance lease contracts as assets in its balance sheet asof the effective date of the lease.
The amount recorded in the balance sheet is the lesser of the fair value of theasset and the present value of the minimum lease payments.
Finance leases substantially transfer virtually all risks and benefits ofownership to the lessee, and comply with the main indications referred to inIAS 17, which are as follows:- an option to transfer ownership upon expiry of the lease, the terms and
conditions of such option being such that, as at the date of execution of thecontract, there appears to be a high probability of transfer of ownership;
- the term of the lease spans most of the useful life of the asset under thelessee’s conditions of use; and
- the present value of minimum lease payments is comparable to the fairvalue of the leased asset upon execution of the lease.
Finance lease payments are broken down into interest and reduction of theoutstanding liability, so as to obtain a constant periodic interest rate on theremaining balance of the liability. The interest costs are directly recorded inthe income statement.
Contracts characterised as operating leases are not subject to restatement.Operating leases are recorded as expenditure, in most cases on a straight linebasis until expiry of the contract.Fixed assets purchased under finance leases are recorded as assets in thebalance sheet and depreciated over the same periods as those describedhereinabove where the Group expects to obtain title to the asset upon expiryof the lease. Otherwise, the asset is depreciated over the shorter of the usefullife of the asset and the term of the lease.
The Group must occasionally carry out sale and leaseback transactions inrespect of certain assets. In accordance with IAS 17, the accounting treatmentof these transactions depends inter alia on the following:- Subsequent classification of the lease entered into (operating lease or
finance lease),- Terms of sale of the asset previously held (arm’s length selling price).
h) Impairment tests IAS 36 lays down the procedures to be applied by a business firm to ensurethat the net book value of its assets does not exceed the recoverable valuethereof, that is the amount that would be recovered from the use or salethereof.
With the exception of goodwill and intangible assets with an indefinite lifethat require systematic annual impairment tests, the recoverable value of anasset is assessed whenever there is reason to believe that the value thereofmay have decreased.
The recoverable value of an asset is the higher of the fair value, minus sellingcosts, and the value in use thereof.
The net sale price is the amount that can be derived from selling an asset atarm’s length between informed and willing parties, minus selling costs.
The value in use is the present value of the estimated future cash flowsexpected from the continued use of the asset and the disposal thereof at theend of its useful economic life.
The recoverable value is assessed for each asset separately.
Where this is not possible, assets are grouped into Cash Generating Units(CGU) the recoverable value of which can then be computed. A CashGenerating Unit is the smallest asset group comprising the asset, the use ofwhich generates inward cash flows that are essentially independent of thosegenerated by other assets or asset groups. To that end, all profit centres arisingfrom prior acquisitions of companies have been identified and changes in therelated assets have been monitored. The recoverable value of a CashGenerating Unit is the higher of the fair value thereof, minus selling costs,and the value in use.
The value in use is computed with reference to cash flows estimated on thebasis of plans or budgets. Such cash flows are projected over three years inaccordance with the historical organic growth rates recorded for the Group.
The residual value of a CGU is a multiple of the last cash flow.
The discount rate is originally based on a rate calculated for the entire Group.It has been computed using intrinsic and market data and reviewed by ourfinancial analysts. The risk component of this rate continues to be appliedwithin the Logistics and Transport Divisions. The recoverable value is thencompared with the book value of the CGU.
If this value exceeds the net book value of the CGU as at the balance sheetdate, no impairment is recorded. If conversely this value is less than the netbook value, impairment of the difference must then be recorded in priorityover goodwill. Such impairment shall be definitive.
For other intangible and tangible assets with a determinate economic life, apreviously recognised impairment loss is reversed if there has been a changein the estimates used to compute the recoverable value amount since the lastentry of an impairment loss in the accounts. In that event, the book value ofthe asset is increased up to the recoverable value thereof. The book valueincreased as a consequence of reversal of an impairment loss should not
exceed the book value that would have applied, net of depreciation, had noimpairment loss been recognised in respect of such asset in earlier financialyears. Impairment loss reversals are recognised as income, unless the asset isrecognised at its revalued amount, in which case the impairment loss isdeemed to constitute positive revaluation. After recognition of an impairmentloss reversal, the depreciation provision is adjusted for future periods so thatthe revised book value of the asset, reduced by any residual value, issystematically allocated over the remaining useful economic life.
i) InventoriesInventories are stated at cost using the average weighted cost method. Animpairment provision is recognised where the cost exceeds the market value.
j) Trade receivablesTrade receivables are valued at face value. They are written down by way ofan impairment provision based on risk of non-recovery, assessed on a case-by-case basis. Impaired receivables are recognised as a loss when they aredeemed to be irrecoverable.
k) Provisions Provisions are recorded where (i) the Group is subject to a current obligation(whether legal or constructive) arising from a past event, (ii) it is likely thatan outflow of resources constituting economic benefits will be required tosettle the obligation and (iii) the amount thereof can be reliably assessed.
Provisions are discounted if the impact thereof is deemed to be significant.The effect of such discounting is recognised as income where applicable.
The own insurance provisions for occurrences of risk are valued withreference to the claims notified as at the balance sheet date of the financialstatements and to claims incurred but not notified.
Provisions for restructuring are recognised in accordance with IAS 37 asfollows:- provided there is a detailed formal plan, identifying at least:• the relevant business or part of business;• the location;• the position and approximate number of the employees who are to be
compensated;• expenditures to be incurred;• the date of implementation of the plan; and- whether the enterprise has raised in those affected a valid expectation, that
it will implement in connection with the restructuring.
Contingent liabilities relate to potential obligations arising from past events,the existence of which is contingent on the occurrence of uncertain futureevents that lie beyond the control of the entity, and to current obligations inrespect of which an outflow of resources is not likely. With the exception ofthose arising from business combinations, they are not recognised but aredisclosed in the notes.
l) Employee benefits • Post-employment benefits
There are various Group retirement benefit plans for certain employees.Retirement plans, related payments and other employee benefits classified asdefined-benefit plans (plans whereby the Group undertakes to guarantee acertain amount or level of defined benefits), are recognised on the balancesheet based on an actuarial valuation of the commitments on the balancesheet date, reduced by the fair value of the related assets.
This valuation is carried out by independent actuaries applying a method thattakes into account forecast salaries (known as the projected unit credit
method) on a case-by-case basis, relying on assumptions as to life expectancy,employee revenues, wage variations, reassessment of annuities and revision ofamounts payable. The assumptions peculiar to each regime take into accountlocal economic and demographic data.
Payments made for plans classified as defined-contribution plans, that is,where the Group is not subject to any obligation other than payment of thecontribution, are recognised as expenditure for the financial year.
Defined-benefit retirement and related commitments assumed by NorbertDentressangle Group companies are as follows:- termination benefit plans (indemnités de fin de carrière) for all Frenchcompanies in accordance with collective bargaining agreements in force (roadtransport, automobile services, knowledge-based economic sectors andcleaning companies);- end-of-service benefits (trattamento di fine rapporto) for Italian companies;- retirement plans for certain UK companies.
Pursuant to IAS 19, actuarial gains and losses based on experienceadjustments and/or changes to actuarial assumptions are amortised as futureexpenditure for each company over the average probable remaining period ofservice of the relevant employees, after applying a 10% corridor of the higherof the value of commitments and value of the plan assets.
The past service cost is recognised as expenditure on a straight line basis overthe average time remaining until the corresponding employee rights becomevested. Where benefit entitlements are already vested upon adoption orchange in the retirement plan, the past service cost is immediately recognisedas expenditure.
• Other long-term benefits
Other long-term benefits mainly relate to bonus plans for long-serviceawards, reserved for French companies forming part of the Logistics Division.Commitments to pay long-service bonuses to serving employees arerecognised as provisions.
Expenses incurred in respect of Individual Training Rights (Droit Individuelà la Formation) are recorded as expenditure for the financial year and do notentail any provision, except where such expenses can be deemed to constituteremuneration for past service and where the obligation assumed vis-à-vis theemployee is likely or firm.
The notes (Note III bb.) include information on the number of hours vested,as well as the number of hours having been requested by employees.
m) Loans and borrowing costsUpon initial recognition, bond loans and other debt are recorded at fair value,against which transaction costs directly attributable to the issue of the liabilityare set off.
The fair value generally corresponds to the cash collected.
After initial recognition, loans are recorded on the basis of the amortised costby applying the effective interest method.
Loan issue premiums and costs as well as bond redemption premiums aretaken into account when computing amortised cost by applying the effectiveinterest method, and are therefore recorded as income on a discounted basisover the term of the liability.
Loan interest is recorded as expenditure for the financial year.
2007 ANNUAL REPORT96
97
n) Share-based paymentsCertain Group employees and company officers hold warrants, sharewarrants and stock options.
These instruments are valued as at the allotment date by applying the Black& Scholes model, which is a valuation model that computes the fair value asat the allotment date and which takes into account various parameters suchas share price, exercise price, expected volatility, forecast dividends, risk-freeinterest rate and the term of the option.
The cost thus computed is recorded as expenditure for the financial yearduring which the rights are vested, with an offsetting entry in a separatebalance sheet account.
No expenses are recognised for instruments that are not ultimately acquired,except for those the acquisition of which is contingent on market conditions.These are deemed to be acquired, whether or not market conditions arefulfilled, where the other performance criteria are fulfilled.
If the terms and conditions of any equity-based remuneration are amended,an expenditure is recorded for at least the amount that would have beenrecognised in the absence of such amendment.
An expense is also recorded to take into account the impact of changes thatincrease the aggregate fair value of the share-based payment agreement orthat entail any other staff benefits. This is valued as at the date of the change.
In accordance with the transitional provisions of the standard, only optionplans subsequent to 7 November 2002 have been recognised in accordancewith the aforementioned principle and valued.
o) Deferred taxes Deferred tax assets and liabilities are assessed at the tax rate expected to beapplied for the year during which the asset is to be realised or the liabilitysettled, with reference to the tax rates and regulations enacted or substantiallyenacted as at the balance sheet date.
Deferred taxes are computed on all timing differences that arise between thetax base and book value of assets and liabilities recorded in the consolidatedbalance sheet and on tax losses carried forward.Deferred tax assets, net of liabilities, are only recorded insofar as there is areasonable likelihood of realisation or recovery. Deferred tax assets arerecognised for tax losses carried forward in accordance with the criteriadefined in IAS 12, that is, where:- the entity has sufficient taxable timing differences vis-à-vis the same
taxation authority and taxable entity, giving rise to taxable amounts againstwhich unused tax losses or credits can be set off before expiry thereof;
- it is likely that the entity will generate taxable income prior to expiry of theunused tax losses or credits;
- unused tax losses derive from identifiable causes which are unlikely torecur; and
- tax planning opportunities are available to the entity that will generatetaxable income within the period in which the unused tax losses or creditscan be utilised.
The deferred tax asset is not recognised if it is unlikely that taxable incomewill be available against which the unused tax losses or credits can be set off.
p) Derivative financial instrumentsThe Group has elected to apply IASs 32/39 as from 1 January 2005.
Pursuant to each standard, where derivatives are designated as hedginginstruments, the treatment thereof depends on whether they are designatedas a:- fair-value hedge;- cash flow hedge; or- hedge of a net investment in a foreign entity.
All derivative financial instruments are stated at fair value. Fair value is eitherthe market value, for instruments listed on a stock market, or a valueprovided by financial institutions using traditional criteria (over-the-countermarket).
Derivative financial instruments mostly consist of interest-rate swapcontracts.
As the special purpose vehicles’ liabilities are assumed at variable rates andrent instalments invoiced by these entities are index-linked to a variable rate,the Group has implemented hedging instruments to limit its exposure tointerest-rate risk.
Derivatives characterised as cash flow hedges are recognised on the balancesheet as current financial assets or borrowings, with an offset in shareholders’equity.
q) Other financial assetsFinancial assets are classified into four categories depending on the naturethereof and the reasons for holding them:- assets held to maturity;- financial assets at fair value through profit and loss;- assets held for sale; and- loans and receivables (non customer).Financial assets are initially recognised at cost, corresponding to the fair valueof the price paid plus purchase costs.Other financial assets mostly consist of deposits and guarantees paid tolessors of premises where the Group conducts its activities.
r) Non-current assets held for sale and discontinuedoperations
When assets are held for sale under IFRS 5 principles, that is, where the bookvalue thereof is recovered mainly by means of a sale transaction rather thancontinuing use, the Group values these assets at the lesser of the book valueand fair value less costs to sell and ceases to amortise or depreciate same.
Assets held for sale are presented separately in the balance sheet and incomestatement.
A discontinued operation is a component that the Group has disposed of orthat is classified as held for sale. These activities are inter alia presented in aspecific line of the income statement.
s) Treasury sharesIrrespective of the purpose for which treasury shares are held, they areeliminated from equity in consolidation.
No gain or loss is recognised as income upon the acquisition, sale, issue orcancellation of Group equity instruments.
t) Cash and equivalentsCash corresponds to bank account balances (credit balances and overdrafts)and cash in hand.
Cash equivalents are mainly UCITS, relating to highly liquid short-terminvestments that can easily be converted into a known amount of cash andthat are subject to a negligible risk of a loss in value. They are classified in thebalance sheet as “Cash and equivalents” assets and as “Bank overdrafts”liabilities. Cash and cash equivalents presented in the cash flow statementcomprise the cash and cash equivalents as defined hereinabove.
u) Earnings per shareNet earnings per share are obtained by dividing net income for the financialyear by the number of shares outstanding at year-end, reduced by the numberof treasury shares.
Consolidated diluted net earnings per share take into account shares issuedas a result of the exercise of stock options, minus treasury shares.
v) RevenuesRevenue from ordinary activities is recognised where it is likely that futureeconomic benefits will accrue to the Group and this income can be assessedreliably. Such income is assessed at the fair value of the consideration to bereceived.
Income from the provision of services provided within the framework of thelogistics business are recognised as of completion of the contractually agreedassignments.
Income from the transport business is recognised as soon as the service hasbeen provided.
w) EBITAEarnings Before Interest, Taxes and Amortisation: earnings before netfinancial results and income tax, amortisation of goodwill and the recognitionof negative goodwill (badwill).
x) EBITEarnings Before Interest and Taxes: earnings before net financial results andincome taxes. This equals EBITDA less depreciation, amortisation andimpairment (including that of goodwill).
2007 ANNUAL REPORT98
a) Events during the financial yearThe main events that occurred during the year 2007 were the following:
• Change in capital
A capital increase took place in 2007, pursuant to the application of theeighteenth resolution of the shareholders’ General Meeting held on 30 May2007 pertaining to the merger of Groupe Norbert Dentressangle andStockalliance by way of absorption of the latter by the former. The 548 fullypaid-up new shares having a nominal value of € 2 each and carrying anentitlement to a merger bonus of € 66.56 per share have been allocated toshareholders of Stockalliance other than Groupe Norbert Dentressangle in thefollowing proportion: 13 shares in Groupe Norbert Dentressangle for 12 shares in Stockalliance.
• Changes in consolidation
Business disposalsThe Group did not dispose of any business activity during the financial yearended 31 December 2007.
Acquisition of companiesOn 23 March 2007, Norbert Dentressangle Group acquired an 80% interestin Northern Distribution and Logistics, a Romanian logistics company. Itshead office is in Bucharest where it manages two warehouses having an areaof 21,400 sq.m, generating annual revenues of € 4.5 million. Taking intoaccount the logistics activity already developed at Arad in Romania, the Groupnow has 50,000 sq.m of logistics warehouses in this country.
The 20% interest held by the minority shareholders is subject to a purchase
commitment granted by the Group. In accordance with applicable standardsand with procedures defined at Group level, these minority interests havebeen recorded as borrowings.
This company’s earnings are consolidated by applying the full consolidationmethod as of 23 March 2007. Since consolidation, this company hascontributed the following to the Group: € 36,000 to net income, € 3,681,000 torevenues, and € 1,411,000 to total assets.
If the acquisition had taken place at the beginning of the financial year, theimpact thereof on consolidated group earnings would have beenapproximately € 115,000 and approximately € 4,488,000 on revenues.
Goodwill amounts to € 1,851,000 (see note y).
Within the framework of the outsourcing of industrial logistics of theBeiersdorf Group in France, on 28 February 2007, Norbert DentressangleGroup also acquired the entire share capital of Beiersdorf Logistics France,which then changed its name to ND BL.The earnings of this company are consolidated by applying the fullconsolidation method with effect from 28 February 2007.Since consolidation, this company has contributed the following to theGroup: € 3,943,000 to net income, € 5,642,000 to revenues, and € 11,978,000 to its aggregate fair value of assets. Negative goodwill amountsto € 3,144,000 (see note y).If the acquisition had taken place at the beginning of the financial year, theimpact thereof on consolidated group earnings would have beenapproximately € 790,000 and approximately € 7,307,000 on revenues.
On 21 June, Norbert Dentressangle Group incorporated the company TigerFuel SAS together with 2 partners. This company is 40% held by ND
III - NOTES TO ANNUAL FINANCIAL STATEMENTS 2007
99
Hydrocarbures and consolidated by applying the equity method. Therecognised impact thereof on earnings for the period from 21 June 2007 to31 December 2007 was a loss of € 1,000.Norbert Dentressangle Group resolved to subscribe for the capital increase ofInterbulk Investments plc in the amount of € 5,902,000. Following thetransaction dated 10 April 2007, Norbert Dentressangle Group held 6.6% ofthe share capital of the company listed on the AIM market in London.
Norbert Dentressangle Group thus became the first shareholder of thatcompany possessing experience in the field of transport and logistics, as theother two main shareholders are financial investors. The Group is a memberof the board of directors of Interbulk Investments plc, which comprises 9 members. Furthermore the Group has built a strong business relationshipwith it. These three criteria show the existence of a significant influence onthe part of Norbert Dentressangle Group on Interbulk Investments plc and,in accordance with IAS 28, the company has been consolidated by applyingthe equity method.
The earnings of this associated company will be consolidated in the Groupfinancial statements in proportion to the Group share of the earnings of thecompanies to which the equity method was applied subject to a 3-monthdelay in light of the balance sheet date of accounts of Interbulk Investmentsplc. As a result, the impact on earnings was a loss of € 76,000 for the periodfrom 10 April 2007 to 30 September 2007.
The balance sheet date of accounts of Interbulk Investment plc is 30 September of the current year. For the period from 30 September 2006 to30 September 2007, key figures were:
Revenue € 237 million Operating income € 11 million Net income € 0.4 million
Tangible fixed assets € 79 million Other assets € 229 million Net assets € 80 million Borrowings € 143 million Other liabilities € 85 million
On 14 December 2007, Norbert Dentressangle Group completed theacquisition of the entire share capital of Christian Salvesen Plc.
This acquisition was carried out pursuant to a Scheme of Arrangement,which was a sale by mutual agreement, with support from both the board ofdirectors and a number of major shareholders, including the Salvesen family.This acquisition was unreservedly approved on 6 December 2007 by theEuropean Commission pursuant to the EC Merger Regulation.
Christian Salvesen Plc has 14,400 employees and manages a fleet of 2,500 tractors and 3,500 trailers. This Group manages approximately 1 million sq.m of warehouse space distributed across 200 sites.
Christian Salvesen’s contribution to Norbert Dentressangle Group consists ofexpert know-how and a significant position on the frozen and fresh logisticsand pallet distribution markets.
Christian Salvesen’s presence in the United Kingdom, Spain and BeneluxStates strengthens Norbert Dentressangle Group’s existing dominant positions.
This strategic transaction, which is in line with Norbert DentressangleGroup’s growth targets, gave rise to a European leader in the transport andlogistics sector, with 29,631 employees, combined revenues of € 2.9 billionin 2006 (based on the consolidated historical data published by the ChristianSalvesen group) generated via 370 sites in 14 European States.
Norbert Dentressangle Group acquired the entire share capital of theChristian Salvesen group. The earnings of this company were consolidated byapplying the full consolidation method from 14 December 2007. For thefinancial period ended 31 December 2007, the company’s contribution to theGroup’s net income since its acquisition was a loss of € 524,000, thecontribution to revenues was € 47,886,000 and the contribution to totalassets was € 238,916,000.
The provisional positive goodwill recorded as at 14 December 2007, i.e. thedate of consolidation, was € 349,710,000 (see note y).
A pro forma income statement appears under note g. It was drawn up on theassumption that the acquisition of the Christian Salvesen plc securities hadtaken place on 1 January 2007.
• Acquisitions and disposals of assets
Equity investments
On 13 December 2007, the Group acquired a 10.48% interest in the sharecapital and voting rights of Novatrans, thus increasing its interest to 10.92%as at 31 December 2007.
This transaction is in line with Norbert Dentressangle Group’s goal tobroaden its range of services by designing combined transport solutions.
It confirms the Group’s commitment to seek solutions that take into accountsustainable development including in terms of reduction of greenhouse gasemissions.
Novatrans is a French leader in the combined rail-road transport sector. Itsrevenues in 2006 amounted to € 110 million, and each day over 70 fulldomestic and international trains circulate on its behalf.
In addition to 345 employees, Novatrans has a fleet of 1,300 wagons, 13 terminals in France, 1 terminal in Italy and 2 subsidiaries in Europe, andcarries the equivalent of 450,000 vehicles each year and ships more than 8 million tonnes of goods.
b) Segment information As stated in the first part of the notes, the two Group businesses are Transportand Logistics.
Transport activities consist of transport solutions (management of all of acustomer’s transport), international groupage, domestic distribution,outsourcing of customer fleets, contract distribution and logistics oncustomer sites.
The main Logistics activities comprise inventory management, qualitycontrol, order preparation, distribution, packing, customisation, sub-assembly, co-packing, delivery to end users, information management andreal-time traceability control, as well as reverse logistics.The Group presents detailed primary segment information in respect of thetwo businesses, Transport and Logistics, since these involve different marketsand levels of capital intensity.Furthermore, they are consistent with the Group’s internal organisation.
The geographic presentation offers an international view of the Group.
• Primary segment presented by activityInformation regarding each activity
2007 ANNUAL REPORT100
■ K€ Transport Logistics Not allocated Income statement total
Total revenues 31/12/2005 898,052 501,264 1,399,31631/12/2006 1,008,147 599,758 1,607,90531/12/2007 1,129,050 675,291 1,804,341 Operating cash flow 31/12/2005 46,918 13,463 60,38131/12/2006 133,995 19,482 153,47731/12/2007 85,454 49,626 135,080 Operating income31/12/2005 26,296 25,123 51,41931/12/2006 49,950 33,138 83,08831/12/2007 42,895 40,056 82,952Group share of earnings of companies treated under the equity method31/12/2005 159 132 29131/12/2006 378 66 44431/12/2007 (186) 123 (63)
■ K€ Transport Logistics Not allocated Income statement total
de résultat
Gross intangible and tangible fixed assets*31/12/2005 504,836 163,447 668,28331/12/2006 560,430 165,594 726,02431/12/2007 687,573 281,551 969,124Of which acquisitions during the year31/12/2005 109,475 35,436 144,91131/12/2006 108,559 25,448 134,00731/12/2007 144,977 24,265 169,242Negative goodwill and goodwill impairment31/12/2005 48,324 (12,758) 35,56631/12/2006 0 0 031/12/2007 0 3,144 3,144Investments in associated companies31/12/2005 544 604 1,14831/12/2006 925 566 1,49131/12/2007 6,059 593 6,652Other non-current assets 31/12/2005 431,850 83,708 515,55831/12/2006 456,884 74,875 531,75931/12/2007 677,614 456,565 1,134,179
Operating cash flow and operating income of the Christian Salvesen group forthe period from 14 December 2007 to 31 December 2007 are statistically
distributed in proportion to revenues.
101
Current assets31/12/2005 429,858 203,063 632,92131/12/2006 451,054 223,902 674,95631/12/2007 513,208 411,487 924,695Total Assets31/12/2005 862,541 286,928 1,149,46931/12/2006 908,655 298,777 1,207,43231/12/2007 1,190,822 868,052 2,058,874Assets held for sale31/12/2005 833 157 99031/12/2006 717 71731/12/2007 455 455
Total Liabilities31/12/2005 841,962 307,507 1,149,46931/12/2006 887,849 319,583 1,207,43231/12/2007 1,190,822 868,052 2,058,874Staff31/12/2005 8,587 5,309 13,89631/12/2006 8,721 5,887 14,60831/12/2007 14,673 14,958 29,631Number of motor vehicles 31/12/2005 4,730 215 4,94531/12/2006 4,983 226 5,20931/12/2007 7,197 809 8,006Number of sq.m31/12/2005 139,475 2,532,201 2,671,67631/12/2006 124,814 2,642,078 2,766,89231/12/2007 525,014 3,288,447 3,813,461
• Secondary segment presented by geographic regionInformation regarding each activity
The “other” countries are Spain, Portugal, Italy, Germany, Switzerland, Poland, Romania, Czech Republic, Belgium, The Netherlands and Luxembourg.
* including fixed assets in the process of disposal.
Financing liabilities of the vehicle segment are statistically allocated inproportion to vehicle numbers.
The various companies derive less than 10% of their revenues fromcompanies in the other business segment.
Invoicing is at market prices.
■ K€ 31/12/2007 31/12/2006 31/12/2005Great Great Great
France Britain Other Total France Britain Other Total France Britain Other Total
Total revenues 1,387,907 112,518 303,916 1,804,341 1,273,417 88,934 245,554 1,607,905 1,087,887 94,548 216,881 1,399,316Fixed assets including 626,883 107,863 234,378 969,124 529,757 23,780 172,487 726,024 518,056 26,361 123,866 668,283acquisitions during the year 104,954 13,577 50,711 169,242 91,389 4,588 38,030 134,007 102,148 4,142 38,621 144,911Staff 14,501 9,098 6,032 29,631 11,080 660 2,868 14,608 11,174 902 1,820 13,896Number of sq.m 2,186,988 616,634 1,009,839 3,813,461 1,966,240 171,584 629,068 2,766,892 1,959,550 220,584 491,542 2,671,676Number of motor vehicles 5,002 1,468 1,536 8,006 3,956 97 1 156 5,209 4,095 100 750 4,945
2007 ANNUAL REPORT102
c) Operating income• Breakdown of operating income: EBITDA - (Provisions)/Reversals
d) Financial profit or loss
■ K€ 31/12/2007 31/12/2006 31/12/2005
■ REVENUES 1,804,341 1,607,905 1,399,316Other purchases and external costs (1,095,628) (992,001) (845,459)Staff costs (531,233) (455,274) (408,328)Taxes, levies and similar payments (35,936) (47,416) (38,350)Gain/loss on asset disposals 8,901 8,308 3,882Share of income/loss from joint ventures 2 (3) 63Other expenses (521) (9,936) (6,163)Other income 373 35,940 13,336
■ TOTAL EXPENDITURE BEFORE AMORTISATION/DEPRECIATION (1,654,042) (1,460,382) (1,281,019)
■ EBITDA 150,299 147,523 118,297
Depreciation and amortisation charges (96,181) (98,651) (81,552)Reversal of amortisation and provisions 28,834 34,216 50,240
■ TOTAL (PROVISIONS)/REVERSALS (67,347) (64,435) (31,312)
■ EBIT 82,952 83,088 86,985
■ K€ 31/12/2007 31/12/2006 31/12/2005
Interest and similar financial income 4,469 2,990 1,672Positive exchange adjustments 12,747 4,055 2,919Profit or loss from disposals of investments 5,361 3,044 1,172Reversals of provisions on equities and financial fixed assets 0 3 1
■ TOTAL FINANCIAL INCOME 22,577 10,092 5,764
Interest and similar expenditure (18,040) (12,551) (9,490)Exchange losses (14,245) (4,122) (2,063)Depreciation and amortisation charges 0 0 0
■ TOTAL FINANCIAL COSTS (32,285) (16,673) (11,553)
■ TOTAL (9,708) (6,581) (5,789)
103
Where there is no certainty that the tax loss of a subsidiary can be offset
against its future tax payable, no deferred tax asset is recognised.
The change in the tax rate is attributable to changes in applicable tax regulations.
The amount of deferred taxes recognised in shareholders’ equity stems from
the application of IAS 39, in the amount of € 168,000.
f) Earnings per share
■ K€ 31/12/2007 31/12/2006 31/12/2005
Net current tax (loss)/income (23,029) (19,524) (15,622)Net deferred tax (loss)/income (852) (7,635) (1,142)Tax on discontinued operations or held for sale
■ TOTAL (23,881) (27,159) (16,764)
Net income of consolidated group 49,300 49,792 64,723Taxes 23,881 27,159 16,764Earnings of associated companies 63 (444) (291)
■ CONSOLIDATED GROUP EARNINGS 73,244 76,507 81,196
Notional tax rate 34.43% 34.43% 34.93%
■ NOTIONAL TAXES 25,218 26,341 28,362
Permanent differences 1,457 (328) 12,596 Use of losses not giving rise to recognition of deferred tax 602 677 188Losses for the period not triggering deferred tax (555) (724) (2,085)Impact of tax rate differences (167) (443) 899
■ TAXES RECOGNISED 23,881 27,159 16,764Effective Tax Rate 32.60% 35.50% 20.65%
■ K€ 31/12/2007 31/12/2006 31/12/2005
Consolidated net income 49,300 49,792 64,723Income from continuing activities 49,300 49,792 64,723Average number of shares 9,836,241 9,818,243 9,812,773Average number of treasury shares (250,114) (215,506) (258,857)Net earnings per share 5.14 5.19 6.77Earnings per share from continuing activities 5.14 5.19 6.77Net earnings per share for discontinued activities or assets being disposed of N/A N/A N/AWarrants 115,000 115,000 10,000Stock options 0 65,300Total average number of diluted shares 9,701,127 9,717,737 9,629,216Net diluted earnings per share 5.08 5.12 6.72Net diluted earnings per share from continuing activities 5.08 5.12 6.72Net diluted earnings per share for discontinued activities or assets being disposed of N/A N/A N/A
Earnings per share are computed with reference to the net income of the Group after tax. The calculation method applied is that of IAS 33.
g) Pro formaThe pro forma income statement was drawn up on the assumption that theacquisition of the Christian Salvesen plc securities had been completed as at 1January 2007.
The pro forma information was prepared on the basis of the consolidatedfinancial statements of the Christian Salvesen group drawn up for the periodfrom 1 January to 14 December 2007.
The pro forma financial information does not necessarily represent theearnings that would have been recognised in the consolidated financialstatements of Norbert Dentressangle Group if the transaction had actuallytaken place on 1 January 2007. In particular, they do not reflect the impact ofsynergies and or an allocation of the purchase price to identifiable assets andliabilities.
e) Corporation tax
2007 ANNUAL REPORT104
■ K€ Gross Amortisation Net valuesvalues and depreciation
Goodwill■ Value as at 1 January 2005 56,709 (1,199) 55,510
Acquisitions 16,707 (1,602) 15,105Disposals 0Translation adjustments 140 (55) 85Change in consolidation 0
■ Value as at 31 December 2005 73,556 (2,856) 70,700Acquisitions 7,295 7,295Disposals 0Translation adjustments 103 (40) 63Change in consolidation 0
■ Value as at 31 December 2006 80,954 (2,896) 78,058Acquisitions 0Disposals 0Translation adjustments (2,902) 170 (2,732)Change in consolidation and reclassification 350,160 350,160of which change in consolidation 350,162 350,162
■ Value as at 31 December 2007 428,212 (2,726) 425,486
Goodwill■ Value as at 1 January 2005 12,910 (6,968) 5,942
Acquisitions/(Provisions) 2,690 (2,256) 434(Disposals)/reversals 227 227Translation adjustments (19) (19)Change in consolidation 0
■ 31/12/2007 31/12/2006 31/12/2005
Executives 1,654 876 866 Employees and supervisors 6,649 3,434 3,177 Drivers 11,105 6,554 6,112Manual workers 10,223 3,744 3,741■ TOTAL 29,631 14,608 13,896
h) Workforce
■ K€ 01/01-31/12 01/01-31/12 01/01-31/122007 2007 2007
Norbert Dentressangle Group C. Salvesen Pro Forma
NET REVENUES 1,804,341 1,278,457 3,082,798Staff costs (531,233) (477,343) (1,008,576)Share of income/loss from joint ventures 2 0 2Other expenses (income) and Provisions (provision reversals) (1,117,553) (749,230) (1,866,783)Amortisation and depreciation charges (87,929) (28,421) (116,350)
EBITA 67,628 23,464 91,092
i) Intangible fixed assets
• Changes in fixed assets
105
■ Value as at 31 December 2005 15,600 (9,016) 6,584Acquisitions/(Provisions) 1,321 (2,207) (886)(Disposals)/reversals (38) 32 (6)Translation adjustments 0Change in consolidation 59 (132) (73)
■ Value as at 31 December 2006 16,942 (11,323) 5,619Acquisitions/(Provisions) 1,602 (2,430) (828)(Disposals)/reversals (157) 147 (10)Translation adjustments (198) 11 (187)Change in consolidation and reclassification 13,696 (1,488) 12,208of which change in consolidation 11,863 11,863
■ Value as at 31 December 2007 31,885 (15,083) 16,802
Other intangible fixed assets ■ Gross values as at 1 January 2005 2,825 (2,538) 287
Acquisitions/(Provisions 26 (67) (41)(Disposals)/reversals (314) 20 (294)Translation adjustments 21 21Change in consolidation (653) 739 86
■ Value as at 31 December 2005 1,905 (1,846) 59Acquisitions/(Provisions) 96 (1) 95(Disposals)/reversals (196) 87 (109)Translation adjustments 8 (10) (2)Change in consolidation 19 (16) 3
■ Value as at 31 December 2006 1,832 (1,786) 46Acquisitions/(Provisions) 143 (16) 127(Disposals)/reversals (61) 61 0Translation adjustments (65) 65 0Change in consolidation and reclassification (385) 508 123of which change in consolidation 20 20
■ Value as at 31 December 2007 1,464 (1,168) 296
Value as at 31 december 2005 91,061 (13,718) 77,343Value as at 31 december 2006 99,728 (16,005) 83,723Value as at 31 december 2007 461,561 (18,977) 442,584
There are no restrictions on the Group’s use of its fixed assets. Apart from goodwill, no other intangible asset has an indefinite life.
j) Tangible fixed assets The assets intended for disposal are the Roost Warendin site assets used for the transport activity.
• Change in fixed assets
■ K€ Gross Amortisation Net valuesvalues and depreciation
Land and improvements■ Gross value as at 1 January 2005 9,880 (455) 9,425
Acquisitions/(Provisions) 775 (13) 762(Disposals)/reversals (740) 2 (738)Translation adjustments 0Assets held for sale (490) (490)Change in consolidation 620 620
2007 ANNUAL REPORT106
■ Value as at 31 December 2005 10,045 (466) 9,579Acquisitions/(Provisions) (63) (63)(Disposals)/reversals (417) 106 (311)Translation adjustments 39 39Assets held for sale 0Change in consolidation 444 444
■ Value as at 31 December 2006 10,111 (423) 9,688Acquisitions/(Provisions) 4 (42) (38)(Disposals)/reversals (890) 5 (885)Translation adjustments (252) 0 (252)Change in consolidation and reclassification 24,844 (80) 24,764of which change in consolidation 22,298 22,298
■ Value as at 31 December 2007 33,817 (540) 33,277
Buildings■ Gross value as at 1 January 2005 65,528 (35,694) 29,834
Acquisitions/(Provisions) 14,198 (4,262) 9,936(Disposals)/reversals (7,793) 1,382 (6,411)Translation adjustments 182 (28) 154Assets held for sale (3,255) 2,799 (456)Change in consolidation 19,133 (1,869) 17,264
■ Value as at 31 December 2005 87,993 (37,672) 50,321Acquisitions/(Provisions) 4,948 (4,380) 568(Disposals)/reversals (10,922) 3,551 (7,371)Translation adjustments 220 (59) 161Assets held for sale 273 273Change in consolidation 841 (310) 531
■ Value as at 31 December 2006 83,353 (38,870) 44,483Acquisitions/(Provisions) 12,764 (5,199) 7,565(Disposals)/reversals (9,883) 4,461 (5,422)Translation adjustments (1,743) 100 (1,643)Assets held for sale 0Change in consolidation and reclassification 74,473 2,126 79,599of which change in consolidation 78,628 78,628
■ Value as at 31 December 2007 158,964 (37,382) 121,582
Equipment, plant and machinery ■ Gross value as at 1 January 2005 59,339 (40,241) 19,098
Acquisitions/(Provisions) 17,674 (9,459) 8,215(Disposals)/reversals (8,060) 5,617 (2,443)Translation adjustments 69 (37) 32Change in consolidation 644 25 669
■ Value as at 31 December 2005 69,666 (44,095) 25,571Acquisitions/(Provisions) 15,941 (11,167) 4,774(Disposals)/reversals (7,590) 5,327 (2,263)Translation adjustments 131 (84) 47Change in consolidation 1,683 (236) 1,447
■ Value as at 31 December 2006 79,831 (50,255) 29,576Acquisitions/(Provisions) 11,157 (7,973) 3,184(Disposals)/reversals (5,741) 4,005 (1,736)Translation adjustments (630) 97 (533)Change in consolidation and reclassification 18,197 9,135 27,332of which change in consolidation 35,752 35,752
■ Value as at 31 December 2007 102,814 (44,991) 57,823
107
Transport equipment ■ Gross value as at 1 January 2005 393,809 (132,553) 261,256
Acquisitions/(Provisions) 96,005 (47,529) 48,476(Disposals)/reversals (95,737) 51,899 (43,838)Translation adjustments 1,311 (150) 1,161Change in consolidation 21,155 (7,601) 13,554
■ Value as at 31 December 2005 416,543 (135,934) 280,609Acquisitions/(Provisions) 97,294 (53,112) 44,182(Disposals)/reversals (69,057) 38,574 (30,483)Translation adjustments 1,798 (930) 868Change in consolidation 11,579 (8,751) 2,828
■ Value as at 31 December 2006 458,157 (160,152) 298,004Acquisitions/(Provisions) 117,877 (58,639) 59,238(Disposals)/reversals (76,730) 46,631 (30,099)Translation adjustments 1,187 (263) 924Change in consolidation and reclassification 20,706 2,827 23,533of which change in consolidation 17,900 17,900
■ Value as at 31 December 2007 521,197 (169,596) 351,601
Other tangible fixed assets ■ Gross value as at 1 January 2005 55,602 (33,692) 21,910
Acquisitions/(Provisions) 10,212 (7,473) 2,739(Disposals)/reversals (3,931) 2,765 (1,166)Translation adjustments 20 (11) 9Assets held for sale (288) 244 (44)Change in consolidation (1,404) 659 (745)
■ Value as at 31 December 2005 60,211 (37,508) 22,704Acquisitions/(Provisions) 11,687 (9,301) 2,386(Disposals)/reversals (3,473) 2,710 (763)Translation adjustments 32 (13) 19Change in consolidation 1,507 (813) 694
■ Value as at 31 December 2006 69,964 (44,925) 25,040Acquisitions/(Provisions) 13,654 (13,617) 37(Disposals)/reversals (4,927) 4 316 (611)Translation adjustments (118) 45 (73)Change in consolidation and reclassification 25,526 (10,252) 15,274of which change in consolidation 8,389 8,389
■ Value as at 31 December 2007 104,099 (64,433) 39,667
Advances and down payments ■ Gross value as at 1 January 2005 8,850 0 8,850
Acquisitions/(Provisions) 4,349 4,349(Disposals)/reversals (6,367) (6,367)Translation adjustments 11 11Change in consolidation (4,557) (4,557)
■ Value as at 31 December 2005 2,286 0 2,286Acquisitions/(Provisions) 1,694 1,694(Disposals)/reversals (1,906) (1,906)Translation adjustments 0Change in consolidation 0
2007 ANNUAL REPORT108
■ Value as at 31 December 2006 2,074 0 2,074Acquisitions/(Provisions) 12,041 12,041(Disposals)/reversals 0 0Translation adjustments (554) (554)Change in consolidation and reclassification 361 361of which change in consolidation 0 0
■ Value as at 31 December 2007 13,922 0 351,601
Value as at 31 December 2005 646,744 (255,675) 391,069Value as at 31 December 2006 703,490 (294,626) 408,864Value as at 31 December 2007 934,813 (316,942) 617,872
• Capitalised and leased assets
There are no restrictions on the Group’s use of its fixed assets.As stated in III-bb, motor vehicle manufacturers have entered into buy-back commitments.
k) Goodwill and fixed asset impairment testsThe main assumptions applied for valuation of the impairments tests are as follows:
Beta is the combined ratio of share performance and volatility. This is a sector ratio computed on a statistical basis.The terminal value of a CGUs is computed as a multiple of the latest cash flow. Calculations made in respect of 2007 did not lead to any impairment losses ongoodwill.
Gross values Amortisation and impairment
■ K€ 31/12/2007 31/12/2006 31/12/2005 31/12/2007 31/12/2006 31/12/2005
Land and improvements 8,132 8,179 3,695 0 0 0
Buildings 53,212 24,676 10,349 (7,255) (7,894) (6,104)
Equipment, plant and machinery 5,414 2,754 2,754 (3,395) (2,201) (1,660)
Transport equipment 7,449 17,466 21,099 (3,484) (9,441) (10,004)
Other tangible fixed assets 0 42 42 0 (42) (42)
■ TOTAL 74,207 53,118 37,939 (14,134) (19,578) (17,810)
■ % 2007 2006 2005
Risk-free rate 4.35 3.40 3.40Equity market risk premium 4.91 4.50 4.50Corporate risk premium 1.38 2.50 2.50Beta 1.14 1.16 1.16Cost of borrowing 5.02 4.23 4.00Tax rate 35.00 35.00 35.00Long-term growth rate 1.50 1.50 1.50
109
A one-point reduction in WACC would entail a 14.53% increase in the goingconcern value of the CGUs. This increase does not affect the lack of aprovision as at 31/12/2007.
The acquisition of companies CCH and GPL led to positive goodwill of€ 7,186,000 as at 31 December 2006. The amount of this goodwill wasadjusted as a result of adjustments to the computation thereof over the 12 month period following the acquisition of the companies in accordance
with IFRS 3. The resulting variation in the initial amount of positive goodwillwas - € 1,520,000 for 2007.
The impairment tests conducted in respect of other fixed assets did not leadto any additional impairment.
■ K€ Goodwill from Goodwill from TotalTransport Logistics
Net value of goodwill as at 01/01/2005 10,056 45,454 55,510
Variation in goodwill for 2005 17,273 (566) 16,707
Impairment for 2005 (1,602) (1,602)
Foreign-exchange differences 85 85
Net value as at 31/12/2005 25,812 44,888 70,700
Variation in goodwill for 2006 109 7,186 7,295
Impairment for 2006 0 0
Foreign-exchange differences 63 63
Net value as at 31/12/2006 25,984 52,074 78,058
Variation in goodwill for 2007 114,812 235,229 350,041
Impairment for 2007 0
Foreign-exchange differences (1,033) (1,580) (2,613)
Net value as at 31/12/2007 139,763 285,723 425,486
■ K€ Net value of earlier Impairment following Net value impairment as at 31/12/2007 loss in value as at 31/12/2007
GND 323 323
Christian Salvesen 347,358 347,358
TND 424 424
TND Sud Est 766 766
ND Logistics Italia 8,316 8,316
TFND 702 (702) 0
ND Chimie 216 216
Sonecovi 2,237 2,237
TND Sud Ouest 69 69
TND Normandie Bretagne 644 644
ND UK 2,763 76 2,839
TND Ouest 380 380
ND Logistics 33,476 33,476
ND Polska 105 105
ND Inter Pulvé 1,670 (600) 1,070
NDT 1,140 (112) 1,028
ND Deutschland Holding 900 (900) 0
TND Paca 517 (488) 29
ND Logistics Nederland BV 2,773 2,773
Distribution Norbert Dentressangle 15,916 15,916
ND & L 1,851 1,851
CCH 5,666 5,666
TOTAL 428,212 (2,726) 425,486
l) Investments in associated companies
m) Other financial assets
• Other non-current financial assets
2007 ANNUAL REPORT
The value of the Interbulk shareholding as at 31 December 2007 has beencomputed in accordance with IAS 28, by applying the higher of fair value(obtained from the quoted share price as at 31 December 2007, as Interbulkis a listed company) and the going concern value (assessed by means ofdiscounted cash flows). The latter value was applied and compared to thebook value of the interest in Interbulk. This valuation is based on the present
value of the cash flows from Interbulk expected by Norbert DentressangleGroup. The following financial assumptions were applied: constant growthrate of 1.5%, discount rate of 9.05% (average weighted cost of capital). No loss in value was recognised as a result of this comparison.
110
■ K€ Investment Company’s equity Revenues Net income
CSND31/12/2007 362 711 6,507 9231/12/2006 328 645 7,591 14931/12/2005 277 531 6,612 155Centrale des Franchisés31/12/2007 99 198 17,902 10731/12/2006 71 141 16,881 9731/12/2005 22 44 3,530 6NDB Logistica Romania31/12/2007 235 469 4,241 (460)31/12/2006 477 1,662 3,333 50631/12/2005 198 395 2,496 143Salto31/12/2007 38 111 8,981 4931/12/2006 21 62 9,998 (15)31/12/2005 26 77 9,182 8LGL31/12/2007 593 1,210 6,517 25231/12/2006 566 1,157 6,211 13431/12/2005 604 1,239 5,309 269TigerFuel31/12/2007 15 37 (3)31/12/200631/12/2005Interbulk31/12/2007 5,278 79,969 152,479 (1,153)31/12/200631/12/2005MNS31/12/2007 33 79 181 1231/12/2006 28 67 169 1631/12/2005 21 51 233 11
■ K€ 31/12/2007 31/12/2006 31/12/2005
Loans 1,431 1,665 1,835
Deposits and guarantees 19,157 17,606 17,854
TOTAL 20,588 19,271 19,689
Shareholdings in non-consolidated companies 824 67 146
TOTAL 21,412 19,338 19,835
111
Loans, deposits and guarantees as at 31/12/07 are broken down by maturity date in the following table:
The loans are interest-bearing loans. Deposits and guarantees do not bear interest.
• Other current financial assets
■ K€ 31/12/2007 Maturity datesTotal Less than 1 year 1 to 5 years More than 5 years
Loans 1,431 6 1,242 183
Deposits and guarantees 19,157 1,553 12,930 4,674
TOTAL 20,588 1,559 14,172 4,857
■ K€ 31/12/2007 31/12/2006 31/12/2005
Financial instruments 946 1,425 396
Operating financial assets 18,529
TOTAL 19,475 1,425 396
■ K€ 31/12/2007 31/12/2006 31/12/2005
Gross trade receivables 538,232 334,960 351,325
Impairment provisions (4,360) (4,856) (5,342)
Trade receivables 533,872 330,104 345,983
Tax and social security receivables 66,371 49,050 67,086
Advances and down payments 24,427 6,035 3,251
Pre-paid expenses 8,540 6,250 6,743
Other miscellaneous receivables 33,393 18,996 8,469
Other receivables 132,731 80,331 85,549
■ K€ 31/12/2007 31/12/2006 31/12/2005
Opening (4,857) (5,342) (3,971)
Provisions for the financial year (1,635) (1,625) (1,468)
Reversals used 389 311 330
Unused reversals 1,417 1,395 837
Change in consolidation and reclassification 329 418 (1,066)
Translation adjustments (3) (14) (4)
Closing (4,360) (4,857) (5,342)
Operating financial assets bear interest based on the Euribor rate.
n) InventoriesAs at 31 December 2007, inventories amounted to € 17,454,000 (€ 7,390,000and € 6,366,000 respectively as at 31 December 2006 and 31 December 2005).They mainly consist of diesel fuel (€ 5,599,000 as at 31 December 2007, € 1,595,000 as at 31 December 2006, € 1,273,000 as at 31 December 2005),
Tax receivables mainly consist of deductible VAT and advance tax payments.
As at 31 December 2007, trade receivables were impaired in the amount of € 1,635,000. Movements in receivable provisions are set forth in the following table:
spare parts and supplies intended for the maintenance of vehicles and trailers (€ 3,532,000 as at 31 December 2007, € 2,521,000 as at 31 December 2006, € 1,828,000 as at 31 December 2005) as well as miscellaneous supplies(packaging film for pallets, computer lists, etc.) (€ 1,310,000 as at 31 December2007, € 898,000 as at 31 December 2006, € 559,000 as at 31 December 2005).
o) Trade and other receivables
2007 ANNUAL REPORT112
■ K€ 31/12/2007 31/12/2006 31/12/2005
Short-term investments 83,125 178,422 119,086
Cash in hand 137,583 77,284 75,541
Cash and cash equivalents 220,708 255,706 194,627
Banks accounts (credit balances) (73,380) (58,609) (50,922)
Net cash position 147,328 197,097 143,705(1)
■ K€ Total Not matured Payable within Maturityand not impaired 0 to 90 days exceeding 90 days
31/12/2007 538,232 369,359 159,524 9,349
Customer receivable maturities were as follows:
Receivables with a maturity date exceeding 90 days do not bear interest.
(1) The € 144,101,000 net cash item in the cash flow statement for 2005 comprises derivatives in the amount of € 396,000.
Short-term investments consist of units in mutual fund-type money market open-ended investment companies at their daily net asset value. No restrictions apply to theGroup’s use of its cash.
p) Cash and cash equivalents
q) Issued share capital and reserves
■ Années Nature of transaction Change in capital Capital après opérationNumber of shares Nominal value Share premiums Amount Number
in euros in euros in euros of shares
As at 1 January 2004 15,565,930 9,728,706
January 2004 Exercise of warrants 38,000 60,800 922,640 15,626,730 9,766,706May 2004 Increase of nominal value from € 1.60 to € 2 3,906,682 19,533,412 9,766,706
As at 31 December 2004 19,533,412 9,766,706
June 2005 Exercise of warrants 10,000 2 204,100 20,000 9,776,706August 2005 Exercise of warrants 75,000 2 1,530,750 150,000 9,851,706October 2005 Exercise of warrants 10,000 2 204,100 20,000 9,861,706
Exercise of stock options 42,600 2 558,486 85,200 9,904,306November 2005 Exercise of stock options 9,300 2 121,923 18,600 9,913,606December 2005 Exercise of stock options 9,700 2 127,167 19,400 9,923,306
As at 31 December 2005 19,846,612 9,923,306
January 2006 Exercise of stock options 21,600 2 283,176 43,200 9,944,906Cancellation of shares (160,913) 2 (4,557,628) (321,826) 9,783,993
February 2006 Exercise of warrants 10,000 2 204,100 20,000 9,793,993Exercise of stock options 3,500 2 45,885 7,000 9,797,493
March 2006 Exercise of stock options 1,500 2 19,665 3,000 9,798,993April 2006 Exercise of stock options 8,000 2 104,880 16,000 9,806,993May 2006 Exercise of stock options 4,600 2 60,306 9,200 9,811,593June 2006 Exercise of stock options 4,000 2 52,440 8,000 9,815,593September 2006 Exercise of stock options 6,600 2 86,526 13,200 9,822,193October 2006 Exercise of stock options 13,500 2 224,105 27,000 9,835,693
As at 31 December 2006 19,671,386 9,835,693
June 2007 Capital increase following Stockalliance merger 548 2 36,475 1,096 9,836,241
As at 31 December 2007 19,672,482 9,836,241
113
In 2007, a capital increase took place in accordance with the eighteenthresolution of the Shareholders’ General Meeting held on 30 May 2007regarding the merger of Norbert Dentressangle Group and Stockalliance byway of absorption of the latter by the former. The 548 fully paid-up newshares having a nominal value of € 2 each and carrying an entitlement to amerger premium of € 66.56 per share, were allocated to shareholders ofStockalliance other than Groupe Norbert Dentressangle as follows: 13 sharesin Groupe Norbert Dentressangle for 12 shares in Stockalliance.
The share capital consists of shares having a nominal value of € 2 each.
Each share carries one vote. However, a double vote - carrying twice theweight of that of other shares in proportion to the fraction of share capitalrepresented – is allocated to:
a) all fully paid-up shares in registered form and recorded in the name of thesame shareholder for at least four years; and
b) registered bonus shares allocated to a shareholder in the event of a capitalincrease by way of capitalisation of reserves, income or share premiums,through existing shares held that carry such entitlement.
This double voting right shall ipso jure be forfeited in the case of any shareconverted into bearer form - if the shares were listed on an official stockmarket - or transfer of ownership. However, the above period shall not beaccelerated and the double voting right shall be preserved in case of transferby inheritance, liquidation of joint matrimonial estate, inter vivos donations infavour of a spouse or relative being a statutory heir.
In addition to voting rights, each share carries an entitlement to the company’sassets, profits or liquidation surplus in proportion to the number and value ofexisting shares.
In order for all shares to be allocated the same net amount without anydistinction and be listed as the same investment, and unless prohibited by law,
the Company shall bear the amount of any proportional tax that may be leviedon certain shares only, including in connection with winding-up of theCompany or a capital reduction; however the Company shall not bear this taxburden where the tax applies to all shares of a given class on the same terms,where there are various classes of shares carrying different entitlements.
Where ownership of a specific number of shares is required in order toexercise a right, the shareholders that do not meet this requirement shall besolely responsible for consolidating shares to that end.
c) notwithstanding any statutory disclosure requirements, any shareholderacting alone or jointly with others and holding at least 2% of the Company’sshare capital or a multiple of this percentage, up to 50%, must notify theCompany by registered letter with advice of receipt whenever any of thesethresholds are exceeded within five trading days of the occurrence thereof.
The penalty incurred for non-compliance with this obligation may be thedeprivation of voting rights for the shares exceeding the undeclared fraction atany shareholders’ General Meeting held within two years from the date onwhich the requisite notice is duly served.This penalty may not be enforced otherwise than at the request, as recordedin the minutes of the Shareholders’ General Meeting, of one or moreshareholders holding at least 5% of the share capital or voting rights in theCompany.Shareholders are also required to notify the Company in accordance with theabove provisions in the event that their shareholding in the company fallsbelow any of these thresholds, within five days of the occurrence thereof.
These provisions were adopted by the Ordinary and ExtraordinaryShareholders’ General Meeting of 23 December 1998 and amended by theMeetings of 29 May 2002, 25 May 2004, 24 May 2005 and 23 May 2006.
■ En € 2006 2005 2004 2003 2002 2001 2000
Net dividend 1.00 0.89 0.84 0.70 0.64 0.60 0.40Tax credits 0.35 0.32 0.30 0.20■ Total income 1.00 0.89 0.84 1.05 0.96 0.90 0.60
■ In K€ 31/12/2007 31/12/2006 31/12/2005
Treasury shares (11,259) (11,259) (8,860)Undistributed reserves 307,307 267,593 226,292Translation adjustments 818 760 (225)Cost of payments in stock options 2,316 1,461 919Fair value of cash flow hedge 597 932 257Other (388) (374) (269)■ Total Consolidated Reserves 299,391 259,113 218,114
2007 ANNUAL REPORT
As at 31 December 2007, 94% of loans granted by financial institutions weresubject to variable interest rates and 6% to fixed rates (respectively 92% and 8% in2006 and 90% and 10% in 2005).
All loans are denominated in euros, with the exception of one GBP 55,000,000loan, representing € 74,983,000 (€ 5,015,000 in 2005 and € 834,000 in 2004).
The total amount of provisions for risks and charges was € 137,522,000 as at31 December 2007 and € 63,020,000 as at 31 December 2006.
For the year ended 31 December 2007, employee benefits include the ChristianSalvesen employee benefits in the amount of € 63,544,000.
The acquisition of the Christian Salvesen group led to the recognition of otherprovisions for risks and charges of € 28,493,000.Furthermore, the other provisions include provisions of € 34,079,000 in 2006and € 20,006,000 in 2007, recorded following the acquisition of part of theFrench activities of TNT Group. For the year ended 31 December 2007, theportion representing provisions for contingent liabilities amounted to € 12,489,000 (€ 23,555,000 at 31 December 2006). These contingent liabilitiesrepresent costs of termination of logistics or transport agreements. The variationin 2007 comprises the costs relating to the various agreements that had beeninitially earmarked.
As these contingent liabilities are potential obligations arising from past eventsand whose existence will not be confirmed otherwise than by the occurrence offuture uncertain events that are not entirely within the Group’s control, suchliabilities are not recorded as provisions otherwise than in connection withbusiness combinations (IFRS 3).The assessment of the risk of customer loss was made on a case-by-case, site-by-site basis with reference to 5 criteria:- date of expiry of agreement,- current level of quality,- competitors’ position vis-à-vis customer,- earnings level,- quality of business relationship.
114
■ K€ Maturity dates
31/12/2005 31/12/2006 31/12/2007 Less than one year 1 to 5 years Over 5 years
CURRENTShort-term borrowings 109,820 113,015 192,066 192,066 0 0Finance leases 4,055 5,193 7,577 7,577 0 0Other miscellaneous financial liabilities 729 928 292 292 0 0Employee profit-sharing schemes 263 1,033 724 724 0 0■ TOTAL CURRENT 114,867 120,169 200,659 200,659 0 0
NON-CURRENTLong-term borrowings 169,335 170,579 438,674 0 422,203 16,471Finance leases 14,470 23,233 30,690 0 19,903 10,787 Other miscellaneous financial liabilities 372 1,027 5,180 0 3,847 1,333 Employee profit-sharing schemes 3,262 3,558 5,329 0 4,910 419■ TOTAL NON-CURRENT 187,439 198,397 479,873 0 450,863 29,010
■ TOTAL 302,306 318,566 680,532 200,659 450,863 29,010
■ K€ Occurrences Employee and Employee Other Total
of risk tax disputes benefits provisions
Value as at 1 January 2006 6,718 4,511 7,239 59,748 78,216Provisions 5,419 2,468 2,361 16,725 26,973Reversals used (4,308) (3,297) (578) (34,070) (42,253)Non-allocated reversals 0 0 0 0 0Other variations (including change in consolidation) (19) 6 (101) 198 84
Value as at 31 December 2006 7,810 3,688 8,921 42,601 63,020
Provisions 4,191 1,360 866 5,512 11,929Reversals used (2,239) (2,819) (560) (8,318) (13,936)Non-allocated reversals (1,070) (219) 0 (11,348) (12,637)Change in consolidation 73 536 65,562 25,855 92,026Other variations (2,666) 861 (1,172) 97 (2,880)
Value as at 31 December 2007 6,099 3,407 73,617 54,399 137,522
r) Borrowings
s) Provisions
115
Deferred taxes recognised in the balance sheet are follows:
■ K€ 31/12/2007 31/12/2006 31/12/2005
Deferred tax assets 45,658 18,345 26,163Deferred tax liabilities (61,575) (37,065) (36,902) ■ Net deferred taxes (15,917) (18,720) (10,739)
■ K€ 31/12/2007 31/12/2006 31/12/2005Net Net Net Net Net Net
deferred deferred tax Total deferred tax deferred tax Total deferred deferred tax Totaltax assets liabilities assets liabilities tax assets liabilities
Intangible fixed assets (7,759) (7,759)
Intangible fixed assets and finance leases 404 (52,210) (51,806) 1,812 (37,918) (36,106) 2,455 (37,100) (34,645)Provisions and employee benefits 41,500 (533) 40,967 17,415 (1,845) 15,570 25,076 (1,880) 23,196Other items 5,976 (3,295) 2,681 3,109 (1,294) 1,815 2,734 (2,024) 710
Total 47,880 (63,797) (15,917) 22,336 (41,057) (18,721) 30,265 (41,004) (10,739)
Impact of compensation (2,222) 2,222 0 (3,992) 3,992 0 (4,102) 4,102 0Tax recorded 45,658 (61,575) (15,917) 18,344 (37,065) (18,721) 26,163 (36,902) (10,739)
■ K€ Intangible Intangible Provisions Otherfixed assets fixed assets and employee items Total
and finance benefitsleases
Deferred taxes as at 1 January 2005 (34,658) 6,231 433 (27,994)Items recorded as income (261) (1,183) 302 (1,142)Impact of foreign differences 444 56 (27) 473Items recorded as shareholders’ equity and impact of change in consolidation (171) 18,092 3 17,924
Deferred taxes as at 31/12/2005 (34,646) 23,196 711 (10,739)
Items recorded as income (704) (8,451) 1,520 (7,635)Exchange differences 0Items recorded as shareholders’ equity and change in consolidation (756) 825 (416) (347)
Deferred taxes as at 31/12/2006 (36,106) 15,570 1,815 (18,721)
Items recorded as income (1,155) 971 (668) (852)Exchange differences 191 530 (613) (97) 12Items recorded as shareholders’ equity and change in consolidation (7,950) (15,075) 25,039 1,630 3,644
Deferred taxes as at 31/12/2007 (7,759) (51,806) 40,967 2,680 (15,917)
t) Deferred taxes
Deferred taxes recognised in the balance sheet are follows:
The adjustment of negative goodwill from the former TNT business resulted in adeferred tax reduction of € 1,186,000 in 2005.Most deferred tax liabilities are generated by differences between company andconsolidated vehicle depreciation periods.
The tax losses giving rise to unrecognised deferred tax assets was € 5,284,000 as at31 December 2006.
2007 ANNUAL REPORT116
v) Information relating to related parties Related parties are:- parent companies,- entities that exercise joint control or significant influence on the entity,- subsidiaries,- associates,- joint ventures,- members of the Executive Board and the Supervisory Board.
1. Transactions between the Group and companies directly or indirectly ownedby Financière Norbert Dentressangle S.A, the majority shareholder of GroupeNorbert Dentressangle S.A, are contracted at arm’s length. This refers to rentfor land and buildings amounting to € 18,909,000 (€ 21,633,000 in 2006 and€ 25,339,000 in 2005).
In July 2005, Mr Norbert Dentressangle transferred to Financière NorbertDentressangle the “Norbert Dentressangle” trademark and the “ND” logoregistered in his name and that he formerly licensed to that company free ofcharge. As before, Financière Norbert Dentressangle authorised Norbert DentressangleGroup as well as its subsidiaries and sub-subsidiaries as defined by Article
L233-1 of the French Commercial Code and companies within which the Groupexercises significant influence as defined by Article L233-16-4 of the FrenchCommercial Code to use this trademark and this logo free of charge and to licenseuse of the trademark to certain independent carriers having entered into afranchising agreement with the Group.To that end, on 13 July 2005, those two companies entered into a trademarklicensing agreement free of charge, for a renewable term of three years. As of 13 July 2008, this agreement shall be converted into an indefinite-term contractentitling each party to terminate same subject to twelve months’ prior notice.The licence is granted free of charge. However, in return for the licensed right ofuse, Groupe Norbert Dentressangle repays the costs of renewals of trademarkregistrations and the expenses incurred for the preservation of the trademarks.Early termination of the trademark licensing agreement may apply, subject tothree months’ prior notice, including in case of breach of the contractualprovisions or where the Licensee is subject to receivership or judicial liquidationproceedings; the same shall apply where the Grantor ceases to control GroupeNorbert Dentressangle Group as defined by Article L.233-3 of the FrenchCommercial Code, subject to 18 months notice.
2. Amounts pertaining to businesses on which Norbert Dentressangle Groupexercises significant influence and accounted for under the equity method.
Balance sheet amounts as at 31 December 2007 were not material in relation to the size of the Group.
■ K€ 31/12/2007 31/12/2006 31/12/2005
Trade payables 373,791 238,979 229,707Trade payables 373,791 238,979 229,707Other tax and social security payables 236,326 170,755 166,312Other current payables 150,248 18,301 21,576Other payables 386,574 189,056 187,888
■ K€ Revenues Revenues Holding company Other
from freight from other costs and similar expensesactivities expenditure
CSND 1,699 0 2,053LGL 368NDB Logistica Romania 150SALTO 2,055 167 87Centrale des Franchisés 15,001 28 114 1,766Tiger FuelInterbulk 443 1,659MNS 14 126
u) Trade and other payables
117
3. Gross remuneration awarded to managerial bodies
■ K€ 31/12/2007 31/12/2006 31/12/2005
■ Nature of expenseRemuneration awarded 1,938 1,763 1,632Short-term benefits 38Post-employment benefits 0Other long-term benefits 0Termination benefits 0Share-based payments 519 236 146Directors fees 57 51 51
4. Remuneration awarded to officers and directors in the form of shares
■ K€ 31/12/2007 31/12/2006 31/12/2005
Subscriptions during the financial periodStock subscription optionsStock purchase optionsShare warrants 115,000Exercised during the yearStock subscription optionsStock purchase options 5,000Share warrants 10,000 85,000 Held at year endStock subscription optionsStock purchase optionsShare warrants 115,000 115,000 10,000
w) Financial instruments and risk management The Group’s main financial instruments consist of loans and bank overdrafts,finance lease payables, trade payables and hire-purchase agreements.The main purpose of these borrowings is to finance the Group’s operationalactivities. The Group holds other financial assets such as customer receivables, cashand short-term deposits that are directly generated by its activities.The Group also takes out interest rate swap derivatives.
• Derivatives
As the debt of the special purpose entity financing structures is agreed at the floatingthree-month Euribor rate, the Group has implemented hedging instruments tolimit its exposure to interest-rate risk. The hedges were maintained as at 31 December 2007.
The hedging portfolio exclusively consists of interest rate swaps (exchanging a
variable three-month Euribor rate for a fixed rate) pertaining to a total nominalvalue of € 95,000,000 (€ 140,000,000 as at 31 December 2005 and € 102,622,000as at 31 December 2004). These contracts mature over periods 1 to 2 years. Thereare no embedded derivatives.
Any income or expense arising from the difference between the rates granted andreceived is recorded as income for the financial year. The income thus recorded for2007 amounted to € 1,129,000 (a loss of € 86,000 in 2006 and a loss of € 946,000in 2005).
In accordance with IAS 39, the fair value of the hedging instrument is recognisedas a balance sheet asset and entails, in respect of the amount thereof net of tax, a € 335,000 reduction to shareholders’ equity (net of deferred taxes) as at 31December 2007 (a € 675,000 increase was recorded as at 31 December 2006 anda € 257,000 increase was recorded as at 31 December 2005).
■ K€ Theoretical Fair value on balance sheet Appropriationeuro amount Opening Closing Earnings Shareholder’s
at bal. sheet date Asset Liability Asset equity
Int. rate swapsYear ended 31 December 2005 102,622 257 257Year ended 31 December 2006 140,000 257 932 675Year ended 31 December 2007 95,000 932 597 (335)
The Group does not subscribe for derivatives for speculation purposes.
2007 ANNUAL REPORT118
The main risks attached to the Group’s financial instruments are interest raterisk on cash flows, liquidity risk, currency risk and counterparty risk.
Currency risk The total amount of assets denominated in currencies other than the Group’scurrency (GBP, RON, CSK, PLN, HUF, CHF) pertaining to companies locatedoutside the euro zone is summarised in the following table. These amounts donot benefit from currency hedging.
The Group generally resorts to self-hedging to limit recourse to the market:as far as possible, the Group aims at striking a balance between collectionsand disbursements in each non-euro currency using centralised cash flowmanagement and allowing certain suppliers and sub-contractors discretion tochoose the invoicing currency. Residual positions, if any, are sold underforward contracts.
In 2007, the Group did not need to have recourse to the market to hedge itscurrency risk, with the exception of the GBP/EUR hedging transaction inrespect of the foreseeable acquisition debt between 03 November 2007 and14 December 2007. The residual net foreign exchange (loss)/gain was - € 1,494,000 recorded in the income statement as at 31 December 2007 ismainly attributable to the realised and unrealised foreign exchange losses andprofits derived from transactions of subsidiaries in a currency other than theiroperating currency (€ 67,000 as at December 2006 and € 856,000 as atDecember 2005).For each subsidiary, foreign-currency transactions are recorded in specificaccounts. Thereafter, the Group’s centralised Treasury department conductsweekly reporting and balancing in respect of these accounts.
Following the acquisition of the Christian Salvesen group, the GBP currencytook on major significance in Norbert Dentressangle Group’s exposure toforeign exchange fluctuations, contrary to the other non-material currencies.
In order to limit such exposure, the Group financed part of this acquisitionby borrowing in that currency, so as to achieve natural hedging of the portionof the positive goodwill denominated in GBP.
Credit riskIn light of the quality and diversity of the customer portfolio, NorbertDentressangle Group is not significantly exposed to credit risk.
Interest rate riskInterest rate risk is centrally managed for all Group positions.Borrowings are concentrated within certain Group companies: GroupeNorbert Dentressangle S.A, ND Location and ND Logistics. All contracts arenegotiated by the Group’s Treasury department and approved by the GroupFinance Director.
■ Currency GBP LEI CZK PLN HUF CHF Total
Asset 358,921 19,575 4,070 53,735 338 2,123 438,761Liabilities excluding shareholders’ equity 353,517 20,593 3,890 53,219 2 1,617 432,838Net positions prior to management in euros 5,403 (1,018) 180 516 336 506 5,923
• Risk management
Impact of interest rate variations on earnings:
As at 31 December 2007, 94% of loans granted by financial institutions weresubject to variable interest rates and 6% to fixed rates.The maturity of borrowings (€ 680,532,000 as at 31 December 2006) is setforth in paragraph r). Trade payables (€ 373,792,000) and Other accountspayable (€ 386,574,000) are mostly due on a short-term basis (within oneyear).Accounts receivable (€ 533,872,000 for trade receivables and € 132,731,000for other receivables) mature within less than one year.
Liquidity riskGroup financing mainly consists of a medium-term repayable loansubscribed for the acquisition of Christian Salvesen, other medium-termrepayable loans, finance leases and similar leasing agreements for thefinancing of intangible fixed assets as well as a revolving credit facility andoverdraft facilities used on an ad hoc basis.
■ Change in base points Impact on pre-tax earnings
2007 +100/-100 (6,366)/6,3662006 +100/-100 (2,865)/2,865
119
Risk on UCITS investmentsTaking into account the composition of its portfolio of investments intransferable securities, the Group is not exposed to price risks.
• Equity management The Group’s main objective in terms of management of its equity is to ensurethe preservation of a satisfactory credit risk rating and healthy equity ratios,so as to facilitate its business and maximise value for shareholders.
The Group manages its equity by applying a ratio of net debt divided byshareholders’ equity and net debt.
For the purposes of the Group’s computations, net debt includes interest-bearing borrowings, cash and cash equivalents, excluding discontinuedoperations.Shareholders’ equity includes the Group’s shareholding, as well as unrealisedincome and losses directly recorded as shareholders’ equity.
• Financial instruments The fair value of an agreement is the arm’s length consideration. On the dateof the transaction, it generally represents the transaction price. Computationof fair value is then based on verifiable market data that provide the mostreliable assessment of the fair value of a financial instrument.For swaps, the fair value of the derivative is determined on the basis ofdiscounted contractual cash flows.
The fair value of borrowings is computed by discounting the contractual cashflows at market interest rates.The fair value of trade payables and receivables is the book value in thebalance sheet, as the impact of discounted future cash flows is not material.
The comparison between book value and fair value of the Group’s financial instruments is as follows:
Cash flows from borrowings based on non-discounted contractual payments are as follows:
■ K€ Book Fixed rate Less than Repayment Variable 1 to 5 years’ Repayment Fixed rate Plus 5 years’ Repaymentvalue interest 1 year’s interest variable interest variable
expense variable expense interest expense interest interest expense expense
BorrowingsBank overdrafts 73,380 73,380Finance lease liabilities 38,267 1,621 439 7,577 3,874 678 19,903 645 0 10,787Financial debt 630,740 80 28,740 192,066 72 58,457 422,203 0 1,263 16,471Other borrowings 11,525 576 0 1,016 1,445 0 857 219 0 1,752(Other Fin. debt + equity)
■ K€ 31/12/2007 31/12/2006 31/12/2005
Interest-bearing debt maturing after more than one year 479,873 198,397 187,439Interest-bearing debt maturing within one year 200,658 120,169 114,867Overdrafts 73,380 58,609 50,922Cash and cash equivalents (220,708) (255,706) (194,627)Net debt 533,203 121,469 158,601Group interest in shareholders’ equity 337,532 297,217 259,813Ratio 1.6 0.4 0.6
■ K€ Book value Fair value2007 2006 2007 2006
Borrowings
Bank overdrafts 73,380 58,609 73,380 58,609
Borrowings 630,740 283,594 625,969 283,420
Finance lease liabilities 38,267 28,426 37,576 30,866
Other borrowings 11,525 6,546 11,400 6,541
Total 753,912 377,175 748,325 379,437
2007 ANNUAL REPORT120
■ K€ Book Fair value Fair value Assets held Loans and Debt at Derivativesvalue through P& L through for sale receivables amortised
equity cost
31 December 2005Non-current financial assets 19,835 146 19,689Trade receivables 345,983 345,983Other receivables 85,549 85,549Current financial assets 396 396Cash and cash equivalents 194,627 194,627Total financial assets 646,390 194,627 0 146 451,221 0 396
Financial debt 302,306 302,306Overdrafts 50,922 50,922Trade payables 229,707 229,707Other debt 187,888 187,888Other current borrowings 3,715 3,715Total borrowings 774,538 0 0 0 421,310 353,228 0
31 December 2006Non-current financial assets 19,337 67 19,270Trade receivables 330,104 330,104Other receivables 80,331 80,331Current financial assets 1,425 0 1,425Cash and cash equivalents 255,706 255,706Total financial assets 686,903 255,706 0 67 429,705 0 1,425
Financial debt 318,566 318,566Overdrafts 58,609 58,609Trade payables 238,980 238,980Other debt 189,056 189,056Other current borrowings 4,919 4,919Total borrowings 810,130 0 0 0 432,955 377,175 0
31 December 2007Non-current financial assets 21,412 824 20,588Trade receivables 533,872 533,872Other receivables 132,731 132,731Current financial assets 19,475 18,553 922Cash and cash equivalents 220,708 220,708Total financial assets 928,198 220,708 0 824 705,744 0 922
Financial debt 680,531 680,531Overdrafts 73,380 73,380Trade payables 373,791 373,790Other debt 386,574 386,574Other current borrowings 7,969 7,969Total borrowings 1,522,245 0 0 0 768,344 753,911 0
121
x) Employee benefits • Retirement benefitsThe main actuarial assumptions applied for the valuation of retirement benefits are set forth hereinbelow:
■ % 31/12/2007 31/12/2006 31/12/2005France Italy United Kingdom France Italy United Kingdom France Italy United Kingdom
Discount rate 5.50 5.50 5.85 4.50 4.50 4 4Rate of return on assets 4.50 7.37 4.50 4Salary growth rate- Transport 3 3 3.10 3 3 3 3- Logistics 3 3 3.10 3 3 3 3Mobility rates - Transport 17.1 8.8 17.20 9.4 17.10 9.4- Logistics 10.8 7.5 10.50 7.4 15.60 7.4
Life expectancy tables INSEE 80 INSEE 80 INSEE TD/TVTD/TV SIM/ TD/TV SIM/ TD/TV 2000-
2003-2005 SIF92 2002-2004 SIF92 2002-2004 2002
In the case of France, retirement ages take into account the measures implemented to extend active working lives under the Fillon Act of 21 August 2003 (Loi Fillon), as well as the option for drivers to retire at the age of 55.
Plan assets consist of the following:
■ In % 31/12/2007 31/12/2006 31/12/2005
Equities 77.8Bonds 9.9Government bonds 9.9Other 2.4 100 100
2007 ANNUAL REPORT122
Plan assets are mainly held in a UK-based fund intended for ex-Christian Salvesen group employees based in the United Kingdom.
■ K€ 31/12/2007 31/12/2006 31/12/2005France and United Kingdom Total France and France and
other countries other countries other countries
Net opening provision 8,540 8,540 6,858 5,868Expenditure for the financial year 866 866 1,395 1,136Consolidation 119 65,111 65,230 463 187Use during the financial year (560) (560) (736) (333)Other transactions 707 707 559Translation adjustments (1,567) (1,567)Net closing provision 9,672 63,544 73,216 8,540 6,858
Cost of services provided during the financial year 789 789 1,074 860Discounting cost 391 391 297 261Impairment of plan variations 2 2 2 2Impairment of actuarial losses and income (194) (194) 3,022 22Expected return on plan assets (9) (10)Expenditure for the year 989 989 1,395 1,136
Discounted value of opening commitments 9,162 9,162 7,632 6,434
Cost of services provided during the year 789 789 1,074 860Discounting cost 391 391 297 261Impairment of plan variations 2 2 2 2Impairment of actuarial losses and income (194) (194) 30 22Impact of business combinations 34 407,713 407,746 463 187Benefits paid (582) (582) (763) (333)Other transactions 806 806 559Reductions and terminations (105) (105)Translation adjustments (9,813) (9,813)Change in actuarial losses and income (321) (321) (133) 198
Discounted value of closing commitments 9,982 397,900 407,882 9,162 7,632
Discounted value of opening plan assets 203 203 222 218
Employer contributions Benefits paid by the funds (25) (25) (27)Impact of business combinations 342,602 342,602Actual return on plan assets 6 6 8 4Translation adjustments (8,246) (8,246)
Discounted value of closing plan assets 184 334,356 334,540 203 222
Net value of liability 9,798 63,544 73,342 8,959 7, 410Unrecognised actuarial adjustments (92) (92) (399) (530)Unrecognised past service costs (34) (34) (20) (22)Net value of recognised liability 9,672 63,544 73,216 8,540 6,858
The “Other Transactions” item mainly refers to reclassification of the Logistics Division benefits recorded earlier in other provisions.
For the financial year ended 31 December 2007, actuarial income and lossesrelating to the impact of seniority amount to € 88,000.
A 0.15% reduction in the discount rate would reduce the liability by € 12,438,000.
The amount to be paid by the Group under defined-benefit retirement plansrepresents benefits paid to employees, the Group’s contributions to funds,
subject to deduction of benefits directly paid by the said funds. The estimatedamount thereof for FY 2008 is € 12.5 million.
Long-service bonuses amounted to € 125,000 as at 31 December 2007.
Bonuses amounted to € 555,000 as at 31 December 2007.
123
• Share-based payment: stock option plansStock options
Date of allocation Numbers of Exercise price Number of Cancelled Outstanding Expiry dateoptions per option options exercised options as of options
allocated at 31/12/2007
29/03/04 116,500 39.64 (23,000) 93,500 30/04/0909/09/04 3,000 39.88 (1,000) 2,000 10/10/0913/12/04 8,500 39.99 (1,500) 7,000 15/01/1021/01/06 9,500 50.81 9,500 21/02/1116/10/06 7,500 61.81 (3,500) 4,000 17/11/11
145,000 0 (29,000) 116,000
Warrants
Date of allocation Warrants Warrants Price per Number of Cancelled Balance Expiry date (issued) (exercised) warrant warrants exercised of warrants
30/06/03 105,000 105,000 22.31 105,000 0 0 31/05/0617/07/06 115,000 115,000 51.68 0 0 115,000 31/05/09
220,000 220,000 105,000 0 115,000
Subscription Subscription Warrants Share Share Share Share Share Warrantsof shares of shares purchases purchases purchases purchases purchases
Date of Shareholders’ General Meeting 24/05/00 24/05/00 27/05/03 29/05/02 25/05/04 25/05/04 25/05/04 25/05/04 23/05/06Date of Executive Board Meeting 09/10/00 03/09/01 30/06/03 29/03/04 09/09/04 13/12/04 20/01/06 16/10/06 17/07/06Total number to be subscribed or purchased 176,000 8,000 105,000 116,500 3,000 8,500 9,500 7,500 115,000Total number to be subscribed or purchased by:Corporate officers 0 0 105,000 0 0 0 0 0 115,000The ten highest employee allottees (1) 41,000 8,000 0 32,000 3,000 8,500 9,500 7,500 0Commencement date of exercise period of warrants or options 10/10/05 04/09/06 01/06/05 30/03/08 11/09/08 15/12/08 21/01/10 17/10/10 01/06/08Expiry date 09/10/06 03/09/07 31/05/06 30/04/09 11/10/09 15/01/10 21/02/11 17/11/11 31/05/09Subscription or purchase price 15.11 € 21.00 € 22.31 € 39.64 € 39.88 € 39.99 € 50.81 € 61.81 € 51.68 € Warrants or options cancelled in 2007(2) 2,000 1,000 3,500Warrants or options cancelled as at 31/12/2007(2) 57,100 0 0 23,000 1,000 1,500 0 3,500 0Warrants or options exercised as at 31/12/2007 118,900 8,000 105,000 0 0 0 0 0 0Warrants or options outstanding as at 31/12/2007 0 0 0 93,500 2,000 7,000 9,500 4,000 115,000
The overall cost of the plan was computed by applying the Black & Scholesformula and the gross annual expenditure deducted therefrom.• The share price on the date of allocation;• The exercise price;• The vesting period;• The market risk-free investment rate (the rate for risk-free zero coupon bonds
with the same maturity); and
• The share’s volatility (Group’s historical volatility).
These calculations gave rise to an expense in respect of 2003 with a € 209,000impact on net assets, a € 485,000 expense in respect of 2004, a € 437,000expense in respect of 2005, a € 542,000 expense in respect of 2006, and a € 855,000 expense in respect of 2007.
(1) The ten employees receiving the highest allotments, or more if the same number has been allotted to several employees. (2) After cessation of employment of beneficiaries.
• Historical overview of stock options
2007 ANNUAL REPORT124
• Other benefits:
Neither Group employees nor management are entitled to any other benefits.There are no supplementary defined-benefit salary-based pensions for officersand directors.
y) Change in consolidation• Changes in 2005
Acquisitions of companiesIn July 2005, the Group acquired shares in French companies Venditelli andVendilog. Venditelli’s main business is pallet distribution in France withspecific expertise in generic products. Vendilog’s business consists of themanagement of a warehouse.This transaction generated positive goodwill of € 15,807,000. The earnings ofthese companies have been consolidated by applying the full consolidationmethod as of 1 September 2005. Additional reviews of the breakdown of thegoodwill led to a € 109,000 upward adjustment to € 15,916,000.
Furthermore, in December, the Group acquired part of TNT’s transport andlogistics activities. With regard to logistics, this involves the assets and goodwill of Aixor, Copaland Cemga. With regard to transport, the transaction pertained to the assets and goodwillof Nord Mendy, the Clermont-Ferrand site of Nicolas and shares in LRF and Barco.This transaction generated an initial negative goodwill of € 35,094,000 andpost-adjustment goodwill of € 37,168,000.
The earnings of these companies have been consolidated under the fullconsolidation method as of 1 December 2005
RestructuringWithin the framework of streamlining its transport and service activities, thefollowing operations were implemented:- Transports Norbert Dentressangle absorbed Loget et Jacquemain and
Entralp Logistique. The merger took place on 14 November 2005 withretroactive effect from 1 January 2005.
- United Savam absorbed Pont Monthyon on 14 November 2005 withretroactive effect as from 1 January 2005.
- ND Iberica Este absorbed ND Iberica Oeste on 31 December 2005 withretroactive effect from 1 January 2005.
- All assets and liabilities of the companies Gyves and ALVI were transferredto Sonecovi on 19 November 2005.
- Furthermore, all assets and liabilities of the company TFND weretransferred to NDNF on 26 October 2005.
All restructured companies are wholly owned and are (or were in the case ofabsorbed companies) fully consolidated.
• Changes in 2006
Acquisitions of companiesOn 19 July 2006, Norbert Dentressangle Group acquired the entire sharecapital of Romanian company Transcondor, based in Arad. This company’s main business is the carriage of packaged products and goodsat controlled temperature between Romania and the European Union. The earnings of this company have been consolidated under the fullconsolidation method as of 1 August 2006. The company’s contribution to the Group’s net income since consolidationwas a loss of € 536,000, as well as € 2,528,000 to revenues, and € 3,733,000to the total fair value of assets. The company’s revenues for 2006 is assessedat € 10 million.
There is no goodwill.On 20 September 2006, Norbert Dentressangle Group acquired the entireshare capital of the Spanish companies CCH and GPL, based in Madrid andthe Canary islands. The core business activities of these companies are “high tech” productlogistics and reverse logistics. The earnings of these companies have been consolidated under the fullconsolidation method from 20 September 2006. These companies’ contribution to the Group’s net income since consolidationwas € 387,000, as well as € 5,652,000 to revenues, and € 10,952,000 to thetotal fair value of assets. The company’s revenues for 2006 is assessed at € 20 million. Goodwill amounted to € 7,186,000.
Company disposalsThe Group sold Les Routiers Français in March 2006 generating a capital gainof € 553,000.
RestructuringIn order to achieve economies of scale and rationalise its Transport activities,ND Inter Pulvé acquired Intersilos on 1 April, with retroactive effect from 1 January. Both companies are wholly owned and are fully consolidated bythe Group.
Omega III’s name was changed to THT and holds 2 logistics contracts newlywon with the Carrefour/Logidis Group.- All of LMDI’s assets and liabilities were transferred to Logibal on 20 October
2006,- All of LTU’s assets and liabilities were transferred to ND Logistics on
4 October 2006.All restructured companies are wholly owned and are (or were in the case ofabsorbed companies) fully consolidated.
• Changes in 2007
Acquisitions of companiesOn 23 March 2007, Norbert Dentressangle Group acquired 80% of Romanianlogistics company Northern Distribution and Logistics (to which was attached a20% purchase commitment). Positive goodwill amounted to € 1,851,000. Acquired cash amounted to € 200,000.
125
On 28 February 2007, Norbert Dentressangle Group acquired BeiersdorfLogistics France, which subsequently became ND BL.Negative goodwill amounted to € 3,144,000 and was recognised as income
under “Goodwill impairment and negative goodwill”. Cash acquired amounted to € 3,740,000.
Norbert Dentressangle Group resolved to subscribe for the capital increase ofInterbulk Investments plc. Following the transaction on 10 April 2007, NorbertDentressangle Group held 6.6% of the share capital of the company listed on theAIM market in London.No goodwill was recorded. The difference between the net assets acquired(Group share of net assets as at 30 March 2007 plus capital increase of 10 April2007) and the price paid (€ 5,902,000) as at the date of purchase is not material. The Group is of the view that, in light of the recent acquisition of interest (April2007) the recoverable value of this interest is not in doubt as at 31 December2007.
The fair values of the assets, liabilities and identifiable [contingent] liabilities ofthe various entities acquired during the financial year were computed on aprovisional basis due to pending expert assessments or additional analyses.
On 14 December 2007, Norbert Dentressangle Group acquired ChristianSalvesen Plc.
Since such acquisition, the said company’s contributions to the Group for thefinancial year ended 31 December 2007 were as follows: a loss of € 524,000 toGroup net income, € 47,886,000 to revenues and € 238,916,000 to total assets.The company’s annual revenues for 2007 is an estimated € 1,278 million. Theallocation of the acquisition price between acquired assets, liabilities andidentifiable contingent liabilities in light of the fair value thereof was pending as
at 31 December 2007. Consequently, and in accordance with IFRS 3, the Grouphas recognised the acquisition by applying the interim figures; the adjustmentsthereof as well as the amount of goodwill allocated shall be computeddefinitively prior to 14 December 2008.
Consequently, the goodwill presented on the following page was computed withreference to the value of the assets and liabilities as recorded in the financialstatements of the Christian Salvesen group drawn up as at 14 December 2007.However, in light of the change in the sterling exchange rate, positive goodwillas at 31 December 2007 amounted to € 347,390,000.
■ K€ Book value Fair value adjustments Restated value
Assets 742 742
Liabilities (501) (501)
Net assets 241 0 241
Interest acquired 100%
Net assets 241
Purchase price for 80% 1,385
Purchase commitment for 20% 707
Positive goodwill 1,851
■ K€ Book value Restatements of fair value Restated value
Intangible fixed assets 1,954 14,460 16,414
Financial Assets 3,733 3,733
Other assets 1,226 1,226
Financial debt (12,709) (12,709)
Other liabilities (1,738) (623) (2,361)
Net assets 5,175 1,128 6,303
Interest acquired 100%
Net assets 6,303
Acquisition price 3,131
Fees 8
Negative goodwill (3,144)
2007 ANNUAL REPORT126
■ K€ Book value Fair value adjustments Interim reassessed value
Goodwill 98,453 (98,453)
Intangible fixed assets 11,881 11,881
Tangible fixed assets 146,547 146,547
Deferred tax assets 22,633 3,828 26,461
Other assets 388,277 388,277
Financial debt (161,739) (161,739)
Deferred tax liabilities (13,331) (8,851) (22,182)
Other liabilities (367,021) (12,765) (379,786)
Net assets 125,700 (17,788) 9,459
Interest acquired 100%
Net assets 9,459
Purchase price 351,979
Acquisition costs 7,190
Positive goodwill 349,710
The total cost of the acquisition was € 359 million and was financed by meansof a € 209.3 million loan.
RestructuringWith a view to achieving economies of scale and rationalising its activitieswithin the Transport Division, the Company carried out several mergers withretroactive effect from 1 January.The companies are wholly-owned and are consolidated within the Groupunder the full consolidation method. These restructuring operations thereforedo not impact the Group consolidated financial statements.
ND Petronalp’ absorbed Petronord and ND Méditerranée on 1 April 2007. Itsnew company name is ND Hydrocarbures.
GND absorbed Stockalliance on 30 May 2007.
NDL absorbed UTL on 6 July 2007.
ND Logistics Nederland BV absorbed ND Logistics BV on 6 March 2007.
CCH absorbed GPL on 20 December 2007 with retroactive effect from 1 January 2007.
Venditelli’s company name was changed to Distribution NorbertDentressangle on 29 June 2007.
Cash acquired amounted to € 71,448,000.
z) Special purpose entitiesSpecial purpose entities used by the Group are those used to finance itsFrench vehicle fleet. These entities, referred to as “Locad” entities, areeconomic interest groupings (EIGs) and are majority owned by a bankingpool. They are intended to purchase a fleet of vehicles matching the Group’srequirements, finance them by means of loans from the banking pool, andlease them solely to various French Group member companies that use them.As at end 2007, the residual outstanding liabilities amounted to € 150,334,000 (€ 126,898,000 as at end 2006 and € 120,656,000 as at end2005).
127
Percentage interest Percentage control Tax group2007 2006 2005 2007 2006 2005
TRANSPORTAJG (Great Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGH CSND (Czech Republic) 50 50 50 50 50 50Tr Marsala Malinovského 874 686 01 UHERSKE HRADISTEDICIVRAC Siren 690 802 079 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT HEINRICH THIER Gmbh (Germany) 100 100 100 100 100 100Nikolaus Otto Str. 6 Postfach 630 46282 DORSTENINTERSILOS Siren 380078 360 0 0 100 0 0 100Les Pierrelles 26240 BEAUSEMBLANT OMEGA 2 Siren 479 885 725 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT MNS Siren 480 073 766 42 42 42 42 42 42Les Pierrelles 26240 BEAUSEMBLANT LOGET ET JACQUEMAIN Siren 302 278 288 (merger with the company Transport Norbert Dentressangle) 0 0 0 0 0Les Pierrelles 26240 BEAUSEMBLANT LOGIBAL Siren 425 018 975 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT MARQUISE BENNE Siren 399 099 936 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND ALIMENTAIRE Siren 377 722 814 0 100 100 0 100 100Les Pierrelles 26240 BEAUSEMBLANT ND BELGIUM (Belgium) 100 100 100 100 100 100INDUSTRIE Zone de Blauwe Toren Monnikenwerve 85 8000 BRUGGEND CHIMIE Siren 352 621 601 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND EASTERN EUROPE Siren 410 211 916 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT ND IBERICA ESTE (Spain) 100 100 100 100 100 100 ESPCalle Buena Ventura Munoz 13-15 entresuelo 2A 08018 BARCELONAND IBERICA OESTE (Spain) (merger with the company ND IBERICA ESTE) 0 0 0 0 0 ESPCalle Buena Ventura Munoz 13-15 entresuelo 2A 08018 BARCELONAND INTER-PULVE Siren 328 802 913 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT ND ITALIA (Italy) 100 100 100 100 100 100Sede in viar Vittor Pisani N16 20124 MILANOND MEDITERRANEE (merger with the companies ND Petronalp and ND Petronord) Siren 425 060 951 0 100 100 0 100 100Les Pierrelles 26240 BEAUSEMBLANT ND NATIONAL FRIGORIFIQUE Siren 399 510 189 (merger with the company TRANSPORTS FRIGORIFIQUES ND) 0 0 0 0 0ZA Bords des Durances 880 av. de la 1ère division blindée 84300 CAVAILLONND HYDROCARBURES (previously ND PETRONALP and merger withND MEDITERRANEE and ND PETRONORD) Siren 326 445 392 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND PETRONORD (merger with the companies ND Petronalp and ND Méditerranée) Siren 425 090 735 0 100 100 0 100 100Les Pierrelles 26240 BEAUSEMBLANT ND POLSKA (Poland) 100 100 100 100 100 100UL GORNICZA 18/36 91765 LODZND PORTUGAL (Portugal) 100 100 100 100 100 100terminal tir do Freixieiro ed Mastosinhos 4 PISO 4460 PERAFITAND SILO Siren 352 619 845 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND SILO BELGIUM (Belgium) 100 100 100 100 100 100INDUSTRIE Zone de Blauwe Toren Monnikenwerve 85 8000 BRUGGEND SILO IBERICA (Spain) 100 100 100 100 100 100 ESPCarretera Taraganone KM 293.3E 08730 LA RAPITA MONJOS
aa) ScopeThe balance sheet date of all companies within the consolidation is 31 December.
2007 ANNUAL REPORT
ND TANKERS (Great Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGH ND UK LTD (Great Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGH NDB Siren 414 642 249 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT NDFI LOGISTICA Y TRANSPORTES SL (Spain) 100 100 100 100 100 100 ESPVALENCIAPONT MONTHYON Siren 662 026 152 (merger with the company UNITED SAVAM) 0 0 0 0 0Les Pierrelles 26240 BEAUSEMBLANT SALTO Siren 441 587 888 34 34 34 34 34 34Zone Industrielle de Seyssuel 38200 VIENNESAVAM Lux (Luxembourg) 100 100 100 100 100 1001 Zone du Scheleck 3225 BETTEMBOURG SHEDDICK (Great Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGH TFND Siren 352 210 640 100 100 100 100 100 100 FZA Bords des Durances 880 av. de la 1ère division blindée 84300 CAVAILLONTND BRETAGNE Siren 380 677 369 0 100 100 0 100 100Les Pierrelles 26240 BEAUSEMBLANT TND ILE DE France Siren 425 090966 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT TND NORD Siren 380 631 929 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT TND NORMANDIE BRETAGNE Siren 311 686 703 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT TND OUEST Siren 414 642 272 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT TND PACA Siren 343 189 460 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT TND SUD EST Siren 327 861 506 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT TND SUD OUEST Siren 692 720 477 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT TND VOLUME Siren 341 152 833 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT TRANSPORTS HARDY Siren 390 548 667 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT TRANSPORTS NORBERT DENTRESSANGLE Siren 332 588 995 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT UNITED SAVAM Siren 716 280 433 100 100 100 100 100 100 FZI Rue Les Moines 02200 VILLENEUVE SAINT GERMAINDND (ex. VENDITELLI) Siren 429 660 822 100 100 100 100 100 100 F42 Route de Saint Symphorien d’Ozon 69800 SAINT PRIESTSNM VALENCIENNES Siren 484 833 827 100 100 100 100 100 100 FZI 1 Rue Galilée 59224 THIANT SNN CLERMONT Siren 484 829 262 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT TRANSCONDOR (Romania) 100 100 100 1001, Str. Dumbrava Rosie Zona Industriala vest Arad 310419 ARAD, jud AradBARCO Siren 379 852 742 100 100 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSELES ROUTIERS FRANÇAIS Siren 399 008 838 0 0 100 0 0 1005-7 Voie les cosmonautes 94310 ORLYCENTRALE DES FRANCHISÉS Siren 483 490 348 45 50 50 45 50 50Les Pierrelles 26240 BEAUSEMBLANT SC NDT (Romania) 100 100Zona industrial Vest, Str I, nr 8, AradTIGER FUEL Siren 498 905 470 40 40Les Pierrelles 26240 BEAUSEMBLANT CHRISTIAN SALVESEN GERPOSA SA A-78503406 (Spain) 100 100Barrio San Martin s/n, CP 39011, SANTANDER, SpainSALVESEN LOGISFASHION SL B-63555791 (Spain) 50 50Camino de Sant Celedoni s/n, SANTA MARIA DE PALUTORDERA, Spain
128
129
CHRISTIAN SALVESEN DISTRIBUCAO LDA. PT-501855807 (Portugal) 100 100Estrada Nacional 10, Km 127-7D, Ponta da Silveira, 2615 ALVERCA DE RIBATEJO, PortugalDARFEUILLE SERVICES SAS Siren 383 242 161 99,98 99,9815 Avenue Benoît Fourneyron, 42160 ANDREZIEUX-BOUTHEONAICIONDO FRANCE SA Siren 327 963 435 99,98 99,98Rue René Cassagne, 33310 LORMONT INTERBULK GROUP (Great Britain) 6,6 6,61 Redwood Crescent, GLASGOW G74 5PA, East Kilbride
LOGISTICSAUTOLOG Siren 393 072 277 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ENTR’ALP LOGISTIQUE Siren 415 002 146 (merger with the company Transport Norbert Dentressangle) 0 0 0 0 0Zone Industrielle des Grives 74150 MARIGNY SAINT MARCELLGL 49 49 49 49 49 49Via Mulini 6934 BIOGGIOMGCA Siren 425 091 014 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT LTU Siren 382 727 089 0 0 100 0 0 100 FLieudit Saint Paul Epagnay 74330 LA BALME DE SILLINGYND LOGISTICS Siren 378 992 895 100 100 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSEND LOGISTICS BV (merger with the company ND Logistics Nederland) (The Netherlands) 0 100 100 0 100 100Markermer 1 5347 - 0 OSSND LOGISTICS CZESKA (Czech Republic) 100 100 100 100 100 100Tr. Marsala Malinovskeho 874 68601 UHERSKE HRADISTEND LOGISTICS HUNGARY (Hungary) 100 100 100 100 100 100Tablas U 36-38 1097 BUDAPESTND LOGISTICS ITALIA (Italy) 100 100 100 100 100 100Calepio di Settala via E. Fermi N 7 20090 CALEPPIOND LOGISTICS NEDERLAND BV (The Netherlands) 100 100 100 100 100 100Markermer 1 5347 - 0 OSSND LOGISTICS SWITZERLAND (Switzerland) 100 100 100 100 100 100World Trade Center - c.p. 317 - 6982 AGNOND LOGISTICS UK (Great Britain) 100 100 100 100 100 100Distribution Center West Moor Park Yorkshire Way - Armthorpe DN3 3FB DONCASTERND LOGISTICS POLSKA (Poland) 100 100 100 100 100U. Niciarnina 50/52 92230 LODZNDB LOGISTICA ROMANIA (Romania) 50 50 50 50 50 50Parcul Industrial DN 7 Centura ARADCCH (Spain) 100 100 100 100Poligono Industrial “La Sendilla” Nave IE6 -km 33 de la carretera Andalucia 28350 CIEMPOZUELOGPL (merger with the company CCH) (Spain) 0 100 0 100Poligono Industrial “La Sendilla” Nave IE6 -km 33 de la carretera Andalucia 28350 CIEMPOZUELOSTOCKALLIANCE (merger with the company GND) Siren 558 800 033 0 100 100 0 100 100 F55 avenue Louis Breguet 31029 TOULOUSEUTL LOCATION (merger with the company ND Logistics) Siren 434 043 766 0 100 100 0 100 10055 avenue Louis Breguet 31029 TOULOUSEVENDILOG Siren 453 196 370 100 100 100 100 100 100 FZI Nord 32 R Galilée 13200 ARLES CEMGA Logistics Siren 484 833 876 100 100 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSEAIXOR Logistics Siren 379 852 742 100 100 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSECOPAL Logistics Siren 484 833 884 100 100 100 100 100 100 F55 avenue Louis Breguet 31029 TOULOUSETHT Logistics Siren 487 565 012 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT
2007 ANNUAL REPORT
LMDI 0 0 100 0 0 100 F55 avenue Louis Breguet 31029 TOULOUSENDBL Siren 448 672 980 100 10055, Avenue Louis Breguet 31029 TOULOUSEND&L (Romania) 100 100Oras Otopeni, Str Tudor Vladimirescu nr. 2HOLISTICA SOLUTIONS LIMITED 5622063 (Great Britain) 50 501 Royal Standard Place, NOTTINGHAM NG1 6FZCHRISTIAN SALVESEN LIMITED 341167341167 (Ireland) 100 1003 Burlington Road, DUBLIN 4, IrelandSALVESEN LOGISTICA SA A-96569207 (Spain) 50 50C/Rio Guadiato, Parcela 2 (CIA), 28.906 - GETAFE, Madrid, SpainSALVESEN LOGISTICA CANARIAS SL B-38869293 (Spain) 50 50Ronda Jose Miguel Galvan Bello s/n, 38009 SANTA CRUZ DE TENERIFE, SpainSALVESEN LOGISTICA ARMAZENAGEM E DISTRIBUICAO, UNIPESSOAL LDA.SOCIEDAD 504400363 (Portugal) 50 50Estrada Nacional No 3, Km 5,7, Vila Nove Da Rainha, 2050 - AZAMBUJA, PortugalCHRISTIAN SALVESEN SA Siren 310 643 515 100 100Parc Technopolis, Immeuble Alpha, 3 Avenue du Canada, LES ULIS 91978, Courtabouef CedexGEL SERVICE SA Siren 349 762 856 100 100ZI, Rue du Vertuquet, 59960 NEUVILLE EN FERRAINCHRISTIAN SALVESEN SERVICES SAS Siren 480 672 906 100 100Parc Technopolis, Immeuble Alpha, 3 Avenue du Canada, LES ULIS 91978, Courtabouef CedexCHRISTIAN SALVESEN NEDERLAND BV 16058964 (The Netherlands) 100 100Marga Klompeweg, 10 5032 MP Tilburg, Netherlands, PO Box 4313, 5004 JH Tilburg, PO Box 4313, 5004 JH TILBURG, The NetherlandsCHRISTIAN SALVESEN (BELGIUM) NV 407 175 (Belgium) 100 100Z.4 Broekooi 160, 1730 ASSE, BelgiumCHRISTIAN SALVESEN DISTRIBUTION SERVICES NV 0421.866.658 (Belgium) 100 100Z.4 Broekooi 160, 1730 ASSE, Belgium
SERVICESGROUPE NORBERT DENTRESSANGLE Siren 309 645 539 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT AIR ND Siren 380 397 695 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT ALVI Siren 378 525 182 (merger with the company SONECOVI) 0 0 0 0 0ZAC de l’Anjoly Ilot n°384 13127 VITROLLESND DEUTSCHLAND HOLDING (Germany) 100 100 100 100 100 100Nikolaus Otto Str. 6 Postfach 630 46282 DORSTENND FORMATION Siren 400 646 386 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND GESTION Siren 440 339 265 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND HOLDINGS (Great Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGH ND TRANSPORTS LTD (Great Britain) 100 100 100 100 100 100 GBGreenfold Way commerce park Greater Manchester WN7 LEIGH ND IBERICA (Spain) 100 100 100 100 100 100 ESPCalle Buena Ventura Munoz 13-15 entresuelo 2A 08018 BARCELONAND INFORMATIQUE Siren 403 283 591 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND LOCATION Siren 329 414 858 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT ND MAINTENANCE Siren 378 619 209 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND SERVICES Siren 323 016 766 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT NDT Siren 386 220 123 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT SONECOVI Siren 315 199 448 100 100 100 100 100 100 FZone Portuaire Avenue de Rhone 69360 TERNAY
130
131
TEXLOG Siren 424 670 321 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT OMEGA IV Siren 487 564 973 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT OMEGA V Siren 487 565 046 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT OMEGA VI Siren 493 339 444 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT OMEGA VII Siren 493 339 493 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT ND FRANCHISE Siren 479 885 717 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT LOCAD 98 Siren 417 625 860 0 100 100 0 100Les Pierrelles 26240 BEAUSEMBLANT LOCAD 99 Siren 422 184 358 0 100 100 0 100Les Pierrelles 26240 BEAUSEMBLANT LOCAD 01 Siren 433 062 619 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT LOCAD 02 Siren 441 333 432 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT LOCAD 03 Siren 445 037 948 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT LOCAD 04 Siren 452 071 467 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT LOCAD 05 Siren 452 071 467 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT LOCAD 06 Siren 488 777 517 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT LOCAD 07 Siren 494 469 539 100 100Les Pierrelles 26240 BEAUSEMBLANT CHRISTIAN SALVESEN PLC SC7173 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandSALVESEN LOGISTICS LIMITED 346268 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLCHRISTIAN SALVESEN (ATHERSTONE) LIMITED 337194 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLCHRISTIAN SALVESEN (COLD STORAGE) LIMITED 944001 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLCHRISTIAN SALVESEN (TRANSPORT) LIMITED SC045907 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotalndCHRISTIAN SALVESEN CENTRAL LIMITED SC034748 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotalndCHRISTIAN SALVESEN DISTRIBUTION LIMITED SC037270 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandCHRISTIAN SALVESEN FOOD SERVICES EUROPE LIMITED SC041509 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandCHRISTIAN SALVESEN FOOD SERVICES LIMITED SC122398 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandCHRISTIAN SALVESEN INDUSTRIAL SERVICES LIMITED SC020438 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandCHRISTIAN SALVESEN INVESTMENTS LIMITED 250351 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLCOMPUTER & SPECIALISED DISTRIBUTION LIMITED 1696199 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLCS3 LIMITED SC131371 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandFERRYFIELD INVESTMENTS LIMITED SC131370 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandGERPOSA U.K. LIMITED 3142610 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLGREEN LOGISTICS LIMITED 1270580 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SL
2007 ANNUAL REPORT
SALVESEN LOGISTICS HOLDINGS LIMITED 2678160 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLSALVESEN PALLETS LIMITED SC045331 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandSUSTAINABLE LOGISTICS LIMITED SC053103 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandSWIFT DISTRIBUTION LIMITED 2348007 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLSWIFT LOGISTICS LIMITED 243446 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLSWIFT LOGISTICS SERVICES LIMITED 4066643 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLSWIFT SERVICES LIMITED 583697 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLTENDAFROST FROZEN FOODS LIMITED 1550916 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLTHE NATURAL VEGETABLE COMPANY LIMITED 1319819 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLTHE SOUTH GEORGIA COMPANY LIMITED 1260670 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLWHELMAR (WEST MIDLANDS) LIMITED SC055217 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandWHELMAR LIMITED 908920 (Great Britain) 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLWILLIAM WALKER & SONS (HAULAGE CONTRACTORS) LIMITED SC045346 (Great Britain) 100 10016 Charlotte Square, EDINBURGH EH2 4DF, ScotlandSALVESEN (JERSEY) LIMITED 63920 (Great Britain) 100 10022 Grenville Street, ST HELIER, JE4 8PX, JerseyINVERALMOND INSURANCE LIMITED 358887 (Ireland) 100 1004th Floor, 25-28 Adelaide Road, DUBLIN 2, IrelandINVERLEITH INSURANCE COMPANY LIMITED 054896C (Great Britain) 100 100Atlantic House, 4-8 Circular Road, DOUGLAS, Isle of ManSALVESEN LOGISTICS LIMITED (FRENCH BRANCH) Siren 434 216 610 100 100Salvesen House, Lodge Way, New Duston, NORTHAMPTON NN5 7SLFINANCES TRANSPORTS ET PARTICIPATIONS SAS Siren 383 857 000 100 10015 Avenue Benoit Fourneyron, 42160 ANDREZIEUX-BOUTHEONDARFEUILLE ASSOCIES SA Siren 886 550 201 99,98 99,9815 Avenue Benoit Fourneyron, 42160 ANDREZIEUX-BOUTHEONDARFEUILLE LOGISTICS SAS Siren 344 777 131 99,98 99,9815 Avenue Benoit Fourneyron, 42160 ANDREZIEUX-BOUTHEONSALVESEN LOGISTICS (INTERNATIONAL) BV 16087722 (The Netherlands) 100 100Marga Klompeweg, 10 5032 MP Tilburg, PO Box 4313, 5004 JH TILBURG, The NetherlandsCHRISTIAN SALVESEN HOLDINGS BV 17123232 (The Netherlands) 100 100Marga Klompeweg, 10 5032 MP Tilburg, PO Box 4313, 5004 JH TILBURG, The NetherlandsCHRISTIAN SALVESEN Srl N.11814400153 (Italy) 100 100Via San Martino 11/B, I-20122 MILANO, ItalyCS3 Inc 1099800 (EU) 100 1003 Embarcadero Centre, 1800 SAN FRANCISCO, California, United StatesCHRISTIAN SALVESEN PACKING AND MARKETING COMPANY 1186882 (EU) 90 903 Embarcadero Centre, 1800 SAN FRANCISCO, California, United StatesCHRISTIAN SALVESEN OIL AND GAS INC. 723570018 (EU) 100 100100 West Tenth Street, WILMINGTON, Delaware, United States
REAL ESTATESCI GYVES Siren 351 922 257 (merger with the company SONECOVI) 0 0 0 0ZAC de l’Anjoly Ilot n°384 13127 VITROLLESSCI IMMOTRANS Siren 333 600 625 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT SCI LA TARNOSIENNE Siren 410 082 077 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT
132
133
SCI TOURS TRANSIT Siren 349 020 354 0 100 100 0 100 100Les Pierrelles 26240 BEAUSEMBLANT SCI TRANSGEDO Siren 345 318 331 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT SNC BRIVE TRANSIT Siren 423 803 758 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT SNC CAVAILLON ENTREPOTS Siren 334 719 671 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT SNC PORT DE BOUC Siren 384 375 515 100 100 100 100 100 100Les Pierrelles 26240 BEAUSEMBLANT SCI IMOTRANS Siren 414 322 396 100 100 100 100 100 100 FZI du Brezet Rue Pierre Boulanger 63100 CLERMONT FERRANDSCI LOGIS TRANS EUROPE Siren 353 565 963 100 100 100 100 100 100 FZI du Brezet Rue Pierre Boulanger 63100 CLERMONT FERRANDSCI LES VOLCANS Siren 339 504 052 100 100 100 100 100 100ZI du Brezet Rue Pierre Boulanger 63100 CLERMONT FERRANDTRANS IMMO PICARDIE Siren 527 221 030 100 100 100 100 100 100 FLes Pierrelles 26240 BEAUSEMBLANT SCI SALVESEN PROPERTY Siren 429 877 251 100 100ZI, Rue du Vertuquet, 59960 NEUVILLE EN FERRAIN
bb) Commitments and contingenciesThe Group’s commitments (holding company and fully consolidated companies) are as follows:
• Commitments given
Warranties against claims in 2007:Amount of excess*: € 260,000 Maximum amount (cap): € 17,250,000 Final date for implementation:2008: € 4,000,000 2009: € 13, 250,000 2010 and beyond: € 0,000 * represents the amount not covered by warranties against claims and therefore at the Group’s
expense
Commitments for real estate rent instalments Commitments for real estate rent instalments amounted to € 540,644,000 asat 31 December 2007, and € 296,136,000 as at 31 December 2006. Theyrepresent rent instalments payable between 1 January 2008 and the firststatutory date of termination of the lease by the lessee.They are payable as follows:In K€ • 1 year 133,238• 1 to 5 years 288,774• more than 5 years 118,631Total 540,644
Vehicle lease commitmentsOperating lease commitments not consolidated on the balance sheet amountedto € 162,689,000 as at 31 December 2007 and are broken down as follows:In K€ • 1 year 41,315• 1 to 5 years 98,837• more than 5 years 22,537Total 162,689
Individual training right (droit individuel à la formation)commitmentsEmployees held 663,203 hours of training entitlements under individualtraining rights as at 31 December 2007 (488,043 hours as at 31 December2006). During FY 2007, 5,765 hours were used up by 245 employees, and106 hours were used in 2006.
Mutual commitments in respect of real estate rent instalmentsAn undertaking to purchase a property currently occupied under an operatinglease was entered into with the owner during the first half-year 2007. Thisundertaking matures within less than one year and represents € 247,000 inrespect of the part consisting of rent instalments outstanding until completionof the transaction and € 8,775,000 in respect of the acquisition proper.
■ K€ 31/12/2007 31/12/2006 31/12/2005
Commitments givenBank guarantees 43,153 24,543 15,528Letters of comfort 10,815 12,090 1,961Real estate rent instalments 540,644 296,136 273,108Vehicle lease commitments 162,689 48,129 54,966Training expressed in number of hours 663,203 488,043 336,418Purchase of minority interests N/A N/A N/AFinancial debt subject to covenants 292,500 0 3,789
Commitments receivedManufacturers 47,939 42,545 41,940Warranties against claims* 17,250 22,609 9,359
2007 ANNUAL REPORT
Minority interest purchase commitments Undertakings to purchase minority interests amounted to € 2.1 million as at31 December 2007.In K€ • 1 year 1.40• 1 to 5 years 0.70• more than 5 years 0.00Total 2.10
• Commitments received
From manufacturersThe Group holds firm buy-back undertakings granted by manufacturers ofheavy goods vehicles in respect of the vehicle engines.As at 31 December 2007, commitments relating to French financing specialpurpose entities are assessed at € 47,939,000 (€ 42,545,000 as at 31 December2006 and € 41,940,000 as at 31 December 2005).
Warranties against claimsThe Group holds warranties against claims in connection with theacquisitions of Venditelli and Vendilog, Transcondor and CCH.
cc) Post-balance sheet eventsDuring the first quarter 2008, the Group acquired a 4.38% interest in theequity and voting rights in Novatrans, thus increasing its shareholding to15.30% as at 23 March 2008.
134
TABLEAUX DES FLUX DE TRÉSORERIE
135
Dear Shareholders,
In performance of the assignment entrusted to us by your Shareholders’ General Meetings, we have audited the consolidated financial statements of GroupeNorbert Dentressangle S.A. for the financial year ended 31 December 2007, as appended hereto.The consolidated financial statements were approved by the Executive Board. Our responsibility is to express an opinion on these financial statements inlight of our audit.
I Opinion on consolidated financial statements
We carried out our audit in compliance with professional standards applicable in France. These standards require that we perform the audit so as to obtainreasonable assurance that the consolidated financial statements are free of any material misstatements. An audit involves the review, by way of sampling,of the documents underlying the information set forth in these financial statements. It also includes an assessment of the accounting policies applied andany material estimates made in drawing up the financial statements, as well as an assessment of the presentation thereof as a whole. We believe that ouraudit provides a reasonable basis for our opinion expressed below.We certify that in accordance with the IFRS accounting standards adopted by the European Union, the consolidated financial statements for the yearprovide a true and fair view of the net assets, financial position and earnings of the companies and entities within the consolidation.Without prejudice to the opinion expressed hereinabove, we wish to draw your attention to the following notes:• note II-a) which sets forth the changes in accounting policies applying to the presentation of the income statement and the cash flow statement,• note III-y) which highlights the provisional nature of the allocation of the purchase price of Christian Salvesen between assets and liabilities acquired as
well as the resulting goodwill.
II. Justification for our assessment
In accordance with the provisions of Article L.823-9 of the French Commercial Code regarding justification for our assessment, we bring the following toyour attention:
Changes in accounting policiesAs stated in Notes note II-a), changes in accounting policies were implemented during the financial year ended 31 December 2007. Within the frameworkof our assessment of the accounting policies and principles applied by your group, we established the validity of the aforesaid changes in accounting policiesand the presentation thereof.
Accounting estimatesIn the process of drawing up its financial statements, the Group makes certain estimates and assumptions in order to identify and assess goodwill,contingent liabilities and provisions for liabilities and charges. We reviewed the available documentation for all such estimates and verified thereasonableness of the resulting valuations.The resulting assessments thus form part of our audit of the consolidated financial statements, considered as a whole, and therefore contributed to theformation of our opinion as expressed in the first section of this report.
III. Specific review
Furthermore, in accordance with professional standards applicable in France, we also reviewed the information set forth in the Group’s management report.We do not have any comments to express in respect of the accuracy of this information or the consistency thereof with the consolidated financial statements.
Lyon, 10 April 2008
The Statutory Auditors
Alain Bonniot & Associés Ernst & Young AuditAlain Bonniot Daniel Mary-Dauphin
STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATEDFINANCIAL STATEMENTSFinancial year ended 31 December 2007
2007 ANNUAL REPORT136
ASSETS■ K€ 31/12/2007 31/12/2006 31/12/2005
Gross amount 1,300 511 511Depreciation and impairment (550) (511) (505)
■ INTANGIBLE FIXED ASSETS 750 0 6
Gross amount 598 483 79Depreciation and impairment (21) (21) (13)
■ INTANGIBLE FIXED ASSETS 577 462 66
Gross amount 539,096 184,180 181,356Amortisation (41) 0 0
■ FINANCIAL ASSETS 539,055 184,180 181,356
■ TOTAL FIXED ASSETS 540,382 184,642 181,428
Trade receivables 2,393 3,129 4,708Other receivables 8,104 10,143 36,280Cash 82,376 49,543 2,754Prepaid expenses 1,318 0 0
■ TOTAL CURRENT ASSETS 94,191 62,815 43,742
■ TOTAL ASSETS 634,573 247,457 225,170
LIABILITIES■ K€ 31/12/2007 31/12/2006 31/12/2005
Share capital 19,672 19,671 19,847Reserves 146,752 141,056 137,975Net income for the financial year 29,704 15,245 14,991Regulated provisions 207 0 0
■ SHAREHOLDERS’ EQUITY 196,335 175,972 172,813
Provisions for liabilities and charges 180 0 0Provisions for tax 0 0 0
■ PROVISIONS AND OTHER-LONG TERM LIABILITIES 180 0 0
Bond loan 0 0 0Financial debt 0 0 0
■ LONG-TERM BORROWINGS 0 0 0
Financial debt 207,867 0 0Convertible bond loan 0 0 0Trade and other payables 11,750 4,859 5,123Other liabilities 161,758 33,531 19,298Banks 55,009 33,095 27,936
■ SHORT-TERM BORROWINGS 436,384 71,485 52,357
■ NEGATIVE TRANSLATION ADJUSTMENTS 1,674 0 0
■ TOTAL LIABILITIES 634,573 247,457 225,170
SUMMARY OF CORPORATE FINANCIAL STATEMENTS AND NOTES (prior to appropriation of earnings)
137
In 2007, the merger of Stockalliance with Norbert Dentressangle Groupgenerated a € 7,389,000 merger premium, recognised as income.
Please note that net profits for 2006 were appropriated by the Shareholders’General Meeting in accordance with the Executive Board’s proposals: adividend of € 1.00 per share was distributed.
As at 31 December 2007, the company’s share capital was fully paid up andconsisted of 9,836,241 shares having a nominal value of € 2.00 each.
INCOME STATEMENT■ K€ 31/12/2007 % 31/12/2006 % 31/12/2005 %
■ NET REVENUE 18,686 100 21,026 100 21,157 100
Operating expenditure (20,585) (110.2) (21,537) (102.4) (22,546) (106.6)
■ INCOME FROM OPERATIONS (1,899) (10.2) (511) (2.4) (1,389) (6.6)
Other operating income and charges 93 0.5 40 0.2 88 0.4
■ OPERATING INCOME (1,806) (9,.7) (471) (2.2) (1,301) (6.1)
Share of income of associates 619 3.3 602 2.9 612 2.9Net financial expenditure 26,520 141.9 12,778 60.8 9,889 46.7Non-recurring items 880 4.7 31 0.1 32 0.2
■ INCOME BEFORE TAX 26,213 140.3 12,940 61.5 9,232 43.6
Corporation tax 3,491 18.7 2,305 11.0 5,759 27.2
■ NET INCOME 29,704 159.0 15,245 72.5 14,991 70.9
SHAREHOLDERS’ EQUITY AND CHANGE IN NET ASSETSNet assets varied as follows during the financial year:
■ K€ 31/12/06 Appropriation Appropriation Other Earnings 31/12/07prior to of 2006 net of 2006 net movements 2007 prior
appropriation income - earnings income - dividends appropriation
Share capital 19,671 1 19,672Share premium 10,103 10,103Statutory reserve 1,985 1,985Distributable reserves 90,000 5,000 95,000Retained earnings 30,553 651 31,204Merger premium 3,878 36 3,914Goodwill on consolidation 4,394 4,394Warrants 58 58Dividends 0 9,836 (9,836) 0Reserves for long-term capital gains 0 0Non-distributable reserves 86 8 942006 net income 15,245 (15,245) 02007 net income 29,704 29,704Regulated provisions 207 207
■ NET ASSETS 175,973 250 (9,836) 244 29,704 196,335
2007 ANNUAL REPORT
SUMMARY OF NET INCOME AND OTHER KEY FIGURES OF THE COMPANY OVER THE LAST FIVE FINAN-CIAL YEARS
■ K€ 31/12/2003 31/12/2004 31/12/2005 31/12/2006 31/12/2007
CLOSING SHARE CAPITAL Company’s share capital 15,565,930 19,533,412 19,846,612 19,671,386 19,672,482Number of ordinary shares 9,728,706 9,766,706 9,923,306 9,835,693 9,836,241Number of non-voting preference sharesMax. number of shares to be created:- By bond conversion 0 0 0 0 0- By subscription rights 279,200 234,900 75,300 115,000 115,000
OPERATIONS AND INCOME/(LOSS)Revenue (excl. taxes) 26,869,366 22,523,332 21,156,880 21,025,980 18,685,923Earnings before taxes, investments, depreciation, amortisation and provisions 14,003,662 9,477,091 9,180,875 12,952,943 26,662,422Income taxes (3,314,326) 3,421,813 (5,758,846) (2,305,183) (3,490,594)Employee profit-sharingNet income /(loss) 18,023,274 6,028,891 14,990,689 15,244,657 29,703,698Income distributed 6,810,094 8,204,033 8,707,754 9,835,693 10,819,865
EARNINGS PER SHAREIncome after taxes, investments, and beforeallowances for amortisation, depreciation and provisions 1.83 0.64 1.55 1.59 3.15Income/(loss) after tax, investments and allowances for amortisation, depreciation and provisions 1.91 0.63 1.56 1.59 3.10Dividend paid 0.70 0.84 0.89 1.00 1.10*
EMPLOYEESAverage number of employees 30 26 29 29 29Wages and salaries 3,087,130 3,015,324 3,876,452 3,656,206 3,266,043Social security charges 1,100,735 1,069,359 1,400,200 1,387,250 1,239,897
138
* Proposed to the Shareholders’ General Meeting of 22 May 2008 on the basis of the number of shares as at the balance sheet date.
Salvesen and Interbulk are sterling-managed foreign companies. The closingrate is applied for share capital and shareholders’ equity computations, and anannual average rate is applied for revenue and net income. The other columns,including the value of the securities, are based on the financial statements ofNorbert Dentressangle Group as at 31/12/2007. The financial statements ofNovatrans are subject to the approval of the Shareholders’ General Meetingdue to be held in 2008.
The investment portfolio of Groupe Norbert Dentressangle S.A. is periodicallyvalued to determine whether there is any need to set aside an impairment
provision. This is based on the consolidated value of the company, its currentand future contribution to Group consolidated income and its current andfuture capacity to generate positive cash flow.A provision is set aside where the valuation based on these various criteriashows that the book value of securities exceeds the company’s earnings andcash flow capacity.
The full company financial statements of Groupe Norbert Dentressangle S.A.and notes thereto are available on request. The appended statutory auditors’reports refer to the abovementioned full company financial statements.
SUBSIDIARIES AND PARTICIPATING INTERESTS
■ K€
Subsidiaries Share Other % Gross Net Loans and Endorsements Revenue Net Dividendscapital shareholders’ held value of value of shareholder and surety income collected
equity securities securities loans loans
NDT 38,850 132,752 100 99,639 99,639 (83,650) 0 28,482 8,926 4,662 ND LOGISTICS 31,171 42,032 100 59,303 59,303 (16,000) 0 384,483 15,218 14,650 OMEGA 2 1,800 573 100 1,800 1,800 (54,500) 0 1,678 464 990 SALVESEN 109,738 37,658 100 357,599 351,952 0 0 1,325,421 69,883 0 INTERBULK 43,469 41,520 7 5,978 5,902 0 0 239,703 407 0 NOVATRANS 3,600 6,975 11 769 769 0 0 114,817 (1,237) 0TOTAL 519,365 (154,150) 0 20,302
NOTE 1
Annual average rate Closing rate Annual average rate Closing rate
31/03/06 - 31/03/07 31/03/07 30/09/06 - 30/09/07 30/09/07
SALVESEN 0.67828 0.67980 INTERBULK 0.67638 0.69680
139
STATUTORY AUDITORS’ GENERAL REPORT ON THE ANNUAL FINANCIAL STATEMENTS Year ended 31 December 2007
Dear Shareholders,
In performance of the assignment entrusted to us by your Shareholders’ General Meetings, please find herein our report on the financial year ended 31 December 2007 in respect of:• The auditing of the attached annual financial statements of Groupe Norbert Dentressangle S.A.;• Justification for our assessment; and• The specific testing and disclosures required by law.
The financial statements were approved by the Executive Board. Our responsibility is to express an opinion on these financial statements in light of ouraudit.
I. Opinion on the annual financial statements
We carried out our audit in compliance with professional standards applicable in France. These standards require that we perform the audit so as to obtainreasonable assurance that the consolidated financial statements are free of any material misstatements. An audit involves the review, by way of sampling,of the documents underlying the information set forth in these financial statements. It also includes an assessment of the accounting policies applied andany material estimates made in drawing up the financial statements, as well as an assessment of the presentation thereof as a whole. We believe that ouraudit provides a reasonable basis for our opinion expressed below.
We certify that, in accordance with French accounting standards and regulations, the annual financial statements provide a true and fair view of theCompany’s results of operations for the financial year ended 31 December 2007 as well as its financial position and net assets at said date.
Without prejudice to the opinion expressed hereinabove, we wish to draw your attention to note I-e) of the notes pertaining to the initial application ofOpinion 2007-C of the Emergency Committee of the French National Accounting Standards Board on the recognition of acquisitions costs of equityinvestments.
II. Justification for our assessment
In accordance with the requirements of Article L. 823-9 of the French Commercial Code regarding the provision of Justification for our assessment, wewish to bring the following to your attention:
Accounting policies
As stated in note I-e) of the notes, your company applied Opinion 2007-C of the Emergency Committee of the French National Accounting StandardsBoard for the first time in 2007. Within the framework of our assessment of the accounting policies and principles applied by your company, we ascertainedthe proper implementation of the Emergency Committee’s opinion on acquisition costs.
Accounting estimates
Investments in subsidiaries were assessed in compliance with the accounting policies and regulations referred to in the notes. In conjunction with ourassignment, we reviewed the appropriateness of these accounting methods and, as regards estimates, we verified the reasonableness of the assumptionspolicies as well as the resulting valuations.
The resulting assessments thus form part of our audit of the annual financial statements, considered as a whole, and therefore contributed to the formationof our opinion as expressed in the first section of this report.
III. Specific verifications and disclosures
In accordance with professional standards applicable in France, we also carried out the specific checks required by law.
We do not have any further comments regarding:
• The accuracy and consistency with the annual financial statements of the information set forth in the Executive Board’s management report and in thedocuments circulated amongst shareholders on the financial position and the annual financial statements.
• The accuracy of the information appearing in the management report in respect of compensation and benefits paid to the relevant officers and directorsas well as any commitments granted to them upon acceptance of, resignation from or change of position or subsequently thereto.
As required by law, we verified that the management report contained the requisite disclosures on the acquisition of equity and controlling interests andthe identity of shareholders.
Lyon, 10 April 2008
The Statutory auditors
Alain Bonniot & Associés Ernst & Young AuditAlain Bonniot Daniel Mary-Dauphin
2007 ANNUAL REPORT140
STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATEDCOMMITMENTS AND AGREEMENTSYear ended 31 December 2007
Dear Shareholders,
In our capacity as statutory auditors, we hereby submit our report on regulated commitments and agreements.The scope of our assignment does not encompass any active search for any such commitments and agreements, but consists of informing you, with referenceto the information we were provided, of the main features, terms and conditions of the agreements notified to us. We are not required to express any opinionas to the usefulness or merits of such agreements and commitments. In accordance with the provisions of Article R225-58 of the French Commercial Code,you are responsible for assessing the grounds for and benefits of entering into any such commitments and agreements with a view to approving same.We have not been informed of any agreement or commitment entered into during the year that is governed by Article L.225-68 of the French Commercial Code.Furthermore, pursuant to the French Commercial Code, we were informed that the following agreements and commitments, approved in previous financialyears, remained in force during the past financial year:
1. With Financière Norbert Dentressanglea. Characteristics and purpose
In July 2005, Mr. Norbert Dentressangle granted “Financière Norbert Dentressangle” the right to use the “Norbert Dentressangle” trademark and the“ND” logo, registered in his name and previously licensed to it free of charge.As before, Financière Norbert Dentressangle authorised the Company to use this trademark and logo free of charge.To that end, on 13 July 2005, those two companies entered into a 3-year renewable trademark licensing agreement for which no charge accrues.
Terms and conditionsThe Company shall repay the various costs relating to the renewed registration and preservation of the trademarks.The total amount of such expenses for the financial year ended 31 December 2007 amounted to € 3,195 excluding taxes.
b. Characteristics and purposeFinancière Norbert Dentressangle continued to provide the Company with a range of services and in particular:• Advice on development opportunities in France and abroad;• Assistance with regard to Group acquisitions, in France and abroad,• Administrative, relationship management and financial assistance.
Terms and conditionsThe amount borne by your company in that respect for the financial year ended 31 December 2007 was € 1,087,380 excluding taxes.
2. With FMV & Associés
a. Characteristics and purposeWithin the framework part of its mergers and acquisitions consultancy business, FMV et Associés, managed by Mr. François-Marie Valentin, continuedto provide support and advice to your Company.
Terms and conditionsThe amounts borne by your company in that respect for the financial year ended 31 December 2007 were:• Fees for consultancy services: € 75,000,• Reimbursement of actual expenses: € 217.90.
We carried out our work in accordance with the professional standards applicable in France. These standards require testing to be performed to ensurethat the information provided to us is consistent with the documents from which it is obtained.
Lyon, 10 April 2008
The Statutory auditors
Alain Bonniot & Associés Ernst & Young AuditAlain Bonniot Daniel Mary-Dauphin
141
I - ORDINARY RESOLUTIONS
First resolution(Approval of the company financial statements for 2007)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, havingtaken cognizance of the reports of the Executive Board, the SupervisoryBoard and the Statutory Auditors, fully approves the report of the ExecutiveBoard and the company financial statements for the financial year ended 31December 2007, as presented, and all the transactions recorded or referred totherein.
The meeting approves the management activities of the Executive Boardduring the financial year elapsed and also notes that no expenses governedby Articles 39-4 and 213 d of the French General Tax Code have been addedback for tax purposes.
Second resolution(Approval of the consolidated financial statements for 2007)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, havingtaken cognizance of the reports of the Executive Board, the SupervisoryBoard and the Statutory Auditors, fully approves the report of the ExecutiveBoard and the consolidated financial statements for the financial year ended31 December 2006, as presented, and all the transactions recorded orreferred to therein.
Third resolution(Agreements for 2007 governed by Article L. 225-86 of the French CommercialCode)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, havingheard the special report of the Statutory Auditors on agreements entered intoin 2007 and governed by Articles L.225-86 et seq. of the French CommercialCode, approves the content of this report and the transactions referred totherein.
Fourth resolution(Appropriation of earnings)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings,approves the appropriation of company earnings proposed by the ExecutiveBoard and accordingly resolves that these company earnings for the year,which amount to € 29,703,698.19, shall be appropriated as follows:
Net income for the financial year € 29,703,698.19
Plus amounts brought forward € 31,204,342.29_____________
Representing a total available amount of € 60,908,040.48
Appropriated as follows:
• To a special reserve pursuant to the provisions of Article 238 B AB of the French General Tax Code (work of a living artist) € 7,166.00
• To shareholders by way of dividends € 10,819,865.10
• To the distributable reserve to increase it to € 100M € 5,000,000.00
• The balance, to “Retained earnings” € 45,081,009.38 _____________
That is a total amount of: € 60,908,040.48
Consequently, each share shall be entitled to a € 1.10 dividend for the year,fully eligible as the case may be for the 40% tax relief provided for underArticle 158.3-2º and 4º of the French General Tax Code or for the election topay the 18% withholding tax.
This dividend shall be paid out to shareholders on 3 June 2008.
The Meeting notes that the dividends per share distributed over the past threefinancial years and the corresponding tax credits were as follows:
Financial Net amount Relief Number of shares
2006 € 1.00 € 0.40 9,835,6932005 € 0.89 € 0.356 9,783,9932004 € 0.84 € 0.42 9,539,793
Dividends not paid out pursuant to Article L.225-210 of the French CommercialCode, that is those relating to treasury shares, shall be appropriated to the“retained earnings” account.
Fifth resolution (Renewal of Mrs Evelyne Dentressangle’s term of office as SupervisoryBoard member)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, renewsMrs Evelyne Dentressangle’s term of office as Supervisory Board member fora period of four years expiring at the annual shareholders’ General Meetingcalled in 2012 to vote on the financial statements for 2011.
Sixth resolution(Renewal of Mr Bruno Rousset’s term of office as Supervisory Board member)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, renewsMr Bruno Rousset’s term of office as Supervisory Board member for a periodof four years expiring at the annual shareholders’ General Meeting called in2012 to vote on the financial statements for 2011.
DRAFT RESOLUTIONS SUBMITTED BY THE EXECUTIVEBOARD
Seventh resolution(Appointment of a Supervisory Board member)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, resolvesto appoint as a new member of the Supervisory Board, for a period of fouryears expiring at the annual shareholders’ General Meeting called in 2012 tovote on the financial statements for 2011:
Mr Vincent Menez, born on 25 March 1964, a French citizen, residing at 7,allée de l’Aubépine in Sainte-Foy-Les-Lyon (69110).
Eighth resolution(Appointment of a Supervisory Board member)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, resolvesto appoint as a new member of the Supervisory Board, for a period of fouryears expiring at the annual shareholders’ General Meeting called in 2012 tovote on the financial statements for 2011:
Mr Jean-Luc Poumarède, born on 30 November 1945, a French citizen,residing at 124 Quai Louis Blériot in Paris (75016).
Ninth resolution(Setting Supervisory Board attendance fees)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, elects toset the attendance fees granted to the Supervisory Board in respect of 2008and subsequent financial years at € 231,000, until otherwise decided by theMeeting.
Tenth resolution(Authorisation granted to the Executive Board to allow the Company totrade in its own shares)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Ordinary Meetings, havingtaken cognizance of the report of the Executive Board and in accordance withthe provisions of Articles L.225-209 of the French Commercial Code, authorisesthe Executive Board to buy back the Company’s shares, with a view to:
• Granting stock options or bonus shares to its employees, officers anddirectors and/or those of its affiliates in accordance with applicable statutoryprovisions;
• Cancelling shares, provided that the ninth resolution put to theExtraordinary Shareholders’ General Meeting is adopted;
• Holding and using shares for the purposes of exchange or consideration aspart of mergers and acquisitions; and
• Implementing or fulfilling obligations relating to the issue of securitiescarrying an entitlement to equity,
• Applying any market practice approved by the AMF and generally carryingout any transaction complying with current regulations.
The Shareholders’ General Meeting sets the maximum purchase price at € 100 per share and the maximum number of shares to be purchased at 10%of the total amount of shares currently making up the share capital, or 5% inthe case of shares acquired by the Company with a view to holding and usingsame in mergers and acquisitions. It should be noted that the overall amountallocated to the share buyback programme may not exceed € 95,361,270.
In the event of a capital increase through the capitalisation of reserves and theallocation of bonus shares or any other transaction affecting equity as well as,where applicable, a share split or reverse split, the € 100 price will bemathematically adjusted by the required proportion to take into account thevariation in total number of shares caused by the transaction.
The acquisition, disposal or transfer of these shares may take place by anymeans, on the market, off the market or over the counter, in particular byblock trading, public offerings, by using or exercising any financialinstrument, derivative, including by way of implementation of options, atsuch times as the Executive Board shall deem appropriate, including duringa public offering period pertaining to securities in the Company or during theterm of a public offering launched by the Company, in compliance withapplicable regulations. The part of the programme that may be carried out byblock trading is not subject to any limitation.
The authorisation is granted for a period of eighteen months as of the date ofthis Meeting and shall in any event expire at the end of the Meeting called toapprove the financial statements for the financial year ended 31 December2008. It cancels and supersedes that granted by the Annual Shareholders’General Meeting of 30 May 2007 (eighth resolution) in respect of the partthereof unused to date.
The Shareholders’ General Meeting grants full powers to the Executive Board,which may delegate same to its Chairman, to enter into any agreements, carryout any and all formalities and filings with any authorities whatsoever,including the French Financial Markets Authority, and generally to take any andall action required to implement decisions made pursuant to these powers.
II - EXTRAORDINARY RESOLUTIONS
Eleventh resolution(Authorisation granted to the Executive Board for the Company to canceltreasury shares)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Extraordinary Meetings,having taken cognizance of the Executive Board’s report and the StatutoryAuditors’ special report, pursuant to the provisions of Article L.225-209 of theFrench Commercial Code and subject to adoption by the Shareholders’ GeneralMeeting of the eighth resolution relating to the authorisation granted to theCompany to trade in its own shares, authorises the Executive Board at its solediscretion, on one or more occasions, to cancel all or part of the treasury sharesit holds by virtue of the authorisations to buy back Company shares.
The authorisation is granted for a period of eighteen months from the date ofthis Shareholders’ General Meeting and capped at 10% of the share capital pertwenty-four month period, and shall in any event expire at the end of theShareholders’ General Meeting called to approve the financial statements forthe financial year ended 31 December 2008. It cancels and supersedes thatgranted by the Annual Shareholders’ General Meeting of 30 May 2007 (ninthresolution) in respect of the part thereof unused to date.
The Shareholders’ General Meeting grants full powers to the Executive Boardto settle any objections, resolve to cancel shares, record any share capitalreduction, offset the difference between the buy back value of the cancelledshares and the nominal value thereof against premiums and availablereserves, amend the Articles of Association accordingly and generally take anyappropriate measures and carry out all necessary formalities.
2007 ANNUAL REPORT142
143
Twelfth resolution(Authorisation granted to the Executive Board to increase the share capitalthrough the issue of ordinary shares, of various securities carrying anentitlement to equity or to debt securities, with retention of shareholders’pre-emptive subscription rights)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Extraordinary Meetings,having taken cognizance of the Executive Board’s report, and in accordancewith the provisions of Articles L.225-129 to L.225-129-6, L.228-91 andL.228-92 of the French Commercial Code:
- delegates to the Executive Board, with the option to further delegate samein compliance with applicable statutory provisions, its right to issue, on oneor more occasions, in France or abroad, in euros, in a foreign currency orin any monetary unit whatsoever based on a basket of currencies, withretention of shareholders’ pre-emptive subscription rights, ordinary sharesin the Company or any securities whatsoever carrying an entitlement to theCompany’s equity or to the Company’s debt securities, including warrantsfor new or existing shares issued independently, whether on a bonus basisor for consideration: such shares may be subscribed for cash or by way ofset-off against liquid and payable receivables; no preference shares orsecurities carrying an entitlement to preference shares may be issued;
- resolves that the nominal value of all capital increases for cash that may takeplace, immediately and/or in the future under this authorisation, shall notexceed a nominal amount of € 20,000,000, such amount being increased,as the case may be, by the nominal value of any additional shares to beissued to preserve, in accordance with applicable statutory provisions, therights of holders of securities carrying an entitlement to ordinary shares inthe Company, it being specified that this capital increase cap applies to thetwelfth, thirteenth, fourteenth and fifteenth resolutions and that the totalnominal value of the capital increase carried out pursuant to the saidresolutions shall be deducted from this overall cap;
- resolves that securities carrying an entitlement to ordinary shares in theCompany thus issued may in particular consist of debt securities or becombined with the issue of such securities or even provide for the issuethereof as intermediate securities. They may inter alia be issued assubordinated securities or otherwise, whether or not subject to a specifiedterm, be denominated in euros, in foreign currencies or in any monetaryunit whatsoever based on a basket of currencies.
The nominal value of debt securities carrying an entitlement to equity thusissued shall not exceed € 400,000,000 or the euro equivalent thereof as of thedate of the decision to issue, it being specified that this amount does notinclude redemption premiums in excess of the nominal value, if any. Thisamount applies to all securities that may be issued pursuant to the twelfth,thirteenth, fourteenth and fifteenth resolutions.The aggregate nominal value of debt security issues under this authorisationshall not exceed € 400,000,000. Debt securities carrying an entitlement tothe Company’s ordinary shares may bear a fixed and/or variable interest rateor even be capitalised, and be repaid with or without a premium, orredeemed, and the shares may furthermore be bought back by the Companyon the market or over the counter, or by means of a public offering,
- In the event that the Executive Board uses this authorisation, theShareholders’ General Meeting resolves that:
I) Shareholders shall be entitled, in proportion to the shares they hold, tosubscribe irrevocably for ordinary shares and securities issued pursuant tothis resolution,
II) In addition, the Executive Board may grant shareholders the right tosubscribe for excess shares in proportion to their rights and to the extent oftheir requests,
III) Where irrevocable subscriptions and, as the case may be, for excessshares, have failed to absorb all ordinary shares or securities to be issuedpursuant to this authorisation, the Executive Board may, at its discretion,limit the issue to the total of subscriptions received, in such order as it shalldeem appropriate, provided that they represent at least three quarters of thecontemplated issue, and/or allocate at its sole discretion all or part of theunsubscribed shares and/or offer all or part thereof to the public.
- formally notes that this authorisation entails an automatic waiver byshareholders of their pre-emptive subscription right for ordinary shares inthe Company to which securities issued pursuant to this authorisation maycarry an entitlement,
- resolves that the Executive Board shall be responsible, with the option tofurther delegate, for setting the issue price for ordinary shares or securitiescarrying an entitlement to the Company’s equity. The sum immediatelycollected by the Company plus, as the case may be, that likely to besubsequently received by the Company shall, for each ordinary share issuedas a result of the issue of these securities, be at least equal to the nominalvalue thereof,
- grants the Executive Board, with the right to further delegate, full powers toimplement this authorisation, in particular for the purpose of setting theterms and conditions of issue, including where applicable the current orretroactive date of issue of the relevant shares, recording the completion ofthe resulting capital increases, amending the Articles of Associationaccordingly and allowing any expenses to be set off against the issuepremium,
- sets the term of validity of this authorisation, which cancels the authorisationgranted under the tenth resolution of the Shareholders’ General Meeting of 30May 2007, at twenty-six months as of this Meeting.
Thirteenth resolution(Authorisation granted to the Executive Board to increase the share capitalthrough the issue of ordinary shares, of various securities carrying anentitlement to equity or to debt securities, with a waiver of the shareholders’pre-emptive subscription right and the obligation to grant a preferential right)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Extraordinary Meetings,having taken cognizance of the Executive Board’s report and the StatutoryAuditors’ special report, and in compliance with the provisions of ArticlesL.225-129 to L.225-129-6, L.225-135, L.228-91 and L.228-92 of the FrenchCommercial Code:
- delegates to the Executive Board, with the option to further delegate samein compliance with applicable statutory provisions, its right to issue, on oneor more occasions, in France or abroad, in euros, in a foreign currency orin any monetary unit whatsoever based on a basket of currencies, withretention of shareholders’ pre-emptive subscription rights, ordinary sharesin the Company or any securities whatsoever carrying an entitlement to theCompany’s equity or to the Company’s debt securities, including warrantsfor new or existing shares issued independently: such shares may besubscribed for cash or by way of set-off against liquid and payablereceivables; no preference shares or securities carrying an entitlement topreference shares may be issued;
2007 ANNUAL REPORT144
- resolves that the nominal value of all capital increases for cash that may takeplace, immediately and/or in the future under this authorisation, shall notexceed a nominal amount of € 20,000,000, such amount being increased,as the case may be, by the nominal value of any additional shares to beissued to preserve, in accordance with applicable statutory provisions, therights of holders of securities carrying an entitlement to ordinary shares inthe Company, this amount being set off against the overall cap laid down inthe twelfth resolution;
- resolves that securities carrying an entitlement to ordinary shares in theCompany thus issued may in particular consist of debt securities or becombined with the issue of such securities or even provide for the issuethereof as temporary securities. They may, inter alia, be issued assubordinated securities or otherwise, whether or not subject to a specifiedterm, be denominated in euros, in foreign currencies or in any monetaryunit whatsoever based on a basket of currencies.
The nominal value of debt securities carrying an entitlement to equity thusissued shall not exceed € 400,000,000 or the euro equivalent thereof as of thedate of the decision to issue, it being specified that this amount does notinclude redemption premiums in excess of the nominal value, if any. Thisamount applies to all securities that may be issued pursuant to the twelfthresolution. The aggregate nominal value of debt security issues under thisauthorisation shall not exceed € 400,000,000. Debt securities carrying anentitlement to the Company’s ordinary shares may bear a fixed and/or variableinterest rate or even be capitalised, and be repaid with or without a premium,or redeemed, and the shares may furthermore be bought back by theCompany on the market or over the counter, or by means of a public tenderoffer,
- resolves to waive the shareholders’ pre-emptive right of subscription forthese securities that will be issued in accordance with applicable statutoryprovisions, the Executive Board being required to grant shareholders anirrevocable and/or revocable preferential subscription right in respect of theentire share issue, for the period and on the terms that it shall set incompliance with applicable statutory and regulatory provisions, tosubscribe therefor pursuant to the provisions of Article L.225-135 of theFrench Commercial Code. Where subscriptions, including, as the case maybe, shareholders’ subscriptions, fail to meet the entire share issue, theExecutive Board may, at its discretion, limit the issue to the amount ofsubscriptions received, in such order as it shall deem appropriate, providedthat they represent at least three quarters of the contemplated issue, and/orallocate at its sole discretion all or part of the unsubscribed shares and/oroffer all or part thereof to the public,
- formally notes that this authorisation entails an automatic waiver byshareholders of their pre-emptive subscription right for ordinary shares inthe Company to which securities issued pursuant to this authorisation maycarry an entitlement,
- resolves that the sum accruing or which should accrue to the Company foreach of the shares issued or to be issued under this authorisation (less, asthe case may be, where equity warrants are issued, the issue price of saidwarrants) shall at least be equal to the minimum amount required understatutory or regulatory provisions applicable when this authorisation isused, that is currently the weighted average price of the share during thethree trading sessions prior to the date on which it is set, subject whereapplicable to a discount not exceeding 5%, following, as the case may be,any adjustment that may be required to take the difference in dated datesinto account,
- resolves that the Executive Board shall be responsible, with the option tofurther delegate, for setting the issue price for ordinary shares or securitiescarrying an entitlement to the Company’s equity,
- grants the Executive Board, with the right to further delegate, full powers toimplement this authorisation, in particular for the purpose of setting theterms and conditions of issue, including where applicable the current orretroactive dated date of the relevant shares, recording the completion of theresulting capital increases, amending the Articles of Association accordinglyand allowing any expenses to be set off against the issue premium,
- Sets the term of validity of this authorisation, which cancels theauthorisation granted under the eleventh resolution of the Shareholders’General Meeting of 30 May 2007, at twenty-six months from the date of thisMeeting.
Fourteenth resolution(Authorisation granted to the Executive Board to increase the number ofshares to be issued in connection with a capital increase, with or withoutpre-emptive subscription rights)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Extraordinary Meetings,having taken cognizance of the Executive Board’s report, delegates to theExecutive Board, with the right to further delegate same, its power to increasethe number of securities to be issued in connection with each issue of sharesor securities carrying an entitlement to equity, with retention or waiver of pre-emptive subscription rights, resolved pursuant to the twelfth and thirteenthresolutions, in accordance with the provisions of Article L.225-135-1 of theFrench Commercial Code and subject to the caps laid down in the tenthresolution.
The number of securities may be increased within thirty days as of the closeof the subscription period without exceeding 15% of the initial subscriptionand for the same price as for the initial issue.
This authorisation, which cancels the authorisation granted under thefourteenth resolution of the Shareholders’ General Meeting of 30 May 2007,is valid for twenty-six months as of the date of this Meeting.
Fifteenth resolution(Authorisation to the Executive Board to carry out capital increasesreserved for employees under the provisions of the French Commercial Codeand Articles L.443-1 et seq. of the French Employment Code)
The Shareholders’ General Meeting, deliberating in accordance with the quorumand majority requirements applicable to Extraordinary Meetings, having takencognizance of the Executive Board’s report and the Statutory Auditors’ specialreport, resolves, in light of the foregoing resolutions, to delegate to the ExecutiveBoard the power to increase the share capital, on one or more occasions, by amaximum amount of € 393,000, through the issue of new shares to be paid forin cash by employees of the Company or related companies as defined by ArticleL.233-16 of the French Commercial Code who hold membership of one or morecompany or group savings plans set up by the company and meeting any criteriathat may be laid down by the Executive Board in accordance with the provisionsof Articles L.225-129-2, L.225-129-6 and L.225-138-1 of the FrenchCommercial Code and those of Articles L.443-1 et seq. of the FrenchEmployment Code.
The Extraordinary Shareholders’ General Meeting accordingly decides towithdraw the shareholders’ pre-emptive subscription right and to reserve saidcapital increase(s) for the employees indicated above.
The Extraordinary Shareholders’ General Meeting decides that the issue price ofthe shares, subscription for which is hereby reserved, shall be set by the Executive
145
Board, without being more than 20% lower than the average opening price overthe twenty trading sessions prior to the decision to commence the subscription,or more than 30% lower than such average price where the lockout period setforth in the plan pursuant to Article L.443-6 is at least ten years.
The Shareholders’ General Meeting expressly authorises the Executive Board, atits sole discretion, to reduce or withdraw the abovementioned reductions inaccordance with applicable statutory and regulatory provisions, so as to take intoaccount, inter alia, locally applicable legal, accounting, tax or employmentregimes.
Pursuant hereto, it also authorises the Executive Board to issue any securitycarrying an entitlement to the Company’s equity as subsequently permitted bystatutory or regulatory provisions.
When implementing the authorisation hereby granted to it, the ExecutiveBoard shall:
- Set the requirements to be met by beneficiaries of the new shares created inconnection with the capital increases referred to in this resolution,
- Set the terms and conditions of the issue,
- Decide on the amount to be issued, the issue price, the dates and terms andconditions of each issue, and inter alia resolve whether the shares will besubscribed for directly or through one or more Company or employee mutualfunds or via any other entity permissible under applicable legislation,
- Decide and set the procedures for allocating bonus shares or other securitiescarrying an entitlement to equity, in accordance with the above authorisation,
- Set the period granted to subscribers to pay up their securities,
- Set the current or retroactive date for the new shares,
- Record the completion of the capital increase(s) for the amount of the shares tobe actually subscribed for, or cause same to be recorded, or resolve to increasethe amount of said capital increase(s) so that all subscriptions received canindeed be met,
- On its own initiative, offset the costs of the share capital increases against theshare premium pertaining to such increases and deduct from this amount thesums required to bring the statutory reserve up to one-tenth of the new sharecapital following each increase,
- Generally, adopt all decisions required to implement the capital increases,complete any resulting formalities and make the corresponding amendments tothe Articles of Association.
The authorisation thus granted to the Executive Board is valid for a period oftwenty-six months from the date of this Meeting and cancels and supersedes thatgranted under the fifteenth resolution of the Shareholders’ General Meeting of 30May 2007.
Sixteenth resolution(Issue of warrants to named beneficiaries)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Extraordinary Meetings,having taken cognizance of the Executive Board’s report, the SupervisoryBoard’s report and the Statutory Auditors’ special report referred to in ArticlesL. 228-92 and R. 225-117 of the French Commercial Code, and having
stated that the company’s share capital is fully paid up:
- resolves to issue 125,000 Company warrants referred to as “BSA 2008 A”and 120,000 Company warrants referred to as “BSA 2008 B” in favour ofthe current members of the Company’s Executive Board, that is 40,000 BSA2008 A and 30,000 BSA 2008 B warrants to Mr Jean-Claude Michel, 30,000BSA 2008 A and 30,000 BSA 2008 B warrants to Mr François Bertreau,30,000 BSA 2008 A and 30,000 BSA 2008 B warrants to Mr HervéMontjotin, 25,000 BSA 2008 A and 30,000 BSA 2008 B warrants to MrPatrick Bataillard, for a price per warrant of € 0.50,
- resolves to waive the pre-emptive subscription right reserved forshareholders in respect of all 245,000 warrants issued to the aforenamedpersons,
- resolves that each of the BSA 2008 A warrants shall, subject to an exerciseprice of € 59.52, carry a subscription entitlement to one share having anominal value of 2 euros, together with a premium per share of € 57.52, andthat each of the BSA 2008 B warrants shall, subject to an exercise price of € 60.64, carry a subscription entitlement to one share having a nominalvalue of 2 euros, together with a unit share premium of € 58,64, such sharescarrying the same rights as existing shares,
- resolve that these warrants may not be exercised unless the requirements,including performance targets, approved by the Supervisory Board of 20March 2008, are met,
- approves the principle of a capital increase of a maximum nominal value of€ 490,000 by way of issue of 245,000 new shares having a nominal valueof 2 euros in the event of exercise of all warrants the issue of which isallowed pursuant hereto,
- expressly resolves to waive, in favour of the aforementioned beneficiaries,the shareholders’ pre-emptive subscription right in respect of the 245,000shares that may be issued following exercise of the 245,000 warrants,
- resolves that the 125,000 BSA 2008 A and the 120,000 BSA 2008 Bwarrants may be subscribed at any time as of the issue by the ExecutiveBoard, until 30 September 2008 inclusive. BSA 2008 A warrants subscribedmay be exercised from 1 June 2011 to 31 May 2013 inclusive; the BSA 2008B warrants subscribed may be exercised from 1 June 2013 to 31 May 2015inclusive; warrants that are not exercised within the said time-periods shallautomatically lapse,
- grants full powers to the Executive Board, with the right to subdelegatesame to the Chairman of the Executive Board, to implement this resolutionand take all measures required to protect warrant bearer in case ofoccurrence of financial transactions involving the Company in accordancewith applicable statutory and regulatory provisions, to formally recordcapital increases following the exercise of the warrants and to amend thememorandum and articles of association accordingly, and generally do thatmay be necessary or expedient for the said purposes.
The members of the Executive Board having a vested interest shall not voteon this resolution, and their shares are not taken into account for quorumand majority computations.
Seventeenth resolution(Amendments to Articles 6-III “contributions – Company share capital” and29 “shareholders’ General Meetings” of the memorandum and articles ofassociation)
The Shareholders’ General Meeting, deliberating in accordance with thequorum and majority requirements applicable to Extraordinary Meetings,resolves as follows:
- in order to take into account the latest provisions of the Supervisory Board’sinternal regulations relating to the number of shares to be held by each ofits members, Article 6-III is henceforth worded as follows: “Each member ofthe Supervisory Board shall hold at least one hundred shares”,
- to amend Article 29 accordingly for harmonisation purposes, the clause“However, the Executive Board may shorten or cancel this period, providedthis applies to all shareholders” being deleted and the expression “postalvote” being replaced with “remote voting”.
III - COMBINED ORDINARY ANDEXTRAORDINARY RESOLUTION
Eighteenth resolution(Powers for formalities)
Full powers are granted to the bearer of a copy hereof to carry out all statutorypublic notice and other formalities required by law.
2007 ANNUAL REPORT146
147
NOTES
2007 ANNUAL REPORT
NOTES
148
Pho
togr
aphi
c cr
édits
: Sté
pha
ne R
amb
aud
- P
hilip
pe
Car
on -
Vér
oniq
ue V
edre
nne
- P
ierr
e B
rune
t -
Cor
bis
- G
etty
Imag
es.
4850-couv rapport 2007 GB:Mise en page 1 6/06/08 10:33 Page 2
2 0 0 7 A N N U A L R E P O R T
4850-couv rapport 2007 GB:Mise en page 1 6/06/08 10:33 Page 1