PSB INDUSTRIESPACKAGING

ANDSPECIALTY CHEMICALS

2009 BUSINESS REPORT

PSB INDUSTRIES

INTERVIEW WITH THE CEO 02KEY FIGURES 04

TEXEN 06CGL PACK 08

BAIKOWSKI 10HUMAN RESOURCES 12

CONTENTS

2009 BUSINESS REPORT

PSB INDUSTRIES 2009

interviewwith the CEO jean-baptiste

bossonCHAIRMAN AND CEO OF PSB INDUSTRIES

02 / 03

In a severely deteriorated economic and financialsituation, PSB Industries appears to have shownresilience? Why?

“We are coming out of an unbelievably violent crisis that has been unprecedented for more than 50 years in the manufacturing world, both in Franceand internationally. The drop in sales is all the sharperas order intake in the first half of 2008 was strong,which created substantial inventories. The slump inconsumption compounded with a destocking effectwhich amplified with the crisis.

In this context, PSB Industries was supposedly lessexposed due to its targeted distribution of risks overthree separate consumption-driven businesses, significant operations in the USA, Mexico and Japan,and 50% of its revenues posted internationally. TheCompany suffered more than we could have imaginedwith annual sales down 14.3% on a constant scopebasis. This decline affected all of our businesses andto a lesser extent food & beverage packaging, an areawhere the decrease in sales primarily originated in thedrop in raw material prices.

Internationally, all countries were impacted at differentlevels depending on the markets. Japanese sales,specialized in consumer electronics, dropped nearly40%, while American sales (concentrated in particularin personal care and beauty products) held up andshould grow in 2010. In Mexico, sales grew beyondour expectations in mass-market cosmetics.”

Was the cost productivity plan able to maintain income?

“Despite a €23 million drop in sales, our cost-savingplan helped us post an operating profit of nearly €10 million, or 5.4% of sales, versus 8.2% in 2008.Lower operating profit adversely affected our netincome, which reached 2.5% of sales, down 34%.On the other hand, cash flow from operating activitiesdid better than just resist, reaching 11.6% of salesversus 11.3% year on year, thereby enabling PSBIndustries to reduce its debt.”

The first signs of an economic recovery can be felt in the 4th quarter. What conclusion can be drawn?

“The key events during the last three months of the year were the end of destocking and a renewedconsumption trend, especially in the beauty packagingsector. This resulted in a slight increase in sales in the 4th quarter of 2009. For the first time, we postedyear-on-year quarterly growth and we expect a returnto growth in FY 2010.”

What about the dividend?

“In light of the significant drop in net income, the dividendwill not be maintained this year at its previous leveland will be set at €1.00. Remember neverthelessthat it rose tenfold between 1996 and 2008.”

From left to right: Alain Wirth (President of CGL Pack), Jean-Baptiste Bosson (Chairman and CEO of PSB Industries),

Christian Baravaglio (President of Texen) and Claude Djololian (President of Baikowski).

key figuresandthe stock market

Sales distribution

PSB INDUSTRIES 2009

€9.9million

0908

16.5

€9.9millionOPERATING PROFIT

Operating profit reached 5.4%of sales, versus 8.2% the previous year. The drop incosts partially offset the dropin gross margin driven by thesharp decline in sales.

—

€182.7million

0908

205.0

€182.7millionSALES

2009 sales were down 10.9%(14.3% on a constant currencyand scope basis), with all Companybusinesses being affected. The trendturned around in the last quarterof 2009, which grew 4.7%.

—

44% France

By geographic zone

By business segment

25% Europe

27% America

60% Beauty packaging

22% Custom packaging

18% Specialty chemicals

4% Asia and others

Operating profit distribution

Stock pricein euros from 01/01/09 to 31/12/09

04 / 05

0109

03 05 07060402 0908 11 12 0110

10

20

18

22

16

14

12

10

€21.3million

0908

23.4

€4.5million

0908

6.9

€4.5millionGROUP SHARE OF NET INCOME

56%OF SALES GENERATEDON EXPORTS

€21.3millionCASH FLOW FROM OPERATING ACTIVITIES

331,000 shares were traded in 2009, up slightly compared to 2008.The stock price on January 2, 2009 was €16 and on December31, 2009 it was €16.20, after reaching a low of €10.80 in March.The Board of Directors will recommend to the Shareholders’Meeting on May 25, 2010 to pay a dividend of €1.00 per share.

—

Cash flow from operating activities reached 11.6% of sales, versus 11.3% theprevious year. This excellentperformance, combined withthe drop in capital expendituresand good management ofworking capital, enabled thedebt to be reduced nearly€13 million.

—

The share of export salesgenerated from outside France,up this year with the sharpincrease in sales in the NorthAmerican zone (Mexico and theUnited States), went from 20%to 27% of sales in one year.

—

Group share of net incomeamounted to €4.5 million, or 2.5% of sales, down 34.4%from the previous year.

—

By business segment

69% Beauty packaging

31% Custom packaging

0% Specialty chemicals

The cost-cutting policy the companyimplemented as of October 2008 hasproved effective. In a worsened economiccontext that was marked in the beautypackaging sector by the sharp drop inupmarket business around the world,Texen managed to ride out the storm,ending FY 2009 with a respectable result.

The good performance of the mass-market,generating increased sales for the Mexicanand American subsidiaries, managed topartially offset the drop in high-end sales,which impacted Mayet and CCM, therebyunderlining the robustness of Texen’sbusiness model.

—

In Mexico, the “beauty packaging” productlaunches during the year resulted in increasedsales. These new products and a numberof substantial deals clinched by Texen’smajor accounts in Europe mean Texen canexpect significant growth in 2010, especiallyin its American subsidiary, Mar-Lee.

Regarding plant and equipment, Texenmade targeted capital expenditures – biofiltration of volatile organic compoundsand the installation of a new automatedmetallization line at its CCM facility in late2009 – which should help improve itsoperating performance.

—

€110.1 millionSALES

56%EXPORT SALES

€6.9 millionOPERATING PROFIT

€13.2 millionCASH FLOW FROM OPERATING

ACTIVITIES

995EMPLOYEES

texenbanks on its US-Mexicanproduct launches

plastic packagingfor beauty products

PSB INDUSTRIES 2009

Mascara Singulier by Yves Saint Laurent

(case coated with an anodized metallic layer accentuated

with the YSL logo in gloss black)

Quadra Eye Shadow by Chanel(injected case and lid, varnished

with hot-decorated logo)

Miss Dior Chérie(cap in transparent Surlyn

made from complex molds developed by CMSI)

06 / 07

Absolue skin care by Lancôme and Ultragloss lip gloss by Dior

During FY 2009, CGL Pack strengthenedits foothold in eco-design and sustainabledevelopment.

As part of its environmental policy, thecustom packaging solutions specialistrecently commissioned a recycling plantat its Lorient facility to recycle and reusemanufacturing scrap. It also ramped upthe development of new biomaterialscombining plastic and wood (20% spruceintegrated) to beef up its product line andimprove its environmental footprint.

—

The company, which should publish itscarbon balance shortly, has opted fornew communication technologies likevideoconferencing to reduce its impact on the environment.

Commercially, this strategy bears its fruits.CGL Pack has enlarged its customerportfolio and is expected to gain marketshare throughout Europe.

—

cgl packrolls out more “eco-concepts”

€40.0 millionSALES

22%EXPORT SALES

€3.2 millionOPERATING PROFIT

€3.9 millionCASH FLOW FROM

OPERATING ACTIVITIES

243EMPLOYEES

customized packaging solutions

PSB INDUSTRIES 2009

Perle du Nord trays

Polywood, a new concept combiningpolymers (PP) and wood fibers

(20% spruce)

PET trays and lids for Aperivrais cheese bites

Quattro, multi-portion pack of 4 thermoformed and divisible trays

for Carib’Fruits

08 /09

Baikowski’s niche market strategy,backed by a substantial R&D programand global development, proved effectiveduring this crisis period.

While FY 2009 was marked by a drop inits sales in traditional markets – lighting,crystals, polishing, etc. – it also heraldednew developments for the future.

Baikowski has developed new varieties of materials for transparent ceramics,luminescent materials and LED substratesthat are primarily intended for the fast-growing domestic and urban lighting and LCD screen markets.

—

In the United States, a formulation unitdedicated to polishing eyeglass lenseswas created on the Malakoff facility whilein Japan, a polishing laboratory for harddisk reading heads was created.

More than ever, Baikowski has the bestassets to continue its growth in tomorrow’stechnologies.

—

baikowskidevelops new materials for leds

PSB INDUSTRIES 2009

€32.6 millionSALES

98%EXPORT SALES

€0.0 millionOPERATING PROFIT

€3.8 millionCASH FLOW FROM

OPERATING ACTIVITIES

154EMPLOYEES

ultra-pure alumina powders and fine mineral oxides

Tube made from ultra-pure alumina powder

for metal vapor lamp

Components for plasma screen luminescent materials

Wafer polished with a mineral powder

based formulation

10 / 11

LED, metal vapor lamp and ophthalmic lens

a managerial culture serving diversity and performance

humanresources

1,402EMPLOYEES IN THE WORLDINCLUDING 1,069 IN FRANCE

Some of the 215 employees of Ceica Plasticos (Texen) in Toluca (Mexico)

12

ARMANIAUTOLIV

AVONAZZARO

BD PHARMACEUTICALSBEHR

BEIERSDORFBIOTHERM

BIO-MÉRIEUXBONDUELLE

BONGRAIN BOSCH

BRESSORCACHARELCERAMTEC

CHANELCLARINS

DA NANO MATERIALSDAUNAT

DIMDIOR

ESSILORESTÉE LAUDER

GEMEY MAYBELLINEGENERAL ELECTRIC

GUERLAIN

HELENA RUBINSTEININTER PARFUMS

KENZOKRONOSPAN

LACOSTELANCÔMELIGHTTEC

LILLYL’ORÉALMERIAL

MIX BUFFETNIVEA

NOVARTISOSRAM

PANASONICPETZL

PHILIPSPIERRE FABRESAINT-GOBAIN

SAVEOLSEPHORATOSHIBA

UNIVERSAL PHOTONICSYVES ROCHER

YVES SAINT LAURENT

worldrenowned

clients

PSB INDUSTRIESBP 22 - F-74001 ANNECY CEDEXTEL. +33 4 50 09 00 02 - FAX +33 4 50 27 11 78finance@psbindus.com - www.psbindus.com

TEXENZI LE POGNAT - BP 77 - F-01460 BRIONTEL. +33 4 74 76 71 60 - FAX +33 4 74 76 71 58www.texenpartner.com

CGL PACKBP 9020 - F-74990 ANNECY CEDEX 9TEL. +33 4 50 27 34 50 - FAX +33 4 50 27 34 47www.cglpack.com

BAIKOWSKIBP 501 - F-74339 LA BALME DE SILLINGY CEDEXTEL. +33 4 50 22 69 02 - FAX +33 4 50 22 28 92www.baikowski.com

PHOTO CREDITS: SÉMAPHORE, STUDIO PREZZO, WOOLOOMOOLOO

DESIGN AND PRODUCTION: AGENCE MARC PRAQUIN