Financial statements - 30 june 2024

HALF-YEAR

FINANCIAL REPORT

 30 JUNE 2024

SA with share capital of €4,525,920  –  Registered office 88480 ÉTIVAL-CLAIREFONTAINE

                                      RCS EPINAL: B 505 780 296  SIRET No.: 505 780 296 000 16                  NAF: 7010Z

                       Tel. +33 (0)3 29 42 42 42           Fax +33 (0)3 29 42 42 00           Website  www.exacomptaclairefontaine.fr

Contents:                                                                                       page

        Half-year activity report                                                                                           3

        Half-year consolidated financial statements                                                            6

        Statutory auditors’ report                                                                                             

        on the consolidated interim financial statements                                                   24

                                                                           2

Board of Directors

François Nusse, Chairman and Chief Executive Officer

Dominique Daridan

Louise de l’Estang du Rusquet

Céline Goblot

Charles Nusse 

Frédéric Nusse

Gabriel Nusse

Guillaume Nusse

Jérôme Nusse

Laurent Nusse

Monique Prissard

Emmanuel Renaudin

Caroline Tamponnet

Caroline Valentin

Statutory Auditors

BATT AUDIT, 54000 Nancy

Isabelle Sagot

ADVOLIS, 75002 Paris

Nicolas Aubrun – Hugues De Noray

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To the Shareholders,

1.                    REVIEW AND APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

First half 2023 earnings were boosted by a €10.5 million capital gain on sale of real estate.

1.1         PAPER PRODUCTION

European sales of printing and writing papers fell by 23% between 2022 and 2023. This year, sales rose 17% driven by excess inventory clearance among customers (source: CEPI).

Paper reel production at our four mills increased by 3%, but our margins fell as a result of the sharp rise in pulp prices. Furthermore, unlike in 2023, we did not benefit from favourable contractual terms for our energy costs.  

1.2        PROCESSING

GfK market research consultants noted a 3.3% drop in revenue from manufactured papers in France and an 8.9% decline in filing item revenue versus first half 2023.

As a result of this sluggish overall consumption, our own sales fell by 4.6%, with volumes down sharply. Margins were also adversely affected by the clearance of inventories built up at high costs in 2023.

1.3         FINANCIAL POSITION - DEBT

At 30 June 2024, gross borrowings stood at €213,058,000 including €46,439,000 of financial liabilities arising from the capitalisation of leases. Consolidated shareholders’ equity was €520,562,000.

The Group has negotiated additional lines of credit with its banks totalling €9,080,000. Commercial paper outstanding at 30 June 2024 amounted to €20 million out of a global programme of €125 million. With gross cash and cash equivalents of €109,539,000 at 30 June 2024, Group net borrowings amounted to €103,519,000.

Excluding financial liabilities generated by the application of IFRS 16, net debt at 30 June 2024 was €57,080,000 compared to €100,137,000 at 30 June 2023.

1.4          SHARE AND SHAREHOLDER INFORMATION

The share listed at €174 on 2 January 2024 and €146 on 28 June 2024. The number of shares traded during first half 2024 was 6,769.

The capital of the parent company is composed of 1,131,480 shares and did not change during the period.  Our principal shareholder, Ets Charles Nusse, held 910,395 shares with double voting rights, representing 80.46% of the capital, at 30 June 2024. LG Invest, a minority shareholder, crossed the 5% ownership threshold on 21 September 2021.

The parent company does not have a share buyback programme and there are no employee shareholders.

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2.          RISK FACTORS

Risk factors related to economic activity and financial risks are of the same kind as those described in Section 2.4 of the 2023 Annual Report. There were no material changes during first half 2024. Provisions for financial risks at 30 June 2024 are presented in Note 2.6 to the consolidated half-year financial statements.

3.          OUTLOOK

In the second half of the year, while our paper production should benefit from lower raw material prices, there is no guarantee of sustained demand for paper.

In processing, revenue for many product lines is much higher during the second half, when we can also expect to see a better workload in the workshops.

As in the first half, full-year operating income is likely to be well below the 2023 figure of €62 million (excluding real estate gains).

4.          GREENHOUSE GAS EMISSIONS

The 2023 statement of non-financial performance was published prior to the Exacompta Clairefontaine Group Shareholders’ Meeting on 29 May 2024. 

The following information supplements and updates the information provided in this declaration.

The free allowances of CO₂ received by the Group amount to 57,813 tonnes for 2024. Any further emissions allowances required are purchased on the European exchange market. Net CO₂ emissions during first half 2024 totalled 40,272 tonnes.

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Exacompta Clairefontaine S.A.

Consolidated financial statements for the year ended

30 JUNE 2024

Half-year consolidated financial statements                                                                                                                 

1.  Consolidated financial statements                                                                                                                                              7

2.  Notes to the consolidated half-year financial statements                                                                                             11

3.  Segment information                                                                                                                                                                      19

4.  Consolidated entities                                                                                                                                                                      22

       1.       Consolidated financial statements

Consolidated financial position

                                                                                                                                                                                                            Notes

                                                                                                                                                                                                            (2.1.1)

                                                                                                                                                                                                            (2.1.1)

                                                                                                                                                                                                            (2.1.2)

                                                                                                                                                                                                            (2.1.3)

                                                                                                                                                                                                              (2.4)

                                                                                                                                                                                                            (2.2.1)

                                                                                                                                                                                                            (2.2.2)

                                                                                                                                                                                                            (2.2.3)

                                                                                                                                                                                                              (2.6)

                                                                                                                                                                                                              (2.6)

                                                                                                                                                                                                              (2.4)

                                                                                                                                                                                                              (2.5)

                                                                                                                                                                                                              (2.6)

                                                                                                                                                                                                              (2.6)

                                                                                                                                                                                                              (2.5)

                                                                                                                                                                                                              (2.9)

Consolidated income statement

Notes

(2.1.2,

2.1.3)

                                                                                                                                                                                                            (2.2.1)

(2.1.1,

2.1.2)

                                                                                                                                                                                                            (2.1.3)

                                                                                                                                                                                                            (2.1.1)

                                                                                                                                                                                                              (2.8)

                                                                                                                                                                                                        (2.4, CFS)

                                                                                                                                                                                                              (2.3)

Comprehensive income statement

Statement of changes in consolidated shareholders’ equity

Statement of consolidated cash flows

Notes

(2.1.4 to

                                                                                                                                                                                                         2.1.6, 2.5)

(2.4)

Balance

sheet

(2.1.4 to

2.1.6)

(Change in

shareholders’

equity)

Change in cash

Presentation of the consolidated financial statements

1-      General principles – statement of compliance

The EXACOMPTA CLAIREFONTAINE Group consolidated financial statements are prepared in accordance with IFRS (International Financial Reporting Standards), as adopted within the European Union. The Exacompta Clairefontaine Group summary consolidated half-year financial statements were prepared in accordance with IAS 34 – Interim financial reporting. They were approved by the Board of Directors on 19 September 2024.

No changes were made compared to the accounting rules and methods applied to the 2023 full-year consolidated financial statements.

2-      Adoption of new standards

The Group did not opt for early application of any standard, amendment or interpretation that is not mandatory in 2024.

3-      Consolidated entities

On 27 February 2024, the Group acquired a controlling interest in Flock One, a company specialising in flocking for all types of decorative and technical application. Recorded goodwill amounted to €2.5 million.

       2.       Notes to the consolidated half-year financial statements

2.1  Non-current assets

2.1.1 INTANGIBLE ASSETS AND GOODWILL

Trademarks

“Concessions, licences, trademarks and similar rights” includes trademarks totalling €5,367,000. No impairment was recorded in the first half 2024 financial statements.

Goodwill

Goodwill mainly pertains to the businesses of the Digital department (€13.2 million) and Manufactured Papers (€19.6 million).

The segment information shows the breakdown of goodwill by business and geographic segment.

Given the levels of performance observed in first half 2024 and the seasonal factors to which some departments are exposed, the Group identified no indications of impairment at 30 June 2024. As such, the projections drawn up at the 2023 balance sheet date were maintained at 30 June 2024 and, therefore, no impairment testing was carried out as part of the 2024 half-yearly closing procedure.

2.1.2  Property, plant and equipment

No changes in useful life leading to a material change in the accounting estimates were identified during the period.

IFRS 16 – Leases

As it is not possible to determine the interest rates implicit in the leases, the Group uses its incremental borrowing rate to measure the lease liability. It is established by reference to the interest rates of loans, whether taken out or not, that have similar maturities and payment profiles. In particular, it is established based on 7-10 year maturities applicable to real estate leases, which represent almost 90% of Group leases in terms of right-of-use asset value.

Low-value asset leases were excluded.

Lease categories at 30/06/2024

In the first half 2024 income statement, the depreciation charge on right-of-use assets amounts to €7,396,000 and lease interest payments amount to €192,000.

Leases are aggregated in the tables of changes in property, plant and equipment.

2.1.3  Financial assets

Unconsolidated equity interests and other long-term investments are stated at cost if there is no reliable fair value.

Intercompany receivables, loans and other financial assets are valued at amortised cost. The book value is equal to the fair value.

Other receivables mainly comprise deposits and guarantees totalling €3,902,000.

2.1.4  Table of maturities of other financial assets

2.2  Current assets

2.2.1  Inventories by type

2.2.2  Write-down of other current assets

Statement of maturities of trade and other receivables

2.2.3  Cash and cash equivalents

Financial assets held for trading (marketable securities) are assets valued at fair value through profit or loss. The book value of €63,080,000 equals the market value at 30 June 2024. The book value is equal to the fair value.

2.3  Shareholders’ equity

The parent company’s share capital consists of 1,131,480 shares with a par value of 4 euros each, totalling €4,525,920, and did not change during the period. A double voting right is granted to each fully paid-up share which has been registered for at least two years in the name of the same shareholder. ETABLISSEMENTS CHARLES NUSSE holds 80.46% of the share capital.

2.4  Deferred taxes

The principal sources of deferred taxes are trademarks, regulated provisions, public subsidies, internal profits on inventories and provisions.

Change in deferred taxes

Breakdown of tax charge

       2.5     Provisions

Provisions for post-employment benefits are provisions for pensions and similar obligations. The other changes correspond to actuarial adjustments recorded under comprehensive income.

Post-employment benefits mainly consist of retirement indemnities. 

They are calculated at each closing date according to the following main parameters:

                   probability of retirement, staff turnover and mortality;

                   projected salary increases;

                   discounting the resulting liability at 3.67%.

The amounts paid to insurance organisations are deducted from provisions.

Net change in the provision for pensions and similar obligations

The recorded liability includes €15,858,000 of obligations under the plan applicable to French companies and €3,993,000 under plans applicable to foreign companies.

       2.6       Loans, borrowings and lease liabilities

Statement of liquidity risk

Medium and long-term financing excluding IFRS 16 lease liabilities consists of loans negotiated at fixed rates.

The fair value of borrowings is equal to the book value.

Change in borrowings

2.7  Issuance & financial instruments programmes

Commercial paper

Short-term needs are financed by commercial paper issued by Exacompta Clairefontaine. A fixed rate determined at the moment of issue is paid on the commercial paper, which has a maximum term of 365 days.

At the interim balance sheet date, €20 million of commercial paper had been issued out of a maximum authorised outstanding amount of €125 million.

Lines of credit

Lines of credit are in place with several banks for a total amount of €145 million, with maturities not exceeding five years. Lines of credit are indexed to Euribor and the average commitment fee charged is 0.23%. Drawdowns are charged on the basis of the amount and the maturity date of each line of credit. The term of drawdowns ranges from ten days to twelve months. No amounts were drawn as at 30 June 2024.

Related covenants are not relevant to the half-year financial statements, as the associated ratios are calculated on the basis of the annual consolidated financial statements. 

Financial instruments 

The Group may use options contracts to hedge forecast transactions, in particular for purchases of raw materials in US dollars which constitute its main exposure to currency risk. The Group implemented no currency hedging arrangements during the first half. Other transactions performed to hedge exchange rate risks are non-material.

       2.8         Financial income and expenses

2.9  Other current liabilities

2.11 Related parties

Group companies benefit from the leadership provided by Ets Charles Nusse and pay a fee equal to 0.6% of the added value for the previous year.

Manufacturing, logistics and office facilities are leased to certain Group companies on arm’s length terms. These leases have been adjusted following the application of IFRS 16.

Transactions carried out by the Group with Etablissements Charles Nusse.

       3.      Segment information

As in the financial statements, segment information is presented for the prevailing consolidation scope at each balance sheet date. 

Correspondence with the consolidated balance sheet:

-          “Other assets allocated” includes inventories and advances;

-          “Unallocated assets” consists of tax receivable and deferred tax assets.

Ø      Segment information by business – 30/06/2024 (6 months)

             Segment income statement                                                                                                                               

             Segment assets                                                                                                                                                  

             Segment liabilities                                                                                                                                             

Ø      Segment information by geographic area – 30/06/2024 (6 months)

Ø      Segment information by business – 30/06/2023 (6 months)

             Segment income statement                                                                                                                               

             Segment assets                                                                                                                                                  

             Segment liabilities                                                                                                                                             

Ø      Segment information by geographic area – 30/06/2023 (6 months)

       4.      Consolidated entities

All companies are fully consolidated and wholly owned.

                                      ADVOLIS                                                                   BATT AUDIT

                                 Statutory Auditor                                                              Statutory Auditor

Member of the Paris Institute of Statutory Auditors       Member of the East Region Institute of Statutory Auditors

                             38 Avenue de l’Opéra                                                    58 Boulevard d’Austrasie

                                     75002 PARIS                                                                  54000 NANCY

Statutory Auditors’ limited review report on the consolidated interim financial statements

Period from 1 January to 30 June 2024

                                                EXACOMPTA CLAIREFONTAINE

                                              A French limited company (société anonyme)

                                                     88480 ETIVAL CLAIREFONTAINE

                                       Epinal Trade and Companies Registry No. 505 780 296

STATUTORY AUDITORS’ LIMITED REVIEW REPORT ON THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Period from 1 January to 30 June 2024

                                                EXACOMPTA CLAIREFONTAINE

                                              A French limited company (société anonyme)

                                                     88480 ETIVAL CLAIREFONTAINE

To the Chairman of the Board of Directors,

In our capacity as statutory auditors of EXACOMPTA CLAIREFONTAINE and in response to your request, we have conducted a limited review of the attached consolidated interim financial statements of your company for the period from 1 January to 30 June 2024.

The consolidated interim financial statements were prepared under the responsibility of the Board of Directors. It is our responsibility, based on our limited review, to express an opinion on these consolidated interim financial statements. 

We conducted our limited review in accordance with professional standards applicable in France and the professional policies of the Compagnie Nationale des Commissaires aux Comptes (French National Institute of Statutory Auditors) relating to such engagements. A limited review mainly involves the conducting of interviews with the senior executives responsible for accounting and financial matters and the implementation of analytical procedures. The work is of limited scope compared to the work required for an audit performed in accordance with auditing standards applicable in France. Accordingly, a limited review provides only a moderate degree of assurance, less than that provided by an audit, that the consolidated interim financial statements, taken as a whole, are free from material misstatements.

On the basis of our limited review, we did not identify any material misstatements that cause us to question the compliance of the consolidated interim financial statements with IFRS standard IAS 34 - Interim financial reporting, as adopted by the European Union.

Paris and Nancy, 25 September 2024

The Statutory Auditors,

                                ADVOLIS                                                                 BATT AUDIT

            Hugues de Noray        Nicolas Aubrun                                              Isabelle Sagot