Tarkett. Limited Liability Corporation (société anonyme) with a share capital of 318,613,480

Transcription

1 FREE TRANSLATION Tarkett Limited Liability Corporation (société anonyme) with a share capital of 318,613,480 Registered office: 2, rue de l Égalité, Nanterre Cedex, France RCS Nanterre REGISTRATION DOCUMENT This Registration Document is a non-certified English version of Tarkett s French-language document de référence, which has been registered by the Aurorité des Marchés Financiers (the AMF ) under No. R This English version has not been reviewed by the AMF. This Registration Document is not an offer to sell or the solicitation of an offer to purchase securities of Tarkett. Any offer or sale of securities of Tarkett, if made, will be made only by a prospectus or other offering document that describes the terms of such offer or sale, and that will contain important information on restrictions that may apply in certain jurisdictions. The annexes to the document de référence have not been translated into English. References made to such annexes in the Registration Document thus refer to French-language documents not part of this Registration Document. English versions of certain of these annexes may be found in English on Tarkett s website. In case of any inconsistencies between statements contained in this Registration Document and the sections of the French-language document de référence that have been presented in translated version in this Registration Document, the text of the French document will prevail. Any reference to the date of the Registration Document, such as as of the date of this Registration Document, as of the filing date of this Registration Document or at the date of the visa on this Registration Document is a reference to the registration date of the official French-language document de référence mentioned above. Copies of this Registration Document are available free of charge at Tarkett s offices at 2, rue de l Égalité, Nanterre Cedex, France, as well as on Tarkett s website ( 1

2 In this Registration Document, the terms Company and Tarkett mean Tarkett S.A., and the Group means Tarkett and its consolidated subsidiaries taken as a whole. Forward-looking Statements This Registration Document contains statements regarding the prospects and growth strategies of the Group. These statements are sometimes identified by the use of the future or conditional tense, or by the use of forward-looking terms such as considers, envisages, believes, aims, expects, intends, should, anticipates, estimates, thinks, wishes and might, or, if applicable, the negative form of such terms and similar expressions or similar terminology. Such information is not historical in nature and should not be interpreted as a guarantee of future performance. Such information is based on data, assumptions, and estimates that the Group considers reasonable. Such information is subject to change or modification based on uncertainties in the economic, financial, competitive or regulatory environments. This information is contained in several sections of this Registration Document and includes statements relating to the Group s intentions, estimates and targets with respect to its markets, strategies, growth, results of operations, financial situation and liquidity. The Group s forward-looking statements speak only as of the date of this Registration Document. Absent any applicable legal or regulatory requirements, the Group expressly disclaims any obligation to release any updates to any forward-looking statements contained in this Registration Document to reflect any change in its expectations or any change in events, conditions or circumstances, on which any forward looking statement contained in this Registration Document is based. The Group operates in a competitive and constantly evolving environment; it is therefore unable to anticipate all risks, uncertainties or other factors that may affect its business, their potential impact on its business or the extent to which the occurrence of a risk or combination of risks could have significantly different results from those set out in any forward-looking statements, it being noted that such forward-looking statements do not constitute a guarantee of actual results. Information on the Market and Competition This Registration Document contains, in particular in Chapter 6, Business, information relating to the Group s markets and to its competitive position, including with respect to sales volumes of the various market participants in the regions where the Group does business, the Group s market share, product sales in various categories and the Group s share of those categories. Unless otherwise indicated, the information contained in this Registration Document related to market shares and the size of relevant markets are the Group s estimates and are provided for illustrative purposes only. To the best of the Group s knowledge, there are no authoritative external sources providing exhaustive and comprehensive coverage or analysis of the Group s markets or product categories in the regions where it does business. Consequently, the Group makes estimates based on a number of sources, including studies and statistics from independent third parties (in particular Freedonia, the European Federation of the Parquet Industry and the European Resilient Flooring Manufacturers Institute), data published by other market participants and data from the Group s operating subsidiaries. These various studies, estimates, research and information, which the Group considers reliable, have not been verified by independent experts. The Group does not guarantee that a third party using other methods to analyze or compile the market data would obtain the same results. In addition, the Group s competitors may define their markets and categories differently. Risk Factors Investors should carefully consider the risk factors in Chapter 4, Risk Factorsˮ, before making a decision to invest. The occurrence of all or any of these risks could have a negative effect on the Group s business, results of operation, financial position or prospects. Furthermore, additional risks that have not yet been identified or that are not considered material by the Group as of the date of this Registration Document could produce adverse effects. 2

3 TABLE OF CONTENTS 01 - RESPONSIBILITY FOR THE FRENCH VERSION OF THE REGISTRATION DOCUMENT 1.1. Name and Position of the Person Responsible for the French Version of the Registration Document 1.2. Certification of the Person Responsible for the French Version of the Registration Document 1.3. Name and Position of the Person Responsible for Financial Information 1.4. Tentative Financial Disclosure Schedule 02 RESPONSIBILITY FOR STATUTORY AUDIT 2.1. Statutory Auditors 2.2. Alternate Statutory Auditors 03 - SELECTED FINANCIAL DATA 3.1. Selected Financial Data for the Year Ended December 31, Selected Financial Data for the Three Months Ended March 31, RISK FACTORS 4.1. Risks Relating to the Group and its Industry Risks Relating to Economic Cycles Risks Relating to Public Spending Risks Relating to the Group s Program for Optimization of Costs and Processes Implemented Risks Relating to Fluctuations in Prices of Raw Materials and Energy Risks Relating to the International Nature of the Group s Business and the Economic and Political Risks in the Countries in Which It Does Business Risks Relating to External Growth Risks Relating to the Quality of the Group s Products Risks Relating to Obtaining Product Certification Risks Relating to Strong Competition in the Regions Where the Group Does Business Risks Relating to the Group s Dependence on Certain Suppliers Risks Relating to Volumes and Production Capacity Risks Relating to Interruption or Security Breach of Information Systems Risks Relating to the Group s Retirement and Other Employee Benefit Commitments Risks Relating to Goodwill and Deferred Tax Assets 4.2. Industrial Risks Risks Relating to Compliance with Environmental and Safety Regulations Risks Relating to Industrial Accidents Risk Relating to Exposure to Toxic or Dangerous Substances Risks Relating to Asbestos Exposure 4.3. Market Risks Foreign Exchange Risk Interest Rate Risk Liquidity Risk 4.4. Legal Risks Risks Relating to the Protection of Intellectual Property Risks Relating to Legal and Administrative Proceedings Tax Risk 3

4 4.5. Risk Management Organization of Internal Control and Risk Management Management of Significant Risks Compliance Procedures 4.6. Insurance and Coverage of Risks 05 - INFORMATION RELATING TO THE COMPANY AND THE GROUP 5.1. History and Development Company Name Place of Registration and Registration Number Date of Incorporation and Duration Registered Office, Legal Form and Applicable Legislation History of the Group 5.2. Investments Principal Investments in 2012 and Principal Investments Underway Principal Future Investments 06 - BUSINESS 6.1. Business Overview Overview Competitive Strengths Strategy Market Description Products Distribution and Sale of the Group s Products Manufacturing Raw Materials and Suppliers Research and Development, Innovation, Standards Applicable to the Group s Products and Intellectual Property Environment and Sustainable Development 6.2. Exceptional Events Having a Significant Impact on the Activities and Markets Described Above 6.3. Information Concerning the Group s Dependence on Patents, Licenses and Industrial, Commercial and Financial Agreements 6.4. Basis for the Company s Statements Concerning the Group s Markets and Competitive Position 07 - ORGANIZATIONAL CHART 7.1. Simplified Organizational Chart of the Tarkett Group 7.2. Major Subsidiaries Principal Subsidiaries Recent Acquisitions and Disposals 08 - PROPERTY, PLANT AND EQUIPMENT 09 - MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9.1 Overview Introduction Principal Factors Affecting the Group s Results of Operations 4

5 Segment Information Exchange Rate Fluctuations Seasonality Turnaround of Certain Business Divisions Acquisitions Presentation of Accounting and Financial Information 9.2. Comparison of Results of Operations for the Years Ended December 31, 2012 and December 31, Overview Net Revenues 10 - LIQUIDITY AND CAPITAL RESOURCES Overview Analysis of Cash Flow Cash Flow From Operating Activities Cash Flow Used in Investing Activities Cash from Financing Activities Financial Debt Net Debt Cash and Cash Equivalents Gross Debt Revolving Syndicated Multi-Currency Credit Facility New Term Loan Other Debt Shareholders Equity Return on Capital Employed Off-Balance Sheet Commitments 11 - RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES 12 - INFORMATION ON TRENDS AND FORECASTS Market Trends Medium-Term Outlook Macro-Economic Climate Outlook for the Group 13 - PROFIT FORECASTS OR ESTIMATES 14 - MANAGEMENT AND SUPERVISORY BOARDS AND SENIOR MANAGEMENT Management Board, Supervisory Board and Executive Committee Management Board Supervisory Board Members of the Executive Committee Statement Relating to the Management Board and Supervisory Board Conflicts of Interest Among Management and Supervisory Boards and Senior Management 5

6 15 - COMPENSATION AND BENEFITS OF SENIOR EXECUTIVES Compensation and Benefits of Senior Executives and Company Officers Total Compensation of Members of the Management Board For Fiscal Years 2012 and Compensation of Each Member of the Management Board For Fiscal Years 2012 and Fees and Other Compensation Received by Members of the Supervisory Board for Fiscal Years 2012 and Stock Subscription or Purchase Options Granted During 2013 to Each Member of the Management Board by the Company or by any Group Entity Stock Subscription or Purchase Options Exercised During 2013 By Each Member of the Management Board Performance Shares Allocated to Company Officers Performance Shares Becoming Available During 2013 For Each Company Officer History of Allocation of Stock Subscription or Purchase Options Stock Subscription or Purchase Options Granted to the Top Ten Employees Allocations of Free Shares Employment Agreements, Retirement Payments, and Departure Compensation of Members of the Management Board Amount of Provisions Made or Recorded by the Company or by Its Subsidiaries For the Payment of Pensions, Retirement Plans or Other Benefits 16 - OPERATION OF MANAGEMENT AND SUPERVISORY BOARDS Terms of Office of Members of the Management and Supervisory Boards Information On Service Contracts Linking Members of the Management Board or the Supervisory Board to the Company or Any One of Its Subsidiaries Operation of the Management Board Duties and Powers of the Management Board Separation of Responsibilities Among Management Board Members Management Board Meetings Work Performed by the Management Board During the Fiscal Year Ended December 31, Operation of the Supervisory Board Duties and Powers of the Supervisory Board Organization and Operation of the Supervisory Board Evaluation of the Organization and Operation of the Supervisory Board Work Performed By the Supervisory Board During the Fiscal Year Ended December 31, Supervisory Board Committees Audit Committee Nominations and Compensation Committee Statement Relating to Corporate Governance Organization of Internal Control and Risk Management Objectives and Frame of Reference Internal Control and Risk Management System Preparation and Processing of Accounting and Financial Information 17 - EMPLOYEES Overview Number and Distribution of Employees Employment and Working Conditions Training 6

7 Labor Relations Shareholdings and Stock Subscription or Purchase Options Held by Members of the Management Board and Supervisory Board and Certain Employees of the Group Direct and Indirect Shareholding of the Members of the Management Board and Members of the Supervisory Board in the Company s Share Capital Stock Subscription or Purchase Options Free Shares Profit Sharing Agreements and Incentive Schemes Profit-sharing Agreements Incentive Schemes Company Savings Plans and Similar Plans 18 - MAIN SHAREHOLDERS Organization of the Tarkett Group Simplified Group Organizational Chart Main Direct and Indirect Shareholders Share Capital Breakdown and Voting Rights Information on Crossing of Legal Thresholds Description of the Reorganization Transactions of November 21, Shareholders Voting Rights Control of the Company Shareholders Agreement Agreements Likely to Lead to a Change in Control Transactions by Members of Management in the Company s Securities 19 - RELATED PARTY TRANSACTIONS Principal Related Party Transactions Guarantees Service Agreement with Société Investissement Deconinck (SID) Assistance Agreement with Société Investissement Deconinck (SID) Cash Management Agreements Service Agreements Statutory Auditors Special Report on Regulated Agreements and Commitments For The Year Ended December 31, FINANCIAL INFORMATION ABOUT THE GROUP S ASSETS AND LIABILITIES, FINANCIAL CONDITION AND RESULTS Group Consolidated Financial Statements Group Consolidated Financial Statements as of and for the Year Ended December 31, Statutory Auditors Report on the Group s Consolidated Financial Statements as of and for the Year Ended December 31, Statutory Auditor Fees Dividend Distribution Policy Judicial and Arbitration Proceedings Material Change in Financial or Commercial Position 21 - ADDITIONAL INFORMATION Share Capital 7

8 Subscribed Share Capital and Authorized but Unissued Share Capital Securities Not Representing Share Capital Shares Controlled by the Company, Treasury Shares and Purchase by the Company of Its Own Shares Other Securities Giving Access to Share Capital Terms Governing any Right of purchase and/or any Obligation Attached to Subscribed but not Paid-Up Capital Share Capital of any Company of the Group that is the Subject of an Option or of an Agreement to Put it under Option Pledges, Guarantees and Sureties History of the Share Capital over the Past Three Fiscal Years Incorporation Documents and Bylaws Corporate Purpose (Article 3 of the Bylaws) Management and Supervisory Boards (Articles 11 to 23 of the Bylaws) Rights, Privileges and Restrictions on Shares (Articles 6 to 9 of the Bylaws) Modifications to the Rights of Shareholders General Shareholders Meetings (Article 25 of the Bylaws) Statutory Provisions Likely to Have an Impact in Case of a Change of Control Shareholding Thresholds and Identification of Shareholders Changes in Share Capital Distribution of Profits (Article 28 of the Bylaws) 22 - MAJOR CONTRACTS 23 - INFORMATION FROM THIRD PARTIES, EXPERT CERTIFICATIONS AND INTEREST DECLARATIONS 24 - PUBLICLY AVAILABLE DOCUMENTS 25 - INFORMATION ON EQUITY INVESTMENTS OMITTED ANNEXES A.1. Company Financial Statements as of and for the Year Ended December 31, 2013 A.1.1. Statutory Auditors Report on Company Financial Statements as of and for the year ended December 31, 2013 A.2. Cross-Reference Table Annual Financial Report and Management Report A.3. Report of the Chairman of the Supervisory Board and Cross-Reference Table A.3.1. Report of the Statutory Auditors Prepared Pursuant to Article L of the French Commercial Code A.4.1. Group Social and Environmental Report A.4.2. Social and Environmental Report: Sustainable Development Scorecard A.4.3. Social and Environmental Report: Note on Methodology A.4.4. Report of One of the Statutory Auditors, Designated as an Independent Third Party, on the Social, Environmental and Societal Information in the Management Report A.5. Table of Results for the Past Five Years A.6. Draft Resolutions to be Presented to the Annual Shareholders Meeting of May 13, 2014 A.7. Report of the Supervisory Board to the Annual Shareholders Meeting of May 13,

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10 01 RESPONSIBILITY FOR THE FRENCH VERSION OF THE REGISTRATION DOCUMENT 1.1 Name and Position of the Person Responsible for the French Version of the Registration Document 1.2 Certification of the Person Responsible for the French Version of the Registration Document 1.3 Name and Position of the Person Responsible for Financial Information 1.4 Tentative Financial Disclosure Schedule 10

11 1. RESPONSIBILITY FOR THE FRENCH VERSION OF THE REGISTRATION DOCUMENT 1.1 NAME AND POSITION OF THE PERSON RESPONSIBLE FOR THE FRENCH VERSION OF THE REGISTRATION DOCUMENT Mr. Michel Giannuzzi, Chairman of the Company s Management Board. 1.2 CERTIFICATION OF THE PERSON RESPONSIBLE FOR THE FRENCH VERSION OF THE REGISTRATION DOCUMENT I certify, having taken all reasonable care to ensure that such is the case, that the information contained in this registration document is, to my knowledge, in accordance with the facts and contains no omission likely to affect its import. I obtained a completion letter from the statutory auditors indicating that they have verified the information relating to the financial condition and financial data included in this registration document and that they have read the entire registration document. The 2013 consolidated financial statements presented in the registration document have been the subject of an auditors report, which contains a note concerning the changes in accounting methods made as of January 1, April 17, 2014 Michel Giannuzzi Chairman of the Management Board 1.3 NAME AND POSITION OF THE PERSON RESPONSIBLE FOR FINANCIAL INFORMATION Mr. Fabrice Barthélemy Chief Financial Officer of the Group 2 rue de l Égalité, Nanterre Cedex, France Tel: +33 (0) Responsibility for Financial Information 1.4 TENTATIVE FINANCIAL DISCLOSURE SCHEDULE The financial information that Tarkett discloses to the public will be available on Tarkett s website ( For informational purposes only, Tarkett s financial disclosure schedule through December 31, 2014 is expected to be as follows: First quarter results April 17, 2014 Annual Shareholders Meeting May 13, 2014 First half results July 31, 2014 Third quarter results October 20,

12 02 RESPONSIBILITY FOR STATUTORY AUDIT 2.1. Statutory Auditors 2.2. Alternate Statutory Auditors 12

13 2. RESPONSIBILITY FOR STATUTORY AUDIT 2.1 STATUTORY AUDITORS KPMG Audit, a department of KPMG S.A. Represented by Mr. Philippe Grandclerc 1, cours Valmy Paris La Défense KPMG S.A. is a member of the Compagnie Régionale des Commissaires aux Comptes de Versailles (the Regional Association of Auditors of Versailles). KPMG S.A. s term as statutory auditor was renewed at the Combined Shareholders Meeting of the Company held on May 23, 2008, for a duration of six fiscal years. Its term will therefore expire at the close of the annual shareholders meeting convened to approve the financial statements as of and for the year ended December 31, Praxor Audit Represented by Mr. Florent Gesbert 23, rue Clapeyron Paris Praxor Audit is a member of the Compagnie Régionale des Commissaires aux Comptes de Paris (the Regional Association of Auditors of Paris). Praxor Audit s term as statutory auditor was renewed at the Combined Shareholders Meeting of the Company held on May 23, 2008, for a duration of six fiscal years. Its term will therefore expire at the close of the annual shareholders meeting convened to approve the financial statements as of and for the year ended December 31, ALTERNATE STATUTORY AUDITORS Mr. Michel Seguin 1, cours Valmy Paris La Défense Michel Seguin is a member of the Compagnie Régionale des Commissaires aux Comptes de Versailles (the Regional Association of Auditors of Versailles). Mr. Seguin s term as alternate statutory auditor was renewed at the Combined Shareholders Meeting of the Company held on May 23, 2008, for a duration of six fiscal years. His term will therefore expire at the close of the annual shareholders meeting convened to approve the financial statements as of and for the year ended December 31,

14 Mr. Henri Grillet 23, rue Clapeyron Paris Henri Grillet is a member of the Compagnie Régionale des Commissaires aux Comptes de Paris (the Regional Association of Auditors of Paris). Mr. Grillet was appointed alternate statutory auditor at the ordinary shareholders meeting of the Company held on October 2, 2013, for the remainder of his predecessor s term. His term will therefore expire at the close of the annual shareholders meeting convened to approve the financial statements as of and for the year ended December 31,

15 03 SELECTED FINANCIAL DATA 3.1. Selected Financial Data for the Year Ended December 31, Selected Financial Data for the Three Months Ended March 31,

16 3. SELECTED FINANCIAL DATA 3.1 SELECTED FINANCIAL DATA FOR THE YEAR ENDED DECEMBER 31, 2013 The financial data presented below is derived from the Group s consolidated financial statements as of and for the fiscal year ended December 31, 2013, prepared in accordance with IFRS as adopted by the European Union, which are included in Section 20.1, Group Consolidated Financial Statements. The consolidated financial statements as of and for the year ended December 31, 2013 have been audited by the Company s statutory auditors. The report of the Company s statutory auditors is included in Section , Statutory Auditors Report on the Consolidated Financial Statements as of and for the Year ended December 31, The financial information shown below should be read in conjunction with (i) the Group s audited consolidated financial statements as of and for the year ended December 31, 2013; (ii) the analysis of the Group s financial condition and results presented in Chapter 9, Management s Analysis of Financial Condition and Results of Operations ; and (iii) the analysis of the Group s cash position and equity capital presented in Chapter 10, Liquidity and Capital Resources. The Group s consolidated financial statements as of and for the year ended December 31, 2013 were audited by KPMG and Praxor Audit, independent statutory auditors, as stated in their report dated February 17, 2014, included in Section , Statutory Auditors Report on the Group s Consolidated Financial Statements as of and for the Year Ended December 31, Selected Group Consolidated Income Statement Data (in millions) For the year ended December 31, restated (1) Net revenues... 2, ,516.4 Cost of sales... (1,765.8) (1,892.8) Gross profit Other operating income Selling expenses... (213.5) (248.8) Research and development expenses (19.8) (25.8) General and administrative expenses (136.2) (162.3) Other operating expenses... (10.3) (14.8) Operating income Net finance costs... (24.0) (31.4) Share in net income (loss) of equity affiliates... (1.9) (1.4) Income tax expense... (42.3) (47.9) Net profit Attributable to owners of the Company Attributable to non-controlling interests (1) Reflects impact of adoption of IFRS 11 on 2012 comparative information as well as different adjustments made in

17 Selected Group Consolidated Balance Sheet Data As of December 31, (in millions) 2012 restated (1) 2013 Total assets... 1, ,826.5 Shareholders equity attributable to equity holders of the parent Total non-current liabilities Total current liabilities (1) Reflects impact of adoption of IFRS 11 on 2012 comparative information as well as different adjustments made in Selected Group Consolidated Cash Flow Statement Data For the year ended December 31, (in millions) 2012 restated (1) 2013 Net cash from operating activities Net cash used in investing activities... (343.3) (103.1) Net cash from financing activities (83.8) Increase/(decrease) in cash and cash equivalents (1) Reflects impact of adoption of IFRS 11 on 2012 comparative information as well as different adjustments made in Selected Financial and Operational Data by Segment For the year ended December 31, (in millions) 2012 restated (1) 2013 Net Revenues... 2, ,516.4 EMEA North America CIS & Others Sports Surfaces Adjusted EBITDA (2) EMEA North America CIS & Others Sports Surfaces Central (5)... (34.2) (40.3) Return on capital employed (ROCE) (3) 14.4 % 17.7 % Net debt (4) End of Period (1) Reflects impact of adoption of IFRS 11 on 2012 comparative information. (2) Adjusted EBITDA, which is not a standardized accounting term with a generally accepted definition, is equal to operating income before depreciation, amortization and adjustments. Adjustments include, among others, restructuring costs intended to grow the Group s future profits; gains or losses on significant asset sales; costs relating to corporate and legal restructuring, including legal fees and acquisition costs as well as the impact on margins of recording inventory of acquired companies in the Group s balance sheet at fair value; management fees invoiced by the shareholders of the Company; and expenses relating to share-based payments without any cash payment. Adjusted EBITDA is not a financial measure defined under IFRS. It should not be taken as a substitute for operating income, net 17

18 income or cash flows from operating activities, nor should it be treated as a measure of liquidity. Adjusted EBITDA may be calculated differently by other companies with businesses that are similar to or different from the Group s. Accordingly, the Group s EBITDA calculation may not be comparable to that calculated by other issuers. See Section , Adjusted EBITDA, for a discussion of adjusted EBITDA and a reconciliation to the most comparable IFRS measure. (3) ROCE corresponds to the ratio between (1) EBIT, which the Group defines as operating income before financial items and taxes and (2) capital employed (which corresponds to tangible and intangible assets (including goodwill), plus working capital). ROCE is not a standardized accounting term corresponding to a generally accepted definition. ROCE may be calculated differently by other companies with businesses that are similar to or different from that of the Group. Accordingly, the Group s ROCE calculation may not be comparable to that calculated by other issuers. See Section 10.8, Return on Capital Employed, for a discussion of ROCE and a reconciliation to the most comparable IFRS measure. (4) The Group defines net debt as the sum of non-current interest-bearing loans and borrowings and current interestbearing loans and borrowings, minus cash and cash equivalents. For more information on how net financial debt is calculated, see Section , Net Debt. 3.2 SELECTED FINANCIAL DATA FOR THE THREE MONTHS ENDED MARCH 31, 2014 The table below presents certain selected financial data as of the dates and for the periods indicated below. The selected financial data presented below has not been the subject of an audit or of a limited review by the Company s statutory auditors. Selected Consolidated Income Statement Information Three Months Ended March 31, (in millions of euros) Net Revenues EMEA North America CIS & Others Sports Surfaces Adjusted EBITDA (1) (1) See definition in Note 2 to the table Selected Financial and Operational Data by Segment, above. Tarkett s performance in the first three months of 2014 demonstrated the solidity of its economic model s balance among geographical markets and end-users. In the CIS countries, the Group s teams also showed their capacity to take advantage of the Group s leadership position and to react rapidly to a difficult environment Net Revenues Net sales were million in the first quarter of 2014, a decrease of 5.4% as compared with the first quarter of The first quarter is structurally the weakest of the year for the Group, in particular in the Sports Surfaces segment and in the CIS region. In 2014, the first quarter was marked by difficult economic conditions and strong currency devaluations in the CIS countries. Despite these unfavorable circumstances, Tarkett was able to limit the organic decrease in revenues to 0.2%. 18

19 Adjusted EBITDA The Group s adjusted EBITDA was 35.8 million in the first quarter of 2014, as compared with 45.1 million in the first quarter of Adjusted EBITDA margin decreased by 140 points to 7.3%. This decrease was primarily the result of a negative impact of 8.5 million from currency effects in the CIS countries. Moreover, the conversion effect of the U.S. dollar and other currencies decreased EBITDA by an additional 3.9 million. Costs of purchases and productivity plans were in line with expectations. In the CIS, the Group s teams took additional measures to reduce costs. 19

20 04 RISK FACTORS 4.1. Risks Relating to the Group and Its Industry Risks Relating to Economic Cycles Risks Relating to Public Spending Risks Relating to the Group s Program for Optimization of Costs and Processes Risks Relating to Fluctuations in Prices of Raw Materials and Energy Risks Relating to the International Nature of the Group s Business and the Economic and Political Risks in the Countries in Which It Does Business Risks Relating to External Growth Risks Relating to the Quality of the Group s Products Risks Relating to Obtaining Product Certification Risks Relating to Strong Competition in the Regions Where the Group Does Business Risks Relating to the Group s Dependence on Certain Suppliers Risks Relating to Volumes and Production Capacity Risks Relating to Interruption or Security Breach of Information Risk Relating to the Group s Retirement and Other Employee Benefit Commitments Risks Relating to Goodwill and Deferred Tax Assets 4.2. Industrial Risks Risks Relating to Compliance with Environmental and Safety Regulations Risks Relating to Industrial Accidents Risks Relating to Exposure to Toxic or Dangerous Substances Risks Relating to Asbestos Exposure 4.3. Market Risks Foreign Exchange Risk Interest Rate Risk Liquidity Risk 4.4. Legal Risks Risks Relating to the Protection of Intellectual Property Risks Relating to Legal and Administrative Proceedings Tax Risk 4.5. Risk Management Organization of Internal Control and Risk Management Management of Significant Risks Compliance Procedures 4.6. Insurance and Coverage of Risks 20