Stock information. Key figures

Transcription

1 Annual report 2009

2 Stock information share price at 31/12 since 1994 (in euros) Consolidated figures per share ( shares) (in euros*) Equity Net profit (+) / Loss (-) Current net profit (+) / Loss (-) Gross dividend NA NA Net dividend NA NA Ebit Ebita Ebitda * figures are rounded off (1) share price at 31 december net profit per share (2) net dividend share price at 31 december (3) gross dividend consolidated net profit (4) in thousands of euros Quotations on Euronext Brussels (in euros) Lowest price Highest price Price at 31 December Price/Earning (PER) at 31/12 (%) (1) NA* NA* Net dividend yield at 31/12 (2) NA* NA* Return Deceuninck share (%) Pay-out ratio (%) (3) NA* NA* Market capitalization at end of financial year (4) 56, ,238 * Not relevant due to loss position; There is no dividend payment Key figures consolidated turnover (in millions of euros) Deceuninck Group (consolidated) (in millions of euros*) Sales Current net profit (+) / Loss (-) (1) Consolidated results before taxes Consolidated results after taxes EBIT EBIT (margin in %) -3.7% -2.2% EBITA EBITA (margin in %) -2.4% -2.2% EBITDA EBITDA (margin in %) 4.8% 4.1% 2004 (1) current net profit = net profit + amortization on goodwill (2) net profit equity (3) current assets current liabilities + accrued charges and deferred income 2007 (4) gross dividends consolidated net profit (5) Return On Capital Employed: operating results capital employed Equity Net debt Working capital Total assets Capital expenditure Ratios Profitability ratio (2) -27.3% -8.6% Liquidity ratio (3) Pay-out ratio (4) NA NA R.O.C.E. (5) -6.6% -3.2% Staff (units) 2,813 2,816 (**) * figures are rounded off ** inclusive temporary employees Deceuninck > annual report 2009 > 2

3 consolidated result after taxes (in millions of euros) capital expenditure (in millions of euros) ebitda (in millions of euros) ebitda/sales (%) ebit (in millions of euros) ebit/sales (%) ebita (in millions of euros) ebita/sales (%) staff (units) ,043 2,979 2,924 2,940 2,813 2,816* (*) temporary employees included; in 2008 and previous years: figures temporary employees excluded; in (temporary employees included) equity (in millions of euros) balance sheet total (in millions of euros) geographical distribution of the consolidated turnover (%) Asia / Turkey 17.0 % USA 11.0% UK 5.5% Central and Eastern Europe 20.7 % South, West and Northern Europe 45.8 % Deceuninck > annual report 2009 > 3

4 TABLE OF CONTENTS Stock information - Key figures 2 Company profile 5 Mission statement 5 Strategy and objectives 5 Message from the Chairman and the CEO 6 Product overview 8 Deceuninck international network 9 Deceuninck Group structure 10 Highlights of Key figures Management 12 Corporate Governance Statement - Board of Directors 13 Management Report - 25 Corporate Social Responsibility - 31 Human Resources - 33 Characteristics of Deceuninck shares 34 Shareholder policy and dividends 35 Consolidated financial statements and notes 38 Deceuninck NV financial statements 95 Auditor s report 105 Declaration with regard to the information given in this annual report Addresses 107 Glossary 110 Deceuninck > annual report 2009 > 4

5 Company profile Deceuninck is a leading international designer and manufacturer of high quality PVC systems for windows and doors, cladding & roofline, interior & garden applications. The basic technology used by the Company is extrusion of PVC and patented Twins n composite material. The highly integrated state of the art production process includes compounding, tool manufacturing, extrusion of gaskets and profiles, printing, PVC lamination and the patented Decoroc coating technology. Twins n -Terrace The Deceuninck Group is active in more than 75 countries, has 35 subsidiaries (production and/or sales) spread across Europe, North America and Asia, and employs 2,816 FTE (full-time equivalents including temporary employees). The head office of the Group and its coordination centre are located in Belgium. The Deceuninck Group achieved a turnover of million euros in 2009, a decrease of 19.6% in comparison with the previous financial year. Mission statement Deceuninck Group is a leading provider of Window systems and building products through value added solutions (colours, high service level, branded, innovative) for Better living at home (aesthetic, energy efficient, maintenance free). Strategy and objectives Deceuninck s strategy is to sustainably position Deceuninck worldwide in the high added value market segment of PVC based window and door systems and building products. Priority is given to innovation in the area of materials, products and applications in combination with a high service level offered to Deceuninck s Customers and an increased brand awareness among the end Customers. Deceuninck > annual report 2009 > 5

6 Message from the Chairman and the CEO Tom Debusschere CEO Pierre Alain De Smedt Chairman Dear shareholder, In 2009 Deceuninck completed its turnaround. The recurring operating cash flow (REBITDA) increased by 37% to 45 million euros. The reduction of the cost base has outpaced the 20% sales decline as a result of the swift execution of the operational restructuring. The net result for the year 2009 is negative. However, the 16.9 million euros loss is almost fully impacted by 24.1 million euros one-off restructuring costs. The positive evolution of REBIT and REBITDA margins (1.7% and 8.9% respectively) supports Deceuninck s confidence that the Company is back on track. Financial restructuring On 11 th September, after intensive negotiations, we managed to reach a long term financing agreement with eleven banks and noteholders. The covenants linked to this club deal are tailor-made. They are based on a sensitised worst case of Deceuninck s own management business plan. The rationale behind the deal was twofold. The covenants provide on one hand sufficient headroom in case of a prolonged recession. If, on the other hand, the economic environment shows a substantial improvement the covenants allow for an accelerated debt repayment without compensation. On 14 th October the debt restructuring was successfully completed with a 84.5 million euros rights issue of which 40.8 million euros of the net proceeds were used to amortize long term debts. The one off costs related to the financial restructuring were high (16.8 million euros) but unavoidable. The Group now has a solid balance sheet with stable financing and adequate headroom for the next four years. We are grateful to the lenders and shareholders for their confidence throughout the debt restructuring and equity injection. Deceuninck emerges from 2009 as a stronger Company. Operational restructuring Manufacturing and warehousing capacity and all operating expenses have been adjusted to the lower sales volumes. The following sites were closed and their activities integrated in the remaining sites: Little Rock, Arkansas (USA); Wroclaw (Poland), Dottignies (Belgium), warehouse in Kaunas (Lithuania). Capacity in Calne (UK) and Popuvky (Czech Republic) was downsized substantially. The current sites still allow for future growth without substantial capacity investments. A partial transfer of the tool shop activities from Bogen (Germany) to Gits (Belgium) started late in 2009, allowing for continued tool maintenance in Germany. Deceuninck Polska has assumed the sales and distribution activities of the Baltic States and Deceuninck Russia is additionally managing sales and distribution activities in Ukraine. Operational restructurings from October 2008 onwards affected 633 FTEs (full-time equivalents) and resulted in full year 2009 savings of 21.2 million euros. Further non-headcount related cost cutting resulted in 17.1 million euros savings. In total cost savings in 2009 were 38.3 million euros. The costs related to the operational restructuring, which were mainly severance payments, amount to 7.3 million euros. Deceuninck > annual report 2009 > 6

7 Our Operations costs were additionally reduced by further automation and enhancements in our manufacturing processes. These will increase our flexibility and continue to increase our service levels towards our Customers. New regional organisation and Executive Team In October we implemented a new regional organisation and a new Executive Team. The Team consists of 9 Deceuninck veterans with an average of 14 years industry experience. Over the past year, our management and employees have shown remarkable resilience and entrepreneurship, which was essential to completing the turnaround. Thanks to our strong product brands and the worldwide network of 4,500 fabricators and distributors, Deceuninck retained its strong market position throughout the crisis. Energy efficiency drives innovation Longer term, energy efficiency remains the engine of the construction market. We will invest all Deceuninck s innovation efforts to enhance these benefits even further. To that end in 2009 Deceuninck developed the 84mm Eforte window system and further enhanced energy efficiency with the introduction of a thermal composite reinforcement. Eforte, which meets the passive house standard, has been successfully launched on the bi-annual window fair in Nürnberg in March Outlook 2010 For 2010 Deceuninck expects continued stable sales, with regional differences. Short term visibility remains limited. Euroconstruct statistics forecast a further decline of residential newbuild activity in Residential renovation has proven to be more resilient. Deceuninck estimates 70% of residential sales to be in renovation. Energy efficiency will continue to be the engine of the construction industry. The lower cost base of Deceuninck in a continued stable economic environment supports Deceuninck s confidence that it will return to profitability in Fundamentally, the PVC window remains the best value solution for energy savings and low maintenance. The fact that PVC windows are an excellent investment for homeowners in both replacement and new construction should drive Deceuninck s future top and bottom line growth. Tom Debusschere CEO Pierre Alain De Smedt Chairman Deceuninck > annual report 2009 > 7

8 Product overview Inoutic Elite Window and door systems window and door systems A wide range of PVC profiles for the production of the most standard windows and doors, in all designs and a wide range of colours. sliding systems Profiles for the production of horizontally and vertically sliding windows and doors. home protection A range of roller shutter, roller shutter box and louver shutter systems. Interior products A wide range of cladding for walls and ceilings, skirting, decorative finishes and window cills. Exterior products A range of wall cladding and roofline products. Garden products decking Composite systems for decking, siding and railing. PVC decking. balcony and fencing systems Various cyclefoam noise barriers Sound absorbing wall systems made of recycled rigid PVC. Deceuninck > annual report 2009 > 8

9 Deceuninck international network Australia Melbourne Belgium Hooglede-Gits Diksmuide Bosnia and Herzegovina Lukavac Bulgaria Plovdiv China Qingdao Germany Bogen Hunderdorf Italy Pontedera Kazakhstan Almaty Lithuania Kaunas Poland Poznan Serbia Belgrade Spain Borox Thailand Samutprakarn Turkey Adana Kocaeli Ankara Istanbul Izmir Croatia Zagreb Romania Bucharest Ukraine Kiev Czech Republic Brno France Roye Russia Moscow Ekaterinburg Novosibirsk Rostov-on-Don Samara Protvino St. Petersburg United Kingdom Calne United States Monroe, Ohio Extrusion Sales and/or stock Deceuninck > annual report 2009 > 9

10 Deceuninck Group structure (31/03/2010) Belgium Deceuninck NV The Netherlands 100% Deceuninck Kunststof BV 0,01% Deceuninck Beheer BV 99,99% Czech Republic United States Deceuninck spol. s r.o 100% 100% Deceuninck North America LLC Deceuninck North America Inc. 100% 0,20% 99,99% 99,80% 99,97% 100% Belgium Deceuninck Coördination Center NV Fin-Tonic NV Plastics Deceuninck NV Detajoint NV Australia Deceuninck Pty. Ltd. 0,01% 99,99% 0,01% 0,03% Romania France Bulgaria Deceuninck Romania SRL 100% 100% Deceuninck SAS 100% Deceuninck Bulgaria EOOD 100% 100% 100% 100% 100% United Kingdom Russia Lithuania Status Systems PVCu Ltd. 0,07% Deceuninck Rus OOO 99,93% 100% Deceuninck Baltic UAB Deceuninck Ltd. Deceuninck Holdings UK Ltd. 100% Ireland Turkey Range Valley Extrusions Ltd. 0,01% Deceuninck Ireland Unltd. 99,99% 97,54% Ege Profil AS 100% Eurisk RE Ltd. 99,99% Ege Pen AS Germany Deceuninck Holding Germany GmbH 100% Poland Branches Inoutic / Deceuninck GmbH 18,62% 81,38% 100% Deceuninck Polska Sp. z o.o. 8,15% Deceuninck NV Succursal en España Profil System Sp. z o.o. 91,85% Italy Bosnia and Herzegovina 100% Deceuninck SRL Deceuninck d.o.o. 100% Serbia Deceuninck d.o.o. 100% Croatia Deceuninck d.o.o. Rep. offices/sales offices that are owned for 100% by Deceuninck NV: China, Russia, The Ukraine and Kazakhstan, Minority participations: Deceuninck NV: 10% in Sistemas Sumum SL (Spain); Inoutic / Deceuninck 48,98% 48,95% Thailand Deceuninck (Thailand) Co. Ltd. Asia Profile Holding Co. Ltd. 51% 100% ownership by Deceuninck Rus OOO (Russia): Ekaterinburg, Novosibirsk, Rostov-on-Don, Samara and St. Petersburg. GmbH: 9.52% Rewindo GmbH (Germany) Deceuninck > annual report 2009 > 10

11 Highlights of 2009 February Pierre Alain De Smedt named Chairman of the Board of Directors. Arnold Deceuninck named Vice-Chairman. Tom Debusschere named CEO. Marcel Klepfisch named Chief Restructuring Officer (CRO) (until October 2009). April Consolidation of all American operational activities in Monroe, Ohio. Closure of the American site in Little Rock, Arkansas. Transfer of Dottignies (Belgium) based Detajoint operational activities to Hooglede-Gits (Belgium). Factory closure Wroclaw (Poland) consolidation of Polish sites in Poznan (Poland). 50% production capacity downsizing in Calne (UK). Restructuring of Baltic and Ukraine organizations. June Extraordinary General Shareholders Meeting decides on capital increase by means of a capital injection for a maximum of 85 million euros. September Long-term financial restructuring agreement with major lenders. Arnhold & Bleichroeder Advisers LLC decrease their stake in the financial capital to a level below the notification treshold. October Rights issue successfully completed. Listing of 86,200,000 new shares and VVPR strips on Euronext Brussels. Implementation of the new regional organization and new Executive Team. December Extraordinary General Shareholders Meeting approves warrant program. Key figures 2009 I Sales of million euros I > 4,500 Customers worldwide I Presence in over 75 countries I 35 subsidiaries (including branches) I 250,000 km of extruded profiles I 2,816 employees (FTE, including temporary employees) I Production of 190,000 tons of compound I 1,800 tool sets in active use Deceuninck > annual report 2009 > 11

12 Management (AS PER 31 MARCH 2010) EXECUTIVE TEAM LEADERSHIP TEAM Tom Debusschere CEO Ann Bataillie General Counsel Stephan Coester Directeur Marketing General Manager Inoutic / Deceuninck GmbH (Germany) Bruno Deboutte Director Central & Eastern Europe Philippe Maeckelberghe CFO Michael Stöger Director Technology Lieven Vandendriessche Director Operations Bernard Vanderper Director Northwest Europe General Manager Benelux General Manager Ltd. (United Kingdom) Paul Van Wambeke Director Southwest Europe General Manager France Deceuninck SAS (France) INTERNAL AUDITOR Steven Powell Internal Audit Manager AUDITOR Ernst & Young, Réviseurs d Entreprises sccrl, Represented by Mr. Marc Van Hoecke Bert Castel Treasury Manager Ergun Cicekci General Manager Ege Profil AS (Turkey) Xavier Costenoble General Manager Deceuninck NV division Compound Ludo Debever Corporate Communications Manager Peter Degrande Product Development Manager Henk Demets General Manager Operations Hooglede & Investments Geert Demeurisse General Manager Research Antonio Escobar General Manager Deceuninck NV Succursal en España (Spain) Volker Guth General Manager Deceuninck RUS OOO (Russia) Filip Levrau General Manager IT Elena Marica General Manager Deceuninck Romania SRL (Romania) Marc Michels General Manager Human Resources Mark Parrish General Manager Deceuninck North America LLC (United States of America)) Roberto Scafile General Manager Deceuninck Italia SRL (Italy) Radek Slabak General Manager Deceuninck spol s r.o. (Czech Republic) Michel Strypstein General Manager Risk & Credit Hugo Vanhoudt Manufacturing Manager David Vermeersch Project Management Office Manager Przemyslaw Zdziebkowski General Manager Polska Sp. z o.o. (Poland) Deceuninck > annual report 2009 > 12

13 Corporate Governance Statement general This section provides a statement of the rules and principles that regulate the corporate governance of the Company pursuant to the Belgian Code on Companies, the Belgian Corporate Governance Code 2009, the Company s articles of association and the Company s Corporate Governance Charter. This section also presents the relevant corporate governance events that occurred during the past financial year. The Board of Directors of the Company adopted the Corporate Governance Charter and will review it from time to time and make changes that it deems necessary and appropriate. A copy of this Charter is available, on the Company s website and at the registered offices of the Company. The Company s Corporate Governance Charter has been compiled in accordance with the recommendations set out in the Belgian Corporate Governance Code issued on 9 th December 2004 by the Belgian Corporate Governance Committee. The Code is based on a comply with or explain system: Belgian listed companies should follow the Code, but may deviate from its provisions and guidelines (though not from the principles) provided it discloses the justification for such deviation. The Belgian Corporate Gover nance Committee released the Belgian Corporate Governance Code (the Code) for 2009, on 12 th March The Board of Directors of Deceuninck reviewed its Corporate Governance Charter in the light of the changes that were made to the Code of 2009 and has, where necessary, taken the necessary measures to modify its governance practices and the Corporate Governance Charter accordingly. The Board of Directors of Deceuninck declares that it applies the Code as reference code regarding corporate governance. The Company s Board of Directors complies with the Code, but believes that the following deviation from its stipulations is justified in view of the Company s particular situation. deviations from the code and the justification thereof Independence requirement (Appendix A 2.4./1.2 of the Code) The independence of the Directors is assessed based on various criteria, including: that he/she has not served more than three terms as Non-Executive Director of the Company s Board of Directors, and that this period was not longer than twelve years. One independent Director has served more than three terms on the Company s Board of Directors. The education and professional experience of this Director of the Group and its products is considered to be an important added value to the Company. The Company will observe the stipulations of the new independence criteria in accordance with article 526ter of the Belgian Code on Companies at the next (re)election of Directors in 2011, and as such an Independent Director will only be able to serve a maximum of 3 consecutive terms as Independent Director. Disclosure of the amount of the remuneration and other benefits paid to individual Directors (articles 7.8 and 7.10 of the Code) and to the Executive Team as a whole (articles 7.14 and 7.15 of the Code). Regarding the disclosure of remuneration on an individual basis, the Company believes that this disclosure of individual amounts provides no added value to investors/shareholders. The Company fears this would rather have a reverse effect as this information could be used or abused by others. Such communication may also be detrimental to the interests of the people concerned. The announcement of the total remuneration of the Directors and the members of the Executive Team enables the shareholders to assess the impact of the compensation on the position, the operations and the results of the Company. Concerning the individual publication of the options and warrants offered to the members of the Deceuninck > annual report 2009 > 13

14 Executive Team, these are not published individually for the same reasons. Due to these reasons, the remuneration report of the Board of Directors does not contain all the information prescribed by the Code. The Board of Directors of the Company also decided to publish the amount for the past financial year globally. However, once the law requires the publication of the individual remuneration, the Company will obviously comply with the legal stipulations in this regard. General Meetings and the shareholder s right to submit proposals (article 8.8 of the Code) Contrary to the Code s recommendations, the Charter does not require that shareholders holding a percentage of the shares representing at least 5% of the capital can submit proposals to the General Meeting. However, in accordance with the Belgian Code on Companies (article 532), shareholders who own more than 20% of the Company s shares are entitled to convene a General Meeting of Shareholders. Given the size of the Company, a smaller percentage is not appropriate. Evaluation of the operations of the Board of Directors and the Committees (article 4.11 of the Code) Even though the Code provides for the evaluation of the Board of Directors, of its Committees and of its individual Directors, the Board of Directors prioritised the financial restructuring and the equity injection during the past financial year. An evaluation provided by the Code is planned during the course of the 2010 financial year. Internal control- and risk management systems The most important features of the internal control and risk management systems, implemented by the management, can be summarised as follows: - Consult with the internal auditor and discuss his audit reports and, when necessary, request additional information and explanations, as well as the measures that will be taken for the implementation of and compliance with the recommendations; - Permanent monitoring of the activities, the operating results and the financial position of the Company; - Follow up on exchange rate risks with actions to manage the risks; - Permanent follow up on the raw material prices and any changes to it; - Management of information systems; - Discuss the rules for the prevention of market abuse with the compliance officer, the compliance with it and any violation of the rules; - Request statements and confirmation by the local general managers to ensure that they comply with the applicable legislation and regulations and internal rules of the Company; - Follow up on and discuss judicial disputes that could have a material influence on the Company every six months with the legal department of the Company; - Follow up on the test results of the new products and innovation in the light of the drafting of product guarantees; - Record policy and procedures of the Company for compliance with the applicable legislation and regulations; - Record and follow up on the measures to prevent catastrophes such as fire, floods, etc. and arrange for adequate insurance cover. Deceuninck > annual report 2009 > 14

15 Zendow Flex/Royal The Executive Team will fine-tune the framework of the internal control and risk management in the next few months. In the meantime the risk management function has been filled in. The risk manager will further implement and monitor the risk management systems. practices of the board of directors General stipulations The Board of Directors of the Company may perform all activities necessary or useful to achieve the Company s corporate objective, with the exception of those activities that are expressly reserved for decision by the General Meeting of Shareholders according to the law or the Company s articles of association. The articles of association of the Company provide for a Board of Directors consisting of a minimum of three members. At least half of the members of the Board of Directors must be Non-Executive Directors and at least three Directors must be Independent directors within the meaning given, among others, in article 526ter of the Belgian Code on Companies. The members are appointed by the General Shareholders Meeting. Their initial term of office is for a maximum term of four years (based on the Company s Corporate Governance Charter), but can be renewed. The age limit for Directors within the Company is set at 70 years at the time of the appointment. In principle, a Director s term ends at the closure of the Annual General Meeting. If a position as a Director becomes vacant, the remaining Directors may appoint an appropriately qualified Director to fill that vacancy temporarily until the Shareholders resolve at a General Meeting of Shareholders to appoint a new Director. This appointment must be included as an item on the agenda of the next General Meeting of Shareholders. Directors may be reappointed at the end of their term. Directors can be dismissed at any time by the General Meeting of Shareholders. The Board of Directors determines the Group s strategic target objectives. The Board of Directors meets at least six times a year or as often as considered necessary or desirable for the Board of Directors to function properly. A meeting of the Board of Directors is validly constituted if there is a quorum, consisting of at least half of the members present in person or represented at the meeting. If this quorum is not met, a new board meeting must be convened to deliberate and decide on the matters on the agenda of the board meeting for which a quorum was not present. In any event, the Board of Directors may only validly proceed if at least half of the board members are present or represented. The meetings of the Board of Directors are convened by the Chairman of the board or by at least two Directors whenever the interests of the Company so require. Independent Directors Directors can only be considered as Independent directors if they meet the criteria set out in the Belgian Code for Corporate Governance and in Article 526ter of the Belgian Code on Companies. Independent directors appointed before 8 th January 2009 (the date when the new independence criteria stipulated in article 526ter of the Belgian Code on Companies came into force), can, until 1 st July 2011, be deemed independent if they comply with the (former) independence criteria stipulated in the former article 524, 3 of the Belgian Code on Companies. The criteria stipulated in the Code will also be taken into account to determine the independence of a director. An Independent Director who ceases to comply with the independence requirements must inform the Board of Directors immediately. The current Independent Directors of the Company are set out below. Deceuninck > annual report 2009 > 15

16 Inoutic Elite Composition of the Board of Directors The Board of Directors of the Company currently consists of ten members. The following changes were made to the Board of Directors since the last General Meeting of Shareholders of 12 th May R.A.M. COMM. VA, with permanent representative Mr Arnold Deceuninck, offered its resignation as Director of the Company at the meeting of 27 th October The Board accepted this resignation at its mee - ting of 27 th October 2009 and decided, based on article 11 of the articles of association and on recommendation of the Remuneration and Nomination Committee, to fill the vacancy and proceeded with the appointment of Mr Arnold Deceuninck. The Extraordinary General Meeting held on 31 st December 2009 confirmed the appointment of Mr Arnold Deceuninck as Non-Independent Director to replace R.A.M. COMM. VA. The mandate will expire with the closure of the 2013 Annual General Meeting. Mr Arnold Deceuninck was also appointed as Vice- Chairman for the term of his mandate. Based on the recommendations of the Remuneration and Nomination Committee, the Board of Directors nominated Mr Marcel Klepfisch, as Non-Independent Director, to the Extraordinary General Meeting held on 31 st December 2009, for a period of almost 4 years, that will end at the closure of the 2013 Annual General Meeting. Mr Marcel Klepfisch is appointed as such as Non- Independent Director by the Extraordinary General Meeting of 31 st December This meeting also decided to submit to the Annual General Meeting of 2011 the question whether or not Mr Marcel Klepfisch complies with the criteria of Independent Director in the sense of the Corporate Governance Charter and article 526ter of the Code on Companies at the time. If the Annual General Meeting of 2011 then believes that Mr Marcel Klepfisch complies with the criteria of independence, he will be registered as an Independent Director for the remaining term of his mandate, in the sense of the Corporate Governance Charter and for a period of almost four years until the completion of the Annual General Meeting of Deceuninck > annual report 2009 > 16

17 Zendow Monorail & Twins n -Terrace The current Board of Directors is composed as follows: The Board of Directors has met 26 times during the past financial year, of which 8 times by telephone. mandate expiry number of attendees chairman pierre alain de smedt* director of belgacom nv, avis europe plc, alcopa nv and chairman of febiac v.z.w. member of the audit and of the remuneration and nomination committee vice-chairman arnold deceuninck** director of companies member of the remuneration and nomina- tion committee vice-chairman françois gillet** directeur sofina nv and nonexecutive member of the remuneration director at, amongst others, colruyt, luxempart, at private equity funds, exmar and codic international and nomina- tion committee director, ceo tom debusschere permanent representative of tom debusschere comm v ceo director willy deceuninck** director of companies member of the audit 2011 permanent representative committee 20 excused: 6 of t.r.d. comm. va director sophie malarme-lecloux** onderdirecteur sofina nv and non-executive director at callataÿ & wouters director clement de meersman director of roularta nv, elia asset nv, elia system operator nv, anl nv, koramic industries nv, smartroof nv and plasticvision v.z.w. director herwig bamelis* permanent representative of hbm consult bvba member of the audit committee chairman of the remuneration and nomination committee excused: director gerhard rooze* director of degroof corporate finance nv and degroof structured finance nv chairman of the audit committee director marcel klepfisch member of the audit committee excused: ² * independent director ** representative of significant shareholder 1 tom debusschere comm. v is appointed as director at the general meeting of 12th may 2009; he was invited to the other meetings of the board of directors. 2 marcel klepfisch was nominated by the board of directors of 27th october 2009 and was appointed by the extraordinary general meeting of 31st december as cro, he was present at the other board meetings concerning the points regarding the restructuring; he was invited to be acting director from the month of october. secretary ann bataillie, general counsel Deceuninck > annual report 2009 > 17

18 Twins n -Terrace+ The curricula vitae of the members of the Board of Directors are set out below: Pierre Alain De Smedt (1944) Pierre Alain De Smedt obtained a Master in Business and Administration at the Solvay Business School (ULB) and a Commercial Engineer Diploma and a Master in Economic and Financial Sciences at the ULB. Pierre Alain De Smedt is currently Director of Belgacom NV/SA, Avis Europe Plc and Alcopa NV. As Non- Executive Director, he is member of various Strategic, Audit, Remuneration and Nomination Committees. Apart from this, Mr Pierre Alain De Smedt is also the Chairman of Febiac, the Belgian Automobile Federation. Tom Debusschere Comm. V Tom Debusschere (1967) Tom Debusschere is a Civil Engineer in electro-mechanics with an additional postgraduate degree in Industrial Engineering. He started his career in 1992 as Logistics Manager at Deceuninck. Starting in 1995, he worked for nine years at Deceuninck North America, where he became Vice President Operations. In 2004, he moved to the Belgian Unilin Group (part of Mohawk Industries, USA) as General Manager of Unilin Decor, a supplier for the furniture industry. He was appointed VP Marketing & Sales of Deceuninck on 1 st December He was appointed CEO of Deceuninck by the Board of Directors on 6 th February Arnold Deceuninck (1950) Arnold Deceuninck obtained a Bachelor in accounting and business management. Arnold Deceuninck is currently a Non-Executive director of Didak Injection NV, Deceuninck Auto s NV, Edero BVBA, Hunter & Colman NV and is the Director of R.A.M. Comm. VA. T.R.D. Comm. VA Willy Deceuninck (1944) Willy Deceuninck obtained a diploma in Economics from the middle school, the Franciscus Exaverius Instituut in Bruges. Willy Deceuninck, the permanent representative of T.R.D. Comm. VA, is currently Director of T.R.D. Comm. VA, Deceuninck Auto s NV, De Palingbeek CV, Holim NV, Hoedec NV, Heating Service NV, Binder NV, CBS Invest NV and D-Hotel NV and is manager of Edero BVBA. François Gillet (1960) François Gillet obtained a Master in Business and Administration at the Leuven Management School (IAG). François Gillet is currently Directeur of Sofina NV, a financial holding Company. As representative of Sofina NV, Mr François Gillet also holds functions as Non-Executive Director in various companies that own stakes in Sofina NV and in Emakina Group NV. Sophie Malarme-Lecloux Sophie Malarme-Lecloux obtained a Master in Business and Administration at the Solvay Business School (ULB) in Sophie Malarme-Lecloux currently holds the function of Onderdirecteur of Sofina NV, a financial holding Company. Mrs. Sophie Malarme-Lecloux, as representative of Sofina NV, performes functions such as Non-Executive Director in various companies that hold stakes in Sofina NV. Clement De Meersman (1951) Clement De Meersman (former CEO of Deceuninck) graduated as a Civil Engineer in Electro mechanics from the Belgian Catholic University of Leuven and completed his studies with a Doctorate in Applied Sciences. Mr Clement De Meersman is currently director of Elia Asset NV, Elia System Operator NV, Roularta NV, Koramic Industries NV, ANL NV, Smartroof NV and Plasticvision V.Z.W.. Deceuninck > annual report 2009 > 18

19 Beebo Gerhard Rooze (1955) Gerhard Rooze holds a degree of Commercial Engineer from the Vrije Universiteit Brussels (Solvay Business School). As well as his University Degree, he participated to the cycle of the Centre Interuniversitaire d analyse Financière (1986) and attended various Fiscal and Legal training cycles in different specialized business schools, universities and professional organisations. Gerhard Rooze is currently Director of Degroof Corporate Finance NV and Degroof Structured Finance NV. Mr Gerhard Rooze is also Non-Executive Director in several related associations and companies of Bank Degroof. HBM Consult BVBA - Herwig Bamelis (1938) Herwig Bamelis holds a Master in Applied Economics from the Universitaire Faculteiten, St-Ignatius, Antwerp ( UFSIA ). Mr Herwig Bamelis currently does not hold any other Director mandates. Marcel Klepfisch (1951) Marcel Klepfisch graduated as Commercial Engineer from the University of Antwerp. He has extensive experience in crisis management and performed the function of Chief Restructuring Officer at Deceuninck NV until October He was Chief Executive Officer at Ilford Imaging, member of the Executive Committee at Vickers Plc and CFO of BTR Power Drives. He is currently a member of the Board of Directors of Nybron Flooring International in Switzerland, member of the Audit Committee and of the Strategic Committee. All Independent Directors comply with the criteria stipulated in article 526ter and 524, 3 (old) of the Belgian Company s Code. Committees In order to be able to fulfil its tasks and responsibilities efficiently, the Board of Directors has set up specialised Committees to analyse specific matters and to advise the Board of Directors. The Board of Directors has currently set up an Audit Committee and a Remuneration- and Nomination Committee. The role of these Committees is purely advisory. The ultimate decision-making power lies with the Board of Directors. The Board of Directors shall ensure that all members of each Committee have the specific knowledge and skills necessary for the Committees to operate in the best possible way. The Board of Directors determines the assignments of each Committee with respect to the organisation, procedures, policies and activities of the Committee. The role, duties and composition of these Committees have been established in the Company s articles of association and the Company s Corporate Governance Charter. Audit Committee The Board of Directors has set up an Audit Committee. Gerhard Rooze is the current Chairman of the Audit Committee. The Audit Committee will among others, assist the Board of Directors, where appropriate through audit assignments carried out by the internal auditor such as: monitor audit activities, along with the systematic checking of files presented by the auditor; assess the reliability of financial information; supervise the internal audit system; and control of the accounts and the budget. The Audit Committee is the most important link between the internal auditor and the external Auditor. The Committee assesses the internal control systems and risk management established by the Deceuninck > annual report 2009 > 19

20 Zendow Executive Team at least once a year to ascertain that the main risks (including the risks relating to compliance with existing legislation and regulations) are correctly identified, managed and that the Company s Board of directors have been informed about it. The Committee makes recommendations regarding the appointment and dismissal of the internal auditor, plans internal audit activities and prepares the internal audit budget. The Audit Committee makes recommendations to the Company s Board of Directors relating to the selection, appointment, and reappointment of the external auditor and the terms of his or her appointment. The Audit Committee consists of at least three Non-Executive Directors. At least a majority of its members are independent. The Chairman of the Board of Directors is not the Chairman of the Audit Committee. Members of the Audit Committee appoint one of its members to act as Chairman of the Audit Committee. The Audit Committee meets as often as required for it to function properly, but always at least three times a year. Meetings are generally convened by the Chairman of the Audit Committee, although any member may convene the Committee. The quorum for presence for the Committee is two members and decisions are taken with simple majority. The Chairman of the Board of Directors may at all times attend a meeting of the Audit Committee. The Audit Committee invites the CEO, CFO, internal or external auditor to attend its meetings. The Audit Committee annually assesses its own rules and effectiveness and formulates recommendations for the Board of Directors. The Audit Committee currently comprises the following Directors: Gerhard Rooze, Pierre Alain De Smedt, Willy Deceuninck, Clement De Meersman and Marcel Klepfisch. All members are Non-Executive Directors. Pierre Alain De Smedt is an Independent Director complying with the criteria set out in article 526ter of the Belgian Code on Companies. He has been appointed by the General Meeting of 12 th May His expertise in the field of accounting and audit is shown by his education and professional experience. Furthermore, Mr De Smedt is a Director in a number of companies and besides he is member of several Audit Committees. The Audit Committee convened four times during All members were present at the meetings held on 13 th August 2009 and 27 th October Mr Clement De Meersman was excused from the meeting held on 26 th June Remuneration- and Nomination Committee The Board of Directors has set up a Remuneration and Nomination Committee. The Remuneration and Nomination Committee makes recommendations to the Board of Directors relating to: The remuneration policy and the remuneration of the Directors and the Executive Team; and The policy relating to the nomination of Directors and members of the Executive Team. The Remuneration and Nomination Committee consists of at least three Directors, who are in principle Non-Executive Directors, and the majority of its members is independent. The Remuneration and Nomination Committee meets as often as necessary for the proper execution of its function, but always at least two times a year. Meetings are generally convened by the Chairman of the Remuneration and Nomination Committee, although any member may convene the Committee. The quorum for the Committee is two members and decisions are taken with simple majority. A report is sent to the Board of Directors after every meeting. The Remuneration- and Nomination Committee currently consists of the following Directors: HBM Consult BVBA, with permanent representative Deceuninck > annual report 2009 > 20

21 Executive team. From left to right: Michael Stöger, Philippe Maeckelberghe, Paul Van Wambeke, Bruno Deboutte, Tom Debusschere, Ann Bataillie, Bernard Vanderper, Stephan Coester, Lieven Vandendriessche Mr Herwig Bamelis, Chairman, Mr Pierre Alain De Smedt, Mr Arnold Deceuninck and Mr François Gillet. The Committee convened five times during All members were present at all the meetings of the Committee. During the past financial year, the Committee, in consultation with the management, closely analysed the rules for the incentive policy and the performance and development policy and worked out the guidelines for the implementation of these policies. The purpose of the incentive policy of the Company is to ensure the success of the Company. It is in the interest of the shareholders that the staff members achieve their individual goals. For this reason, the contribution to the development of the activities and the results of the Group form a significant part of the remuneration policy. The remuneration policy equally aims to attract, to maintain and to motivate competent and skilled persons. For this reason, the size of the remuneration is determined based on the individual tasks and responsibilities. Apart from the fixed remuneration, the members of the Executive Team can also receive a variable remuneration. This variable remuneration is linked to the results of the Company on the one hand and to the individual achievements on the other. The results of the Company are based on the following criteria: the net profit and the EBITDA of the past financial year. These criteria are evaluated by the Remuneration- and Nomination Committee annually, and changed when necessary. A certain percentage of the variable remuneration depends on the published operational results and a certain percentage of the variable remuneration depends on the achievement of individual performance criteria. Options and/or warrants on shares of the Company are also offered to the members of the Executive Team. The Remuneration and Nomination Committee tests the market competitiveness of remuneration regularly. The Executive Team The Executive Team is not an Executive Committee in the sense of article 524bis of the Belgian Code on Companies. The task of the Executive Team is to guide the board of the Company and to assist the CEO to carry out other responsibilities delegated by the Board of Directors to the CEO in accordance with the values, strategies, policies, plans and budgets established by the Board of Directors. The Executive Team meets as often as necessary for the proper execution of its function, but always at least once a week. Meetings are generally convened by the CEO, although any member may convene this Team. The Committee s quorum is half of the members. The Chairman of the Board of Directors may attend any meeting of the Executive Team. A report is sent to the Chairman of the Board of Directors after each meeting. The Executive Team currently consists of the following persons: Tom Debusschere Comm. V, CEO, Chairman of the Executive Team Ann Bataillie, General Counsel, Secretary of the Board of Directors Stephan Coester, Director Marketing and General Manager Inoutic / Deceuninck GmbH (Germany) Bruno Deboutte, Director Central & Eastern Europe Philippe Maeckelberghe, CFO Deceuninck > annual report 2009 > 21

22 Inoutic Elite Michael Stöger, Director Technology Lieven Vandendriessche, Director Operations Bernard Vanderper, Director North West Europe, General Manager Benelux and Deceuninck Ltd. (UK) Paul Van Wambeke, Director South West Europe and General Manager Deceuninck SAS (France) The tasks, operation and composition of the Executive Team include: The daily management of the Group; Assistance to the CEO in the daily management of the Group and in the execution of his other responsibilities; Proposal of the Company s strategy and the implementation of the strategic plan as approved by the Board of Directors with due regard for the values, risk appetite and main policies of the Group; The preparation of complete, timely, accurate and reliable consolidated annual accounts of the Group, in accordance with the Group s accounting principles and policies; Provide to the Board of Directors in time all the information (such as the provision of a balanced and comprehensible assessment of the Group s financial situation) to enable the Board of Directors to fulfil its obligations; Report about its actions and responsibilities to the Board of Directors; Establish the required internal control measures, in order to monitor the compliance with the legislation and regulations applicable to the Group; Fulfill other assignments and tasks that the Board of Directors entrusts to the Executive Team in specific cases. Remuneration report Remuneration policy and specification of the remuneration level for Non-Executive Directors Non-Executive Directors receive a fixed amount as remuneration for the execution of their mandate increased by a fixed amount per board meeting, limited to a maximum amount. Performance based remuneration such as bonuses, share-related incentive programs, fringe benefits are excluded. The size of the remuneration for the Chairman, the Vice-Chairman and other Non-Executive Directors vary. If the Non-Executive Directors are also members of a Committee, this remuneration will be increased by a fixed amount per meeting of the particular Committee. The Company and its subsidiaries do not provide any personal loans, guarantees and such to the members of the Board of Directors or the Executive Team. The Directors charged with special tasks and projects receive an appropriate remuneration for those activities. The remuneration of the Directors is approved by the General Meeting of Shareholders. No termination compensation is provided for Non-Executive Directors. Remuneration policy and specification of the remuneration level for the CEO and the members of the Executive Team The remuneration policy strives to attract, maintain and motivate competent and professional emplo - yees. For this reason, the size of the remuneration is determined in proportion to the individual tasks and responsibilities. The contributions made by the Executive Team members to the development of the activities and the results of the Group form an important part of the remuneration policy. Apart from the fixed remuneration, the members of the Executive Team receive a variable remuneration Deceuninck > annual report 2009 > 22

23 Twins n -Terrace that is linked to the result of the Company and the individual performance as described above. The members of the Executive Team also have a company car at their disposal and they are covered by a Group insurance plan. The Remuneration and Nomination Committee assesses the total remuneration paid to the Executive Team members annually. As payment for his services as Executive Director, CEO and Chairman of the Executive Team, the Executive Director receives: a fixed remuneration, a variable remuneration or bonus according to the criteria mentioned above, and, a contribution towards insurances and pension, certain fringe benefits and share options and warrants. Remuneration of the Board of Directors in 2009 The total remuneration of the members of the Board of Directors, with the exception of the executive Director, amounted to 880,000 euros. This amount includes additional remuneration granted to Directors for their presence at Committees to which they belong and special remuneration paid to Directors responsible for specific assignments. This remuneration is awarded by the General Shareholders Meeting and is registered as a general cost. During 2009 the Company or any affiliated Company of the Group granted no advances or loans to any of the Directors, nor are there any outstanding repayments owed by the Directors to the Company or any affiliated Company of the Group. Remuneration of members of the Executive Team in 2009 Members of the Executive Team (as on 31 st December 2009) received a remuneration of euros, this amount includes a variable remuneration of 11.3%. This variable remuneration is based on personal performance and achievements in individual areas of responsibility. The retirement allowance amounted to 184,119 euros and consists of an approved contribution procedure to an external insurance Company. The Board of Directors annually approves a share option plan where options to existing Deceuninck shares are granted to the Executive Directors and to the members of the Executive Team. The Extraordinary General Meeting held on October 2006 approved an option plan for existing shares whereby the Board of Directors is given the authority to approve option plans (total maximum 75,000 options) annually. The Board of Directors approved the issuance of 550,000 warrants within the authorised capital (warrant plan 2009) at the end of The Extraordinary General Meeting has approved an additional warrant plan for the issuance of 1,000,000 warrants (warrant plan 2010). The warrants are offered free and may only be exercised from the third year following the offering of these options or warrants. The warrants can be exercised as follows: 1/3 released to be exercised after 3 full calendar years to the end of the exercise period; 1/3 released to be exercised after 4 full calendar years to the end of the exercise period; 1/3 released to be exercised after 5 full calendar years to the end of the exercise period; The warrants are offered according to the provisions stipulated in the law of 26 th March 1999 concerning the Belgian action plan for job opportunities The exercise of warrants could lead to an increase in capital unless the Board of Directors decide to distribute the shares that were bought by the Company. The Board of Directors will evaluate the granting of options and warrants annually, after receiving the re- Deceuninck > annual report 2009 > 23