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Presentation of the groupPresentation of Sequana 1Continue to improve operating performanceand maximise cash flow generationIn both of its businesses, the Group strives to protect its margins byincreasing selling prices and boosting profitability. Arjowigginsis a moderate-sized player in the graphic papers segment and thisprevents it from setting prices. In light of the fraught market conditionsprevailing in 2011 and 2012, the Group was unable toimplement planned price increases. These are crucial to Sequana’soverall profitability and remain a priority for management, whointend to continue implementing a strict pricing policy.Over the past few years, Sequana has strengthened commercialties between Antalis and the Arjowiggins’ Graphic and CreativePapers divisions. This has enabled an increasing number of synergiesto be unlocked between these businesses. It has also producedtangible benefits in terms of marketing, business andproduct development and service quality. These initiatives havealso helped optimise Arjowiggins’ industrial capacities and generatedsignificant cost savings by improving the supply chain,reducing delivery lead times and managing working capital moreefficiently (just-in-time inventory management).Amid efforts to accelerate growth and cement positions in themost dynamic and profitable segments of both businesses,Sequana has focused on cutting costs, particularly on its mostmature markets, with the aim of maximising margins and cashflow generation. Arjowiggins constantly strives to match its productioncapacity to market demand and in 2012 it shut down apaper machine in the UK and closed two plants in Denmark andArgentina. These measures provide enhanced capacity managementas well as cutting overheads.Faced with a tough overall sales environment over the past fewyears, the Group has sought to generate cash flows throughthe combination of strict working capital management and thedivestment of non-core assets at both Antalis (Promotional productsand Office supplies) and Arjowiggins (Carbonless paper,Decor paper Asia, Decor and Abrasive papers, and the Moulindu Roy plant) to give it the necessary financial clout to bolster itsleadership in selected businesses and reduce net debt.Continue to prioritise product innovationand customer serviceSequana believes that customer service is vital in creating valueand constantly endeavours to meet the demands and expectationsof its customers across its business spectrum.On the distribution side, the RACE 2012 programme – the planto overhaul Antalis’ sales structure – places customer excellenceat the heart of all business systems. The programme has beenrolled out over the past three years to all of the countries in whichAntalis does business and it was finalised during the year. It aimsto leverage Antalis’ supplier expertise, distribution network andthe breadth of its product and service offering.Arjowiggins continues its innovation drive in all of its divisions,which each have their own R&D department. The Group willcontinue to improve customer relations by promoting new products,developing new applications using its superior technologicalcapability and optimising product quality and reliability.Monitor growth opportunities and play a partin market consolidation through mergers,acquisitions and divestmentsThe Group’s long-term strategy is to refocus on distribution, inparticular through acquisitions in the distribution of visual communicationand packaging products while strengthening its leadingpositions on selected specialty paper production segments.Sequana also intends to play a role in the consolidation of theproduction sector through mergers, acquisitions and disposalsin order to carve out leading positions for businesses on theirrespective markets. This was the logic behind the 2011 sale of theDecor and Abrasive businesses based at its Arches (France) andDettingen (Germany) plants. However, the Group continues toensure that its activities deliver strong operating performancesand that any transactions in which they are involved reflect theirstrategic value.Sequana | 2012 Document de référence (English version) | 9