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1Presentation of the groupPresentation of SequanaArjowiggins Graphic currently boasts the market’s largest ecofriendlyoffering, comprising a unique range of white and naturalrecycled papers and eco-friendly papers mixing FSC®-certifiedrecycled and virgin fibres. Sales growth in this segment in 2012confirms companies’ interest in eco-friendly products that fit withtheir sustainable development approach.In 2012, Arjowiggins Graphic continued its innovation efforts,cementing its leadership in recycled and eco-friendly papers. Newoffice and digital printing papers were marketed and sold and anew digital offering developed, due to be launched in 2013. Thiswill be the first recycled full colour coated inkjet paper designedfor direct marketing, publishing and personalised promotionalapplications (texts, images, data). The new product will roundout Arjowiggins Graphic’s range of recycled papers specificallydesigned for digital colour printing and suited to all machinesused by major manufacturers, from printing platforms such asHP Indigo and digital dry-toner web presses to more traditionaloffset presses.Arjowiggins Graphic’s green strategy is highlighted in innovative,award-winning marketing campaigns. The division wasa shortlisted in the “Promotional Campaign of the Year” categoryat the 2012 Pulp & Paper International Awards (PPI) for itsCocoon ads. Cocoon is 100%-recycled paper designed for printers,designers and major companies, and the campaign showcasedthe product’s strong green credentials.Arjowiggins Graphic came top of WWF’s most recent PaperCompany Index, a ranking of 19 paper producers based ontheir overall carbon footprint. It scored 73.86%, the best in the“Graphic paper” category, confirming the division’s leadership inthe use of recycled fibres for these papers.Robust growth of specialty businessesSpecialty businesses reported robust growth in 2012, driven bythe launch of new innovative products.In the laminated segment, sales were buoyed by the successof Sequoia, a laminated paper for gift, loyalty and SIM cardslaunched in 2011. Since it is biodegradable and compostable,Sequoia represents a real alternative to plastic, and in 2012 wasused in new visual communication (POS advertising, displays,etc.) and printing (calendars, brochures, etc.) applications.On the sublimation print market which includes embellishingtextiles and objects (skis, mouse pads, etc.), a new adhesive productfor stretch textiles was launched in 2012 within the Sublimagerange and showcased at two international trade fairs (Fespa andSGIA). The entire Sublimage range is certified FSC® and Oekotex®,which guarantees that it contains no substances harmfulto humans or the environment. These achievements cementArjowiggins Graphic’s position as a leading player on this market.Innovation efforts were also in evidence when the divisionlaunched a new sparkling tissue in its range of Kaleïdo colour tissuesused for tablecloths, mats and napkins. Technical innovationin four-glued ply tissue which was launched in 2011 continuedapace, and the technology was extended to new applications forprinted handkerchiefs and napkins.Business was particularly brisk in the healthcare segment,boosted by the success of Sterimed which was launched in 2011and is used by hospitals for disposable medical instruments andsterilised packaging solutions. Arjowiggins Healthcare continuedwith its innovation efforts in this segment, and at the Medicatrade show in November unveiled the first packaging solutionwith authentication features designed to protect against counterfeitingand illicit trading. An active communications policy(newsletters, attendance at different trade shows) also raised itsprofile among manufacturers of medical instruments. In the hospitalsegment, ArjoGreenTM, the first biodegradable solutionmarketed for sterilised wraps, enjoyed strong demand. As concreteproof of these sustainable development efforts, ArjowigginsHealthcare was certified FSC® in 2012. A new product was alsolaunched in the Sterisheet range: ArjoMarker is a marker thatuses special ink to indicate sterilisation.Further productivity gainsAmid a structural decline in the European market for graphicpapers and the resulting overcapacity in the industry, adjustingplant capacity is a priority for Arjowiggins Graphic. Exacerbatedby the economic crisis in Europe, this situation led the divisionto close its Dalum Papir A/S plant in Denmark at the end ofNovember. Arjowiggins Graphic is therefore sharpening its competitiveedge by better managing capacity to ensure that its plantsoperate efficiently at the lowest possible cost and with a utilisationrate of above 90%.Thanks to the flexibility of its production facilities, all productionat sites shut down (representing 103,000 tonnes) was able tobe transferred to Arjowiggins Graphic’s three plants in France.The division continues to manufacture products for its recycledpaper ranges Cyclus and RePrint Deluxe, enabling clients tocontinue benefiting from the division’s high quality and serviceexcellence.To meet the growing demand for premium recycled pulp bothfrom its own plants and from external customers, ArjowigginsGraphic has undertaken investments to expand the capacityof its Greenfield site in France. Greenfield produces white andextra-white deinked pulp, which is used mainly in premiumwhite recycled paper for the printing and writing industries. Thisinvestment increased the plant’s capacity from 125,000 tonnes to150,000 tonnes at end-2012.In the healthcare segment, an active investment policy has helpedto upgrade plants and equipment, thereby increasing capacity,productivity and efficiency. In the future, the division will thereforebe able to develop high value-added products for the medicaland hospital sector. Work also continued on the two biomassheaters at the Palalda plant in France, and these are expected tocome into service in October 2013. The use of biomass instead offossil fuels will prevent 21,000 tonnes of CO 2being released intothe atmosphere each year.Key figures - Graphic division(€ millions) 2012 2011Sales 569 581EBITDA 14 2Recurring operating income (loss) (6) (20)Operating margin -1.2% -3.5%36 | Sequana | 2012 Document de référence (English version)