Etexco Interim Management Rapport 2013

Etexco
Avenue de Tervueren - Tervurenlaan 361
1150 Brussels
Numéro d’entreprise : 0860 004 176
Interim Management Report 30 August 2013
(Regulated Information)
Introduction
Etexco SA/NV (“Etexco”) is incorporated and domiciled in Belgium. It is a direct and indirect
subsidiary of Etex SA/NV (“Etex”), the parent company of a number of subsidiaries (the
“group”) that manufacture and sell building materials. The group is active in 45 countries,
employs about 18,000 persons, and had a turnover in 2012 of 3.168 billion euro.
Until 2012, Etexco was the sole group company providing financing to other affiliated
companies, through a syndicated loan arranged by international banks. It also developed
hedging activities, including currency swaps. In 2012, Etex decided to diversify its finance
sources. One element of this programme was the issue by Etexco on 6 September 2012 of a
corporate bond listed on NYSE Euronext Brussels. The issue price was 101.00 % with a
5.00 % fixed rate bond. The bond issue raised 400 million euro and the funds were fully used
to partly repay the syndicate of banks.
Half Year Results
The revenues and expenses of Etexco are purely financial as it does not have sales
activities.
Interest income in the first six months of 2013 increased by 6.6 % to 35,680,259.20 euro.
Interest expense increased during the same period by 34.0 % to 26,106,795.11 euro. After
deduction of the net operating result (-746,119.28 euro), the profit before taxes amounts to
9,237,290.84 euro. Operating expenses amounted to 819,717.45 euro.
Unaudited Half Year Results
The half year results have not been audited by the statutory auditor.
Half Year Activities
After diversifying its finance sources in 2012, Etex decided to split the group’s financial
activities between several companies. Consequently, Etexco can now focus on its core
business : providing medium-term financing to and accepting medium-term deposits from
companies of the group in euro only.
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As a result, Etexco dissolved its notional cash pools in Belgium and The Netherlands, and
stopped providing working capital credit lines to the group’s subsidiaries. A consequence of
this has been that Etexco reduced its balance sheet by approximately 73 million euro.
Additionally, on 30 June 2013, Etexco reduced its currency exposure, which resulted from
loans and deposits denominated in foreign currencies, by 145 million euro. The remaining
currency activities are managed by Etexco on a one-to-one basis. Currency exposures of
group companies are taken on the Etexco balance sheet, but are immediately hedged with
Etexco banking partners.
By focussing on its core business, Etexco reduced the amount of its finance activities and
earnings, while maintaining its overall profitability.
Next Six Months
Etexco will continue to provide medium-term financings to group companies and will accept
medium-term deposits from group subsidiaries, in euro exclusively.
Due to the reduced activities in cash pooling, Etexco has reduced its operating expenses. By
transferring all loans and deposits denominated in foreign currencies to another group
company, Etexco has also improved its risk profile. This should enhance the overall
performance of Etexco in the future.
In June 2013, the US Federal Reserve announced that it will progressively abandon its
friendly monetary policy, consisting of massive purchasing of US Treasury notes to inject
cash into the economy. This announcement immediately provoked a strong and rapid
increase in interest rates. Due to the effects of the economic crisis, still present in many parts
of the world, as well as the volatility of interest rates, it is difficult for Etexco to give a financial
forecast for the next six months. However, thanks to a hedging programme developed by the
group, the impact of exchange rate and interest rate fluctuations may remain limited.
Statements
To our knowledge, the semi-annual accounts have been prepared according to applicable
accounting rules and give a fair and true view of the assets, liabilities and revenues of
Etexco, and the Interim Management Report contains a faithful and complete disclosure of
any relevant information required to be disclosed.
Karel De Wilde
Director
J. Alfons Peeters
Director
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