Half year financial report 30 June 2011
Activity report p. 2
Summary of the half-year consolidated financial report p. 10
Statement of the person responsible for the half-year report p. 34
Auditors' report on the half-year financial reporting p. 35
1 Activity report
SUMMARY OF RESULTS
. Operating income: €134 million, up 17% thanks to the continued growth of the results in transport and logistics, and improved results from other activities (industry, media, telecommunications, plantations, holdings), despite the high spending on electricity storage (batteries, supercapacitors, electric vehicles).
. Net profit: €232 million, up 22%, including a gain of €141 million on the sale of Vallourec shares. The first half of 2010 benefited from a significant reversal of provisions on Havas (€85 million).
. Net earnings, group share: €213 million, up 29%.
. Ratio of net debt to equity improving, now at 39% as against 44% at end 2010.
. Interim dividend of 2 euros per share.
CONSOLIDATED RESULTS
In millions of euros 1st half 2009 1st half 2010 1st half 2011 Turnover 2,952 3,292 4,032 +22% Ebitda 157 200 220 Operating income 85 114 134 +17% Net financial income (17) (20) 121 Share in the net income of affiliated companies 34 146 41 Taxes (35) (50) (64) Income from activities held for sale (9) - - Net income 57 190 232 +22 % of which group share 42 165 213 +29 %
. Strong growth in net profit achieved thanks to: - the smooth running of the Group, whose operating income increased by 17% to €134 million, - the capital gain of €141 million on the sale of the 3.5% stake in Vallourec.
. The income for the first half of 2010 benefited from a significant reversal of provisions on Havas shares (€85 million).
BALANCE SHEET, PORTFOLIO, LIQUIDITY
In millions of euros 31 December 2009 31 December 2010 30 June 2011 Shareholders’ equity 3,076 4,035 4,322 of which group share 2,844 3,736 4,025 Net debt 1,317 1 760 1 672 Net debt/equity ratio 0,43 0,44 0,39 Market value of the portfolio of 1 448 2 208 1 953 listed securities(1) (1) detail on page 8
. Shareholders' equity increased by €287 million compared with 31 December 2010 due to good results and higher stock prices.
. Net indebtedness fell by €88 million in the first half, given the sale of Vallourec shares for €275 million, partially offset by increased investments and acquisitions.
. Market value of the portfolio of listed securities (Vallourec, Havas, Aegis, Mediobanca, Socfinal, Socfinasia, etc.) €1,953 million at 30 June 2011.
. Group's liquidity greatly increased: more than €1.5 billion available and confirmed, strongly up as a result of the sale of part of the Vallourec shares and the bond issue by Bolloré in the first half of 2011 (€350 million).
2
TURNOVER
In millions of euros 1st half 2010 1st half 2011 Change Change at constant scope and exchange rates Transport and Logistics 2,196 2,335 +6% +8 % Fuel distribution 922 1,477 +60% +22 % Industry 99 112 +14% +16 % Media, telecommunications, 75 108 +45% + 37 % plantations, holdings Turnover 3,292 4,032 +22% + 13 %
. Growth in turnover of 13% in the first half of 2011 at constant scope and exchange rates, driven by higher volumes transported in the world, rising oil prices, the good performance of industrial activities and significant growth in media advertising income and plantation sales.
. In gross data, the increase reached 22%, due mainly to the incorporation of LCN (Les Combustibles de Normandie), from 1st February 2011.
OPERATING INCOME BY BUSINESS
In millions of euros 1st half 2010 1st half 2011 Transport and Logistics 172 185 Fuel distribution 13 10 185 195 Industry (40) (33) Media, telecommunications, plantations, (31) (28) holdings Operating income 114 134
. Operating income up 17%:
- Transport and Logistics: continued earnings growth despite events in the Ivory Coast which affected the first half, - Fuel distribution: a first half marked by unusually mild temperatures, - Industry: good performance, thanks to the improvement of the results from IER and plastic films, but the development costs involved in electricity storage (batteries, supercapacitors, electric vehicles) also remained very high, - Other activities benefited from the improved performance of plantations and the growth of advertising revenue in the media.
FINANCIAL INCOME
In millions of euros 1st half 2010 1st half 2011 Dividends and income from investment 6 13 securities Net cost of financing (19) (28) Other financial and income expenses (7) 136 Net financial income (20) 121
Increase of financial income, which includes:
. an increase in dividends received, mainly due to the deconsolidation of Aegis in July 2010, dividends from which are now posted in non-trading income,
. an increase in the cost of financing due to higher average borrowings compared to the first half of 2010 higher interest, rates and higher cost of new financing,
. the capital gain of €141 million on the sale of the 3.5% stake in Vallourec.
3
SHARE IN NET EARNINGS OF AFFILIATED COMPANIES
In millions of euros 1st half 2010 1st half 2011
Share in net income of affiliated 146 41 companies
. The share in net income of affiliated companies has been boosted by good results from Havas (contributing to the income of €15 million) and plantations (€27 million).
. In the first half of 2010, income from associated companies enjoyed a particularly important provision reversal regarding Havas (€85 million), the contribution from Aegis and a capital gain of the sales of Socfinaf.
CHANGE IN DEBT
In millions of euros 1st half 2010 1st half 2011
Cash flox gross margin (1) 175 193 Change in working capital requirements (60) (100) (+= decrease) Business net cash flow 115 93
Net capital expenditure (90) (139)
Net non-trading investments (18) 234
Dividends paid (40) (43)
Net financial costs paid (17) (22)
Capital increase, change in fair value and other 21 (35) items
Change in net debt (29) 88 (- = increase in net debt) (1) After elimination of capital gains and before financial costs
The change in net debt in the first half of 2011 mainly includes:
. a significant increase in working capital requirements (€100 million after a rise of €60 million in the first half of 2010) in a context of a strong increase in sales of 22%, compared with 12% in the first half of 2010, . Investments in net increase and many non-recurring items: sale of Vallourec securities, taking control of LCN and VEPB, capital gain from the Conakry terminal in Guinea, partial payment of the price for Direct Star, etc.
PARENT – COMPANY EARNINGS –PROPOSED INTERIM DIVIDEND
Parent-company net earnings for first half of 2011: €107 million compared to €165 million in the first half of 2010, which included significant reversals of provisions on Havas and Aegis securities. Distributable profit: €745 million. Proposal to pay a dividend of 2 euros, as in October 2010, i.e. a total amount of €49.6 million
Change in dividends paid
74 M€ (3.00 €)
32 M€ 49.4 M€ 49.6 M€ 27 M€ 27 M€ (1.30 €) (2.00 €) (2.00 €)
18 M€ (1.10 €) (1.10 €)
(0.72 €) 8 M€ (0.36 €)
2005 2006 2007 2008 2009 2010 2011
Interim dividend Total dividend
The coupon detachment date will be 2 September 2011 and the payment will be made on 7 September 2011.
4 ACTIVITIES
TRANSPORT AND LOGISTICS
In millions of euros 1st half 2010 1st half 2011
Turnover 2,196 2,335 +6 %
Operating income 172 185 +8 %
Investments 67 93 +39 %
BOLLORÉ LOGISTICS ONE OF THE WORLD'S LEADERS IN TRANSPORT AND LOGISTICS ORGANIZATION
. Growth in turnover of more than 9% to €1,370 million, thanks to the ongoing recovery in world trade observed since 2010, after the sharp fall of 2009.
. Bolloré Logistics has again benefited from a sharp increase in transport volumes, particularly on the Europe-Asia run and intra- Asia movements.
. The Bolloré Logistics network in Asia takes advantage of the dynamism of China's growth and the satisfactory operation of the platforms in Singapore and Hong Kong in the cosmetics and aerospace industry sectors.
. Good results from operations in France and Europe, especially Britain, Germany and Belgium.
. Satisfactory operation of port handling in France, where investments were made as part of port reform (Dunkirk, Rouen, Nantes, La Rochelle).
BOLLORÉ AFRICA LOGISTICS THE LARGEST INTEGRATED LOGISTICS NETWORK IN AFRICA
. The Group was affected by the shutdown of business in the Ivory Coast for several months during the first half of 2011.
. Despite this, thanks to the diversity of its locations, Bolloré Africa Logistics was able to increase its turnover (up 2.4% to €965 million) and its result over the period.
. This performance can mainly be explained by:
- the dynamism of the port terminals, including the Tin Can, Lagos, in Nigeria which is experiencing very strong growth,
- good results from the main countries of Central Africa, especially Cameroon, Nigeria, Congo, Gabon and Ghana,
- the smooth running of the East African operation, particularly Kenya,
- contribution from the start-up of the new terminals recently won: Freetown in Sierra Leone, Conakry in Guinea.
BOLLORÉ ÉNERGIE SECOND DISTRIBUTOR FOR DOMESTIC FUEL OIL IN FRANCE
In millions of euros 1st half 2010 1st half 2011 Turnover 922 1,477
Operating incomes 13 10
Investments 6 6
. Acquisition in early February 2011 of a 49% stake in LCN (Les Combustibles de Normandie) in order to eventually hold 100%, representing an annual turnover of about €800 million, with a 4 % market share of the heating fuel oil. The acquisition will significantly strengthen the Bolloré Energy network, which now represents about 14% of the French market.
. Revenues from the division rose by 60% with the inclusion of LCN. At constant scope and exchange rates, the increase is 22% mainly due to higher oil prices.
. In France, lower results in distribution due to a particularly mild climate (domestic heating fuel oil decreased by 14%) but good results of the logistics, transport, and warehousing operations.
. In Europe, good results for Cica in Switzerland and Calpam in Germany.
5 INDUSTRY - ELECTRICITY STORAGE AND SOLUTIONS BATTERIES, SUPERCAPACITORS AND ELECTRIC VEHICLES, PLASTIC FILMS, IER - TERMINALS AND SPECIALISED SYSTEMS
In millions of euros 1st half 2010 1st half 2011 Turnover 99 112
Operating incomes (40) (33)
Investments 6 32
Maintaining a high level of expenditure in the electricity storage (electric batteries, supercapacitors and electric vehicles) and large increase in investment in this sector. Signing the Autolib' contract for the system of clean cars in car-sharing in the Ile-de-France, starting on 1st October 2011. Significant improvement in the results from plastic films and IER.
. Increased spending to increase the industrial capacity in battery production. After laying the foundation stone in January 2011, the new battery plant in Brittany will begin production in 2012. With this new plant and that in Canada, also being extended, the aim is to produce 20,000 x 30 kWh batteries and 20,000 x 15 kWh batteries per year by 2013.
. 100% rise in VEPB (Pininfarina Bolloré Electric Vehicle) that will deliver several hundred Bluecar units by the end of 2011.
. Start-up of Autolib' in October 2011 with the provision of about 3,000 Bluecar units within one year, in Paris and the Paris region.
. First deliveries in September 2011 of electric buses, Bluebus, products in partnership with Gruau.
. Start of marketing of supercapacitors tested and used by manufacturers of trams and cars.
Plastic films:
. Turnover up 22%, after posting growth of 26% in the first half of 2010.
. Confirmation of the increase in volumes and improved results, especially in films for capacitors, where price increases have occurred to offset the increase in resin prices.
IER: . Turnover up 8% and earnings up compared with recent years, reflecting the recovery in business volumes.
. Self-service and registration: continued growth in turnover particularly in North America in the aviation sector. IER has benefited from the commercial successes of 2010.
. Access Control (Automatic Systems): sustained growth in activity following the completion of major contracts won in the field of European public transport and a good level of activity in North America.
. Automatic Identification: business growth through winning major projects particularly in the logistics sector and prospects for new RFID markets in distribution.
6
PLANTATIONS
Very good results from plantations that have benefited from the sharp rise in the price of palm oil (33% compared to the average of the first half of 2010) and especially rubber (45%).
. Safa Cameroun (8,800 hectares of rubber trees and oil palms): increase of 42% in turnover to €15.1 million, due to the sharp rise in the selling prices of rubber and increased production. Net income reached €6.9 million, in accordance with IAS 41, compared with €6.2 million in the first half of 2010.
. Groupe Socfin (formerly Socfinal Group) (1): the Group owns approximately 39% of Socfin, which manages 150,000 hectares of plantations in Asia and Africa:
- Socfindo, in Indonesia, (48,000 hectares of oil palms and rubber trees): net earnings €41 million, compared with €33 million in the first half of 2010, up 36%. - Okomu, in Nigeria, (15,300 hectares of oil palms and rubber trees): earnings of €13 million, compared with € 6 million a year earlier, mainly due to the sharp rise in selling prices. - Socapalm (35,100 hectares of oil palms) and Ferme Suisse (refining unit), in Cameroon: net earnings of €11 million euros, compared with €15 million in the first half of 2010. The volume increase was offset by increased tax rates in Cameroon. - Lac, in Liberia, (14,000 hectares of rubber trees): net income sharply up, reaching €9.9 million, compared with €3.7 million in the first half of 2010, thanks to the 78% increase in turnover. Salala(1), in Liberia, (5,000 hectares of rubber trees): Net income turned positive in the first half of 2011, after the takeover by Socfinaf (formerly Intercultures) in 2010. - SOGB, in Ivory Coast, (22,600 hectares of oil palms and rubber trees): Net income doubled to €23 million, compared with €11 million in the first half of 2010, thanks to the sharp increase in selling prices and despite the difficulties in Ivory Coast. SCC: strong earnings growth in the rubber machining business. - Developments: creation of 12,000 hectares of rubber plantations in Cambodia and replanting 5,000 hectares of oil palms in the Democratic Republic of Congo.
. Other agricultural assets :
- American Farms (1): the three farms cover 3,000 hectares. The cultivated farmland (cotton, corn, soy, peanuts) is leased while the pine forests are planted and maintained directly. Rents for first half 2011: 540,000 dollars.
- Vineyards (1): La “Croix” and “La Bastide Blanche” domains accounting, after the acquisition of an additional domain, for an area of 246 hectares including 116 hectares of vineyard rights. Production 2010: 550,000 bottles, an increase of about 40%. Strong increase in sales the first half of 2011 to €1.4 million (+52%) with nearly 300,000 bottles sold.
(1) Corporate data before IFRS adjustments. The Socfinal Group plantations are accounted for by the equity method in Bolloré's financial statements. (2) Included in the consolidation scope in 2010
COMMUNICATION, MEDIA
. Good results from the free press and television division, which now includes Direct Star, and whose advertising revenue rises 63 % to €55 million
• Digital Terrestrial Television: - Direct 8: audience increased sharply, reaching 2.5% today, compared with 2.0% a year earlier, with 45 million viewers per month. - Direct Star: acquisition on 1st September 2010 of Virgin 17 from Lagardère Group. Renamed Direct Star, the chain represents a national audience of 1.4% in June 2011, a marked increase.
• Free Press : - Direct Matin, with its regional editions, became the first newspaper in France with an average circulation of 966,000 (1) in June 2011. In 2010 it recorded the highest growth in the sector and has 1.8 million readers per issue. - New format of the weekly Direct Sport and launch in March 2011 of the women's magazine Direct Femme, thematic variations of Direct Soir each with a distribution of more than 400,000 copies.
. Audiovisual Logistics and Cinema :
• Euro Media Group (2): Bolloré owns 18% of EMG, Europe's leading logistics player for film and television, which posted turnover of 147 million euros in the first half of 2011 (+8%), EBITDA of €18 million against €23 million in the first half of 2010. • The Group owns a nearly 10% stake in Gaumont and also owns the Mac-Mahon cinema in Paris.
(1) Source OJD (2) Equity method
7
. Advertising
• Havas (32.8 %) : - Revenue of €765 million in the first half of 2011, 5.6% organic growth, - Current operating income: €95 million (+13%), Group share of net income: €53 million, up 8%. - New business: €940 million, - Net debt: €105 million at June 30, 2011, compared with €129 million a year earlier, an improvement of 19%.
• Aegis Group Plc (26.2% shareholdings, 26.5% with Bolloré Participations): - Deconsolidation of the stake in July 2010 - Ongoing sale of Synovate for £525 million. Distribution of an extraordinary dividend of £200 million. - Results without Synovate : revenue £519 million, 7.8% organic growth, operating income £55.9 (+51%), Group share of net income: £24.5 million (+68%), net debt £393 million (gearing 58%).
• The Group owns 100% of the CSA Institute of Studies and Surveys (sales of €13 million in the first half of 2011) and an interest of less than 15% in Harris Interactive, an American company specializing in Internet surveys.
. Télécoms
• WiMax : - Bolloré Telecom has 22 regional licenses which provide national coverage; further tests of the pilot sites particularly in the Paris region, in the port of Brest with the National Navy, the marinas on the Cote d'Azur and with local authorities, 220 stations deployed and operated on Bolloré Telecom frequencies. - Cumulative expenditure at this stage: about €130 million, including licensing. • Wifirst: Internet service wireless broadband, especially for student residences. Base of 120,000 rooms installed. Sales of €4.4 million in the first half of 2011, up 48%.
SHAREHOLDINGS
The market value of the portfolio of listed securities of the Bolloré Group amounted to € 1,953 million at 30 June 2011 after the sale of Vallourec shares for € 275 million in the first half (capital gain of €141 million).
Main investments :
. Vallourec (1.7 %): market value of the stake: €169 million. . Havas (1) (32.8 %): market value of the stake: €521 million. . Aegis (26.2 % (2)): market value of the stake: €597 million. . Socfin (1) (38.8 %) - Socfinasia (1) (21.8 %): market value of stakes: €288 million. . Mediobanca (5.1 %), Generali (0.13 %) and Premafin (2.30 %) (3): market value of stakes: €339 million. Mediobanca is the main stake, in which the Group federates together a group of international investors who hold, in the shareholders' agreement, an 11% stake in Mediobanca and have four representatives on the Board of Directors.
EVENTS AFTER CLOSURE OF THE ACCOUNTS AND UPCOMING EVENTS
. Aegis
Framework of sale in the process of Synovate subsidiarie to Ipso, Aegis made a commitment to pay an exceptional 200 million pound of sterling dividend to his shareholders. Bolloré Group should consequently receive approximately 52 million pounds of sterling therefore in participation in Aegis;
. Change in the market price
At August 25, the Paris stock exchange fell by 22% compared to June 30, 2011 in a general decline in global markets. During the same period the value of the portfolio of available for sale of the Group decreased overall by 13%. As shown in ote 26-A, a uniform change of 1% of share price impact leads to 26 million euros on assets held for sale and shareholders’ equity.
Moreover, the diversity of business and investments of the Group should enable it does not anticipate significant change in the overall situation in the second half of 2011.
MAIN RISKS AND UNCERTAINTIES
The main financial risks the Group could be facing in the second half of 2011 are set out in the note 26 in appendix of the consolidated situation interim financial statements.
MAJOR TRANSACTIONS WITH ASSOCIATED PARTIES
The major transactions with associated parties are detailed in the note 24 in appendix of the consolidated interim statements.
(1) Equity method (2) 26.5% with Bolloré Participations (3) Not included 2.73% held by Odet
8 GROUP STRUCTURE As of 30 June 2011
Sofibol 54.6(10)(82.3) 14.9 (0.0) Compagnie du Cambodge** Financière de l'Odet 5.0 (0.0) Société Industrielle et Financière de l'Artois** 4.9 (0.0) Financière Moncey** 18.6* 1.5 (0.0) Nord-Sumatra Investissements ** 0.4 (0.0) Imperial Mediterranean ** 67.4 (77.8) 4.0 (0.0) Société Industrielle et Financière de l'Artois** Bolloré 3.8 (0.0) Nord-Sumatra Investissements ** 3.0 (0.0) Imperial Mediterranean ** 19.2* 2.6 (0.0) Compagnie du Cambodge**
10.7 (2) 63.7(1) 95.0 (1) International logistics Plantations des Terres Rouges Nord-Sumatra (Luxembourg) 2.8* Investissements
22.8 5.0 Transport and logistics in Africa 37.1(1) Compagnie du Cambodge 61.8 64.2 1.1* 4.1(3) Forestière Équatoriale 29.2 (1) 36.7 (Ivory Coast) Energy distribution 15.2 17.2 2.5* Financière Moncey 26,6 3.3 (6) 4.0* 8.9 31.5 48.2 Société des Chemins de Fer Compagnie des 28.6 Société Bordelaise Batteries, Supercapacitors Tramways de Rouen et Tramways du 90.5(1) and electric vehicles Africaine 8.9 42.1 6.0* Var et du Gard 64.6 (5) 14.0 4.6* 37.0 (7) 9.3 Société Industrielle et Financière de l'Artois 1.9 (8) 4.3* 7.3 Plastic films, 52.4 IER 47.6 Socfin (Terminals and specialised 11.5 ex-Socfinal 25,3. (1) systems) (Luxembourg) 12.0 54.7 Communication and media 100.0 32.5 55,5 Compagnie de Compagnie de Financière du Loch 5.0 Socfinasia 16.7 Cornouaille Pleuven (Luxembourg)
100.0 100.0 (4) Advertising, 12.9 Telecommunications Financière de Financière du Perguet 100,0 (1)(9) Imperial Mediterranean 46.8 Safa 28.2 (1) Sainte-Marine 12,06* As a convention, shareholdings of less than 1% are not mentioned % (%) % of capital (% of the votes at the Shareholders' General Meeting) (1) Directly and indirectly through 100%-owned subsidiaries * Percentage of capital outside the Group (2) of which <10.0% by the Compagnie du Cambodge (3) 4.1% by SFA, 98.4%-owned subsidiary of Plantations des Terres Rouges ** Controlled by Bolloré (4) of which 12.0% by Société Industrielle et Financière de l'Artois (5) 64.6% by its 53.4% directly-owned subsidiarySocfrance?? Listed companies (6) 3.3% by Plantations des Terres Rouges (7) 30.2% by the Société Bordelaise Africaine and 6.8% of its 53.4% directly-owned subsidiarySocfrance?? Transport and Logistics (8) 1.9% by Plantations des Terres Rouges (9) Transferred to a subsidiary of Bolloré in August 2010 as part of an internal reclassification of Mediobanca and Generali securities. Energy distribution (10) of which 4.6% by its 99.5% directly-owned subsidiary Compagnie de Guénolé Industry Communication, media, advertising and telecommunications Plantations Shareholdings
CHANGES IN SHARE PRICE
Share price in euros (monthly averages)
9 Summary of the half-year consolidated financial report
Consolidated balance sheet p. 11
Consolidated income statement p. 12
Consolidated comprehensive income p. 13
Consolidated cash flow p. 14
Statement of changes in consolidated equity p. 15
Accounting principles note 1 p. 16
Main changes in reporting entities note 2 p. 18
Comparability of accounts note 3 p. 18
Notes on the balance sheet notes 4 to 18 p. 19
Notes on the income statement notes 19 to 23 p. 27
Other information notes 24 to 27 p. 31
10 CONSOLIDATED BALANCE SHEET
At 06/30/2011 At 12/31/2010 (in thousands of Euros) Notes
Assets
Goodwill 4 1,111,084 1,098,140 Intangible assets 5 -19 240,561 226,099 Tangible assets 6 -19 1,116,908 1,091,769 Equity method investments 7 802,065 802,005 Other financial assets 8 2,912,988 2,632,714 Deferred taxes 38,358 39,253 Other assets 290 312 Non-current assets 6,222,254 5,890,292
Stock and work-in-progress inventory 9 228,222 175,051 Trade notes and accounts receivable 10 1,915,363 1,649,730 Current taxes 111,618 97,585 Other financial assets 8 1,360 325,179 Other assets 36,879 21,277 Cash and cash equivalents 11 514,220 346,878 Current assets 2,807,662 2,615,700
Total assets 9,029,916 8,505,992
Liabilities
Capital 395,630 395,218 Paid-in capital 239,014 235,614 Consolidated reserves 3,390,419 3,104,920 Group share of equity 4,025,063 3,735,752 Non-controlling interests 297,245 299,650 Shareholders' equity 12 4,322,308 4,035,402
Long-term financial debt 16 1,405,201 1,290,613 Provisions for employee benefits 14 102,897 103,867 Other provisions 13 119,307 124,729 Deferred taxes 79,344 69,210 Other liabilities 29,661 19,209 Non-current liabilities 1,736,410 1,607,628
Short-term financial liabilities 16 783,685 820,153 Provisions (portion under one year) 13 27,976 26,416 Trade notes and accounts payable 17 1,886,741 1,716,251 Current taxes 227,034 218,137 Other liabilities 18 45,762 82,005 Current liabilities 2,971,198 2,862,962
Total liabilities 9,029,916 8,505,992
11 CONSOLIDATED INCOME STATEMENT
June 2011 June 2010 December 2010 (in thousands of Euros) Notes
Turnover 19-20-21 4,031,805 3,291,571 7,010,251
Purchases and external charges 21 (3,306,092) (2,616,094) (5,610,597) Salaries and employee benefits 21 (500,854) (472,858) (957,366) Amortization and provisions 21 (86,349) (86,041) (181,298) Other operating income 21 63,100 52,266 114,566 Other operating expenses 21 (67,881) (54,829) (132,229) Operating income 19-20-21 133,729 114,015 243,327
Net cost of financing 22 (28,376) (18,812) (41,182) Other financial income 22 312,256 36,038 112,999 Other financial expenses 22 (162,962) (37,188) (62,765) Financial result 22 120,918 (19,962) 9,052
Affiliate companies' share of results 7 40,811 145,948 199,892 Corporate income tax 23 (63,769) (50,065) (94,498) Net income from continuing operations 231,689 189,936 357,773 Net consolidated income, Group share: 213,000 164,608 316,851 Non-controlling interests 18,689 25,328 40,922
Earnings per share (1) (in Euros): 12
June 2011 June 2010 December 2010 Group share of net income: - basic 9.96 7.70 14.81 - diluted 9.89 7.70 14.81 (1) Excluding treasury shares
12 CONSOLIDATED COMPREHENSIVE INCOME
June 2011 June 2010 December 2010 (in thousands of Euros)
Net consolidated income in period 231,689 189,936 357,773
Other items of comprehensive income (net of tax) Changes in conversion reserves from controlled entities (25,370) 49,401 28,621 Changes in the fair value of controlled entities' financial instruments 143,482 270,578 575,601 Other changes in comprehensive income (1) (17,993) 61,710 52,855
Comprehensive income 331,808 571,625 1,014,850
Including: - Group share 304,021 529,309 945,195 - Minority interests' share 27,787 42,316 69,655
including tax on the fair value of financial instruments (268) (655) (173)
(1) Changes in comprehensive income from equity method investments (including conversion: -19.7 million Euros at 30 June 2011, 62.4 million Euros at 30 June 2010 and 50.9 million Euros at 31 December 2010).
The sale of the Vallourec shares sold ultimately resulted in income to resume June 30 2011 an amount of 140.8 million euros in revaluation reserves.
13 CONSOLIDATED CASH FLOW STATEMENT
June 2011 June 2010 December 2010 (in thousands of Euros)
Cash flows from operations
Group's share of net income 213,000 164,608 316,851
Minority interests' share 18,689 25,328 40,922
Consolidated net income 231,689 189,936 357,773
Expenses and income not affecting cash flow: - elimination of amortisation and provisions 86,159 66,045 179,326 - elimination of change in deferred taxes 5,885 6,108 (1,677) - other income and expenses not affecting cash flow or related to operations (38,483) (136,779) (191,604) - elimination of capital gains or losses upon disposals (140,571) (1,013) (38,233)
Other restatements: - Net finance expenses 28,377 18,812 41,182 - Income from dividends received (13,141) (6,297) (17,086) - Corporation income tax charges 61,830 62,062 103,736
Dividends received: - Dividends received from equity affiliates 19,944 19,505 42,159 - Dividends received from non-consolidated companies 3,791 6,190 13,272
Taxes on companies paid out (52,988) (51,240) (92,200)
Effect the of change in working capital requirements: (99,689) 59,936 (91,203) - of which stock and work-in-progress (18,166) (25,640) (17,504) - of which payables 163,918 50,873 71,143 - of which receivables (245,441) (85,169) (144,842)
Net cash flows from ongoing operations 92,803 115,419 305,445
Cash flow from investment activities
Disbursement:
- tangible fixed assets (124,147) (84,751) (196,194)
- intangible fixed assets (28,914) (7,758) (23,133) - securities and other financial fixed assets (27,917) (20,251) (31,022)
Income from disposal of assets: - tangible fixed assets 13,807 2,252 9,091 - intangible fixed assets 93 74 2,164 - securities 275,427 1,464 1,972 - other financial fixed assets 2,067 1,344 9,953 Effect of changes in scope on cash flow (39,445) 7,073 (391,923)
Net cash flows from investments 70,971 (100,553) (619,092)
Cash flow from financing activities
Disbursements:
- dividends paid to parent company shareholders (21,401) (27,809) (70,590) - dividends paid to minority shareholders net of distribution tax (21,860) (12,363) (24,352)
- financial debt repaid (571,153) (186,718) (258,844)
Income: - increase in shareholders' equity 3,023 3,070 3,095
- investment subsidies 00 0 - increase in financial debt 818,530 192,575 306,147
Net interest paid (22,125) (17,664) (40,942)
Net cash flows from financing activities 185,014 (48,909) (85,486)
Effect of exchange rate fluctuations (6,771) 17,592 9,426
Cash flows 342,017 (16,451) (389,707)
Opening cash balance (1) (17,572) 372,135 372,135
Closing cash balance(1) 324,445 355,684 (17,572) (1) See Note 11 - Cash and cash equivalents
14 Flow activity: The working capital rulement (WCR) rose by 100 million euros compared to December 2010: - Working capital activities in Africa increased significantly from 50 million euros due to: => the increase of the activity in Africa (excluding Ivory Coast) to + 9% over the first half of 2010, => of events in the Ivory coast from February to April to late June have yet to adversely affect the working capital rulement. These effects were partially offset by improved customer time is confirmed with a reduction of 4.9 days on average compared to 1 half of 2010. - The working capital of the transport and logistics activities outside Africa increased by 18 million euros due to a high level of activity increased by more than 9.2% compared to the first half 2010. This variation is partially offset by improved time customers who continue (gain of 1.7 days on average). - The working capital of the activity distribution of energy increases by 7 million euros. The increase in revenues reflects the continued increase in the prices of petroleum products (+30% increase in the first half of 2011 compared to the first half of 2010) that mechanical impact positions inventory, customers and fornisseurs. Delays are stable customers.
Investment flows:
Disbursements related to acquisitions of tangible and intangible assets are mainly the transport and logistics activities for Africa 85.4 million euros and the investments made in the context of developments batteries for automobiles and 32.8 million euros.
Receipts from disposals of securities mainly include the effect of sales of securities Vallourec sold forward for 275 million euros.
Financing flows:
Flows from issues and repayment of loans essentially consist of movements associated with to finance the Group through Bolloré SA: The main movements of the semester are:
- Bolloré SA emission of a bond for 350 millions euros - Issuing a long-term debt with respect to Financière de l'Odet to 200 million euros, - Emissions of bank loans to 201 million euros, - Repayment of credit lines for 471 million euros and commercial paper for 63 million euros.
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
Non- Number Paid-in Treasury Fair value Conversion Group share Capital Reserves controlling TOTAL of shares(1) capital shares IAS 39 reserves of equity interests (in thousands of euros) Shareholders' equity at 12/31/2009 21,391,076 395,218 235,614 (354,055) 861,690 (112,354) 1,817,922 2,844,035 231,867 3,075,902
Transactions with shareholders 0 0 0 0 0 0 (22,293) (22,293) (340) (22,633) Dividends paid out (27,809) (27,809) (14,242) (42,051) Operation on own equity 00 00 Share-based payments(2) 7,040 7,040 66 7,106 Changes in reporting entities (3) (1,030) (1,030) 14,244 13,214 Other changes (494) (494) (408) (902)
Comprehensive income items 259,541 105,250 164,608 529,309 42,316 571,625 Income from period 164,608 164,608 25,328 189,936 Other items of comprehensive income Changes in conversion reserves from controlled entities 44,861 44,861 4,540 49,401 Changes in the fair value of controlled entities' financial instruments 260,084 260,084 10,494 270,578 Other changes in comprehensive income (4) (633) 60,389 59,756 1,954 61,710
Shareholders' equity at 06/30/2010 21,391,076 395,218 235,614 (354,055) 1,121,141 (7,104) 1,960,237 3,351,051 273,843 3,624,894
Shareholders' equity at 12/31/2010 21,391,076 395,218 235,614 (354,061) 1,416,110 (38,360) 2,081,231 3,735,752 299,650 4,035,402
Transactions with shareholders 35,122 412 3,400 1,008 621 (29) (20,122) (14,710) (30,192) (44,902)
Capital increase 25,710 412 3,400 3,812 3,812 Dividends paid out (21,401) (21,401) (27,702) (49,103) Operation on own equity 9,412 1,008 608 1,616 26 1,642 Share-based payments(2) 4,376 4,376 41 4,417 Changes in reporting entities 621 (29) (3,739) (3,147) (2,384) (5,531) Other changes 34 34 (173) (139)
Comprehensive income items 133,179 (42,158) 213,000 304,021 27,787 331,808 Income from period 213,000 213,000 18,689 231,689 Other items of comprehensive income 00 Changes in conversion reserves from controlled entities (23,124) (23,124) (2,246) (25,370) Changes in the fair value of controlled entities' financial instruments 131,532 131,532 11,950 143,482 Other changes in comprehensive income (4) 1,647 (19,034) (17,387) (606) (17,993)
Shareholders' equity at 06/30/2011 21,426,198 395,630 239,014 (353,053) 1,549,910 (80,547) 2,274,109 4,025,063 297,245 4,322,308
(1) See Note 12 - Shareholders' equity
(2) Bolloré stock options plan, the effect of the stock option and accumulation plan for shares of subsidiaries and equity interests is shown on line "Other changes" . (3) At 30 June 2010, the impact on minority groups mainly comprises the recognition of the minority groups of Tin Can Island Container Terminal Ltd (+11 million Euros) further to a change in the said entity's consolidation method (from proportional consolidation to full consolidation), and the contribution of minority groups to the capital increases of integrated companies.
(4) Primarily changes in comprehensive income from equity method investments (including conversion: -19.7 million Euros at June 30, 2011and 62.4 million Euros at 30 June 2010).
15 NOTES TO THE FINANCIAL STATEMENTS
Note 1: Accounting principles
A/ Highlights
Acquisition of LCN By subscribing to a capital increase, the Group has taken in early February 2011, a 49% giving it control of LCN (Les combustibles de Normandie). A commitment to purchase futures maturing in 2014, covering the remaining capital, was also contracted by the Group. This acquisition will significantly strengthen the presence of network Bolloré Énergie on french market
Signing the Autolib ' contract The contract of public service concession for the project Autolib ', system cleaner cars in car-sharing in the Parisian region, was signed in February 2011. The launch is planned in October 2011 with the provision of the first and the early electric véhiciles stations. Issuing a bond Bolloré made its first bond issue, for an amount of 350 million euros in five years, with an annual coupon of 5.375%. This enables it to diversify its funding streams and to extend the maturity of its debt.
Sale of Vallourec shares The Bolloré Group, which had covered in 2010, a portion of its interest in forward sales, sold in May 2011 3.5% of capital in Vallourec for 275 million euros realizing a gain of 140.8 million euros. Following this operation, it holds 1.7% of capital in Vallourec.
B/ Accounting principles and deduction methods
B.1/ Basis of preparation of financial information
Principles and methods used to prepare the summariezd consolidated financial statements are identical to those used for the development speaks Group consolidated financial statements for the year ended December 31, 2010 prepared in accordance with IFRS (International Financial Reporting Standards) as adopted by the European Union and detailed in note 1 "accounting Principles" of the consolidated financial statements for fiscal 2010, are supplemented by accounting standards or interpretations applied by the Group from 1 January 2011.
The accounting principles used for these condensed interim consolidated financial statements are the same as those applied by the Group for its consolidated financial statements at 31 December 2010 as described in note 1 of the annex, subject to the specific provisions of IAS 34 and the items presented in paragraph B4 - Normative changes.
B.2/ Normative changes B.21/ IFRS standards, interpretation IFRIC or amendments adopted by the Group from 1 January 2011
Application dates: Dates of periods beginning on Standards, amendments or interpretations adoption by the or after European Union
Amendment of IAS 32 « Classification of rights issues » 12/23/2009 02/01/2010 Revised of IAS 24 «Related party disclosures » 07/19/2010 01/01/2011 Modification of IFRIC 14 « Prepayments of a minimum funding requirements » 07/19/2010 01/01/2011 IFRIC 19 « Extinguishing financial liabilities with equity instruments » 07/23/2010 07/01/2010
01/01/2011 (excluded amendments to IFRS 3 Improvement to IFRS - may 2010 02/18/2011 and IAS 27 : 07/01/2010)
The application of these new texts has no significant impact on the Group's financial statements.
16 B.22/ Accounting standards or interpretations that the Group will apply in the future
The IASB has issued standards and interpretations not yet adopted by the European Union on June 30, 2011, they are not applied by the Group at that date.
Date of Application dates: Standards, amendments or interpretations publication periods beginning on by the IASB or after
IFRS 9 " Financial Instruments" Phase 1: classification and measurement of financial assets)" 11/12/2009 and 01/01/2013 10/28/2010 Amendment of IFRS 7 "Disclosures about transfers of financial Assets" 07/10/2010 07/01/2011 Amendment of IFRS 12 "deferred taxe: recovery of underlying assets" 12/20/2010 01/01/2012 IFRS 10 "Consolidated Financial Statements" 05/12/2011 01/01/2013 IFRS 11 "Joint Arrangements" 05/12/2011 01/01/2013 IFRS 12 "Disclosure of interests in other entities 05/12/2011 01/01/2013 IFRS 13 "Fair value measurement 05/12/2011 01/01/2013 Revised of IAS 27 "Separate financial statements" 05/12/2011 01/01/2013 Revised of IAS 28 " Investments in associates and joint ventures 05/12/2011 01/01/2013 Amendments of IAS 19 "Employee benefits" 06/16/2011 01/01/2013 Amendments of IAS 1 " Presentation of items of other comprehensive income (OCI). 06/16/2011 07/01/2012
The Group is currently analyzing potential impact of these texts on the consolidated accounts.
B.3/ Use of estimates The preparation of financial statements in accordance with IAS 34 leads management to use estimates and assumptions in the implementation of accounting principles in order to value assets and liabilities as well as revenues and expenses for the period presented.
B.4/ Information on the company Bolloré is a French société anonyme (public limited company) governed by all texts applicable to commercial concerns in France, and more particularly by the provisions of the Commercial Code. Its registered office is at Odet, 29 500 Ergué Gabéric. The administrative HQ is at 31- 32 Quai de Dion-Bouton, 92 811 Puteaux. The Company is listed on the Paris stock exchange.
The interim financial statements have been prepared further to the instructions of the Board of Directors' meeting of 30 August 2011.
Note 2: Main changes in reporting entities
New reporting entities - Fully consolidated entities
A/ Transport and Logistics The Group fully consolidated company STAT, following the takeover of the company, operated through the acquisition of additional 5.04% of the shares, bringing its stake to 55%. According to IFR3 revised, the share of pre-existing interest has been re-evaluated by outcome, impacting the bottom line for 0.1 million euros. The Group opted for the recognition of partial goodwill and goodwil calculated on the share of 55% is not significant.
B/ Fuel Distribution
The Group has taken a 49% stake in the company LCN early February 2011. The subgroup LCN is fully consolidated due to Control the Group exercises on it, as the Group includes the majority of votes in the Board of Directors, in accordance with IAS 27 revised. This acquisition is accompanied by a purchase futures at a fixed price of the interests not held, resulting in the immediate consideration of all interests for the Group and the recognition of a full goodwill, of which the assignment is being finalized.
C/ Other activities
The Group fully consolidated, the company Autolib ', a company owned 100% by the Group, and created for the needs of the project Autolib'. The company's main purpose is the realization and operation of the service provision of electric cars, self-service.
Note 3: Comparability of accounts
The accounts of the first half of 2011 are similar to those of 2010 and first half of 2010 with the exception of changes in scope of consolidation above and changes in presentation detailed below:
17 Change in presentation of financial results:
The Group changed the presentation of financial income in the consolidated account resulting output. Capital gains (losses) from disposal of shares no longer appear on a separate line of the set of results are classified on the lines "Other financial income" and "Other financial expenses". The comparative financial statements have been restated. The amount of capital gains (loss) from sales of securities is provided in note of the financial result.
Seasonality of the business:
Turnover and income from operations are seasonal, with Transport and Logistics, Fuel Distribution and Industry busier in the last quarter of the calendar year. This phenomenon nonetheless varies from year to year. In accordance with IFRS accounting principles, turnover is recognized in the same conditions as at annual closing.
18 NOTES ON THE BALANCE SHEET
Note 4 - Goodwill
Changes in goodwill Breakdown by operating segment
(in thousands of Euros) At 12/31/2010 1,098,140 (in thousands of Euros) 06/30/2011 12/31/2010 Acquisition 15,768 (1) Transport and Logistics 908,580 911,881 Disposal 0 Energy Distribution 73,114 57,183 Exchange rate fluctuations (4,146) Industry 24,413 24,099 Other 1,322 Other activities 104,977 104,977 At 06/30/2011 1,111,084 TOTAL 1,111,084 1,098,140
(1) Mainly corresponds to the acquisition of Les Combustibles de Normandie Group. In accordance with IAS 36 "Impairment of Assets", goodwill undergoes impairment tests every year at closing if there is an objective indication of depreciation. Since there was no sign of loss in value at 30 June 2011, no impairment test was done on the said date.
Note 5 - Intangible assets
Changes in 2011
Gross values At 31/12/2010 Acquisitions Disposals Changes in Changes in Other At 06/30/2011 (in thousands of Euros) scope change movements Concessions, patents, research costs 259,287 16,009 (88) 5,416 (829) 2,645 282,440 Business assets 71,636 90 0 25 (129) 55 71,677 Other 87,145 11,143 (3,177) 300 (881) (4,285) 90,245
Gross values 418,068 27,242 (3,265) 5,741 (1,839) (1,585) 444,362
Amortization and provisions At 31/12/2010 Allowances Reversals Changes in Foreign exchange Other At 06/30/2011 (in thousands of Euros) scope variations transactions Concessions, patents, research costs (93,130) (7,036) 228 (228) 177 (133) (100,122) Business assets (39,531) (238) 9 0 94 1 (39,665) Other (59,308) (4,256) 757 (53) 340 (1,494) (64,014) Amortization and provisions (191,969) (11,530) 994 (281) 611 (1,626) (203,801)
Net values 226,099 15,712 (2,271) 5,460 (1,228) (3,211) 240,561
Note 6 - Tangible assets
Changes in 2011
Gross values At 12/31/2010 Acquisitions Disposals Changes in Foreign exchange Other At 06/30/2011 (in thousands of Euros) scope variations transactions
Land 68,604 3,579 (1,434) 1,290 (1,226) 1,138 71,951
Buildings 734,691 9,676 (4,028) 7,057 (8,338) 31,346 770,404
Machinery, plant and equipment 695,697 27,472 (7,416) 10,235 (9,397) 7,559 724,150
Other 575,289 16,806 (11,333) 5,399 (4,338) (21,205) 560,618
Inventories & WIP 79,026 55,154 (4,111) 456 (1,631) (15,340) 113,554
Down payments to suppliers 15,118 12,445 0 0 (32) (2,210) 25,321
Gross values 2,168,425 125,132 (28,322) 24,437 (24,962) 1,288 2,265,998
Amortization and provisions At 12/31/2010 Allowances Reversals Changes in Foreign exchange Other At 06/30/2011 (in thousands of Euros) scope variations transactions
Land (8,024) (384) 10 (258) 30 (27) (8,653)
Buildings (288,937) (15,266) 2,709 (3,625) 1,652 (4,788) (308,255)
Machinery, plant and equipment (423,851) (27,232) 5,500 (6,457) 4,671 (1,623) (448,992)
Other (354,455) (26,609) 6,548 (4,073) 2,939 6,679 (368,971)
Inventories & WIP (1,288) (8,055) 225 0 0 (5,000) (14,118)
Down payments to suppliers (101) 0 0 0 0 0 (101)
Amortization and provisions (1,076,656) (77,546) 14,992 (14,413) 9,292 (4,759) (1,149,090)
Net values 1,091,769 47,586 (13,330) 10,024 (15,670) (3,471) 1,116,908
Capital expenditure is itemized by operating segment in note 19.
19 Note 7 - Equity method investments
(in thousands of Euros) At 12/31/2010 802,005 Changes in the scope of consolidation (3,174) Share of income 40,811 Other transactions (1) (37,577) At 06/30/2011 802,065
(1) Including (19.9) million Euros of dividends, and (19.7) million Euros for conversion (including (14.8) million Euros for Havas).
Consolidated value of the main companies consolidated by the equity method
At 06/30/2011 At 12/31/2010 Share of Value of Share of Value of (in thousands of Euros) Income equity method Income equity method
Havas (1) 15,135 538,825 149,013 550,669 Group Socfin 26,865 223,574 44,829 210,048 Euro Media Group (1,733) 31,495 (303) 33,182 Aegis - - 4,874 - Other 544 8,171 1,479 8,106
TOTAL 40,811 802,065 199,892 802,005
Measurement of equity method investments In accordance with IAS 28, the value of equity method shareholdings is tested at closing if there is an objective indication of impairment. The value in use of such shareholdings is calculated using several criteria that factor in the market quotation, estimated future cash flows and market comparables.
These methods are compared with the price objectives determined by financial analysts for the listed shares. The economic values of the Havas and Aegis shareholdings were recalculated at 30 June 2011. It is above the market price. No allocation or reversal of impairment has been recorded over the period, the value in use is close to the equity participation in the June 30, 2011.
(1) Havas Havas is a listed company that prepares its consolidated financial statements in accordance with IFRS. The Bolloré Group held 32.84% of Havas's equity at 30 June 2011 (32.88% at 31 December 2010).
Under IFRS, since the Group does not have a controlling interest in Havas, this shareholding is consolidated by the equity method in the consolidated financial statements. In the first half of the year, no events occurred to alter the assessment of the significant influence of the Group's investment in Havas.
At 30 June 2011, the consolidated value of the shareholding came to 538.8 million Euros and the Group's share of income came to 15.1 million Euros.
The market value of the shareholding amounted to 521.1 million Euros at the spot rate at 30 June 2011.
Note 8 - Other financial assets
At 06/30/2011 including non- (in thousands of Euros) Gross value Provisions Net value current including current
Assets available for sale 3,057,852 (177,862) 2,879,990 2,879,990 0
Assets measured at fair value in income or loss 1,312 0 1,312 1,275 37
Loans, receivables, deposits and bonds 69,328 (36,282) 33,046 31,723 1,323
Total 3,128,492 (214,144) 2,914,348 2,912,988 1,360
At 12/31/2010 including non- (in thousands of Euros) Gross value Provisions Net value current including current (1)
Assets available for sale 3,097,461 (173,597) 2,923,864 2,599,314 324,550
Assets measured at fair value in income or loss 4,291 0 4,291 4,253 38
Loans, receivables, deposits and bonds 65,949 (36,211) 29,738 29,147 591
Total 3,167,701 (209,808) 2,957,893 2,632,714 325,179
(1) Mainly corresponds to the Vallourec shares covered by forward sales optional due 2011, sold in the first half of 2011.
20 Breakdown of changes over the period
At Changes in fair impairment recognized Other At 06/30/2011 (in thousands of Euros) 12/31/2010 Acquisitions Disposals (1) value (2) in income or loss transactions (3) Net value Net value
Assets available for sale 2,923,864 1,297 (142,332) 101,716 (4,737) 182 2,879,990
Assets measured at fair value in income or loss 4,291 0 0 (2,976) 0 (3) 1,312
Loans, receivables, deposits and bonds 29,738 5,612 (1,919) 0 (175) (210) 33,046
Total 2,957,893 6,909 (144,251) 98,740 (4,912) (31) 2,914,348
(1) Which effect sales of Vallourec shares sold forward (141.9) million euros. (2) Essentially revaluation of holdings under control (or 115.2 million euros) and Aegis (or 47.4 million euros) offset by the release of revaluation reserves of Vallourec shares sold futures, which were transferred from revaluation reserve to the income statement for an amount of 182.7 million euros (excluding derivatives). (3) Including (4) million euros related to depreciation Premafin shares. At June 30, 2011, the latent loss noticed in shareholders' equities on the securities amount to 23,5 million Euros concerning mainly the securities Mediobanca. They are neither sustainable not significant towards the criteria defined by the Group.
Assets measured at fair value in income or loss Assets measured at fair value in income or loss mainly comprise derivative financial instruments. See note 16 - financial indebtedness.
Assets available for sale
Breakdown of main shares: At 06/30/2011 At 12/31/2010 (in thousands of Euros) Percentage Net carrying Percentage Net carrying Companies held amount held amount
Financière de l'Odet (2) 26.82 640,836 26.82 542,874 Aegis (3) 26.19 597,908 26.24 550,522 Mediobanca 5.06 304,564 5.06 290,394 Vallourec 1.71 168,984 5.21 482,688 Generali 0.13 29,511 0.13 28,822 BigBen Interactive 13.71 15,755 13.71 14,662 Gaumont 9.57 15,741 9.57 18,398 Premafin 2.30 5,332 2.30 6,984 Harris Interactive 14.68 4,726 14.75 7,338 Other listed securities - 2,552 - 2,601 listed securities subtotal 1,785,909 1,945,283
Sofibol (1) (2) 48.95 585,047 48.95 520,320 Financière V (1) (2) 49.69 304,101 49.69 270,558 Omnium Bolloré (1) (2) 49.84 153,552 49.84 136,633 Other unlisted securities - 51,381 - 51,070 Unlisted securities subtotal 1,094,081 978,581
Total 2,879,990 2,923,864
Listed equity interests are measured at market price (see note 26 - information on financial instruments and risk management).
Unlisted equity interests primarily comprise the Group's shareholdings in Omnium Bolloré, Sofibol and Financière V, which are intermediate Group holding companies.
(1) Sofibol, Financière V,Omnium Bolloré
The Bolloré Group directly and indirectly has equity interests in Sofibol, Financière V and Omnium Bolloré, intermediate Group holding companies.
These securities are measured on the basis of their transparent value, namely the average of the 3 methods described below
- the Bolloré market price, - the Odet market price, - the consolidated shareholders' equity of Financière de l'Odet The aggregate value of these equity interests estimated solely on the basis of the Financière de l'Odet market price would be 105.7 million Euros higher than the value thus calculated, this aggregate value remaining higher than their acquisition cost.
(2) Despite its shareholding in Financière de l'Odet (26.82%), Sofibol (48.95%), Financière V (49.69%) and Omnium Bolloré (49.84%), the Bolloré Group has no significant influence on them because the shares have no voting rights due to the direct and indirect control these companies have over the Bolloré Group.
(3) Aegis Despite its 26.19% holding in Aegis, the Bolloré Group considers, after analyzing the facts, no conditions that could indicate the existence of significant influence in the sense of IAS28 "Investments in Associates", is completed for the reporting period, and consequently continued to participate in shares available for sale. (4) sale of shares in Vallourec sold forward (see Note 18 - Other current liabilities)
21 Note 9 - Stock and work-in-progress
At 06/30/2011 At 12/31/2010
(in thousands of Euros) Gross value Provisions Net value Gross value Provisions Net value
102,334 (15,743) 86,591 92,920 (15,844) 77,076
15,755 (745) 15,010 13,050 (630) 12,420
49 0 49 312 0 312
1,621 0 1,621 1,379 0 1,379
125,652 (701) 124,951 84,369 (505) 83,864
Total 245,411 (17,189) 228,222 192,030 (16,979) 175,051 The evolution of this position is mainly due to the entry into the scope of consolidation of Les combustibles de Normandie Group.
Note 10 - Trade notes and accounts receivable
At 06/30/2011 At 12/31/2010 (in thousands of Euros) Gross value Provisions Net value Gross value Provisions Net value Trade notes and accounts receivable 1,535,760 (68,581) 1,467,179 1,402,734 (65,823) 1,336,911 Welfare and tax operating receivables 29,009 (692) 28,317 15,640 (577) 15,063 Suppliers with debit balance 143,755 (403) 143,352 99,479 (407) 99,072 Active current accounts 35,542 (15,175) 20,367 57,763 (14,646) 43,117 Other trade receivables 250,184 (7,702) 242,482 156,116 (5,470) 150,646 Other receivables 20,794 (7,128) 13,666 12,895 (7,974) 4,921 Total 2,015,044 (99,681) 1,915,363 1,744,627 (94,897) 1,649,730
Note 11 - Cash and cash equivalents
At 06/30/2011 At 12/31/2010
(in thousands of Euros) Gross value Depreciation Net value Gross value Depreciation Net value Cash 263,245 (176) 263,069 282,487 (176) 282,311 Cash equivalents 251,469 (382) 251,087 49,988 (382) 49,606 Cash agreements - assets 64 0 64 14,961 0 14,961 Cash and cash equivalents 514,778 (558) 514,220 347,436 (558) 346,878 Cash agreements - liabilities (16,053) 0 (16,053) (228,429) 0 (228,429) Cash credit (173,722) 0 (173,722) (136,021) 0 (136,021) Net cash balance 325,003 (558) 324,445 (17,014) (558) (17,572)
Note 12 - Shareholders' equity
At 30 June 2011, Bolloré SA's share capital totalled 395,629,776 Euros, divided into 24,726,861 fully paid-up shares with a nominal value of 16 Euros each. During the closed period, 30 June 2011, the average weighted number of ordinary shares in circulation came to 21,392,579 and the average weighted number of ordinary and dilutive shares came to 21,537,401.
Changes in capital
Bolloré SA realized during the first half of 2011 a capital increase by issuing new shares related to the exercise of stock option shares granted by the Board of Directors on April 6, 2007. The corresponding capital increases (issue premium included) generated acrroissement to 3,812 thousand euros of shareholders' equity.
Events that affect or could affect Bolloré SA's share capital are subject to the agreement of the general shareholders' meeting.
The Group more particularly monitors the trend in the ratio of net debt to total shareholders' equity.
Net debt is presented in note 16 - financial indebtedness.
The shareholders' equity used is that presented in the statement of changes in net worth in the financial statements.
Dividends paid out by the parent company The parent company paid out a total of 24.7million Euros in dividends, making 1.3 Euros per share for period 2010. An interim dividend of 2 euros was paid in fiscal 2010.
Own share held At 30 June 2011, Bolloré and its subsidiaries held 3,300,663 own shares.
22 Income per share
The table below lists the items used to calculate the basic and diluted income per share as presented at the end of the income statement.
June 2011 June 2010 December 2010 (in thousands of Euros) Group share of net income used to calculate income per share - basic 213,000 164,608 316,851 Group share of net income used to calculate income per share - diluted 213,000 164,608 316,851
Number of shares issued 24,726,861 24,701,151 24,701,151 Number of treasury shares (3,300,663) (3,310,075) (3,310,075) Number of shares in circulation 21,426,198 21,391,076 21,391,076 Stock option plan 1,111,290 1,146,000 1,137,000 Free shares 34,600 0 34,600 Number of shares issued and potential shares 22,572,088 22,537,076 22,562,676
Average weighted number of shares in circulation - basic 21,392,579 21,391,076 21,391,076 Potential dilutive shares resulting from the exercise of stock options and free shares (1) 144,822 0 286 Including stock options plan Bolloré 2007 (2) 135,232 0 0 which attributions of free shares Bolloré SA 2010 (2) 9,590 0 286 Average weighted number of shares in circulation and potential shares - after dilution 21,537,401 21,391,076 21,391,362
(1) Share options for which the price plus the fair value of services to be carried out by the recipients until rights are obtained is greater than the annual average stock exchange price are not included in the calculation of the diluted income per share owing to their non-dilutive effect. (2) See note 15 - Share-based payment transactions.
Note 13 - Contingency and loss provisions
No significant change in the first half of 2011.
Note 14 - Employee benefit commitments
Employee benefit commitments were updated at 30 June 2011 through extrapolation of calculations done at 31 December 2010. The demographic data at 31 December 2010 were updated to reflect expected retirements in 2011 and the effects of changes in reporting entities. The exchange rates and the discounting rate were updated, the other assumptions were retained.
1/ Assets and Liabilities recognized in the balance sheet:
At 06/30/2011 At 12/31/2010 Post- Post- Other long-term Other long-term employment Total employment Total benefits benefits (in thousands of Euros) benefits benefits
Present value of commitments (unfunded plans) 72,259 19,712 91,971 80,422 20,917 101,339
Present value of commitments (funded plans) 46,191 0 46,191 48,577 0 48,577 Actuarial gains and losses not recognized (3,136) 0 (3,136) (13,842) 0 (13,842) Fair value of the plan's assets (29,455) 0 (29,455) (29,457) 0 (29,457) Cost of past services not recognized (2,674) 0 (2,674) (2,750) 0 (2,750) Net balance sheet amount of employee benefit commitments 83,185 19,712 102,897 82,950 20,917 103,867
2/ Cost components:
At 06/30/2011 At 06/30/2010 Post- Post- Other long-term Other long-term employment Total employment Total benefits benefits (in thousands of Euros) benefits benefits Cost of services rendered (3,132) (865) (3,997) (2,747) (826) (3,573) Interest expenses (2,625) (390) (3,015) (3,031) (529) (3,560) Expected return on the plan's assets 792 0 792 695 0 695 Cost of past services (76) 0 (76) (60) 0 (60)
Recognized amount of actuarial gains and losses (1,820) 1,260 (560) 0 (534) (534) Effects of reductions and plan liquidation 3,655 677 4,332 0 0 0
Costs of employee benefit commitments (3,206) 682 (2,524) (5,143) (1,889) (7,032)
23 3/ Net liability/asset transactions recognized in the balance sheet:
- Changes in the provision
Post- Other long-term employment Total benefits (in thousands of Euros) benefits
At 01/01/2011 82,950 20,917 103,867
Accretion 3,206 (682) 2,524
Write-down (2,632) (1,082) (3,714)
Translation adjustment (1,182) (251) (1,433)
Other transactions 843 810 1,653
At 06/30/2011 83,185 19,712 102,897
4/ Valuation assumptions: The commitments are valued by independent actuaries Group. The assumptions take into account the specificities of regimes and societies. The discount rates, determined per country or area, are obtained for significant commitments in reference to the rate of return on grade one private benefit plans (maturing at the same time as the evaluated plans).
The main valuation assumptions used to determine the commitments are as follows:
France United Kingdom Other (as a percentage)
At 06/30/2011
Discount rate 5.00% 5.40% 5.00%
Expected return on assets 4.00% 5.86% 4.00%
Increases in salaries (*) 2.60% 3.90% 2.60%
Increase in the cost of medical expenses 3.40% - 3.40%
At 12/31/2010
Discount rate 4.00% 5.60% 4.00%
Expected return on assets 4.00% 6.25% 4.00%
Increases in salaries (*) 2.60% 3.90% 2.60%
Increase in the cost of health spending 3.40% - 3.40%
(*) including inflation
Note 15 - Share-based payment transactions
For integrated companies, no new plan was granted in the first half of 2011.
IFRS 2-related expenses recognized in the period amount to (4.5) million Euros. It's take into account an additional half year of acquired rights for plans in effect at 31 December 2010. excluding stock option plan of the Bollore June 2007, whose rights were finally granted in early April 2011.
The arrangements for awarding these options are detailed in the notes to the financial statements at 31 December 2010 of the Bolloré Group.
The recognition procedures for these plans were not modified in the half year.
24 Note 16 - financial indebtedness
Net financial indebtedness:
including non- including non- At 06/30/2011 including current At 12/31/2010 including current current current (in thousands of Euros) Convertible bond issues 00 0 0 0 0 Other bond issues 428,701 3,972 424,729 87,453 4,169 83,284
Borrowings from lending institutions 1,303,745 575,066 728,679 1,599,731 442,511 1,157,220 (3) Other comparable borrowings 450,007 204,647 245,360 417,233 373,473 43,760
Derivatives liabilities 6,433 0 6,433 6,349 0 6,349
Gross financial indebtedness 2,188,886 783,685 1,405,201 2,110,766 820,153 1,290,613
(1) Cash and cash equivalents (514,220) (514,220) 0 (346,878) (346,878) 0 Security deposit in cash (1,064) 0 (1,064) 0 0 0 Derivatives assets (2) (1,312) (37) (1,275) (4,291) (38) (4,253)
Net financial indebtedness 1,672,290 269,428 1,402,862 1,759,597 473,237 1,286,360
(1) Cash and cash equivalents - See Note 11 (2) See paragraph below - "Derivatives asset and liabilities in net debt". (3) The first half of 2011, the cash management agreement between Bolloré and Financière de l'Odet was replaced by a long-term loan for
Main characteristics of items of financial indebtedness
I-Analysis of financial liabilities by class
1- Liabilities at depreciated cost
A - Other bond issues
06/30/2011 12/31/2010 (in thousands of Euros)
Value (1) 428,701 87,453
(1) Issued by Bolloré: balance at 30 June 2011: 428.7 million Euros; balance at 31 December 2010: 87.5 million Euros.
On May 24, 2011, Bolloré issued bonds amounting to 350 million Euros maturing in 2016, with an annual coupon of 5.375%.
On 22 December 2006, Bolloré borrowed 123 million American dollars in the form of a private placement, divided into three tranches:
- the first tranche is at floating rate (LIBOR +1%) and totals 50 million American dollars, repayable in 2013 and issued at 98% of the par value with a call premium of 1 million dollars; - the second tranche is at fixed rate (6.32%) and totals 40 million dollars over ten years; - the third tranche is at fixed rate (6.42%) and totals 33 million dollars over twelve years;
This loan is a combination hedge (Currency and Interest Rate Swap ), swapping initial interest for fixed rate in euros, namely 2.925% for the first tranche, 3.26% for the second and 4.19% for the third. The principal is repaid in American dollars at an exchange rate of 1 euro =1.3192 American dollars.
B- Borrowings from lending institutions
06/30/2011* 12/31/2010*
(in thousands of Euros)
Value 1,303,745 1,599,731
* Of which credits lines drawwn credits lines of 166.3 million Euros at 30 June 2011 and 510 million Euros at 31 December 2010 under a finance line facility expiring in 2014.
* Of which 195.7 million Euros at 30 June 2011 and 193.7 million Euros at 31 December 2010 under a realisation of receivables facility.
* Of which 146 million Euros of commercial paper drawn down under a facility of up to 500 million Euros (209 million Euros at December 31, 2010). * Of which 200 million Euros of guaranteed financing by pledged of Havas and Aegis shares as of June 30, 2011. (see note 34 - Contractual off-balance sheet commitments of the Annual Report 2010
C - Other bank and comparable borrowings
06/30/2011* 12/31/2010* (in thousands of Euros)
Value 450,007 417,233
At June 30, 2011, includes principles of bank overdrafts amounting to 173.7 million Euros and a loan agreement with the Financière Odet of 200 million Euros and 31 December 2010, bank overdrafts amounting to 136 million Euros and a cash management agreement wth Financière de l'Odet of 228.4 million Euros.
2 - Derivative assets and liabilities in net debt
06/30/2011 12/31/2010
(in thousands of Euros)
Value Non-current derivatives - assets (1) (1,275) (4,253) Current derivatives - assets (37) (38) Total (1,312) (4,291) Non-current derivatives - liabilities 6,433 6,349 Current derivatives - liabilities 0 0 Total 6,433 6,349 (1) Included under Other non-current financial assets - See note 8
25 Nature and fair value of derivative financial instruments
fair value of Risk hedged Total nominal Fair value of instruments at Nature of the instrument Company Maturity instruments at against amount 06/30/2011 12/31/2010
(in thousands of currency units) (in thousands of euros) (in thousands of euros)
Interest rate swap contract Rate Bolloré 2011 to 2012 125,000 (€) (3,792) (6,349)
Interest rate swap contract (1) Rate Bolloré 2014 145,000 (€) 1,028 1,236 Currency and Currency interest rate swap interest rate Bolloré 2013/ 2016/ 2018 123,000 ($) (2,641) 2,980
Other derivatives(2) 285 75
The derivatives presented in the table above are not qualified for accounting purposes as hedges except for the rate swap(1) (structured interest/variable) having a fair value of 1,028 thousand Euros at 30 June 2011.
The revenue and expenses recognized in the period's profit or loss relating to these financial liabilities are presented in note 22 - financial result.
(2) Derived individually insignificant
Note 17 - Trade notes and accounts payable
Changes Changes Changes in Other At 12/31/2010 At 06/30/2011 reporting scope (in thousands of Euros) net of exchange transactions
Trade accounts payable 747,350 (4,820) (10,401) 79,760 1,505 813,394
Welfare and tax operating payables 179,410 (17,356) (845) 3,678 (14) 164,873
Accounts receivable in credit 115,408 45,229 (2,687) 170 1 158,121
Current accounts - liability under one year 30,410 (3,489) (18) 44 (24) 26,923
Other trade payables 526,428 124,377 (15,963) 9,531 1,369 645,742
Other liabilities 117,245 (14,107) (716) (27,673) 2,939 77,688
Total 1,716,251 129,834 (30,630) 65,510 5,776 1,886,741
Note 18 - Other current liabilities
Changes Changes Changes in Other At 12/31/2010 At 06/30/2011 reporting scope (in thousands of Euros) net of exchange transactions
Prepaid income 31,479 14,255 (238) 245 1 45,742
Other current liabilities (1) 50,526 20 0 0 (50,526) 20
Total 82,005 14,275 (238) 245 (50,525) 45,762
(1) Whose output derivatives related to Vallourec securities sold forward for 50.5 million Euros.
26 NOTES ON THE INCOME STATEMENT
Note 19 - Information on operating segments
Under IFRS 8 "Operating segments", the operating segments selected for segment disclosures are those used in the Group's internal reporting, reviewed by General Management (the Group's chief operational decision-maker), and reflect the Group's organization, which is based on trading segments.
The Group presents 3 segments: - Transport and Logistics: includes services relating to networked organization of sea and air transport, and logistics - Industry: includes the production and sale of plastic films, batteries and supercapacity batteries, specialized terminals and systems, automotive developments - Energy Distribution: the distribution and storage of petroleum products in Europe
The other activities include television, press and related, telecoms (information and communication technology), plantations and holding companies do not exceed the quantitative thresholds under IFRS 8, appear in the column "Other".
Trading between these various segments is done at market rates. No single customer accounts for itself over 10% of Group turnover.
The segments' trading results are the main figures used by General Management to assess their performance and allocate funds to them.
The accounting and measurement methods adopted for internal reporting purposes are identical to those used to draw up the consolidated financial statements with the exception of the allocation of royalties brand. Turnover and capital expenditure are also monitored by General Management on a regular basis. Information on depreciation and estimated expenses is provided to allow the reader to assess the main elements not having any monetary effect on segment operating profit or loss but is not included in internal reporting.
- Information on operating segments
In June 2011 Intersegment Transport and Consolidated (in thousands of Euros) Industry Fuel Distribution Other activities elimination Logistics total
External turnover 2,334,579 112,237 1,476,632 108,357 0 4,031,805 Intersegment turnover 2,542 192 794 16,346 (19,874) 0 Turnover 2,337,121 112,429 1,477,426 124,703 (19,874) 4,031,805 Provisions (53,491) (16,118) (5,481) (11,259) 0 (86,349) Sector-based operating Income 185,179 (32,838) 10,234 (28,846) 0 133,729
Investment in intangibles and tangibles 93,415 32,333 6,258 20,368 0 152,374
Reconciliation with the consolidated operating income Sector-based operating income 185,179 (32,838) 10,234 (28,846) 0 133,729 Leading royalty(1) (11,441) 0 0 11,441 0 0 Consolidated operating income 173,738 (32,838) 10,234 (17,405) 0 133,729 (1) Invoicing of the material signs which distinguish the Group in the world
In June 2010 Intersegment Transport and Other Consolidated (in thousands of Eros) Industry Fuel Distribution elimination Logistics activities total
External turnover 2,195,724 98,740 922,475 74,632 0 3,291,571 Intersegment turnover 2,214 138 656 15,427 (18,435) 0 Turnover 2,197,938 98,878 923,131 90,059 (18,435) 3,291,571 Provisions (56,661) (16,170) (5,508) (7,702) 0 (86,041) Sector-based operating income 171,557 (39,955) 13,215 (30,802) 0 114,015
Investment in intangibles and tangibles 66,713 5,398 6,168 7,621 0 85,900
In December 2010 Intersegment Transport and Consolidated (in thousands of Euros) Industry Fuel Distribution Other activities elimination Logistics total
External turnover 4,642,867 205,270 1,995,473 166,641 0 7,010,251 Intersegment turnover 4,728 313 1,500 33,468 (40,009) 0 Turnover 4,647,595 205,583 1,996,973 200,109 (40,009) 7,010,251 Provisions (108,195) (26,984) (11,002) (35,117) 0 (181,298) Sector-based operating income 363,097 (70,481) 36,914 (86,203) 0 243,327 investment in intangibles and tangibles 177,445 20,063 13,212 19,203 0 229,923
Reconciliation with the consolidated operating income Sector-based operating income 363,097 (70,481) 36,914 (86,203) 0 243,327 Leading royalty(1) (20,728) 0 0 20,728 0 0 Consolidated operating income 342,369 (70,481) 36,914 (65,475) 0 243,327
(1) Invoicing from the second half-year 2010 of the material signs which distinguish the Group in the world.
27 - Disclosures by geographical segment
France and French Overseas Europe Africa Americas Asia/ Total (in thousands of Euros) Departments and Territories outside France Pacific In June 2011
Turnover 2,049,960 687,513 891,211 146,896 256,225 4,031,805
Intangible assets 147,782 377 89,271 1,821 1,310 240,561 Tangible assets 395,395 45,364 628,115 41,511 6,523 1,116,908
Investment in intangibles and tangibles 56,901 1,171 86,401 6,532 1,369 152,374
In June 2010
Turnover 1,556,611 520,445 852,943 132,174 229,398 3,291,571
Intangible assets 139,702 370 74,469 2,732 1,565 218,838 Tangible assets 379,852 46,565 586,065 26,042 6,374 1,044,898
Investment in intangibles and tangibles 26,198 3,858 50,914 3,432 1,498 85,900
In December 2010
Turnover 3,261,209 1,182,916 1,794,103 284,432 487,591 7,010,251
Intangible assets 145,714 405 76,403 1,916 1,661 226,099 Tangible assets 376,318 47,571 621,871 38,840 7,169 1,091,769
Investment in intangibles and tangibles 65,852 5,751 143,230 10,831 4,259 229,923
Turnover by geographical segment presents the allocation of revenues according to the countries where the sale takes place.
Note 20 - Main changes on a like-to-like basis
The table below describes the effect of changes in reporting entities and exchange rates on the key figures, the 2011 figures being restated to match the 2010 reporting scope and exchange rates. When it is made reference to data with constant scope and exchange rates, it means that the impact of the variations of exchange rate and variations of scope (acquisition or transfer of participation in a company, a variation of percentage of integration, change of method of consolidation) was excluded.
June 2011 Changes Changes June 2011 June 2010 December 2010 in in Like-to-like (in thousands of Euros) reporting scope change basis Turnover 4,031,805 (337,190)(1) 14,337 3,708,952 3,291,571 7,010,251 Operating income 133,729 10,014(2)(2) 5,255 148,998 114,015 243,327
(1) The changes in reporting scope concerning turnover are mainly bound to the takeovers of the companies of les Combustibles de Normandie on the first half of the year 2011 and Direct Star during the second half-year 2010. (2) At the level of operating income, the change in reporting scope mainly concerns to the takeovers of Direct Star as well as change in consolidation method of VEPB.
28 Note 21 -Operating income
Income from operations by type of revenue and expenses is analysed as follows:
June 2011 June 2010 December 2010 (in thousands of Euros) Turnover 4,031,805 3,291,571 7,010,251 Sale of goods 1,579,976 1,006,789 2,173,088 Provision of services 2,402,425 2,232,537 4,729,303 Income from associated activities 49,404 52,245 107,860 Goods and services bought in (3,306,092) (2,616,094) (5,610,597) - Purchases and external expenses (3,217,249) (2,532,974) (5,431,136) - Lease payments and rental expenses (88,843) (83,120) (179,461) Staff costs (500,854) (472,858) (957,366) Allocations for depreciation and provisions (86,349) (86,041) (181,298) Other operating income (*) 63,100 52,266 114,566 Other operating expenses (*) (67,881) (54,829) (132,229) Operating income 133,729 114,015 243,327
* Details of other operating income and expenses:
June 2011 June 2010
Operating Operating Operating Operating (in thousands of Euros) Total income expenses Total income expenses
Capital gains (losses) on sales of capital assets 102 14,973 (14,871) 1,235 2,101 (866) Exchange losses and gains 514 11,489 (10,975) 7,155 12,339 (5,184) Assigned profits and losses 166 12,923 (12,757) 834 14,217 (13,383) Other (1) (5,563) 23,715 (29,278) (11,787) 23,609 (35,396) Other operating income and expenses (4,781) 63,100 (67,881) (2,563) 52,266 (54,829)
December 2010
Operating Operating (in thousands of Euros) Total income expenses
Capital gains (losses) on sales of capital assets 3,036 11,068 (8,032) Exchange losses and gains 4,025 26,994 (22,969) Assigned profits and losses (458) 27,675 (28,133) Other (1) (24,266) 48,829 (73,095) Other operating income and expenses (17,663) 114,566 (132,229)
(1) Which includes miscellaneous operating expenses of no significance individually and 5 million euros in research tax credits in june 2011 (8 million euros in june 2010 and 14 million euros in december 2010).
29 Note 22 - Financial Income
June 2011 June 2010 December 2010 (in thousands of Euros) Net cost of financing (28,376) (18,812) (41,182) - Interest charges (35,032) (25,735) (54,165) - Income from financial receivables 5,710 5,500 10,213 - Other income 946 1,423 2,770 Other financial income (*) 312,256 36,038 112,999 Other financial expenses (*) (162,962) (37,188) (62,765) Financial income 120,918 (19,962) 9,052
* Details of other financial income and charges:
June 2011 June 2010
Financial Financial Financial Financial (in thousands of Euros) Total income expenses Total income expenses
- Income from investments in shares and securities (1) 13,176 13,176 0 6,303 6,303 0 Capital gains on sale of equity securities and investment securities (2) 140,910 275,612 (134,702) (119) 2,776 (2,895)
Effect of changes in consolidation scope (3) (245) 0 (245) (2,132) 0 (2,132) - change in financial Provisions (5,344) 748 (6,092) (303) 596 (899)
- Fair value of derivatives (2,368) 3,253 (5,621) 14,624 15,097 (473) - Other (4) 3,165 19,467 (16,302) (19,523) 11,266 (30,789) Other financial income and charges 149,294 312,256 (162,962) (1,150) 36,038 (37,188)
December 2010
Financial Financial (in thousands of Euros) Total income expenses
- Income from investments in shares and securities (1) 17,689 17,689 0 Capital gains on sale of equity securities and investment securities (520) 3,448 (3,968) Effect of changes in consolidation scope (3) 45,749 45,991 (242) - Change in financial Provisions (10,125) 6,902 (17,027) - Fair value of derivatives 6,601 7,277 (676) - Other (4) (9,160) 31,692 (40,852) Other financial income and charges 50,234 112,999 (62,765)
(1) Principally Aegis dividends received during the first-half of the year 2011 and Mediobanca dividends received during the second half-year 2010. (2) Capital gain of Vallourec transfer of the securities sold forward for 140.8 million euro in the first half of the year 2011. (3) Effect of the application of the standard IFRS 3 revised. At December 31, 2010, 30.7 million euros for the fair value adjustment of Aegis securities at the time of deconsolidation and a write-back of 9.4 million euros of recyclable elements from comprehensive as well as 5.9 million euros is related to the takeover of Gruau Microbus.
(4) This amount is essentially established by the losses and the foreign-exchange gains on financial elements.
30 Note 23- Corporate income tax.
Analysis of income tax expense
June 2011 June 2010 December 2010 (in thousands of Euros) Taxes due (1) (72,968) (60,296) (138,709) Effects of the Group tax relief 15,084 16,337 42,529 Sub-total of corporate income tax (57,884) (43,959) (96,180) Net deferred taxes (5,885) (6,106) 1,682 Sub-total for deferred taxes (5,885) (6,106) 1,682 Total (63,769) (50,065) (94,498)
(1) Including impact of CVAE amounting to (4.9) million Euros at 30 June 2011, (4.4) million euros at 30 June 2010 and (10) million euros at 31 december 2010.
31 OTHER INFORMATION
Note 24 - Transactions with related parties
The Group concluded various transactions with affiliated companies as part of its normal business activities. These transactions were concluded at market rates.
They mainly include commercial or financial dealings between Bolloré and its subsidiaries, in particular cash pooling transactions.
In the half year ending 30 June 2011, there were no significant changes in the nature of transactions between the Group and its related parties in comparison with 31 December 2010. (see Note 33 to the consolidated financial statements for period ending 31 December 2010).
Note 25 - Off-balance sheet contractual commitments
This note supplements the information on commitments given and received at 31 December 2010, as described in note 34 "Off-balance sheet contractual commitments" to the consolidated financial statements at 31 December 2010. Changes in off balance sheet commitments during the first half of 2011 focuses on the commitments given in respect of operational activities. The update to the elements have undergone significant changes, 30 June 2011 is provided below:
- Commitments given for the purpose of operational activities
At June 30, 2011 (in thousands of euros) Total Under 1 year Between 1 and 5 yearsMore than 5 years
Other bonds, endorsements, guarantees and delcredere granted 163,782 141,262 16,454 6,066
Firm investment commitments 104,627 40,475 64,152 0
Contractual investment obligations for concessions 1,679,413 175,300 551,707 952,406
At December 31, 2010 (in thousands of euros) Total Under 1 year Between 1 and 5 years More than 5 year
Customs bonds 367,302 180,382 107,601 79,319
Other bonds, endorsements, guarantees and delcredere granted 143,782 129,262 8,454 6,066
Pledges and mortgages 9,594 0 615 8,979
Firm investment commitments 102,887 56,652 46,235 0
Contractual investment obligations for concessions 1,090,336 94,223 403,207 592,906
Note 26 - Information of financial instruments and risk management
This note updates the information provided in note 36 to the 2010 annual report.
Debt and financial instrument management
The Group's treasury and Management Control departments organize and oversee the collection of information on the monthly financial indicators of the divisions, in particular the income statement and net indebtedness.
All bank dealings in foreign currency hedges, interest-rate swaps or short-term investments are subject to the consent of the Finance department. The Group works only with first-class banks.
A - Market risk regarding listed shares
In view of its financial activities, the Bolloré Group is exposed to changes in the price of listed securities.
The equity interests held by the Group in non-consolidated companies are measured at fair value at closing in accordance with IAS 39 "Financial instruments" and are classified as financial assets available for sale.
For listed securities, fair value is the market quotation on closing. At 30 June 2011, timing difference revaluations of securities available for sale in the consolidated balance sheet, determined on the basis of market prices, totalled 1,621 million Euros before tax, offset against consolidated shareholders' equity . At 30 June 2011, a 1% change in market prices would have an impact of 26.1 million Euros on assets available for sale and 26 million Euros on consolidated equity, including 8.3 million Euros for revaluations through market transparency of intermediary holding companies (1). These companies' unlisted securities are not very liquid in nature.
(1) Transparent revaluations based more particularly on the market quotations of Bolloré and Financière de l'Odet (see note 8 - Other financial assets).
32 B - Liquidity risk
The portion under one year of credit used at 30 June 2011 includes 146 million Euros of drawn commercial paper under a program totalling a maximum of 500 million Euros and 196 million from refinancing of receivables.
In addition, confirmed but undrawn credit lines totalled 1,369 million Euros at 30 June 2011. All the credit lines drawn and undrawn are written down as follows:
- year 2011 4% - year 2012 14% - year 2013 7% - year 2014 49% - year 2015 4% - year 2016 3% - after 2016 19% The average term of the Group's sources of funds is nearly 3.5 years. Most of them mature in or after 2014.
The Group does not make use of bank loans subject to external credit rating. Most of the credit lines used, as confirmed but undrawn (including the 1.1 billion Euro syndicated bank facility maturing in 2014), do not include a prepayment clause that requires financial ratios to be met. Some credit lines used as confirmed undrawn sometimes include such a clause. In which case there are two ratios: a debt ratio and a ratio relating to the Group's capacity to service the debt.
The Group met all these criteria at 30 June 2011.
C - Interest-rate risk
General Management decides on when to arrange interest-rate hedges. Firm hedges (interest-rate swaps, forward rate agreements) may be used to hedge the interest-rate risk on Group debt. Note 16 describes the Group's various interest-rate risk derivative hedging instruments. At 30 June 2011, after hedging, the portion of net fixed-rate financial debt came to 50% of total debt. Sensitivity: if rates fluctuated uniformly by +1% the annual impact on finance charges would come to +8.4 million Euros after hedging interest-bearing debt. Cash surpluses are invested in risk-free monetary products.
D - Customer credit risk
The Group's treasury department centralizes monthly changes in working capital requirements. Most divisions make use of credit insurance, and the larger ones have credit manager. Given the diversity of its operations, the Group has a very diverse customer base both in terms of sector of industry and in terms of size and location. Customer receivables are analysed on a case-by-case basis, and depreciation is recognized on an individual basis that takes into account the customer's circumstances, late payments and whether or not the debt is covered by credit insurance. No depreciation is recognized on a comprehensive basis.
E - Foreign exchange risk
The turnover breakdown (62% in the Euro-zone, 13% in the CFA zone, 4% in Swiss francs, 3% in US dollars, 2% in pounds sterling, 16% in other currencies) and the fact that much of the operating expenditure is in local currencies, mitigate the Group's exposure to operating exchange rate risk. The Group mitigates its exposure still further by hedging its main transactions in currencies other than the Euro and the CFA.
Foreign exchange exposure is centralized at group level in France and Europe: each subsidiary having export/sales or import/purchase flows in foreign currencies with external third parties in excess of 150 thousand Euros opens one account in each currency. In order to eliminate the risk of fluctuating exchange rates, at the end of each month it requests a hedge from the management unit on the estimated balance of its sales/purchases for the following month, payable at 30 or 60 days EOM as the case may be. The currency treasury calculates the net commercial positions and arranges firm hedges with the banks (forward purchases or sales). In addition to these three- month sliding transactions (end-of-month procedure), other hedges may be arranged for a particular deal as the need arises. Intercompany flows undergo monthly netting, which limits exchanges of flows and hedges the residual foreign exchange risks.
Net exchange losses and gains relating to operating flows in currencies totalled 0.5 million Euros for the Group at 30 June 2011, making 0.4% of the period's operating income. F - Commodities risk
The Group's lines of business below are sensitive to changes in the prices of the following commodities: Energy: Oil Plantations: Palm oil and rubber
However, in view of its wide-ranging activities, the effects of changes in commodity prices on Group results remain limited. The Fuel Distribution operating segment is the only Group segment that is directly and significantly impacted by changes in oil prices; turnover is closely correlated to the price of crude oil and fully correlated to the price of refined petroleum products. In order to minimize the oil risk, the Energy Distribution segment passes on the price of oil to customers and arranges forward purchases and sales of product backed by physical operations.
At 30 June 2011, forward sales of products totalled 43.6 million Euros and forward purchases totalled 19.8 million Euros. Open seller positions on the IPE (International Petroleum Exchange) amounted to 32,100 tonnes for a total of 20.6 million Euros. Stocks of domestic fuel oil are fully covered except for a stock of roughly 59,500 m3 at 30 June 2011.
Note 27 - Post-balance sheet events
- Aegis Framework of sale in the process of Synovate subsidiarie to Ipsos, Aegis made a commitment to pay an exceptional 200 million pound of sterling dividend to his shareholders. Bolloré Group should consequently receive approximately 52 million pounds of sterling therefore in participation in Aegi Changes in the market price At August 25, the Paris stock exchange fell by 22% compared to June 30, 2011 in a general decline in global markets. During the same period the value of the portfolio of available for sale of the Group decreased overall by 13%. As shown in Note 26-A, a uniform change of 1% of share price impact leads to 26 million euros on assets held for sale and equity.
33 STATEMENT ON THE HALF-YEARLY REPORT
I hereby certify that to the best of my knowledge the condensed financial statements for the past half year have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, financial position and performance of the company and all its consolidated entities, and that the interim progress report on page 2 gives a true picture of the highlights in the first six months of the financial year, their effect on the accounts, the main transactions between related parties and a description of the main risks and uncertainties for the remaining six months of the financial year.
August 30, 2011
Vincent Bolloré Chairman & Managing Director
34 Statutory Auditor’s review report on the half-year financial information
Company BOLLORE Period from January 1, 2011 to June 30, 2011
This is a free translation into English of the Statutory Auditors’ review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
To the Shareholders,
In compliance with the assignment entrusted to us by your Annual General Meeting and in accordance with the requirements of article L. 451-1-2 III of the Monetary and Financial Code ("Code monétaire et financier"), we hereby report to you on:
• the review of the accompanying condensed interim consolidated financial statements of BOLLORE, for the six months ended June 30, 2011, • the verification of information contained in the interim management report.
These condensed interim consolidated financial statements are prepared under the responsibility of the Managing Board. Our role is to express a conclusion on these financial statements based on our review.
1 Conclusion on the financial statements
We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
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Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 – “Interim Financial Reporting”, as adopted by the European Union.
2 Specific verification
In accordance with professional standards applicable in France, we have also verified the information given in the interim management report on the condensed interim consolidated financial statements subject to our review.
We have no matters to report as to its fair presentation and consistency with the condensed interim consolidated financial statements.
Paris and Neuilly sur seine, August 30, 2011
The Statutory Auditors
AEG Finances Constantin Associés Member of Grant Thornton International
Philippe BAILLY Thierry QUERON
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